Guillermo Rauch clearly knows how to build a successful startup, founding Vercel in 2015 and building it into a frontend developer platform that raised $150M in a funding round last year that saw its valuation double to $2.5 billion. He shares how he got there in a conversation with G2i’s Michelle Bakels and Gabe Greenberg.
What might be even more impressive than those heady numbers is that Rauch managed to raise that capital while continuing to be an attentive and loving father to his three young children — defying the tired trope that tech workers can’t build a powerful business product without sacrificing everything personally.
“Founders tend to become super obsessive about their companies, but creating different spaces for developing yourself and developing your family will make the company better. These things are not at odds. They complement each other really well,” Rauch told GV (formerly Google Ventures) in 2020.
“There's never going to be a perfect time that you can think, ‘Okay, now is the moment to make all those investments in my personal life and in building a family,’” Rauch said. “You have to say, “I'm going to prioritize myself and prioritize my family. There’s always this competing stuff that you could be doing otherwise.”
Rauch isn’t alone in this thinking — recent studies show that many parents feel working while having kids enhances their personal and professional lives. However, it can be difficult to actually benefit from that juggling act if your company undervalues work-life balance.
Here are just a few of the lessons Rauch has for anyone looking to maintain culture while scaling a company.
Hire the right people, and treat them well.
Rauch started Vercel with two people he worked with on Socket.io, an open-source event-driven library for real-time web applications. That prior experience collaborating together helped Rauch feel confident that they would work well together at Vercel too.
That’s why, when people are starting something new, Rauch suggests founders ask themselves: “Who are the best people that you can possibly work with out of the people you already know?”
But what if you don’t already know any strong candidates? In that case, Rauch recommends working on open-source projects, so you can meet new people and get a trial-run of what it would be like to build a company with them.
Rauch cites Sam Altman’s advice to ‘Hire for slope, not y-intercept.’ In other words, hire people who will perform steadily over time rather than spike and then fade — people you believe will grow along with your company.
It’s great to get experienced workers who contribute immediately, but this can be cost-prohibitive for young companies. Instead, look for people who show potential but haven't had the chance to prove themselves yet, such as early-career talent or people who recently changed careers.
After hiring the right people, Rauch encourages entrepreneurs to keep the wellbeing of these employees in mind.
“In your company, you want to be there to empower others,” he said, warning against “requiring these unique sacrifices out of people that no one in the world can meet, because then that also caps your ability to grow.”
It’s important to remember the human value of each employee, not just their production value.
Theoretically, these are people who will work by your side for years, so it’s in your best interest to treat them well. Empathize with them. Show them respect. Take their feedback seriously, he says, and entertain their ideas.
Finally, commit to build value together, rather than at each other’s expense.
Build resiliency and grow faster, stronger.
Since Vercel’s early days, Rauch has spent much of his time finding the right infrastructure to invest in, so the company can scale while still providing high-quality service.
By making these investments, Rauch hopes to avoid the all-night scrambles for solutions that tech workers often endure when responding to software outages.
“I want to build a platform that is not keeping anyone up at night; I want to build a platform that is secure and reliable by default.”
It’s taken years to perfect, but Rauch has incorporated mechanisms within Vercel’s design that provide automatic redundancy and resilience. For example, during an AWS outage, the container infrastructure used for builds stopped working, but Vercel avoided disaster by automatically rerouting it to their other regions.
That’s why Rauch encourages anyone building a software organization to consider what you can do design-wise to protect the future mental health of your team. There are ways to build resiliency through software, like chaos engineering or building globally distributed systems that have no single point of failure.
“At the end of the day we are subject to the capabilities of our software, right? There's humans that are on the line and I think being very careful with architecture pays great dividends in the future.”
Building resiliency within products gives employees and customers peace of mind. It’s also an attractive selling point to people who join your company.
When Rich Harris, the creator of Svelte, joined Vercel, Rauch immediately connected him with a large security team to help with anything he might need. Performing audits, giving advice, double checking the security of an API — whatever the concern might be, Rauch wanted Harris to know he didn’t have to find solutions alone.
Incorporating such fail-safe measures has also helped Vercel maintain their positive work culture even as they’ve grown. It helps that Rauch’s vision for the company has been clear from the beginning.
“I want to build a culture of transparency and alignment with the values of our customers,” he said. “We’re operating a service, so we develop the culture around the massive responsibility that comes from doing right by the folks that trust us to operate that service.”
That means making sure that message is reflected in every interaction a customer has with Vercel. Anytime they talk to a customer success team or interact with someone at an event or conference, customers should experience a sense of shared values and transparency.
However, that can’t happen if Vercel’s services are constantly failing. Building resilience within his software and team has allowed Rauch to make Vercel a reliable and trustworthy product for customers.
Pay attention to feedback.
When Rauch first announced Socket.io to the world, it made front page news on a programming subreddit. Unfortunately, it wasn’t the kind of response Vercel had hoped for.
“It had the worst feedback of my life,” Rauch said. “The comments were 100% terrible.”
It surprised Rauch to see how many people seemed ready to rain on his parade, jotting down quick, harsh comments without even reading past the title of his blog.
However, he chose to look at the critical response as a learning opportunity. This allowed him to appreciate how diverse customers can be, and ultimately enhanced his product.
“Even when the customer is wrong in a sense, there's always some value, some lesson in there for you.”
Rauch encourages people to aggregate as much data as possible and pay attention to each individual piece of feedback, especially in the beginning of the product design phase. He also thinks it’s important to consider anecdotes, which embed taste and opinion while conveying how your customer understands the product.
Feedback is especially important to consider while trying to scale a company. While a business is in its early stages, you might have only five sign-ups a day, but the success of those five sign-ups informs the future performance of your company and product.
If your team reads the comments on their products and learns to tolerate negative reviews, you’ll be able to learn and grow better as a company.
For similar reasons, it’s worth offering frequent and thoughtful feedback to employees and coworkers within your own organization, so they can grow as individuals.
A 2021 Gallup study showed that employees who received meaningful feedback within the past week are almost four times more likely than other employees to feel engaged — as in, more involved, and enthusiastic —about their work.
Find the right fit for your company culture.
Way back in 2014, before he had started Next.js, Vercel, or any of his other projects, Rauch gave a conference talk on the seven principles of virtual applications.
He later realized these principles served as a blueprint for what he wanted to accomplish, so he posted those ideas on his blog. Soon, Rauch was approached by multiple people who saw his post, shared his vision and wanted to collaborate with him.
That happy accident served as a surprise crash course on how to build the type of culture he wanted. “Write down what it is you want to do. It’ll attract people to you,” Rauch now advises people.
Companies need to be creative in finding what works for them and their employees. For example, G2i has embraced the 4-day work week as a way to increase productivity and protect the mental health of its employees, as a larger part of our commitment to Developer Health.
Rauch doesn’t think this would work well for Vercel, who have clients that rely on them throughout the typical work week. However, he said he’s still extremely supportive of challenging the current norms around work in the tech industry.
“We have to all have this open conversation around how creativity, progress, code — whatever it is that you're after — doesn't happen 9-to-5, consistently. It happens in spurts, it happens in states of flow that are not sustained for days and days and days in a row.
As Rauch continued, he returned to a theme he mentioned repeatedly while talking about building a company — the importance of treating yourself and others with respect.
“I think the conversation is super healthy to have because we all have to recognize and not hold ourselves to an unreasonable bar of work output.”
Here's the full recording to hear Guillermo's thoughts firsthand: