20VC: Why "Hire Great People and Get Out of the Way" is Total BS, Why Your Upbringing Can Make You a Worse Leader & A Bentley, Two Nissan Cubes and Becoming One of Macedonia's Largest Employers; The Story of Slice with Ilir Sela

0:00Things that we've been taught when we are young, actually I believe sometimes create a lot more damage than good. Okay, higher grade people get out of the way and I've done that. It's complete bullshit. A company's growth trajectory is a collection of mini pivots. You don't have to make this huge company pivot, but every decision tree is a little pivot. I just don't believe in like getting out of the way of anybody. This is 20VC with me, Harry Stabby. It's a modern, incredible story we have for you today. a company that went from Boothstrapton Proftbulk with the founder buying a Bentley to changing the way a generation of small businesses work and being one of the largest employers in Macedonia.

0:36This is the story of slice and joining us is slice's founder, Elyah Seller, through his partnerships. Slice has driven over a billion dollars in earnings, for over 18 ,000 independent pizzerias nationwide. Before slice, Elyah started Nerdforce and sold in 2008. I want to say huge thank you to Jeff Richards at GGV and Ben Sun at Primary for some amazing questions. Questions today. But before we dive into the show today, you know all those mind -numbing tedious tasks that seemingly take up half your day. Well, Coda is here with their new AI -powered work assistant that helps you and your team not just finish tasks but make progress so your product team can bring a feature to market faster by using Coda AI to tag customer feedback, Draft PRDs, suggest target audiences, summarizing product discussions and more.

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3:56Thank you so much for hosting me. I'm looking forward to this one. Let's have some fun. It's gonna be great, but I want to start, and I'm secretly an arm -jess psychologist, so I like sticking to people's childhoods. But you know, you saw your parents running small businesses and your grandparents even. What is the single biggest takeaway for you from seeing your parents and grandparents build that small business in your more formative years? The biggest takeaway is that building a small business is an incredibly lonely journey. It's lonely because you kind of start off this business, try to solve one problem, and then you inherit an Infitted amount of other problems that you suddenly have to be an expert in solving and so that process can be lonely It's a lonely process then you decide to be a sole founder It is so lonely Why did you decide to be a sole founder when you could have had a co -founder and you find it lonely today?

4:46Yeah, look I'll be honest I didn't really come through sort of the VC or Silicon Valley part of the business world. I was just raised to build businesses by creating something that the world needs. You know, that cost me a dollar charged two dollars for it and do that as many times as possible. I'm much more of a small business owner at heart than I am this person who sought out to build a multi -billion -dollar company. It's funny we'll get into the kind of not coming from Silicon Valley Central Crossing later but I do just want to stay on this one element of kind of lessons from upbringing. I always think that we're kind of shaped by our past.

5:24How do you think about what you're running from? That's a really good question. I was born in this town of called Diberin, what was then former Yugoslavia. It's like on the border today of Macedonia and Albania. This is a town of like 5 ,000 people and there are no traffic lights. It's a tiny little town. Growing up, the understanding the common knowledge or what we were taught was to simply Do your best to get a really good job. Hopefully save enough money, maybe buy a house, have a car. That was the North Star, that's like the most ambitious plan that anyone from that town could have. When I was 10 years old, my family moved back to New York.

6:02It was my first time immigrating to the US, but my family used to live in New York in the 70s before I was born. Anyway, we're flying back to JFK Airport. As a 10 year old, you're looking out the window, you see all these lights, like you imagine Imagine the stark difference between a town of 5 ,000 people with no traffic lights and then approaching the landing at JFK Airport in New York City and looking out the window. As a 10 -year -old, and I remember one of the things my dad said was, think about what's possible here, one of the things I don't want you, and he said this to my brothers as well, was to not squander as the opportunity because they made an ultimate sacrifice to leave their family to come to the US for more opportunity for their kids.

6:41And so coming back to New York, growing up where I did, very important for me to prove to the world, I think that anything's possible, but you just have to work really, really hard. I spoke to Ben and Son before the show, and the joy of the way we do this is like, we just have a great chance at finding the schedule. He told me about you having a Bentley, but then also kind of being like Staten Island. My question to you is, and something I think about a lot, having come from nothing is financial security. How much were you chasing financial security in the early days do you think? And was that important to you?

7:14Yeah, I think, look, financial security is important, and I will tell you the Bentley story in a moment. However, growing up, when we moved to New York, we moved in with my uncle. And so my uncle and his family, my dad and our family, we all lived together, my grandparents, we all lived together in a single apartment in St. Island. Two bedrooms. All of the kids slept on these sort of mattresses on the floor at night, and then we have to pick them up and shove them under the couch during the day. I can imagine it was a struggle for my parents, my uncle, and his wife, but for me, it was some of the best times of my life.

7:47I remember those days vividly. We didn't have a lot, but life was awesome. And so for that reason, I'm actually not afraid to land or to end up in a situation where I don't have enough or a lot or it's a simple way to say financial outcomes is not what motivates me. I enjoy the process of hard work. I think I'm enjoying the process of going through a lot of pain and sometimes business feels a bit like a game. It gives you purpose. It's all of that. Now, one of the things I do love are I love cars. When I was bootstrapping the company in 2015, I want to say February of 2015. Look at my spreadsheet one day.

8:26I was tracking my company on an Excel sheet, not even on QuickBooks. and in one month we profited $250 ,000. And it was a tiny team. I was a sole owner, small business, not that small at that point. And my twin brother who's much more of a free spirit than I am, he's like, hey, let's have some fun with it. And so went to this really expensive car dealership in Manhattan and bought a Bentley on the spot. But I would say immediately after I was like, what am I doing? I need to figure out how to reinvest this funny back in the business. and that is truly what led to me reaching out to Wiley, for example, on Twitter, which is, I think, a magical platform, by the way, we can talk about that separately.

9:05Fuck it, why not just go there? I love a natural comment. You said, you're talking to me about that reach out to Wiley, because Lizzy, he told me that you reached out to him on Twitter, and that was the catalyst to them, you know, getting to know you, and ultimately leading you around. Can you tell me the story? Yeah, so that's a month, February of 2015. I realized that there was an opportunity for me to really restart what was then called my pizza ultimately became slice. And two reasons. One, we were performing really well as a business. Two, I had just gotten my first acquisition offer. You know, the offer to sell the company for $18 million.

9:39It would have been awesome. So owner, no debt, $18 million would have been great. I turned it down. I turned it down because I thought, what would I do if I sold the company? Well, I would probably go and try and open up or launch a very similar business, work really hard again for another five years and maybe have some similar outcome we'll see. But that wasn't really that exciting for me. What I wanted to know is what happens if I approach this business as that new company that I may launch post sale? What would that look like? What would that journey look like? I would learn a lot more at scale to a point that I hadn't scaled before.

10:15But hopefully I can surround myself with people who can really help me get there. And so I went on Twitter, like I said, can be a magical platform. And I went and followed a number of really great founders and entrepreneurs in the food tech ecosystem. I tweeted within minutes, Wiley, who I thought at the time was still leading a company called Single Platform. I tweeted the founder of Delivery Hero. I tweeted the founder of Zomato and a couple of other people. And Wiley is the only one who replied. So Wiley replied to my tweet. And he's like, sure, you know, send me a message and I couldn't message him because he wasn't following me back so I couldn't DM him.

10:51Anyway, we got on a call and he was like, what's going on? Like, who are you? Like, why are you reaching out? How can I help? And I told him that I am getting some traction with this really great merchant centric online ordering and commerce enablement for small businesses company. And he's like, look, when you're working with about 100 or 200 locations, give me a call back. I said, well, we're working with about 3 ,000 locations. And he's like, come to my office tomorrow. And so I go to his office at the time, it was at first round capital, which by the way, I had no idea what first round capital was.

11:25But when I met with him, that led to a number of other introductions. I have so many questions to ask here. I think the first thing that I do just have to ask is, there's quite striking that, 3 ,000 locations, and he was saying, come back with 100 or 200. Why did you not go to investors before? I didn't go to Wiley as an investor. I went to Wiley as a leader in the Futech ecosystem, hoping that he can connect me to some people who can join my company to help me scale. I didn't need money at the time. We were very profitable. The last thing I needed was money, or what I needed was people and leadership.

12:01Like I said, I went to the first round office, and one of the people he connected me with was Josh Koblman. Josh and I spoke for about 90 minutes, bit of great conversation, and I leave that meeting and why they caused me. He's like, Josh, love you. And I was like, why does that matter? I really didn't know Josh's background and probably why I was maybe so loose and the conversation went so well. One of the reasons why I ended up raising money was because that was the way to get them involved in the business. And so that's really how my bootstrap company became venture backed. It was almost like not for that purpose as a primary reason it was to get the right people on board and then capital was the way to get them on.

12:39What did you do due to not having money that would have been different had you had money? Not having money forces entrepreneurs to become incredibly creative by in order to solve problems. Capital constraints create incredible solutions that are very hard to replicate by other companies who may not have the same constraints. One of the examples is I started investing in building a team in Macedonia, which is again where I'm from. So in that small town of 5 ,000 people, I started hiring people there for two reasons. One, unemployment rate in that country is like 50%. No one's really working. Average wage for those who do work was about $200 per month average wage.

13:22Very, very limited opportunities. However, in terms of culturally, education is instilled in every human. Hard work isn't still in every person. And I felt like there was an opportunity for me to on board some really great team members early days, paid them really well, doubled the national average, but that would cost me a lot less than having to hire people in the New York or anywhere in the US, really. So we very quickly started building out that team. Today we have about 650 people in Macedonia, we're one of the largest employers in the country. That would not have happened if capital wasn't a constraint.

13:59I mean, we went as far as like creating schools, like English courses because we ran out of people who spoke English. We couldn't hire people who spoke English because you know we hired them all. So we started creating English courses. If someone passed a course and they got a certificate, they would then be qualified to work at slice. How do you create English schools? You go online and record videos teaching English. I just tell you me to that, Eva. Like, physical schools, so went to the city, like there's English teachers at the actual schools in Macedonia who teach the English language, I hired them to become teachers at the time.

14:35It's called my pizza .com, but to become teachers at our company and they were holding courses. It was like a classroom. And so people had to show up every day. It was free. Anyone can join, anyone can go and learn English. You don't have to work at my pizza after. But if you learned and you were proficient and you were excelling in that course, then you would immediately graduate to a job at my pizza. Why did you not spend money because you didn't have it? But with the benefit of hindsight, you wish you had have done. It was really mostly probably in the go -to -market side of things. One, I was limited by the number of sales people I can get based on the profits or the amount of money that we were making at the time and it took a long time to ramp up.

15:17I get to get to a five years to get to a point where we had real scale. You know, one salesperson led to two, two, led to four, four, led to six, but it was like a very slow ramp. I couldn't hire like sales classes to go and introduce this product to as many locations as possible. That created a very slower ramp time. The other part was product. I had one engineer, his name is Sam Kennedy. He's the only engineer and product person. He's the only tech person we had in the company for five years. One person. So we had one person doing product and engineering. This person became a bit of a hero to our team in Macedonia because I would say no to a lot of stuff, and he would stay up late at night, building things and tools for the team to be able to work better.

16:02They had this like behind the scenes roadmap that he would work on after hours while he would build sort of the consumer facing or shop facing product during the day. I also am terrified that he's gonna get sick. Because then your fox is being like that one person dependency. Often it is said that you should hire great people and then the best CEOs get out of the way. You've disagreed with that before when we've chatted. Why do you think that's bullshit? It's complete bullshit. I mean, I use the feel like, okay, higher grade people get out of the way and I've done that. I've done that many times and every time I've done that, things have failed.

16:38I have failed the person and the person typically fails at slice and the reason why I think that is is because every situation is incredibly unique. Even if it's the similar role in a similar company in a similar industry, There are details in every business that really really matter that I think are very important for leaders to align on It's my job to make sure that leaders are successful at the company It's my job to make sure that we talk about the details and really understand the decisions that are made on a weekly or monthly basis a Companies growth trajectory is a collection of mini pivots You don't have to make this huge company pivot but every decision tree is a little pivot right?

17:21you're kind of going down a path and those decisions are so important and alignment around those decisions is incredibly important. And how can you align on those things if you're just kind of zooming out and saying, Hey, I've got this leader running go to market and like, I'm sure what they're doing is great. The numbers are great. But three months or six months later you get into the details and you realize that things have deviated significantly. I just don't believe in like getting out of the way of anybody. I think it's teammates and going along the journey together. Are you decisive? You mentioned that many Pivers.

17:54Are you decisive in your thought process? Not as decisive as I would like to be. I feel like I'm progressing. I'm getting better at it. I used to be really better. I used to really try to run companies with consensus, right? It was like go into these exact meetings and say, okay, what do you think and what do you think and everyone had to say? And we had to like all get on the same page eventually. And it would be this really slow process because it's hard to get consensus when you have five, six, seven strong -minded experienced people around the table. And I think that that was a terrible way to run a business.

18:27People want someone to make decisions. They want someone to carve out a vision for where we're headed. I feel like I've become better, but I'm still not as good as I think I need to be. Why not? If I'm honest, it's because when I was growing up, the culture that's instilled in me, it's like hospitality first culture, which is you kind of want to take a little bit of a back seat. You definitely want to get people along. You don't want to like piss anybody off. I come from a culture where telling people what to do is a bit of a disrespectful element, right? Like it's not respectful to go to people and say, this is what I want you to do.

19:06It's more like, how do you get them there? Things that we've been taught when we are young, actually I believe sometimes create a lot more damage than good. Now, I'm not saying things like hate be kind or be nice or be good to people. I'm saying don't speak when you're not called upon That kind of stuff. I think can be very very de -interest, but it's probably because of my upbringing My therapist once told me parents they fuck you up Harry and I thought that was a wonderfully consign That's right. I waited for it. That's a decision making in many ways. The other thing is fastings You mentioned the mini -pivots with mini -pivots you need good communication and the thought process around it We've been your biggest lessons in effective communication in management, given the many, many pivots.

19:50I think the number one thing is really just the frequency of communication, so the same thing really needs to be communicated incredibly frequently, especially as the company scales. There's no communication debt in the early days. It's a small team, everyone kind of is in the same place. Nothing's lost in translation. As the company scales, the first thing you want to do is obviously communicate these things multiple times. A mentor of mine once said, if you're not feeling nauseous because you're communicating the same thing over and over that you just feel like, why am I saying this again? Do it one more time.

20:21That's how you know that you've communicated enough. I think the other part is, I think it's very rare that people clearly communicate the why because the why is very, very important. Not just the decision we're making, but why are we making that decision? How can we articulate that not just a step ahead, but like five steps ahead. How can we connect the current Y with some future decisions? I think it's a really important part of clear communication because then you want people, the team members, to be able to make their own little many decisions and if they don't understand the Y, then how can they make the right decisions?

20:55I mean, you can't be present for every single one of them. So communication frequency and then being incredibly clear with the Y, not just like one step ahead, but many steps I heard one of the lessons upload. That's all good and well and I totally agree with you. You decided to go from hard mode to extra hard mode though and have a team in Macedonia with those communication pathways. How do you prevent a team of like two islands, one in the US and one in Macedonia, Macedonia team? How do you prevent those kind of silos between the two in communication especially? Yeah, and by the way, to make things more complicated, We also have an incredible team in Belfast.

21:35That team is about I want to say 150 people now And so you've got this company that is part US part UK part Macedonia You know the question is how to prevent those silos what I've learned is I think it's probably more important to just embrace the silos I don't think you can prevent them because every single geography every single region has its own cultural dynamics. What we've done is we've actually created geographic communication frameworks and platforms. So actually today I've got an all -hands meeting with everybody in the US. Next week it'll be everyone in Macedonia and then Belfast. The reality is that what motivates people in Macedonia and the cultural differences there are incredibly unique.

22:18If I communicate it to the company more broadly and try to like make sure that all these people behave identically or as similar as possible. It would be a total failure in my opinion. Who made the rule that everyone has to be like all on one cultural norm? It doesn't have to be that way. We get a fundraising. You mentioned communicating to different parts of the organization that fundraising is communicating and storytelling to investors. We get it. Given you had no idea respectfully, you know, who first around why and really won from Silicon Valley costing a tool. I was really good at it when our numbers were great and I was very bad at it when our numbers were bad.

22:56Why were the numbers bad? I want to say in 2019 I could not fundraise for the life of me. I learned for the first time that when you raise capital, so we raised around $15 million in 2017 and I was led by GGV Capital by Jeff Richards and I was an amazing moment for slice. What I didn't realize is that that raises the stakes. I'm not coming from the world of like let's go raise all this money. It was just like a moment in time where I felt like Capital would be able to really help us scale faster But it set expectations that were even further beyond my own Realization of what the company needed to accomplish in order to then raise more money in the future I would also say I got out of the way too much We hired a lot of people our team won from like 30 people to 100 and that creates It's demand for more capital.

23:46Some of these people are still learning the business. So the performance was great. Like we were growing, I wanna say 60, 70, 80%. But at that early stage, in order to do that next round, we needed to grow by 150. Because of our very clear focus on one segment, pizza shops. Any moment where slices performance hasn't been best in class, immediately the assumption is your tam constrained. Immediately it's like, okay, you ran out of tam, which is completely false but that's the natural reaction and so our numbers weren't like fascinating or really exciting in 2019 and I was terrible at fundraising.

24:23Our numbers were incredibly great in 2021 and we raised in like two days. What did you change when the numbers were shit in 2019 or not great in 2019 and it was hard? What did your mind say to yourself and what did you change? I needed to stop getting out of the way. I basically outsourced a lot of the decisions internally to other leaders. And so I got involved again. I think one of the realizations is companies can actually accomplish a lot with much less. So one of the things that I did was just put a lot of constraint on why we're hiring people. You know, I realized we had a lot of people who were hired to do a specific role.

24:59But very few founders ask, is that a full -time role? So someone will hire position A, and yes, that's needed for the company to continue to grow. But But how many hours a week does position A require? Is it 10? Is it 5? What are they doing with the other 35 hours? And so what they're doing is creating more jobs and then that creates more of a downstream. I want to say impact on the org to go and do more and it gets very noisy and then expensive and it's a snowball effect. And so putting constraints was probably the best thing I did after 2019. Do you think it's a failing of you as a manager that when you step back it didn't go as Well, of course, but then my question to you is like, is it right for you to step back in or should you just implement new Godrails and new structures to allow yourself to remain out of it?