Clara Shih is founder and CEO of enterprise fintech platform Hearsay Systems and member of the Starbucks board of directors. She studied computer science and design at Stanford and credits her design training for helping her empathize more deeply not only with Hearsay’s customers, but everyone in her life, from her family to employees and community.
What have you leaned on to navigate 2020?
When the world turns upside down, embrace it. I’ve had to draw on every bit of empathy, courage and resilience built up over my career. My guiding light is thinking about what would make the people in my life proud—my employees, our customers and above all, my mom.
In part, that’s meant taking swift action—from closing our offices and cancelling critical sales meetings as the earliest COVID-19 cases emerged to making a snap call to replace our June all-hands meeting with an open forum about race. Each decision felt scary in the moment and required me to lean into my fear.
It’s also meant frequent communication—making sure the team hears from me consistently and often, about everything from the tough situation for working parents to our company’s financial situation. In the last few months, I have experienced how leadership is forged in crisis.
I think that through our actions and words, we’ve been able to help our team to move through denial, anger and grief, and earned the opportunity to cheer them up. We’ve mailed surprise gift boxes to team members, shared poems, and held cello concerts over Zoom to double-down on our humanity and fight the mundane.
And through it all our team unexpectedly uncovered a new sense of purpose. Hearsay’s users are financial advisors who communicate with their clients through our platform, and we’ve been deeply moved by the humanity in those conversations. People are losing loved ones; they’re worried about their jobs; their retirement savings are getting wiped out. Seeing that has inspired even more urgency and conviction for everyone in the company.
What advice should first-time founders heed?
Ruthlessly prioritize. When we were just getting started in 2009, one of our early angel investors, Thomas Layton, told me, “The hardest part of starting a company isn’t deciding what to do—it’s deciding what not to do.” I didn’t really understand what he meant at the time, but it has turned out to be incredibly sage advice.
When you’re starting out, there are endless possibilities. You can do anything, but you can’t do everything. I remember in our early days, social media was really hot, and many companies asked us for features that weren't part of our vision and roadmap. We got an inbound invitation from Coca-Cola to participate in their social brand marketing RFP, which wasn’t at all aligned with Hearsay’s founding mission to establish social selling as a new category. But we hadn’t raised money yet—and it was Coca-Cola! It was terrifying to respond to a Fortune 100 company with “no thanks.” But they were looking for a brand solution, which wasn’t part of our vision and would have required different features and taken us down a different path. So we walked away. That clarity of purpose, staying focused on what we were actually trying to build, turned out to be critical for us as an organization.
What question are you asked more than any other?
I get asked a lot about being on a public company board of directors—how it happened and what it’s like. The “how” is pretty simple; I had gotten to know Sheryl Sandberg through writing my book The Facebook Era (2009)—which Howard Schultz, Starbucks’s CEO at the time, had also read—and she referred me to replace her on the Starbucks board. As for what it’s like—joining the board of another company is something I’d highly recommend to leaders of any organization, because it provides valuable perspective. Starbucks and Hearsay are in very different categories and at different stages, but we have many of the same board conversations about growth, focus, people and leadership.
As someone who is generally cynical about the motives behind many CSR campaigns, what’s surprised me about Starbucks is seeing how decisions are genuinely based on doing what’s right for employees, customers, and communities. College tuition reimbursement. Hiring 25,000 military veterans. Healthcare for part-time retail store employees 25 years before the Affordable Care Act. Hearsay doesn’t have the resources Starbucks does, but we can still make the same kinds of values-based decisions, and it’s important to set that bar early. When it really counts and it really costs you, are you going to do the right thing?
What early experience shaped who you are?
They all have—I believe we are the sum of our experiences. I’m who I am because I immigrated to the U.S. from Hong Kong; because I grew up in Chicago; because I worked at Google and Salesforce.
I think the key is to derive as much as you can from each experience, and that requires time to reflect. Once per quarter, I look back on what went well and what didn’t and why, and set goals for myself that I can check against the next quarter. I also try to set aside at least a couple hours each day to not be on a device, so I can think and reflect without distractions.
What’s the best interview question in your toolbox?
I usually ask how the person has changed since they first started their current role. The most important things I’m looking for when I hire are learning ability and speed, which lend to other qualities like growth mindset and bias for action.
I want to dig into the ways someone has set themselves up to learn—not just how they’ve changed, but how much agency they had in that process. Do they actively seek out feedback? What’s the pace of their learning? In any role with any company, there is a lot you can learn about the business, yourself, your management style. It’s about taking ownership and continuous improvement.
What’s a lesson you learned the hard way?
Hire slow. Failing to “hire slow” is a mistake we all make, even when we know better. You’re so desperate to fill a role, maybe the person’s got a competing offer, and you decide to rush the process just this once. But it always comes back to bite you. A few years ago, we had a VP role open for nearly a year. A bunch of people quit, and I wanted so badly to get the team moving again. I thought someone would be better than no one, but as bad as things were before that hire, they actually got worse after. People got spun up on a bunch of things that didn’t matter. We pissed off customers. Eventually I had to make a change, and it was so much harder than if I’d just kept the position unfilled. We all get this advice, and yet it’s so easy to make excuses in the moment.
What book should every company-builder read?
In the pandemic, I’ve been obsessed with Think Like a Rocket Scientist by Ozan Varol. He's like a millennial Taleb meets Kahneman, two of my favorite writers. The book makes a ton of really provocative points, but two in particular stand out for startup founders. First is that we should be careful not to let our egos and identities trap us—we should be the ones to evolve our stories and identities. Second, he takes a neat contrarian view against two Silicon Valley staples: that the "move fast and break things" mentality popularized by Facebook might be fine for consumer entertainment apps but not mission-critical projects, and that the Agile methodology comes with the danger of incrementalism and not thinking big enough. Rocket science is a better analogy for large, high-stakes projects which need iteration but ultimately must work without error.
- Lean into fear
- Hire for learning ability
- Decide what NOT to do
— Clara Shih, Founder & CEO, Hearsay Systems