Deep Dive with Kathryn Minshew

Intro: Welcome to The Daily Bolster. Each day, we welcome transformational executives to share their real world experiences and practical advice about scaling yourself, your team, and your business.

Matt Blumberg: Welcome to The Daily Bolster. I'm Matt Blumberg, the co- founder and CEO of Bolster, and I am here today to go in depth with Kathryn Minshew, the founder and CEO of The Muse. Welcome to The Daily Bolster.

Kathryn Minshew: Thanks so much. I'm excited to be here.

Matt Blumberg: Yeah, so you have such an interesting story. You founded a company, super innovative in the jobs, HR, tech space. Grew it, took it through a transition to private equity ownership. Recently completed an acquisition of Fairygodboss, another company in this space, that I also knew over the years, and working to change the world of recruiting and in particular recruiting and job placement for women. So I'm excited to talk to you a little bit about your journey today.

Kathryn Minshew: Yeah. That's to say, ask away. I'm an open book.

Matt Blumberg: Let's start at the beginning. What gave you the idea for The Muse?

Kathryn Minshew: It really came out of my own experience and wanting something that didn't exist. So my own career journey, I'll give you the very short Cliff- notes version. I moved to the Washington D. C. area when I was about 12, and I decided shortly thereafter, I know what I'm going to do with my life. I will be either a CIA agent slash international woman of mystery, or, I guess, State Department official. And I think in retrospect, it was partially loving the cosmopolitan and international nature of D. C. There was a television show, Alias, starring Jennifer Garner, one of J. J. Abram's first shows, was really big on TV, and I just loved the character of Sydney Bristow, who was a double agent. And I liked history, I liked international relations. And so with this sort of uncomplicated worldview of a teenager, I was like, " Great. I got it all figured out." And I went through my entire educational career thinking I knew what I wanted. I majored in political science, I learned French and Turkish. I interned at a variety of different international organizations. And luckily in 2007, I had the chance to work at a US embassy in Nicosia, Cyprus with a secret level security clearance. And I realized, " Oh my God, this job is nothing like I thought it would be." And as much as I have so much respect for everyone that I worked with, and for people that work in both the foreign service and the intelligence community, I realized that was actually not at all the right job for me. So I was in my early twenties, full of quarter life crisis angst. I ended up getting recruited by McKinsey& Company and moving to New York to be a management consultant. And candidly, I didn't really love that either. And I started thinking, " Can I love my job? How would I know if I liked a job or a company or a career path before I started?"

Matt Blumberg: Now I'm catching the thread here.

Kathryn Minshew: Yeah, exactly. Now you can start to see why it led me to The Muse. But McKinsey was also really interesting because as a consultant, you drop into different companies every couple of months. And I started to realize that all of these companies that might look the same on the outside, three of the biggest five banks in the country, for example, they actually look really different on the inside. Their culture is different. The way they communicate is different. And so when I was looking to leave consulting and move in a different direction a couple years later, I was really struggling with how do I understand what these options actually look like on the inside? And on one hand I had a bunch of hedge funds and banks and things recruiting me. I was also using Indeed and monster. com and LinkedIn. And the online job search experience was so bad that I remember thinking, " I cannot believe that someone has not improved this." And specifically, " I can't believe that there aren't more tools for job seekers to understand what is the culture, work environment, communication style of a company. What benefits do they offer? What will my life be like if I join?" And so I ended up founding The Muse because I wanted it to exist and it didn't. And I started to realize that other people wanted it to exist too. And today, The Muse serves roughly 6 to 8 million people every single month, over 70 million people a year. And we serve all genders, but we do have a majority female audience. When I first started The Muse, we were exclusively talking to women, but then we had so many men coming in and saying, " Hey, I love what you're building and this actually would help me too, and it doesn't exist for anyone." And so it was that recognition of a broader problem, but a broader opportunity to really change the way people looked for work and for companies. And this is the last thing I'll say, and then I'll stop my monologue, but I think it's so interesting, as a society, we used to treat companies and jobs as these indistinguishable things. Oh, you want a sales job? You want an engineering job? Here's 5, 000. And by the way, media organizations love to publish the 50 Best Places To Work. I think that this is as silly as publishing the 50 Best People To Marry In Boston, or in New York or wherever, because who you should work for is much more dependent on who you are as a person. What do you value? What sort of environment motivates you? What sort of things drag you down? It's exactly the same as most human relationships. Some people are looking for a kind of high velocity lifestyle. Other people want security, stability. What pace? I could go on. But I am just fascinated by how we create better matches. And I think it serves companies because instead of having someone showing up, clocking in and out, trying to just do a job, you have someone who actually thrives in your environment. Research has shown that enthusiasm correlates with 15 points higher IQ. So it's not just about getting a workforce, it's getting the right force, getting the right people who show up and really care about what your company is doing.

Matt Blumberg: That is so true. And yeah, it's certainly been my experience over the years. Obviously, I've never worked at your company and you haven't worked at mine. I think they probably have a lot in common in terms of the way they treat people. But I think regardless of how you treat people, it is true, every company is different and every human is different. And figuring out how to most effectively make those matches is really important. And I think something that, it's easy for people to say, " Oh, I don't like interviewing for fit because that creates group think, or that means I'm just going to hire people who are just like me." And I actually think that's not true. I think values and fit are incredibly important, but they're not just about what people look like. They're about the kind of place, the kind of environment, as you said, where people will thrive.

Kathryn Minshew: And honestly, you can take most good things too far. I love the point you're making because I think that there is a difference between, " We hire based on fit, so everyone should look and feel the same, or everyone should be super cool to hang out with at a bar." That's not fit. But if you have a company that is really fast- paced, don't ask stupid questions, go, go, go, hard charging, people should know that and they should proactively opt into it. And you know what, it's interesting, sometimes you have these articles about companies with hyper aggressive company cultures that are published in the media, and sometimes applications go up because there's a certain type of person who's like, " Yeah, I want that. Awesome, great, fantastic." What I think is important is giving people enough information to make an informed choice. And by the way, it benefits the business because if you hire someone who shows up at your company and hates working there, they will not be a great employee for you and they will not be a long tenured employee for you. And this is what I also think sometimes gets lost. It's not just about the cheapest hire, the fastest hire, getting a butt in the seat. It's about getting somebody in the role who is going to be successful and ideally tenured. And that requires finding some level of the right fit.

Matt Blumberg: Yeah, no, that's right. I actually think we're about to see a process of self- selection again around the work environment in the post- pandemic era. The companies that are forcing you back in five days a week versus the ones that blew out their offices and are all remote versus the ones that are somewhere in the middle, there are people who are wired for those three different environments. And I think there's going to be a little bit of a shuffle around that.

Kathryn Minshew: Absolutely. I could not agree more.

Matt Blumberg: All right. So you founded The Muse in what year?

Kathryn Minshew: 2011.

Matt Blumberg: In'11, okay.

Kathryn Minshew: This summer will be 12 years.

Matt Blumberg: Okay, so 2011, you're growing the business. You get to a point in 2020 or 2021, I guess, during the pandemic, where you decide that you want to take it in a different direction. Talk a little bit about sort of that process and how you landed on the path you landed on.

Kathryn Minshew: Yeah, so it was late 2021, early 2022 when I started thinking about this idea of a broader roll- up strategy. And it came from a few places. The Muse had grown at that point to serve kind of 5 to 8 million people a month. We had this great kind of roster of clients, 20% of the Fortune 500. But when I was talking to those clients, what I kept hearing is, " Kathryn, we love The Muse and we would spend more with you if you had an even bigger customer base, job seeker base." But I was looking at the brand that The Muse stood for and the community that we had, and we do really, really well among certain segments of the population and certain psychographics. The Muse is a brand for I think people that are very ambitious and kind of digitally connected. And I love that. So we had these internal conversations. Would we want to expand the tent and perhaps have to change what The Muse stood for, but to bring even more people in, or should we think about a model where we either build or acquire or partner with other communities that speak to other audiences, but ultimately are sort of connected with the same employers? I think you have this really interesting dynamic in the job search and recruiting space where the employers are pretty consistent. A lot of them are looking to hire a wide, wide variety of people, but candidates are starting to gravitate towards groups and communities that speak to their specific needs. Some of those are around diversity or demographics. Some of them are attributes, some of them are functions. People who are marketers coming together. And so the idea started to take shape. And this was also partially, I think, even more supported when the stock market started to crash in 2022. And we started to realize that there was going to need to be a lot of consolidation. And I thought, " What if we could create a group or a constellation of brands that had a single point of sale into the employer?" We could simplify the process for an employer of recruiting great diverse entry and mid- level talent, but we could give them access not just to The Muse community, but potentially to other communities as well. And so I started talking to other founders. There I think is a lot of opportunity. I still am a huge believer in this thesis. And so we identified the first, initially, actually the first two deals that we wanted to do. And I went out into the market and started talking with private equity and some venture capital firms about backing this. And it was really interesting.

Matt Blumberg: Look, it's a really natural story. You can have multiple front ends in communities, but one backend, one sales force, one billing system, and sort of take what you had done and expand it exponentially.

Kathryn Minshew: Yes, exactly. And when I started talking to some of our customers about the idea, a lot of them were like, " Oh my goodness, Kathryn, please do this." One of our longtime customers, he has bought The Muse for eight years at I think three different employers. And he was like, " Do you know, right now, I have 37 different contracts with 37 different tools." And he's like, " Some of those are really kind of long- term mainstays with us, like The Muse." But he said, " Others suffer from this flavor of the month, whereas my corporate priorities change, I'm pulling budget, pushing budget, and if I could, again, do that with fewer relationships but also more, I think it would add some stability to some of these smaller players." And it was really exciting to me. So we went out, spoke to a lot of folks. I think summer of 2022, not the ideal time to fundraise, but great time to run a roll- up plan if you could have it. So I had incredible opportunities on the buy side and just was looking for the right capital partner, is a kind of process you'd expect. There were a lot of people who said, " Love you, Kathryn, we love the idea, but go out and buy the first company or two, integrate it, then come back to us." And I'm like, " Well, if I had the cash to do that, I wouldn't be in your office right now." But ultimately, we ended up getting the process to a point where we had a couple different offers on the table. The private equity partner that we chose was really excited about the roll- up plan as well. And we signed a term sheet with them and then started the process of our first acquisition basically a couple of days later and completed it a few weeks after our main investment closed.

Matt Blumberg: This kind of moved in parallel.

Kathryn Minshew: Yes, it absolutely did. And by the way, a lot of people told me that I was crazy. They were like, " You can't do both of these at the same time." And you know what? In a perfect world in which I got to choose every variable, would I do them sequentially? Yeah, probably. But that's not the world we live in. And the world we live in was this deal is going to go away if I don't have the ability to move on it soon. And frankly, I think for a lot of the investment backers we were talking to, I don't know that they would've been as excited if I was like, " I'm going to do a roll- up, theoretically." I was like, " I'm going to do a roll- up and these are the companies that I'm going to acquire in this order and this is what the businesses look like when you put them together." And so that level of depth and clarity was very helpful. It took a lot of intensity and work to pull it off. But we closed and announced the Fairygodboss acquisition in October of 2022. And it's been really exciting to bring the two brands together. Again, we sell to very, very similar employers. We had, I think, about 45 customers in common and then several hundred customers on each side of the house. And then from the team perspective, we've been able to learn a lot. Some places they made certain choices that were different and in some cases theirs were better and some case take process going through.

Matt Blumberg: Interesting. So your first one is done, you're six months in. What are some things that you've learned about doing a roll- up? What's the process been like around consolidation?

Kathryn Minshew: I think that there are a number of different constituencies that you have to really think about communication with. And I think that there's the broader market. You might do a press release or I think we had a article in TechCrunch and maybe something in follow up on Fortune. But you also have the employees of the company you've acquired. You have your own employees who are wondering, " What does this mean for me?" You have customers on both sides. So we held a customer town hall where I walked through why we did the acquisition, what they should expect, some questions people might have. We also let people ask questions. We did a lot of time investment in the teams, both teams themselves, because both teams, anytime there's a lot of change, people are really wondering, " How does this impact me? What does this mean?" And as a leader, you don't necessarily have all of the answers upfront, but I think giving people the information you do have, helping them see the context and why you made the decision you did, and giving people a chance to ask and air questions both in their name and anonymously, that was very, very helpful. We made sure that each individual team took a lot of time to get to know each other and to not only bond as a team, but also like I said, I think one of the most exciting things about a successful acquisition is that both teams now have new ideas, new resources, new expertise. And so we really tried hard to say, " Hey, we're not going to say that one way or the other way is better until we really look at both. Some ways we're going to say,'Oh, let's move all the systems over to this way of doing things.' Or other times we might go the other way." But we really tried to go team by team and help people see each other as colleagues, help them understand how this was an opportunity to tackle a problem that I think every single person at The Muse and Fairygodboss is here because they care about the mission. And while the two missions are not identical, they're very, very aligned.

Matt Blumberg: Those two are pretty similar for sure.

Kathryn Minshew: Exactly. Very similar. And there's a lot of things culturally that were very similar. So no acquisition is without bumps. There are things I look back and I'm like, " Oh, we should have caught that. We should have invested more time here." But by and large, I think, we tried to be both just extremely responsive, create a lot of channels for people to give feedback, and then communicate, communicate, and sometimes overcommunicate. And that was helpful. And so yeah, it was a really just fascinating, rewarding experience. And we've been thinking about what's next.

Matt Blumberg: Well, so that's the interesting question. So what you just described makes all the sense in the world for the first one. Once you've consolidated the first one, and now if you wind the clock forward six months, 12 months, 24 months, you go to do the next one and the next one and the next one. How do you think that's going to look different, and how's your role as a CEO going to change and scale with that type of a play?

Kathryn Minshew: So I think, firstly, there's a lot of different approaches you might take based on the size differential between the company doing the acquiring and the company being acquired. For the case of The Muse and Fairygodboss, we were bigger, but not dramatically so. I think we were maybe, I don't know, 50% bigger from a headcount perspective. So there were a lot of things that we could manage sort of like two similarly sized businesses coming together. We've also looked at companies that are five people and they have a incredible product, but it's very nascent. Something like that would be integrated very, very differently than a company of 30 people. But I do think that if you can approach an acquisition with an open mind to say you have things to teach us and you have things you are better at, just like we have things that we are better at, and that sort of respect. And I think if you go into an acquisition with the perspective that we are better at every or something like that, you just doom it because we have learned so, so much from the expertise, the teams, the process, the strategy of the company that we acquired. And I think that approaching future acquisitions like that, you're most likely, first of all, to actually learn. You've got to be open to learning. Otherwise, it's very hard for anything to penetrate the thick wall of, I already know this, but also the respect that you give people by listening and again, truly being open to them teaching you something, I think is also a very important part of building a company culture where people can say what they believe and they can raise questions and problems and ideas, and that's ultimately what we're trying to do.

Matt Blumberg: Yeah. All right. So I'm going to come back and talk to you after your 10th acquisition and we'll see if it's still working the same way.

Kathryn Minshew: I mean, frankly, I'm sure I will learn things on every single one. I think that the process will certainly change. But yeah, I don't know. I'm excited. And I think that there's a lot of opportunity still in the space. And I think because the career space is one that so many people have personal experience with, whether it's looking for a job and feeling how frustrating that is, joining a company, it's not right, it's not what you thought, or trying to hire and recognizing the challenges that exist. I think there's a lot of really passionate people in this space, a lot of great ideas. And I think with the markets the way they are, with funding being at all time, or at least last several year lows, I do think we'll continue to see a lot of consolidation. But my hope is that that will allow the best ideas and the best products to have broader reach and not result in all of the brilliance and the creativity and the innovation of the last few years just dying on the vine.

Matt Blumberg: All right. Last question. So you've been a CEO for 12 years now, couple different chapters of that along the way. If you could go back to younger you, maybe not the day you founded The Muse, but sort of a year in, two years in when you were still trying to figure out product market fit, or you had product market fit and now you were trying to figure out how to scale, what is the one piece of advice you would give younger you?

Kathryn Minshew: I wish that I had had access to more operational expertise in the mechanics of growing and running a business. And what I mean by that is I look back at early, early, early stage Kathryn, the CEO, and I actually think that my instincts about our market were pretty right. My instincts about our customer were pretty right. My instincts about our product were pretty right. But my instincts and knowledge about how to build a company around those things that could scale and that could operationalize them, especially once we really kicked into gear a couple years in and raised our series A, that was something that was completely new to me. And it's very different. And I think sometimes founders fall into the trap of saying, " I identified a need where a lot of people didn't see it. I've built a company out of nothing, I've created something new in the market. So as I'm building my company, I'll just reinvent the wheel on all these processes, or I'll just figure out how to." And I think that if I could go back to my younger self, I mean, frankly, I would love if me now could go back and help me seven years ago. Oh my God, the company, the mistake- What?

Matt Blumberg: You needed Bolster.

Kathryn Minshew: Yes. I mean, and I told you this, when I first heard about Bolster, I was like, " God, I wish I had had this in the early days." Because even when we hired our first executives, there were times where we had eight months to hire somebody and there was just no one in the seat. It made letting people go harder because I was afraid of what would happen to the business if we had a hole in a key function that no one else could fill for four months, six months, seven months. So yeah, I do really wish that I had had Bolster, and it's one of the reasons why I'm such a big fan of what you all are doing.

Matt Blumberg: All right. On that note, Kathryn Minshew from Muse, thank you so much for being with us today and look forward to hearing how things progress for you.

Kathryn Minshew: Amazing. Thank you so much for having me.