Today, I'm connecting with Alexey Mitko, Employee #23 at Canva. Early at Koala®, CFO/co-founder at Eucalyptus, and today, one of Australia's most helpful early-stage angel investors.
Laura Nicol dials into Alexey Mitko. Alexey’s career has been all about operational leadership. Finance, HR, legal — he’s held the keys to the gritty, foundational work that lets startups scale without falling apart.
He puts it simply:
“When the startup community has been so generous in teaching me how to see the world differently as a 20-something, it’s my obligation — as an almost 40-year-old (don’t forget to stretch, people) — to do the same. If I can pass it on, use my skills, and maybe get rewarded along the way? That sounds pretty good to me.”
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[Note: This transcript is AI-generated via Descript. Please expect typos]
Laura: [00:00:00] Welcome to Calling Operator a podcast, dialing into the stories of startup operators. Tune in as they share their incredible and often challenging journeys of building and scaling startups. Operator connecting to Alex Mitko, employee number 23 at Canva. Earlier at Koala, CFO and co-founder of Eucalyptus.
And today, one of the ecosystem's most helpful, early stage angel investors. I'm lucky enough that I get regular access to Alexa as part of my role with Covens. He's a venture partner for Covens, so I see him supporting the founders we work for on a daily. He holds the keys to a lot of the foundational things that you need to know about early company building.
Today we talk about his first decade working in startups and how he's enabled many people that he crossed his paths with to go build their own thing. And in startup years, one year can be three years of career growth. So I feel like talking about his first decade meant that we had a lot to unpack. I [00:01:00] also went out to some of his community, Charlie, Gus, and Estelle, to crowdsource questions around how we operate to bring that to you today.
Enjoy the episode.
Alexi. Welcome to Calling Operator. How are you doing?
Alexey: I'm doing really well. How are you?
Laura: I'm good. I'm good. I feel very privileged that you're joining me today. You have a very impressive operator. Resume, employee number 23 at Canva, early at Koala, CFO at Eucalyptus, and now you're on an angel investing journey.
Take us on a personal note. What does life look like today for Alex and your family?
Alexey: So my wife is from the South Born Shire. So I moved here and I don't think I'll be moving out. I have two kids and it's very much set up for family life. So you have a pool here, a very nice school in the area. So day to day I'm in a comfortable.
Phase [00:02:00] in terms of the professional life. Most of my days are spent on Zoom calls, and I'm sure everybody else's are, but I'm talking to founders. I'm talking to connections in the VC space. Operators that are thinking about moving from one company to the other. Some of them are coming through the same.
Functional area that I do and just helping them navigate their career. I do quite a bit of free advice to founders as well.
Laura: Which is how we are connected. You are a venture partner at Covens and you have been such a wonderful support for all the founders that we work for. So very excited to open source some of this knowledge today.
You also didn't mention that you teach at your son's school.
Alexey: Uh, yes. Is
Laura: this public knowledge?
Alexey: Yes. I'm also an ethics teacher in my son's school.
Laura: How old is he?
Alexey: Five and a half.
Laura: Oh, amazing. So do they understand [00:03:00] ethics?
Alexey: It's very different at those early stages. It's less about ethical dilemmas and more about asking questions because if you think about the way teaching is often done and kids get taught that there is right and wrong in classrooms, but then ethics provides another perspective that it's sometimes they're questions that it's okay to say, I dunno, too.
Laura: All of this combined summarizes your pay it forward mentality, both towards the startup community and also your outside communities and your kids' communities. So you are a wonderful human, but I guess, tell me about your operator background. Do you wanna take us on that journey from interactive accounting to wherever you get up to and we'll go naturally with the conversation.
Alexey: Yeah, sure. We'll preface it with the fact that I've never worked in a large company. So Eucalyptus, when I was leaving, it was the largest company that, and actually my longest tenure in a company. So it was four years and [00:04:00] 250 people when I left. So that's the largest company I've worked with. But early, early on in my journey after my graduation in the United States, I couldn't get a job in, uh, regular.
Types of work because it was the height of the financial crisis. So nobody was hiring graduates, uh, but startups were an option and they would pay you in sweat equity and not in cash. And the first startup that I joined kind of crashed and burned within a year. But I think that's a very common story in this field.
Uh, but I just. Loved the fact that I was able to tackle problems that were outside of my comfort level and outside of my experience level by a long shot. So the pace of learning I fell in love with. So when I moved to Australia. I kind of tried to find places where I could excel and interactive accounting was a good kind of launchpad for me because it allowed [00:05:00] to build a lot of professional skills related to accounting while giving me the exposure to cool startups at the time.
So that was really good. After I spent couple years at Interactive Accounting, I wanted to actually give a try in running a finance functions by myself in an early stage startup. And because interactive accounting was so prolific and a lot of startups were their clients, I needed to find a company.
Wasn't the client so as to not have conflict of interest when I switched and one company caught my eye based in Sur Hills and was Canva. So I joined, as you mentioned, employee number 23. Canva opened my eyes to what a rocket ship. Really is like same principles applied in many cases where you come in, you kind of have a foundational knowledge about things that you feel confident in, and then it gets [00:06:00] smashed into pieces by the scale of challenges.
But that's where you really learn. So I, I'm firm believer that the type of person you are is a result of the circumstances that you put yourself in. So if you are always comfortable. You'll always have just one year experience because you're just repeating the same year over and over. But in startup years, one year can be three years of career growth.
Laura: What role did you get hired for at Canva?
Alexey: I got hired as an accountant and there was one person in the finance function at the time, and I was hired as the assistant, but then within the two and a half years I left as a finance manager. That being said, I got to do things that. Accountants don't get to do until they're in their mid thirties.
I got to open an office in Philippines and set up all the operations there. From the financial point of view, I got to roll out the [00:07:00] ESOPs for early stage companies, which is what I'm known for now as well.
Laura: The ESOP guy, isn't it?
Alexey: Yeah, we can, we can talk about that story in a moment. Yeah. I got to see how flip up are done into the United States.
So a lot of foundational things that you need to know to work in that environment. And after a little while, I felt that. My growth and my ability to grow was lagging behind what Canva actually needed because it was going on a different trajectory. So we went through the process of hiring CFO and financial controller for the business because it was time to kind of bring experience rather than myself who was a, a fast learner, but inexperienced and I.
Wanted to see if I actually have a skillset that can be repeatable in this space, [00:08:00] and if I could do what I've done at Canva again, or it was just canvas magic rubbing off on me. So what I've done is I decided to leave and join another tiny startup in the area, which was koala. I spent about two years there as well, and I met my co-founders, Tim and Charlie, who were working as a head of marketing and head of creative there, and together we grew that business from about 10 million to a hundred million in Rev in two years, and then decided to split off and start Eucalyptus.
Laura: That brings us to Eucalyptus, but the themes that I'm picking up there in terms of you and your operator experience are recruiting, leading teams, defining those finance functions, especially offshore, and understanding those cross-functional BizOps. So what did you take from Koala that you knew you were ready to then start Yuk?
Alexey: I think there's a couple of [00:09:00] perspectives. First is that building businesses has two aspects to it. There is an existential set of questions like, is the product that I'm building is something that people are willing to pay for, or how can they pay more, or how can they get a better experience out of it?
Those questions are the ones that make you successful. If you can answer them well, but then there is another set of questions, which are things that won't make you a success, but it minimizes the risks of failure. So can I run payroll accurately or do I have the right contracts in place? Or can I make sure that my ESOP is after scratch for what business needs in that particular moment in in time?
So throughout my career. It is the second set of questions that I've always tackled, allowing other [00:10:00] people to focus all of their attention on the first set. And usually that's where people find energy and excitement. Apart from me, of course I derive excitement from the boring set, but in Koala, by working with Charlie and Tim, it was a, a great match because we were just so different.
In terms of skill sets, in terms of personalities, and in terms of what energized us. So when we started Eucalyptus, we already had history of working together. That means that we weren't stepping in each other's toes because we knew how to run our respective functions. We were skilled in our respective areas so we could move quick.
And it was a great pleasure to see them excel and contribute myself. So, uh, the first few years were quite exciting.
Laura: I've heard you somewhere say that you've made a career out of what you call are the boring but [00:11:00] necessary operational challenges. So this is completely your canvas to tell your story for whatever role and company you wanna share this story through.
But I'd love to know just over the course of your operational career, what have been the lessons that have stuck with you?
Alexey: There are a few. One is that. You need to frame your work in a way that energizes you. So for my part, something that I tell myself and teams that I build up is that the. Back office functions.
They are critical of course, but they are the people who build the stage for others to perform. It's a service that we provide, right? It doesn't mean that we're in a spotlight all the time, but it means that other people can succeed and that's very important. The second one is [00:12:00] that. If things go perfectly and nobody notices, this is the highest form of praise, because if you have a, an amazing onboarding program, or you have a contract that ticks all the dots, or there's no mistakes in a particular process, and everything just gets done on time and accurately.
Very few people pay attention to it because they have so much other crises that they have to fight in the existential questions, I find it energizing that. I know that if we set this process like this, it avoids a lot of. Pain down the road. For example, how to make sure that asset management for all the laptops in the business works smoothly from day one.
Because if you don't know that, then you'll spend a lot of time in the subsequent years trying to figure out how to set up that system when the problem is much larger. But [00:13:00] all the problems that I have avoided for the business, they're just like in my head, right? Because nobody within the business have experienced that, but I find it very energizing.
And then the last bit I'd say is that. Accountants and lawyers and maybe technical people to some extent, sometimes they get into this system of like, perfect is enemy of good and you have to do everything by the book. But what I've learned in. Business building is that you have to stretch certain parts of the organization beyond the maturity that they would've been otherwise.
So for example, maybe a sales process needs to really have an additional resource contributed to it at the expense of all the other functions, but it needs to. B and do that in [00:14:00] that particular moment, because if certain targets are not hit, we as a team don't exist anymore. So this ability to see your function as a part of the whole business is important.
I think it gets lost. These pressures get lost in the larger organizations because. When you are one of 300 accountants working for a company, you're kind of in your own universe. You don't experience the flexes that other functions have. It's very easy to start thinking, oh, it's my team versus the other team.
But in a smaller org, it's one breathing organism and being able to kind of understand that is an important point for any operator.
Laura: What are some examples from Canva?
Alexey: We were launching Canva for Work, which is a paid product. And before that, Canva was bringing in fairly little [00:15:00] revenue from just image sales and that technology product got built, but any back of the office functions to actually calculate the revenue.
Derived and which country it was derived from was missing. So we could estimate, but we couldn't like to the DOT inform ourselves what was the GSD collected on the Australian sales. So at that moment in time, I just didn't understand what I was just talking about. So I thought it's like, well, that's. A crisis of in the accounting function, right?
Because we can't do our jobs. So I was very frustrated, but then I talked to Cliff and he said, look, you need to understand doing business. If we don't push Canada Fork out now, we won't be there in the next year. Right. It's a critical product launch that has to happen. Yes. We'll pay fines to the A TF for late lodgement, or [00:16:00] maybe we have to go back and correct it in a, in subsequent periods.
But that's all right. It's a fine. We are trading that off for speed in velocity in our product treatment, and that really kind of clicked to me because I'm like, yeah, it's a combination of the whole things because if you try to do everything perfectly, maybe you'll won't be there to actually launch.
Laura: How did you learn to become comfortable with those trade-offs?
Was it just because you could start to see the bigger picture?
Alexey: I think the fact that early stage startups force you to do multiple functions helps a lot. So as I mentioned, in the early stages, you see the people function or you oversee the people function. You oversee finance, you oversee legal. So sometimes the trade offs are not between two people, it's just within your own time and head, right?
So you start saying [00:17:00] things like. Okay. I can't really contribute my time into developing. People and culture, things like career plants and a wonderful one-on-one framework. But I could make my onboarding process a lot more robust. And if I do that, then I. Have to spend less time in a culture and people area.
Maybe for a little while, maybe it's just six months of breathing room that I get there before the problems there escalate. But I'll be in a different place because there'll be an assistant accountant who will take away my. Finance responsibilities to a certain extent, and then I'll be able to circle back.
You figure out a way to move your attention through time according to the resources that you're applying to put in place, if that makes sense.
Laura: Yeah. And it's a really hard thing to do, learning that skill to move your attention free time.
Alexey: Yeah.
Laura: How have [00:18:00] you nailed it? I'm looking at you like how do you nail it?
Alexey: Well, I had multiple cracks.
Laura: Yeah, true. To do it
Alexey: right. So I had, well first of all, in interactive accounting. I've seen that problem a lot from the outside, but I didn't really recognize it 'cause I was just too early in my career. And then when I moved in in-house, I had three cracks to make it better. So in Canva it was like.
A lot of the time has been spent furiously researching and trying to kind of just catch up or keep up in Koala. I came in with a view that I know the basics right, and I did, and things that were taking me two weeks to solve and can I could solve in one afternoon in Koala, because I just knew the people to call.
The prices they would charge, right? For whatever needed to be done. Or I knew the people, or at least the profile of people that I need to hire. So the, a lot of the things were smoother. But then there was another great [00:19:00] host of other problems that come with physical goods and management of that. And then in Eucalyptus, it's a fun combination of the two.
'cause we have obviously the digital and subscription. Part. Then we have the physical products part. We had a lot more complex regulatory environment to work in. So every business had its own challenges, but I had three cracks to kind of layer several parts of the puzzle that makes it a mastery.
Laura: So then anything to highlight in terms of the lessons learned at Koala and Eucalyptus
Alexey: in Koala?
I perfected, uh. Building of early stage teams across the finance and people sides of the business. So it was a good place to reaffirm some of the lessons that I learned in Enva, but in Eucalyptus, the [00:20:00] remit was much broader. Because I was coming in as one of the founders, and I think new things that I learned there is that the importance of the early team and how your early decisions in the early hires really influenced the outcome over the years.
Because at certain point as a founder, you just don't have the time and sometimes you're not the best skilled. In a particular area. An example I would give is that, um, one of our early hires was Nicole. She's just a joy to work with. Highly intelligent, and I knew, like we all knew, if we have a candidate that we really, really wanted to join Eucalyptus, if they had that interview with the founders.
They might be a little bit excited, but if we put that candidate in the room with Nicole, we had 90% chance that they would say, yeah, cool. It's a scrappy startup [00:21:00] that I'm joining now, but it seems like highly intelligent people work here and they're very passionate about, and that has worked wonders for our early stages in Eucalyptus is journey.
Laura: Which actually kind of takes us to you and the founding team at Eucalyptus have almost built this proven operator factory. Like anytime you're looking for an operator that solved X, you often go to EU employees. So what did you look for in great operators?
Alexey: We had and probably still have challenges of recruiting external talent into UK at the senior level.
And I think the reason for that is that they're actually. Very few environments that are as complex as Eucalyptus because we have multiple brands under a central hub. Each single business is kind of the same, but not really. So it has its own quirks. We have to be [00:22:00] able to be across multiple types of businesses.
From every single function. They, they need to be flexible in their thinking. How do you do reporting? How do you structure the creative process? How do you do performance marketing? How do you communicate the brand? It's the same people behind kind of each of the brands, but they have to be very flexible and context switching.
And it's challenging, right? Because to do it well, you have to not only know your craft, but able to shift very, very quickly. So I think that was challenging, but it also has helped us identify people who excel and those people who can excel in that kind of environment, naturally get more responsibilities and see greater challenges either within Duke.
As we grow or we had a number of people live and start their own businesses in which we've supported them as well.
Laura: Okay, [00:23:00] so I have crowdsource some questions from the community and one of them is relating to communicating up, and this is from Estelle. Wonderful. Estelle, who's also been a guest on the podcast.
So hey, to you, Estelle, thank you so much for giving me your questions. I'd love to hear how you think about communicating up through using these visual models that stakeholders can engage with.
Alexey: That's actually one of the questions Estelle asked me, 'cause the bit of a background there. She went through Eucalyptus Mentorship, young Leaders program, and one, I was one of the mentors and Estelle was, I was very lucky to have Estella assigned to me as one of the mentees.
So this is a question that we've talked about with her quite a bit, and I think one thing to note is that. People above, they are pressed for time and they lack, at least in EU of escape, they lack the time to do deep [00:24:00] analysis, but they're very, very motivated to do the right thing. So if you are able to find a question that is interesting and impactful and do the analysis and then paint your.
Model of how a particular area operates clearly, then you'll have a very good reception. It is half-baked ideas that are dismissed, but if you are done your homework, it'll be received very well. So an example of that is for some businesses, returns are a big problem. So if you come to a senior leader and you say, Hey.
I can see that the returns of the product is high. I think we should do this. Don't expect to have a great reception, right? Because you identified the thing that they already know about. And you probably told them the idea that, uh, they already thought about and tried. If [00:25:00] you come into the room with saying, Hey, I know returns are a problem, but this is the world of returns, right?
And not all are the same. And they happen at different points in the user journey. And some of the returns have warning signs that precede them. Then you'll have senior leaders intently listening to you because the level of analysis that you have done is beyond what they're capable of and within that world, any suggestions that you make comes from place of knowledge rather than place of opinion.
Laura: Yes, because founders get so many opinions in one day, and if you're in a head of our C-Suite role, you'd hope that you'd have access to the financial data of the company. But I think even if there's operators out there listening to this that aren't at that level and you don't necessarily have the finances, a key message there is like, look to the market data to then bring your recommendations.
Would you agree?
Alexey: Or ask for access, [00:26:00] right? Because if there is something that you can do to improve the company and the only limitation there is that you can't access data to do it, then you would have to be a very, uh, ineffective senior leader not to provide it. Right?
Laura: That's true. You often give people the space to fail, given that it's a great way to learn, but how do you give people the space to fail while figuring out like a way to control the failure?
Alexey: So there are a couple ways. One is like, what's the worst thing that could happen? Question. Because in the context of building a business, there are actually not a lot of critical failures that business destroying, and there is not a lot of failures that have a financial impact. A lot of the times the failures that do happen is it's just a problem that somebody more senior has to take a little bit more time to solve.
Right. So [00:27:00] if you are clear in terms of what the worst thing that could happen, it's becomes very liberating from actually giving your juniors space to do these things if the impact is. Like the worst kind of impact is $20,000 and you are able to have 10 different opportunities for juniors to do that.
The actual worst failure might happen once, but then you gain nine other instances where the junior is now a little bit more experience and they're able to take more of your play subsequently. So I, I look at the space for failure, not as putting in a sandbox where they can't fail. Creating a big enough area for sometimes actually to experiencing that failure.
But in their world, it might be an enormous thing. But in a world of the businesses itself, it might be just an inconvenient thing, [00:28:00] and hopefully they have learned from it. In Eucalyptus, we had a number of people who, I think my favorite example is somebody forgot to put a payment button that actually worked on the website for a week.
We didn't recognize it and it meant that we lost $50,000 in sales for the week or something along those lines. I don't remember exactly, but after that experience, the way we deploy has changed. Right? So sometimes those things are actually for the better
Laura: operator. I have a quick ask. This show is all about creating space for tech operators and learning how to be a better operator along the way.
Please help me reach the builders doers and multipliers behind great founders by hitting, subscribe or follow wherever you're listening. Thank you. Operator. I guess in that stage you were a manager of managers, so then how are you enabling the managers to encourage those like [00:29:00] experiments and room for failure?
Alexey: Similarly. So I think what's important is to speak to them and see what challenges that they have, and always ask a question is like, Hey, you say that you're trying to solve this problem in relation to recruitment. But have you actually given that junior an opportunity to present their thoughts to you, or are you jumping in and actually solving it for them?
And in many cases, their instinct is to solve because they, they were doing that job just prior, right. And they know that they are able to solve it quicker, but the reality of it may be in that instant, but they have 10 other challenges. We'll go without their attention in the period of time that they're doing it.
So I always try to focus them on the three things that really need your attention, and then let everybody else do their jobs If they fail. Okay, well that's becomes one of the three things that needs your [00:30:00] attention. But otherwise you need to give a bit of a space for people to operate.
Laura: Yeah, such a great reminder looking at myself there as well.
Um, so then also last one from Estelle was hearing more about how you think about scaling teams and functions, but being self-aware enough of where the value you bring plateaus.
Alexey: For me, it's slightly different because, uh, well at least, uh, thinking about my experience is that I'm kind of jack of all trades, but master of none.
So in the early, early stages of the business, I can cover a lot of ground, but in reality, every single function, if I hire into it, that person that I'm hiring is much better than I am in doing it right. So I always. Um, thinking about where am I worth at? And then [00:31:00] complementing my skillset with the incoming team members to adjust to that with a view that eventually I have no job because all the jobs have been delegated at, and this is exactly what happened in Eucalyptus, because now I'm not operationally involved there, but the team has been built out across various functions.
Laura: I guess when you're working at early stage, you always have the fortune that you can just be thrown at any problem. Has there been anything along your journey where you've had to like really earn that trust to take the unknown and to gain the trust that people know that you can just learn into the role?
And learn your way to an outcome.
Alexey: I think at the early stages, the trust to tackle is not a problem. It's the willingness to try that's the problem. Yeah. Right. Because if you're a founder, you have 50 different. Fires burning at any one time. And if somebody comes to me and says, Hey, I know you have those 10 super critical things, but here is an [00:32:00] important thing.
Can I give it a crack? You'd be like, please just go. Go for it. Really, because you have a lot on your plate and people who are self-directed and willing to try and grow from that experience of few and far between.
Laura: Yeah, you're like, please think 10 steps ahead of me at all times so you can solve my problems.
Okay, next up is the wonderful Gus Wood, and he was sharing one of his humorous memories was that you did every help people request right up until mid to late 2022. So you've granted hundreds of Zoom pro licenses, meta base access, slack access onboarding, and offboarding requests until the company was at 200.
One, he has no idea how you did that. Two. I was just like, why?
Alexey: Oh, because we, we haven't operationalized it as a function at that stage in time. Actually forgot about [00:33:00] this part of my role until you just mentioned, but it's true. It was coming through. So I set up the system that it just come through and it just became, uh.
Second nature in a way, right? Because when it comes through in my mind, it's somewhere else doing something else. But, uh, the muscle memory allowed me to do all that thing, order the laptop, make sure the laptop is headed to the asset register, and doing all, all that kind of stuff. There's a lot of things like that that I've done for longer than I should have, but it's just that we didn't have the capacity to dedicate resources into that area.
So another one is I've done payroll for probably the first three years in eucalyptus. And only when it was to at the point that it was just starting to break down. We hired a wonderful guy, Bowen, who is just an, was an amazing payroll specialist. People think that payroll is just something that happens, but there is a lot of complexity that goes into [00:34:00] it, so I will be forever grateful for that transition.
Laura: Yeah, so what's your advice here for operators? It's like push and stretch your role as far as you can before you then hire in a replacement for that function.
Alexey: No, you need to build a model of the sequence in your mind in terms of like where do you start in the business and how that progresses and what kind of people need to come on under you at what stage.
Because for example, if you are purely finance focused. You will always hire an accounting resource first to help you with day-to-day processing, like accounts, payables, receivables, bookkeeping, all that kind of stuff, right? So you just know that at some stage this has to happen. And then after that there is a, an analytical resource that comes in.
And maybe after that you have a shared resource like payroll plus people in some form, right? [00:35:00] So. Depending on your initial skillset, whatever that might be, right? You need to build out a model of the sequence that has to happen as the company progresses. I think in a lot of cases that's just learned through doing it a few times.
Laura: So then you can have your sequence, you can have your plan, but surely there's a lot of things that fell on your lap throughout your roles that you didn't have any answer to, and some, I guess, weird and quirky things that you had to work on. What pops to mind when I say that?
Alexey: In Canva, we wanted to make a slide between level one and level two, and I had to research how much it would cost to drill a hole in a, in a concrete floor and how much it would cost to repair.
And then we also had a fortune of thinking about putting in a climbing wall, so I had to figure out how to. Get an insurance for that type of thing. So there was some [00:36:00] funny, funny calls that I had to the insurers in that regard. So quirky things do come up like that, but in terms of the role and team building it actually like.
Once you've done it once and once you start doing it the second time, if you actually paid attention, then the sequence becomes very, very evident. And then it's just a race between hiring or when you're able to hire hiring and train them up quickly enough for you to then being able to jump to the next area that needs to be.
Addressed because if you slow down or you spent too long, or the hire that you originally got wasn't the right fit and you need to rehire, that's what really hurts you and hurts your time in being able to focus on the next thing.
Laura: When did you know a hire wasn't right? Like how did you learn that muscle?
Alexey: I forget the exact phrase, but there are people who [00:37:00] like routine and there are people who are able to invent and do new things, and you need both kinds of people in these roles. So you have to be very clear what kind of person you're hiring and into which role. So I think that was the first lesson, because you can hire an outstanding.
Person to do a bookkeeping job, and they will do it really well for four months. And then they'll say, Hey, actually I'm not interested in this one. I actually am gonna go to another startup or another company to do something else. And that kind of hurts. So that's number one. Number two. I think there is always an incentive or maybe false desire to hire a person who is good in two different areas.
An example would be like people, operations and recruitment, and you're like, I'm gonna find a unicorn that [00:38:00] actually knows both areas really well. Right? And they'll do awesome job in two of those areas, but in reality, it's like. The system that produces these professionals. They either good at one or the other and they build their careers in one vertical or or the other within, maybe it's finance, maybe it's people teams, maybe it's legal teams.
So you have to be very clear that. If there are two areas that you have to cover, you need to be very clear who are you hiring and from what background and what responsibilities you put in their plate. Because if you put both areas in there, good, and one, what you'll get is that they'll focus in that one that they're good at, and the other area will just deteriorate because you're no longer paying attention to it.
So that was a big lesson for me is because sometimes we would hire. People who are great recruiters and they'd say, excellent. I'll take care of all the [00:39:00] people stuff as well. And I obviously say, yeah, cool, go for it. But then they'll focus on things. What is their perception of. People things to be doing like, uh, career development plans, while the basics are not in place for things like onboarding, uh, things like code of conduct, things about how to kind of manage conflicts that that arise.
So that's probably the second lesson that I've learned.
Laura: And within that second lesson, what have been like the hardest people challenges that you've had to deal with?
Alexey: Couple things there. I think if you are first time founder, you will be taken aback by the complexity of functions that you've never been exposed to.
So that's kind of a given. And second, and I'll probably illustrate it with the question to you, Laura, is how often do you purchase a [00:40:00] mattress, for example?
Laura: Once in my life. Is that weird?
Alexey: Well, you're about to move to Australia. I'll be a second time two. So, uh, my min event, but how many times do you think a mattress store sells a mattress a day or a month or a week?
Laura: Oh my goodness.
Alexey: Definitely more than once.
Laura: Yeah. I reckon they sell five a week.
Alexey: Maybe,
Laura: maybe. I'm
Alexey: not sure.
Laura: I was like, this is a trick question,
Alexey: but the point there is that they sell it much more than what you buy. In your lifetime. Right? And the same thing goes with different functions in the business. So an employee complaint in your personal life, let's hope it's rare, right?
But an employee complaint in a context of a people and culture function, that's just like a work stream. So it happens all the time. Mm-hmm. If your business is big enough, [00:41:00] some of them are very silly ones, right? Because you decided that you wanted to put a, a toaster in the kitchen instead of a sandwich press, and now somebody is upset because they don't have the sandwich press and they wanted it.
Right. And you'll get some of the silly complaints. Other ones are a little bit more serious. Right. And some of them are just summary dismissal. Type of territory, sexual harassment, bullying, et cetera, et cetera. So when you say more difficult people things, I don't necessarily think of them as difficult. I just think of them as a capability that the function needs to.
Expect. So there is a process, how to deal with whatever challenge that comes up. It's just you need to be able to put it in place into your organization. If you have four male founders. As an example, people might not feel comfortable to go to you and, and say some of their [00:42:00] concerns. So you put in a whistleblower system into your business, right?
And if there is something that you feel that you can't address because you have some. Conflict, right? Maybe it's a person that you know, maybe it's a person on your team that had a complaint against, right? Then you have ways to make it impartial. Hire external people to help with that. Process. So there, there are tools in your toolbox to address any kind of issue that comes up.
It's just you need to know and be prepared for it. But first time founders, they struggle with it a little bit because the law of large numbers means the more employees you have, every kind of problem will come your way. But the first one is always shocking, right? The first season this season. Bladder and that comes into your legal inbox is always a shock because you're not a lawyer, right?
And you don't know the severity of how to deal with this [00:43:00] thing. But then at some point, if you talk to a lawyer, they're like, oh yeah, cool. Just change this and then tell them to go away. And it's not difficult for them. It doesn't have to be difficult for you, it's just you need to be aware that your functions need to be able to handle that those work, work stream at the right points in the company journey.
Laura: What emphasis did you guys put on your people function to withstand the growth that you had on an employee account?
Alexey: So actually something that stuck with me was I started at Canada about the same time when the lead recruiter started by the name of Mahesh.
Laura: Mahesh Mahesh recommended you for this interview.
Such a good guy,
Alexey: wonderful. And something that stuck that what he said is that the company is a living organism. So what comes in determines the quality of how [00:44:00] it flourishes. So if you are putting very little effort in your recruitment function, expect to have a lot of people problems down. The track because ability to recruit well, ability to recruit people with the same motivations and the same kind of drivers ability to onboard them effectively into your organizations.
Uh, good. Places to invest your time because it allows the other parts of your organizations to be less developed, right? Because you just don't have the resources for it. And people generally are very adaptable, so they might behave very differently in their previous. Place of employment, but if they get into your company and you tell them the expectations, there is no bullying, there is no theft, there is no sexual harassment, then in their first week, then [00:45:00] it sets a tone for the rest of their time there.
It helps quite a bit in making sure that you are not spending your time trying to fight fire, so don't have to be there in the first place.
Laura: And then talking about your co-founder mix, Charlie Garside. So his question was, well, actually, his context, his question was that he's never been sad or in a business context than the day that you told him you were walking away from Eucalyptus after doing the same at Canva and Koala after a couple of years stints.
So his question off the back of that is, how do you know the right time to walk away from a company? Is it like a leaving party when you're having the most fun? Generally? How are you so self-aware?
Alexey: Well, that's something to ask him, right? 'cause he is, he followed me a year later. But in all seriousness, I think the things that pushed me, and the reason why I left [00:46:00] Canva for Koala as well, is that at certain stage you stop being excited and you stop learning and at certain stage of the company growth.
For me personally, the role becomes a lot. More concentrated. So effectively, like if you start with remit of all these different things and very large field over time it kind of boils down to a CFO role and CFO role in a company of 500 is very different to A CFO role of a company of 50. And I felt that I have built my skillset in the early stage.
And I know a lot about the early stage. I know a lot less about a large scale company running, and the tools that I use at the early stage are very different to the tools that. The later stage company would employ for ex an example and our current CFO and [00:47:00] Eucalyptus. Justin just told me that he's spent a lot of times undoing things that I have done, not because they were wrong, but because they were, they're not right for the stage anymore.
So an example of that was. In Eucalyptus, we had unlimited budgets. So there is no such thing as a budget. A lot of people come into the com, uh, in Eucalyptus, and they're like, oh, what budget do we have? And we used to tell them, Hey, you have no budget. If you need to spend money to be effective, do it. But.
Expect Alexa to come to your desk sometimes and sit down with you and say like, why did you spend it? What was the logic behind it? And that was very effective because it switched on part of their brains to think about the resources versus the returns. But that doesn't work on a 500 people company 'cause it just doesn't scale.
So budgets. Do you need to make an appearance at some stage because you can't just train people in in a kind of business [00:48:00] owner mindset at that scale. So when it gets to that scale, right, I'm just not the best person for it. So that's kind of a cue for me to make the space for somebody more talented at that stage.
Laura: So from my perspective and for the context, I guess, of the listeners who are operators, I speak to a lot of operators who actually don't really understand the equity portion of their comp, which is, I guess crazy because we all sign documents. So I feel like there's such a equity education gap. Which is pretty real in this ecosystem, I guess, given the maturity of the ecosystem, and it's something that I believe that this community that we need to talk about more so that this community can understand better and can learn.
So I know you speak a lot to founders about this and how they can communicate the value of that equity today and what will it be versus salary, et cetera, but what lessons can you share with [00:49:00] operators on equity and how to understand the equity?
Alexey: So we are talking about from an individual's point of view, right?
Laura: Correct. Yeah.
Alexey: First of all, if you'd like to have exposure to equity, you need to find jobs that provide equity. Mm-hmm. And actually, there is a great website called equity jobs.com au or something along those lines that somebody built, I dunno who. But it scours, uh, websites of all the companies in the, that VCs have backed in their job boards and then puts it in one place, and most of those companies do provide equity exposure.
Secondly, I'd say that your ability to dictate how much of a equity in a business you receive. F determined by two things. One is your level of experience and then the level and stage of the business that you're joining. Third thing that I would say there is that your career, if you think [00:50:00] about it from your early twenties to let's say mid thirties, it's actually like you can think about it as 15 years, or you can think about it as.
Seven different two year periods, and each one of those two year period is an bet on a particular business. For sure. Grants are there for a period of four years, usually, but, uh, you pretty soon figure out if this business is on a, the growth trajectory of the business. If it's gonna be a rocket ship, like in a year, even six months into canvas.
Journey. I, I already knew that it's gonna be a great business because we celebrated, I think 1 million users when I joined, and then six months later we were like at 5 million users or something like that. Crazy. So I instantly knew that there's a potential in this business, right? So if [00:51:00] you stay in the same company for five years, actually you are doubling down on.
The amount of bets that you could make for that particular company. So I'd encourage for you to think about your career as several distinct intervals. And the last bit is ask, negotiate, because a lot of times when people get to the contract stage, they. Don't ask about equity. They don't ask whether they can take lower salary and have higher equity component.
And a lot of founders actually think that if you have higher equity exposure, you are more aligned. To the goals of the business, and they want you to have bigger proportion of it, and they often shorten cash because in the early stages, the resources in terms of cash are quite limited. So this is the conversation that I think a lot of founders are very open to having, [00:52:00] but I had very little, maybe one in 10 employees that we would hire would open the negotiation process.
So that's not frequent, but it's, I don't. Instantly say, oh, he wants to negotiate. That's fine. With offer is withdrawn. No, no. There is only positive feelings involved in that interaction.
Laura: Yeah. And on the flip side, I feel like I get so much exposure to equity being on the table, playing in early stage roles.
So how can somebody, I guess, coming into an early stage startup get comfortable with the salary hit that they're about to take for the esop?
Alexey: Uh, salary hit in terms of receiving lower salary?
Laura: Yeah, correct.
Alexey: In reality, like personal circumstances dictate a lot. So if you have a mortgage in the family, like you just have to have a certain level of income that you have to bring in.
And I've seen it a couple of times where we would [00:53:00] offer high equity, low salary packages, but the response there was like, I need to have X. That means that they would get. Uh, very low equity exposure. Even though, like in Eucalyptus case, over the course of the next five years, it would've been radically different numbers at the end of the day.
So like your foundational level of expenditure is important there. But then personally, I actually never experienced that salary hit per se, because provided you're good, you, I think can demand fairly. Good salaries in a startup if you're, uh, able to lead the team and a critical skill set that the startup requires, they don't pay peanuts in terms of the discrepancy.
Laura: And then say if somebody is reviewing their offer today, they've got really competitive cash salary and they get given equity, what's the information [00:54:00] that they need to analyze that equity offer to really kind of put numbers around it if the founders haven't been forthcoming with that information?
Alexey: There is an article that I have written on Eucalyptus website, the blog, I think the title of it is, you should read this before You Accept an Equity offer or something along those lines. So that article breaks down it in great detail. Right. But if I were to summarize it, I'd say is you need to understand what level of exposure you're getting.
What the current price per share is, and then you need to know or estimate how much dilution you would suffer through subsequent fundraising routes. Because a lot of people say, or the way the offers get presented is that, or you'll get 0.5% of the business. Right. And they're like, oh, [00:55:00] it's a tiny little number.
I don't want zero 5% of the business. But it depends on what business it is, right? 0.5% of Google, it's pretty good. 0.5% of, uh, Alexi Hobi co. Probably not so good. So you need to, uh, put in some context of on the denominator en numerator in that equation. But I'd say that people should go and read that article because it really breaks it down.
Laura: Awesome. And then given that our jobs as operators are to be founder friendly and to essentially help a founder make their vision operating reality, on the flip side, what's something that we should be really conscious of as founders are offering equity based on what you advise founders every day.
Alexey: Number one thing is that you need to sit down and actually think through how much equity you will require to [00:56:00] get through a series of funding rounds, right? 'cause it's not very intuitive. When you map it out and that you have to hire a hundred people over the course of, let's say three years, and they all come in at different stages and some of them will have to have a top-up grants given to them.
That kind of puts that little bit of a frame to what you cannot offer initially, and it could be that you thought that you could offer 3% for that role. If you offer 3% for this role and all the subsequent hires in that bracket, now that means that you'll have zero equity available at your, let's say, series B, and that means that you won't be able to offer equity to that head of engineering or else in your role that you require.
So I try to coach founders to think through it because. Equity seems abundant in the beginning, but it [00:57:00] becomes a scarcer resource as you go through, but you still need it to hire specific roles.
Laura: Yeah. Awesome. Okay, so my final question for you is, you have been in this ecosystem for 10 years working in startups, so what's your outlook for the APAC startup ecosystem and what signals are you paying attention to?
Alexey: It has changed dramatically since I started, right? Because when I started there was only tank, stream labs and, and fin burners, the two coworking spaces, and that was pretty much it. I lost count how many coworking spaces there are and the number of funds has increased. We have a lot of activity happening in.
Places outside of Sydney and Melbourne as well. So apparently we're, uh, the most efficient at producing unicorns for dollars invested as well. So I feel very encouraged as to what the next decade [00:58:00] brings to Australian ecosystem. I don't think it's a zero sum game for us. It's us against the world really.
So as much as we can support each other and let those success stories happen, I'm all for it.
Laura: Awesome. Perfect place to end. Thank you so much for spending this time with me.
Alexey: Pleasure.
Laura: And that's a wrap. Today's episode was recorded by me, your host, Laura Nichol, with original music composed by Steven Shelton.
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