Missionaries, not Mercenaries, will Turn the Tide on Climate Change
You read about a lot of big ideas in business these days, and especially in Silicon Valley. Companies and founders talk a lot about culture, values, and mission. What do these things really mean, and how do they look in action? What makes a company mission-driven as opposed to profit-driven like any other? When the pressure goes up, that’s when you find out what your culture is really made of: Are you guided by values or by expediency in the moment?
On March 1, 2020, Turntide had everything lined up to finally achieve escape velocity. After 10 years of development, our core electric motor technology worked! We reduced energy 64% in commercial HVAC retrofits. Turntide had finally cracked the code on switched reluctance motors — producing the most efficient and lowest-cost-to-build electric motor in the world. Then it had taken a long three years for us to validate its performance and reliability in the real world with third parties and Fortune 500 customers.
We had just passed through all the key pilot hurdles, and we had a verbal agreement on a $10mm order for a large retailer. It would have given us the key market validation to scale all of our processes, so we could grow 10–100x larger in short order. It seemed like everything was coming together to raise funds and achieve profitability in 2021. Our pre-COVID plan called for 2020 to see 10x growth in bookings vs 2019. This heavy weight we’d carried up the mountain for years felt lighter as we saw the peak.
Then COVID-19 spread to America. We saw it coming through our supply chain in China two months earlier, but we felt a misleading sense of ease after our contract manufacturers returned near full capacity after a five-week shutdown. Meanwhile, we continued to produce with our parallel suppliers in India without missing a beat.
By mid-March the whole country was shutting down except for essential businesses. At first, I was in denial about the situation, attaching myself to the momentum of the path that we had been building towards for years. Surely some exogenous event couldn’t slow down or halt our incredible team’s work, I thought. I knew our fundamentals were strong and empathized with those truly impaired in the hospitality, travel, or event businesses. Our customers were grocery chains, essential retailers, industrial companies, agriculture — surely they would remain strong.
Internally, we were well-equipped to deal with the disruption. Our team was already distributed across five offices and were already using modern cloud-based productivity tools. Much of our development is software-driven, and even the hardware testing can be done without close quarters.
Then I got a call that haunted me in late March. Our large $10mm order, which we expected to start delivering in June, was being delayed. Our customer was deemed an essential business and staying open, but they were pausing any new projects until they saw how the COVID situation was going to play out. Our grocery chain customers also had to pause installations. Their stores were reaping record revenues but they couldn’t accommodate any upgrade projects due to lack of labor.
While nothing had dented our long term economic prospects, and our teams were able to adapt and keep making progress developing our company, at our spending pace we had only six months of runway, with no clear timing about how COVID would play out.
I’d started fundraising conversations early March given the significant progress we had made. But through late March and April, nearly everyone was on the sidelines, risk-averse, and waiting to see how things would unfold.
Unprecedented Times Require Unprecedented Measures
Pressure is not an unfamiliar place for me. If anything my larger fear is low stakes boredom. I was a national champion rower and road cyclist, and I always felt doubly energized by the pressure on race day. I could always harness it into intense focus to get the best out of myself. I have a history of doing things from first principles, away from the conventional, safe path.
But this experience really took a toll on me. The combination of being so close to the finish line of a years-long milestone, plus COVID being so far out of our locus of control, wore me down.
It was clear we had to make some changes at the company to reduce risk given the newly uncertain environment. We can only create sustainable value if we sustain our existence. Like a lot of startups, we faced a dilemma: a) scale back and let go half the company to extend our runway or, b) do nothing and risk the whole company running out of cash.
Most senior executives were prudently advocating for path a), knowing that making a tough call now would save us to fight another day. I knew they were right but it just pained me so much to see our momentum slow, and the human cost of laying off so many people was so high. It felt like we were a plane accelerating down the runway, but 20mph before liftoff we had to hit the brakes and turn around to change passengers and alter our flight plan. One of my mottos in life is “the only way out is through.” I do not turn back easily.
Rowing was a great teacher for me growing up. It is an unpopular, incredibly challenging sport and unlike most other sports with frequent matches, you get virtually no external feedback on your progress. In frigid Toronto where I grew up, your team basically trains all winter and then has a one month season where it either wins or doesn’t. In addition to this “inner scorecard,” I learned that effort = results. I started as the slowest on the team and built up fitness gradually but consistently over four years to be one of the strongest in the country.
Fitness is not a tactic, it is a way of being. When I learned about Shirzad Chamine’s work on Positive Intelligence, the framing around mental fitness immediately presented the tool I knew we needed to implement our culture principles every day. I never liked the term “wellness” — it evoked an artificial, pristine sitting-on-a-cushion image to me. Building companies is a messy, loud, chaotic “gym.” If you need to exit that reality to find peace and grounding, it won’t be sustainable. That’s also why I always felt we needed values that were rock solid and true across time and space, forged in first principles. These would be values so strong, you could hit them with a hammer and they wouldn’t dent.
After I spent time turning around very broken companies earlier in my career, I was determined for Turntide to do things differently from the start. I was actually criticised many times over the years for this premature focus when we hadn’t even achieved any revenue yet. “Marissa Mayer can worry about culture — you need to go get revenue!” one board member opined.
I disagreed. Revenue is an important metric of course, but if you are developing complex technologies, you need to achieve key milestones before you’ll ever see revenue. Making revenue a “priority” doesn’t allow you to skip phase 2 and 3 FDA trials for a new drug. All of those key milestones will happen faster, with less stress and waste, if you have a culture that includes and grows individuals to be their best selves and do their best work together. Ultimately this will result in more sustainable and higher revenue.
Cutting Through a Dilemma with First Principles
Faced with a painful dilemma late March, my mind searched for another dimension to escape what felt like a trap. Reason from first principles: how would we get through this using our guiding values? Like all startups, we raise capital from investors in advance of profits to fund development, which mostly consists of salaries to our highly marketable people. With new funding frozen in COVID uncertainty, I thought we should just eliminate the extra step. What if our employees could “invest” in the company we were building together, to extend our runway?
So at our weekly all-hands, I explained the situation we faced — we communicate openly & precisely. I explained how we faced a challenging dilemma, and we didn’t want to sacrifice our accelerating momentum.
We gave everyone the option to invest whatever percentage of their cash compensation during Q2 they wanted. By reducing their cash compensation and conserving it to the company, they’d economically be investing that cash into stock on the same pricing model as our early investors.
I thought it was important for this to be an individual choice and confidential, not driven by peer pressure or anything that could create regret. We work to build trust, and genuine autonomy is an essential ingredient to do so. Worst case, everyone is as scared as investors, so nobody participates. Best case, people double-down on their commitment to Turntide and our mission, since no one should ever let a crisis go to waste.
I optimistically estimated 70% of people would participate, while another leader estimated 30%, which honestly sounded more realistic. We gave people a week and then we’d have to make our call what to do next.
I’ve always admired people who are able to focus on the long term. Anything easy or opportunistic to me has always felt “cheap” and unsustainable and basically not worth doing. Effort should drive something cumulative, like the momentum of a flywheel, to advance a mission with purpose. Mercenaries are always looking for the next gig, focused on payoff over principles. They’re the fairweather friends who show up for the free BBQ.
Very few have the patience, commitment, or determination to focus on long-term goals. One thing Jeff Bezos has instilled so well in his shareholder letters and organization at Amazon is this focus on the long term. Jamie Dimon too in the distinctly less dynamic world of banking has made JP Morgan the best performing large bank by driving a culture to focus on long term value creation. “My grandmother could do that,” he often quips when a trader brings him a “sure-fire” easy-to-implement deal like a Yen spread trade, where they obviously have no competitive edge.
Why aren’t there more missionaries in a world full of mercenaries? It’s hard. Most new ideas are wrong, most startups fail. Very few things are forged out of first principles and stand the weathering test of time. Today, we face daunting, complex, long-term challenges like climate change, pollution, and lack of mental and physical fitness. The world needs more people willing to focus on the long term and plow through obstacles.
Missionaries Focus on the Long Term
At first, the indications came in slowly from our 107 team members over participation on the equity investment program. We gave everyone the weekend so they could talk it over with their partners.
In the end, my optimistic estimate was way off. We ended up with 85% participation, averaging a 40% voluntary cash reduction/investment. Ten people chose to work for zero cash comp, preferring as much equity as possible. It was one of my proudest moments at the company to feel that everyone was committed to the mission and to each other. This team commitment gave us the extra dimension we needed to keep our momentum going strong through all the COVID uncertainty.
We still had to realign, letting go of a dozen valued team members and furloughing a dozen others whose functions had become delayed by the market conditions. It was a painful, challenging time that put us to the test.
But I wouldn’t have had it any other way — growth requires discomfort. We knew what it would take going into this mission, that it would not be easy. We knew that our guiding values — create sustainable value, reason from first principles, communicate openly & precisely, build trust, and include & grow individuals — would deeply root our business against the strongest gusts of wind. The challenge of COVID forced a clarity and focus, forging our ideas into concrete action.
The changes brought the team closer together and made us more motivated than ever to replace all the motors in the world with our optimal motor systems. When we achieve this by 2040, it will be the carbon equivalent of adding another seven Amazon rainforests to the planet. And that mission is, in the end, what we’re all working for here.
Missionaries want to be around other missionaries and we are incredibly excited to be part of the Climate Pledge to help make the world carbon neutral by 2040, 10 years ahead of the Paris Accord.
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