Ep09: How Treehouse, An $8 Million Revenue Company Operates On A 4-Day Work Week And No Managers – Interview with Ryan Carson

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Today’s interview is with Treehouse CEO Ryan Carson, who I had the pleasure of working for. I can speak from firsthand experience that Ryan has created a unique company that I feel very honored to have been a part of. For starters, Treehouse is an $8 million dollar company that only works 4 days a week. And if that isn’t crazy enough, they’ve just changed their business to have no managers. And if that isn’t enough, the online education startup boasts an impressive list of world class investors such as Kevin Rose, Reid Hoffman, Chamath Palihapitiya and Mark Suster? You’ll learn how he got acquainted with these guys in this interview. Key Takeaways

• • On acquiring the first 100 users
    • Becoming an ‘overnight success’ takes years of hard work.
    • Ryan built up a good network by being the ‘connector’ through his conference business.
    • Treehouse was launched at one of his own conferences.
    • The single biggest source of success he’s had was building up his network through MeetUps and conferences. Give them so much value and then ask them to buy later.
    • Start a MeetUp with 10 people first. It starts small and then builds quickly. You can get a projector and then invite someone to speak – offer them value. Give them free drinks at the end.
    • How to Win Friends and Influence People – key book to Ryan’s success.
    • People start to think you know what you’re doing as you continue to grow (for better or worse).
    • Jab, Jab, Jab, Right Hook – a book full of case studies on giving value first and then asking later.
  • Treehouse uses a blended attribution model.
  • They spend a lot of money on YouTube advertising.
  • It took them a very long time to build those tracking tools. Ryan wishes they would have done it a lot sooner.
  • On having no managers.
    • They communicate through their internal Reddit-like forum called Convoy. They first had an internal discussion about this and it was very fruitful. Lots of excitement and concern at the same time.
    • People at the frontline know what’s going on best – Ryan and his co-founder Alan have a small say with hires.
    • Ryan and Alan set the high level goals each month.
    • To get things done, people start projects inside of Flow. Think of these as setting goals and defining what needs to be done to get there. You then add who you need inside the project and then people decide whether they want to join or not.
    • Each day, there’s an e-mail sent to the entire group noting what new projects have started. Lots of insightful things being proposed per day.
    • You now have 60 people thinking like owners instead of having a small group of people dictating everything.
    • The feeling is chaotic but it has been shockingly effective.
    • On ‘boring’ projects – the dynamic has changed because people *choose* to do something rather than being *told* what to do.
    • With this new system, Ryan says there might not be a place for someone that can’t execute on their ideas.
    • You need to have a team of smart, motivated people or else this isn’t going to work. They had to let some people go when they made this change. Some people weren’t able to switch to this style. Some employees want to be managed.
  • The 4 day work week
    • No matter how much you work, there is always going to be more work.
    • Ryan figured if they worked smartly, they could cram 5 days of work into 4 days.
    • People say they have 20% less time than competitors. Ryan’s response: Ryan wants to build a long term company and it sounds crazy but it works.
    • The 4 day work week also enables him to spend more time with his kids, which is more valuable than sending a few more e-mails.
    • The whole benefit of being an entrepreneur is to have a universe that you control where you can have fun and personal time.
  • On attracting world class investors:
    • He met Ryan through Kevin Rose through his conference business. They became friends slowly.
    • Ryan ended up showing Treehouse to Kevin. Kevin then said he wanted to invest and then introduced him to Chamath Palihapitiya, former VP of Growth at Facebook and Reid Hoffman, founder of LinkedIn.
    • Ryan recommends AngelList becomes it makes it easier to raise a Seed or A round.
    • Meeting people in person changes everything because it establishes a real relationship.
  • Entrepreneur’s Organization
    • The big benefit is having a forum of other entrepreneurs because you can talk about all your business or personal problems.
    • You’re not allowed to give advice in the forum – people share experiences instead.
    • It’s small group therapy for CEOs.
    • There are spousal groups as well.
    • Accelerator is for entrepreneurs that haven’t hit $1.5m in annual revenues yet.
  • On Udacity pivoting to focusing on vocational training instead: Treehouse has been trying to make people job ready for awhile.
  • Must read book: The Great Game of Business – great for if you’re scaling your business and if you’ve moved into a CEO role.
  • If Ryan could go back and change anything from when he first started Treehouse, he would build the measurement tools first to understand things better. Building

Resources

• • • Ryan’s Twitter
    • #NoManager post
    • More on Treehouse’s 4 day work week