The emotions of fear and shame often surface for people as they address their finances. Shannon McLay, the founder of the Financial Gym, discusses her journey and tips she has for founders and would-be founders as they build their businesses.
The emotions of fear and shame often surface for people as they address their finances. Shannon McLay, the founder of the Financial Gym, joins Scott on Founders Focus to discuss her journey and tips she has for founders and would-be founders as they build their businesses.
The Financial Gym is a fitness-inspired, personal financial services company. After a 13-year career working for Bank of America Merrill Lynch, Shannon’s goal was to open a financial services company that would help clients of all financial shapes and sizes.
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Scott Case 0:00
Welcome to Founders Focus, a podcast made for founders by founders. I'm Scott Case, CEO and co founder of Upside, and I created Founders Focus to help share free resources and actionable advice. Together we're building a community for business leaders, entrepreneurs and founders to come together to tackle today's challenges. This podcast is powered by my awesome team at Upside. Please visit foundersfocus.com to join the live video sessions or to catch up on past topics.
Scott Case 0:27
With that, why don't we get started by introducing you to Shannon McLay, who is the founder and CEO of the Financial Gym. And it's a national personal financial services company that takes a fitness inspired approach to its clients finances. The topic for today is financial therapy for founders. Because part of what Shannon has discovered through working with all kinds of different people, particularly entrepreneurs, is I think it's 98% therapy and 2% math. But Shannon, you'll tell us more about that. So Shannon, go ahead and introduce yourself and tell us a little bit more about the Financial Gym.
Shannon McLay 1:14
Thank you so much for having me today. So yes, I am the founder of Finance Gym. I always tell people that I'm like an accidental founder because I never had any intention of starting a company until I had the idea for the gym. And I had it while I was working as a financial advisor at Merrill Lynch and I became a financial advisor at Merrill Lynch too because I saw the lack of diversity and financial advisory and I realized that once I became a financial advisor that the problem wasn't necessarily lack of diversity with advisors, it was on the inclusivity of the community that to work with me as a financial advisor, you had to have $250,000 in assets and I was meeting a lot of people who wanted help from a financial planner and did not have 250,000 in assets. And, I remember thinking at the time, because I was on a weight loss journey when I wanted to get physically healthy, I had so many places to go to get physically healthy, but if people want to get financially healthy, where would they go? So where could I send these clients who didn't have 250,000 assets that would treat them with care and compassion, empathy and not try to sell them products, and give them the help that they needed. And I thought if you wanted to get financially healthy, you go to a financial gym. So that was seven years ago, I thought very clearly I said, it's like H&R Block, but fun and cool and advisors wear jeans and T shirts, and they're not advisors, they're trainers. And people pay a monthly membership fee like a regular gym. And that was seven years ago and knew nothing about starting a business, went on a very dark journey the next two years of going through everything I own and trying to figure out what financial training looks like. And then we raised a round of investor money in 2017. And to date, we've raised a little over $8 million. We have four gyms across the country, we work with clients in all 50 states, and we work with clients in all financial shapes and sizes.
Scott Case 3:18
So I'm going to go back to you had the insight at Merrill Lynch. Were you financially like sound yourself? Like as an individual in the world prior to starting this? Did you like to have all your ducks in a row? Or were you one of those people who's like every accountant I know never gets their taxes filed on time.
Shannon McLay 3:45
I mean, I thought I was in good financial shape. Because I knew nothing about starting a business and I'm a highly optimistic person, that's something you definitely need as a founder, I was so convinced that the business was going to be this multimillion dollar business like in no time because I thought this was the great smartest idea ever so of course, it's gonna be so big. So I didn't have the financial preparedness for the time it takes to have a really smart idea go from a really smart idea to actually people making money from it.
Scott Case 4:23
Did it mostly take you a lot longer or combination of it took you a lot longer and you ran into things you didn't expect?
Shannon McLay 4:29
Yeah, a combination. The joke is that because in those two years of trying to figure it out and not charging people a lot of money, I was going through my personal savings. So the joke is that, now I'm sitting in one of our gym locations in Manhattan, that when you're in the gym, you're sitting in my 401k. When we opened our second location in DC, one of my one of my trainers said, we've now doubled your 401k, you got two locations! And I was like, Yes.
Scott Case 5:04
That is interesting. I was talking to a founder once early in my journey, and we were at an event and there were hundreds of their employees and spouses were there. And I said, Oh, you must be so proud, this is great. And he looked across the room and said, yeah all I see is payroll.
Shannon McLay 5:23
I've been there, too.
Scott Case 5:26
So, I want to stay with your founder journey for another minute or two, and then we'll kind of wade into what you've experienced with founders from a financing standpoint. Was there like one or two big ahas you had in that early journey? Like something that, you know, is that one piece of advice for someone who's starting out, or starting to think about making the leap in that you identify this like a key thing like, make sure you think about this or that?
Shannon McLay 5:55
I mean I think that you have to trust your gut instinct, a tremendous amount. And I think that's really difficult. When the world around you, there's a lot of opinions when you're starting a business, I think, some great advice I read like a few years back was Sara Blakely telling people don't tell anyone what your idea is until it's like ready to go. Because you'll have so many people who will poopoo it and you don't want to hear that negativity. And I remember thinking, Oh, that's great advice there. If I took that three years ago, like everyone in my family thought I was crazy when I said I'm leaving to start the gym, my parents thought I'd lost my mind because they're like, you're leaving this like six figure plus business working for Merrill Lynch, like a well known brand to help people with no money, like you've lost your mind like we thought you were the smart one of the family. So thankfully, I trusted my gut. And I was like, I feel like there's something here. But it's very difficult to combat the voices. So you have to have a really strong gut instinct. And what I say as a founder, over the years of running a business, what you become is a really good problem solver. And you're just given non stop problems, and you become better at problem solving over time. And what you have to realize is like, sometimes you don't always have the answers to the problems, or sometimes the answer is not. It's like you're getting led from one answer to another. And that's where your gut comes in, you got to trust some of those leaps of faith. So there was a time where I literally was ready to throw in the towel and quit. I was like, I'm going through everything I own. I told my then husband, now ex husband, that I should just go back and make six figures again, like this has been great helping people but I need to make money again. And he was like, No, I feel like you're onto something because I was getting results. He's like, you should keep going. He's like, I have money in my IRA. So now we almost have two retirement accounts in here. And, literally two weeks later, I had coffee with a former boss of mine at Merrill Lynch. And I was telling him about the work I was doing and the business I was building. And he had just been fired from Merrill, and he had this severance payout. And he said, What do you think I should do with my severance payout? Because asking me as a Merrill advisor in investments, and the first thing I said was, I think you should invest in a small financial services company that's about to run out of money. And that was my first $100,000 check.
Shannon McLay 8:29
And so I guess a secondary thing is like, as a founder, your network is so huge, and I hate the word networking, and I think it's got a negative connotation to it, I went to so many networking events, like for female founders when I first started, that was just a waste of time. But the way I like to explain networking to is like that somebody that I interviewed a while back said, networking is like creating a garden, like you're going to plant seeds, you're going to water them sunlight, like you're going to create, it's going to take time to grow, so you want to keep planting seeds and develop them when you can, and then at some point, they're going to sprout fruit and you're going to need it, and you're not going to know when you need it. And you're not going to know what fruits and vegetables are going to come from it. But it's just taking the time to tend to it. So the best example is Bob, my first investor, and like the greatest angel investor of all time, he was my manager for 10 years and he mentored me through 10 years, so he knew me really well. And when it came time to me starting a business, which I never thought I would start, but I never thought I'd ask him for money. I had known him for 10 years. So it was an easy check for him to write.
Scott Case 9:42
Well, you demonstrated a few things there too. One was not being afraid to ask. Because I think a lot of people forget that if you don't ask you don't get it. And then I agree with you. I'm not a fan of the word network. I believe in relationships, your garden example is a perfect one. You're not just harvesting right away, you're actually building a relationship and you never know which ones are going to pay off. And, part of it is you have to invest in it, you've got to put in, which means you're often helping other people figure out how to get where they need to go. I believe the best entrepreneurs are a really powerful match between those two things, the notion of creating relationships and providing value as part of it.
Scott Case 10:24
So I know, as part of the Financial Gym, you work with a wide range of different different individuals. But I want to hone in on the kind of role that you play when you're working with founders. I know you have a lot of independent contractors and sole proprietors as part of what you do. And there's often a lot of, I guess, fear and shame that sort of shows up around people talking about their finances. And I certainly see that with entrepreneurs when I'm poking at, well how much capital do you have and how much runway do you actually have? Because if you don't know those things, like you can't plan and manage. How does that sort of manifest itself generally and then specifically among owners, operators, founders?
Shannon McLay 11:10
So this is something I love to speak about, because it's something I experienced personally, and I'm joking about going through my 401k. But the reality is that usually 9 times out of 10, founders personal finances are going to be impacted by the company at some point. And so there's a difference between your company finances and your personal finance, sometimes they're more intertwined than they should be and the way we coach and help clients who are in the early stages of thinking about starting a business or they're somewhere starting there is it is really best practice to have the two separate, your personal and the business, and to create as much of a businesslike approach as you can. And so what we like to see our clients do is save at least one year of their monthly expenses in this like savings account to help to kind of create their own payroll, so that they can create this monthly, you know, let's say $3,000 a month are their monthly expenses, that they've got 36,000 saved and that they're going to pay themselves $3,000 a month, so that they can live like they have a paycheck, which they used to have if they're working for W2 or another employer before, because that just creates some kind of consistency. And then as they're building the business, everything can replenish that account and start rebuilding it from the business standpoint. But trying to create some kind of stability in payment is the best practice because what normally happens is, especially with freelancing or depending on your business is, there are going to be a lot of ebbs and flows. And the erratic nature of getting paid creates a more like erratic mentality too, like your highs are really high if a big deal comes in, they're really low if you're running low on money, but if you can kind of keep that kind of consistency and pay yourself as the best practice. And then the next level is if you could figure out your expenses too and have those planned for and have a worst case scenario budgeted in. But you start running through the numbers, and they get really large, and then people sometimes get concerned and maybe it's not the right fit. And so I tell people, that's the financially best way to start a business.
Shannon McLay 13:24
Then there's option two, which is the option path I took, which is you are so passionate about what you are going to do that the world needs it and no one else can do it but you and you have to do it and you will find a way to figure it out. And you do somehow it's like the universe knows and you'll find a way, but it's a very challenging and painful path. There are, I've said, there's four times in the history of the gym that the gym as a business almost ran out of money and where we almost didn't make payroll. We've never missed payroll in seven years but there were four really tight times and you're going to experience things, like you have the potential to experience things like that, I know a number of founders who have and so the more you can separate the business and your personal would be best, but I also think it's really important to understand that your personal finances will take a hit until the business gets to the point of sustaining itself, other people, you, whatever, it's gonna take time and to not feel, you know, it's very hard but to not feel personal shame because you started a business. I had somebody say to me, in the early days, like don't be ashamed or embarrassed of wherever your business is, you've done something that most people don't have the balls to do like never have done like you. And even if you fail. even if the business fails, you're learning more than like anybody could in a different type of job, and I think that's something really important to remember too is even if something doesn't go right with your business, like you've learned and have so many skill sets that are transferable and other jobs that no one else, you have the best and worst life skills, like there's no class like the class of entrepreneurship, like the real life class, and I took entrepreneurship in college, just because it was supposed to be an easy class, not because I wanted to start a business. But there's nothing like the lessons you learn here are just better than any other school out there. So even if you fail, you haven't failed.
Scott Case 15:40
You're spot on with the business and failure. I've had a few things not go my way in businesses. And myself and a number of other founders talk about it as very expensive tuition that we've gotten, we've learned a lot of things and the most valuable thing is actually taking the time to write down what those lessons are. And if you get to that place, just understand how you got to that decision. And it's smart to do that. I think the whole point, just to come back to the shame piece of it, you're under a lot of pressure as a founder as it is and so giving yourself some permission to like release some of those things, because they're not going to help you get there and you're not alone. We all face those things. I actually don't know of any founder that hasn't at one point or another been faced with an existential threat to their company of some form or another. And they don't often talk about it, but they've happened, like you get them together and you have a glass of wine or a beer, you get them talking, they'll tell you about the time that the whole thing almost fell apart. And they almost had to go to business. And so if you find yourself in that spot, you're not alone. Just know that you need to find other founders to talk to, kind of work through with you.
Shannon McLay 16:57
Yeah, I remember reading this book about, no it isn't a book, I attended a conference and there were a few founders, they were talking about their stories, and they all kind of shared a similar kind of the lowest point worst point of their journey. And I remember thinking a few times along the way, like this business is going to be huge because we are experiencing all the things that like every great entrepreneur, every great company has this like horrible like doom and gloom like part of the journey in it. And I was like, This is gonna be huge because we're checking off all the checkboxes of like what makes a great company.
Scott Case 17:34
That's it. Yeah, that's it. You can be encouraged by the fact that you've had to go through. I think there's a storytelling model called the hero's journey, where there's a big part of it being miserable in the middle to get there.
Scott Case 17:50
So what are kind of the two or three things that let's say you're in the business already, you've started your business, and it's keeping the personal side of it from the business side kind of separated out, what are some of the tips or tricks that founders need to keep in mind as the business matures over time to continue to kind of figure out how to manage my own personal finance, which I think is largely with the Financial Gym focuses on and then my finances of my company?
Shannon McLay 18:25
Yeah, I think two big things. One is, I think it's really important, there's a lot of people who say don't take on debt or debt is a bad thing or whatever. I think you should not be afraid to take on debt for the business. Whether it's personal loans or credit cards or home equity lines, whatever you can have access to, preferably not a home equity line, and I literally encouraged clients, I'm like you have to use a credit card which I know the interest rates are not good, but what I'm getting at is it's best to kind of keep the business expenses like in this package and sometimes debt might be the package because again, worst case scenario if something were to happen, you can always file for bankruptcy and that debt is going to go away and kind of be part of the story and lesson learned versus if you don't have your 401k or don't have personal savings then what's your next chapter for you personally after this learning lesson, so to try to keep as much of that and kind of the expenses squared away. Something that I know sounds horrible, but to think about too, make sure you have life insurance if you start a business and you have family. I used to joke, so as I was going through the 401k, and it's very stressful for the business, I remember thinking like oh my god, what is my family going to do like this business might kill me? And what is my family gonna do because there's nothing left for them. So that was what really motivated me to get life insurance and it was like term Life Insurance like $35 $40 a month or something like for like a 750 or million dollar policy, and so that helped me to have more confidence in moving forward with the business because I was like, okay, there's something here. And I remember having many dark days being like, I'm really worth more dead than alive. And so maybe that's the right thing for everybody right now, but I obviously didn't take that.
Shannon McLay 20:21
And then on the other side, too, about the finances and stuff, is it's really important to find your your mental health and wellness options while you're a founder, because sometimes the expenses are your decisions or your challenges are being born out of stress and challenging times, and you want to make as clear decisions as you can. And I think to not underestimate investing in your wellness. And I had a period of time a few years ago, where I felt like I really needed a therapist or something, and I couldn't afford it. Like, I literally couldn't afford that extra expense. And, so I found podcasts, I started practicing gratitude more ,Oprah's Super Soul conversations was like my free therapy around that time. And then I got a gratitude journal, and you don't even need a journal, just a notebook of like creating more positivity and energy, and that started to dramatically shift, but really focusing on the mental health aspect of it will also end up helping your financial health as well.
Scott Case 21:28
The key thing there too is as you said, you're making a lot of decisions and so if you're not kind of taking care of yourself, you're likely to make poor decisions or you're more likely to get them wrong or get bad outcomes out of them.
Shannon McLay 21:45
Yeah, in the early days of the gym, I was easily working seven days a week. I mean, that was like the pace, it was seven days, and it was consistent. And I remember at some point, like three years in, kind of feeling the toll of that and feeling like, you know what, maybe every other weekend, I'll take the weekend off. And as a founder, it's scary, especially in early days when you're the only one doing things, you feel like things won't happen. And I said I'm gonna take like every other weekend off and not try to not check my phone and really plug into the other areas of life that you have, which is really important as a founder, because it's so easy for your company to be the only thing in your life. But there's other things and people around you. So I started doing that. And I remember joking, like I just felt better and it's a practice, like I will give clients time on my calendar every other weekend. But the other weekends, they can't schedule time, I've really held true to it. And I remember joking. I'm like, Okay, so I'm off four days a month that feels like a vacation, but it does and you need to think about stuff like that. Because I think it's easy to just keep doing it and not have an outlet. And it's again, challenging on your mental health over time.
Scott Case 22:59
That's really smart. And so I'm going to talk a little bit about investing. There's a question here about how do you balance reinvesting in the business versus taking, let's say, paying yourself more or paying yourself at all? Is there any kind of formula or a way of thinking about it that can balance those two things? And you just talked about your investment of time and finding a way to balance that. What's the financial or the cash flow, is there any kind of rule of thumb or way to think about it?
Shannon McLay 23:37
Yeah, for every dollar, I always think what is the return you're going to get on it? So like where is that dollar going to get the best return on investment. So sometimes it is taking it out. And maybe it's going on a vacation or like doing something personal like getting a new car because your mental health is also still a really good investment in yourself. I do think that is, but if the business has growth opportunities and you know at some point, it's going to lead to better numbers, like better outcomes or whatever, then I would say keep it in the business. Like for me, people ask a lot like, Oh yeah your 401k is gone forever. And I would always say like, I know what the financial markets are gonna deliver over time, but I know that my potential is unlimited so I would rather invest in me all day long and I have control over what I put into this. So I'd rather invest in me all day long. So that's how I think about it, like where's the best investment and I'm like it's in the business I'm running.
Scott Case 24:49
Absolutely. And you don't have any real influence over the market, but you have real influence over what you do. And as you said earlier, you're learning no matter what. So even if you end up putting in $1 and getting nothing out, you gained something, you may not have gotten a financial return, but you got a lesson learned or some new information.
Scott Case 25:11
So I'm curious, just turning a little bit to go back to your business. You chose to open a bunch of physical locations. You said earlier you have four, I think you said four locations now, so what was the theory in the business of having a physical place for people to come and talk about their finances? And how has that changed now that that's harder?
Shannon McLay 25:42
Yeah, I still believe in the physical space model. So, people with money can go to a Merrill Lynch office, why can't anyone go to a place to talk about their money. Money I always say is the ultimate taboo topic, I say we're more comfortable getting physically naked with somebody that's financially naked with them. So it's very personal and having a space and a safe place to be was important. Plus, we see a lot of health and wellness gym references are very aligned with finances. And I would always compare us to a soulcycle or regular gym where you go where it's a collective of people with a common goal, and you create this community, you knowCrossFit, and you create this community of people that are aligned with the same goals. And if you see it in gyms and physical locations where you create that community, we want to create the same thing with finances. And what is really powerful is that most people don't know who's in the financial fitness club, right? Who is trying to get financially healthier? Who is passionate about talking about money? Because most people don't want to talk about it. And the great thing is here everybody's talking about it, we are talking about credit scores, we're talking about how much we're making, we're talking about saving and investing, we're talking about student loans, and it's normalized, and it's safe, and it's a place people want to be, so yes COVID has changed that. And we're working with clients virtually. We always worked with clients virtually, we're going to continue to do that. But I do believe there is a future for more gyms for us. I just have no interest this moment in opening another gym.
Scott Case 27:29
Makes sense. I also think there's something about the transition from I'm home or I'm at work to going to a gym like this is the place I go and work out and exercise. And it's not only a safe, but it's a bit of a controlled space, right? It's easy to say, you know this weekend I'm going to spend time figuring out my financial plan. Whereas if you have a scheduled meeting with somebody, and there's accountability to it, that sort of plays into it.
Shannon McLay 27:58
Plus people say, well what does the gym look like? Like what's your workout equipment? Are there like treadmills or barbells? And I would say our workout equipment is wine and Kleenex. So we give our clients wine or beer, because money is stressful. And there's a lot of tears that happen here too. So also like a cathartic experience as well.
Scott Case 28:21
Well, so talk a little bit about that. In some ways, we called this session financial therapy for founders, how much of it really is that mental health psychological get over the shame and fear part of it so that you can actually get to the numbers. Like what's the balance there of how you and your trainers spend their time?
Shannon McLay 28:41
I think the best thing I could say and another big takeaway that I give to the group, and I've seen it over the last 10 years of working with people financially, whether you're a founder or your personal side. I think something that's really important to note is that everything you do financially is fixable. Everything. Their finances are not life and death decisions. Like my dad's a surgeon, those are life and death decisions he's doing it work. Like your finances are all fixable. It's just a matter of how much fixing do we have to do. I mean, we've had clients who filed for bankruptcy who were buying homes, we've had clients with negative $2,000 in their bank account when they started with us who now have 1,000s of dollars in their bank account. We have clients like who've lost. I have a couple that started with me. One of the reasons they started was the husband invested $150,000 of their IRA money into one stock snd the company went bankrupt. So they lost $150,000 in this. They joined the gym because the wife didn't trust the husband to invest anymore. I was like hey, it's great you're still married after this so this is great. And I was like and we can make up for this like we've all agreed the husband is not allowed to invest money anymore, the wife's involved and we just had a quarterly review, they've been my clients for four years, and they have like double the money than when they started with me even addressing for that loss, so everything's fixable. So I think an important thing to start with is it doesn't matter what you look like, they're just numbers, they don't define you, and they're not permanent. So, you know kind of letting that go and letting that shame of whatever your financial digits look like and setting the path though for what you want them to look like and start working toward that.
Scott Case 30:25
So we've talked a lot about kind of the stress, and you just brought up Hey, look this is all fixable. Like in worst case scenario land this is pretty good. How much of a toll does the mental wellbeing of your trainers, you have a bunch of employees who are every day passing out beverages and tissues to people, what do you do to support their well being while they're navigating all of that because that's a lot to take on day in and day out, and you obviously get the rewards but there's also the sort of those dark challenges.
Shannon McLay 31:03
Yeah, I hire highly compassionate, empathetic people whose mission in life is to make a difference. And the good news is that's what we do on a regular basis, but it is challenging. So we have a monthly stipend for the team, that's a wellness stipend. We provide health insurance as part of their benefits but we also provide another $100 a month that can go to whatever kind of wellness they need. So for some of them, it could be therapy, or life coaching, or some people their mental wellness is like extra Starbucks or like whatever it is, a pair of shoes, like we don't tell them how it should be spent, like they know that we're giving them that for their wellness. We do regular wellness events, when things started with COVID we knew it was going to be really challenging. We have a partner who does meditation, and so we had a daily meditation that happened the whole month of April that was optional, but it was happening every day at 10am. And it was a zoom meditation that people could go into and now they can use their wellness stipend for them. We partner with journey meditation as well, an app to provide that. And then and we're constantly engaging with the employees. So we have a mentor mentee program. We have different kind of like pods of employees that check in on them and keep them up to date. And, sometimes what does happen, we know this, sometimes trainers need to take time away, take days off, we actually give every employee in the month of May and June a Mental Health Week. So to take a week off, and I said literally unplug and unplug from everything and just kind of you know, nobody could travel anywhere but it was take the time off. And what's funny is a lot of employees were like I don't want to stop working, I'm busy, but we force everyone to take the time and we didn't count it against their vacation time. Everyone came back from that week, they were like, Oh my god, I feel so much better like I didn't know I needed it until I took a time away. So we're really cognizant of the hours spent in work and the challenges and then the time they're taking away and how they're spending their time outside of work, too.
Scott Case 33:24
So we had a question earlier, you talked about the kind of the, I guess the competence you can have when you have things like life insurance, for example, and that you take one of those risks off for a founder. One of the questions that came in was, what's your view on like key person insurance? Do you see that? Do you recommend it? Talk a little bit about that, if you have a point of view?
Shannon McLay 33:55
Yeah, we don't have it. I don't have it on me. And my investors haven't required that. I would say it depends on what that means, like, so I'm not a big fan of paying for things you don't need and they don't provide value. So what would the key person insurance insure? If it's you running the company, do you envision the company running without you should something happen to you or could the company still run without you? And does your family need the money? And then it's just a life insurance conversation. So I think it's like, where does that fit in and does that make sense? versus like, I think a lot about if something were to happen to me, so I don't have it, the company doesn't have it, but, I've got life insurance for my family God forbid something happens to me. And I have a leadership team who can run the business if it's not me. Will it be the same? No, right. Nothing will ever be the same without the founder, but I think any founder should make sure the business is going to run without them in their place because God forbid you're hospitalized or something happens like you really do want to have the contingency plan for the business running when you're not there. So you can take vacation. I mean, when I took my mental health week, I did not check a single email because I have an amazing team supporting me. I was like, they'll have the answers, they'll be fine. Feels good.
Scott Case 35:19
How long did it take you in the beginning of your journey? I know you raised capital A couple years in. Do you remember when you got to a place where you felt like you could let go for your team? Where you could say, Yep, they got this now, I've sort of handed all the pieces, delegated the components off, and now I'm able to go spend two weeks doing something else or think about the next phase of the business or?
Shannon McLay 35:43
So four years ago, I hired the first employee and then of my leadership team, the majority have been with me for three years now. So we kind of formed our executive leadership team within that first like year-sh. It was probably two years ago. So after about a year of us all the leadership team, two years with employee number one but a year of us like working together and seeing that, I was making less and less decisions and kind of seeing where they would go and it was about two years ago, I took a vacation. And I really didn't check anything. And I put my out of office on which was like, I can't remember the last time I've been out of office on vacation. But I felt confident enough to do it. And the thing was, I was like for training questions, go to Bridget, for operations, go to Alicia, for marketing, go to Kaitlyn, like I could point to the people and feel confident that they were all taken care of, so two years ago and it's been like that ever since.
Scott Case 36:45
So your first four years, you were completely solo? Then you hire your first employee, how big is your team now?
Shannon McLay 36:53
40-45 employees?
Scott Case 36:56
And, how quickly did you go from employee number two to 40?
Shannon McLay 37:03
It took about two years. And although we actually doubled a year ago, it was a slower pace. We were at about 20 employees up until last year, we raised our series A and then we literally doubled the company like overnight, and dramatically changed. That was a whole other challenge of like the tale of two companies. But it all ended up merging fine.
Scott Case 37:33
What made it a tale of two companies? We'll let that be our last question.
Shannon McLay 37:36
So it was like 20 employees were part of the old school. And then 20 literally started in a day together, so they're literally half the company with a whole different set of experiences and new together. So the employees pre that, you know, the older ones were like, Oh my god the company is gonna change, it's so many new employees. And the new employees were like, Oh my god, there's so many people not like us, so those dynamics were fun to manage through, we thought through those a lot. We planned for them. And now who knows what was part of what group?
Scott Case 38:16
Is there one particular thing that you look back on that was particularly helpful in integrating those two cohorts?
Shannon McLay 38:28
Not necessarily those cohorts, although we did a lot of team building exercises around that. Funny thing was, one of the ideas was we'll do a scavenger hunt, like we'll combine old school new school teams. And then we realized we can't do scavenger hunts anymore, because some people were so competitive like they were so intense, like we got to get all these things. And some people were like, let's just have fun, like we're running around New York and so it actually created more friction in personality types than like our company types. But a bigger thing and a bigger area that works really well for us as we do personality test all of our employees, and we use the Gallup Strength tests as part of our process. And we find a lot of success with that since we've employed it. And so we look at how everybody fits together before we hire somebody, we do their Gallup strengths, and we figure out Hey, do they have the right strengths for the role we're about to hire them for? And b how do their strengths fit in with the rest of the company? And how do we think they'll be within the bigger company mix?
Scott Case 39:33
Awesome. Well, Shannon, thank you so much for sharing both your story and giving us tips and tricks on how to think about our finances, especially as founders. Really appreciate you being here today.
Scott Case 39:43
Thanks for tuning in to this episode of Founders Focus. What did you think? You got any feedback for us? Got a topic that you'd like us to discuss, or maybe a future co host? We'd love to hear from you. Just hit me up on LinkedIn at T Scott Case and join us at foundersfocus.com to stay up to date with the latest episodes. And join us live every week at our Founders Focus sessions. Hope to see you there.