A Q&A with Buddy Media's Mike and Kass Lazerow

When Mike and Kass Lazerow sold Buddy Media to Salesforce for $745 million in 2012, the headlines focused on the exit. But the real story, which is the one that matters for founders grinding through pre-seed to Series A, happened in the years before. It's a story of relentless operational discipline, brutal honesty about what wasn't working, and a willingness to make the hard calls that most founders avoid or delay.

In a fireside chat, the Lazerows shared the operational playbook they used to scale from zero to $50 million in ARR in three years. This isn't about vision or fundraising tactics. This is about the daily execution that separates companies that scale from those that sputter out.

Q: You had employees build their own desks on day one. Why start there?

Kass: I wanted people to realize that everybody was at the same level despite titles. I was never going to inflate titles, and I wanted people to feel their hard work. If they could build their desk right in the beginning, it wasn't like I was going to do it or Mike was going to do it, we were in this all together and it was going to be hard work.

Q: What's the formula for culture, especially in today's remote environment?

Kass: The first is radical transparency. We shared financials. We shared when things were going well and when they weren't. As a result, people had no surprises. With no surprise, when you decide to pivot and do something or bad news happens, no one's going to jump ship.

The second part was bonding activities. Please don't do Zoom games or Zoom happy hours as those don't count. You have to take time as founders and meet with people in person. If you can't bring everybody in, you should be traveling around four times a year. It's hard to do, but it's a necessary thing.

But the biggest glue we ever had was picking a cause and having everybody participate because it was something bigger than the company, bigger than ourselves. We raised over $375 million for Cycle for Survival. It became something where everybody felt good at the same time.

Q: Could Buddy Media have been as successful without that culture?

Mike: No. 100% no. We had a cult. Part of that cult was when you got a job at Buddy Media, you were born into a team, either white or blue. You could never switch teams. Competition for whatever reason seems to bring people closer together.

Q: You had a saying: "Do the job you have and do the job you want." How did that become your mantra?

Kass: I hate people coming to me with complaints or asks without solutions. The only thing I could say is if I see you doing your job and the one you want, I will promote you. Period. It's proof right there. So it was a tool, and I urge all of you to use it too because it shuts people up. They can be like, "I'd really like to get a promotion," and you can say, "You haven't done it yet. So be that person who does everything."

Q: By the time you had 60 people, you'd fired 30. How important is it to cut the fat fast?

Kass: You're going to start with people you like very much who wear multiple hats. Then you're going to find your product-market fit. And you're going to have to fire some of those people because they're not going to like having fewer responsibilities or being "pigeonholed" into one department.

I began to love firing people. I want you to hear that: I love it. I absolutely love it because I feel like it's cleaning my closet. Not in an inhumane way, but really thinking about how you make sure every single person is working toward a goal and everybody else likes them. If you don't do it, you're not going to get to 60 people.

Q: What's the "Moneyball" approach to team management?

Kass: We went to see Moneyball, and I came out crying because I realized I had to fire seven people. I'd totally made the wrong decision about one team. Moneyballing is part of your job. At every point along the way, you have to make sure people are in the right position or you will have cracks in the foundation and you won't be able to move as fast. You'll know. You'll be like, "God, that team just doesn't get stuff done as fast as I want them to." It's because someone on that team or multiple people are not in the right position.

Q: What should performance reviews look like for early-stage companies?

Kass: After four people, you should be doing performance reviews 100%. They're the best use of time to identify and really spend time thinking about what does and doesn't work. You've got to show that you care about what these people are going to do when the company gets bigger.

I don't like performance reviews all throughout the year. If you have people that are not going to do well on their performance review, it better be during Christmas. I believe you do them once a year around Christmas when bonuses come out, when it's a happier time. You have categories and you better have been consistent for a long period of time.

Q: How do you identify slack in a remote organization?

Kass: Talk to every single person. You're going to find out more than just talking to a few or just talking to the managers. There's going to be some repeat themes that come up. You can do it at 50 people, and you better do it quick so you can cut the fat sooner rather than later.

Mike: We also did office hours where people could just come in and share what's going on. I learned a lot since people typically share what they're concerned about. I like one-on-one because there are a lot of people who don't want to talk in front of others who are very important to an organization. Add food to it…like a $20 GrubHub gift card. Food always helps.

Q: How do you build momentum in an early-stage startup?

Mike: The way everyone in the room has to get momentum is through focus. What do you want to be as a company and what do you need to do to accomplish that goal? Way too many entrepreneurs, especially today with AI tools and all these opportunities, try to do too much. You could do anything, you just can't do everything, especially at once.

The best way to get momentum is: we are going to focus on getting 10 customers. That's all we're doing this quarter. Nothing else matters. We did that at the beginning when we focused on customer acquisition. Then we had to shift to customer success because we did really good with customers, but then they were saying goodbye to us. You're always changing your focus.

If you can't say that the number one priority is this, number two is this, number three is this, you're not focused. You'll never get momentum.

Q: How did you manage competing priorities across departments?

Kass: We met every week for two and a half hours. It was sacred. You only got a pass if you were on a honeymoon or at a funeral. That was it. We called in 100% of the time. That was the only time the roadmap could change.

If there were disagreements between departments, they would duke it out in front of us and everything was okay. If we made a decision as a team, we all knew why even if we didn't like it. Then that roadmap was locked. No matter what ideas came up, you would wait and tell us in a week.

Mike: The focus exercise is so important because you're going to have this conversation over and over: "I need this for this customer I'm trying to sell. They're not going to sign on unless we have it." The product team's like, "Okay, what should we not build?"

By having focus, you can as the leader explain why you're making decisions. "We're doing this because we need to lock down our current clients. Nothing matters if we're a leaky bucket: bringing in 10 customers and 10 leave is not a business."

Q: What's the "dealmaker vs. deal breaker" mentality?

Kass: I wanted people to be dealmakers. I wanted them to say, "Okay, this didn't happen. This is not what we want," pick themselves up and move forward. I didn't mind failures. I just minded people who got paralyzed by them. You have to breed it in your company because the people who can deal with that and become dealmakers, they're going to figure out anything. They're going to run through walls for you.

Q: You pivoted three times before finding product-market fit. How did you know when to pull the trigger?

Mike: We launched as Ace Bucks, which was a currency for Facebook. It was a really bad idea. We ripped the band-aid off and went to raffles. That was horrible. Then we went to custom apps, which we stayed close to customers for. They said, "We need help on Facebook building apps." We did that, but it wasn't scalable. We had to rip the band-aid off something that was working and making money but wasn't going to create a venture business.

Every time we got punched in the face by the market, we fully pivoted. There wasn't "we'll keep our options open." I announced the first-ever Facebook page management system to the Wall Street Journal, and that was the first time our head of product and technology had ever heard of it.

Q: That seems extreme. Why force it that way?

Mike: I wanted to pivot the organization, but I knew if I asked the organization or asked Kass, maybe they wouldn't have gone along with it. I'm not saying this is a mature thing to do, nor would I do it again. It put us in a leadership position where we were always announcing stuff that was new while our competitors were trying to build what we had. They didn't know we didn't have it.

Q: How do you know when something isn't working versus when you just need to push through?

Mike: By putting together metrics at the beginning and not only your budget numbers. How many customers do you expect? What's our churn? We wanted to get churn less than 10%. After the period went by, did we succeed or not? It's binary.

But the more important way to know is in your gut. We all know when things ain't going well, and you admit it to yourself. Then the next two weeks you talk yourself out of it: "What are you talking about? Things aren't going well? We just made this incredible hire, we've got this office space, I got this vacation coming up..." It's your ego.

That first thought of things aren't going well is usually the best one. You have to rip the band-aid off. For me, it was taking steps to do it drastically.

Q: What are the steps to executing a pivot?

Mike: There are three things you have to do:

1. Admit it's not working
2. Take responsibility. It's not my employees' fault it's not working. I told them to do Ace Bucks. We agreed. It was my idea. Don't blame others. It's on you, the founder.
3. Have a plan to move forward. A clear plan that you execute on immediately.

When you take a loss and it's not working, you have three options: keep doing what's not working (doesn't make sense), shut the business, or pivot. And I'm not saying you have to pivot the whole company always. We pivoted customer success many times because we weren't supporting customers the right way.

Q: Fear is constant in entrepreneurship. How do you deal with it while still dreaming big?

Mike: Fear is your business partner whether you like it or not. It'll never go away. You're running out of money, you're scared employees are going to leave, you don't want to get on that stage because you don't like public speaking. Fear makes you do the wrong things both personally and professionally.

As the founder, you need to jump out of the airplane and get people to follow you. It's never going to be without fear. You're inventing something new, asking for business, doing stuff that's new.

The way we were able to deal with fear was going back to focus. "Oh no, this is what we're trying to do. We have to do this." I see a lot of entrepreneurs who end up making the wrong decisions because they think: "I just raised money. I told investors I would do this. I know it's not working, but I don't want to tell the investors that, so I'm just going to keep doing it."

All of these reasons we don't do things come back to fear, which breeds uncertainty and then self-doubt. Part of what helped us was building confidence after making mistakes. Once you build your confidence, you can make better decisions. You can hire better, fire better, create culture without being beholden to this business partner named fear.

Q: How do you stay optimistic after taking a big loss?

Kass: What fuels me to get back out there is not losing. I hate losing. I want to make up for the L with more wins. That's how I think about it.

Mike: If you're a worker and something goes bad and you fail, it's existential. You're like, "I'm a failure." If you're an entrepreneur, it's like, "Okay, we're one step closer to getting where we need to be." Failure is a feature of entrepreneurship.

If you're bummed out because you failed with your first product and it paralyzes you, it's going to be a hard run as an entrepreneur. Too many young entrepreneurs today are just constipated perfectionists. You've got to get it out there to get customer feedback. It's going to suck at the end, and that's okay because you can improve it. You've got to get the feedback.

Q: What makes a co-founder relationship work, especially under pressure?

Kass: Any co-founder relationship, I don't care how many there are, there should be no overlap in skills. If you have two product people, two engineers, two ops people, two marketing people, you're going to fight, you're going to micromanage, and you're going to have strong opinions. At one point you're going to want to win, and that doesn't help the company win.

You guys should have really deep conversations about how you work. What is your work ethic? How much are you going to put into this? How many hours do you expect to work? Why are you doing this? It's kind of like a marriage. Don't you text your co-founder first thing in the morning and at night before you go to bed about stuff you're going to do?

The big question I always ask when doing due diligence with partners and co-founders is: What's your priority outside of this? Someone might have a family, someone might play golf every Sunday, someone might have a boxing group. You guys should know that about each other and then not resent it but embrace it.

Mike: Cass did most of the stuff to run the company, but nothing works if we don't have revenue. If we don't have a business model, if we haven't raised money, that's squarely on my plate. Cass is not responsible for revenue. If we're not generating revenue, that is me.

Although Cass knows when things aren't working, I know it faster. You need complementary skills where each person owns their domain completely.

Q: How did you create a culture of accountability?

Kass: We agreed on a direction in our weekly leadership meeting. We might not have agreed initially, but we eventually agreed. Then whoever was responsible for different things had to come back to that meeting the next week. They had to do it. You had to come back and you had to do what you said you were going to do.

If Patrick, our head of product, wanted to do XYZ and we all agreed, even if not everyone was happy, he had to come back showing us he built XYZ. If he didn't, he had to look at all of us. That accountability is the positive cult you want to build.

Q: How do you balance being a "benevolent dictator" with listening to your team?

Mike: It wasn't a democracy. Cass was more like a benevolent dictator. But I had to learn to listen. Early on, I'd go into meetings just wanting to get my way. Cass hired an executive coach who did a 360 review, and what came back was the worst report I'd ever read. I was distracted, distracting, getting in the way.

I'd go talk to engineers because I love engineers. I'd shoot the shit and be like, "Oh, wouldn't it be cool?" And they'd change the roadmap. I didn't ask them to, but they're like, "Oh, Mike thinks it's cool, let's do that."

It was a brilliant move by Cass because we have a marriage we want to keep in place. It would have been really hard for her to deliver all that feedback. This stuff also bleeds into your personal life: how you listen, how you communicate, how you show up.

Kass: You have to have the hard conversations. If you're pissed off, tell me. I don't read minds. There was a culture where you just have to say the hard stuff. Too many people these days are passive-aggressive. They won't share their feelings.

Q: You had three kids while building the company. Is that advisable for entrepreneurs?

Kass: There's never going to be a good time. It's like taking a vacation. If you want to not miss out, I would have them when you're doing your startup. In the beginning years, a lot of people can love them, change their diapers, walk them to school, read to them. Small problems, small kids. But when they get older, bigger problems with bigger kids.

I would jump and do it as soon as you can. Entrepreneurs have this incredible gene of suffering where they get punched a lot in the face and then they're okay with it and then they get a little win. That's kind of like having kids. There's not a lot of ROI on kids for a long time.

Q: Should entrepreneurs plan for date nights and personal time?

Kass: If you have family or significant others, you should be trying to have a date night at least once a week, no matter what you do. When we could afford it, we paid our childcare person regardless of whether we went out because even if we were home, it was kind of luxurious to have her take care of the kids. Put it on the calendar, kids or not, every single week.

Mike and Kass Lazerow are the co-founders of Buddy Media (acquired by Salesforce for $745M) and authors of "Shoveling Sht: A Founder's Guide to Building a Business." They now invest in and advise over 100 startups through their venture firm.