From Burnout to Balance: Chris Savage's Strategies for Leadership - Mark MacLeod

June 26, 2024 - Marina

From Burnout to Balance: Chris Savage’s Strategies for Leadership

Check out my discussion with Chris Savage, the co-founder and CEO of Wistia, on The Startup CEO Show.

In this episode, we unpack the deeply rooted values that have shaped Chris’s company, emphasizing the importance of genuine connections, personal growth, and integrity in leadership.


In addition, we dive into the importance of personal branding in today’s social media landscape, with Chris explaining why CEOs should be building genuine profiles that resonate with their community.

Explore the Episode Transcript with Chris Savage for better insights

Mark MacLeod:
In this episode, I sit down with Chris Savage, co-founder and CEO of Wistia, a leading company in the video space. He’s built this company over the last 17 years, and in the early days they were on the VC train, but they bought their investors back. This is pretty fascinating and pretty rare. And the funny thing is, that he now works less, but his company performs better and he is more effective as CEO. We go deep into that, the buyback process, how to delegate properly, co-founder relationships, and so many more topics. I hope you enjoy this episode.

Chris, welcome to The Startup CEO Show. It’s a true pleasure to have you here today.

Chris Savage:
Oh, thanks for having me. It’s good to see you.

Mark MacLeod:
Good to see you. The last time we saw each other, the tables were turned and I was your guest. And I have to say, the whole premise behind your podcast is great, this notion of talking too loud. It’s not like I felt pressure coming onto the call, but that first question, what have you talking too loud, is just so disarming. And I’m like instantly talking about the thing that I love the most, which is just a great way to kick off a podcast. And so since you ask that question all the time, I just got to ask you, what’s got you talking too loud?

Chris Savage:
Oh, man, there’s so many things. I would say… Well, today’s Valentine’s Day, and we’re recording, I have two daughters who are six and eight, and they are really excited. So, got up early and made heart pancakes. We dyed them pink and it was just the joy on their faces, like the whole morning. We got to school early, basically, which doesn’t always happen. Yeah, and it was just great and exciting and fun, and I don’t know, they’re at fun ages, so seeing them get a lot of joy just brings me a lot of joy. What’s the point of life if you can’t enjoy these things? And so, yeah, just a great start to the day.

Mark MacLeod:
Amazing. I was going to go there at some point, but you kind of opened the door, so we’re there now. So the first time I met you in person, we were over in Scotland, both speaking at Turing Fest. Your wife came with you on the trip. You know, you’re making time for your daughters now. So I certainly had the impression that you were creating real space for family at the same time as you’re growing your business. Has that always been the case, or is that more of a thing now? Maybe talk about that?

Chris Savage:
This is such a good question. I mean, it was not always the case. I think when I first started the business, and for a while I told my wife, but she was my girlfriend back then, I was like, hey, look, I’m going to work more now, and then someday there’s going to be a big liquidity event, and you’re just going to see me all the time, every day. It’s going to be great, and we’re going to make up for the fact that we’re not spending much time together. And I kept saying that and kept saying that and kept saying that. And we started the business in 2006, and in 2017, we did our debt-funded buyback.

And it was actually at that moment… So my first daughter was two. I was trying to be more present at home. I had realized suddenly when my daughter was born, Zoe, I was like, wow, I have this other thing I want to do. I want to spend time with my kid. And I remember this feeling and this instinct of, like, I didn’t care if meetings went long before or if we sometimes were late to start. We’d be like, oh, we’re waiting on this person. And the first thing that changed at work was I was like, I have something else I should be doing, so I’m not wasting time. Like, I’m trying to get home by dinner. I’m trying to do that.

And that was the first change. And then it was when we decided to do the buyback, which meant we weren’t going to sell. There wasn’t going to be a big liquidity event right now. My wife and I had a big conversation, I was like, look, let’s just pretend. Let’s act like I did sell the business. What would I do? I was like, well, I would definitely take more vacations. I would take longer vacations. I would try to focus more on really being home for dinner every night that I possibly can, present with the kids in the morning, present on the weekends, and focus on presence with my family.

And I did that, and it worked. And of course, the other thing that came from that is that once you take real vacations and you tell people, like, hey, please try not to contact me. What I learned is every time I would take a vacation, especially if it was a two-week vacation, I would just end up getting fewer emails afterward. I’d be pulled into less stuff after. And it was like, people would just have to make a decision without you. And so over time, I realized, like, oh, this is letting us scale the business better.

Mark MacLeod:
It’s fascinating.

Chris Savage:
And so it’s like, this seems like a good deal. Be more present with my family, and spend more time with my friends, but also scale better, and have more growth for folks. And so, yeah, it was an explicit decision at an explicit moment to do that. And I think I now understand that building a company is really about… it’s just about people and what everybody wants. What the best want, I guess I should say, is like, they want to grow, they want big challenges, and they want to try things they haven’t done before. They want to take their skills and apply them to new situations, and delegating well, and having a really strong team, and that’s the secret to time. That’s how you get time back.

And it’s also the same thing of, like, if I’m present with my family and also if I’m working out and if I’m eating well, I’m a happier person and I can manage more stress, and so then I can manage more stress at work, and I think that makes me a better leader. But it took me a long time to figure out that putting yourself first in a lot of ways is how you can show up and be more present and available to your team.

Mark MacLeod:
Amen. Honestly, so good to hear that, because I write about this stuff all the time, because I deeply believe in it and I’ve lived both worlds. But it’s amazing to hear someone else hear it.

So, we’ve talked about a bunch of the positives that have come from that. You’ve created space for others to step in and fill your shoes. Did you have to lay the groundwork for that? Part of the reason why the founding CEO is always on the critical path is because nobody has more context, nobody has more motivation. You have all the information and all the values. Did you have to do things to share context to make sure people were living the value?

Chris Savage:
Oh, yeah. The truth of it is years of context sharing, years of delegation, and also, like, I mean, I was just talking to a new manager about this recently, and they’re like someone on their team is doing something, they’re not sure it’s the right thing. Should you let them make the mistake or not? The question is, how long-term focused are you on? If you wanted this person on your team in three years and you want them excelling, probably if it’s not a devastating mistake, especially if it’s a mistake they could learn from very quickly, let them make the mistake, and if they’re right and you’re wrong, great. And if you’re right and they’re wrong, then they could figure it out quickly. People tend to internalize things more when they’ve experienced them themselves.

And so a lot of that was like, what is our tolerance for mistakes and failure? And the boat analogy, I think, is a good one. Above the waterline, below the waterline thing, I don’t know if you’ve heard that, but if you’re making decisions or you’re making a call, and if it’s above the waterline of the boat, let’s say you break off part of the boat, it doesn’t affect you, you don’t sink. So it’s like, okay, yeah, keep trying stuff, and then hopefully you make better decisions over time and the boat’s not at risk.

But if it’s below the waterline, like, if it’s a decision that could hurt you for a long time. For a long time drag your business down, drag the boat down, then you have to be much more cautious. So the more important thing is figuring out what are the decisions that are truly catastrophic if you get them wrong and putting enough time, effort, and people into those decisions.

But the other ones, I think you can give folks a lot more freedom than you think. But I say that as, like, the moment for me when I started doing this ten years in, and I had a lot of context, a lot of understanding of the values. We had a lot of momentum. People understood what we were trying to do so it didn’t feel like there weren’t that many decisions that were below the waterline.

Mark MacLeod:
Right. Do you find that being a father has influenced how you lead? I’m just picturing that patience and benevolence to let people make mistakes, I feel like it has to be influenced. Like watching your kids instead of doing it for them, right?

Chris Savage:
It’s all connected, yeah. I think there’s a lot of leadership, which is just leadership if you’re at home or it’s leadership if you are at work. I think a lot about how it’s really easy to see with your kids that actions do speak louder than words. So if I tell my kids, hey, you’re not going to watch anything today. And then I watch something or I’m on my phone, they’re like, but you’re on your phone. So why are you able to do that? Why am I not? And you could try to be strict, but they instantly pick up on the difference.

And so also, for example, things that I’ve been into over the years, like rock climbing, especially, like, there was a rock gym close by, lifting weights, going for runs outside, whatever. I didn’t tell my kids, hey, you need to do any of this stuff. They’re not lifting weights. But I didn’t tell them, you need to do this stuff. But they’re like, oh, I want to go rock climbing. I want to do that thing. Because they can tell it’s important to me.

So their brain is saying, like, hey, maybe this might be important to me also. The same thing happens at work. In fact, I think as your company gets bigger, even more of leadership is just actions because people can never get enough context. They can never know enough of your thinking or the details. They can’t get enough time, so everyone’s looking at actions, trying to decide what’s permissible and what’s not.

I’ll give you an example that just happened yesterday. That’s like a cultural, societal example, which is, I don’t know. Did you see this video of Mark Zuckerberg talking about the Vision Pro? So, Mark Zuckerberg, CEO of Meta, has all these VR devices, Metaverse, blah, blah, blah, the Quest, and they’ve been really in front of this thing. But Apple just launched their first VR device called the Apple Vision Pro. The Apple Vision Pro costs $3,500, and the Quest 3 costs $500. And Mark Zuckerberg released a video of his, quote, honest take on the Vision Pro. So it’s a competitive product from Apple. And he released, like a four-minute video of him just talking in, talking about the good and bad stuff, as you would imagine.

Mostly he just says his thing’s the best. But it is shocking to see a CEO of a company that size give, like, an authentic take on a competitor’s product. I don’t know that I’ve ever really seen that. And I guarantee you we are going to see more CEOs and leaders do this very quickly because they’re going to be like, oh, I feel like I have permission.

Because if Mark Zuckerberg can do it, and he’s celebrated for doing it, as the CEO of Meta, why shouldn’t I give an honest take and reaction to my competitor’s products myself? We’re just going to start to see it. And it’s just, he’s not telling anyone to do this. He’s not saying, hey everyone, this is how it’s done. He’s just releasing this one video, and I promise you we will see more people who copy this approach because actions speak louder than words. He doesn’t have to tell us to do it this way. People will say, oh, if the culture accepts it, I should do it too.

Mark MacLeod:
Yeah, I love it. Yeah, and whether that’s a fully objective take or not, we can leave that for others to decide. But there’s an era of authenticity. It seems somewhat…

Chris Savage:
That’s what people like.

Mark MacLeod:
Yeah, exactly.

Chris Savage:
And I think they know he’s of course biased. But if he says this stuff is good, or this is why I think our product is better in XYZ way, you just don’t normally see that. I’m even thinking of other very combative CEOs. You don’t normally see them get into that detail, talking about their competitors. And so that is like, if more people start doing it, that would be a cultural change that would come from this, which would be interesting to see. It’s a very different thing.

Mark MacLeod:
I love it. Going back to the balance and creating more space for a moment, I think the multimillion-dollar question I have is, has creating that space, making the heart-shaped pancakes, and having the time for that come at the expense of business performance?

Chris Savage:
I think it’s the opposite.

Mark MacLeod:
Amazing.

Chris Savage:
Yeah. I will say, I’m not trying to say if you’re a two-person startup that you can’t delegate, you have to just work like crazy. And I did that, like, work like crazy to figure it out. I think you should do whatever is the best thing for you. But I can say that one thing we often underestimate is persistence and what it takes to set ourselves up to be persistent.

And so for me, I can tell you, if I was feeling completely burnt out all the time, there’s no way I could stay at this problem, these problems that we’re working on for this long. And I would also say another thing is we can’t control usually the market. The market is moving and asking for what it wants at different points in time.

And I will talk about the example of Wistia like, we started in 2006. Let me tell you, we were early. We were way earlier than we thought we’d be. My data today makes me believe that our market is more early stage than it’s ever been. Because COVID changed people’s expectations for video so much that you can show the background of your home. We are used to seeing inside people’s homes. We never used to see that everyone sees their computer as a camera. So expectations for how you use video have changed more than ever.

And we’re just at the very beginning. Does the market care that I’ve been at this for 17 years? No, it doesn’t give a shit. They just want better tools that are easier to use, that are faster, that enable them to do things they couldn’t do before with the stuff that’s available today. And so I think a lot of us, it’s too easy to have a “me-centric” view of the world when you’re building a company like, well, I’ve been at this for a while, so it makes sense that this is going to connect at this moment.

The truth is you might get lucky and it connects instantly. You might not get lucky and it takes a long time, or you could even be too late for it. But I think in any of those cases, it’s often just like the persistence that stops you. And so if you don’t have sustainable working habits, you’re not actually delegating if you’re not taking care of yourself, or my favorite analogy here is like the oxygen mask idea of like you get on the plane, you put the oxygen mask on yourself first if there’s a problem and then your kid, even though your instinct as a parent is to put on your kid first, that’s what you think you should do.

Because it’s like, well, they’re the higher risk, but yeah, if you don’t put it on yourself, you can’t get off the plane when it lands, they can’t put it on you. You have to put it on yourself first. So yeah, I think it has just driven way more performance because you end up building more systems, and you end up having more people step up as everybody does this. You need to have, I believe, an environment where people aren’t getting burnt out, that they’re excited about what they’re doing and they can be creative. And it’s like, again, really hard to be creative if you’re tired. And so there’s just really simple things like if you are living so unsustainably you can’t sleep well, guess what? You’re not going to be on your A game. And that’s going to set the example to everybody else that they don’t need to be on their A-game either.

Mark MacLeod:
I have a year-to-year grin. Honestly, for anyone who’s a potential client going forward, I’m just going to send them this podcast because this is everything that I believe in. And so often when clients show up, they’re completely burnt out. They just can’t move forward anymore. And yeah, it’s almost impossible to create when you’re stressed out. So yeah, this is music to my ears.

Chris Savage:
I mean, I know personally I could probably easily tell you ten entrepreneurs that the reason that they sold or the reason that they stopped even though they had success was just that they were burnt out.

And I think we don’t understand what the cost of that is because it’s not just stopping on the startup. I’m not talking about just the money you would make. You’d make more money, right? Like you’d make more money if you stayed out longer and compounded more. That’s how things work. If you’re growing and you compound it, that’s where you get the returns.

But actually, I’m talking about happiness, which is like a lot of those people were so happy when they were building. And we underestimate the joy you can get out of creating stuff if you’re the type of person who wants to do that.

And so when I look at my job today, I’m like, man, if I knew that I could have a job that’s super creative, where we get to try things and learn them pretty quickly because of the size of the audience. If we are successful with something, it changes people’s lives and it can change people’s lives at work, and we underestimate that. Like, we’re talking about not being burnt out, but there’s a lot of people, like, I want more time to work on this other project, or I want that promotion, or I want to grow this thing so I can hire more people. Or like, changing someone’s life at work actually matters.

And so, I’m just so motivated by this that I just love this job. And I think a lot of people love the job and they talk about how it’s so fun when they’re just getting traction and then scaling, they get burnt out. And actually, with the right long-term view and the right balance in your life, you can look at those things and it can still, as I’m talking about it, feel early stage and exciting and creative, and then you could sustain it.

And that’s just a great job for a lot of us. And so that’s what makes me sad is people I know who loved what they were doing and now miss it. And yeah, the grind at the beginning or getting lucky on timing, that stuff’s hard to repeat, so it makes it harder to jump back in the deep end again and start over.

Mark MacLeod:

So much good stuff here. I’ve often felt as an operator and investor that the single biggest element in startup success is timing. You could have a great team and a great product, but if you get the timing wrong, you won’t get the outcome. So that’s definitely a theme that you’re talking about.

And as a guy who sold a lot of startups, that is the number one reason why CEOs want to sell, number one. And theoretically, they could replace themselves and it’s an asset that could go on without them. But there are two problems with that. One, their identity, for better or worse, is completely wrapped up in the thing. Second, just practically, their shares are illiquid. So unless there’s some sort of liquidity event, how do they put food on the table? Because they’re not going to get a job, they’re going to figure out what the next thing is and they need some kind of cushion.

Chris Savage:
Which makes sense. And I think that those are real reasons. Like you put a ton of time in, you’ve built something of value, and it is, we’re dealing with an illiquid asset class by default. So figuring out your way through that, that does make sense. And I know many people who have sold for that exact reason as well.

I think that’s why it’s interesting. The last couple of years have been interesting because I have paid more attention and learned more about interest rates than I ever wanted to. And I think the whole industry has realized how tied up we are in this. But one thing I think about that I don’t know if it’ll happen, but I think it’s interesting is there’s been a lot more investors right at the end of the bubble that got comfortable with later-stage investing and getting liquidity for founders and doing that to let them keep going. And I hear from folks that that is still happening.

But I also wonder about resetting expectations with the public market. The general thinking today is that you have to be pretty big to go public with a very stable growth trajectory in front of you. And I wouldn’t want to go public without having that. But it used to be the case that smaller companies could go public, and when that was happening, that actually was good for the public because people could invest earlier. And it was also good, I think, for the founders and employees, because if they had something stable, they could get some liquidity in an ongoing way without having to give it all up. So I don’t know if there will be other solutions for folks to figure that out. But that’s another interesting kind of interesting thread to pull up.

Mark MacLeod:
Yeah, in a world where you kind of want to keep just going in perpetuity as a standalone business, it does make you inevitably think about the public market. Something I gained a much deeper appreciation for when I was writing my investment bank was how many layers there are in the private markets. Venture capital kind of sucks up all the oxygen. They’re the ones blogging, tweeting, and speaking at conferences.
But there’s 2 trillion of dry powder in the mid-market private equity space. And there are some folks that want to buy you at $10 million, some at 50, some at 100, some much bigger. So you can sort of keep resetting the clock if you’re comfortable with kind of a private equity type majority investor. I think the big thing that’s missing is some kind of structured secondary market for privately-held shares which Carda tried to create with no permission and got their hands on.

Chris Savage:
That big oopsie there.

Mark MacLeod:
Big Oopsie. But that’s a missing piece because they are not for the faint of heart.

Chris Savage:
I agree. I agree with you. I think that some kind of more robust secondary market that even if it was like, hey, you’re going to provide ‘X’ financials once a year and there’s this pool of capital that’s going to come in, they understand the terms very simply of what they’re getting in there. Something like that. If it was more programmatic, I think it would have a huge impact.

Mark MacLeod:
Yeah, huge. I’d be on both sides of that. I would kill to be an investor in Stripe. I’ve tried to figure out how to get in there for a long time and I’ve got investments like my oldest angel investment is 15 years old. I sure would love to get some liquidity on that.

Chris Savage:
And I think that one of the challenges a lot of people have is they raise money, they haven’t done it before. They see that as the win versus the ticket to play the game. And then you have all these folks that are on your cap table that have different incentives at different timelines.

Mark MacLeod:
That’s right.

Chris Savage:
And so without being able to remove the pressure, the simplest way is often to sell. And that also can to the points we were talking about before, sometimes you might see the future in front of you as very bright, but to have the resilience to say, I am not going to sell at this moment because I believe in ten years can be that much bigger and people are like, but we’ve been in 15 years.

And so I do think that the right way of aligning folks there and getting folks liquidity would just much more easily align the people on your cap table. And I think a lot of companies would have more of a shot at being independent.

It’s funny, we’re getting into this conversation because I decided not to sell, not planning on selling right now. We haven’t raised venture capital, so who am I to talk about all this stuff? But I’ve thought a lot about it because I’ve realized how important it is to get incentives right on every front. And it pains me when I see companies and people because companies are people that are just like working on something and they’re excited about what they’re doing and then they can’t do it anymore.

And it often pains me because it’s just like these markets are so big, so much of this is still so early. And I don’t know, I want more people to be able to build companies in ways that they’re proud of. I think we can build companies and cultures that we’re proud of, and I think that those actually can be the companies that win. And I think more examples of that are just like a good thing.

Mark MacLeod:
Yes. You can’t A/B test the exit decision, right? I was CFO for a scalable storage company back in the day, and we sold it for a 10x return. Bought my first house with my option proceeds. Facebook was growing like crazy, and as they were building out their server farms, we were putting in the storage for that. We were growing linearly with them. We could have kept going for a long time, but we got a great offer and we sold. So you’d never know what it could have been if we kept going.

So, switching gears often when I speak with… The reason I only coach CEOs of at-scale technology companies that have raised either VC or PE is that I do it because I always tell them that once you take that money, you’ve begun a one-way journey to deliver an outcome. Yes, there’s no turning back, but you turned back. You did a U-turn along the way and bought your investors out. And I’d love it if you could walk us through that journey because it’s pretty unique and I’ll bet you there are a lot of lessons for people.

Chris Savage:
Yeah. So basically 2017, we had the opportunity to sell the business. We’d had three different companies approach us about buying the company, all companies I respected. And we’d had people approach us in the past just poking around. But we were just like, no, but this time my co-founder, Brendan and I were like, all right, let’s have these conversations. Let’s see, three at once, seems like there’s something here.

We have the conversations get into the place of getting offers, look at the offers and they’re real offers. Like, they’re big numbers. And as I mentioned before, we’re about ten years into starting the business at this point. So we’ve been at it for a while and we’ve started to take these offers seriously and start thinking, like, one offer in particular. Like, what would we do if we sold the company? And we’re talking to the folks at that business about what would happen if we got there. And they’re like, well, the truth is you guys are entrepreneurs. Are you going to stick around here? Because I was trying to come up with this big thing that we would do that would be new.

That was what I was excited about. And they’re like, no, are you going to do that? You’re just going to start your own thing in two, like, really listen to, like, that’s probably true. And so then Brendan and I started talking. We’re like, well, what would we do? What would you do? What would I do? It’s like, well, if we start another business, like, we would work together. We feel like we have a unique partnership. We have built our values together as we’ve built this company of understanding in every sort of business decision. I almost always know how Brendan’s going to go, and what he’s going to want to do. He almost always knows what I’m going to do. That’s not 100% true, but it’s true. Very true.

We felt like the video space was changing a ton at that moment. And we’re like, is the beginning of being able to make videos with your computer, like where you record and stuff. Like, okay, this is going to have a huge change. This feels like a similar scale change to when we started the company.

So then who would we hire? We start making a list of employees. They all work at Wistia. We’re like, what type of customers will we focus on? Like, oh, we’d be a small, medium-sized business. What values would we uphold? We’re like, well, we’d take a very long-term approach and we’d try to make sure we give ourselves permission to be creative because that’s what stands out, and that’s what’s different. That’s how you get the alpha. That’s how you get a better return.

We’re looking at each other, and we’re like, wait for a second. If we sell, we’re talking about rebuilding Wistia. Why? Why are we saying we should rebuild it? And I look at Brendan, I’m like, “Are you happy?” And he’s like, no. He looks at me, he’s like, “Chris, are you happy?” I’m like, no. Like, why aren’t we happy? Why do we want to rebuild the company? And we realized that actually, we had, a few years before, kind of changed how we were running the business, and we switched to an approach of growth at any cost.

And that was because we’d gotten so much advice from other entrepreneurs about how we were doing. I’ll give you some numbers. It was a moment we did 10 million in revenue one year, and we had 3 million in EBITDA. And we thought that was pretty cool. We’re like, look at us. We’ve only ever raised 1.4 million in angel money, and we got 3 million in EBITDA in one year. Isn’t this amazing? And everyone I talked to was like, you guys are idiots. You could be growing much faster. You shouldn’t be profitable. It’s way too early to be profitable, blah, blah, blah. Which is general advice, like venture capital advice, right? But everyone I talked to said that.

And Brendan and I started to question ourselves, and so we decided we weren’t growing enough. We should be pushing harder. And so we started running negative. And because we’d been profitable for a few years, we’d saved up cash, so we used our own cash. It’s like we switched into venture mode.

But the problem was when we did that, we had tons of great ideas, I thought, and instead of asking when we had a new idea for something to do, is there something we’re doing that we should stop doing? Is there something we’re doing that’s not working, that we should take the person who’s on that, put them on this new idea instead of asking that question we just hired and grew and said yes to everything. And so then we ended up in this problem of, like, we are running negatively.

We had improved our revenue growth rate slightly, but not much. And it felt like we had a lot of zombie projects of things that were just continuing, but, like, lumbering and not making progress. We lost focus. And so we looked at each other, and we’re like, all right. Instead of selling. Let’s fix the business. The first thing we’re going to do is we’re going to get back to being profitable. We believe if we’re profitable again, it’s going to be much easier for us to be long-term focused because what ended up happening when we were losing money is that every month that went by, we’re losing money.

You now have, like, a time to live. You do the time to live math, and if your math is off, you might think you have 18 months. And then suddenly revenue doesn’t grow as much as you’re expecting. And you don’t have 18 months, you have eight months. And are we going to stay like this or not? Without meaning to, everything became short-term focused. And when it’s short-term focused, if something doesn’t work, it’s really stressful.

And so sometimes you try something, you do it for two months, and you think, fuck, it’s not working. We need to adjust, and then you stop it, you try something else. And a lot of times, that thing actually would have worked if you’d stayed on it. So you’re, like, distracting yourself constantly in this kind of, like, constant thrashing churn mode. And so that’s why we were so unhappy.

So, we decided, all right, we’re going to be profitable long-term focused, but we think we need to realign with our investors, because our investors have been in the company for ten years, and they want us to sell. They want a return. So that led us to this idea of raising debt. And debt would force us to be profitable.

It was just like, we’d have to be profitable. And we also believed if we were profitable, that we would get back to being long-term and that we would perform better. And so we, during the summer of 2017, figured all this out, said no to the deal, told the company that we decided not to sell the company and that we’re going to go in a different direction.

Mark MacLeod:
Have you told them previously that you were thinking of that?

Chris Savage:
We went to them and said we had some offers to sell, and we decided not to do it. And they said, what are we going to do? And we said, we don’t know yet, but we’re going to tell you as we figure it out. And then the next month went by, we’re like, we think we’re going to do a debt deal so we can do a buyback. And they’re like, wow. And then the next month, we came back, and we’re like, all right, we have a partner that’s going to happen with this, and we’ll give you the details soon. And then maybe two months later, we did what’s called a tender offer.

And so all employees and every investor got the opportunity to write in at a specific valuation. Like, how much of their shares would they want to sell? So, it’s like a liquidity event. The way it works is you can’t market it, so Brendan and I said, this is going to happen. Then we walked away, and we hid. And our COO and VP of Finance at the time communicated everything to everybody. And you can’t talk to Chris and Brendan, they can’t give you any advice.

But everyone got the same 60-page packet of the deal, our forecast, our recent financial blah blah blah. And then on the other side of it, we had bought back control, converted, preferred to common, so our shareholders who stayed in knew that they would be aligned with Brendan and me. And then we could focus on getting the business profitable so we could serve the debt, and we could focus on being long-term.

Mark MacLeod:
Amazing. That’s wild. So, I have to say, probably while all that was playing out. So when I was running Surepath every quarter, we would put together a list of our ideal clients. And Josh, who ran my San Francisco office, said, we have to go after Wistia, and I’ve got to figure out how to get in front of Wistia. And then we were just trying to figure out how to get in front of you. And then we heard about this deal. So it’s pretty wild. Did you use a banker for all of this?

Chris Savage:
No, we did it ourselves.

Mark MacLeod:
That’s impressive.

Chris Savage:
Yeah, it was cool. I mean, I feel like I learned so much through that. And the question I often get right after we start talking about this is like, what did you do for the team going forward just so people know that we introduced profit sharing, we were on track to do negative EBITDA of 3 million in 2017 before we made the change. And we slowed down, we focused our efforts on marketing, we focused our efforts on the product. Revenue growth increased in 2018, with the team size shrinking because we had attrition, because people got liquidity, and some people left because of that, and we just slowed our hiring. And we had 6 million in EBITDA in 2018, the first year following the buyback.

So a $9 million swing in a year, which was crazy. And then we used profit sharing as a way to incentivize everyone so that they all knew what we were trying to do. And then, actually, I’m a believer, and you go hard at stuff when you see it, and that’s how you learn faster, is like you go hard and you understand, does this work, does this not? And you understand in like a year or two as opposed to like five years.

So we were on our merry way doing this. And then, as I was talking about before, our market changed so much, it felt early stage, that in early 2021, we decided to dramatically change our product and expand it dramatically. So, from really like a hosting and management analytics of video to including creation and editing and live broadcasting. And, as we did that, we felt that the market was early stage. We knew we needed to grow the team a ton, so we grew the team a ton, which meant we brought EBITDA down.

So we invested ourselves back into the business. But then we also introduced equity again because we felt that the market, if we believe it’s early stage and there’s that type of risk in the market and there’s that type of upside, we want the team to be aligned to that.

So we did the buyback. We then eventually introduced equity back. We still have a bonus that’s kind of like profit sharing that’s more tied to revenue than it is to specifically EBITDA. And then the final piece of the story, because there’s so much to it, is that we ended up paying off the debt that we did the buyback with last year. So we’re debt-free at this point.

Mark MacLeod:
Thank God, because we’ve gone through a pretty serious increase in interest rates. (Laughs)

Chris Savage:
We had a fixed rate, we were very focused, and our fixed rate was really low. Actually, it’s four and a half percent.

Mark MacLeod:
Amazing.

Chris Savage:
You might be like, why did you pay it off? But it made sense at the time, given the, actually the banking.

Mark MacLeod:
So good that you did, honestly.

Chris Savage:
Yeah.

Mark MacLeod:
I have a couple of private equity-backed clients that are successful businesses, but the debt-servicing burden is crippling them.

Chris Savage:
It’s amazing. So now we have so much flexibility, and I think we have the right incentives that everyone is aligned and understands what we’re trying to do. And all these new things that we’ve launched are all working and scaling and it’s super exciting to me. It honestly feels like it did in 2011, and 2012, where we were just starting to go. That’s what it feels like again today.

Mark MacLeod:
I have to say. I’m guessing the word profit is just like a strange concept for so many people tuning into this. We just have this default assumption that we’re supposed to burn our way to greatness. I love seeing a counterexample to that.

Chris Savage:
I think it just gives you rigor. Like, rigor to evaluate investments, and rigor to maintain them too. We always talk about that and I think you’d be surprised how decoupled they can be, profit, and growth.

Mark MacLeod:
It’s wild. Do you find you’re attracting a different demographic of employees?

Chris Savage:
We certainly, once we did the buyback, got a different demographic of employees. We had a lot of people who had been in growth at all costs, companies that didn’t work and they were looking for the sustainable route and it got much easier to recruit after we did the buyback.

That was another thing. People like, how are you getting anyone to join you? I was like, we started getting way more applicants once it was… I mean, you have to stand for something, I think that’s the thing. It was clear to people that we stood for something and we’d put our money where our mouth was. And so then it was like, well, Chris and Brendan are really in this thing for the long haul. That’s going to be a different type of work environment.

And it’s shifted again because of going remote. And so we have access to way more talent. And then it shifted again as we saw our market as an early stage and have found a lot of people who have been at very successful companies in the past have been a part of that growth journey. And they’re like, they are excited to be at Wistia to try to propel a ton of growth, but to do it in a smart and clever way.

Mark MacLeod:
Right. Was 37signals a role model for you at all as you were thinking about this new way?

Chris Savage:
They were a role model for sure. In the early days, I remember reading… God, what was it? The getting real or something? I think, or something like a PDF. And I think seeing what they were able to do with a very small team was always really inspirational. I think at some point I realized that a lot of building a company is you create these value systems or religions, religious beliefs, and their religious belief around staying 37 people, which there was a religious belief they had for a long time and that that was the best way to go.

I remember thinking that it scared me almost of having a company that was a lot bigger. And then I remember at some point thinking how silly that was because there’s a lot of things where it’s not more work to have more people. It’s often less work because you have more people as we’re talking about before they go deeper into other problems and take them on from you. I think they’re very good at marketing their way of doing business, but I don’t think it is the way for everybody, just like my way is not.

I hope when people listen to this, they’re just picking the things that align with their values and make sense. If you’re going to take any advice from this, I think that’s what everyone should do.

Mark MacLeod:
There’s no one way. Otherwise, someone wouldn’t have written the book and I wouldn’t have a business.

Chris Savage:
For some reason, I’m really on this kick of like, there’s a lot of building a business, there’s the right long-term things to do, and then there’s the short-term hacks. And it’s the same thing as trying to get in shape. We all know what it’s supposed to take to get in shape. You eat right and you work out and you sleep well. If you do those things, you’re going to get in shape. The hard part is doing those over a long time, doing them consistently.

And I think the same thing happens in business all the time, that people are looking for growth hacks or they’re looking for something to go viral or whatever, they just stay on the hacks just like the fad diets, basically, and it never works and they can’t sustain it. They’re like, why am I not growing? And it’s like, well, the long-term thing you have to do is build things and bring them to customers and ask customers if they like them and actually listen to them and then change based on what they say and you continue to do that over and over and over.

And you just have to do that in a space that’s big enough that you believe that you have some unique approach. And it sucks sometimes for a long time. And so the way to make it not suck is like, work with great people, have it, be thoughtful, have balance, blah blah blah. And as you do that and figure out doing the right long-term stuff, ultimately that’s how you end up driving real growth and you get into shape or you build a successful business. But sometimes it takes a lot longer than people think. And so I think that’s why the incentives and how you get the work done matter a lot.

Mark MacLeod:
So you’re in two relationships, you have a marriage that has lasted a long time, and you and Brendan, and probably in a world where you were in offices, you probably spent more time with him. Maybe it’s less so now, but what do you guys do together to kind of make that relationship work? How do you explicitly work on that co-founder dynamic?

Chris Savage:
It’s interesting, I said before we figured out our values together. And I think that’s just like, once you have enough really hard experiences with somebody else that are disparate enough, you start figuring out, do you agree in the hardest moments or can you get to agreement in the hardest moments? And I think because we started this so young, and honestly, we were fortunate that it was slow going at first. We had a lot of those really hard moments and we figured it out together. And we internalized the lessons from those that were the same. The great irony is that when we were in Brendan and I spent more time working together today than when we were fully in-person.

Mark MacLeod:
Oh, wow. Okay.

Chris Savage:
We realized that pretty quickly because our offices… You know, we would both be in a lot of meetings and walking meetings and just constantly chatting with other folks. And we always felt like the two of us could find time later. So we should let ourselves be available to other people as much as possible. And then I remember right when COVID hit, we weren’t remote. Suddenly, Brendan and I could Facetime each other the second another meeting ended or call each other or go for a walk or whatever. And we were talking more, actually. And so he and I, we have maybe 4 hours a week blocked just for the two of us.

Mark MacLeod:
Amazing.

Chris Savage:
And we rarely have an agenda. It is just like, what’s on your mind? What are you seeing? What’s working, what’s not? Sometimes it’s using our product and looking for bugs. Sometimes it’s using competitive products. Sometimes it’s using things in different industries. Sometimes it’s playing. It’s all different types of stuff. And I think one thing that I’ve realized over time that was not obvious to me at first was we were best friends going into this, and we prioritized our friendship.

We said, our friendship is really important. And I know that’s, like, counter to a lot of advice, which is like, don’t get into business with your friend. The thing that happens if you’re in business with your friend or you’re just in working with people you really like is if you really like working with people, you want to give them feedback when stuff isn’t working And I think that simple thing really matters.

And I’ve unfortunately seen it when you don’t have people you like or you just don’t naturally get along, if you need to give someone hard feedback, it’s like, do I really need to give it to them? Is that actually the most important thing? Or let’s say you don’t work close to someone day-to-day, but once a month you spend an hour with them and they always annoy you. Are you going to give them feedback about how you work together?

Mark MacLeod:
You’re just going to avoid spending time with them.

Chris Savage:
Exactly. But that’s bad because that hurts teams and overall hurts the company. So if you actually like someone, you want to give them feedback because you care about them and you want them to do better. And so I think that’s been part of the magic is that Brendan and I just like we let it rip. Like, if he does something stupid that I think is stupid or I disagree with or like I tell him and he tells me, and it was funny, I had someone on the team who knows us well, ask us if Brendan and I do reviews for each other. And I laughed and I was like, oh man, you should see our reviews.

They are just like letting it rip to a thousand percent. And that, I think is why our friendship is so good. Because we trust each other to say what we think, both in work and life. And I think it’s also back to culture and leading by example. I think that’s kind of happened in business where people will care for the people they work with. We invested in that. We do off-site and all these things to bring people together when they’re not working. And I think that adds up to more feedback. It’s hard to tell, but I think that’s what’s happening. And I think that’s part of the magic of Wistia.

Mark MacLeod:
Will you two hang out socially? Like, do you get together in the evenings or weekends ever?

Chris Savage:
Yeah, get our families together, go to the trampoline, park, skiing, dinners, all that kind of stuff.

Mark MacLeod:
I’ve seen situations where when there’s such a close founding pair that it’s super positive, it’s magical, but it also results in a two-layered leadership team. There’s like the founders and everyone else, and often the founders show up having sort of predecided. I’m wondering, do you have that dynamic? Have you worked to avoid it?

Chris Savage:
I would say that the truth is, like, we probably have that dynamic in some ways and we’ve tried to work to avoid it in other ways. I think the buyback made it clear to everybody. Like, okay, these guys, they’ve risked everything to build this company. So if you came in here, you know what you’re getting. You know, it’s like Chris and Brendan.

Mark MacLeod:
You’re now the literal owners. You always were, but you’re just the owners now.

Chris Savage:
Yeah, and so people get that. But also we want to get to the truth and we want to get to the best answer. And I know that Brendan and I are not always going to get to the best answer, especially if we’re by ourselves, especially if we don’t have the data from everybody else. So we’ve tried to be pretty explicit in terms of what the decisions are. It’s almost like the way I think about it is we have a board, it’s Brendan and I and one outside early investor who we asked to come back on and say, like, hey, we want you to represent the shareholders. So we’re very aligned. But Brendan and I have our roles as like, board members managing the business and then we have our roles as operators and we see those as different roles.

And then within our operations, we have a tech leadership team, we have a go-to-market leadership team, we have a finance leadership team, and we’ve been pretty explicit about what are the things that these teams own and how they work. So I would say it is not a situation where people, they don’t just jump to Brendan and me and be like, just, can you make this call? Like, the system is open, and hopefully, people understand how it works. Such as like, if you have a big thing you want us to change and go to market, you know who to go to to ask the questions, suggest the idea, or pitch the thing or the same thing on the product side. And that seems like it has worked super well.

And so it’s like delegating ownership so clearly that then the stuff that’s left is like the hardest stuff, the longer-term stuff, like the overall investment level questions, things like that which I think it makes sense that it’s coming to Brendan and I. So I wouldn’t describe it as a two-layered leadership team.

I would say people know that founders have different roles and that is the case. And they also know that we’re the owners, so they treat it differently because of that. But I can see that problem happening and in the past, I think we worked hard to avoid it. But I also think just being transparent about how it works is helpful, usually.

Mark MacLeod:
You do have a different context here since you are the owners. Sounds like you’ve been very thoughtful about it. So we began this conversation talking about your podcast. And as we start to wrap it up, maybe I’ll go back to personal branding. Seems to be a thing — you have a podcast. You know, what are your thoughts? Is this a thing CEOs should be doing? What do you think about that?

Chris Savage:
Yes, I have a podcast, and I have become much more active on LinkedIn and Twitter in the last couple of years. I was active in the early days because it felt like I didn’t know what I was doing. I was just kind of like sharing along with what was going on, and it was kind of exciting.

And then a couple of years ago, I asked myself the question, what can I do that no one else can? And I was like, I can tell the company story in a way that no one else is going to. So I started posting on LinkedIn, and I had a few things take off, and I was like, oh, I remember this feeling like, I can do this. And it’s actually like community building and bringing people in and so it’s something I like doing.

I’ve also effectively been media trained because I have done so many podcasts and so many interviews and so many journalists, so many talks, so many things. I was like, I know how to do this and I enjoy doing it. I get energy from it. So that seems like a good match. Like, I like doing, it seems unique.

So that’s what caused me to start doing it a few years ago. And then the thing that I’ve realized is that there’s also a cultural change that has occurred. And the cultural change is actually kind of wrapped up in what we were talking about before of like, we’re seeing inside each other’s homes, or you’re on TikTok, you’re seeing people all the time having extreme, not necessarily true, but feeling very authentic, feeling experiences.

And we just have a belief. I have a belief that is that more and more we want to connect not just with a brand, but with the people in a brand. And that’s something we’ve always done at Wistia. We’ve always tried to be very people first because we figured out that having videos where you feel like you have a relationship with someone on the video, it moves the needle. It really does. If there are two products that are the same, you ever feel like you have a relationship with the person, one product, you go with that. That’s business. We know that’s just how it works.

But we started to realize, hey, the biggest companies in the world, they do a ton of PR around people in their businesses because then you take the values of that person and you apply it to the business. And, you know, Apple is the easiest example. Steve Jobs, innovator, creator of product, incredible marketer, blah, blah, blah, so when he had product launches, we were ready for it, excited for it. Like, what will we see? One more thing. Surprise! He’s like a showman, all this stuff. And you expect that in the Apple products and the packaging and the messaging and all that stuff, and he’s kind of a dick too. And you expect that and all these things.

And then you have Tim Cook, who’s like the operator, and is an incredible operator. And so of course, now we pay more for the AirPods and the accessories and you just take the person’s personality and you apply it to the business and it’s helpful as a way to differentiate and understand and try to guess where the company is going to go, which I think is something we’re always implicitly doing and in subscription, always doing.

Like, if you’re becoming a Wistia customer today, you’re not just getting what we have today, you’re taking a bet that in the future, the products we build are going to be better and save you more time, because switching stuff sucks. So if you can understand and have a relationship with me, and that means you feel like you better understand and connect to Wistia, that is valuable.

And I think that’s a big trend that we’ve been on. And we’ve seen in the data that organic reach for individuals has changed dramatically from that of brands. So, Wistia used to get way more organic reach on Twitter and LinkedIn, and you have to pay to get reach now, that’s just kind of how it works.

Facebook did this back in the day. Used to have a Facebook company page. Everything you posted they saw, then they just slowly over time switched it so you have to pay every time you send something out to get to people who’ve liked your page. That’s basically what’s happening on all social platforms, but that’s not happening with individuals. And so we get way more organic reach when you’re sharing as an individual.

And the other thing that’s changing is AI. So Google and all the social media networks are trying to tune things so that they’re not overrun by AI, because otherwise, we would all be able to just see nothing but junk all day already, right? Like, that’s all we’d see. So what they’re doing is selecting for things that are uniquely human.

So opinions on things, authenticity as an experience, unique data, and research that someone has taken together and released. And so all of that stuff is doing a lot better. That stuff feels riskier sometimes. Like opinions, for example, for a brand to share, is not that hard for a person. And so that’s the other reason the last thing I would say is, you asked me the question, should every founder do this? Probably not. I don’t think every founder should do it.

I don’t think every founder has the personality to do it or wants to do it. But I do think every founder should ask the question. If you’re going to have people in your business that you want someone to connect with, who should those people be?

Chris Savage:
And then I think the question is also, like, it does feel a little bit risky to build up someone’s profile because they could leave. And media companies deal with this all the time. And I think you have to just look at it as like, hey, if you have John Stewart, who’s hosting The Daily Show and is funny and great over time, yeah, John Stewart’s going to earn a lot of money by doing that, but a lot of people are going to show up just to see him, and that’s okay.

And if you are the founder and can do it and you’re planning to stick around, that’s even better. But I think just by trying to ask yourselves those questions and figuring it out, people do want to connect with people. That’s an innate human thing. And the algorithms are now adjusting to make that even more important. And I think we should expect that they will even more because they don’t want everyone to just be overrun with generative text that doesn’t actually make sense.

Mark MacLeod:
Yeah, we need authentic connections more than ever these days. And on that note, I have to say I’m truly grateful that you and I connected. I really enjoyed meeting you and getting to know you. I always enjoy spending time together, and this has been fascinating.

Like I said, I meant what I said earlier about how you’ve created balance and the business is performing even better is just like the religion I’ve been preaching. So, I’m just basically going to send this podcast to all my CEOs.

Chris Savage:
Amazing. Well, look, it was great meeting you, too. It was so fun to get to do that in person and at the conference and hang out and catching up with you since has been great. So, I appreciate being on the podcast, and being your friend. So thank you for having me. And if I can ever be helpful, obviously, just let me know.

Mark MacLeod:
Thanks so much, Chris. You be well. All the best. Take care.

Hey, thanks for listening to the Startup CEO Show. If you’d like to connect with me, be sure to visit my website at markmacLeod.me, or follow me on LinkedIn at The Mark MacLeod, or X account @markmacleod_, and if you want to tune in again next week, be sure to subscribe on YouTube, Spotify, Apple, or wherever you get your podcasts. We’ll see you next time.

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