Founder Interviews: Francisco Homem de Mello of Qulture.Rocks

After a successful start to his career in investment banking, Francisco decided to change course and start a software startup, which has now grown to over 50 employees.

What’s your background, and what are you working on?

So my name Francisco Homem de Mello, and I’m the founder of Qulture.Rocks. We make software that helps teams implement one-on-ones, OKRs, feedback, and performance conversations. I actually didn’t come from HR nor was a team leader before founding the company.

My background is in finance. After I worked for 10 years in big investment banks, I took a sabbatical to explore other options in my career. I ended up writing a book called The 3G Way, that unpacked the management style and culture of the trio that owns 3G Capital, a major stakeholder in Anheuser-Busch Inbev, Kraft Heinz and Burger King. That’s where I fell in love with performance management and, connecting the dots with my previous experiences as an employee at big companies, decided to found Qulture.Rocks.

The company was founded in 2015, we went through Y Combinator in winter 2018, and we currently have more than 30 thousand users in more than 10 countries.

What motivated you to get started with your company?

It’s interesting. It started with my experiences of being someone else’s direct report, in investment banking. I was really frustrated with the lack of feedback, the lack of one-on-ones, and the general lack of perceived purpose in what I was doing. When I wrote the book and had a glimpse of what great management could look like, and it all clicked. That’s what got me started and gave me the domain expertise I needed to start.

But I hadn’t really been a manager up until that point. I didn’t know the other side of the story. And that came with founding Qulture.Rocks and managing our team, which is currently more than 50 people. I now can fully appreciate the challenges both sides of the table face, and I can say it’s much more nuanced than an individual contributor can imagine. That certainly gave me a gigantic boost in motivation for solving these problems.

When I started Qulture.Rocks, I had a pretty solid financial standing, having some savings from my investment banking career. So I could, at the time, go for a year or two with no earnings and be ok with it. But it all came crashing down when my savings became dust when a private equity fund I had invested almost all my savings in blew up. That really spiced up my journey, and added a lot of urgency to getting to revenue and paying myself a salary.

What went into building the initial product?

The product got going when I was already fully committed to Qulture.Rocks. I didn’t really know how to code, so I started taking courses on Codecademy, Code School, and so on and so forth. I also took an HTML + CSS course in person at a local school, and there met a guy who was a CS dropout learning front end to build a CRM tool. I asked him for intros to former classmates that could give me private coding lessons, and that thread led to my meeting Qulture’s first two engineers, Fred and João, who joined me as interns, helped me build the product’s first iteration, and are currently Co-CTOs of the company.

Since we were building software for companies that already had quite high expectations for performance management software, we couldn’t really ship an MVP. We had to skip that phase and deliver a quite polished product to start with. So our team, which basically was comprised of myself doing sales and customer development and two engineers writing code, spent almost 6 months just building an initial feature set, with no users. At the time, a former colleague who was a designer freelanced an initial UI we could use, and that’s where we started from.

On the other hand, the initial specs were pretty clear, so we didn’t have a lot of discovery work to do. I was basically visiting customers, asking what performance review features they needed to use our product, and heading back in the building to build it. So our initial scope was really to get a number of companies to use us for their performance reviews.

How have you attracted users and grown your company?

I’d be hard pressed to say the answer is hustling. When I decided Qulture.Rocks was on, I started taking meetings with anybody who would meet me. Some examples of early meetings were a friend of a high school classmate who was an entrepreneur and could introduce me to the HR department of the company that had acquired his startup; my best friend’s wife who worked in HR; a friend’s coach who had headed HR at a startup. It was basically a meeting a week at best, and furious networking to book more meetings with anyone that would say yes. Those first three meetings generated six, which generated twelve, and so on. They compound.

Content marketing was also a huge part of our journey. At that time I also started writing for our blog, shipping very opinionated pieces around people management practices, and people started to notice and look forward to taking meetings with me. I studied these things hard, and very quickly became sort of an authority on performance management and leadership, producing high quality pieces that really stood out from marketing department boilerplate. I sent these blog posts to a weekly email list I built with a mix of acquaintances, former customers, friends, and HR people.

Finally, I started early on to do events. Our first Qulture.Con, with about a hundred attendants, took place before we had launched our beta. That also helped gain the trust of those early prospects who ended up becoming customers.

What’s your business model, and how have you grown your revenue?

We have a pretty straightforward SaaS business model, so we charge a subscription fee per seat being used.

One thing that really helped our start was that since the early days we took in customer revenue. I had a really hard time raising family, friends, and angel money (that only changed after YC) and thus revenues were critical to our survival.

So we could never really afford to burn a lot of cash. I hired people pari passu with the amount of customers we closed, and cash was controlled on the back-of-the-napkin until very recently when we started scaling.

What are your goals for the future?

We live and die to unlock the potential of people and organizations. We want to make a big impact on how people relate to their professional growth, on a global scale. We’ll know if we are getting there if in ten years we get to a couple hundred million dollars in revenues, a hundred thousand organizations using us, and ten million users.

Our plan is to get there by focusing our efforts on the tools people use to grow at work: feedbacks, one-on-ones, goals, and performance reviews. The stuff of that toolkit is something that isn’t going anywhere in the coming decades, and we’re still in day zero of what could be created in that space.

What are the biggest challenges you’ve faced and obstacles you’ve overcome? If you had to start over, what would you do differently?

Wow. So many challenges. I didn’t really appreciate it when other entrepreneurs said it only gets harder as the company scales, but now I totally understand where it comes from.

One thing we’re really struggling with is hiring. There’s always this tough tradeoff between, on the one hand, filling positions quickly, and on the other hand, keeping the bar high. We hired a number of false positives in the past that ended up taking time and energy from the team and giving out the impression that we’re losing talent when we’re actually even relieved bad fits are leaving.

Looking back, I’m not sure we could have done anything better, given our constrained resources, but it’s certainly something we’re working hard to fix as we now can be more picky with who we say yes to.

On the tech side, a poor choice we made was picking AngularJS as our initial frontend framework. We’re doing a lot of work to get rid of it and migrate our stack to React, which looks really promising.

Have you found anything particularly helpful or advantageous?

On the reading side: In particularly rough days, I usually pick up “The Hard Thing About Hard Things,” by Ben Horowitz, and read a couple of chapters off of it. It reminds me of how much nastier my job could be. I’m also a huge fan of Paul Graham, whose essays are one of the main reasons we applied to YC, so I frequently reread some of his essays, particularly those that deal with the reasons most startups fail and doing things that don’t scale. Finally, I reread Sam Walton’s Made in America once or twice every year. It really inspires me on many different levels.

I’ve also developed a healthy habit around keeping a pretty well-groomed to do list updated and on me at all times. I’m analog about it: it’s an Excel template file I print 30 or so copies every month, and keep them around. Once they’re filled up, I open another one. The template has two columns. On the right-hand side, I keep my to dos and follow-up items. On the left-hand side, my top three OKRs for the month, my top three priorities for the week, and some stoic journaling questions, like “three things I’m grateful for” and “three things I’ve learned.” These help put myself in a positive frame of mind.

Exercising is really helpful, but something I’ve struggled with keeping a habit of. I’m a former Ironman triathlete, so it shouldn’t be that way, but since starting Qulture.Rocks my stress levels are much higher than back then, and when I’m stressed out I can’t seem to build up the courage to hit the gym. One thing that’s helped is to schedule personal boxing sessions. It’s really intense and, because of all the mental and physical effort it requires, I can stop from thinking about the company for a solid waking hour, which is impossible with weightlifting, running or swimming, activities that seem to only boost my thinking brain.

What’s your advice for entrepreneurs who are just starting out?

I’d like to answer that question further down the road, when it’s clearer I’ll have any credentials to do so :)

Seriously though, only start a company if that’s your only option. Starting up is really hard. The challenges are endless, and you’re pushing a boulder up a steep hill. The only reason that justifies becoming an entrepreneur is if not doing so would constitute an even steeper hill to push a boulder up.

Where can we go to learn more?

Our blog, which can be found at https://qulture.rocks/en/our-blog/, has many pieces I’ve written about OKRs, giving feedbacks and running one-on-ones. I also put out a weekly-ish newsletter called Unlocking Potential, https://1percentbetter.substack.com/, aimed at CEOs, executives, investors, and leaders at large, with stuff I’ve been reading and thinking about.

I’d love to answer your questions on the comments section below, so don’t be shy!!