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Sar : Let’s start with your passion project. What can you tell us about Bikefrontier?

Julia : Frontier is a women’s cycling apparel brand I started working on earlier this year. I’ve been a cyclist for years, but really started to get into it this spring during Covid as it was one of the few safe, acceptable activities during shelter in place. Between getting outside, seeing friends in a socially distant manner, and getting exercise, it was a really win.

Since I was biking so frequently, I started thinking more about what I was wearing, and looking more closely at the brands that existed for women cyclists. Most brands were focused on a hyper competitive look, and tended to be geared more towards men. I had a vision for a brand with a more modern aesthetic that was focused on women. It would pull from the best of women’s activewear - think bike shorts with high flattering waistbands and jerseys that don’t make you feel like you need to be riding the Tour de France - and be accompanied by a healthy, fun biking lifestyle brand.

That said, imagining what could be possible with a new brand and actually designing and producing clothing are two very separate things. Right now, I’m in development on 4 items, but timelines are slow, and my manufacturing partner has been difficult to work with. Choosing fabric has been one of the most difficult parts. But we’re making progress, so stay tuned for more on Frontier - we should be launched by spring 2021 if not before!

Sar : We became Twitter friends and later met in SF shortly after you had left Opendoor after more than 4 years in a variety of roles like Head of Seller Experience and Chief of Staff. I'm sure you have seen all sorts of takes on Opendoor lately after the SPACs news. What can you share with us that you think is underdiscussed or misunderstood about the company?

Julia : Yes, I still remember our coffee together at Equator! As for Opendoor and the SPAC news, it seems like realtors and their hold on the industry still remains underdiscussed. On the one hand, Opendoor came in and caused the beginnings of a paradigm shift here. Opendoor proved for the first time that home owners are willing and able to sell their homes without a realtor (<10% of people who sell with Opendoor use a realtor in their sale). However, a majority of buyers of Opendoor homes are still using realtors, and realtors have stubbornly remained part of most real estate transactions. What’s going on? Why is that?

I believe the future of real estate will involve far fewer real estate agents, as consumers are armed with more information and services that allow them to manage their own transactions and not give up 6%, which most people believe is far too much compared to the effort involved. So what’s my hot take here? I believe Opendoor is well-positioned to be *the* brand for those who want to transact without a realtor, and that Zillow will have a much harder time shedding their identity as a platform for and supported by realtors. This means that if Opendoor can continue to get this right, aka build product for self-sufficient buyers and sellers, and Zillow can’t and won’t make that transition given how deeply enmeshed they are with realtors, Opendoor is well positioned to become the primary platform in real estate in the 21st century.

Sar : That idea of self sufficiency isn’t something that gets talked about enough in the online commentary I have seen so far. That’s subtle and powerful.

You were just getting started with angel investing when we met. What has surprised you the most about the culture or dynamics of investing so far?

Julia : When I first started investing, my investments were in people I knew directly. As I expanded the scope of my investing, friends and other investors started to send companies my way, and I began to invest where I didn’t have an initial personal connection. What’s surprised me most about investing, especially for angels like myself, is how little information I typically have to work with when making an investment. I typically meet with a founder for 45 minutes (these days exclusively online, not in person like before) before deciding whether to invest - maybe with an additional follow up meeting if I’m lucky. This means there is a lot that needs to get communicated, and that I need to be picking up on, during a single meeting. Things like assessing overall horsepower and founder-market fit need to come through in that initial meeting. I’m not sure the alternative of spending much more time per investor-founder meeting makes sense given the time constraints founders have, but it is surprising how comfortable both founders and investors have gotten with investments made after such limited interaction.

Sar : There’s always some disconnect between analyzing an early stage company as an outsider (job seeker or investor) and having the experience of working day-to-day as an insider. With the benefit of hindsight on your time at Opendoor and having seen lots of startups through investing, do you have thoughts on how one can bridge that disconnect to get a better read of the internal dynamics of a company? It is the internal culture ultimately that plays a much bigger role in eventual success than the observations of smart outsiders. Would you agree?

Julia : Culture is an important part of what makes a team and company successful, but you do still need to find an unmet need in the market and a business model to support it. I wouldn’t say either culture or the business fundamentals is more critical than the other - you really need both.

The latter is easier to assess from the outside - you can learn how the industry works, analyze the competition, and assess their proposed business model. Culture is not quite as easy when you’re not an insider.

So how do you assess culture from the outside, say as an early stage investor or job seeker? The best you can do is understand who the founders and early team members are and what they believe. Ask former colleagues what they’re like at work. Learn about their values and operating principles. This is probably the closest you can get to understanding what the day to day culture inside a company is like and will be like going forward, and this will ultimately impact the success of the company in the long run.

Sar : That’s very helpful. The compatibility of the business model is underestimated a lot. It is easy to get carried away with the public persona of a company or a founder. I have been talking to friends who got too charmed by the public narrative of a company and paid too little attention to talking to alums and early employees.

You spent 3 years as a consultant at Bain before joining Opendoor. You have written great guides on the chief of staff role and transitioning from consulting to startups. The mindsets required to excel in those worlds seem very different. One is about thinking in the abstract and making recommendations. The other is about thinking in minutiae and taking actions. Would you agree? It feels like there would be a lot of unlearning to do in order to thrive in making a move in either direction. What can you tell us about the differences between early stage startups and consulting?

Julia : The building blocks to being a great operator come from working in the weeds on the day-to-day minutiae of the business, whether that’s running ad campaigns, fielding customer support inquiries, or doing analytics. This is where judgment is developed and honed. For example, only by doing sales myself did I learn what makes for a strong value proposition and how to sell something, down to things like the specific phrases and wording to use, or what tone of voice meant uncertainty from a prospective customer. This informed my ability to lead our Customer Experience team and make decisions about our sales script, how many team members we needed per 100 customers, and when the best time to reach out to a prospective customer was. Similarly, only by doing analytics myself did I learn how to spot discrepancies and inconsistencies in how data was labeled and stored in our database, which taught me to always dig into the data to spot check for errors when looking at metrics or analytics output as a manager.

Working as a consultant at Bain did have part of the “weeds” aspect of learning how to operate, particularly when it came to things like running analytics and building models. There was a concept called “zero defect” at Bain, which meant you paid close attention to detail, developed ways to gut check your work (e.g. does this answer make sense, or does it feel like it’s an order of magnitude off), and didn’t make careless errors in your analysis. However, at Bain I was never responsible for operations directly, so didn’t make certain kinds of errors, like incorrectly setting up an automated email, or not sufficiently training a new hire. These were new “weeds” to be waded through, but both kinds of weeds provided a strong base for future layering of new skills.

While working in the weeds on a very specific problem with limited scope is the best way to get started in business, you don’t ever unlearn this. Instead, you layer on top of your in-the-weeds know-how the ability to think about the bigger picture and tackle broader, strategic questions. Instead of building the metrics dashboard, you’re thinking about what metrics are in fact the most important to the business, and sniffing out data errors in the chart the first year analyst put together.

Like anything else, you get better at this “higher level” thinking over time, with practice. I encourage everyone, no matter what stage they are in their career, to practice thinking at the level of their manager. What issues and questions are they wrestling with? Do you agree with their perspective on strategic questions? Why or why not? This will help you develop the judgment and skills required to operate at the next level, and hopefully provide your manager with some useful input in the meantime :)

Sar : It’s been awhile since you left Opendoor and started investing. How much of what you did during your time there is really helpful in helping other early stage teams? I'm sure you have an incredible network to tap into and that the social capital from having joined early on is paying off dividends! But, what I really want to know is the delta between social capital and the applicability of what you learned as a practitioner! I know at least one founder you have invested in and he is impressed by your operational experience! I ask you this because I know you will be very honest and wont oversell. There is a common trope in SV that having worked at one successful company (especially the ones that are hot at any given moment) makes you ten times more qualified than everyone else.

Julia : Lots to unpack with this one! I joined Opendoor as the 10th employee, pre-launch and pre-revenue, so was a lot of early stage work to get done, from building the v1 product, finding product market fit, setting up operations, hiring, building out tools and systems. Much of this applies across all types of companies, so I’ve found that my experience usually is helpful to founders and early team members. At the very least, I can offer examples of how we did things at Opendoor, and brainstorm whether or not that approach might be a good fit for the situation at another company.

To answer the second part of your question though - yes, I do think the social capital that accrues to early employees at successful companies may sometimes be more generous than it should be, and is perhaps even unwarranted at times. There are absolutely average people who got lucky and joined a rocketship. And there are exceptional people who work at companies that don’t make it quite as far. That said, it’s rare for an exceptional person to stick around for a very long time at a company that’s not doing well. While you don’t get compensated nearly as well as a founder when you’re an employee, you do have the flexibility to leave and join another company. I’m not advocating for leaving as soon as the going gets rough, but after a while, a good person should be able to navigate themselves to another more promising opportunity and get some additional at-bats in operating. This not only gives them another opportunity to join a company that scales, but they’ll have a couple of different company experiences under their belt to pull from.

Sar : Anecdotally, it seems like there are way more Bain alumni in venture capital and startups than any other consulting firm. Do you have any theory on why it feels that way?

Julie : Ha - it does seem that way, though I’ve never seen any data proving it! I do have a few thoughts on the subject though. They say that Bainies tend to think more “80/20” than alums of other firms, meaning that they focus on the few things that matter the most, instead of boiling the ocean and getting bogged down in detail. Bainies also seem to be a bit more socially adept, which may come in handy when fundraising, and less likely to be perfectionists. Bain is known to have a lower GPA bar than McKinsey does, which may tie into the perfectionist piece. There is probably an inverse correlation between perfectionist tendencies and comfort with uncertainty and risk taking, both of which are required for startups and venture capital.

Sar : Wow, that’s a POV I have never heard of before!

You have a magic wand. What would you change systematically about the world of management consulting?

Julia : Gosh my time in consulting seems so long ago at this point. I left consulting in 2014, and since then I’ve heard they’ve started to incorporate more systems, tools and techniques from the tech world. When I left Bain to join Opendoor, so many of the tools (Looker! Airtable! CRMs!) and systems (databases! internal tools!) were foreign to me. I was surprised I hadn’t gotten any exposure to these tools, and many of them, particularly those associated with databases and analytics tools, would have been powerful tools to use in the analytical work we did for our clients. This would have been not only beneficial for the quality of work done (and efficiency), but would have made the training programs more relevant and competitive for new grads. And as more and more companies adopt tech tools, consultants should also be there to educate and support their clients in adopting and using these tools within their own companies.

Scatter Brain

A chat with Julia DeWahl, ex Chief of Staff…