Our next guest is COO Alliance Member Alex Zerbach, Director of Operations at Carrot.
It can be tricky to stand out in the crowded space of real estate marketing, but with the right approach to software, you might just hack your way into dominance. Carrot helps you solve that problem by using a high-level website development and launching platform and providing a suite of marketing tools that will generate leads to your business online. Joining Carrot in 2014 as employee #4, Alex Zerbach has helped grow the company past 30 employees and 6,500 customers. Now serving as its Director of Operations, Alex enjoys bridging the gap between departments to help make the biggest impact for Carrot and its customers. Sitting down with Cameron Herold for a chat, Alex shares what he learned from his successes and failures in the company, his training in conflict management and his recent attendance to his first event at the COO Alliance. He also shares how Carrot keeps communication alive and on task with their remote employees and how he interacts with the CEO in communicating about projects.
Alex is the Director of Operations at Carrot, a software company that helps high achieving real estate investors and agents generate leads online. Carrot’s customers are able to run highly profitable businesses and make an impact in their communities. Carrot focuses on website and marketing performance and helping their customers stand out in the crowded space that is real estate marketing. Alex joined Carrot in 2014 as employee number four and has helped grow the company to past 30 employees and 6,500 customers. Alex bleeds orange and loves seeing Carrot customers change their lives for the better. Alex has been involved in projects and initiatives across all business functions and enjoys bridging the gap between departments to make the biggest impact for Carrot and its customers.
He’s a self-proclaimed spreadsheet addict and loves to see a well-organized project with clear metrics and objectives. Alex finds balance in life by leaving the office and enjoying all the Pacific Northwest has to offer with his wife Morgan and their twin daughters, Nora and Hadley. I also have a fun story about Alex. He set a goal a few years ago to eventually get the company to the size that he would be able to join the COO Alliance. He attended his first COO Alliance event. We got to have a picture together and he told me the story. He got choked up and I got a little choked up as well. Alex, welcome to the show.
Thanks, Cameron. It’s a pleasure to be here.
That was a neat story that you shared with me and I was touched to hear that. Why don’t we start briefly with that? How did you first learn about the COO Alliance? What was it that had you wanting to join that?
The credit goes to Trevor, our CEO. He’s part of a couple of mentor groups and was always challenging me like, “You’ve got to find mentors. You’ve got to find people who have been there and done that before you.” Google searching has what put me on to you in the first place, and then listening to a lot of your podcast episodes. I was like, “That’s going on my goal board.” I tweeted you too, and you tweeted back. I said, “I’m going to join the COO Alliance soon. Save me a spot.” You said, “Okay, I’ll see you soon.” I got that picture next to the tweet, so it’s a cool story.
That’s cool that you chase that down. Thanks again for telling me that story. Why don’t you tell us briefly what Carrot is so we get a bit more of a layman’s terms idea of what Carrot is as a company? I want you to tell us about how you got to Carrot.com. There’s a cool story there as well.
Carrot, in layman’s terms, we allow our customers to launch a website but it’s a little bit more than that. On the back end, we have a bunch of tools, resources, and training that allow them to use creative marketing that we’ve tested and proven that it works. Some of the common practices that Carrot customers use like fix and flips. If you’ve ever seen any of those shows on HGTV where they have houses that need a little bit of remodeling, our customers will market to people who want to sell those houses. They’ll fix them up and then turn around and sell them.
We also have a lot of agents using our websites for the more traditional list-your-house and all that kind of stuff. That’s what Carrot does in a nutshell. Carrot is a brand. People have asked us, “Why Carrot? It seems abstract for real estate.” It came from our original website OnCarrot like, “You need to get on Carrot.” The whole Carrot idea comes from the carrot on a stick mentality. That’s what lead generation in our mind was. We always saw Carrot as a platform and a much bigger play at anything that is a high margin business. We wanted the website to be from Carrot.
We knew that in order to brand that way, we needed to own Carrot.com. We’ve been trying for years to grab that domain and it was never available. We became aware that it was available. The story was sad. The guy who originally owned the domain passed away and his family had it. We had to go through probate and everything, but then once the family learned there was a tangible asset and worth some money, we got involved with the broker. He’s like, “We’re doing a one-time offer. There are no counteroffers. You’ve got to give your best offer. We’ll put it all in front of the family and we’ll let them decide.”
We had no idea what other people were willing to bid for on the domain. We threw some money at it. Michael was the name of the guy who owned the website before. To sweeten the deal, we said, “We will put a page on our domain with a tribute to Michael and all of his artwork.” He was an artist that did a special type of painting, “We’ll memorialize him on Carrot so he’ll always be a part of Carrot.” That spoke to them and we nailed it. That’s all to Trevor’s credit. He’s a savvy negotiator and got the deal locked up.
It’s an interesting connection to what matters to people and that is the intangible. You got involved with Carrot as a young company in 2014. You were young at the time as well. What was it that attracted you to such a small brand with few employees?
I knew of Trevor. He and I both went to the same small college in Southern Oregon called Oregon Tech. He was there probably 4 or 5 years before me. We had a mutual friend. He was like, “I know this guy who’s starting this online business thing. You should reach out to them.” I did and I did an internship. At the time, he just got Carrot off the ground and didn’t have any money to pay me. I went and I was doing sales for another company. I didn’t enjoy that as much. I kept in contact with Trevor and he’s like, “I’m making some money. Do you want to come over here and help me grow this thing?” I was like, “Send me an offer today. I’ll put my two-week notice in.” I did. It was the idea of the online, the software and real estate. I always knew I wanted some piece of that. When we put all three together, I was all in on it.
You’ve been with the company through its entire growth. When did you move into this COO role?
At the start of 2018, we created an operations team and I headed that up. Towards the back half of 2019 is when I started taking on more of the traditional COO type of operations. We’re growing that in the future. I’m excited to see what the next step of that at Carrot looks like.
What parts of the company do you run? What parts of the company does Trevor run? How do you guys divide and conquer?
It’s something we’re still working through and figuring out on a quarter-by-quarter basis. I have the success team, the customer success team, the operations team, which we use as a team to enable systems, processes and training across the entire team. Trevor mainly focuses on marketing. That’s his strong suit. Marketing products as well and making sure that those are dialed in. As we’re growing together, our relationship is improving. I’m starting to take on more of the internal stuff with employees like hiring and maintaining the culture. He’s starting to focus more externally on the shift that’s happening in the market like higher-level strategic partnerships, potentially getting interested in some M&A opportunities and things like that.
You talked about getting into some other kinds of companies that would be selling online.
We’re interested in taking the brand outside of real estate at some point. It’s in our ten-year vision, anything that’s high margin.
You’re in real estate and stay deep in that for a while. We mentioned that you have done a good job with some of your work-related and strategic planning. I want to start with strategic planning in a couple of other areas. What was it over the years that you learned about strategic planning that you got better at?
We failed quite a bit at adopting different methodologies. What we’ve done a good job at in Carrot is looking at things like, “Let’s test this out for a quarter to see if this gives us clarity and alignment, and see if we can progress to our goals in a comfortable way without stressing everybody out.” Over the years, we’ve tried things SMART goals, Agile, Scrum, and all these kinds of methodologies. What’s working is OKRs. We’ve done a good job of making sure it’s an alignment in a communication tool. We’re getting better at setting those OKRs, knowing the right way to set key results, and what a good objective is.
Most of our effort goes on the annual planning, and then we break those down quarterly. The quarterly call we had, reset is what we call it, was the best call we’ve ever had. It was because everybody was already in alignment with what we’re doing for the year, so it’s cool. “You scope it to Q2. What do we accomplish in Q1? Let’s review the budget and finances. This is still valid and valuable so let’s move it into Q2 with some updated key results.” It’s quick and efficient. Everybody is on the same page. Everybody already sees how their team and them personally can benefit from some of the objectives and key results. We’re in a good spot there.
How many of your team are involved in coming up with the OKRs or coming up with a strategic plan for the company?
For OKRs, we try to involve the entire team. We ask for feedback from each team member before we set OKRs each quarter to see if there are any opportunities that the leadership team is missing or that they’re aware of at the customer level. Sometimes we are somewhat removed from the customer interaction. As far as the strategic planning at the leadership level, there are eight leaders who are all on the call. Each business function has a voice at the table for the strategic plan.
Those eight business leaders, do you all have a weekly meeting rhythm for the eight of you as well?
We do Mondays and Fridays.
How did those work? Walk us through what the format is of those.
We always start with a win or a celebration. We always want to come in with energy. Ideally, it’s something from a team member or even a cross-functional team member that calls out, then we look at scorecards and make sure we’re looking at the key metrics. From there, it’s a quick rock review or OKR review to make sure anybody has status updates that need attention. If anything is red, meaning low confidence that it’s going to get done, we address that right away. After that, it’s usually announcements from Trevor and I at the company level, making sure people are all caught up. We wrap it up with issues like a tight parking lot and anything from the week that we need to review on the leadership call.
You and Trevor, how often do the two of you meet one-on-one?
That’s always changing depending on the season we’re in. It’s about three times per week now. Since we’re a remote company, we’re both in Slack quite a bit. We text in Vox constantly. Sometimes, if he can’t get my text, I’ll just Vox him. One way or another, I’m going to get ahold of him.
Vox has been good. I’ve been starting to use something called Marco Polo, which is a video version of Vox. Does Vox have a video now or is it just audio still?
It’s just audio. I’ve used Marco Polo with my family and stuff. That’s interesting that they’ve developed it for a business application that might be better than Vox.
It’s even better than Vox because a couple of things happen. You get some of the visuals of the other person. You get some more expression and a little bit more of the intention behind what they’re saying. You also do get to see the other person and it’s like, “Good job,” but you see that they’re smiling and they mean it versus like, “Did they really mean it?” There’s a lot more that comes over it. There is a bit of that human connection. Even though you’re not talking over video, you feel like you are because you got a video message back and forth. It’s a clean and simple application that is powerful in business. You go from the OKRs and strategic planning into scorecards with each of your individual team members. How do you run the scorecards? How do you set those up?
I love spreadsheets. Our scorecard is 100% a spreadsheet. There are pros and cons to that. Things do break in spreadsheet, especially if you have 30 people updating them. I know there are tools and software out there. I am starting to get to the point where I’m interested in looking to move from a spreadsheet to software. Like I always say, you want to start with the spreadsheet, keep it simple, understand what the process is, and then look for something to automate it. Each team has a tab, and then at the top level of each tab is the team metrics, and then below that is individuals. A lot of times they ladder up, which is nice to see. We’re a big believer in if you can see your contribution as an individual going up to the team and building up a company, you have ownership in this company. We try to do that as much as we can.
How often do you revisit the scorecards with the team members?
I have a view of the high-level company metrics. We look at that on our Monday call with all team members so they can see. We’re open financially as well so we share all the top-line revenue, user growth, NPS, and all that stuff at the company. Each team is responsible for looking at their team once on the call, which is usually right before the company calls.
Do you share any of the expenses with the company at all?
We do. It’s public in our Google Drive but it’s not something we typically bring up unless it’s something we’re underutilizing a line item or way over on a line item. We call it out and say, “We’re aware and here’s what we’re doing to fix it.”
Any reason why you’re not getting deeper into the expense side then yet?
Not really. It’s probably an optimization point for sure because it’s an input and output like, “Here’s what we spent to get this result.” We’ll probably do a better job of connecting the story of why we’re doing some of the things we’re doing.
That’s the core reason to show people the expenses. They understand why we make some of the decisions that we make in terms of investing. They start to have an understanding of some of the ROI behind things. They also understand why we might be saying no on some other investments. They start treating the business like a bit more of a business instead of just a project by project too. There are some benefits to it for sure. It’s not an easy art to do, but it sounds like you would be able to pull it off. You mentioned to me that you’ve got about 7 people in an office and about 30 people remote. How are you dealing with having remote employees? What tools are you using to keep them aligned and to keep the communication high? I want to dive into the culture a little bit with you.
We’ve been on Slack for a long time. That’s our main source of communication. Since we’ve always been a remote company, it felt natural. We haven’t had a ton of pain points with it, which is nice. On the whole, the team is generally younger, so adopting new software to run some of this stuff comes naturally for most. We use Slack, Google Hangouts and Asana for project management. It’s been good.
Anything that doesn’t work well for you in culture over managing remote teams? We’re talking a little bit about culture because you mentioned to me that you’ve got a fairly good company culture too.
It’s even funny we’re talking about Marco Polo. In Slack, a lot of times, you could work with somebody all week and have maybe 1 or 2 calls. I have no idea about the home life situation. That’s an optimization point for us. I love the idea of Marco Polo and I’d like to see where they’re at. If they’re out for a walk, if at home, and the baby in the background so I feel a little more connected to them. That is lost a little bit in the remote aspect.
I hadn’t even thought of that. Without playing big brother, it’s not a bad way to get an idea as to where your employees are. All of a sudden, you get a little Marco Polo back like, “You’re on the ski hill.”
That’s going into culture. We don’t care as long as you’re hitting project deadlines and not slowing anybody else’s progress down. There are some rules that you have to be in front of the computer. If you’re on a support team taking chat, but if you’re heavily project-based, as long as you’re committing to realistic timelines getting the work done, we don’t mind what you do at 2:00 in the afternoon. The other thing about remote work is, for anybody reading this and thinking about allowing people to go, the culture is sharing your monitor screen so they can see you. A lot of times, people want to turn off the camera. As much as you can, try and guard against that. You can see, are they energetic? Are they focused? Are they on their phone? All that kind of stuff.
There’s more of a human connection when you have that on video too. I was talking to someone about that and saying that in this time that we’re in, we’re in the midst of this whole Coronavirus. The world is shutting down and panicking. It’s more important than ever to have that human connection with our employees, customers, suppliers, banker and accountants. Doing it over video is a powerful and easy way to build that connection versus over audio or text. We’ve migrated from the office environment into some digital platforms that helped us communicate and be faster, but we’ve lost a little bit of that human connection. We are still human starving for that. There’s also a strategic benefit that we build better relationships, and then the business is going to scale because of that too. What do you struggle with in terms of your role? You’ve had to grow with the company as you’ve been building the organization. What have you struggled with in terms of your growth?
Personally, it’s managing people. I fundamentally believe people want to show up on Monday and want to do great work. They want to be ambitious and want to do right by the company. A process that’s clear in my mind or a way about solving a problem might be clear as day to me. Getting somebody to buy in, understand, think about it the same way, or follow the process and expect the same outcome has been a bit of a challenge. It’s something I’m always growing and learning, but it’s also a fun challenge. I started with the company as a strong individual contributor, and then transitioning that skillset, and then coaching and training people. Working through them has been an exciting and difficult challenge, but I enjoy it.
You clearly are showing up as a leader too. You’ve joined the COO Alliance so you’re going to be in this network of seconds-in-command from four countries. You’ll be with that peer group in scaling. Have you specifically worked on any skill areas for yourself over the last couple of years?
I would say conflict resolution is one for sure. Finding ways to boost my emotional intelligence. We talked about different personality tests. Getting people to take those and not just looking, but learning what that personality is because it’s different than mine. It’s something I’ve been working more towards.
Walk me through what you’ve learned in terms of the conflict management model. I’m interested in that.
It’s interesting because it’s a team member who does some of that. He’s on my team so it’s great because I pick his brain and take on some personal coaching from him. Things like mirroring back to somebody what their actual concern is with the conflict. If there is an open loop, closing the loop within, coming to a resolution, and making sure on both sides of it that you closed on the resolution. That’s been huge for me because I’m thinking, “I’m closing the loop,” and they’re like, “No, you’re not.”
How do you close that loop? Is this something specifically you ask them or something specifically you say?
I probably could level up here, but I usually just set a reminder in Asana or my calendar to follow back. If I feel like there’s some resolution, I’m like, “Let me look it out for three days,” and then I’m being like, “I know we had some closure on that. Is there anything we need to tackle or is there anything we need to still address?” If it comes back no, then in my mind, “I got it.”
Have you closed the loop with your wife, Morgan, on everything? There are still a couple of open loops like with everybody in our relationship. That’s a good tool. It’s like, “Are we good now?” You’re right. It takes some time at times.
I could probably send a recurring reminder for forgetting.
That’s what flowers are for. Let’s talk about you and Trevor. I was joking about you and your wife, but your secondary wife is Trevor. You and he had been building the company together virtually from the get-go. Tell us about a good conflict that you’ve had. I’m sure you have had at least one. We all have as leaders.
I’d be remiss to not bring Chris, the other Cofounder, into the mix. The three of us have been on this journey together. I want to give Chris a little shout out. The conflict that comes to mind is years ago when Trevor was casting vision for me and my career development here at Carrot, he would say things like, “You’ve got to get more strategic,” or “You’ve got to own this better.” It was always hard for me to see it or understand what he meant. I’m like, “Show me.” I’m a Millennial. “Give it to me today.” “How do I do it?” I always push back and be like, “Give me three things with realistic timelines that you need to see me do to prove it.” He’s like, “It’s not quite that simple. These are skills. You can’t just watch a Udemy course and master in a week. You have to go through experiences, challenges and hard things.” We’re just getting me on that point. I look back and I feel foolish and naive with my perception of how it was all going to go, but I’m appreciative of the opportunity.
You were fairly perceptive. The second side of that is that he needed to get better in terms of providing feedback. Learners and mentees need to be given specific feedback, not general feedback. Often, general is hard for anybody to wrap their head around. You weren’t doing anything wrong. In many ways, he probably hadn’t grown yet in terms of how to give good feedback too.
It could have possibly been the right time and right place. We’re trying to align like I’m here, and he’s like I’m not there yet.
It’s like two people. One guy comes in for the fist bump and the other comes in for the high five, and they meet somewhere with an awkward hug. It’s like, “What is that about?” You have to work through a couple of those. How about staying on the same page with him in his vision? Typically, the CEO is the caretaker of vision and the COO is the caretaker of the plan. How do you stay on the same page?
We’re always working on it. I know when I joined COO Alliance, hearing some people go through some of the same stuff, I was like, “Finally, there are people who totally understand.” Trevor is entrepreneurial. He’ll get on a call for the company and he’s excited about something, and he’s saying, “We’re doing it.” Me sitting there like, “I know he talked about it, but I didn’t think it was confirmed.” In terms of communication, it’s constantly following up with people or with Trevor and being like, “That’s great. I’m super excited for us but let’s rein this in a bit and think about optics and how we’re going to lay this out.” Also giving him complete freedom. When he gets excited, go for it and let’s course correct after. Slack and all that kind of stuff have been helpful because we’re getting better at sending each other what we intend to send out to the whole company and aligning around it quickly. That’s been big for us.
All entrepreneurs tend to have the idea of the minute where they get inspired and the ideas they want to start. Sometimes, they want to start because they don’t know where to keep all the ideas and in the absence of a place to keep them. They need to get them started. One question I’ve got is, how do you green light, yellow light and red light those ideas for him so you know which ones to say, “Yes, go for it,” and other ones to go, “Yeah, but not now,” and others to go, “Great idea, but no for never?”
I have a list in Asana where I try to keep all those things. Trevor and I do a monthly commitment list with all the leadership, especially to each other. Anytime there’s something that’s outside of that, I’m always like, “Which of these commitments do you want me to reprioritize or move so I can fit that on here?” I’m always asking questions like, “Let me check if that’s an OKR.” Even though I already know if it is or isn’t. I’m trying to realign around things we’ve already committed to.
The big one is, “Which project do you want us to move?” Often, they have no intention of having us move a project at all. How about in terms of staying aligned with his vision? How do you do that?
We have a document, which is a 1-year, 3-year tenure. Anytime we come to a tough decision or we can’t decide, we pull up that doc and we try to align around it that way. We ask each other tough questions. It’s interesting because both of us can see where we’re trying to go long-term with Carrot. Sometimes the more close 1 to 2-year stuff is where we misalign, which I don’t know if that’s common for that dynamic.
When you don’t attach a project to a goal or to which part of the vivid vision is making come true, it’s hard to understand why we’re doing that project in the first place. What’s the relevancy? It’s attaching the relevancy of a project to a bigger goal or a higher purpose. What is it making happen? You mentioned that Trevor is a part of some groups that he goes to and learns from. Where is he a member of? What does he go to?
He was a part of Russell Brunson’s group. Russell has taken some time off from that, so I don’t believe they’re meeting anymore. Dan Martell is another mentor. He has a SaaS Academy type of program. Trevor runs his own mastermind that he’s done for years. It’s been cool seeing some people come in and out of there and getting to know them as well. They primarily are in real estate, but not all of them. As it’s grown, it’s definitely taken on more. It’s mainly entrepreneurial folks but it’s been cool to see that grow as well.
It’s cool that he’s part of Dan’s group. Dan and I have been a part of a group for several years called Mastermind Talks, and Dan is a great guy. Talk to me about how you hire. With the remote team, what do you look for? What systems do you have in place in terms of hiring people and finding great people?
Our hiring process is always somewhat changing but we do a three-step hiring process where we have 4R doc, which is your Role, Responsibilities, Results which is the most critical one there, and Requirements. We take that and we get alignment around it, budget, etc. We go and find qualified candidates. We use some software to help us with the pipeline. Usually, we have a team that can filter some of those first interviews with some general questions. We take them to step two, which is a test project. We try to keep it somewhat vague and mainly, we’re looking to see like can they commit to a timeline? This test is due by Thursday. How do they communicate? We leave it open until they email us with a specific subject line. It can be following directions. We want to see how they present and how much time they can put into the presentation. From there, if things are progressing, we might have a call to understand a little bit better about the role. The final step is always with Trevor at the end to make sure it’s a culture fit and whatnot.
I like that you’ve got each of the steps laid out as well. You mentioned you use some software to help you with the process. What software do you use?
We use ApplicantPro.
How long have you been using that?
I’ve been using it for about a year.
Do you like it?
We do. It’s like a CRM on the back end, which is common. The power that I see in it is we can select which job boards we want to push to. For an engineering role, I know they want GitHub, AngelList and Stack Overflow. I catch that up as a saved group. I know in customer success, there are these 5 or 6 that we found good talent through. It’s nice to have all these presets. When you tell me what you need, I just click a couple of buttons and it’s building off stuff we’ve already figured out and developed.
Anything I haven’t asked you that you want to make sure that we know about either you or Carrot, what’s made you successful in your role or what’s made the company successful?
I’m insanely proud of the culture, the team that we built at Carrot, and the mission we’re on. I love Trevor’s outlook on business and life, and the more of an impact we can make in our local communities and in our team member’s lives. All that business’ worth. Our mission is adding humanity back to business and we’re passionate about that. Especially in nowadays, it’s gone away. When we call customers on the phone, they’re blown away that they’re talking to either the CEO or someone who helped start the company. It’s something that we’re passionate about and genuinely enjoy. I wanted to get that out there. If anybody’s interested in Carrot or working for our company like that, let us know.
It’s amazing you started to do some video messages with customers. You’d go to the moon there as well.
We got pitched on from Drift. We let it circulate in Slack like wildfire and everybody’s like, “Why aren’t we doing this?”
What did someone pitch you on?
Drift sent us a video and it was like, “Hey, Carrot.” They’re showing our website and showing how features can be adopted like in ours. It went through Slack going, “Why aren’t we doing this?”
When you have that instant visceral reaction, jump on it because that’s probably easy to implement a solution that sets you apart from other competitors quickly. Alex, one final question. If you were to think back to your 22-year-old self when you were just starting out with Carrot or starting out in your career, what word of advice do you wish you’d known then that now you know to be true?
Read a lot of books and be patient. It takes time. Trust in yourself. If it’s meant to be, so shall it be.
Alex Zerbach, the COO for Carrot.com, thank you for joining us. I appreciate having you on the show.
Thanks. It’s a pleasure to be here.
About Alex Zerbach
Alex Zerbach, a software company that helps high achieving real estate investors and agents generate leads online. Carrot’s customers are able to run highly profitable businesses and make an impact in their communities.
Carrot focuses on website and marketing performance and helping their customers stand out in the crowded space that is real estate marketing.
Alex joined Carrot in 2014 as employee #4 and has helped grow the company past 30 employees and 6,500 customers. Alex bleeds orange and loves seeing Carrot customers change their lives for the better.
Alex has been involved in projects and initiatives across all business functions and enjoys bridging the gap between departments to help make the biggest impact for Carrot and it’s customers.
He is a self-proclaimed spreadsheet addict and loves to see a well organized project with clear metrics and objectives.
Alex finds balance in life by leaving the office and enjoying all the Pacific Northwest has to offer with his wife Morgan and their twin daughters, Nora and Hadley.