This week's episode has a special guest, Vivian Wang - Founder and CEO of Landed. Landed is the first end-to-end recruiting platform helping restaurants and hospitality employers hire top-notch candidates fast. During the interview Vivian and I chat all about how Landed is making it easier for restaurants to hire folks (which is especially helpful due to the incredibly high turnover rates), how tech is and will affect the restaurant industry and strategies for navigating Y Combinator (which Vivian is a graduate of).

In addition to the guest interview with Vivian, we have two partner meeting segments. Here’s what’s covered:

• Startup Tip of the Week: how/when to build your startup’s sales team.
• Blockchain: Brett shares news about a recent crypto airdrop from Arbitrum (an Ethereum Layer 2) and we discuss how crypto enables an amazing ability for open governance.

Enjoy.

Links:

• Links: Landed
• Follow us on Twitter: @mpd, @interplay, @brettpalatiello, @vivwang_
• Podcast Links: Website, YouTube, Twitter, LinkedIn

Transcript (this is an automated transcript):

MPD: Welcome everybody. I'm Mark Peter Davis, managing partner of Interplay. I'm on a mission to help entrepreneurs advance society, and this podcast is part of that effort. Today we've got our normal partner meeting supplemented with a guest conversation. So Fong is gonna lay down some wisdom about building sales teams that I think is worthwhile for a lot of founders out there.

We're gonna, we're gonna wrap on a little bit of blockchain. And then we've got Vivian Wang from Landed, one of the interplay portfolio companies and she's got a really interesting story, personally and a great perspective. Her industry that she plays in is the restaurant space. We're gonna talk about post covid life the increasing role of technology and how that plays out.

And then we also take a little detour. She's a graduate of Y Combinator, and we get some best practices and tips for how to navigate. Help you enjoy.

Hello Fong. Hi Mark. How are you? Good. How was your costume party last night? Oh, 

Phuong Ireland: it was amazing. We had our school had a Hollywood theme dress up party, so it was either dressing up as your favorite movie or red carpet. And my husband and I dressed up as Indiana Jones and short round, who is the 10 year old Chinese boy in certain

That's amazing. And it's. My, my husband's six four and I'm five feet tall, so it just so actually lends its, yeah, totally worked 

MPD: that we're the only ones who actually pulled off an outfit. I feel like most people, when there's a costume party, just find something that is flattering. Yes. And pretend that it's, so that's someone, 

Phuong Ireland: that was a situation I was in where there were a lot of red carpet, beautiful gowns and tuxedos, and I was part of the 20% who showed up in a costume, and specifically in a Halloween costume, a 10 year old boy

MPD: Amazing. Amazing. So Miserable Night . No good for you. That's awesome. It was fun. All right, let's get into it. What do you got for us this week? All right, 

Phuong Ireland: mark. So today I wanted to talk about sales teams, and specifically as a startup, when is the best time to build that team? And then when you decide that it is how to best compensate them.

So you know, when you're just starting out, obviously salespeople aren't the first people you hire. You don't even have a product yet, so there's nothing to sell. But as you're building and testing your product, how do you know when you're ready for dedicated salespeople? So if you're too early in the process, you're not gonna have the revenue to be able to hire the best salespeople without burning some serious cash.

And then hiring mediocre salespeople. It's not gonna give you the results that you're looking for. But then if you wait until you're too late in the process, you're gonna struggle to get the customers you need to really fuel your growth. So just a couple guide. To keep in mind, to determine when is the best time.

First is you need to have reached product market fit, right? So don't build the sales team before you reach product market fit because you're gonna be paying people to sell a product that's not ready for the market, they're not gonna be successful, and it's gonna be a waste of resources. Secondly, there's a general rule that a founder shouldn't hire outside salespeople until they've done the work to hire the.

10 or so clients. You know that number can vary depending on your price point and sales cycle. I think part of this is a demonstration that you've reached product market fit, and then part of it is that the founder should be doing this legwork so that they know how to sell people their product and then can establish sales strategies and processes that will enable others to sell their product.

Lastly related to that, you should wait to build a team until you've established a sales and lead generation strategy. Otherwise, you're not gonna be able to effectively deploy your sales team. So then once you're ready to hire how do you structure a compensation so that you're motivating your sales team to sell your product and that they feel like valued employees?

The first thing is pay a base salary. Avoid a commission only structure. It makes people feel like you're investing in them and it gives them stability month to month. And this really helps with employee churn, so you're not always having to retrain new salespeople. . Secondly, set quotas.

This is probably obvious, right? Give your salespeople a target to work towards established sales targets that are both achievable and challenging. They should be based on your industry, your company stage, and your product pricing. Third, establish a commission. So that's, Like a variable component of pay.

This compensates people for their performance. A good guideline amount for this is about 10%. So a salesperson's total pay would be their base salary, plus 10% of the revenue that they close. Now, a couple things to keep in mind when you're doing this is. Commission should be based on the first year's revenue, not on recurring revenue on renewals, right?

So this incentivizes a sales team to close new deals with new customers. Recurring revenue should really be a metric used for compensating your customer success team, cuz those are the people who are responsible for customer retention. Secondly, use sale accelerators. Give your salespeople motivation to.

Meet but beat their sales target. So let's say your sales commission is 10%, you can institute a 15% commission for any revenue above your established quota. And then conversely, you can have lower commission rates for the amounts brought below the quota to give people that extra incentive to meet targets.

There are also a lot of other tools you can use, such as non-cash rewards and spiffs. I'll go into that in a future episode, but hopefully I've given you enough to start thinking about your strategy today. 

MPD: I love this topic and I think there's a another topic that comes out of it, which is what types of demand generation strategies should a company use?

Should it be marketing, inside sales, field sales, et cetera. I think there's a couple of dimensions in here that are very interesting. One thing that I would just. is, there's a lot of thoughtfulness that companies should put on whether or not they're giving the commission on a revenue number or gross profit or contribution number, contribution margin number.

That can be a real way to create incentive alignment if there's pricing variability. For the sales folks though, they have some control of how things are priced. The thing I wanted to double click on, which I think what you said is spot on and massive is in the beginning of a company. , one of the founders needs to go do the sale.

Yeah. Because when you start hiring salespeople saying, I'm gonna hire a salesperson that isn't clear enough. That's like saying, I'm gonna buy a car. What type of car? 

Phuong Ireland: How do you talk to your customers about that car? Or how do you, what are the features that people like? You have no idea. And how do you train other people to do it if you can't do it?

MPD: Totally. You have to be able to say, Hey, here's how it works. But also it's is the person more wheeler in dealer transactional style? Are they someone who could become everyone's friend? There's different types of sales strategies that are all great and appropriate and the right dynamics. It just depends on what your sell us, and I think you gotta live it.

To know, hey, when I'm looking for a salesperson, I'm really looking for a salesperson with X, Y, and Z characteristics. And that changes the game in terms of getting the hiring so it's just, it's too broad of a category and a lot of people just think when they're first time at this hiring a salesperson is hiring a salesperson.

That's not the case, not the. Totally agree. This is a pretty timely conversation for you. I know you're working through this on the back end. Yeah. What are the things that you find founders have trouble with when they're hearing these frameworks? Where do you get pushback?

Phuong Ireland: I get a lot of pushback. I think a lot of cust a lot of entrepreneurs who are doing this for the first time just don't know the basics, right? I think the base salary versus commission only salary. Oh, commission only structure. It seems like a no-brainer, but when you're a founder and you're, you are working with a limited budget commission only sounds great.

I don't, yeah, it sounds amazing, but you really have to think through all the implications of of everything. And then secondly is the timing, right? I think founders, a lot of founders are, More they're either really into the tech or they're, not a salesperson.

So they automatically wanna outsource that as soon as they can. And I think this waiting, like you mentioned, is a really good discipline to have, but it's hard for a lot of founders to do. 

MPD: I've also seen it go the other way where you've got a founder with sales capability and dna.

and they're out selling and they don't wanna hire someone to come in and do sales because they don't wanna spend the money. And they're like, I can just do it. But what they end up doing without realizing it, is they keep the comp, they keep the company in third gear. They never go to fourth or fifth.

Cuz when you get to one another salesperson, you can eventually get to two or three and it starts to compound. So there, this can go the other. 

Phuong Ireland: Totally. Yeah. It's hard to delegate that when you are, especially if you're not a, a fresh startup, if you've been doing it on your own for two to three years to fill your own pipeline, and that's one of the things that's really hard to turn over to someone else.

You're only gonna get the pipeline that you know, like you're only one person can do and you're probably not paying attention to other things. That can really drive your business as well 

MPD: as, yeah, it's kinda like this blind spot. It's this, but I'm, all the deals that are coming in are getting handled, so why would I hire somebody?

And the answer is because there's all the deals that aren't coming in that could be coming. If you were at every event or if you were making more phone calls or if you were sending more emails, whatever the channel is for the, for a giving company. Anyway, great topic. We should definitely do a when you're should do marketing versus inside sales versus field sales session, that would 

Phuong Ireland: be really cool.

Yeah, I'd love to do that. There's a lot to think about in terms of how to structure your sales organization. 

MPD: Thank you, Fong. All right. Thank you. Brad, I like your hat, man. 

Brett Palatiello: Thank you. Yeah, it's emblematic of the entire reason the space exists. So I figured I'd rock it. I'm big on, on free swag.

So at East Denver I was I was a very happy camper. So this is one of the swags, one of the swag I got 

MPD: for all the folks listening. It says, censorship resistant. 

Brett Palatiello: Yeah, it might be, looks backwards to me, but censorship resistant. There you go. 

MPD: All right, man. You're fresh back from East Denver. You're plugged into the scene, what's happening in blockchain?

Brett Palatiello: Yeah taking a bit of a breather from all the banking chaos arru, which is a layer two rollup on Ethereum just airdrop their token. So that's very interesting. And obviously there's a ton of trading volume and a lot of people were dropped a ton of money.

But it's a more interesting experiment from the perspective of why layer two tokens even exist and what should be done with them. So optimism is also a roll up on Ethereum and they have a token. And there's been a lot of chatter about what exactly you do with this token. And optimism is actually quite interesting.

They use the token for voting. But they have a very interesting governance system. They have a bicameral system where one half or of the bicameral system is a token house. So everybody votes according to the number of tokens that they. But then they have a citizen's house, which is basically a number of elected people from the community to make certain decisions.

It tries to balance out the potential for plutocratic rule on the token side with something that's more, quote, representative of the people on the citizens. Arbitrary hasn't done anything like that yet. But what's interesting is that the token isn't used for fees. It, it's purely used for governance.

So there's a question of, how much value is actually going to accrue to these tokens. So nevertheless, it's interesting to, to finally see with Trump, throw its hat in the ring with a token, and we'll see ultimately what they do. 

MPD: Who's in the gov, these governance constructs. It's a bunch of, folks who are coding it and around the space are, yeah.

Super hyped about crypto or this is representing the citizens Air quotes. It's not the broad population. No. No, I still dunno what the hell this 

Brett Palatiello: is. Yeah, we're we're partially involved in some of this stuff, obviously not as on a grand scale in terms of we're not in the citizen's house.

We are token holders, we're not huge token holders. But yeah, these typically tend to be developers or people that are highly integrated into that ecosystem. I would hardly say it's representative of. My parents or , anything like that. , it's it's a very interesting, and it's sorta, it's not chaotic but, anybody can participate.

I if they own a token. It's a little bit of a free for all, but but nevertheless, yes , it's not adequately representative of the population at large, I would say. . 

MPD: Yeah. But this. You know what's interesting about all this is the expression of the concept of creating something that looks and operates like a company but isn't owned by one kind of narrow group of shareholders.

Yeah. And that's, and there's not regulat red tape around trading share anything. It's just making it. Open and flexible. This true, how you govern a decentralized ownership is hard. It's true. So that's what these experiments really are. I think there's gonna be fascinating case studies and it's sociological implications, it's psychological implications.

There's all these things at play here that are probably bigger than people understand at the moment. Yeah, I, 

Brett Palatiello: it's really interesting. And you're starting to see, certain areas where decentralization could work really well. And where centralization or, tendencies for centralization work much better and more efficiently.

But you can have the accountability of a decentralized user base. For example, the United States is centralized in terms of, you have governors and then you ultimately have, or senators and House of Representatives, and then you have a p. But ultimately they're held accountable by a decentralized group of voters.

And I know that, there's nuances with that but they're slowly figuring out some of those lesson lessons of history. But there's a lot of cool novelties that they're working in along the way with tokens and the fact that it's built on a blockchain. I very much think it that, it's an interesting experiment in governance and social systems.

MPD: I would love next next week if you would do some thinking or framework, if you're into it, on what we've learned about governing these types of operations. Yeah. Now that this has been around for a bit of time. Yeah. There's gotta be some rules and lesson learned and some case studies of collapses. But whether it's just applies to crypto or blockchain or if it more broadly has Hey sociologically, we see when you do this kind of thing, people game it.

Yeah. That would be fascinating. Yeah. Because in theory, this is a high volume, repetitive set of testing governance structures that should, in theory, if people are learning and paying attention, move towards a more and more practical 

Brett Palatiello: function. Yeah, a lot of this is, mechanism design, which is, trying to figure out a system that, that achieves a specific goal.

And yeah it's a really interesting playground for a lot of these different things that people have had to do in the real world without the. Ability or option to fail without sort of big catastrophic consequences. I would assume there's gonna be a lot of academic studies on what's going on in the space regardless of whether it's successful or not.

MPD: The crypto blockchain world is rearchitecting government structures. I love that. Yeah. 

Brett Palatiello: All right. More to come. All right. Thanks Mark. 

MPD: Vivian, thanks for being here today. 

Vivian Wang: Thanks for having me. Excited to be here. All 

MPD: right. Let's jump in. You mind giving us an overview of Landed just to start?

Vivian Wang: Absolutely. So what landed is it's the fastest way for restaurants and hospitality groups to hire for hourly workers. So we use our conversational AI technology. Plus our intelligent match to actually take a candidate from sourcing, vetting, engaging an interview setup, and ultimately automate the entire hiring process for for the general managers who are, super busy with all these other things that are going on in the restaurants.

We really just become a recruiter for every single one of your managers. 

MPD: That's a huge pain point, right? I feel like. There's a lot of turnover at the places, and it just feels like this is a revolving door type dynamic where, oh, enormous uploading that is 

Vivian Wang: huge. Enormous. The restaurant industry's turnover rate is about 130%, and after Covid, that's actually spiked up to an average about 200%, which means that you're like needing to hire a new person basically every week, if not every day, in order to keep up with that turnover.

What 

MPD: the hell? What? How does that. How does that even exist? When you, as a tech person work in these companies, like turnover, at 200%, that means the entire team changes twice per year, right? 

Vivian Wang: Yep. Absolutely. 

MPD: How do you, how do they even function with that? 

Vivian Wang: So it's interesting, right? Because if you think about the general manager's job, it's become more complex now than ever.

General managers have to take care of now, new hygiene procedure. They have to actually run the guest experience. They have to run the actual product. They're delivering a food product. And nowadays they're like all these new revenue streams, right? Delivery, curbside, even like ghost kitchens, cloud kitchens.

So the job of a manager has become increasingly complex and the way that I think the most innovative companies out there. So we work with Kava, we work with Bar Taco, we work with Dave's Hot Chicken, super fast growth brands. The thing with them is that they've realized that you can't just keep on pushing more stuff onto the manager.

It's, they're not trained recruiters. They're super time strapped. So that's where these tools like landed, this ultimate solution that's able to take that away from the manager and leave them focused on the two things that they really care about, which is guest experience and food product.

that's really like how they're able to scale so quickly. Kava is opening up five to 10 new restaurants every month. Wow. And that's incredible scale. And they're able to do it super quickly because they don't even have to think about that talent component of their restaurant operations.

MPD: Okay. But let's take a look more macro for a second. We've had Covid came pandemic. Everyone ate it. It wiped out a lot of the restaurants. People are dining now, we all know this. What's happened with the restaurant market? Why is it, why is turnover up? What's the real estate of play kind of post pandemic for the restaurant world.

Vivian Wang: Sure. So it's, it, so the restaurant world is, a, it's super people first when it comes to their guests, right? Danny Meyers written an amazing book on about like setting the table, things like that. But when you look at the actual people who are supporting this essential workforce, so the people who are ch checking out your groceries, the people who are in the back.

Putting together the food. They have been just nonstop, like for the past three years, essentially since March of 2020. And I think what the restaurant industry is seeing, and because there are a lot of other job opportunities out there as like some jobs have shifted to remote as tech companies and other companies are, booming.

When we look at these restaurants, they now have to think about actually supporting their employees the same way as they have to support their guests. And I think that 360 degree brand is gonna come in play. So it's not just about the brand that you're giving to your guests, it's about the brand that you're giving to your workers.

So when they come in every day, . Yeah. What is the work experience? It's not easy to sit, to stand there for eight hours a day on, on the fryer frying, flipping burgers, right? But someone has to do it. How can you make that environment a better one for them? So I think this idea of becoming a preferred employer, thinking about how you're differentiated as a preferred employer that's been around in other industries.

But it's coming to the hospitality industry in a very fast and real way, and they've been confronted with the need to introduce technology in order to actually have their restaurants run more efficiently, drive up their bottom line, and also make sure that the, their employees are spending time on actually high value things rather than just, menial work, 

MPD: repetitive towels.

Wow. It's so interesting hearing you say this because. I probably wouldn't even thought of that. Given the industries I'm in, the experience of the team, treating people with respect, creating good work life balance, those are givens, right? The idea that is just getting into that market because of a supply and demand shift is jolting.

Jolting. Now, you mentioned that they're leveraging tech. What other tech solutions are out there that. Are really making a difference. What's the modern restaurant using? 

Vivian Wang: Sure. So I was actually just at the multi-unit restaurant technology conference in Vegas earlier this week, and I was there as part of their innovation alley.

So they had some semi-finalists come up and we were one of the top 15, which was very exciting. There were a lot of, companies out there that are doing really cool things like you wouldn't think it but a drive-through in a re. Is some of the highest tech parts of the entire operation.

They have AI cameras, they have ai order taking software. They're able to do smart, real-time recommendations on what you should be buying, what you should add on to your main meal. So there's a lot of really cool innovation happening. When it comes to. The actual physical space of a restaurant.

And then it also on the on the efficiency side. So you would think that the simple action of receiving a delivery from DoorDash is is pretty straightforward, but actually there's a lot of data, messy data. There's a lot of different fleets of drivers they can be tapping into. So there are a lot of companies that are attacking like those parts of the problem.

An exciting thing that happened. We actually got selected by the CTO of Five Guys, the CTO of bricks Holdings and the VP of Technology of Mod Pizza to be in the top three to actually present on the main stage at Meek. And so it was us and a really cool reservation software and a data ana restaurant, data analysis software that ended up duking it out on stage.

And we actually were voted the. First place. So we actually won the whole competition at landed because fundamentally, all these revenue streams and ways to run your operations more efficiently, that's great, but funda. But fundamentally, like if you don't have people who are working in your stores, you have to cut hours.

You have to turn off your third party delivery cuz you simply can't even support that. Or you just, maybe you're doing cloud kitchens, you can't even support a bigger menu cuz you don't have enough back of house team members supporting your existing menu. So there are all these different amazing innovations out there and I'm really excited to see them.

But fundamentally, you have to keep your store staffed in order to do any of the above. 

MPD: What's your story? How did you end up as a, working in restaurant software? That's a interesting. Cross section. 

Vivian Wang: Yeah. I think of us as ultimately what we're building. So my parents, they immigrated to the US from China and their first two jobs were being a dishwasher and a waitress at a local Chinese restaurant.

. And so I grew up in that environment and when you are immigrants in foreign country and we were in Ohio you don't have a community around you to support you. So you have to figure things out on your own. You have to figure out how to buy a car. You have to figure out how to finance that car in a place where English is not your first language, right?

So what I'm really looking to build here at Landed, if you step. The work that we've been doing to to date has been focused on the job component, but really what we're building is a livelihood platform for blue collar workers. And a livelihood platform comes down to three pillars. The first is a job, the second is your finances.

Third is your education, so you gotta take it one step at a time. We're focused on the first pillar of getting folks a foundation of their livelihood, which is a stable job or. In the hourly space, they tend to hold more than one simultaneously. And I saw that with my parents. And fast forward, I studied public policy at Princeton.

It was when the gig economy was exploding and you can see that. A lot of what the gig economy was doing was a labor kind of arbitrage that was happening. And, but when you double click in the people who are supporting these gig economies and supporting the hourly work that's happening around us, they're, 25% of them are unbanked or underbanked.

There are a lot of predatory solutions out there for them that are just not helping them invest in their financial futures and in their livelihoods. So the goal of Landed is to actually. For every single worker 90 million of them in the US alone, there are over 3 billion blue collar workers across the world.

For them to be able to come onto landed and know that their job, their finances and their education are going to be taken care of, and that's the safety net that would've helped my parents a lot. Of course, they figured it out along the way. They're both now software engineers. But that's a path that should be more.

MPD: I love that. Now, I know you went through Y Combinator in your journey. What was the biggest value you got out of the program? 

Vivian Wang: The number one value was the amazing other founders that we met. So they have these things, which are Tuesday night dinners, and so everybody every week gets together and we talk.

The challenges that we're facing we're all in the same stage, so being in the same stage is great cuz you're, even if you're in different industries, you're probably facing relatively the same challenges. So it's. Amazing because it's just like a candid group of people who are just there to help each other.

It's, you cut the crap. Like it's not about selling yourself as a founder or selling yourself, your company or any of that. It's about like truly coming down to the nitty gritty, putting your heads together and figuring out how to problem solve and problem solve really quickly.

Because every week we're getting together and every week we're talking about our growth and. , some weeks are good weeks, some weeks are not so great weeks. But you can always, and everyone's gonna be a different path of that journey. And even today I have really close friends that I've made from Y Combinator.

We're texting each other. Anytime anything comes up, we text each other and we trust the advice that we're getting from each. . 

MPD: That's awesome. It's obviously a very sought after program by a lot of entrepreneurs. Any tips for the folks who get in on how to best maximize the value of the experience?

Vivian Wang: Absolutely. Make sure that you go to all the events, like in person as much as possible. And afterwards, like put together your own groups of people. Like just put yourself out there. It's , no one really knows each other when you go in, so just get to know as many people as you can.

And I think the other big piece is that you're separate. You might be in different groups, you might be working on different ideas, sas, consumer hardware, whatever, but get to know the people in all the different groups, not just the people that are in your group because people pivot, or.

I see a lot of co-founders. I see a lot of leaders in businesses actually be hired from other companies later on. So it's an amazing network and it's just a bunch of smart people. It doesn't really matter what they're working on, they're just smart people. Get to know as many of them as you can.

MPD: Vivian, thanks for being on today. Appreciate you. 

Vivian Wang: Of course. Thanks for having me.

MPD: All right. I hope everyone enjoyed that. I love having some guests on to mix it up a little bit, just kinda get new perspective and keep learning. I hope everyone is doing well, and we will catch you again next week.

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