Chapter 2 - BRAVE CONVERSATIONS: Leadership Changes, Venture Assistance, and The Obstacle is the Way (2017)

PIVOTS, a 3-part series

Mental health and virtual care are having an incredible moment during COVID-19. As co-founder of Ginger, an on-demand mental health provider delivering access to care around the clock and across the globe, we've been fortunate to be in the right place at an incredibly trying time. And with fresh capital from our Series D financing, there is no doubt this is our moment, too. 

But we’ve all heard *that* story about a company that goes from nothing to success, seemingly overnight. The reality is *this* story has come with many twists and turns. It's a story of near-failures and many battle scars. In this series, I’ll share what I learned from our Business Model Pivot (Ch 1), our Team Pivot (Ch 2), and my “Me” Pivot (Ch 3). Losing years on the “wrong” business model to being within inches of selling the company. Transitioning our entire leadership team to managing a CEO change. Being weeks from cash out to our hyper-growth of today. And ultimately, how over the past decade we evolved as a company and I evolved as a leader.

I don’t profess to have any singular insight or knowledge of the “right” path. My hope is that by exposing the adversity we went through, I can help other entrepreneurs succeed by being authentic versions of themselves. To challenge the stereotype of the “always-on” and “always right” founder. To be willing to ask for and receive help. Even with those you aren’t “supposed to” show vulnerability with, and especially when it’s hard to hear. 

If you missed it, read Chapter 1 first.

Get your “who” right

Our first pivot at Ginger was about determining our “what.” What product we would offer to the market. Our next pivot would be about our “who.” Who would we need around the table to scale this next mountain, and who to listen to for advice along the way. 

The year 2017 was by far the most transformative of our decade-long journey. It tested me more than any other period in the company’s history. It required having brave conversations with our leadership team and our board to discuss our failures and shortcomings. And it challenged my understanding of what venture assistance, not just venture capital, really meant. Straight talk is what we all needed in those company-defining moments. And undoubtedly, it’s something many would shy away from providing.

I certainly had.

Mindset is your oxygen

We had pivoted to becoming a mental health provider. It was clear that we had made the right call, but it was a tough move. There was no playbook for what we were doing in mental health. We couldn’t buy it or hire the expertise. Building a technology company and a nationwide health system was a much bigger and complex approach to the mental health access issue. It required new corporate and legal structures - and more capital than we had anticipated. While we were getting real traction from early customers and incredible feedback from members, we weren’t hitting the key milestones that would bring us to scale as quickly as we needed. And...we were running out of cash.

This put a real strain on the leadership team and beyond. We debated our next move — should we join forces with another high growth venture to scale our impact or rewire our team to raise a new round? A dwindling cash position can mess with your collective psyche, and our team had very different opinions on what we should do. With no track record of success, and no financial cushion, our confidence was flagging.

So much of the venture game is conviction. And momentum. And speed to execution. When any of those variables are shaken, your team can falter. When all of those are shaken, your psyche can also falter. 

Mine did, and I started listening to the doubters.

Seek truth, speak truth 

We needed help to find the right path forward. But from whom? I’ve found one of the hardest parts of being an entrepreneur is knowing who to trust, when and how. Especially with your investors. As a first-time founder, I knew only the basics: venture capitalists were a critical source of, well, capital.

For much of our early days we were afraid. In board meetings, we’d pitch to our board, instead of sharing a realistic snapshot of how it was going (not well) or what we needed help with (a whole lot). We thought this was our job. I feared the inevitable carnage that might happen if “they” were “let inside.” They’d jump ship if they understood the brutal truth, right? But, as time passed, I also began to struggle with presenting a rosy, united front alongside the team. I realized that if I was being honest with myself, it was clear that we didn’t have the right leadership in place. In one of the most difficult decisions I’ve ever had to make, I broke rank with my co-founder.

To muster up the courage, I consulted with my personal board of directors and a collection of mentors and friends who I trusted to be straight with me. Their advice? The only way out of this messiness was through it. Building trust required being vulnerable and speaking truth. I had to enter the arena.

I held a series of one-on-ones with our board and investors - Sam Brasch at Kaiser Permanente Ventures (KPV), Jon Callaghan and Adam D’Augelli at True Ventures, and Vinod Khosla at Khosla Ventures (KV). I quickly realized what we lacked most was a shared understanding of the reality on the ground: how we were operating as a team, the gaps in our execution, and market feedback on our future prospects. Hearing the honest truth wasn’t easy. I began to appreciate how hypocritical politeness is weaker than brutal honesty.

These conversations culminated in one fateful car ride.

The team you build is the company you build

I met Vinod at the Hotel Nikko in San Francisco and took a ride down to Menlo Park. With traffic, what was supposed to be a 30-minute drive took well over two hours.

We covered a range of topics from digging deep into why I’m so passionate about mental health, reviewing the key tenets that led to his team’s investment in Ginger, and the future that we both saw ahead. We talked about the real challenges with our current execution, tough changes we needed to make, and the tension between presenting a united front and doing what was right for our employees. We debated the merits of being acquired versus pressing down the path as an independent, private entity. Multi-million dollar exits and the feeling of missing out. Platform strategies versus singular-focused category killers. Having been at this since grad school with no liquidity or partial payouts. Matching our team to the new scope and scale of our mission. The impact tackling the mental health crisis could have on the collective world psyche.

Most importantly, we dove deep into how the company you build is ultimately a product of the team you assemble. We would need to nail our “who” if we were ever going to achieve our “why.” Vinod was supportive of our mission when others weren’t, and he stuck with us so we could get it right – for that I’m eternally thankful. And he reminded me that, sometimes, the obstacle is the way.

Ultimately, I reconvened the team and our board, and we made a critical assessment: we needed a new CEO that could scale the company. I stepped in for my co-founder as interim CEO to enable this transition and drive our search. I worked daily with Vinod, Bruce Armstrong and Kristina Simmons from the KV team, and Sam from KPV. In the age of WeWork and Theranos, I began to appreciate that the “Cult of the Founder” needed to be balanced by the right level of support, advice and governance. So much of what makes for a great founder, running through walls, can also prevent you from seeing those walls. Ultimately, I leaned hard into our values of transparency and compassion to make decisions with integrity.

Edit the gene pool for lift-off

Getting clear alignment around our ideal CEO profile took time and eventually led to interviews with over 30 candidates. Our criteria were “simple.” Find an experienced leader with high emotional intelligence, a get-stuff-done mindset, and strong product instincts. Those interviews tested my resilience, required me to put my ego aside and be open about past failures. Recognizing what had been built and making space for new DNA. I had the dual challenge of letting go and holding on to what needed to be preserved.

We worked with an incredible recruiting team from our board and Paige Kuderka at Daversa Partners. And, we continued to get financial support from KV and KPV, who held steadfast to our core reason for being and ensured the team could execute during this transition.

Our search lasted for well over six months until we found our top candidate, Russ Glass. Over pancakes one morning in a diner near SFO, we spoke frankly. Russ shared, “The only reason you’re not CEO right now is because you haven’t been one before. If we’re successful, I’ll help you develop the skills you need to grow as a leader, and as a person. I want this to be you next go ‘round.” That cemented my relationship with Russ as my mentor and my boss. 

When you find a world-class leader, it can have a transformative impact across the team. From day one, Russ set the right tone and led us in re-articulating our mission, vision, and values. He’s created an effective operating rhythm and strategic planning process. He’s built direct lines of communication with the board. And, he’s brought a relentless focus on hiring incredible talent. He pushed me to stretch, grow, and thrive in ways I hadn’t been before. And, he’s helped level up my own leadership through a period of hypergrowth. 

With the team we’ve assembled around the table, I wouldn’t bet on anyone else.

You first

The truth is that talking about a leadership change is one thing; executing on it is an emotional rollercoaster. As a founder, it’s especially hard because your identity and your company are all wrapped up together. After bringing on new leadership, my co-founder, who had served as our technical spark and brought incredible passion and creativity over the years, transitioned off the team. While these changes are certainly common at venture-funded companies, dealing with the mental toll around being “the survivor” wasn’t easy. After all, he and I had been to battle together for almost a decade, pouring our hearts and souls into the company.

I’ve also realized that you don’t have to go at this alone. Your board and venture investors can act as an extension of your team. They should expect you to be open and should be willing to do the same. The best ones maintain their integrity in the heat of the moment, and recognize when they may be wrong. Their unyielding support means investing capital even in the darkest of times. They can be founder friendly while still helping you make a tough call. They help you stay grounded in the here and now. That’s mindful entrepreneurship and company building.

I now understand engaging in brave conversations starts from within. Leading through uncertainty means taking care of yourself first. Being authentic and vulnerable requires operating from a place of strength. Because getting the right product and the right team is one thing. Keeping your mind right is quite another.

Read on for Chapter 3 - RESILIENCE: Founder Mental Health, Mindset and the Bounce-back Muscle and let me know what you think.