Roger Lee’s first startup wasn’t so much a company as a beautiful accident. As teenagers, he and a friend built three websites that reached the top-ten most viewed teen-oriented websites in 2003. So even before they graduated high school, they created SubProfile, an early social media network, to capitalize on the websites’ popularity.
In 2008, Lee cofounded Thunder, his first “real” startup — with a team of employees, an office, and the other trappings of what felt like a "real business." The company builds design software used by more than 100 publishers, agencies and brands. In 2011, Thunder (at the time known as PaperG) was named one of Forbes’ 100 Most Promising Companies in America.
Lee’s most recent startup, founded in 2015, is a digital 401(K) provider for small to medium-sized businesses called Human Interest. The company has raised over $70 million from Y Combinator, Uncork Capital, USVP and other Silicon Valley investors.
Roger, a Harvard graduate, is a well of ideas and management experience. When we spoke this week, he told us how a founder’s mindset changes after your first hire, how to differentiate between the essential tasks and the urgent, but unimportant ones, and the way AbstractOps can make time for the things that actually help startups grow.
What sparked the idea for Human Interest?
The impetus for the idea came when I was running my last startup which is called Thunder. I had cofounded Thunder with three friends and, from the early days, I had wanted to get a 401K plan for our employees. There were two reasons driving that: one was as someone very interested in personal finance, I knew the importance of saving and investing early for retirement and its value for our employees. But secondly, from a practical matter, we were trying to recruit our earliest employees from larger companies like Microsoft and Google, where retirement plans were a standard benefit. We knew as a small unknown startup that it was going to be hard enough to attract top-tier talent and that it was going to be even harder if we didn't even offer the standard benefits. So we thought a 401K was table stakes in order to be competitive on the hiring front.
And so I set out to get a 401K for that business and naively assumed that I could just go online, click a few buttons, and we'd have a 401K and I could move on to the next item on my very long to-do list. I was disappointed and shocked to discover that actually it was going to be quite challenging to set up and a 401K.
I learned that through traditional 401K companies like John Hancock or Mass Mutual or Vanguard, it was going to take two or three months to just get a 401K plan off the ground. That was going to involve a lot of paperwork and complicated decisions about plan design and investment funds, and lots of manual data entry to enter in all of our employee information. Just a lot of hassle to even get the 401 K plan launched in the first place. And that’s not even considering that once the 401K plan is live, there's going to be ongoing administrative work that someone at the company is going to need to do. At the time, our company Thunder was maybe 10 employees, so we didn't have an HR person and we certainly didn't have a finance team that could take this on. And my cofounders and I were all busy just trying to get the business off the ground, so we had very little capacity to take on 401K administration on top of our long list of responsibilities.
And so, long story short, we decided not to offer a 401K because we thought it was going to be too complicated to start and to run. We came to the conclusion that we'd have to become a bigger company to offer a benefit like a 401K. That always made me feel ashamed and embarrassed that we couldn't offer something so fundamental as a 401K to our employees.
Later, I realized that we weren't alone, that the vast majority — something like 80% of small businesses with less than a hundred employees — also aren't able to offer 401 K for the very same reasons. That means over a third of the American workforce — 40 to 60 million Americans — don't have access to a 401K at all because their employer doesn't offer one. So, that frustrating experience is what inspired me to start Human Interest. I wanted to try to make it a lot easier for smaller companies to offer a 401K; I wanted to make sure there were less American employees who were deprived of what has now become the most common way of saving for retirement.
We’re fascinated by the moment a founder switches to being a boss/manager. What was that like for you and your cofounders at Thunder?
I think the biggest shift was just feeling like we had this big responsibility; it was a shift in mindset to now being responsible for others. In the very beginning when you're starting a company and you have an idea, you're building the product and just trying to bring something to life, and it's just a unit of cofounders working together. You don't have investors, you don't have employees, you don't even have customers. It’s this rare time window where you're just focusing completely on building the product and getting something off the ground.
But when you begin to expand your team, it shifts both in terms of mindset and just how you operate, because you should start thinking from the employee perspective. You start thinking: how do I make sure I give my employees compelling benefits? How do I design a good culture? How do I keep employees happy and motivated and engaged? How do we make sure that we're working well together and communicating well? Those are all questions that, prior to having employees, you don't really have to think about. They arise when you have a mindset shift, which leads in turn to an operational shift.
And the same is true on the investor and customer front as well. What are the needs of the other person or other party? How can I provide value for them? How can I make sure it's a mutually beneficial relationship? How do I think long term?
At that point when your startup goes from idea to business, what percentage of your mind space flips to focus on employees or on investors or the operations side?
Despite what I was saying before, even in the very beginning, there’s never zero percent attention focused to employees and investors. When I came up with the idea for Human Interest, which I felt was an ambitious one — to bring retirement benefits to the 60 million Americans that didn't have access to them — I instantly knew that wasn’t something that my cofounder and I were going to be able to do alone. I knew we were going to need to hire employees — really good ones, too — to join our team to make progress on that front. I knew where we're going to need to attract investors, who were bought into the vision and the long-term opportunity that we're pursuing. And so even at the time of the idea genesis, you need to consider the broader long-term context, which is going to include employees, investors, and, of course, customers.
From the start, the idea, inherently, has to consider: what the team's going to look like? What the investor base is going to look like? How’s it going to be funded? Who is it going to serve? And on and on.
But of course, as the company matures and grows, you're devoting a greater and greater percentage of your time and energy and focus to the team. Because as you hire more employees, the percentage of the effort being put into the company is less and less your own, right? It used to be that I was putting in 50 percent of our startup’s hours — because it was just me and my cofounder — but once our team was even just five people, suddenly, I was only contributing 20 percent of the total hours to the company.
At that point, you realize the way to make progress is creating leverage via your team. Helping your team become more effective and attracting the right employees and motivating them and retaining them suddenly has a lot more impact on the progress of your startup than just a founder’s individual efforts alone. And so that necessitates spending more and more time and focus on the team rather than your own work.
Often, it’s missed opportunities or mistakes that are the best learning experiences. What is something you regret or wish you could do again that’s taught you an important lesson?
I was saying before about my own efforts becoming less and less impactful relative to the leverage I have by impacting the team, but I could have more efficiently prioritized my own time while heeding to that principal. I struggled with always wanting to help my team become more effective by shielding them from things that weren't core to their jobs. I viewed my role as manager and leader and founder as working to shield my employees from anything that they didn't have to worry about so that they could focus on what they were uniquely good at and what they were brought on at the company to do. I believed that was the way to maximize the progress of the collective team.
So, I very much adopted the mentality of: no task is too small for me, even though I'm the founder; I'm willing to do anything that’s needed to unblock obstacles for the team. In general, I think that served me well as a mentality, but at the same time, I couldn't help but see that there are a whole host of things that I certainly didn't want my team to be doing, but that honestly wasn't the best use of my own time to be doing either. So, I realize now that it would have been more valuable to find some way to delegate to some other party in a way that wasn't going to distract the team, but also wasn't going to distract me from higher-leverage tasks that I could be doing. It’s those high-leverage projects that help startups progress.
A lot of these distractions are back-office stuff, a whole host of things that it sounds like AbstractOps is solving. I suspect that’s the reason it's become so valuable for its customers: it can free not only the founder’s time, but also the team's time from having to think about legal and finance and compliance and benefits and payroll and vendors and so on. Those were items that I was mostly taking on myself in the early days, not wanting to burden anybody else on my team with it, but that was to my own detriment. It meant I was spending my time on tasks and responsibilities that were inessential and not strategic to the business, instead of deploying that time more productively to further bigger, more impactful priorities.
As a three-time founder, I'm sure you’ve learned a lot via trial and error. But is there a framework or idea that you’ve read or been taught that’s been especially impactful on how you approach the operations/management side of founding a business?
There's one particular framework that's been really helpful for me. It’s called the Eisenhower Decision Matrix which was popularized by the book The 7 Habits of Highly Effective People. The Eisenhower Matrix is a framework that divides all of your tasks and responsibilities into four quadrants along two axes. You have things that are Urgent And Important in one quadrant, then you have Urgent, But Not Important in the second quadrant, then you have Not Urgent And Not Important in the third quadrant, and then Important, But Not Urgent in the fourth quadrant.
If you organize your to-do list in those four quadrants, Urgent And Important are pretty obviously the things that you need to work on. But many founders — myself included — end up devoting far too much time to Urgent, But Not Important tasks. These are the constant pings and Slacks and emails and meetings and things that kind of just appear on your calendar and in your inbox that feel like they're time sensitive and so you jump on them. But if you zoom out, they're actually not that important to the success of your business.
As a result of that, you're not spending nearly as much time as you should be on the Important, But Not Urgent, like the long-term planning and designing the company culture and thinking through your strategy and your vision and your roadmap. Those things are all essential to the success of your business, but can always be put off, right? They don't have to be done today.
I certainly fell for that trap and ended up procrastinating on a lot of these Important, But Not Urgent tasks in favor of emails in my inbox and things on my calendar that were Urgent, But Not Important. These days, though I don’t maintain a physical matrix, I always sort things into the mental model.
One approach I used was regularly reviewing my calendar to ensure that it reflected my priorities. This meant intentionally blocking off time on my calendar for Important, But Not Urgent tasks, and canceling or shortening meetings that were Urgent, But Not Important. I also used Boomerang's Gmail Snooze feature to pause my inbox throughout the day so I wouldn't be compelled to constantly check email, and increased my use of "Do Not Disturb" to avoid getting Slack messages or other notifications during times that I had allotted for deep work.
So, I think that framework has been really useful for me to just consciously think about my day to make sure that I'm giving enough attention to the tasks that are in the quadrant of Important, But Not Urgent and not spending too much time on tasks that are Urgent, But Not Important. It’s really hard in this day and age, but you have to find a way to make sure you’re devoting the time to those essential tasks that often get procrastinated on.