Founder to Founder: People, Values and the Mystery of Company Culture

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Jason Wenk is a writer, a math geek, an investment systems developer and the founder of Altruist, a fast-growing fintech startup. David Rabie is a self-professed food nut and co-founder and CEO at Tovala, a smart oven and fresh meal delivery service that offers a time-saving, high-quality way to eat well at home. What do these two have in common aside from being “Midwest nice?” They’re both navigating leading teams of people at fast-growing scaleup companies in a world of quiet quitting, remote work and changing attitudes about basically everything work related. In this episode of Founder to Founder, Jason and David dig int to all. things company culture and people.

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This episode was recorded in December 2022. Transcript has been edited for clarity and length.

Jason Wenk: I’m Jason Wenk Founder and CEO of Altruist, and I’ll be your host for this episode of Founder to Founder. With me is David Rabie, Founder and CEO of Tovala. David, welcome and thanks for being here. Let’s start by talking a little bit about what Tovala is for those who don’t know.

David Rabie: Thanks for having me, Jason, this is an exciting opportunity! Tovala is a combined smart oven and chef prepared meal service. So imagine a meal kit and a microwave meal got married, and you only took the best parts of both of them. That’s Tovala. So you buy our oven, it sits on your countertop, you subscribe to our meals, we send you the food, it arrives mostly raw, but you actually only do about 30 to 60 seconds of work, put your food in the oven, scan a QR code. The oven downloads the cooking instructions from the cloud and cooks your meal to our exact chef specifications in about 15 to 20 minutes. And then voila, you’ve got a restaurant quality meal and you did almost no work, and there’s no cleanup. So that’s who we are — we’ve been in market for just over five years and have had quite the journey to talk about.

Wenk: It’s awesome. I should admit, full disclosure, that I’m a big fan of both you as an entrepreneur, your company and your product. Tell us a little about the growth. So five years in — what’s that been like in terms of the pace and how rapid the growth occurred? And total size in terms of the team, how has it matured over the last few years?

Rabie: Yeah, so we launched in the summer of 2017. And we felt like we were building something so innovative that if we built it, they would come. We launched this product and sold a ton of units in our first two days, and then we didn’t sell a lot for a long time. And we were kind of racking our brains — It’s like people love this thing, our retention is amazing. Everyone that worked at the company was a huge power user and it was changing our lives. But we could not translate that into new customer adoption, and so it was about a two year journey from launch to what we defined as finding product market fit, which happened in August/September of 2019. Fortunately, we had a lot of positive things happening in those two years that helped keep us alive and helped motivate the team. And then a combination of some changes to our pricing strategy and changes to our brand positioning and the business just took off.  We tripled in size from September of ’19 until the end of 2019 and grew more in those four months than we’d grown in our first two years. Since then, we’ve just continued at that rapid pace of growth. It’s an entirely new chapter, you know? And now it’s how do we actually manage a more scaled organization? We have a pretty large team because we also produce all of our own foods. So we run our own food facilities across two states in the US, employ all of our own people in those facilities, make all the food ourselves. That’s the reason why the quality is so high. We’ve had to scale the operational side of the house while also scaling the corporate team to support a much, much larger business.

Wenk: Well, I mean, perfect intro because today, we’ll be talking a lot about managing that growth, especially kind of the hyper-growth and changes organizationally. So digging in, I think one problem that we face as entrepreneurs and we hit the growth stage is that early stage where to your point you had, it sounds like a family-type atmosphere. Everyone was a huge fan of the product. Maybe that’s even a big part of what drew them. They’re super happy, loyal customers. And so that feeling is awesome. But once you hit really rapid growth, that feeling gets more difficult. So I’m curious from your own experience, how critical is it for you to build a strong company culture from the very beginning? And how did you make sure you scale that, with the values and camaraderie from early days?

Rabie: Yeah, it’s a great question and I wish I had all the answers. I will say that from the beginning, we’ve tried to think really hard about culture and the types of people we were recruiting — the types of behaviors we were incentivizing or disincentivizing. I’d like to think it was not an afterthought for us. And, you know, we didn’t pick up our heads one day and say, oh my God, we need to think about company culture — It was true from day one. we never thought company culture was ping pong tables and happy hours, it was really about behaviors, how we treat each other, how we work together as a group. Definitely there is a difference, I’d say in the first 15, 20, 25 people that work here, and people that came after. There’s some overlap, certainly, but I think there’s something about the early group of people that helped start our company, and I think this is true of most startups. Innately you will have a deeper sense of ownership when you’re one of the people that helped get the business off the ground versus someone that comes to play a role when the business is more in that scaleup phase. I think that transition is really hard. It was really hard for us, magnified because much of it happened during COVID. So, we found that hyper-growth about six months before COVID. And in that six month period, everything was breaking. It was all hands on deck for a long period of time, we didn’t even have HR to hire anyone. And we were trying to hire people to support the growth — that was slow and painful. Then once things stabilized and we started hiring people, that was kind of the heart of COVID. It was a big transition for us, everyone in the office together – an office small enough where everyone could see each other, now we’re separated and remote as a corporate team, but then in the facilities as an operations team. There were just a lot of challenges to work through. One of the things we tried to do to improve it was document values — we had not done that early on, which actually worked fine for us. I think there was a set of accepted principles that we talked about a lot, but we’re never put on paper. We did that in probably Q3/4 of 2020. I think that helped to some degree elevate what we felt were the important principles and values. But I think we also got a fair amount wrong, you know, the hiring became a lot faster, so we were bringing people in the door and embedding them and teams started to form their own cultures. I’d say in the last six or nine months, we’ve done a much better job of trying to bring a uniform culture across each team, uniform accountability, uniform expectation setting, an understanding of what are the values of the business. And we’re now actually going through a values refresh and doing it in a way that’s engaging people that have been here for seven years and those who have been here for three months. And creating a set of values that we feel are an evolution of what we put on paper two and half years ago, but are actually meant to meet the company where it is today. But I’d say it’s a really complicated problem, and I think every company has its own dynamic set of challenges around culture.

Wenk: Yeah, I was thinking about that — you’re both a software company, a hardware company, direct consumer distribution network, and you have food processing. That juggling act is pretty impressive, and I’m sure super challenging.

Rabie: Yeah, it’s hard managing all the different businesses but that’s part of what makes the product so magical — those different disciplines working together as part of our mode, it is a really complex business to run and operate and brings on a whole set of pretty unique challenges. We need to be so cross-disciplinary, and there’s so much overlap from menu, to engineering, to operations, to product. And those teams have to learn how to speak each other’s languages well enough that they can work together and work quickly. It gets harder the more people you add to them.

Wenk: Let’s dig into that culture refresh. It’s interesting because one of the things I think doesn’t get discussed enough — and my business has this challenge because we’re sort of a B2B2C company – is there’s a consumer message, there’s the B2B message, and there’s the internal message. And I think what gets missed a lot is the internal brand, what you’re doing to make yourself a great place to work, a place that grows and nurtures people, but then having this really desirable consumer facing part of your product. I think it’s beautifully designed, the hardware is beautiful, they’re easy to use software. So you’re crushing it externally — how do you merge those things to where you’re building that same strong brand connection with your people, as you do with your end customer?

Rabie: Yeah, I struggled with this for a while. I am not a kind of pound your chest CEO that wants to be out there a lot. I felt that should be the case with our employer brand and we hired a Chief People Officer that really questioned my thinking on that in a good way. And he’s like, listen, we do all these great things for our team here, we should share that, we should attract more people as a result of it — it’s not bragging if we’re going out and sharing truth. I was very hesitant to do that for a while, I think because it’s not my nature. For example, we give equity to every single employee in the company, from an assembly worker in our facilities to corporate. I really did not want to share that publicly for a while because we felt like it was the right thing to do not because we wanted props around it. But we should share that, because that matters to people that are thinking about joining Tovala and it is a part of our values. So I think I’ve personally gotten more comfortable with sharing some of the things that make our culture unique in order to attract really strong talent. But what we always found is once people came in the door and started interviewing, they got a really good sense of our culture and that was a big part of what sold people to join. I think internally what has changed over the last couple of years is for a while was just tribal — like there were not that many people here. So it could flow pretty organically, but as we’ve gotten bigger, that just doesn’t work anymore. It has to be really thoughtfully embedded throughout the organization, whether it’s names of rooms, including it on your performance reviews, including it in company all hands, just a lot of places where we try to sprinkle the values so that everyone understands this is what it means to operate at Tovala. And we’re on that journey now.

Wenk: I should clarify too, for the globally-based entrepreneurs listening, David’s company is a Midwest United States company. There’s a cliche around the country, but I think quite accurate, they call “Midwest nice.” I think that humbleness sometimes makes it hard to do the pound your chest, hey, look how great of a place we are to work. I suspect it’s common in other parts of the world as well. We’re just culturally pretty humble, and you don’t want to ever make that a disadvantage when recruiting amazing people. I’m glad to hear that you’re vocalizing it a bit more. So one of the things I want to kind of click into a bit deeper — you mentioned how as the company grows, there’s almost culture created in, I don’t want to call them silos, but specific teams are creating their own micro cultures within the organization. And sometimes that can be a really wonderful, beautiful thing. But it can be hard when you’re the CEO, you’re the founder, you’ve got these broad responsibilities and can’t oversee every single person on your team, you know, you start building layers of management, and those managers have their own individual leadership styles. How can you build teams that complement each other that still feel aligned with one universal value system, while still really respecting that there are these unique kind of micro-cultures being created, especially if they’re really positive ones? How can you then multiply those against across the organization?

Rabie: I think it’s a great question. I don’t I don’t think we’re best in class at this by any means. This is one of the reasons we’re doing a refresh — the values that we set up years ago, they didn’t apply uniformly across everything. So for some teams, there were a couple of values that didn’t resonate. And for other teams, those values were the best values we had. Inevitably, that created tension between teams because as an organization, we’re saying, hey, these are the important things. But for some teams that that wasn’t right. That’s what we have with this refresh of like, what are values that we think can actually speak to every single person in the organization, every single team, then everyone can live the same set of values, understand this is what is important here, understand what they’re being held accountable to. Then we can cascade that down. It needs to start at very top — the whole executive team has to live and breathe every value or deeply believe in it, then have a set of shared principles around how those are managed with their teams, how those are communicated down, and on and on. Before we had a built out a people function, I didn’t have enough bandwidth or know how to do this systematically. It takes a lot of rigor, it takes time, it takes resources to do that really well.

Wenk: Well, a very quick question and more of a personal curiosity. At what point you said you added a Chief People Officer and built out a people function. Where was the company when you started that process of building up the people function and then adding in that senior C-Suite leader, in terms of headcount?

Rabie: I was telling someone this the other day that when I would join CEO Summits early on in my journey, one of the common questions that gets asked of later stage CEOs is: “What hire do you wish you had made earlier?” and I swear most common one was a head of people, or sometimes people say head of HR. I ignored that advice foolishly. So I wish we had hired our Chief People officer probably three years earlier, even though it’s a hard hire to make, obviously cost money, and not so clearly tied to performance on the P&L if you don’t have very strong cultural values. That’s obviously the CEOs job and having a partner to really focus on it 100% of the time improves how you operate as a company and ultimately flows into the P&L. I think my point is, I wish I’d made that hire much sooner. Maybe think about it from a fundraising standpoint — we were Series C funded at the time of our People hire, between A to B — I think as soon as you find product market fit, make the hire.

Wenk: Yeah, not uncommon. You know, in hindsight I should have and I couldn’t agree more –shout out to all the incredible people leaders out there! I’ve seen a number of flywheels you know, ever since Good to Greatcame out. And oftentimes at the center of those flywheels is culture and engagement — without it it’s hard to get the best results. You’ve talked about some of the changes that you’re going through, updating your values. And one of the things that is very difficult as a as a leader is change, because people are very resistant to this. And you know, some studies show that just instinctively, people oppose change initiatives, because they disrupt established power structures and established ways of getting things done. So it can be the most obviously good change in the world and there’ll be people who are just like: “Ah, no, I like the old way.” I’ve thought about whether it’s cultural, or just a part of changing from a small team, to now a multiple hundreds of people.

Rabie: Yeah, we’ve definitely faced this in a lot of different parts of the organization. I think for a lot of people changing from a small company to a late-stage growth company is hard. And a lot of things change about how we have to operate, the amount of autonomy people have, the kind of work people are doing. And for some people, that change is well received. And it’s part of what drives them and fuels them. And for other people, it’s not right. You know, for some people, the early stage is where they are best. And just accepting that often is hard, especially for folks that have been here for a long time and been with the organization as it scales. But for some people, they’re better suited at the early stage and that has nothing to do with talents or anything like that. Certainly, that’s an area we’ve faced some challenge, and we try to name it as a thing and normalize it. Another area is when we have certain processes that for some reason people hold sacrosanct, and I try to reinforce the message that nothing is sacrosanct here, most things that came to be probably came to be for a silly reason. If you just joined in the last six months, you shouldn’t assume that there were months of thought and data and insight put into certain things — it’s possible one person made that decision in 30 seconds, because of circumstances three years ago. And so that’s a message I actually tried to repeat a lot. You should never say “we’re doing this because we’ve always done it this way” — those words should not come out of anyone’s mouth here. Anything should be considered game for change and reconsidering. And I think that has to be true for a startup that is scaling and trying to grow. Because we’re so far away from being a stable steady-state company that’s growing 10% year over a year, we have to be rethinking what we’re doing on a regular basis. And people have to be comfortable with that.

Wenk: I love the self-awareness there. I think when you have that first employee who leaves and they say it’s because you’re getting too corporate, you know, it probably means you’re moving into one of those evolutionary stages of business. That may mean that some people are no longer a fit, and that’s okay. It’s also okay for the business and nobody should feel like things have to stay the same for decades. If that happened, I think most businesses would stall out. So change should be embraced, communicating it though — super challenging. Speaking of. that, one thing I’ve found is a lot of the early hires — I started my company in late 2008 — joined me early because they wanted to have real proximity to a founder at the very earliest stage, because they were entrepreneurial themselves. When you think of your job, one of the things that you have to do is to train and develop people who may want to be in a role like yours one day. How do you manage that in terms of helping develop your own senior leaders, knowing that in some cases, your absolute best people are entrepreneurial and perhaps one day they’ll be off starting their own venture

Rabie: I have always said nothing would make me happier than people leaving Tovala to start their own companies. We have not seen that exodus yet, but I do hope one day that actually does happen. I think for the really entrepreneurial people that have stayed with the company and evolved, it’s about giving them continued autonomy, challenge and growth in their role, so that they feel like the role continues to be entrepreneurial. And in some ways, this comes back to the last question of, for some people, they can evolve for that and the organization can evolve with them, and for others, it can’t. That’s been true in our experience; we have some people that have been here since the beginning that have continued to evolve with the organization and some that haven’t. Same on the leadership track — we also have people that are hugely valuable to the company, but not people managers. They don’t want to be people managers, but they’re great for Tovala and they’re really happy here. We’ve tried to create tracks for those folks that maybe more traditionally would have become managers and sat in a lot of meetings but are actually just very strong technical contributors in different functions across the team.

Wenk: It’s great, and by the way, I hope every founder says that very thing, which is that the proudest moment is when people go on to go start new things, and hopefully really successful big things. The way I’ve always framed it is I hope that people are inspired just enough to go do something ten times greater than anything we ever did at my own companies. And truly, when you mean that, I think you attract, retain and develop really great people. So that’s awesome. I want to just do one last question — it’s one that whenever it comes up to me, at first I cringe, then I beat around the bush, so see if you can be more direct than I am. But you know, as we’re recording this, there’s a fair number of large companies making people return back to an office to work and I’m curious to know your view on remote work, how it’s working for Tovala, and if you had to guess five years from now, what’s the most effective workplace going to look like? If you’ve already experimented with this, maybe just share any of those experiments too. You have certain people that have to be physically on site, but not everybody and managing that is actually really hard.

Rabie: Yeah, we definitely have a more challenging situation than companies that are in one of the two camps have can be fully remote, or they can’t be — we’re in the middle, which makes it hard. Just managing that dynamic alone has taken a fair amount of brain space. I think we still have work to do, just to ensure that both sets of people here feel equitably treated, and that we’re creating policies that are fair and equitable for everyone. So that is an ongoing challenge. The way we’ve managed the corporate team is we are hybrid, and I think quite flexible. We encourage people to come in one day a week to have lunch together and gather as a group but I use the word encourage pretty deliberately, it is far from a mandate. It’s more of a social thing that we want people to spend time with their peers, but not a requirement. And then each team is empowered to gather on their own. So if they feel like it’s best for their team, that they should be in the office together, one day a week or one day a month, that’s on them to figure out what is best. We were trying to do more regular off-sites for each department, and sometimes for cross-functional kickoff meetings we will do in-person. I think we’re trying to find the right balance of when do we fly people in? What is the cadence of that? Who are in those groups that are meeting in person. But otherwise, I’d say generally our company has adapted pretty well. I think certainly some of the cultural challenges are a result of us not being together in a room every single day, there are 1,000% things that are lost as a result. But there’s a lot gained, we’ve been able to recruit awesome talent not based in Chicago, people have more flexibility to travel, they have more flexibility with young kids – it’s been much more conducive to me being a present dad. So I don’t I don’t see us changing how we’re operating. But what I will say is, if I was going go start a new company, I would be highly biased towards doing it in person, unless it was all people that I’d worked with for a really long time before. I think getting something off the ground, forming those early bonds in the early culture, and wading through the morass of finding product market fit…it would be very hard to do purely remotely unless you were really experienced with the people you’re working with.

Wenk: That’s very thoughtful. I will say it’s hard as a founder — I know, personally, I’ve waffled back and forth many times about, could we or should we be one way or the other? Maybe not looking at your business, but if you had to guess five years from now, the best performing companies from 2022 to 2027, how are they going to work do you think?

Rabie: I think they will have to be hybrid. I just think the demand from the best people will be for the ability to work remotely and you’ll just miss on talent is the truth. You’d have to make up for it probably in terms of connection and culture within an organization because you’re working in person together all the time. But if we zoom out, my guess would be the majority of the companies that are doing best are hybrid.

Wenk: Well said! Thanks so much again for joining us again David, this has been a lot of fun. I don’t often times get to play host! Wishing you nothing but the best and continued success, huge, huge fan!

David: Thanks for having me, this was great!