The structure and culture it takes to build a successful company
In a startup, absolutely nothing happens unless you make it happen.
That is what makes managing a startup an uphill task. It requires a strong culture and a leadership team that knows what to prioritize.
That’s because as the company grows in size and revenue its priorities also evolve. For instance, to create a superior product and remain competitive, there is a need to hire more specialists to replace the generalist talent.
These challenges aren’t specific to companies that are building new innovative products from scratch. Companies that are also working on digitally transforming existing industries also have to overcome them. In this episode, the second part out of two, Ed Bernardon interviews Toby Russell, founder and former CEO of Shift. He’ll share with us what it takes, in terms of structure and culture, to build a successful company. He’ll also share with us his views on the future of buying and selling used cars.
Some Questions I Ask:
- How do you choose the areas to add more resources? (03:04)
- What inspired you early on in your career? (10:07)
- What’s the most interesting thing that you encountered being a deputy press secretary? (12:52)
- How did you balance family life and startup life? (20:54)
- What retail marketplace out there is prime for this kind of revolution? (34:50)
What You’ll Learn in this Episode:
- Talent and staff distribution at Shift (01:28)
- How a team evolves as the company grows (06:13)
- The biggest challenge that Toby faced while building Shift (25:55)
- The impact of Shift’s ‘no interruption’ culture (26:50)
- How it’s going to be like to buy and sell a car 20 years from now (31:32)
Connect with Toby:
Connect with Ed Bernardon:
- Future Car: Driving a Lifestyle Revolution
- Motorsports is speeding the way to safer urban mobility
- Siemens Digital Industries Software
Ed Bernardon: Shift has digitized and revolutionized the entire process of buying and selling used cars. Their philosophy, make it pleasant and fair for all parties, something that isn’t part of the typical car buying experience.
Today, my chat with Shift Technologies’ Toby Russel continues. He tells me why he sees the auto industry going the way of Airbnb. He describes his biggest piece of advice for company builders, and his early career inspiration, and we also discuss the importance of a congenial work environment to enhance collaboration and productivity.
Tune in and hear part two of my conversation with the co-founder of Shift and a pioneer of the online automotive marketplace—and learn his special motto that encouraged company-wide behavior that was a key to their success.
Ed Bernardon: At a very high level, to give us a feel for the nature of the company, you’ve got your engineers, your technologists, the software programmers, so that’s one group. But now you’ve got mechanics, you’ve got people doing eCommerce, you’ve got people in the finance business; what’s that look like? What’s the split? What percentage are technologists, engineers, software people versus mechanics, etc?
Toby Russell: We haven’t shared that publicly but I can say that there are, broadly speaking, three groups. There’s engineering, product design, and data science, like you said, that’s group one. There’s what we call operations, that’s group two. And then there’s corporate functions – so think HR, finance, legal, the corporate folks. In terms of people, individual people, the largest group is operations, almost by definition, because we have field operations with a sizeable number of people in them. The folks that go out and pick up the cars we call a concierge. So, when you sell your car to Shift, someone will come to your home, they will do a quick evaluation using our iPad app, and they’ll bring that car back in. If you live near a hub or if you live anywhere in the country, somebody is going to deliver that car to your house when you buy it, that’s the online to offline. Or if you come to a hub, you can do that as well. We’re the first truly eCommerce multi-channel operation, true omnichannel. You can come to a hub, we can deliver to your home near a hub, or we can ship anywhere in the country. The folks who handle that are what we call our Concierge Team. And there’s a good number of folks, a great team, many of whom feed the corporate and engineering functions. So, the folks will start out in the concierge space, get to know the business, and grow up through it. Our first head of sales started out as a concierge, worked up through — that’s not an uncommon path for career development at Shift. So, the largest absolute number is operations, and then the corporate team is the smallest. The next biggest then is the engineering, product design, and data science.
Ed Bernardon: So, you’ve got these data scientists and software engineers. And whenever you’re building a business, you have your customers tugging you in certain directions. But it seems to me you’re running four businesses in one. And the concierge people are going to say, “Hey, you’ve got to add this to the product.” And then the finance people want to add that. And now you have to balance where you put all your technology people. Where do you put them to work? How do you trade-off which one of those things was more important to put your resources on?
Toby Russell: That’s a great, great question. And that is literally the art of company building.
Ed Bernardon: Can you give us the biggest secret, your piece of advice for us company builders out here?
Toby Russell: One, the degree to which you need to make those trade-offs changes over time. In the beginning, Shift really had to be single-threaded. We just didn’t have a large-enough engineering and product design team where we could take on multiple major initiatives. So, we had to take one. And typically, we would pick the thing that had the biggest impact for customers. Like I said, in 2016, it was a big focus on “All right, we’ve got to focus on this thing – financing and point-of-sale ability for buyers.” And usually, what you look for when you’re in that early single-threaded thing is you will have a list of 10 different things that you could do, and you realize you can only do maybe two. And what you look for is you look for two that are at the top of the list that are also complementary. What do I mean by that? You’re like, “Hey, we have bread, we can go and we can make soda, and we can maybe make pickles, or we could make peanut butter, or we could make jelly. What do we do?” And you say, “We’re gonna choose peanut butter and jelly.” “Why?” “Because in addition to the bread, we can then have peanut butter sandwiches, we can have jelly sandwiches, or peanut butter and jelly sandwiches.” We can add two products, but in effect, we’re going to get synergy among those products, and they’re going to be complementary. So, in the 2016 timeframe, we were facing this; we could only choose two things. We focused really hard on building that iPad app that would allow a concierge to run the entire sale off of the iPad at the person’s home. And we focused on enabling the financing because those became complementary. When you build the iPad app that would allow the concierge to scale and handle more customer appointments and deals and allow them to do the financing at the same time, you get double goodness because they could then sell cars right there on the spot and customers were disproportionately more happy because the things came together to a couplet. What we could have done is we could have built a really fancy iPhone app at that point and the iPad app, but those wouldn’t be as complementary. And so, what we look for is you look the stage, you find what are your list of 10 things you want, you basically give up the bottom five, and then you look within the top five and you say, “Which two or these three are going to be both standalone valuable and complementary so that you get disproportionate impact?” And that’s kind of what you have to do, certainly at the early stages, when you’re just single-threaded; you can only make one, maybe two bets.
Ed Bernardon: Yeah, you look for some synergies, and ultimately, you judge them by how happy you’re going to make your customer. I think another interesting thing is, we’ll get into your background here in a second, but definitely, what wasn’t in your background was car mechanic. I didn’t see that, and there are probably a few other things here. So, here you are, you finally figure out, “Oh, I gotta hire car mechanics.” How do you do that? How do you start a car servicing business when you’ve never done that? Now you suddenly realize that’s a big part of the business you’re trying to grow.
Toby Russell: I can’t claim to have done it perfectly. But the thing that I have found is that as a leader, you oftentimes go through two phases of how to do that. You tend to start out wanting a team. And then the short answer is team, no question about it. You can’t do everything. It’s all about being able to find talented people who are capable of doing it. In the early phases, you look for generalists; people who are capable enough and versatile enough and just have the grit to be able to try and figure things out. And it might not be their specialization, but they’ll figure it out enough to where you can decide “Is this the thing we should be doing or not?” Then you move into hiring people who have more specialization, who’ve literally done that thing with a track record of success in the past. And this is why the virtue of companies is they start small and get big. When you’re small, you can get away with generalists who don’t necessarily have a whole lot of experience doing that thing, experimenting and dabbling, because you’re kind of prototyping. We did this with our inside sales operation, as an example. We were the first salesperson, the first concierge at Shift had owned their own Ford dealership before – incredibly knowledgeable, incredibly skilled, knew the industry in and out. But we were like, “We want to make this accessible to people that come and work, who don’t know a lot about it.” So, we started experimenting with this idea of a few skilled people on the phone as a dial-a-friend, who could support a concierge if they had an escalation or an issue they didn’t know how to handle, and we called that inside sales support.
Toby Russell: And so we experimented with that, we were like, “Should we do that? Does that make sense?” And the first person around that was an ex-McKinsey leader who had had some experience with sales teams in Silicon Valley but had never run auto sales. And they’re like, “Well, I know enough to figure out whether or not we can do this with three or four people, and we’ll test it and we’ll learn from it.” But then later, we said, “All right, this is working. Let’s scale this out.” We hired a VP of sales, who had actually done career, focused on sales team growth, development, and building. And so, what you tend to do is experiment and prototype things to say, “Is this something that’s really needed?” And you want relatively low-cost stand up and drop down. Because if you commit heavily to a thing that you end up not needing, you waste a lot of resources. And what you really are in the early stages is you’re a learning machine, and so that generalist talent that can help learn fast but then quickly replace themselves with specialists is kind of the talent you want for that early stage. And then you’re recruiting specialists, folks who have a track record and proven success at doing the thing that you now know you need, because your job is to figure out what you need, and then get somebody who’s done it in the past and will do it way better than you or the generalist team that you’ve got could possibly do it, and they elevate that leadership team or that group. And you look to hire increasingly senior leaders in that space, who can take and do that thing at larger and larger scale.
Ed Bernardon: In a way, what you’re saying is set yourself up so that you can quickly experiment and find out “Well, what is it we really need?” And I think maybe this is a solution. Make it so that you can figure out what it is, but then also make it so that you can pivot very, very quickly and then fill those gaps you uncover. You’ve got to know what you don’t know, in order to figure out where you want to go.
Toby Russell: That’s exactly right, is being able to be a learning machine and then a scaling machine.
Ed Bernardon: So, let’s talk a little bit now about your career. I mean, interesting career; you were in politics, finance, ultimately car selling and buying in the end. But early on, what was your inspiration? Who inspired you? What inspired you early on in your career?
Toby Russell: So, before I started my career, I had a roommate, a flatmate in graduate school over in the United Kingdom. And he talked about his thoughts on a life well-lived. And he and I got to riffing on this. It’s not a new concept but he was the person that brought it home for me. And he talked about a life guided by learn, earn, and serve. Learn, so that you have wisdom and insight, and can bring something valuable to the table, so to speak. Earn – spend time making money so you can provide for your family because it is important to be able to offer enough material resources that will give you the latitude to then go back and serve. And the nature of service is, you’re not making money, the reward is the doing and the giving, but you’ve brought to that table then enough wisdom and insight and enough material resource to where you can truly give back. And my career, I originally thought that that was going to be just “In the beginning of life, you do the first thing; in the middle of life, you do the second thing; in the end of life, you do the third thing.” And that’s broadly true.
Ed Bernardon: Well, you took the words right out of my mouth. I was going to say, “Hey, is that serial through a whole life?” But it sounds like it’s stacked up in different combinations through life.
Toby Russell: For me, it’s turned out to be mini-cyclical. And I think there’s a way to do all three at the same time, everybody can do it differently. But broadly, I have found I’ve gone through mini-cycles on that, and that’s what tends to explain my resume. And that’s why I spent time in politics. I believe that politics is about being able to serve and give back; I don’t think it should be a professional career. I do believe in the concept of a citizen legislature and people who go to serve to actually give, not to take. And I believe, also, in being able to provide for your family, a private-sector career that supports you and your family materially. And I believe in continuous learning in doing things that help you develop. You might not make money, you might not actually be giving back a whole lot at that stage, but you’re learning so that you can then go and do that. And at each stage, I’ve tried to incorporate one, maybe two of those in it. And so I’ve done a couple of rounds of political service, and I’ve done a couple of rounds of corporate service, and a little bit of education along the way. And that’s the theme there.
Ed Bernardon: You were Press Secretary for Senator Jeffords?
Toby Russell: That’s right. I was like a Deputy Press Secretary. I was young, like right out of college.
Ed Bernardon: What’s the most interesting thing that you remember you encountered being a Deputy Press Secretary for a senator?
Toby Russell: Senator Jeffords was an extraordinary person. In terms of politics, he laid out a philosophy that I think is a good one for our country, but massively underrepresented. As you can see, he ended up leaving the Republican Party, becoming an independent, switching the Senate from one party to the other in the year 2000. His is, I’m afraid, a dying breed, and that is he was a moderate who believed in social rights and expansion of rights, and fiscal responsibility. And I think he wanted to balance those two things, and he believed in the concept of balance. I tend to think that balance in life is a really important thing. But I think that since 2000, and since working with Jim, who I think, espoused that and articulated that very well, our political landscape has changed significantly away from balance. And so, the thing that I learned most on that was the importance of that concept of balance; there is not just nuanced, but a balance that might not align with the way the predominant political forces are going, but it doesn’t mean that it’s wrong. You can be right and not aligned with the party or existing apparatus because the apparatus itself often times gets things wrong and is incapable of finding that right balance.
Ed Bernardon: Like you said, he was a Republican, became an independent. He was true to what he believed in, and secondarily to his party. And in some ways, that’s not unlike what you’re saying about business. You’ve got to be true to what the customer wants, not necessarily your business. And if you do that, it’s a good way to ultimately achieve the goal that you want. Well, you went on to Department of Energy, Capital One, certainly Curb Mobility or Taxi Magic; how did all those pieces come together to bring you to where you are now? It’s a hard question maybe.
Toby Russell: I coach two things when folks ask me for career advice. Thing one, I say, “Don’t follow my career.” If you look at it, it makes no sense. It’s not like a recipe for success. But what’s underlying it is at each stage, I would look for the intersection of where can I either contribute and make a difference, and/or learn a lot and develop, and/or feel passionate about what I’m doing. And if you can find all three, that’s great. And so, at each stage, there was an opportunity for me to contribute, make a difference, learn a lot, or make a big impact. And that tends to be what I look for. So, as I left the campaign, I didn’t feel like going into – at that level – as a junior person. It was pretty clear to me that going into government, I was going to be a cog in a machine, and not learn a lot, not make a big impact, and not really make a difference. And so I thought, “Hey, I should go learn.” And so I went and worked on a doctorate, I wanted to create knowledge that was new. And then went to work for actually the Boston Consulting Group. My flatmate, Angus Thompson, said, “Hey, you should really consider Boston Consulting Group.” “Why?” “Because they’re going to teach you not just how to do academic learning, but actually do applied analysis, figure out how to learn and apply that to a business.” So, great learning experience. Pretty quickly, I got tired of coming up with good ideas for other people to do. I wanted to go and start a business. And so I had, basically, been traveling around the country as a consultant thing, being like, “It’s really hard to get a taxi.” I was living in New York, didn’t own a car, and would rent cars but kind of like the idea of being able to land and push a button, have a taxi come pick me up and be able to get around. And I thought that should exist, public transit should be available readily in US cities, but it wasn’t. And it was really difficult to get around with a taxi. Although, in New York, it was actually pretty easy to use public transit.
Toby Russell: And so I thought, “Hey, there’s an opportunity to do that and enable a lot more cities to have what we had in New York,” which was the ability to get around the city without having to own or park a car and create a lot less footprint, environmentally. And so the opportunity came together and I got to do a startup and create something that didn’t exist before. And I believed, I had a bit of an impact. As I’ve been recruiting over the years, I remember when I was in Capital One, I would often times recruit people who would say to me, “Hey, look, I’m thinking about joining your team, or I’m thinking about going and doing this startup.” And I’d say, “Well, then your choice is easy.” And they’d say, “What?” And I’d say, “Go to the startup.” And they’re like, “I thought, you were recruiting me.” I’m like, “Look, if you’re at a point in your life, when you have the opportunity and you don’t have a mortgage to cover and a family to support, and you’ve got a team and an idea that you feel passionately about; it’s a no brainer, just go do that thing. And here’s the deal: If you go and you fail, the big corporations are going to be here – the Facebooks, the Googles, the Capital Ones – they’re not going anywhere. We’re gonna still be here, we’ll still be recruiting you.”
Ed Bernardon: I was gonna ask you that the people that you gave that advice to, did any of them come back a year or two later and say, “Hey, it didn’t work out, please hire me now.”?
Toby Russell: Well, yeah, and that’s the thing. At the big companies, we would want those people even more because you’ve gone, you’ve shown, you’ve learned how to learn, you’ve learned how to be responsible, not just for a tiny silo within a huge organization, but thinking across the board and figuring out how to integrate a lot of different pieces of the puzzle. That’s what you need for innovation, is you need to be able to pull multiple levers and recognize that you’ve got to configure a bunch of different pieces of the puzzle. So, after Taxi Magic, I had the rare opportunity to go work for the first Obama administration running a large energy efficiency renewable energy deployment program during the Great Recession. I saw a country that was in the worst economic shape that had been since the Great Recession, and thought “This is a moment and an opportunity to go serve and make an impact.” And I don’t think that what we were doing is long-term sustainable. We were injecting a huge amount of federal dollars into the economy to invest in clean technology and jobs. And I think that’s a great thing to do in the short run when you’re in a blip and need to do some Keynesian style, like stimulus of the economy. But it was a great short-term stint in government to go serve and help, really execute an operation to get done what, by and large, the department that I joined wasn’t really designed well to do, and that is physical deployment of programs as opposed to more of an R&D type activity. So, great opportunity to, I believe, make a difference and have an impact.
Toby Russell: After that, I began asking the question of “Hey, I want to go back into a learning phase.” That was my serve phase, and I thought I need to go back into a learning phase. And so I started looking around, and I started talking to Google and to a few other companies, Capital One among them. And I went to someone who I trusted and got his advice, and he said, “Look, when you’re choosing the next thing to do, choose a company or an organization that, one, shares your values, you align with the values that they have; and two, has a leadership development program that will invest in you, both formally and informally.” I looked around for that. And it turned out, I was surprised that I wouldn’t have seen this one coming, but Capital One was about to go do a major transformation or was interested, the CEO had said, “Hey, we want to get from here to there and do a major transformation in how we approach our business.” They were great analytics in direct mail shop, and they said, “We want to look and be a lot more like a software company. We think that digital technology can really transform what we do.” And they have built a leadership development machine. And so that was a good opportunity for me while starting a family. I had my first daughter at that phase. The corporate phase can be really helpful. Well, not in crazy startup, worried about making payroll, long nights and weekends while trying to start a family – that’s a hard thing. So, I thought the corporate learning would be good.
Ed Bernardon: How did you balance family life and startup life?
Toby Russell: In the first phase, I tried to avoid that. So, I went to go work for a company while having a young child.
Ed Bernardon: Well, when you were at Shift, how did you balance those two? Because if you’re doing a start up, you’re working 80-100 hours a week, who knows what it is? How do you keep a happy family life and run a good business?
Toby Russell: It’s really hard. I wish I had the answer on that. What I would really do is try and compartmentalize and segment time. I would try to create protected time, when I would spend time with my family. For me, I was very calendar-driven. So, I would say, “Hey, my time is my currency as a leader.” I would carve out time and really work to protect that time for family in the evenings, like six o’clock, unbailable dinnertime. I would travel a lot, unfortunately, and that was a challenge. The advent of FaceTime was incredible. I’d literally, on my calendar, every day had FaceTime with my daughter, that helped at least maintain a form of connection even with the young kids. But I would actually hold to that. I literally would walk out of board meetings and be like, “I am not going to be in the board meeting right now, I’m scheduled to do my FaceTime with my daughter.” I would have really hard calendar management with a prioritizing of the time that I would have with my daughters on that list. But ultimately, and this is a tough reality, I have reached that phase where I thought that it was actually not going to be workable anymore to make that all go round. So, I have a young daughter now who is living on the West Coast, and then another daughter who’s living on the East Coast. My first marriage ended, and I was literally going back and forth. Recently, I had announced that I was actually going to leave Shift. And we got in the company to the phase where it was public, and I believe really well-staffed with incredibly talented people and sustainable. And just having done tremendous growth, poised for more growth and more more goodness. And so at a certain point, I needed to say, “Hey, I need to restructure and compromise on the level of business commitment that I’m going to make so that I can focus on family.” And sometimes it’s hard. It’s day-to-day calendar trade-offs. And sometimes it’s higher, bigger picture, meta trade-offs. I didn’t go do a startup in 2012-2013 when we had my first daughter, and I did that quite deliberately saying, “I want to start a family, and I’m not going to put myself in a position of having to choose between two children, so to speak – a startup and a child. I’ll do corporate life for a while, and then go back and do a startup.” Which is how I faced it.
Ed Bernardon: I was a founder in a startup along with some others that ultimately got acquired by Siemens. And when we started, I had my first son who was about two or three years old, and my second son was born soon after the startup began. And I did exactly like you said. I had a call from my family, immediately, I jumped out of a meeting. On weekends, when I wasn’t traveling all over the world to make our sales, it was always with my boys. And then, let’s just say, seven or eight years in, one evening, I put in a DVD that my wife had made of my boys playing. I said, “Oh, my God! I missed this, and I missed that.” I said, “Oh, wow!” I really paid a price here that I didn’t even know I paid because I was still spending a lot of time with them. Is there anything that you think you missed that you wish you wouldn’t have missed on all those years when you could have spent more time with your daughters, that you found out later that “Oh, my goodness. I didn’t know that happened.”
Toby Russell: That’s a tough one. I think there’s a tremendous amount that I missed being on the West Coast while my first daughter was living here. I say here now because I’m in Virginia. We’ve relocated to be near my older daughter. It’s one of those like “don’t even know what you don’t know,” no DVDs available. I went into a phase of knowingly saying, “Hey, I’m going to do my very best to maintain my relationship and grow my relationship and connection with my daughter.” But recognize that that was not going to be a long-term sustainable state of being. And it was about balancing, again, and trade offs of getting Shift far enough along that I would be able to then reprioritize. I can’t imagine the total tonnage of what I did miss. I also did a tremendous amount of travel. So, I would fly cross country twice a month and spend weekends with my daughter here for about half a decade. And then she’d come out and spend summers and we would do travel together. And I think most of what I missed is the day-to-day.
Ed Bernardon: Yeah, the simple things that you just don’t know. “Oh, look how they’re wrestling on the couch.”
Toby Russell: Yeah. “Hey, I’m going to school and I’m nervous because I don’t think that my friends are going to accept me today.” And that day-to-day connection wasn’t there, and I regret that, and I think I did miss that, and that was a very explicit and reality of a trade off that I made and realized couldn’t go on forever.
Ed Bernardon: I want to ask you one more question about your business and growing it. So, you’ve done a tremendous job of telling us about all the pieces: the pickup service, inspection, test, driving, negotiation, money-back guarantees, on and on and on. Looking back now, what do you think was probably the biggest challenge you had in getting all these pieces to work together?
Toby Russell: Creating an integrated culture. No question about it. I can’t overemphasize the importance of culture. What is culture? It is the result of what people believe are expected and encouraged behaviors, as well as discouraged behaviors in the company. A lot of people talk about culture is like, “Oh, we have a ping pong table and snacks.” Culture is what are encouraged and discouraged behaviors.
Ed Bernardon: What’s an example of an encouraged behavior that you tried to foster?
Toby Russell: All right, here’s a very tactical one: At Shift, we do not interrupt. This is a super tactical. It’s not like on the list of values and whatnot. But there was a time when we had a lot of enthusiastic people who would jump into meetings and would talk over each other. And I thought that was a terrible culture. It’s not a learning culture. It’s not a culture of “seek first to understand and then contribute.” It was a culture of “pound the table, and yell and scream, and not listen.” And I don’t think that that will achieve the objective of being able to cooperate and interoperate. It was kind of the opposite. And so I would literally start saying in meetings – if I cut somebody off, I would try to catch myself and I say, “Wait, I’m sorry, go ahead. At Shift, we do not interrupt.” I read research. And this is actually, I believe, really important for creating diverse teams, and inclusive teams, particularly with female leaders. Turns out women in meetings are disproportionately interrupted. The men interrupt the women, and here’s the crazy thing, the women interrupt the women. And so, being a woman in a meeting, it’s almost impossible to speak.
Ed Bernardon: But then women don’t interrupt the men as often.
Toby Russell: Women don’t interrupt men, but women interrupt women, so women are always getting interrupted. And I think that’s awful. It’s just awful. It doesn’t allow for an inclusive culture. And so that was one example. The thing is, I would say, “At Shift, we do not interrupt.” And I think that that it’s a very concrete example of an encouraged, or in this case, a discouraged behavior that shapes the culture because the meta culture is, we have a lot of very diverse skills that we need to bring together. We need people who can write software, who can design websites, who can repair cars, who can drive cars and interact with customers, who can problem-solve with a DMV that needs paperwork that may not exist – a wide variety of skill sets across the board. And it was absolutely critical that those teams be able to interoperate and collaborate. And so, creating an inclusive and collaborative culture is critical. And an example of what kills that is interrupting and talking over each other. It can’t work.
Ed Bernardon: I’ll have to keep that in mind when I’m doing interviews, of course, especially with you here. But let’s say, it’s a one-hour meeting, 5-10 minutes left, you’re running the meeting, there are some things you wanted to get done and somebody is going on and on about something. You don’t want to interrupt them. How do you handle that then?
Toby Russell: I mean, now we’re getting to good meeting etiquette. It’s important that the meeting owner set an agenda. And if someone’s going on and on about a thing, the meeting owner needs to intervene and say, “That is an important topic. If it’s an important topic, let’s take it offline. And let’s structure a creative process to be able to follow up on that topic without having to take everybody in the meeting through this specific topic.” Unless it’s something it’s important that everybody in the meaning is directly on point and on agenda, that’s a legitimate thing to do. And we would see this a lot, and we had to really develop the ability to not rathole. I was guilty of this massively, like I would get interested in a thing and be like, “Let’s rathole in it.” And I had to learn how to shut up, especially as an executive and a CEO. And my standard for a good meeting that I attend is that I talk less than everybody else, definitely. I think any good CEO will tell you that, that you want to do mostly listening and mostly watching and seeing, “Is the machine working? Am I seeing the players who need to talk, talk? Am I seeing the players who need to listen and contribute and collaborate? Is the dynamic working? And is this team grappling with the right issues, identifying the right problems, coming up with solutions and driving that to action?” And that’s mostly a watching and observing exercise. And I think that’s a danger, as a leader, is to believe that you need to jump and do things. And I would do that, I was massively guilty of that. And learning to step back and say, “Hey, this is about building a machine and enabling a team to do the thing” is a hard lesson for a founder and a cofounder, early stage person to go in scaling a company, but that is the principle. And believe it or not, when I do it and the other leaders do it, everyone else does it. “At Shift, we do not interrupt” is a little bit of a tiny grain of sand that I think began to help build that culture of “Let’s identify the problems, let’s solve the problems, and let’s take action collaboratively. And if there’s a thing that needs to be taken offline, let’s take it offline.”
Ed Bernardon: Small thing but key part of your success. And we could talk about this more, maybe we can do that later. But let’s move on to another topic now, and let’s talk about the future a little bit here and sort of wrap things up. 20 years from now, what’s it going to be like to buy and sell a car?
Toby Russell: It’s going to be completely different. I love this question, and it’s a really, really valuable one. I think there are going to be three things true for on-demand ground travel. Thing one: Cars are going to be electric. Thing two: Cars are going to be autonomous; they will drive themselves. Thing three: They will be networked. And what do I mean by networked? I believe we won’t see — A lot of people say, “Yeah, yeah, the electric and the autonomous, like, obviously.” And what we’re going to see is Uber owns hundreds of thousands of cars, and everybody goes and calls that car. I actually don’t think that’s what’s gonna happen. I think we’re going to see networks emerge, the equivalent of Lyft or Uber, they’ll be like Visa and MasterCard. Visa and MasterCard don’t do all the banking, they aren’t the merchants, they connect them. And I think we’re going to see a couple of major networks emerge that do a connection between a person who needs a ride and a person who has an autonomous vehicle. And that person might be an individual, it might be a mini fleet, and it might be a mega fleet. But what we’re going to see is networks emerge, where you have the ability to go on that network and request a ride. You have the ability to take a ride if you have a car and you buy a car, and you own it, and rent it out on the network – think Airbnb meets Uber. What does that mean? I take my car, I have my autonomous vehicle, I rent it out on the network when I’m not using it, and then otherwise, I’m using it. And I think it’s going to completely transform auto retail, it’s going to completely transform automobility, and it’s going to completely transform auto finance. So, I think that we’re going to see that occurring; it’s going to be more Airbnb and less Marriott and sort of like vertically integrated hotels.
Ed Bernardon: So, it’s a Mobility-as-a-Service but the split is a little different. Like you said, there’s a connector business, but then I could be me and say, “Hey, I’m going to get myself a little fleet of three or four cars, and I’m going to provide a service.” It might be for moving people, might be for moving packages, might be in just this little section of town, might be something special, some sort of specialty interior, who knows what it could be.
Toby Russell: And I think that retail will continue to exist. And this shouldn’t come as a galloping surprise, retail will look like Shift. What does it mean? The car drives itself, you’re going to go online, you’re going to shop and be like, “I’m interested in that one.” You’re going to push a button, the car is going to come to you. You’re going to get to ride in it, test drive it. You decide you want to buy it, you’ll buy it right there on your mobile device, now you own that car. And it’s going to be an online to offline delivery mechanism, not unlike what Shift has. But then you own that car, and if you want to put your car seat in it and keep your hockey equipment in the back, you can do that. And then when and if you feel like it, you will rent that thing back out to the network because there will be efficiency in doing that. Just like you would with Toro or some people do with Toro, only it’s going be a lot easier because now I don’t have to worry about managing meeting somebody, I’m just going to push a button and be like “Car is on network.” And the network will then manage where the car is and where it needs to be. And then the car shows back up when I tell it to where it needs to be. So, I think the cars will be electric, autonomous, and networked.
Ed Bernardon: We could do a whole podcast on just this topic here. One last question. So, you’ve revolutionized car buying and selling. Digitalization has made it all possible. What marketplace out there is prime for this kind of a revolution?
Toby Russell: That’s a great question, and I’m looking at that a lot and saying, “Hey, where’s the next reviled but in need of massive transformation?” I’m also doing some reflection for me personally, and that is, I’ve gone after a couple of spaces that I, personally, experienced and had found challenging, that I thought could be better. For me, the next thing I think I want to do is very much — I’m interested in doing much more of a mission-driven company, where I feel more passion and impact, not just as a business or as a thing that could be a bit better, but something that can be really transformed to make a big difference. I haven’t found that yet. But I do think that there are a lot of business opportunities and transformational areas. I’ve got a list of the ones that I’m like, “This is the list of what might make it, what might not.” But I don’t think I’m there yet to be able to come out of stealth on there, “Hey, here’s the exact thing.”
Ed Bernardon: Can you give us a hint, maybe a general category?
Toby Russell: Oh, they are all over the board, everything from education to some degree Health Tech, FinTech, there’s a bunch of things I’ve been thinking about, and also mobility and transportation. I’ll throw out one that I’m half serious about, it’s kind of a joke. I spent a lot of time traveling back and forth across the United States to be with my daughter over the last half-decade. I came to the conclusion that the problem with the flight from one coast to the other is not that it’s too long but that it’s too short. What do I mean by that? It kills your entire day. Whereas in my earlier incarnation, I was doing research, in Russia, on Russian weapons transfers, for my doctorate. I would go from Moscow overnight to Petersburg on the train. And you get on the train, fall asleep, you wake up, you’re in Petersburg. It was almost like no time has passed, but it was because it was long enough to do an overnight. And I’ve been noodling the idea of — and this is completely from the hip, and I haven’t researched it well enough — but noodling the idea of could we get slow flying electric planes that are large transport style, where you could have train-like births and beds, where you could sleep, fly coast to coast overnight, and I jokingly call it time travel. You take off at 8 pm, you land at 8 am, you get a meal, you get to hang out and chill, and you get to sleep overnight. So, things like that I’m noodling. But that’s a long way off, and it’s not a digital marketplace technology. But I’ve been kicking around ideas like that.
Ed Bernardon: Toby, thank you so much. It’s been great. Thank you for joining us on the Future Car podcast.
Toby Russell: Likewise, Ed, thanks for having me, man. It was great chat.
Ed Bernardon: Now, before we let you go, though, we want to do our traditional rapid-fire section. I’m going to ask you some quick questions, quick answers. Let’s start off. Are you ready to go?
Toby Russell: Yeah.
Ed Bernardon: All right. What was the first car you ever bought or owned?
Toby Russell: Ford Bronco 1990, white. OJ Simpson changed the brand on that thing later on.
Ed Bernardon: You had to sell it before OJ took his ride in it. Did you pass your driver’s test on the first try?
Toby Russell: Yes. And in every state I’ve lived in, which is multiple.
Ed Bernardon: Fastest you’ve ever driven a car on the street.
Toby Russell: Oh, well, probably about 120.
Ed Bernardon: Oh, very good. It might be a Future Car podcast record. I don’t know, I have to check that one. We always ask about the living room on wheels. You’ve got a five-hour trip. And it’s an autonomous car. You can have anything you want. It’s like a living room. It’s a space you’re going to enjoy for five hours. What is in your living room on wheels?
Toby Russell: My family. Maybe some exercise equipment, some entertainment equipment videos. Something fun, maybe like a hot tub where the girls could swim.
Ed Bernardon: If you could have someone join you, living or not, join you and your family in that car, in your living room on wheels, who would you pick?
Toby Russell: I’d actually want it to be Angus Thompson, the guy I mentioned earlier, who was my flatmate. He passed away many years ago, a little over a decade ago, and it’d be great to reconnect with him.
Ed Bernardon: What car best describes your personality?
Toby Russell: I think probably the Audi Q5. I jokingly say my favorite vacation involves a wetsuit and a tuxedo. So, the Q5 is stylish enough to be not overly pretentious, but move quicker and have style. But also I can throw some racks on that thing, get my surfboard up there, drive off-road to go trail running.
Ed Bernardon: Greatest talent not related to anything you do at work.
Toby Russell: My thing is telling stories to my daughter. She and I have done this thing called Seraphine and the Dragon. It’s a huge epic story about two girls, who go on adventures. They’re heroines, not heroes. They discover their ability to work together and achieve things that they didn’t think they could before.
Ed Bernardon: What do you wish you were better at?
Toby Russell: Relationships.
Ed Bernardon: If you could have the answer to any question, what would that question be?
Toby Russell: This is a stupid one: What causes gravity? The fact that we live every day with gravity, and we have no idea how it works. We literally can’t describe why there’s a force between us and the planet that has an incredible impact on us that we can’t see, touch, or feel; that blows me away. If I can understand that one, like what’s going on there? What’s causing gravity? And frankly, how might we manipulate it?
Ed Bernardon: I wonder what Google tells you if you put that in. Have you ever tried that?
Toby Russell: There are long descriptions about how large masses attract things to them. It’s like, yeah, that’s great. But what’s really going on there? Like physically, what’s happening? We don’t really understand that force.
Ed Bernardon: If you could magically invent one thing, what would it be?
Toby Russell: I jokingly say that airplane that could fly across the country overnight. But seriously, a thing that could bend time and space where you can get from one point to another, at a great distance without actually traveling. I think that would be a fascinating thing to create.
Ed Bernardon: What would you uninvent, eliminate one thing?
Toby Russell: Cigarettes. It killed my grandfather and my uncle. My mother was able to quit, but I think that they’ve had really devastating impact on a lot of people, and particularly impact children in a negative way.
Ed Bernardon: And here’s the last question: Tell us something about yourself that would surprise your family and friends that they don’t know about you.
Toby Russell: I love them a lot more than I let on.
Ed Bernardon: Good answer. Toby, thank you so much. And thanks for joining us on the Future Car podcast. We’ll have to have you back some time to pick up on some of these great topics you introduced.
Toby Russell: Thanks so much, Ed. I’d love to riff on your startup journey and the acquisition and how that’s gone for you as well.
Toby Russell Board Director Former CEO Founder Shift
Toby Russell is Co-Founder of Shift—which went public via SPAC—the platform to make buying and selling cars simple and accessible to everyone. Previously, he was the Managing VP of Digital at Capital One, where he led the bank’s technology transformation to mobile. In 2007, Toby co-founded Taxi Magic (now known as Curb), the first on-demand mobile transportation booking technology company. He also led a $12 billion renewable energy and efficiency investment program for the U.S. Department of Energy. He holds a Doctorate from Oxford University.
Ed Bernardon, Vice President Strategic Automotive Intiatives – Host
Ed is currently VP Strategic Automotive Initiatives at Siemens Digital Industries Software. Responsibilities include strategic planning in areas of design of autonomous/connected vehicles, lightweight automotive structures and interiors. He is also responsible for Future Car thought leadership including hosting the Future Car Podcast and development of cross divisional projects. Previously a founding member of VISTAGY that developed light-weight structure and automotive interior design software acquired by Siemens in 2011. Ed holds an M.S.M.E. from MIT, B.S.M.E. from Purdue, and MBA from Butler.
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The Future Car Podcast
The tech-driven disruption of the auto industry cuts across domains, from silicon and software to sensors and AI to smart traffic management and mobility services. Get the chip- to city-scale story in regular interviews with technologists at Siemens and beyond.