2015 INC. 5000 RANK: 293
HEADQUARTERS: Denver, CO
YEAR FOUNDED: 2010
2014 REVENUE: $38.6 million
3-YEAR GROWTH: 1,553%
A history and English major at Colgate University, Craftsy CEO and co-founder John Levisay expected to become a professor. Instead, the former General Electric and eBay executive is co-founder and leader of one of the fastest-growing companies in America, landing at No. 293 on the 2015 Inc. 5000. With nearly nine million registered members, the online arts and crafts community brought in $35.8 million in revenue in 2014 by selling online videos and related supplies to hobby enthusiasts. It's raised more than $100 million in funding since 2011 as the library of online classes has expanded from quilting and sewing topics to cooking, photography, woodworking, and gardening. Here, he discusses his company's growing pains--and how it's working through them.
--As told to Alix Stuart
It's inherent in human nature to become tribal. In the work world, you have finance, marketing, product, and engineering. It's human nature to identify with the team you're on. I had seen this before when I worked at eBay, and I began to see it here at Craftsy in 2012 and 2013, when we really started to grow. You see engineers and marketing socializing with their own groups even at company events designed to build bridges. You hear whispers of cross-functional complaining, the "Well, if they were doing their job, we could get this done a lot faster."
The inflection point for us--and for many startups--was once we got beyond 30 or 40 employees. We raised our series B round and started going from 40 to 80 employees in a quarter or two, doubling and tripling the head count in short order. The first 100 employees, I knew their middle names and birthdays, but when you're hiring seven and eight new employees at a time, it gets harder to provide that context. Now, we have about 270 employees, and I have a new-hire lunch every couple of weeks, because building that connective tissue between new employees--especially if they're from different tribes--is good.
It's really important to help employees understand what other groups are doing. We have rotational meetings, where a person from one department will go to another department's meeting and talk about what he or she is working on and what the challenges are. That helps debunk the idea that "we're the only team working hard, and the others are holding us back," and it creates empathy.
We also do some job rotations, which eBay was a big proponent of, as was GE, where I started my career. There comes a point when even the smartest people can develop internal biases about what works and what doesn't, and it's often very helpful to get fresh eyes on a problem. So we've had 20 or 30 people rotate jobs. Some come out of e-commerce and go over to marketing; people from analytics go into operational roles; people from production go into content and education. The prerequisite is that you have to kick ass at your original role, because you don't ever want to pass duds from department to department. That's a dirty trick to play on another team.
We have an open office environment, and we discourage emailing and IM'ing people who are in your sight lines. Get up, walk over, and create a human interaction. That breaks down some of those functional walls. In tech startups in particular, you really need alignment between product, engineering, and marketing. We've moved them around to make sure they sit in proximate areas, so they are in sync and all have input into decision-making processes.
Also, as we put top goals together for the quarter or year, we have cross-functional teams assigned to each one. Each team has to identify where it is dependent on other teams, and we make sure those goals show up on every team's list of priorities. For the second half of 2015, we have five main goals. We also make a list of things we are not going to work on. That's because you see pockets of enthusiasm for a given initiative--for instance, marketing might be in love with a concept or engineering really wants to try something out--but unless it's embedded in everyone's goals, you will have suboptimal outcomes. It doesn't mean we're never going to work on them; it means, in the next 26 weeks, leave it alone. Don't have pet projects that haven't been approved.
Ultimately, the uniting factor is the customer. About a year and a half ago, we started using the mantra "Team over self, company over team, customer over company." That's something of an amalgamation of what we've seen work at other companies we admire. What that means is that there are sometimes painful, expensive, arduous things that need to be done, but when it creates customer success, that's what brings groups together.