Since starting Meadow in 2014, we’ve only had one employee leave. When she did, it was at our encouragement (so she could start her own business) and she still remains one of our fiercest supporters and ambassadors.
When I state this fact to other founders they raise an eyebrow. Is it really possible? How?
Sure, we’re a small team and it’s a small sample size – but I’m still proud of our near-perfect retention and wanted to share some insights into how we’ve accomplished it.
Building a different kind of company
Meadow started as a team of 4; myself and my three co-founders. We are now 15 strong, and service over 100 dispensaries across California with software that powers their point of sale, inventory management, online ordering, reporting, delivery, regulatory compliance, and more.
My co-founders and I set out to build a sustainable company that would last for the long haul. Knowing that most startups fail in their first year, we knew we’d have to approach our process with strategy and intention. This was especially important when it came to hiring, team building, and retention.
Investing in employees for the long run
The average tech worker lasts between 12-18 months at any given job. The root cause of this trend is the short-term focus inherent in startups.
We believe that real value comes with time. It sounds completely antithetical to the norm in Silicon Valley, but I firmly believe that someone needs to work at a company for 1-2+ years to truly add value and realize their full potential. We, therefore, set long-term compensation and equity incentives, and focus on growth for the long haul.
There’s a honeymoon phase of any job where you’re trying to prove your worth and understand where people are in the value chain. After that passes, you eventually build up a very deep expertise into the whole ecosystem: product, roadmap, customers, partners. Most importantly, you’ll have enough history to understand how to position the company and product. Once you establish that robust foundation, that’s where you start to really add value.
And it’s a shame because a lot of compensation incentives are built around a one year cliff, at which point employees often leave to get more equity at another startup—and the cycles continue.
Our team didn’t happen by accident; it was the result of a slow and intentional process focused on establishing our company mission and finding employees aligned with our vision.
Most employees are trying to find a place where they can grow, learn, and work on something they’re passionate about—they want much more than a “job”.
In our case, our team lives and breathes cannabis—literally! Our mission is to build software tools that will create the foundation of a thriving regulated cannabis industry in California and beyond, and alignment to that mission is critical for finding a truly great fit. If you don’t believe in that mission, you’re not likely to be motivated for the long-term. Conversely, if you really buy into the mission, then seeing us succeed will only make you more invested over time.
Mission alignment can be fun too—especially in cannabis! Being able to enjoy cannabis with one another gives us perspective and appreciation for the work we’re doing and the community that we’re building for. When you consume cannabis with someone, it’s a very intimate, real, and vulnerable experience and encourages reflection and new perspectives. Our happy hours usually involve tasting and sharing the best oils, flowers, and edibles, which is a very different way of connecting with people.
Developing team chemistry
Chemistry allows you to get much more out of much less. When people develop rapport and trust, they can accomplish more than the sum of their parts because everyone understands what others bring to the table, which increases output.
Developing team chemistry requires time working with your colleagues on different challenges to establish trust and build muscle memory. When you undergo this process with several team members and you all mature together, something magical happens: you don’t have that communication gap because everyone’s in sync and knows how to act both independently and cohesively to solve problems.
We recently put on an industry event called Meadowlands that perfectly demonstrates the value of having a long-tenured team. We invited over 350 people in the California cannabis industry to a camping retreat in the Northern California redwoods. It was only possible for us to coordinate the event with our small team because we already had the experience of throwing over 200 events together.
This is why hypergrowth companies run into problems when they go on hiring binges: you can’t replace chemistry with warm bodies! Implicit trust and team chemistry only come with time and repetition, and enable us to take on more ambitious and diverse projects together.
How we find (and retain) the right people
A and B buttons
When hiring, I think about skills like a Nintendo game: A button and B button.
Your A button is your core skill: what you’re amazing at today, right now, that makes you special. Your B button is your accessory: not as strong or used as much, but a part of your skill-set that can grow and prosper if put in the right situation.
Everyone has an A and B. At Meadow, we try to have some overlap, but have enough diversity within our A’s that allow us to cover more territory. With that diversity, everyone is leveling up other skills that they didn’t necessarily have beforehand because you end up working so closely with one another rather than being in siloed roles.
To find people who align to the mission and have the right skill-set, we have a pretty rigorous interview process that we break down into 6 rounds:
Round 1: Resume. We review their skills and past work history, and how they believe those experiences can contribute to Meadow’s mission going forward.
Round 2: Alignment. We ask questions like: What do they want to learn? What do they want to share and what makes them dangerous? How do they think about cannabis and what is their comfort level in that space?
Round 3: Technical skills. We take a deeper dive into their area of focus, with an emphasis on past accomplishments and tangible future goals.
Round 4: Scenarios. We walk through different hypothetical situations to see how they would handle them.
Round 5: Team. We set up face-to-face interviews with the team to see if they fit well with our culture.
Round 6: Take home project. We give them a project directly related to the problems they would be solving on the job to better understand how they work and communicate.
Following Round 6 we also do references—but not like most companies. Instead of the standard “Hey, do you vouch for this person?”, we dig a lot deeper. We ask questions about how people work on a day-to-day basis—not just to make sure they’re a good fit, but to ensure that we fit with them.
Creating a flexible work environment
We believe in a flexible work environment that prides itself on productivity over facetime—and it’s only possible due to the implicit trust built up over time. As long as you’re getting your work done and are able to communicate with the team, you can work how and when you want. We trust our team to take time off when they need it and put in work when they need to.
We’ve had team members work from home, work from the mountains, and even work abroad. The result has been team members who are grateful for the flexibility and even more dedicated to our team and our mission.
Once you find the right people, they need to feel comfortable to thrive. A large part of our success with retention is owed to the way that we empower employees to be true stakeholders in the business and have a full contextual understanding of how other parts of the business operates. For anyone to truly excel at their job, they need to understand the full context behind who we’re building software for (our customers), and what they need.
Everyone on the team gets to meet the actual people using the product, see how the product makes their lives easier, and gets directly exposed to the feedback that we bring from in the field. Seeing the true impact of the work is very motivating!
Trust through transparency
One of our company values is transparency through over-communication, which makes our relationships stronger and collaboration more effective.
When communication among the team is strong and consistent, there’s no need to micromanage—it’s actually counterproductive! We have a culture of providing really honest feedback, constructive criticism, and constant communication about where we stand as individuals, as teams, and as a company.
A lot of companies follow the original Facebook mantra of “move fast and break things”.
We can’t do that in the highly regulated cannabis space. We can move fast, we have to iterate, but we have to focus first on stability. We think about development cycles on a quarterly basis, versus the two-week agile sprint methodology that’s quite prevalent in the Valley. From working in those environments, I know that these short cycles create an underlying sense of impossibility—which then leads to friction, stress, and eventually burnout.
By setting longer-term cycles, prioritizing work-life balance, and giving our engineers more time to build the best products, we’ve cultivated a sustainable environment where our employees grow.
Conclusion: Survive and thrive
In 2015, Meadow became Y-Combinator’s first cannabis start-up. At that time Justin Kan, founder Justin.tv and Twitch, was a YC partner and a mentor. I distinctly remember a Tuesday dinner where the topic came up about the success of his start-ups, and he summarized it with one quote: “survive and thrive.”
In other words, you don’t have to be the first one out of the gate; you have to be the last one standing. And when you look at many spaces, a lot of companies gained early traction: raised money, hired tons of people, grew fast. But most didn’t make it out the other side.
There is a time and place to focus on week-on-week growth, but what about 15% year-on-year? Then in 10-15 years, you’ve built up a monster business. And that success comes from a strong core team with people that are in it for the long haul. They’re being nurtured and supported and empowered to lead healthy and balanced lives—in their careers, and beyond.
Companies that survive have a core team that works together and supports one another—and that’s why they outlast everyone else.