A Conversation with David Cancel from Drift: Building a Successful Company Calls for More Than Product-Market Fit
Building a successful company calls for more than finding product-market fit. It’s about hiring the right team at the right time, using challenges to grow, and staying focused. Serial entrepreneur David Cancel has experienced it all.
David, or DC as he’s often referred to, is currently the CEO of Drift, a company he co-founded in 2015 with Elias Torres. Together, they’ve built Drift into the largest and fastest-growing company in conversational marketing. But this is just his latest success. DC previously founded (and sold) four companies. We’ve known DC for many years and have witnessed his tremendous success not only as an entrepreneur, but also as an author, podcaster, investor and most importantly, a leader. We’re proud to have invested in Drift throughout the years starting with their Series A, and CRV General Partner Izhar Armony sits on the company’s board.
We recently caught up with DC and talked about how to successfully transform a company from early stages, what it takes to attract top talent in a competitive market and which lessons he’s found most valuable over the years. Read on for more insight.
1. What’s one thing every founder should ask themselves before they start a company?
Every founder should ask themselves if there’s a need and fit for what they want to build. Following trends so often carries a negative connotation, but when you’re founding a company, you need to look at what is happening in the market and create a product that aligns with that shift.
At the same time, don’t give up too quickly if you’re not finding product-market fit right away. Box’s Aaron Levie said it best: “Innovation is hard because solving problems people didn’t know they had and building something no one needs look identical at first.”
2. What should founders keep in mind as their company transitions from an early-stage startup into growth mode?
Growing pains are real, but it’s the lessons we learn during this growth that will help us tackle the challenges we’ll face down the line. There will be painful points, but that pain is temporary.
On the people side, I think the single most important thing you need to teach your team is this: let go of your legos. This is something Molly Graham, who has scaled teams at Google, Facebook, Quip and the Chan Zuckerberg initiative, talks about a lot. When you first start a company, everyone will be doing 10 jobs. As you grow, you have the opportunity to bring on more people who relieve some of those jobs. The original people can have a hard time “sharing their legos.”
Scaling isn’t just about hiring more people. It’s also about teaching people already at your company how to scale themselves. Help them recognize that adding people doesn’t mean there’s less work to do — it just means that the entire company can do more.
3. Drift is known for its incredible company culture. What’s the secret to attracting talent in a competitive marketplace?
Drift is in the 2 percent of VC-backed startups led by Latinx founders. Diversity is baked into our culture because it’s baked into who we are as people. We want to be the new face of tech and corporate America, and we believe our roots are a competitive advantage in a competitive environment. A diverse team means diverse opinions and solutions. So if you’re looking to attract talent, showcase diversity, but don’t just talk about it. Live it.
4. What’s the most valuable insight you’ve gained while growing a company?
I used to think about hiring only in terms of the quantitative (what skills a person has, which companies they’ve worked at, which industry they come from) and the qualitative (culture fit and personality). But I was ignoring a crucial third dimension: company stage.
Your company’s stage is critical because it adds so much context about what you need for where you are. Before I took stage into account, we’d hire people who were great on the quantitative and qualitative aspects, and then they’d struggle. Their only experience was with companies a few stages ahead of us.
Now, we’re very deliberate about considering where we are. We try to forecast what the company’s growth will look like and where we’ll be by the time a new hire is up and running, and then we look for people who are a good fit on all three levels.
5. How much time do you spend thinking about the future vs. executing today?
We spend a healthy amount of time thinking about both. Executing daily keeps us in touch and aligned with our team. But, as Drift has grown, we’ve had to get better about planning into the future. When we were in one small office, we could all communicate everything that was happening. But now we’re nearly 400 people in four locations. To align, we need to set goals for at least 6 months out.
6. What are some of the common mistakes companies make while fundraising?
The terms obviously matter, but it has to be about more than that. When you raise funding, you’re likely accepting new people onto your Board for the long term. These people are going to be in the weeds of your business, right along your side as you make crucial decisions. You have to respect their opinions and more importantly, you have to want to have a relationship with them for years to come.
7. Building a company is stressful work. How do you stay healthy and energized?
Outside of work, I spend time with my family, read and listen to podcasts, and cycle. We also encourage our employees to recharge outside of work, which is why everyone at the company, myself included, gets a month-long sabbatical after three years. On my sabbatical, I set three goals, completely unrelated to work: Become a better cyclist, learn to become a horse hand for my daughter (who participates in equestrian competitions), and practice daily meditation. During that month, I was able to take myself out of the day-to-day — and I came back to work with a completely new perspective.
8. We love all of Drift’s podcasts, including yours, Seeking Wisdom. What industry podcasts do you listen to regularly?
I’m a huge fan of Recode Decode with Kara Swisher and Farnam Street’s The Knowledge Project with Shane Parrish.
