Alexa von Tobel: People are everything. I tell every one of our founders, you start and win by your people, period, everything else is fluff.
Jack Altman: Hi, I’m Jack Altman, the CEO of Lattice, and welcome to our series, Uniquely Led, where we sit down with incredible leaders to talk to them about their unique management styles and how that impacts culture. Today I am thrilled to be chatting with Alexa von Tobel. She’s currently the founder and managing partner of Inspired Capital, which invests in early stage startups. Prior to Inspired Capital, Alexa founded her own financial planning company called LearnVest in 2008, which was eventually acquired by Northwestern Mutual in 2015. She’s also a best-selling author and the host of Inc. Founders Projects podcast, which is where I actually first got to chat with her. So Alexa, welcome to our show. Thank you so much for taking the time to chat with us today.
Alexa von Tobel: Thrilled to be here. Thank you so much for having me. This’ll be fun.
Jack Altman: So the first question I always love to kick these off with is, could you take a second and describe your leadership style and maybe give us a sense into what makes it unique.
Alexa von Tobel: I’m really loyal to people, and I’m sure at times that’s probably a weakness too, but when I really commit to somebody, I commit all the way, and I really am there to help them get better, help them feel safe, help them do their best work. And I think in retrospect, in the reverse, want them also to give me better feedback and help me be better. And so it really is that comradery. So in short, I would probably say psychological safety and environment with lots of feedback and the comfort with just none of us are perfect, our job is to keep getting better every day, a real learning culture. And then I really do think I am a loyal leader. I’m very human. I am very emotional. I love the team I work with. I care about them. And I think that is just the only way I know how to be a leader. And I think that is very authentic to me, and that’s the only way I know how to lead.
Jack Altman: I’m curious from starting LearnVest at this young age, going through that experience, selling the company. Now you’re doing venture and you’re working with early-stage founders. Over that journey, what would you say are the biggest evolutions in your leadership style? What has changed most substantially?
Alexa von Tobel: So I’ll start by saying that in some ways, in retrospect, I feel like I really won the lottery. Back in 2007, 2008 in New York City there wasn’t a huge culture of angel investing, and I really lucked out, I had some very, very senior people in their careers, people early at Goldman Sachs, things like that, angel investing in LearnVest and become board members to me. And one of them literally is the next door neighbor to where I’m sitting right now. And they were extremely high integrity people. They were the literally everything you do matters, it must be the highest integrity, no matter what, at all times. And I had already grown up in a household with that being a value system, but as you’re learning how people do business, and I think lots of people have very different styles of how to do business. And being surrounded by people who were so committed to integrity, one, it was just such a gift. It was like they didn’t believe in cutting corners, and I am so grateful that that was just my first real orientation to just the major business world.
So, that was part one. And I think that just set a really nice course for just my value system, getting stronger, and again, really reinforcing that, that’s the right way to do business, even if it sometimes means you don’t always win everything your way, but do the high integrity thing. Number two, I think I probably between 23 and 25 felt, and this is in retrospect, probably felt like I needed to have all the answers, I probably felt nervous that I was a 23 year old, Harvard Business School dropout, first time founder, a female in a landscape of FinTech entrepreneurship, which was pretty rare. And so I had probably an intensity around just doing extreme hard work, which was great. So I’m happy about that. But I think just that carrying the weight of really feeling like I had to have the answers, tell everybody exactly where we needed to go, that softened a lot.
So I would say over the coming three to five years, I actually quickly realized it would make no sense if I had all the answers. There were certain places where I needed to be exceptional at what I did. The vision where we are headed, what I cared about, the value system of the company. We were a mission-based financial planning startup trying to really help everyday Americans. And I think that a big chapter page turned for me when it was like, actually, you don’t need to have the answers. In fact, hire people smarter than you, far more experienced than you, and really trust them. So that’s an obvious one, but it really happens in my own chapter.
And then another big breakthrough for me, which was so simple. And so I hired myself an executive coach because I’d been an athlete and I felt coaches can get you to be better, and I had this very simple thought which is, I’ve never been a CEO before. If I was going to train for something else in my life, I would hire people who can train me to be better. And so I asked the board if they’d be willing to pay for it, and I think they were happy that I asked to do that on my own accord, without anybody having to ask me to do it.
And I had just a major breakthrough over the coming six months, first, it was really uncomfortable. I was like, oh geez, what’s going to come out of this. I hate this. Why did I sign up for this? Alexa, what were you thinking? And then it really quickly transitioned into just really good practical, obvious points, but when you’re running 900 miles a minute, things like you can’t manage other people if you can’t manage yourself, so you have to sleep, you have to get exercise, you have to eat three meals a day. There were days where I wouldn’t even need two meals a day. It was just basics and just really creating a practice around being able to do my best work, because I am somebody who will work myself into the ground. It is very much in my DNA to do that. And so just really getting better at working smart and not just feeling like sheer effort and time is how you win. And just being able to trust the process a bit more.
I’ll pause there, but that gives you a really good sense. And then I would say just this final chapter is probably the one I’m most proud of, which is when you’re having fun, you literally do your best work. And so just bringing the genuine joy of what we do, now I get to be on the other side of the table and helps founders, stand up companies, and support them through the dark days. And really, truly bringing, one, I love this job. It’s like a zest for life. I can’t believe I get to do this for a living. And then just bringing that joy to the work every day, which is just, I remember what it was like to be a founder. It was so intense. It was so anxious written. Having somebody on the side of the table just give you a moment of way to go, this is good stuff. Way to go on this small thing. Oh, of course, we’ll tackle that problem. We’ve got this. Just really being able to have fun while you do it.
And there’s a lot of science behind that when you actually have fun you do your best work. And so I would say that’s probably a big new evolution in my leadership style, which again was pretty naturally there. I just had to dial down my own stress along the way.
Jack Altman: I want to come back to the topic of executive coaches and feedback saying that’s really interesting, but something you said about how you were running 900 miles a minute and you were not eating enough meals, not sleeping enough, that reminded me of something that you said, where you described I think the role of a CEO as somewhat similar to being an emergency room surgeon. And I guess what I’m curious to hear about is what do you mean by that? And when you think about your own evolution as a founder or CEO, was there a transition there? Do you think that there is a, is there a center that you think founders should try to be operating from where it’s very controlled, or is the chaos just part of the nature of the thing?
Alexa von Tobel: I finally was able to express through that analogy basically you’re an ER surgeon, a body has come in with a really, really bad series of accidents. It needs probably three to four surgeries to keep the patient alive, but you have to only do one surgery at a time. And companies are literally, they’re called corporations that stands for body in Latin, and they’re living organisms. And I truly trust, and this is very much how we work with our founders at Inspired, that the CEO is the only person at the helm of it who actually feels and understands the environment, the living and breathing organism that has been created by them.
And sometimes it’s like, yes, I need to do three surgeries on this patient because, yes, we need a new CTO and a new CRO, and we also need to shut our line of business. But if I did all three of those in the same week, people are going to be really freaked out, really worried. Maybe one of them impacts something else in a way, I need to first see how that works. And you have to watch it. And so that’s the other thing I really realize is, strategy is core to the job of the CEO. You have to be able to do strategy at a 10X level, but then you also have to have a real feel for the car, the race car that you’re driving, of can you speed up a bit more? Can you go faster on the corner? Because people are human and you can only push them so far, or make so many changes.
So that’s a little bit of how I thought about, the job always gets harder and you have to keep getting better. And that’s a very humbling thing. It doesn’t reward you with, wow, way to go. It rewards you with even bigger, harder challenges that you have to grow for. And then the other thing is really judgment decision, you have to have great judgment of when and how to make decisions, knowing that you always have to make the hard decisions. And that’s a huge part of the job.
Jack Altman: I love all of that. And I want to talk about strategy, which you touched on a couple of times now about how that’s one of the most important jobs of the CEO. Interestingly, you said something about how, when you started your first, you started your company, LearnVest, you wrote a 75 page business plan, and that’s not something I’ve heard a bunch. So I always find it interesting when I hear something like that, that is not the most common path or piece of advice. So I would love to hear from you about that. Tell me about that experience. Do you recommend that to all founders? How do you think about such a detailed plan for a business?
Alexa von Tobel: I sat down, wrote down the whole plan. And part of that, Jack, what was so important to me was, the plan, first of all, was like probably had 700 misspellings. It wasn’t about the beautiful crafted the writing. It was really more of taking the time to articulate all the ideas, what chapters could look like. It was literally content, tools and advice. The word LearnVest was learn, earn, invest. It was all of the pillars of money. You have to learn about it, you have to earn it, and then you have to take care of it. And so was putting it all together. And then as I was standing up the company, I started out of my savings. So I was like, how do I get this off the ground with very little money? Because again, seed investing wasn’t a thing, I’m so thankful for the environment that now exists for all of us.
But so it was just this body of work that happened to give me a roadmap. And then the one thing, Jack, that I will say, fast-forward, LearnVest was a really hard business to build, I’ll never tell you it was just like, woo, a rocket ship. It was hard. And if it wasn’t for that business plan, that business plan actually in the moment where we literally had to decide, are we going left or right? And those decisions really mattered. Are we leaning into building a subscription company, or are we going to try to continue to be a content platform for the masses that monetizes in other ways, partnerships, et cetera? And I chose subscription. And it was because I had done that deep thought and I’d really understood the work that in the end I made the right decision, but I’ll tell you that was a weekend of absolute stress, really trying to process it. And if I hadn’t had such a deep thought before I went in, it’s like trying to build the plane while you fly it.
Some of that is okay, but fundamental strategy, it’s extremely stressful if you don’t know what your child looks like as they’re growing up, but they’re your child and you’re responsible for it. And so actually doing that deep work gave me a lot of just pretty cognitive conviction in what we were trying to build and which path to go, and I could articulate why, because I’d done a lot of prior work. So I don’t recommend people write a 75 page business plan, because I don’t even think anybody outside of my boyfriend, now husband even read it, but it was more about just the mental preparation of all the different ways the business could evolve and pivot and grow that I had thought about actually pretty thoughtfully prior.
Jack Altman: I’m curious, did you also take a pass at trying to describe your culture early? Did you also articulate a people’s strategy, articulate mission, vision, values? Did you do that work upfront too? And do you recommend that sort of work early on to founders today?
Alexa von Tobel: For our business, it was absolutely foundational. Our mission was to empower everyday Americans to get access to a financial plan, and to be extremely transparent and trustworthy around the wallet. Now, because there was so much distrust around the wallet, particularly for people who had very little money and couldn’t get good advice. There was so many times companies were selling snake oil and so people just were on guard by nature. So our mission had to not only be paramount, but it was just such an important pillar of our value and our brand. So, that one was really clear. And down to, the mission was on the wall, that we kept evolving, we kept adding words to it as obviously the company was evolving. So, that was very clear.
What I didn’t write about was, what is the culture of the company? And I actually think that we builders, et cetera, have gotten better. I’ve just recognizing that motivating and really seizing the hearts and minds of a group of people, it’s how you do something exceptional and really building that. And I think that was one of the things I was learning about. So I think I intuitive knew culture was important. And it took me actually probably until two years into business to realize that people, not only are they obviously your biggest expense, they’re your biggest asset, and really harnessing that properly is really important. So the mission was obvious, but the, what’s our culture going to look and feel like? I never got into the nitty-gritty. And in retrospect, now building Inspired and people are everything. I tell every one of our founders, you start and win by your people, period, everything else is fluff. And really making sure you capture the heart and minds of people in a way where they’re excited to build the vision is the best way to be a leader in my mind.
Jack Altman: On the topic of people, which I, of course, fully agree is the most important input to a successful company and business. You’ve talked a lot about criticism and the importance of criticism and feedback. You talked about an executive coach and mentorship. You’ve talked about the need to be comfortable giving and receiving it. What’s the role that you see feedback playing for founders, for people inside companies? How have you gotten comfortable? How do you help other people get comfortable with it?
Alexa von Tobel: I’m not going to pretend for one second that I was superhumanly comfortable with people telling me all the ways I was bad or doing something terribly, but I had an intellectual switch at some point in my mid twenties, probably. My point saying is, I’m just like everybody else. When somebody tells me, hey, Alexa, I don’t like this. You don’t look great. What you said was wrong. I have the same normal human feelings and emotions where I’m like, oh, that hurts my feelings, and I feel badly. But I did have an intellectual flip where I realized that people were really doing you just a massive favor. I have so many times in my life where I want to go give a piece of feedback, but I’m like, ooh, I’m going to hurt their feelings. I’m going to upset them. They may get mad at me, and then you end up not doing it.
And I realized that the people who actually tell you the things you need to hear, which is, X, Y, Z, are really not only putting themselves out on limb, but they’re really doing you a favor. They’re trying to make you better. They’re trying to do that. And when I approached feedback as really a gift that people were going out of their way to give me that they didn’t need to, I quickly learned to flip it in my own head and actually to step back and say, not only am I not going to shoot the messenger, I’m going to be grateful for the messenger and thank them and say, hey, I got to process that, but I’m really grateful that you had the confidence and guts to come tell me that. Thank you.
And I think it just creates a very different environment when feedback is really comfortable, and even at Inspired, year one we asked everybody to give everybody feedback. And when you approach it with, we’re all trying to get better, we’re all trying to make one another better. None of us have ego about this. And I think in everyday work, everyone’s moving so fast, egos can flare and people can feel that, but just reminding everybody that none of that matters, we’re all here to be in a learning mindset and get better. And I think by being a leader that truly thinks people, and people give me feedback all the time of things I can get better at, missteps I made, a choice that wasn’t perfect. And I’m human. And so just trying to keep getting better. And I will say, as a result, I have gotten better.
I also, outside of work, surround myself with people who give me a lot of feedback, be it my family, or this wonderful person who’s my husband gives me feedback probably daily. And I say that with, it really is so wonderful to have people that are trying to make you better and look after you. And that’s how I view it. So it was a big switch flip, it’s not someone trying to hurt your feelings. It’s not someone trying to tell you why you’re not good at your job. It’s actually somebody who’s trying to invest in you. And again, and then after that it’s just a matter of logging it and figuring out, all right, which thing do I want to get better at now? Because you can’t get better at five things at a time. And so just keep thinking about material progress over time.
Jack Altman: Yeah. I love that. And I love the idea of constant feedback from people who clearly care about you and believe in you. I think that’s the most effective source. I’m curious to think about how some of these concepts impact your thinking in your role today as an investor. So for example, I’m curious, how do you think about looking out for the traits in a founder that you find valuable when you’re looking at investing in a company?
Alexa von Tobel: The most important decision you make as an investor is the founder and who you back. And founders come in all shapes and sizes. And so there isn’t a single archetype that we believe is the winning archetype, but it really is getting under the hood with the founder to really understand what’s driving them? Does stress wake them up and make them better? That’s probably one of the bigger, more important things. Does stress make you better. When things get hard, do you get better? Do you personally have a growth mindset? Do you have a learning curve? I call it L-I-T-T-P, can you lean into the pain? L-I-T-T-P. Being a founder is all about which problem you’re fixing. Can you lean into that? Do you have the grit and inertia to be able to do so?
And so I think we really look for those types of founders. And then one thing that I think is worth saying is just, we’ve all been founders, we’ve all built companies at Inspired. And so it’s a little bit of an important mindset of the firm, a cultural pillar of the firm is, and then we trust our founders. So I think that’s an important thing to say, which is, I remember having investors that would say, oh, I think we need this. And I was listening to them and it wasn’t that I listened to the feedback, but I was like, I actually am certain we need this. And just respecting their judgment because of the fact that, as I said, they are the CEO of an organism that’s moving and breathing, and you have to trust their instincts. As long as, again, you can trust that they take feedback well, and they’re listening to all the input.
And so it really is about just having exceptional high trust with our founders and then doing everything to try to make them super human, filling in their gaps, taking work off their plate, pushing them when we can tell they need to be pushed, listening to them, which is a very important thing. And then making them comfortable to say the things they’re scared about, and again, all of that psychological safety. So probably no surprise from all of this, Jack. I studied psychology Harvard undergrad, have been a complete junkie for everything around behavioral development, personal growth and improvement is stuff I find fascinating. And so I do think that, that probably plays a little bit into the way I think about the role.
Jack Altman: How do you determine some of these things? I fully agree with what you’re saying. I love that notion of does stress make you better? I love trying to think through people who are receptive to feedback. I think that’s super correlated with people who grow a lot. How do you identify these things in people? Is it through references? Is it just through spending lots of time together? How do you determine whether these things are present?
Alexa von Tobel: I really just like to spend time with the founder, really talk to them, get a sense of, one of the questions I like to ask is, tell me a time in your life where you were shattered, something went terribly wrong. And what did you learn about yourself through that? Really understanding their self-awareness through stress and pain and, because I believe that when you’re going through intensity, we all have skillsets and things that we lean on to get through it. And so just really understanding how self-aware are they through really big stresses? And one thing we always tell our founders, we can promise you that you’re going to have some of your most sleepless nights of your whole career once you start a company, it’s a promise, and I’m sure Jack you’ve had your own where you just really, really are worried that something is really going to go wrong and it’s miserable.
And so it’s really taking the time, and hopefully you get a sense of my personality, it’s giving people the space that you can be exceptional without being perfect. You can be a top 1% founder and still make a lot of mistakes, but you want to surround yourself with that team of people that keep pushing you and make you better, because that is the way to the top. And as cheesy and corny, and overused of failing your way to the top, in some ways that is what being a founder is, is you’re going to get something very wrong, and we need to know that in those moments, you’re not trying to cover up your tracks. You’re saying, okay, this went really bad. How do we fix it as quickly as we can and move on? And that’s a real comfort with problem-solving.
So getting to know founders, talking to them, running references, having really veneer down conversations like this to say, talk to me, why do you think you’re good at that? Why do you think you’re going to be better than others? What did that look like in the past? And you can get a sense of founders have really not thought those things through, or frankly have no well to drawn on, in which case they’re really going to be learning about themselves for the first time in the seat.
Jack Altman: The last question I’d love to get your thoughts on, you wrote article with your co-founder recently about ways to be a more empathetic leader, which is something that we think about a lot at Lattice, I think this is a super important subject. So I guess I would love to just hear a little bit about that from you. How can leaders more meaningfully connect with their teams?
Alexa von Tobel: In so many ways, I feel like the professional veneer of the nineties and the early aughts, was briefcase on, perfectly professional, everything behind you is buttoned up. You don’t even have a family. That very sadly outdated in every way world. What we’ve been through with COVID in my mind as a very hardworking mother of three little kids, I have a six-year-old, a three-year-old and a two-year-old. So really in all ways, I think one of the things that Penny Pritzker and I really talked a lot about was, one, we’re going through a really important cultural opportunity for our country and for the globe of just thinking about different ways to work.
And I think one of the things I love about what’s happened through COVID, and obviously many things are really scary and have been so hard, but I think we’ve begun to let us be our whole selves at work where right now we’re in each other’s homes, or spaces, and you can be your whole self, you can be different. You can have lots of things going on in your personal life, and people don’t necessarily need to question whether or not you can show up at work and do a great job.
And I just think that creating that empathy for the whole person is not only a critical thing to having people do great work, it’s just a massive opportunity for us to change the fabric of our culture. And so I think what we wrote about in that first company article was just the fact that I really do believe the path forward to greatness is one where we embrace the whole person. We think about just how important empathy is, also coming through COVID, we’ve all been through a trauma, all of us. In fact, the American Pediatric Association just declared COVID a trauma for children. And that’s pretty wild if you think about it. We’ve been through something really traumatic.
And so I just think people get to do their better work when they’re not walking on pins and needles, and in an environment where it’s so cutthroat that you worry about everything. And that doesn’t mean, don’t mishear me, we’re here to win. We’re here to be competitive. We’re here to do our absolute best work, but I think you can do it without just every intensity knob turned all the way to the top. And as I said, leading with fun, I think you’re going to do better work. I think you’re going to have higher employee satisfaction. People are going to stay longer, all the signs point to those things. And so just really reminding us through this chapter that empathy is a pretty critical leadership skill right now.
Jack Altman: I love that message. That’s an amazing note to end it on. Alexa, thank you so much for taking the time. Learned a ton, really enjoyed it, and really appreciate you being here with us.
Alexa von Tobel: Jack, you are such an icon in what you’re building. We’re so proud of you, and we’re just really grateful that you wanted me to be on. So thank you so much.