How to Operate and Scale a Business the Right Way
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
In this power-packed episode of The GaryVee Audio Experience, Gary sits down with Henry Ward, Co-Founder and CEO of Carta, for a meat-and-potatoes conversation about building and scaling a real business. (02:48) Henry shares the journey of transforming paper stock certificates into a cloud-based equity management platform, growing Carta from earning its first $120 in revenue to a $350 million company with 2,000 employees over the past decade. The conversation dives deep into operational challenges, board management strategies, leadership evolution, and the critical decisions that separate sustainable businesses from fly-by-night startups.
- Main themes: The episode focuses on practical entrepreneurship, operational scaling challenges, board management best practices, leadership development, and the evolution from startup to scale-up mindset.
Speakers
Gary Vaynerchuk
Serial entrepreneur, investor, and CEO of VaynerMedia with over 2,000 employees. Gary built his family's wine business from $3M to $60M and has invested in companies like Twitter, Facebook, and Uber. He's the author of multiple bestselling books and hosts The GaryVee Audio Experience podcast.
Henry Ward
Co-Founder and CEO of Carta, a $350 million revenue company that digitized equity management for startups and venture funds. A former Marine who went through officer candidate school, Henry has grown Carta from a beta product in 2013 to serving over 60% of the startup ecosystem with 2,000 employees across three business lines.
Key Takeaways
Master the Art of Board Management Through Pre-Communication
Henry reveals his golden rule: "Don't surprise the board" and takes it further with his "rounds" strategy. (18:30) Before every board meeting, he calls each board member individually to preview controversial topics and gather input. This approach builds trust, makes board members feel valued, and ensures decisions are essentially made before the formal meeting. Gary reinforces this by explaining how over-optimistic CEOs who hide problems for 90 days often lose board trust when issues inevitably surface worse than expected. The key is under-promising to your board and over-delivering, treating them as strategic partners rather than judges.
Prioritize Customer Success Over Short-Term Revenue Growth
When Carta couldn't onboard customers fast enough in late 2014, Henry made the bold decision to stop all sales for three months and convert his sales team to onboarding managers. (10:42) This came after discovering that 100% of their customers checked references before buying, making customer satisfaction the most critical factor for growth. Henry's willingness to sacrifice quarterly revenue to ensure long-term customer satisfaction demonstrates how sustainable businesses prioritize lifetime value over immediate gains. This decision ultimately enabled Carta's explosive growth because happy customers became their most powerful sales force.
Transform Middle Management from Defense to Offense
Henry identifies a critical organizational disease: middle managers being judged by their worst mistakes rather than their best achievements. (28:52) Drawing from his Marine background, he explains that military judges people by their worst performance while civilian life should judge by peak performance. At Carta, they actively forgive mistakes and celebrate middle managers who "bend the arc" of the company through bold initiatives. This approach combats the natural tendency for middle managers to play defensively, avoiding risk due to fear of political backlash from superiors who may feel threatened by their success.
Build Strategic Family Members Throughout Your Organization
Both Gary and Henry emphasize maintaining a network of trusted "family members" throughout their 2,000-person organizations—people who serve as eyes and ears beyond the C-suite. (33:39) Henry maintains about 24 such relationships across different levels and locations, calling them directly for ground-truth insights before visiting offices or making major decisions. These aren't just informants but trusted advisors who provide unfiltered feedback about organizational health. The key is earning these relationships through consistent support and genuine care for these individuals' success.
Know Your Audience in Leadership Communication
Henry challenges the "one-size-fits-all" approach to leadership feedback, emphasizing that how you deliver difficult conversations must adapt to your audience. (20:30) His framework starts with understanding the employee's self-perception before delivering criticism. If someone agrees they're underperforming, it becomes a collaborative problem-solving session. If they believe they're excelling, the conversation shifts to curiosity: "Why do you think I don't think you're doing well?" This approach focuses on resolving perception gaps rather than proving who's right, leading to more productive outcomes and better relationships.
Statistics & Facts
- Carta generates $350 million in annual revenue with about 60% coming from cap table management, 30% from fund administration, and 10% from private equity services. (02:58)
- In their customer research, 50 out of 50 customers asked existing Carta users for references before making a purchase decision, making customer satisfaction their most critical growth factor. (13:12)
- Carta earned their first $120 on January 7, 2014, and made $800 total that month, compared to their current trajectory of $100 million in annual bookings. (06:46)
