Success Isn’t an Arrival Point: Interview with with Adam Harris and Richard Castle, Co-Founders of Cloudbeds
I recently spoke to Adam Harris and Richard Castle, co-founders of Cloudbeds.
Adam Mendler: Thanks again for taking the time to share your advice. First things first, though, I am sure readers would love to learn more about you. How did you get here? What experiences, failures, setbacks, or challenges have been most instrumental to your growth?
Adam Harris: Before founding Cloudbeds, I spent time on Wall Street and started a few businesses. There have been challenges at every phase of my career but as CEO and Founder of Cloudbeds, the pandemic was the greatest challenge I’ve faced as a leader. COVID was an existential threat to our business. Practically overnight, we went from the high of landing a major cash infusion ($82 million series C led by Viking Global Investors) to an immediate low where the world, and especially our industry, was majorly threatened. It was dark (and lonely). In a moment where everyone was panicking, it taught me about grounded decision-making. I couldn’t show panic as a leader. I was like a duck on water – seeming calm and collected on top of the surface – but underneath the feet were moving a million miles an hour. Ben Horowitz’s Peacetime/Wartime CEO framework really came into play (minus the chest beating). We couldn’t get caught up in the noise. We had to stick to our good judgment around solid business economics while maintaining flexibility in our approach. We had to settle in, stick to the plan, and be incredibly agile. As leaders, Rich and I had to be patient and find a way to climb out of this crisis. We did, and we’re better leaders because of it.
Richard Castle: I’ve always had a passion for travel and innovation. Prior to Cloudbeds, I founded a software development company, worked in Japan using Japanese, and worked in a Salmonella research laboratory at UCSD. As founder and COO of Cloudbeds, I’m often fielding setbacks. The most difficult times have been the most instrumental in my growth. In times of crisis and change, those are the times when you question yourself as a leader. Adam touched on one of our greatest challenges around COVID, but we’ve faced other obstacles that have caused tremendous growth for me as a leader. Some system performance issues in our technology stack recently have caused our people to look at leadership during that time to observe how they should feel and think about the company. Leadership at those times is imperative because your sentiment will cascade down to everyone. In times of crisis, it’s important for leaders to realize that people look to them. Leaders help guide the team on how to feel. We give them hope when times are challenging. We set the tempo and the tone. But you have to do so without dismissing that what’s going on are real, major issues. Acknowledge the severity of the problem and yet motivate your team around their ability to solve it.
Adam Mendler: How did you come up with your business idea? What advice do you have for others on how to come up with great ideas?
Adam Harris: Some shared background: Our idea for Cloudbeds came as a little problem while we were traveling through Brazil – a posada wanted us to wire money to “someone affiliated with the property” to hold our reservation. Aside from being super sketchy, it didn’t resemble the modern guest experience most travelers have come to expect, even internationally.
Frustrated by this disconnect, we dreamed of a better way — a platform that would allow any property, no matter their size, type, or location, to run their lodging business successfully. It was a back-of-the-napkin idea that has become the platform that powers hospitality, enabling tens of thousands of lodging businesses in more than 150 countries worldwide to grow and thrive.
Surround yourself with talented people who have better ideas than you. It’s important to have some people who are visionary (they see big, transformational ideas in the future)... some people who are operators (they know how to action an idea and get things done)... and some people who are people managers (they’re very good at motivating and influencing people to do things). With these different lenses, you’ll have a lot of good ideas around you from really smart people and you should always let the best one reign. Fight for the very best answer to a problem at hand. Be committed to finding the best ideas and letting them win.
Richard Castle: Think about the problems you want to solve and get people to follow you by showing them that your solution is better than what is out there. Your problem can be very micro in nature – like something you have personally struggled with – or it can be very macro in nature – like trying to solve global warming. The next step, once you’ve identified the problem, is to think about the best way to solve that problem. Often, the best way to solve that problem is to enroll people in your cause and make a case that the way you want to solve your problem is better or different from other people. When you’re starting a business and coming up with ideas for problems you want to solve, you have to convince other people to join you. They will if they trust you. In order for them to trust you, they have to trust that you’re the right person for them to follow. They need to be confident that you can solve these issues and problems. If you haven’t been able to enroll people around your cause, problem, or idea, it’s a sign you may need to re-calibrate.
Adam Mendler: How did you know your business idea was worth pursuing? What advice do you have on how to best test a business idea?
Adam Harris: We didn't know. We realized pretty quickly that our first idea wasn’t the best idea. You have to get your idea out there early. Test it. Then iterate. Then test some more. I’m a big fan of product-led growth, which is going to drive adoption, right? If you’re focused on your customer, know what your customer needs, and keep building for the customer, it’ll force you to keep evolving. You don’t have to have the most original idea. Statistically speaking, someone somewhere else in this world, is thinking about the same problem as you. It’s a matter of how you execute on that idea. How do you test it? How do you get it in front of the customer? How do you get the right feedback and what do you do with that feedback? You’re going to put product out there that’s not good enough. It’ll be missing features. But you’ve got to move before you get to perfect, in order to get to an idea that drives adoption and growth. There’s no such thing as perfect (except for my kids and my wife). You’re trying to get to near perfect which is really, really hard. But get something out there and keep working toward your vision.
Richard Castle: You have to believe it's worth pursuing. Oftentimes, you’ll need to remind yourself why you pursued your idea in the first place, because there’s plenty of obstacles that will come up and attempt to convince you to abandon it. If you’re not strongly attached to the problem you’re trying to solve, you’ll be quite easily derailed. It’s ok to be derailed from your ideas (the solution to solving the problem), but stay true to the problem you’re trying to solve. You can’t be too stuck to your idea for solving problems. That’s the biggest mistake I see entrepreneurs make. Their problem was correct, but their solution just isn’t. They get stuck on their idea and they end up failing because the idea becomes the reason for their entrepreneurship, versus keeping the business focused on trying to solve the original problem. Stick to the problem you’re trying to solve. We never knew if our idea was the right one. We just knew that the problem was worth solving.
When it comes to testing your ideas, you need to have a hypothesis. Run through the idea with all types of people. Through enough conviction, establish a hypothesis that the idea is right, or the way you want to solve it is correct (at least in your mind). Roll something out and be willing to change your hypothesis based on what you learn. It doesn’t matter whether you’re a salesperson, an engineer, or a wealthy land owner before becoming an entrepreneur. Being an entrepreneur means developing a product. You can’t outsource that. Even if it’s a services business, you need to learn product development. Study how to develop a product.
Adam Mendler: What are the key steps you have taken to grow your business? What advice do you have for others on how to take their businesses to the next level?
Adam Harris: Three things. 1) Focus on data. Data will drive a lot of your decision-making. Get accurate data, or at least bring clarity to data earlier, which will help you make tough choices along the way. 2) Then remember your team is going to change over time and that’s OK. Don’t be afraid to make changes to your team, even sizeable ones. As you scale, there’s different skill sets and resources necessary. 3) Treat problems in two ways, as either one-way doors or two-way doors, which Amazon pioneered. You’ve got to be willing to experiment. You’re not going to be fully committed to every idea so you need to be able to test and fail. And that’s okay. Testing and failing is part of growth. If you do all those three things you’ll create a rhythm and understand what works and what doesn’t.
Richard Castle: Think big enough. You need to have a big vision, relatively speaking, to whatever problem you’re working on. Then maintain and iterate on that vision, while thinking small enough on how to accomplish the vision. So, you’re thinking big and visionary and then you’re thinking small enough to execute to get to that vision. It won’t happen overnight. There’s not one company that executed the vision overnight. They just executed the steps to get to that vision over time. Thinking small is the most difficult part. Many companies fail from a great vision but poor execution, which will include a series of experiments, but you’ll need a lot of intuition too. Apply your subjective opinion, which means taking a risk. Every great vision includes risk. Anything you want to do involves risk. People fail because it’s risky and there’s no certainty. Risk-taking is imperative to success in any business you start.
Adam Mendler: What are your best sales and marketing tips?
Adam Harris: Connect your entire funnel. Oftentimes you’ll be tempted to look at just marketing or just sales. But try to understand the journey from lead to MQL to SQL to opportunity and how each of your different sources funnel into your strategy. Go-to-market is really important. Second, content. Content is king. It always will be. It doesn’t matter whether we’re in the era of search optimization or TikTok or AI, good, quality content drives engagement. The better your content is, the more frequent it’s out there, the more likely your content will be viewed.
Richard Castle: Entrepreneurs often want to form this hierarchical organization on paper when they’re small. Don’t do that. Don’t worry about whether you have a VP of sales or a CRO or CTO. Hire people who can sell or execute. In the early phases of your business, you want to hire people that think entrepreneurially. You want people who can think outside the box and operate in the grey. Those people will help figure out how to execute on your vision and craft your vision over time. You need to surround yourself with people like that in sales and marketing in the early days.
Adam Mendler: In your experience, what are the defining qualities of an effective leader? How can leaders and aspiring leaders take their leadership skills to the next level?
Adam Harris: I see three types of effective leaders, and you need to identify what form of leader you are. There’s a visionary leader who sees the long-term concept and how everything plays out. An operator is excellent at executing. And strategists who think of weaknesses and threats around the vision and how it’s being operated. It’s not likely you’re going to be all three. So, define who you are and fill your weaknesses with the people around you. Find people smarter than you at all things. Then remember your job as a leader is to create environments for others to be successful. If you’re not creating those environments, you’re not going to be an effective leader. If others can’t succeed underneath you, you’re not a leader.
Richard Castle: Leaders are humans and have their own individual, personal failures. There will always be things you could have done differently or better, and hindsight will always be 2020. What’s most important is introspection and thinking about your place as a leader. Consider your place on your team and how your team views you. Knowing how you view yourself is an important thing for leaders. You’ll find there are times when you have failed yourself or failed your team. Don’t beat yourself up over it too much. Move on and continue to grow.
Adam Mendler: What is your best advice on building, leading, and managing teams?
Adam Harris: Over-communicate. You’re not communicating enough until your team tells you that you’re communicating too much. Your communication demands context. There’s this great Anaïs Nin quote, “We don't see things as they are, we see them as we are.” Think about the last time you communicated something to your team, but it got executed very differently than the way you want it to be. They didn’t misinterpret you. Rather, your message was missing context. Context is what makes communication effective or not. Communication is how good leaders become great leaders. Rich and I put a ton of emphasis on communicating to our team in formal and informal ways – regular memos, monthly founders letters, internal podcasts, town halls, and company wides.
Richard Castle: You’re going to make mistakes as a leader when you’re building, leading, and managing teams. Let’s focus on building teams. You always want to get your hires right. But you’re not going to. You’re not going to get them 100% correct. You’re going to make mistakes. So the question is, when you figure it out will you admit that you got it wrong? Admit that it’s not right and move on quickly from that. I’m not the first person to say this but the most important component of any team is trust. Establish trust with the people that you’re building and bringing onto your team. Expect them to build trust with the people they’re working with. Trust comes from engaging with them. Good leaders engage with their teams in ways that are real and authentic. You’re not always going to see eye-to-eye with them. But be able to hold conflict while still maintaining trust with your team. It’s easier said than done, but it’s important.
Adam Mendler: What are your three best tips applicable to entrepreneurs, executives, and civic leaders?
Adam Harris:
1) Stay ruthlessly focused.
2) Surround yourself with unbelievable talent, we call it talent density
3) Work-life balance. You need to have a healthy heart and mind. You can’t just kill yourself from overwork.
Richard Castle:
1) Have conviction. When you have an idea, you'll find plenty of people that tell you it's a bad idea. At the end of the day, have your conviction and move forward regardless of the naysayers.
2) Success isn’t an arrival point. The most accomplished people that did big things probably never woke up and thought “I’ve hit it out of the park.” There’s moments when you feel good. And there’s moments where you feel bad. Keep going.
3) Prioritize your business. It has to be one of the most important things in your life in order to succeed as an entrepreneur. This doesn’t mean you can’t have family or friends or a personal life, but your business needs to be a top priority. Treat it, if you will, as part of fulfilling a purpose for you.
Adam Mendler: What is the single best piece of advice you have ever received?
Adam Harris: I had a coach who gave me one really valuable lesson. Luck is when preparation meets opportunity. He’d say it every day. If you dissect the quote, which I did, you’ll be reminded to work really hard at something before you can get lucky doing it. Become an expert at something. It going to yield a better opportunity to see success because of your preparedness. I’m a big believer that if you want something bad enough, you’re not going to just stumble right into it. You need to think and obsess and lose sleepless nights over it. You need to want it and crave it and make it one of your entire things in life. So ultimately, there’s a lot of truth to that quote.
Richard Castle: Early in my career, I wanted to go to a top 10 business school. I had limited work experience, and I hadn’t been on a traditional pre-MBA track like investment banking (back then that was traditional) or management consulting. I applied to those top 10 business schools despite having had limited time in the workforce. I remember all the schools rejected me. After getting rejection letters, my principle investigator, Donald Guiney, a late professor of medicine at UCSD, and a personal mentor, sat me down and said: remember where you came from and how you felt before you decided to apply to these schools. These rejection letters don’t tell you anything about yourself. Remember how you felt a year ago and get back into that mindset. Don’t let perceived “failure” in these rejection letters change who you want to be. Remember who you were before the “failure” came. That’s advice I’ve used throughout my career. Whether we lost an incredible employee or an investment round or missed a major company goal, I recognize the missed goal feels bad but I remember the highs we felt from achievements that preceded the failure. How you get through failure by remembering who you are is important.
Adam Mendler is an entrepreneur, writer, speaker, educator, and nationally-recognized authority on leadership. Adam is the creator and host of the business and leadership podcast Thirty Minute Mentors, where he goes one on one with America's most successful people - Fortune 500 CEOs, founders of household name companies, Hall of Fame and Olympic gold medal-winning athletes, political and military leaders - for intimate half-hour conversations each week. A top leadership speaker, Adam draws upon his insights building and leading businesses and interviewing hundreds of America's top leaders as a top keynote speaker to businesses, universities, and non-profit organizations. Adam has written extensively on leadership and related topics, having authored over 70 articles published in major media outlets including Forbes, Inc. and HuffPost, and has conducted more than 500 one on one interviews with America’s top leaders through his collective media projects. Adam teaches graduate-level courses on leadership at UCLA and is an advisor to numerous companies and leaders. A Los Angeles native, Adam is a lifelong Angels fan and an avid backgammon player.
Follow Adam on Instagram and Twitter at @adammendler and on LinkedIn and listen and subscribe to Thirty Minute Mentors on your favorite podcasting app.