Daniel Yanisse: Biggest Mistakes Founders Make in the Hiring Process | 20VC #903

1. 0:00 – 2:36

   The Story of Checkr

   1. DYDaniel Yanisse0:00

      (beeping) Three, two, one, zero. You have now arrived at your destination.

   2. HSHarry Stebbings0:08

      Daniel, this is such a joy to do. I heard so many good things from Ali, from Anu, from Rich at Excel actually, so thank you so much for joining me today.

   3. DYDaniel Yanisse0:16

      Thanks, Harry, I'm excited to be here.

   4. HSHarry Stebbings0:18

      Well, I'm excited for the conversation. I want to start though with a little bit of storytelling. We look at Checkr today and the big valuation and the incredible team, but where did it all start and what was that aha moment for you?

   5. DYDaniel Yanisse0:30

      Yeah, it all started, uh, in, uh, my living room with my friend Jonathan, a co-founder and engineer. We were hacking, coding different side projects and one of them was the early version of Checkr.

   6. HSHarry Stebbings0:45

      I love it. Where did you come up with the idea?

   7. DYDaniel Yanisse0:47

      Uh, we had many startup ideas that we were playing with, um, but this one came from our previous job, and I think like many B2B startups, you might find, uh, a problem or a gap, uh, in your, in your work and then you, you have the idea to build something better. So, um, Jonathan and I, we were both, uh, engineers in a on-demand delivery startup and, uh, we were... The startups was hiring lots of contractors. Uh, we were looking at the background check process, there was a bottleneck to hire people fast and, uh, with a good experience. And, uh, after looking at the options on the market, we realized, uh, there was a, a gap and, and, uh, no great solutions, so we said, "Hey, I think we can build something, something better here."

   8. HSHarry Stebbings1:33

      Were you nervous to leave the confines of a safe job in a fast-growing company to start on your own and strike out on your own?

   9. DYDaniel Yanisse1:42

      Yeah, a little bit, for sure. Um, you know, we were like 24, 23-year-olds. Uh, I think Jonathan was may- even meant to be 22. So we only had a couple years of work experience, not- not many savings. We also were on H-1B immigrant visas in the US, so our visa was tied to our current jobs, so definitely quite risky to, uh, quit your job and- and start a startup. Um, but we were also very excited and we got some good advice from other people encouraging us to- to go for it, and- and we did.

   10. HSHarry Stebbings2:18

       Uh, listen, I- I'm sure you're thrilled you did, looking back now. I do want to discuss your leadership. It was really something that I discussed a lot with your cap table before the show. And when I was chatting with them, there were a couple of areas that were very much commonalities in the discussion points. So let's start on delegation. I think most founders suck at it, especially first-time founders.

2. 2:36 – 5:38

   How to delegate

   1. HSHarry Stebbings2:36

      So when we think about delegation, how do you and how did you extract yourself from the weeds of what you didn't need to do? How did you put the support structures in place?

   2. DYDaniel Yanisse2:48

      Yeah. I- I would agree that, uh, first-time founders suck at it. I- I s- I sucked at it a lot. Uh, I might still do. Um, so it took me a while to- to learn how to delegate because like a founder you want to make sure everything's perfect and good and that, you know, I have a high bar and- and I like, I like the details on how things are built and how things are done. So I think for many years, um, I was very bad at it. And then, um, what helped is hiring good, strong, more- more senior people. So actually our first hire, um, was one of our angel investors, Pascal, who was really good and experienced in other startups in many- many areas. And so when he started to take on things off my plate and doing things very well, that gave me a little bit of confidence to- to delegate. But it's been a long journey, um, to try to delegate. I think you kind of have to force yourself to do it as a founder. I mean, there's- there's so much you can say about like the person and everything, but I think for many founders like me, I had to, after hearing the feedback that this is not gonna scale, there's not enough time, I have to prioritize other things, I had to force myself to let go of some areas. I think one thing that helps is, um, to then focus my mind on other things. So if you can kind of focus your mind on other bigger problems that only the founder can work on, like, you know, finding new types of customers or launching a new product or, you know, fundraising, those are activities that only the founder can do, so for me-

   3. HSHarry Stebbings4:18

      Do you-

   4. DYDaniel Yanisse4:18

      ... it does help myself to- to focus on other projects so I can delegate, um, more of the day-to-day.

   5. HSHarry Stebbings4:24

      Do you not think that everything can be delegated away, essentially? Launching a new product, well, a product manager can do that, a great product manager. Fundraising, I agree. Setting the mission, I agree. Hiring a C-suite as well. But pretty much everything else can be delegated away, don't you think?

   6. DYDaniel Yanisse4:42

      Yeah, absolutely. Everything can be delegated and, uh, but in the early days there's always gonna be some gaps in your startup, right? Like, you might not have a head of sales or a head of product or a recruiting team, so you can go, you know, push hard in the areas where there's no coverage. Uh, the best thing you can do is hire someone, so I completely agree that the highest leverage activities you can do as a founder is hiring the best bench and C-suite and VPs you can. Um, setting the vision, that's only something you can do, you know, finding the values and the purpose of the company or mission, um, being the cheerleader of the company in the media, outside, um, you know, fundraising. Those are some of the highest leverage activities only the- the founder or CEO can do. Also spending time with customers is very important, and I don't think you should delegate all of that. Um, founders should stay close to the customer.

   7. HSHarry Stebbings5:36

      I think hiring is the area where most

3. 5:38 – 8:06

   What were your biggest mistakes hiring?

   1. HSHarry Stebbings5:38

      founders make the biggest mistakes. When you look at your hiring, where did you make the biggest mistakes, Daniel?

   2. DYDaniel Yanisse5:44

      Yeah. I made, I think every business, ev- every mistake in the book possible. Um, I think I hired over 20 plus, I kind of stopped counting, leaders, uh, over time and- and- and that didn't work out, uh, for one reason or another after some time.

   3. HSHarry Stebbings6:02

      ... was there commonalities in why it didn't work out? And so like, for me, I always hire people who I like, who may not be best suited for the role. Common problem.

   4. DYDaniel Yanisse6:13

      Yeah, lots of common problems. I would say, I mean, so first, it's, it's normal that, you know, leadership hires don't work out. I think between one in two and one in four executive not, don't really work out in any company, so it is just a, a very hard thing to nail, and you can never be, I think, 100% in, in hiring leaders. Um, I mean, it just is hard because you only spend a few hours to evaluate someone and then you're gonna have to work with them for thousands and thousands of hours. Um, so, so it's just, it's just a flawed process in general. So y- I think we just try to do the best we can. For me, the common reasons, um, one is oftentimes you are attracted by this, you know, shiny resume, really amazing experience and pedigree of the person, and because the person's, you know, background and experience is so, you know, exciting at some of the best companies, you might overlook some of the other gaps or flags that might not make this person the best for your company. They might not have the best culture fit. For me, one thing that I overlook too many times is humility and ego. We have a core value check of humility and sometimes I, I've compromised on that and hired some people that had a bit too much ego, I think, and, and that led to, to, to issues. That might be one of the main reason for failure in, in my company is, uh, people who have some ego or prioritize some of their personal agenda, you know, ahead of what's best for the company or for the team. Um, but I've also hired people who had too much large-scale experience and were too, we were too early for them. Uh, that's also another comment I hear f- you know, from other startups. "You hired a big exec who is amazing, who'd worked at the FAANG companies and is gonna really be, you know, the adult in the room that scales everything," and, um, sometimes you're just too early. Th- th- you're not ready for those type of leaders.

4. 8:06 – 9:38

   How to tell if FAANG candidate is ready for leadership

   1. DYDaniel Yanisse8:06

   2. HSHarry Stebbings8:06

      How do they most often show themselves to be not ready? The FAANG leaders coming with their enterprise badges and the big, big accreditations. How do they show that they're not actually a fit?

   3. DYDaniel Yanisse8:17

      Yeah, I mean, the, the way I see it is, so there are large-scale executives who have scaled, you know, teams with hundreds of thousands of people. Um, when you, when you're in a company like this, you have just, what you do day-to-day is very different. It's, you have a lot of other senior leaders. You do a lot of planning. You do a lot of delegation. You're quite far from the day-to-day, the customers, the spreadsheets, the calls, et cetera. And so, if you have to go from that to then a very chaotic environment where there's no infrastructure, no team, no process, nothing, and you have to get your hand dirties and like, make the first documents and spreadsheets and all of the hires yourself by hand, some people can do it, uh, but it's really a shock to the system. And, and for most leaders, they realize, you know, that it's just not the best skill set, uh, match for them. Because they've perfected the way to operate at scale, and then getting back to such an early stage might not be fun or, or the most productive time for them. Um, it can also be related to ego sometimes, like when people are used to having a huge staff with chief of staff and EA and all kinds of bench and direct the team and only do, like, reviews. You know, getting back to doing everything yourself, not everyone is, is doing... is ready to do that.

   4. HSHarry Stebbings9:30

      So when is the right time to hire them? You know, you've raised a lot of money. Uh, I think the last valuation was four and a half billion. W- when did

5. 9:38 – 10:48

   When is the right time to hire an experienced FAANG candidate?

   1. HSHarry Stebbings9:38

      you, wh- when is the right time to hire these experienced, like, you know, FAANG badged logos?

   2. DYDaniel Yanisse9:45

      Yeah, so, so first I would say some of the best leaders are the leaders who might not have the most amazing resumes or, or companies in the past. The ones that are really, you know, smart, hungry, wanting to get their, you know, big success in tech, and so, so those can be some of the best talents that can be, you know, uh, underrated sometimes. Um, that being said, you know, we've also had some great people from some of the best companies. I think you have to hire them, uh, for what you need in the next two years. So if you look at the scale that they've operated at and you project yourself one or two years in the future, that, that's, you know... Let's say if you have 100 people in the revenue team and you plan to be 200 to 300 in the next two years, then you hire someone who has experience at 200, 300, 400 people. But I wouldn't hire someone who's led a 2,000 revenue org, um, person. There, there's gonna be risk there, especially if they haven't done smaller scale or startups in, in a while.

   3. HSHarry Stebbings10:44

      Say it doesn't work out. How, how do you think about the

6. 10:48 – 12:00

   How long to give new hires store you decide it isn’t working?

   1. HSHarry Stebbings10:48

      right way to let someone go? And how long do you give someone on determining whether it does or it doesn't work? 'Cause you've got to give them a little bit of time.

   2. DYDaniel Yanisse10:57

      Yeah. So in, in the early days, um, I was following the Y Combinator playbook, um, that says, uh, you know, "Hire slow, fire fast." So I did fire fast many people. Uh, maybe too fast, I think. I, I was too fast to pull the trigger and let people go. You do need to give them some time, and, and, you know, also founders, I would say, suck at giving feedback. Uh, there's many reasons why, for some there's- it's hard to give, you know, constructive feedback to, to senior leaders. But you do need to give them feedback to talk about it with them and, and to give them, I, I don't know, I would say three to six months is a good period of time to let... to try to course correct, and then, and then, and then if it doesn't work out, you have to have that hard conversation. Um, and, and so it's hard. It's a balance. You don't want to be too fast so, so you don't give anyone a chance and you don't learn through the process, but you also don't want to let it drag for a year, which will really impact your culture and, and your company performance.

   3. HSHarry Stebbings11:56

      Before we touch on like, the conversation of letting go, how do you, how do you think

7. 12:00 – 13:45

   How to give effective feedback

   1. HSHarry Stebbings12:00

      about giving effective feedback today? If most founders suck at it, how do you approach it, and what would you advise founders having probably not been so good at it before and (laughs) now being much better?

   2. DYDaniel Yanisse12:10

      Yeah, so I think there's, there's two things. So first, it's important to give feedback often, um, and I think most founders are worried about giving f- I was worried about giving feedback because I had, like, maybe five to 10 constructive pieces of feedback, which were mostly, like, negative feedback. And I knew in my gut that if I just keep sharing this negative feedback, the leader is not gonna enjoy receiving that feedback, so then I would just not share it. I th- what I do now is changing the ratio of, like, positive feedback to negative feedback. So always start with one, two, three things that actually the leader does well or has done well recently, so start with positive feedback, and then add at the end, you know, one thing that they can work on to improve or do better next time. And I think delivering feedback this way, to leaders but also to anyone in general, works way better than just bombarding them with, like, 10 things they could do better because that's just demotivating for, for anyone, independent of, of your seniority.

   3. HSHarry Stebbings13:11

      Have you ever heard of a shit sandwich? (laughs)

   4. DYDaniel Yanisse13:14

      Yeah, yeah. It- it- it is a little bit of the shit sandwich, but you don't have to, to, to, to be a sandwich and you also don't have to, like, sugarcoat it. Um, you know, I, I think you can say, "Hey, this was great," you know, uh, "amazing drive, great delivery on this, great hire, and then, you know, I think one thing we can work on is, uh, you know, attention to detail or, or, or to, you know, be closer to per- the customer." So, it doesn't have to be the shit sandwich, um, but there's definitely that balance of positive and negative.

   5. HSHarry Stebbings13:44

      The negatives,

8. 13:45 – 15:24

   What the right way to let someone go?

   1. HSHarry Stebbings13:45

      they continuously don't improve on, and it's not working. How do we let people go? I- I've sucked at this in the past, like really (laughs) bad. Um, uh, what's the right way to let people go?

   2. DYDaniel Yanisse13:58

      Yeah, I mean, tha- that's, that's hard. Um, I, I don't know if I'm, if I'm any good at it. Um, uh, I think you'd, you just gotta be transparent and care for the person. You know, a- after repeating multiple time the same feedback, hopefully it's not a surprise for the person, so I think you're gonna have to increase over time the intensity and make it clear that this is becoming a big problem. Um, I think it's too easy to just d- deliver it, like, "Oh, it's just a little imp- uh, you know, a little thing I'd like to do better." You have to say, "No, this is becoming an important issue," you know, something that holds the leader back, so I think have clear feedback that gets stronger and stronger, and then if y- when you get to the, to the final decision, you just have to share it at th- as is. And then I think what helps a lot for people is, is how you do the process after the announcement, um, so being generous on severance and pay, you know, crafting the departing message together with the person so that it's, it's positive, you know, committing to helping them on reference call and to find another job. I think all of those little details on how you let the person go and how you support them and, and you're fair during that process, tha- that has been helpful. At Checkr, we've been generous and positive and helpful when we let someone go, and so that has helped us to keep good relationships even with, with people who are not here anymore.

   3. HSHarry Stebbings15:22

      When you look at team building now

9. 15:24 – 17:27

   Team Building

   1. HSHarry Stebbings15:24

      and you look at it over the last years with Checkr, what would you have done differently knowing what you know now?

   2. DYDaniel Yanisse15:31

      Yeah, so, so back to the leadership journey and, and so I used to hire lots of execs, not find a good fit, and then there would be a lot of leadership churn over time. And I think that's the case in many fast-scaling startups if you see lots of execs come and go and come and go. And I think during the pandemic in the last couple years, thanks to the help of my coach, um, something changed and, and we started to hire a good team, and I feel like now we have a leadership team that's cohesive and has fun together and trust each other. And so I didn't invest enough into team building, personal connection building, you know, events outside of work, and really getting to know each other at the personal level, and I think that's one of the most important things, uh, uh, to, to, to keep a, a leadership team happy together.

   3. HSHarry Stebbings16:21

      Okay, so what do you do within your leadership team specifically and as granular as possible to bring them together and create that unity?

   4. DYDaniel Yanisse16:29

      Yeah, so we do a, uh, a few little, uh, little things. So, uh, when COVID started and we moved mostly to remote, we started doing daily stand-ups. So, we have a 30-minute daily stand-up with my leadership team every single morning every day we see each other, so that's been very helpful to have that personal connection. Um, what else? We have a iMessage thread with, uh, with my leadership team where we text each other and share things, um, mo- a lot of them non-work-related. Like, we share, you know, news about each other's family and what we do on the weekends, and cooking things, all, all kinds of, uh, you know, pictures from vacation, so that really creates a bit more camaraderie and, and, and connection. Um, those are just a few of the, of the things we do. And then we have in-person events, dinners, you know. Uh, sometimes we invite each others to each other's house. So, so, uh, those, those things have been super helpful.

   5. HSHarry Stebbings17:24

      You mentioned the CEO coach there. Talk to me.

10. 17:27 – 22:20

    CEO Coaches

    1. HSHarry Stebbings17:27

       How often do you see them and for how long is each session?

    2. DYDaniel Yanisse17:31

       Uh, yeah, so I have a session every two weeks for, uh, an hour.

    3. HSHarry Stebbings17:36

       Okay, gotcha. So a session every two weeks for an hour. What questions have you found most helpful and constructive for you in really shaping your thinking that they've posed to you?

    4. DYDaniel Yanisse17:47

       Yeah, I mean, for me, so I've had two different CEO coach over the years. Um, my current coach, I think we've been working together for two to three years now, and she really helped me make some big changes on my leadership style, um, especially when it relates to the relationship with the leaders and, and, uh, my delivery to the company to be a lot more...... positive, and also clarity of the vision and strategy of the company. So I've worked on a few things with her. I think what was the most helpful with ƒ... a coach is to have an independent person who can go and collect unbiased feedback from your leaders, from your board, and then work with me on an action plan on actually how to make progress on the day-to-day. 'Cause it's easy to do a 360 and you have this kind of theoretical feedback, but then how are you gonna change every day and who's gonna keep you accountable that you're actually improving your behavior? Um, so she's been he- very helpful, very explicit, just good experience, and she was able also to attend some meetings, so to be like a witness in the meeting and say like, "Hey, I see how you change your delivery, what words you use, the way you behave, or, or even your, your physical appearance in the meeting." Like, having someone hands-on with you is super helpful because I think no one can improve on their own. It's almost impossible. Even if you're very self-aware, you need a friend to improve, whether it's like a therapist in life or a coach at f- or in a professional setting. I do think you need others to help you. Otherwise, it's almost impossible for a human to change their behavior without help.

    5. HSHarry Stebbings19:23

       What do you think you still need to work on? If you've improved in terms of the negative to positive mindset, you've improved your hiring style, you've improved the leadership morale, where do you still suck? (laughs)

    6. DYDaniel Yanisse19:35

       Yeah, I mean, I can still improve on many things. So first, all of those areas, even delegation, I've improved but, uh, still have a lot to go. Um, so I think in all of those areas you can always get better. I can always get better. I'm just on the beginning of, of the journey. I think I can improve more on, you know, um, being more inspiring as a leader, sharing more per- personal stories, um, you know, uh, on, on storytelling. I think those are important areas where, you know, as an engineer, I'm, I'm not very good at it naturally, so I really have to, to stretch myself, um, and, and, and, and learn this. I think I can, uh, better listen as well, you know, I still tend to have opinions and form my opinions quickly, so I have to be more patient and, and a better listener. Um, so I'd say those are some, some areas I, I'm working on.

    7. HSHarry Stebbings20:30

       What would you advise others when it comes to CEO coaches? Having not had one and now having had two actually different ones, what would you advise other founders on when to get one, the type to get, and how to use them?

    8. DYDaniel Yanisse20:42

       Yeah. It's been the best thing in my life. Uh, it, it did change my life. I don't know if I would have made it that far without, without this help, so I absolutely recommend it to any CEO. I mean, unless you're a CEO and you feel like you're doing amazing and, and there's nothing you can improve on, uh, which I would be skeptical for any, any founder or CEO, I think it's, it's the best investment you can make. Many people tell me that they don't have the time to, to spend time with a CEO- with a coach. I think that's BS, because having a coach helps you better prioritize your time, um, be more effective as a leader. And then what, what type of coach? I've, I've interviewed a bunch. I've a- asked for referrals. Um, I think you, you just... I don't know. I, I couldn't... The, the best thing well- for me was to, um, to interview a bunch of coaches, ask them what type of leaders they work well with, uh, you know, share your wea- your weaknesses and areas to work on, and, and test them. So, I think doing some testing with a few different coaches might be the best way. I think the, the personal fit is, is very important. Do you feel like you enjoy this person and, and you think they're gonna help you? So, most of them are happy to do like a, you know, trial session, one or two coaching sessions. So I would, I would encourage people to, to, to just try different coaches and see the ones that does best for them.

    9. HSHarry Stebbings22:07

       Totally agree with you. I think it's very much like a therapist actually, where, you know, different ones fit different people, so very much aligned there. Can you imagine hiring where all founders, like, a lot of founders, especially first-time founders suck? I think another area is

11. 22:20 – 27:17

    Board Management

    1. HSHarry Stebbings22:20

       board management. I, I don't know any first-time founders that are, uh, innately skilled at board management, and quite rightly so. It's a weird thing to be skilled at. When you look at board management, what do you think it takes to manage a board effectively and what have you learned over the years with regards to it? You've got some big hitters on the board.

    2. DYDaniel Yanisse22:37

       Yeah. I'm very fortunate. My, my board is amazing and, and they really helped me a lot in the journey, and even helped me on how to manage the boards. Uh, I have some other executives or previous founder CEOs on the board who, who helped me on how to manage the boards. Um, I think there are similarities with managing your leadership team and managing your board. At the end of the, of the day, it's also a team and a group of people who are here to work on the business and, and to help the business. So, I think, you know, a few things. So first, it's important, I think, to be very transparent with the boards, just share the truth, what's going well and also what's not going well. Um, you don't wanna sugarcoat or have just a rosy picture of your company with the board. That's gonna create a divide of understanding of where the company is, um, and, and actually create more pressure. I think for... Uh, the board can be scary for founders too, so sometimes you wanna please your board and, and really take every feedback and ask, uh, immediately to heart and execute on it. But, um, sometimes you might not be able to, or, or it could be conflicting feedback, or maybe not the best thing for the company. Uh, for me, I would say a few years ago, there was pressure on financials, revenue growth, which is always gonna be some type of pressure from the board who wants, of course, the company to, to, to perform better. So I think it's important for the founder to listen, but also to be able to push back, to take some feedback, but also, s- you know, say, "Hey, from the five things I've heard today on the board, uh, this is one or two that, that we're gonna work on." And, and it's okay to i- to ignore or push back on, on a few other areas. Um-And then, I think to also get your board excited about what, what we do, so we try to share progress on our mission with the board, on diversity, you know, share product demos and videos with the board. Um, you also have to put yourself in the shoes of the board member. Sometimes it can be really boring to go to, you know, a three, four-hour meetings only reviewing dry financials. So, I think keeping your boards interactions also fun and exciting and bring them in the, in the fun of building the company is important to, to have, uh, an aligned, an aligned board team. Um, and also doing dinners and personal connection as well. So, lots of similarities with managing the, the C-suites.

    3. HSHarry Stebbings24:53

       I don't know why boards are three or four hours. I'm really sorry. I find this, like, egregious. It's a waste of your time. It's a waste of other peoples' important time. Like, you send the deck three days ahead of time. You have three strategic questions on a Google Doc: "When do we expand into Europe? When do we expand with a new product? Do we hire a COO?" And that's your discussions for the one hour. Financials are sent three days before, and they can review them ahead of time and if there's any serious problems, then they can bring them up in the board meeting in any other business. Why have a three or a four-hour board meeting?

    4. DYDaniel Yanisse25:26

       Yeah. No, that's, that's, that's a good question. I think, uh, it can be more efficient. Um, s- things we've done is we send the boards, uh, information way ahead of time, multiple days before. All of the financials are already kind of in the appendix, so we don't spend any time talking about those. And then we, we have debates mostly on products, strategy, go-to-market strategy, leadership structure, the topics you, you mentioned, so I think those are the right ones. Um, yeah. I mean, it, it, it can be done efficiently potentially in one hour or two. Uh, board meetings do tend to drag more and more. But I, I think if you can have three, four hours, that's actually proactive debates, you learn something out of it, the company makes progress after having strategic debates. Um, that's, that's a positive. And I would say that's rare. Many board meetings, it's not, it's not adding value. It's actually, you know, creating more burden and work for the, for the leadership team and the CEO. So, I, I, I, I think we're lucky that our board meetings add value and are, and are strategic.

    5. HSHarry Stebbings26:31

       You were, you were 22, 23 when you started, and you had some heavy hitters around the table early. Did you ever feel you had to do what they said because you were young and they were mature and wise and had seen it before?

    6. DYDaniel Yanisse26:44

       Yeah, definitely. Uh, definitely, a, a little bit. I was really lucky because my first board member, Rich Huang from Excel, he's amazing. So, he's really founder-friendly, um, really good at coaching, you know, first-time founders and helping without imposing any vision or strategy, just helping the founders grow and learn. So, I was really, really lucky to, to get an amazing first board member. That's not the case for many founders. And so, they might have to, you know, push back, uh, in, in a harder way. Um, that was not the case for me 'cause I, I, I got lucky.

12. 27:17 – 28:18

    Did you have insecurities when you were young?

    1. DYDaniel Yanisse27:17

    2. HSHarry Stebbings27:17

       Did you feel insecure as a 22, 23-year-old? I, you know, I'm, I'm much younger than I look (laughs) . Um, but like, I had real imposter syndrome when I was like 20 and in venture and, yeah, I was very insecure. Did you have insecurities when you were young and what were they around?

    3. DYDaniel Yanisse27:36

       Yeah. I mean, I, I didn't have too many. I'm, I'm, um, my personality is, is, uh, you know, quite confident, maybe overconfident. So, I'm on the other side of the spectrum, whi- which definitely was helpful for starting this company, you know, uh, taking all of the risk I'm taking, pushing forward and, and making fast decisions. So, um, for me, I'm, I'm usually pretty confident in myself whi- which helps me not, not, you know, feel pressure or things like that. I have other issues that confidence, you know, comes on the other side, um, uh, and, and can conflict with that, with humility or empathy or, or being patient. Um, I've had-

    4. HSHarry Stebbings28:17

       Have you

13. 28:18 – 29:35

    Have you ever gotten too confident?

    1. HSHarry Stebbings28:18

       ever drank-

    2. DYDaniel Yanisse28:18

       Yeah.

    3. HSHarry Stebbings28:19

       Have you ever drank your own Kool-Aid too much? I've done this too on the flip side, which is, you know, you raise a ton of money, a lot of smart people say you're a genius at 23, and you're like, "Yeah, I am. Yeah, I'm really good." Have you ever had the alternative where actually you get too confident?

    4. DYDaniel Yanisse28:36

       Yeah. No. It, it's possible. And it's, it's, it's a hard balance. I think, um, especially in, in the early years when you get a lot of traction, you know, you think that any product we do, any move we do is gonna be successful and, and I'm lucky that I got some punches in the face and, uh, you know, we've had some very hard year in 2019, 2020. Uh, so, so when problems hit, it's, uh, it's humbling and, and I'm glad we've had some of that because otherwise, you can tend to get too confident. Uh, so it's, it's a balance. You want to be confident without, uh, without losing, uh, humility and, and perspective, so definitely you- I've been oscillating between s- some insecurity sometimes and the hard times and, uh, and overconfident when things are good. But, uh, I try to, to stay grounded. My, my family and my wife has been actually a good, um, support for me to, to keep me grounded, uh, uh, on Earth.

    5. HSHarry Stebbings29:34

       Why

14. 29:35 – 31:55

    Why were 2019-2020 so hard for you?

    1. HSHarry Stebbings29:35

       were 2019 and 2020 hard? And how did you deal with those really shit hit the fan times?

    2. DYDaniel Yanisse29:41

       Yeah. S- 2019 s- you know, was, was, was starting to get some business, um, headwinds because we grew very fast in the gig economy and with tech customers. And those companies, like, you know, Uber, DoorDash and others went public at those days and then started to suffer themselves, so that had a negative impact on our business. So, our business was starting to slow down. And then, uh, and then COVID hits. And during COVID, you know, hiring, uh, stopped in many businesses and that really, really impacted our, our business, which is, you know, around hiring. Um, so those were the hardest times of the company.... we had to make layoffs, um, we had to change our strategy, uh, we, we had low morale. It, it was hard. It was some of the hardest times. And that was actually a good thing. If, you know, for high growth confident company, that was actually a good, you know, shock that, in a way, we needed to, to update our strategy, to change the product we do, um, to change some aspects of our culture, and I think after making those hard changes with- for me personally and for the company, now I think we're way stronger and better position, but any company has- is gonna have at some point, uh, they're gonna hit the wall, they're gonna have some hard days, and, and that's part of the journey, and you have to persevere through it and, and learn from it.

    3. HSHarry Stebbings31:06

       How did you get through them? That's a really shit time. (laughs)

    4. DYDaniel Yanisse31:10

       (laughs) Yeah, I mean, I, I had some bad days where sometimes you start, you know, questioning things for the future, but, uh, again, I'm, I'm a pretty resilient person. I, I kind of never back down or give up on confidence, so I just kept pushing and kept working hard and, uh, I'm lucky I have good support and that I have a good team at the time, good board that was very supportive, and we, we made it through, but, uh, you know, not, you know, for many months it, it was, it was not fun in, in the morning.

    5. HSHarry Stebbings31:37

       There's a couple of things I'm really interested to hear your thoughts on. And it's, you know, we're, we're hearing a lot of advice, especially now with potential tides turning, and a lot of people are saying, you know, "Oh, so many founders have raised so much money at high valuations that they're not gonna be able to live into." When we look at the valuations,

15. 31:55 – 34:45

    Do you worry about raising capital at such high valuations?

    1. HSHarry Stebbings31:55

       a- and I mean this with total respect, before with Cheqo, they've been pretty high, and I've always thought, "Wow, that's pretty high." Um, and then you've always done incredibly well, and, you know, raised subsequent great rounds. But did you worry about raising at high valuations and being able to live up to it? And what would you advise founders having been through some very competitive and high-priced rounds?

    2. DYDaniel Yanisse32:18

       Yeah. No, I, I, I do a lot, um, and, uh, at, at Cheqo actually we've been quite conservative on all of our fundraises, so we rarely fundraise really too far ahead of our scale. Um, we've always been a profitable business, which most companies are not, um, so actually, you know, we, we're, we're lucky to not push the valuation too high. We never fundraise at, you know, 30 to 100 times revenue multiples or things like that. We actually always had pretty reasonable, I would say, lower valuation than other companies, um, and we, we were very careful with the amount of money we raise and the, and the b- we have almost no burn, uh, and are profitable most of the time. So I've been more on the conservative type, uh, side of the spectrum, and I'm involved with many other startups and companies and I always try to coach them on not raising too much money and then being stuck, running out of money, and having to do a down round, which is a horrible situation. So I think the risk is high now, especially with the crazy valuations from the last year or two, um, but knock on wood, I think, with Cheqo, we've, we've been careful not to push the valuation too high and also to, to make sure we're, uh, always profitable or very close to profitability, which then you own your own destiny. If you're profitable, you can always, you know, keep pushing for a few more years and, and, and catch up to whatever valuation of the day, um, your company is at.

    3. HSHarry Stebbings33:43

       The other element that people say is, you know, actually when you raise at such high valuations, it's just impossible soon to get great talent, because when you're valued at 10 billion, what's the upside for someone coming in with equity when it's 10 b- a- are we, are we gonna be a 20 billion public company? Okay, it's 2Xed. Like, it's not as good as it could be if you were gonna 10X it or 20X it in early st- So, how do you respond and think about that piece of advice?

    4. DYDaniel Yanisse34:08

       Yeah. I, I completely agree. I think, I think you gotta be careful. There's many, many, many reasons why h- raising at too high a value- of a valuation is gonna be a negative for your business. So, all of those are fair points, and, um, yeah, you, you need to be able to justify your valuation today and have a compelling story for new hires on how you're going to three, four, five x this valuation in the future, um, and I think we do at Cheqo. You know, we are a $5 billion company today, and at, we have, uh, high potential to, to grow this, uh, multiple fold in the next few years.

    5. HSHarry Stebbings34:40

       Well, you said there about kind of working and advising many companies and founders. Other than raising

16. 34:45 – 39:08

    Mistakes founders make when fundraising

    1. HSHarry Stebbings34:45

       at high valuations kind of, um, without justification or without, you know, the credentials to do so, what are some other big fundraising mistakes that you see? I'm intrigued, Daniel.

    2. DYDaniel Yanisse34:55

       Yeah, I mean, um, uh, f- back to fundraising, I think the most important in fundraising is who you work with, so the quality of the investor and, and the money, um, especially if you're gonna have o- the investor take a board seat. So too many times, founders focus on the, the number, and so the high valuation, and then you can end up, you know, raising very high money from low quality investors or hedge funds who might be too aggressive, um, and, and not really help your company. So I've always tried to say find a fund that, and a partner, that you really like and you really think the person, the investor, the person is going to help you and understand your business and be excited by you and your vision, so I think that's the most important is the quality of the investor, not to over stress the dilution and, and, and the economics. Um, you can use competition to negotiate overall. When you get multiple term sheet investors, if you do some basic negotiation, you're gonna get fair term- terms, but I think, uh, hiring, um, yeah, working with a, with a good partner in investors is the most important. I've seen many situations where the investor, you know, backed down or backed off the company or didn't finish the deal because, again, it was just a transaction or conversation. They were not attached to understanding the, the company's long-term potential.

    3. HSHarry Stebbings36:19

       Totally get you. Um, can I ask, when you think about, like, advising founders today, in terms of, you know, their own personal development, final one, but, like, where do you think most of them are weak? Like, what, are there commonalities in where you find founders need help?

    4. DYDaniel Yanisse36:35

       I think it depends on the personality of the founder. So, uh, you know, I'm more of a, you know, hard charging, intense, confident, you know, perfectionist, direct kind of founder, and there's many other founders like me. So for, for the, the, the intense founders like myself, I think you need to work on self-awareness, listening, empathy, you know, putting yourself in others people's shoes and bringing people around together, not just your sheer power and will. But I also have other founder friends who, um, have... are very empathetic and patient and, you know, don't like conflict, and so for those, they need to do the opposite. They need to actually be more direct, ge- get more conflict, make the hard decision and hard calls. Um, so there's, there's just different human personalities. But if- but if you're an intense founder, hard charging, I think you gotta work on the soft skills and self-awareness so that you work better with, uh, with other humans and, and teams.

    5. HSHarry Stebbings37:32

       What was the hardest fundraise for you? When you look back, was there one fundraise that was a bear to get over the line?

    6. DYDaniel Yanisse37:38

       Yeah, I think it was our Series C, um, hardest. I mean, overall we've been lucky. I've had really fast, easy fundraises because the business bef- had been performing well, and, and we have a good team. Um, but the Series C, uh, was one of the hardest because we got the term sheet for the Series C and then we, you know, our s- our revenues slowed down a little bit, so we missed the quarter, uh, in terms of, uh, revenue targets compared to what we had in the Series C pitch. And, uh, the investors in the, in the Series C, uh, started to get worried that we haven't closed around, so we actually had to, um, negotiate very slightly some of the terms to get it back on track and close it. I'm grateful that the investors were flexible and friendly, but that was one, one that was harder. Um, (smacks lips) yeah, it's a-

    7. HSHarry Stebbings38:25

       Do you think that's reasonable?

    8. DYDaniel Yanisse38:29

       It's, yeah. It happens. Um, I- I think in the early stage it's it happens all the time, but I think as you start to get very late stage and, and, and raising money from, you know, New York investors and mutual funds, they're going to be a bit closer to judging you like public investments. And so the accuracy and the forecast and, and those things are becoming more important. Um, so you just have to change your fundraising strategy a little bit. It's very different from a Series A where everyone knows that the projections are up and to the right, but not guaranteed.

    9. HSHarry Stebbings38:59

       Um, projections are poetry at early stage. I'm totally with you. I- I do want to just... kind of two elements before we dive into the quickfire, promise you. Um, when you think back,

17. 39:08 – 43:28

    Best/Worst decisions you made for Checkr?

    1. HSHarry Stebbings39:08

       what was the- like, the best decision you made for the company? It could be raise a round pre-COVID, it could be hire a certain person. What was the best and what was the worst where you were like, "Fuck, I wish I hadn't a done that"?

    2. DYDaniel Yanisse39:23

       Oh man, that's a good question, hard question. Let's see. The worst decision, for sure, um, was to go too early into the enterprise. So after we had really good traction in the gig economy with tech companies, we dec- I, I read Crossing the Chasm and so I decided, "Okay, let's expand to enterprise customers," and that was the worst decision I've made. I was super naive on what it takes to go enterprise, and so I think we lost a bunch of time and money and, and, um, or to go too early into very big enterprise customers who are not tech company, companies.

    3. HSHarry Stebbings40:00

       What were you naive- what were you naive about there? What did you not see that it took you going in to see?

    4. DYDaniel Yanisse40:06

       I mean, the enterprise is just a completely different beast. I was naive in terms of how those customers think, how, you know, little they understand tech and software, and, and how you really have to adapt your entire product to, to them. So I was naive. There's just hundreds and hundreds of features and, and custom things that large enterprise customers want, and we were definitely not ready to, to push back on that and, and to build the right product for them. Um, and also, the sales process. You know, everything is way more expensive and harder. And so we got some wins, but it was so expensive in terms of sales and marketing and product delivery that it was not a good decision. It was way, way too early for us. We... i- it's important to take your time to grow into the enterprise and we went directly for, like, the Fortune 100. So that was, that was a big kind of go-to-market and product, um, (smacks lips) mistake that, uh, I wouldn't do next time.

    5. HSHarry Stebbings41:03

       Is it difficult to then retreat?

    6. DYDaniel Yanisse41:07

       T- very difficult, yes. Um, and we're still in it a little bit, I would say, because once you have a multimillion dollar, very big, you know, uh, enterprise customer and they keep asking for more features and you keep not being able to, to do it for them, it's very hard because you don't wanna have that churn and, and lose that big logo or that big revenue. So yes, very, very hard to, to retreat from it, um, yeah.

    7. HSHarry Stebbings41:29

       Okay, so that was the worst (laughs) decision, going too early into enterprise. Um, w- sorry, fi- final just question on that one. Do you not kind of blame other people though for that in the way that, like, I'm sure everyone said to you, "SMB market's shallow, you're gonna run out of customers fast, you need to move into enterprise"?

    8. DYDaniel Yanisse41:49

       Yeah, it's not-

    9. HSHarry Stebbings41:49

       And that's logical.

    10. DYDaniel Yanisse41:51

        There's no one to, uh, to blame into it. I mean, and it's- it's just me. I mean, of course we worked on it all together and, you know, I think the team was great. They- they identified opportunities but also challenges, so I think it's- it's just a strategy decision and, and it's, it's me at the end of the day. So no, that's, that's fine. I think that was a good learning. Um, yeah.

    11. HSHarry Stebbings42:10

        What- what- what was the best decision then? Where are you like, "Yes, I deserve a fucking medal for this"?

    12. DYDaniel Yanisse42:15

        (laughs) . Uh, I, I mean, I don't know. It's been a lot of good little decisions. Maybe if I can pinpoint one or two... (smacks lips) I mean, I think at s- you know, starting the company to be an API first...Uh, the way we did it, I think was really good, and today, it still differentiates us. So, building an API, being an API first company, and, and being focused on the developers, that has been magical for us. Like, brought us so much growth, so differentiated, uh, and still helps us win today. Another one is, we've done some pretty good M&A and acquisitions early on. Um, we're a data company at Checkr, and we, you know, I, I decided earlier on to, to buy some of our data suppliers and, and supply chain, which was a non-obvious decision, and that has been a very good investment and move. So-

    13. HSHarry Stebbings43:21

        That's, that's a-

    14. DYDaniel Yanisse43:21

        ... yeah, I would consider that, yeah.

    15. HSHarry Stebbings43:22

        ... a super non-obvious decision. And for a first time founder also, it's, it's hard to do. What would you say your biggest

18. 43:28 – 44:59

    Biggest lessons learned on M&A

    1. HSHarry Stebbings43:28

       lessons are on how to do M&A well, and how to do integration well?

    2. DYDaniel Yanisse43:33

       Yeah, so I think now we've bought five companies so far, so lots of learning along the way each time, and we just announced our, our biggest acquisition with hundreds of people recently, so, uh, at that scale, it's, uh, it's a lot of work. Um, I would say, uh, I, I mean, M&A's tricky. It's hard. There's more failure than success in M&A. Most companies buy others and, and it doesn't work out. For us, um, it's been, it's been pretty good. Um, so far, we haven't bought companies that we had to deeply integrate the product and the platform. That's a very hard thing to do. So the suppliers were already integrated-

    3. HSHarry Stebbings44:09

       So you just do that normally as standalone businesses?

    4. DYDaniel Yanisse44:11

       Yeah, they're standalone businesses. Almost all of the M&As we've done was either standalone businesses or very small teams, which is easier to integrate. Um, and then focusing, I think, on the culture is very important. I think most M&As fail because of cultural issues and kind of treating the people at the acquired companies not as well as your own company and, and forgetting about what it means to them. So in the, in the last integration we're doing right now, we're trying to be, be very people first and, and very focused on the employee experience of the, of the team being acquired. So that's, that, that's been helpful.

    5. HSHarry Stebbings44:49

       Love that. I didn't actually know that. That's terrible. Shit research, Harry. But I didn't know that M&A was such a cool part. I didn't know you'd made as many as you have done there. That's amazing to hear. I, I do wanna move into

19. 44:59 – 49:40

    Quick Fire Round

    1. HSHarry Stebbings44:59

       my favorite, which is a quick fire. So I say a short statement, and then you give me your immediate thoughts. Does that sound okay?

    2. DYDaniel Yanisse45:05

       Yeah.

    3. HSHarry Stebbings45:06

       All right, so hit me. What's the favorite book and why? You mentioned Crossing the Chasm. I love that book. Tell me, what's your favorite book and why?

    4. DYDaniel Yanisse45:13

       Yeah, lots of business books. Um, I don't know if I have a favorite, but I'll share with you the, the latest I read that I like a lot. It's called Accelerate. It's, uh, it's a book about engineering and dev ops, but it's very readable by any non-technical people. And that's the first book that gave me the answer on how to measure engineering in a tech company, 'cause that's actually one of the hardest thing to do, and engineers push back on it, and that book, uh, was very clear on how to measure engineering quality and, and velocity, uh, in the best companies.

    5. HSHarry Stebbings45:45

       Have you met Iso at Athenian?

    6. DYDaniel Yanisse45:49

       Who?

    7. HSHarry Stebbings45:50

       His name's Iso Kant. Um, he runs Athenian, which is an incredible startup that measures the performance, uh, velocity of ca- development of, like, engineering teams.

    8. DYDaniel Yanisse46:01

       Uh, I have not, but, uh, yeah, I would love to.

    9. HSHarry Stebbings46:03

       He's a fucking beast. Uh, you'd like him. Um, tell me, what is the hardest element of your role with Checkr today?

    10. DYDaniel Yanisse46:13

        I would say still, uh, hiring. Hiring is, is what takes a lot of time and energy, uh, and, and it's, it's a very hard thing to do. Still haven't cracked it.

    11. HSHarry Stebbings46:24

        What's the hardest role to hire for today?

    12. DYDaniel Yanisse46:29

        Oh, uh, it's whatever current, uh, leader I'm hiring. I mean, right now, I'm hiring for, um, head of revenue, and so it feels like the hardest to hire. (laughs)

    13. HSHarry Stebbings46:40

        Uh, head of revenue's tough. Head of people's tough as well. Um, what purchase under $1,000 has made the most impact to your life?

    14. DYDaniel Yanisse46:50

        Um, on my home office, uh, the f- like a year ago, I started to invest into better equipment and, um, definitely the, my MacBook dock, docking station, amazing. Just saved me so much time.

    15. HSHarry Stebbings47:05

        (laughs) What would you most like to change about the world of startups, Daniel?

    16. DYDaniel Yanisse47:13

        Um, all of the, all of the entitlement around crypto and money and, like, using super smart people and super cool engineering for the most stupid things ever.

    17. HSHarry Stebbings47:30

        (laughs) Okay. How do you think about changing that? Like...

    18. DYDaniel Yanisse47:35

        Uh, I don't know if it's gonna change. I mean, peop- peop- it's, I don't know, people have, have fun on Twitter and other places talking about those things, but sometimes it's just wasted opportunity for me. We have all of these resources and smart people, are... There's so many problems in the world around, you know, environment and water and social and opportunity for, for people, and all of these smart engineers are working on, like, you know, million dollar NFTS to sell, which I... And I love Web3 and NFTS and I think it's the coolest technology and opportunity in the world. It's just the early applications are a little bit underwhelming.

    19. HSHarry Stebbings48:11

        Tell me, who's the unsung hero from your cap table who's done the most to help, if you were to have one?

    20. DYDaniel Yanisse48:17

        Yeah, there's definitely one. His name is, uh, Pascal Lévy-Gabouille. He's one of our very... He's, he's actually my first angel investor, and he's helped us over the years all the time, and it's been eight years so far. So he's been the unsung hero.

    21. HSHarry Stebbings48:33

        You can have a billboard anywhere. Where is it and what does it say?

    22. DYDaniel Yanisse48:39

        So we did start, uh, having billboards in the, in the Bay Area for the first time, uh, in the last year and it's been great actually. Um, I don't know. I was just in New York and, uh, there's just so many people there and so much going on. Uh, would be great to have a billboard in New York, in downtown New York.

    23. HSHarry Stebbings48:55

        Tell me, final one, what do the next 10 years hold for you and for Checkr? If we do this in 2032, where will Checkr be?

    24. DYDaniel Yanisse49:04

        Yeah, I mean, Checkr will be a great, you know, it's HR tech software platform, um, who continues to, to grow and innovate for, for customers, uh, continues to drive our mission to build a fair future and give second chances. Uh, I would hope that fair chance and second chance hiring, which is my passion, giving chances to people who've been in prison, becomes more mainstream, at least in tech. And for me personally, I guess I'll, uh, I'll be a dad and a, and a family guy in, in 10 years from now. So that's gonna be an interesting shift.

    25. HSHarry Stebbings49:35

        Daniel, it's been such a pleasure. Thank you so much for the time today, and I can't wait to finally meet in person.

Episode duration: 49:40