In 2007, Karen Appleton and Aaron Levie purchased the domain name Box.org to predicate the non-profit arm that would exist in the company’s future. They didn’t know when the initiative would launch but it was always on their minds.
At the same time, Karen and Aaron struggled to raise the two-year-old company’s Series B funding round. Between investors hiding their checkbooks amidst the financial downturn and Box pivoting from a consumer facing software product to enterprise, Karen recounts the experience as “scary, fun, energizing and challenging.”
“We didn’t have a huge robust story to tell,” she says. “We had a dream and data to support our goals.”
Dogged determination and thoughtfulness are characteristic of Box’s story. Founded on deliberate decisions to help teams collaborate, Karen cites Aaron’s incredible foresight that’s led the team to serve 57,000 paying customers and more than 4,500 Box.org members a decade later.
In today’s featured interview, Karen takes us back to Box’s early days and highlights three critical questions the team faced on their journey to their January 2015 IPO.
- How do you implement process without bureaucracy?
- How do you hire the best team members for the current stage of your company? What do you do when they’re no longer the right fit?
- How do you navigate personal growth as a leader and leverage feedback to your advantage?
How to Implement the Right Kind of Processes
When Karen joined Box in 2007, the company was led by Aaron, a 21-year-old college drop out, and the team operated in a live-work space where the co-founders slept in the garage.
In reflecting on her experiences, which she asserts she wouldn’t trade for the world, the team’s first partnership with Dell is one that stands out.
“We couldn’t believe that at 10 employees we were going to sign a deal with Dell. It was crazy, exciting, and everything else at the same time,” she says.
Life at Box was very different then. Project management was defined by Karen walking a few feet to the table where the engineers worked, having a 10-minute planning conversation with them, and executing.
“Today, if I walked to one of the engineers and asked them to build me something it would cause chaos,” she says, considering the 1,250 individuals who now work at Box.
You have to create process to mitigate chaos.
While organizational structure is critical to scaling, one of Box’s highest priorities is implementing process in a way where the now public organization still feels and operates like a startup. Karen, Aaron, and the rest of the senior management team achieve that in the way they deploy and practice their core values.
An important example is failing fast, which according to Karen is easier said than done. “How do you know if you’re failing? How do you know if it’s fast? The mentality of the leadership team has to represent what it looks like to move fast and furious in order for it roll down to the rest of the organization,” she says.
The key to scaling the attitude is ensuring that from the top down every member of your team is strongly aligned with the company’s goals and where you are in route to achieving them. The resulting discipline empowers team members to streamline the projects that need to be fast-tracked. “You have to understand the pros, cons, and trade-offs of the decision you’re making and whether or not you should sign off on them to make the progress the team needs,” Karen establishes.
An ownership mentality thrives in the implicit nature of Box’s product; Diminishing hierarchy and inviting anyone, regardless of their title, to contribute to a project. Hierarchy is a burgeoning indication of bureaucracy at startups. The Box team is vigilant about avoiding it.
“We can have a marketing initiative inspired by an intern implemented throughout the entire company,” Karen says. “The essence of what we are trying to create is a flat structure where everyone feels like they can contribute.”
With thousands of team members distributed across the world, Karen’s the first to affirm that there are numerous times when, as a leader, you have to step back and assess how your culture is evolving. Most recently, her experiences leading Box’s young Industries team have required her to implement an experimenter’s mentality to their efforts.
“We spent our first year defining what we wanted to achieve, the metrics we needed to measure, and the outputs we’d use to gauge our success,” she says. The team embraced Box’s ‘Fail fast’ mentality, analyzed their data, made necessary improvements, and set a plan for the future.
You have to fail fast to get better fast.
The hunger driving Box helps the company “stay innovative, culturally aware, and as hierarchal as flat as makes sense.”
How to Balance Hiring and Timing
Despite managing teams for over two decades, Karen’s hiring philosophy is informed by a happenstance conversation that she had with two colleagues.
“I was walking with two women and one of them was taking over a company, as CEO, that was completely failing. I asked her why and she said, ‘I like to fix super broken things.’ The other said, ‘I like to start things and grow them.” A self-identified builder, Karen made up the third pillar, passionate about developing and scaling an idea within an organization. The conversation was a critical learning for her and shapes Box’s ‘bucket approach’ evaluating potential team members.
“We put people in different buckets based on the size of the organization. For example, an individual running sales at a super small startup is going to hit a point where their experience can’t take them to the level the company needs, say multiple billions of dollars of sales.”
In the early days, Box’s strategic hires were individuals who were risk tolerant and possessed a variety of skill sets. They played a critical role helping the company scale, however, the senior leadership team recognized that they may not be the same person they would hire when Box was a public company with over a 1,000 team members.
“You have to bake that in when you look objectively at your company’s growth,” Karen says. “You need different skill sets at different stages.”
On a personal level, Karen strives to have a solid connection with each individual she brings on her team. “You hire people after you spend a few hours with them. When you extend an offer to someone, you’re committing to spending all day with them for years to come. Trust is critically important.” Every team at Box runs fast. A foundational relationship is required to accelerate that.
While the framework has served Box incredibly well – Karen’s exceptionally proud of her team – it’s inevitable that you will make wrong hires as you grow. According to Karen, the best way to mitigate a mistake is, to be honest about it. Often, a hiring misplacement isn’t related to an individual’s character, he or she simply isn’t in the right role to maximize their strengths.
You can make a hiring mistake without it being a tragedy.
While the conversation indicating that you need to let someone go is difficult, Karen’s never had one that didn’t result in the individual to moving to a better place. Thoughtfully approach it by saying: ‘We love you. We think you’re fantastic. We just don’t think you are the right fit for what you’re doing.’
“The key is doing it with dignity, grace, and honor,” she says. “You want people to be happy and productive. Just because someone doesn’t work in one role doesn’t mean they won’t excel in another.”
Build Your Leadership Learning Circle
Karen’s story at Box started long before she joined the young team nine years ago.
“I always had the dream to join a company at its inception and take it all the way through the IPO process,” she says.
I’m builder. I like to take an idea and strategically execute it.
From securing the team’s earliest partnerships to founding Box.org in 2014, Karen’s certainly made the dream a reality. However, she couldn’t have done it without the leaders who came before her.
A big believer in the power of storytelling, Karen’s spent her career asking colleagues and professional mentors about the challenges they’ve faced and how they navigated them. It’s as simple as saying: ‘I’m facing this challenge right now, how would you handle it?’ And then contextualizing the individual’s response to your situation and adapting it your personal leadership style.
Whether it’s a happenstance conversation with Aaron at Box HQ in Los Altos, or spending time with one of the 300 women who comprise a tight-knit group of collaborators in Silicon Valley, Karen is constantly utilizing stories to sharpen her leadership skills. “You want to build a network of folks around you who you can rely on when you need them, on a one-off basis or regularly,” she says. “Everything comes down to building your learning circle of leadership.”
Amidst that circle, is Karen’s executive coach who she compares to her mother. “She knows exactly what kind of day I’m having based on the sound of my voice when I call her,” she says.
Despite achieving her dream, a rarity she humbly recognizes, Karen’s faced hardships along the way; Among the most challenging was grappling with difficult feedback.
“It’s exceptionally painful to hear something about yourself that you didn’t already know. However, harsh feedback, when given in the spirit of growth and betterment, is the greatest gift in the world. You can’t grow completely if you don’t have the good and the bad,” she affirms. “As much as it hurts, there’s no better way to learn than to go through that.”
Learning how to digest positive and negative stimuli requires courage and patience. Karen compares confronting feedback to the way we cope with grief, in stages. “First, you deny it, then you want to throw a rock at them, but what you really need to do is sit with it and distill it. Then once you come to grips with it, you can decide whether you’re going to embrace it or dismiss it.”
Confronting feedback is like facing the ghost in the closet.
The first step of the confrontation is turning around the feedback and openly asking yourself: Is this the person I want to be? Am I valuing what’s important? The answers will reveal your next step. Your job is to determine how to get there, take it, and move forward.
“It’s powerful when you can do that,” Karen says. “You’re always going to be hesitant to open the door. But when you do, and you honestly let everything out and make it a part of who you are, it frees you. It doesn’t keep you locked in anymore.”
Images retrieved from Box, Ozy, and Emily Chang.