Leadpages founder tries 'radical candor' at new startup

The co-founder and board chairman of the company behind the marketing software Leadpages and Drip, Clay Collins, meets regularly with CEO John Tedesco, often over lunch in Minneapolis' North Loop.

Turning over the CEO job to Tedesco was both Collins' idea and one that he still thinks of as textbook good practice for startups. That day two summers ago when he handed the baton to Tedesco — literally a baton, in the offices — Tedesco was simply a much better CEO.

Yet now when the two get together, it's not for Collins as founder and chairman to offer feedback to Tedesco, the professional CEO, as you might expect.

It's mostly the other way around — and that says a lot about how two high-profile leaders in the Twin Cities technology sector think about entrepreneurship, management and leadership.

Over another lunch last week with Collins and Tedesco not far from the Minneapolis office of Drip and Leadpages, Collins asked to start the conversation "just to set up John to seem really smart later."

Collins explained that he's eager to keep a conversation going with Tedesco because he's cofounded a software and pricing services firm called Nomics for the digital currencies market. And this time he wants to remain an effective CEO as Nomics hopefully blossoms into a big company.

Collins got Leadpages going more than six years ago, with Simon Payne and Tracy Simmons. Leadpages developed and sold software to automate and refine internet marketing. Collins served as CEO.

Collins said he really enjoyed managing people and thought of himself as good at it — coaching, teaching and correcting when needed.

But managing the managers of people is a different job. Then the company grew big enough for him to start managing the managers of the managers. He came to understand that he was on what he called the nine-month cycle of founder CEOs.

The first three months go great. The founder CEO knows exactly what to work on and feels confident running the business.

During the second three months, through one painful goof-up and vexing problem after another, the founder CEO realizes that the job has somehow changed. What had worked great no longer does. And it really does happen that fast with the company taking off.

The third three months is when the founder figures out what the CEO job now requires. That leads to the next three months of being good at the CEO job again, as the cycle begins again.

As his company grew to more than 150 people, and roughly around the time his twins were born, Collins decided he didn't want to go through another cycle.

"It doesn't feel great to just day in and day out feel like you suck at your job," Collins said.

By then Tedesco was on board, the two having met when Collins was looking for an adviser. Tedesco, now 48, had experience as a CEO and as a startup founder. When they'd started meeting, he was chief operating officer of SportsEngine, a fast-growing provider of software for managing teams and leagues.

Tedesco came to work for Collins in 2015, and by the time of the formal transition as CEO, most of the organization was already reporting to him.

One of the things Collins had always sweated as CEO was having to tell a poor performer to leave. It turned out to be surprisingly easy to fire himself, he said.

As Tedesco described it, Collins made the transition painless by fully explaining why Tedesco was the right choice and then disappearing. No founder ex-CEO was still around to get in Tedesco's way or raise doubts among staff with something as simple as a sour facial expression in a meeting.

Last week Tedesco wasn't willing to fully accept the term professional manager. That suggests a box on the organizational charts of big companies like UnitedHealth Group. His company is still an upstart.

All startups are underdogs, he said. Managers need to be player-coaches, rolling up their sleeves to get the work done as well as leading a team.

A good CEO, to Tedesco, sets a vision for the business, recruits and develops talented people and makes sure there's adequate funding. Yet Tedesco is also in a player-coach role, spending by far most of his time on Drip, the company's business of customer relationship management software sold to e-commerce companies.

As an example of different ways of thinking, the two shared an idea called radical candor that intrigued Collins back when they were working together. It's where workers hear exactly what co-workers, including the boss, think about how they're doing.

Collins is doing that at Nomics, with fewer than 10 folks on the team. Nomics has monthly radically candid job feedback with formal performance ratings of green, "not green" for needs improvement and red for failing. Collins said he's received "not green" ratings as CEO from his co-founders.

But at a company already grown to 150 or 200 people, Tedesco said, implementing that form of monthly reviews likely wouldn't have gone well.

Tedesco said his management approach relies on being straight up, too, but he talks about it as a reliance on "tools" and "language." Tools simply means agreeing what success for an employee or team is going to look like and how they are going to measure it.

Language, he explained, "is how do we demonstrate we care about the person as a person while having the tough conversations to help them grow? How do we communicate … both our empathy and feedback?"

As CEO of something many times bigger than Nomics, he's still managing "people," as Collins might've put it. It's just that the people he's responsible for managing are up the organizational chart from where the hands-on work on products and customers takes place. That's where the founders worked at the beginning.

Tedesco has started a company and knows what that job takes, too. And founder, Tedesco said, "is a capital F title."

lee.schafer@startribune.com 612-673-4302