Against The Herd with Howard Lerman

Imagine you’re sitting at a café, enjoying your coffee while eavesdropping on two successful entrepreneurs chatting away, that is precisely what the first episode of Against The Herd feels like. Chris Herd, CEO of Firstbase, and Howard Lerman, co-founder & CEO of Roam, discussed a range of topics related to startup life, remote work, the state of offices, and more:

• Are we facing the extinction of traditional offices?
• The need for a growth mindset and adaptability to stay relevant in the face of constant change
• AI and its impact on how we work and live 
• The Future of Work and trends that are set to dominate the next decade   

Enjoy watching this episode and if you'd like to read it, the full transcript is available below.

Watch The Full Episode Here

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Find The Full Transcript Here

Chris Herd:

Hello, and welcome to Against the Herd, the series where we dive deep into conversations with contrarian leaders and visionaries at the cutting edge of the future of working living. In today's episode, we're excited to introduce our guest, Howard Lerman. Howard is a trailblazing entrepreneur and the co-founder and CEO of Roam, a one-stop cloud HQ, created to serve as the central hub for distributed companies. Before Roam, Howard was the Founder and CEO at Yext, which he and the team took public in 2017. Under Howard's leadership, Yext became a major player in the world of online data management, helping businesses maintain an accurate and consistent presence across search engines, social networks, and other digital platforms. In this episode, we'll dive into his insights on operating as a distributed company, operating as a CEO in a public company, and his unique perspective on leadership in the age of digital transformation. Please welcome Howard Lerman.

Howard Lerman: Hey, Chris.

Chris Herd: Hey, 

Howard. How's it going?

Howard Lerman:
I'm great man. How are you?

Chris Herd:
I'm coming to you live from my wife's mother's bedroom.

Howard Lerman:
Well, that's the beauty of distributed work.

Chris Herd:
Doesn't get any better than that.

Howard Lerman:
You can be in the in-laws' bedroom and doing podcasts.

Chris Herd:

Yeah. Bad lighting and everything else. Well, I'd love to do three things today. I think there are probably three areas that it's interesting to touch on. I think Yext is an obvious space. I think distributed work challenges are another, and I think your perspective on how people communicate and collaborate in this new more distributed world with Roam is going to be pretty interesting as well.

Howard Lerman:
I'm really excited to be here. But first, can we just talk for a second about the name Against the Herd?

Chris Herd:
Yeah, where do you want to start? My distaste for it.

Howard Lerman:

Well, I just find it quite fitting that you told me yesterday or the other day that you were against the name.

Chris Herd: Against the Herd.

Howard Lerman:

There you go. I don't know if that's‌ accurate or if it's an oxymoron. Or it might be one of those paradoxes; it's impossible to stop.

Chris Herd:

Right. It just is. It is what it is. We are against the herd, and I was against the herd. So as a starting point for the entire series, it's pretty goodest.

Howard Lerman:
It's like one of those Google pictures that don't get solved.

Chris Herd:

It just keeps going. The tail eats itself. Well, I'm going to kick off with a question that I've tested on a few of your Yext alumni. And something that I guess probably not a lot of people knows, and you obviously lived through it with Yext. The world changed pretty drastically at the start of 2020. Having gone through that experience with the real estate you guys had, how did that make you think any differently or did it make you think any differently?

Howard Lerman:

Well, there's no question everyone thinks differently today. I'm not sure a public company's CFO or any CFO really would sign off on a huge real estate project at this point like they would've in before 2020. I think at a minimum you have to really think hard about, whether is this the investment we want to make. Because for most companies, SaaS companies, at least in technology and consumer as well, real estate is often the second largest SGNA expenditure outside people. So a lot of the historical kind of numbers for a lot of companies have been between five and 10% of top-line revenue goes to real estate. And so now I think companies are realizing that wait a minute, I might not have to spend five to 10% of my top-line revenue on real estate. I could pay my people more with that money, with those savings. I could just take it to my bottom line and return it to ‌shareholders. Another really interesting thing is you could return it to your customers in the form of lower prices.

Chris Herd:

Right. How did that inform the way that you thought? You obviously found a new business, you have a different perspective, you've lived through all that and you might not have lived through that had the pandemic not have happened. How did that really impact, I guess, your perspective on the future of work and what companies should look like, and how they should function?

Howard Lerman:

Yext was always, and I was always a super pro; every day in the office, Monday through Friday, 8:00 AM to 8:00 PM kind of leader. And in 2006, when we started Yext, we had hundreds of people ultimately not in 2006, but in a couple of years as the company grew packed together in the same room, feeding off the energy, feeding off the speed of everything going on. People were on the phone talking to customers. It was like a boiler room. And I think I always felt that having people together in the physical sense was really, really, really foundational to our success.

And then fast-forward to the pandemic, like everybody else, this was 14 years later, and we were a totally different company. We went to Zoom and Slack and we lost something when we went fully to Zoom and Slack and didn't really have any ability to interact in person. And so I began to think about a lot of the challenges of the era that we live in today and where we might be able to go going forward and how technology can solve those problems. Because the fact is technology is a lot different in 2023 than it was in 2006. You couldn't get a video call to work in 2006.

Chris Herd:
You didn't love WebEx or Blue Jeans.

Howard Lerman:
I don't think they even existed in 2006.

Chris Herd:
Yeah, Skype did, but Skype was.

Howard Lerman:
Skype might have been there.

Chris Herd: Very, very poor.

Howard Lerman: Yeah.

Chris Herd:

Something I love about the, and we can get into Roam a little bit here as well, something I love that you're doing and this recent development is the FRL messaging piece. So messaging that doesn't exist in perpetuity. How do you think about building something that caters to the way the world's changed? You talk about Slack, you talk about Zoom, clearly, they weren't meeting the needs for you. How do you think about meeting the needs for what you needed and for what other companies need?

Howard Lerman:

Well, let's take a step back and just talk about the era in which we lived. In 2006, video conferencing didn't work ever. And fast-forward to today, 2023, we live in the era of video meetings and video conferencing. And while the technology has been incredible in making it work, what's happened is we've all changed our workflow to be in support of this technology. And that has presented us with tons of problems. And so if you look at most people's calendars today, they're back to back to back Zoom calls.

And then trying to read this massive Slack in between those and hope they don't miss anything that people may have said.

And so you are trying to replace a lot of the feeling you had while you were in an office with reading stuff in Slack and back-to-back Zoom calls. And it's a line I use all the time, but things that used to take two people, five minutes are now being scheduled for 60 minute Zoom calls next week with eight people. And so the result of this is companies have just slowed down, they've slowed down as they've relied too heavily on back-to-back video calls, which has been, they've been intentional, they've been structured. And so everyone's got a different philosophy on synchronous verse async. And I don't really have a religion on that except to say I think we can all agree that less meetings, shorter meetings and more speed is better. And frankly, if in theory everyone was together in one headquarters or one office, that would be better. But that's just simply not practical.

Chris Herd:

So is your answer that it's both, right? You don't want to cater to either. You want to give people the opportunity to work in a form that lets them do their best work. Whether that's sync or async.

Howard Lerman:

I think there's no question that right now there's this huge debate about whether the future of work is going to be in the office, whether it's going to be hybrid, whether it's going to be three days a week, whether it's going to be whatever. And companies, the HR people at companies are sitting around trying to figure out these policies and articulate these policies that there is no catchall policy. And it's frankly the wrong question because the fact is 100% of scaled companies are distributed. They have people everywhere. Yext had people from Berlin to Beijing. Tesla has, Elon's come back to the office at Twitter, but then Tesla has factories, they have call centers, they have dealers, they have offices, they have reps, they have people fixing this charging station. I mean, the fact is every company that gets anywhere has everyone together.

And so I think what we have to do, Chris, is get away from this HR discussion about whether people need to be in their seat on Tuesday or Thursday and get to the real problem, which is how can we help the whole company work together as if we are all in the same place, even when it is not practical and impossible for us to be.

Chris Herd:

Yeah, I mean I think the practical reality a lot of businesses face now is we have this large expanse on our balance sheet, which is an office. We have an expiring lease and somebody in the business has a big ego and he wants to maintain the office space. Now I think the question then ends up, and clearly I think my perspective, and I think there's a lot of people know my perspective, it feels like there is a real estate apocalypse coming of some description. To a greater or lesser degree, something will happen. And I think the narrative in the media is doing kind of what you're saying, it sort of obfuscates the fact that the conversation isn't, will people be in person or will they be distributed? They already are. So I think the question is like, well, how do we actually enable this in a way that people can do the best work that they've ever done?

And I think that actually isn't as straightforward. I think it's also worth acknowledging that we don't have all the answers yet. This is hard. We're still two, three years in a mass experiment that a lot of people didn't have a lot of experience with. And I think to your point, there's a bunch of tools that we all use which is optimized for a world in which people do operate in an office. So how do you think about that, where that changes people now have experience with it, and how do you build tooling for a new world rather than the one that previously existed?

Howard Lerman:

Well, that is really, Chris, what inspired Roam, which is a cloud headquarters for distributed teams. And the fundamental idea behind Roam, and this was the big insight. I was setting up a Zoom one day, and when you set up a Zoom, you're adding people to the calendar invite. And I forgot to add someone. And I realized at that minute that if you forget to add someone to a calendar invite in a remote or distributed environment, that person is a non-person. They don't exist at all. And so I had this idea, well, wait a minute, what if there were a bird's eye view of all of the people in a company that everyone could see, and it was a shared view and you could see who was meeting with who and you could move between them and you could engage with people and you could get a feeling for what's going on.

And almost like a marauders map, if you ever read Harry Potter, for the office. And so that inspired Roam. And the thing that a real world office can bring that is more challenged in a distributed environment is synchronous presence. That is when you walk into a building, you can tell what's going on, you can see who's talking to who. You get a sense of the energy. You can tap someone on the shoulder if inspiration strikes and have a quick two minute or five minute conversation. You can see three people are talking about something and you can be ad hoc.

And in the era in which we live today, this era of sort of video conferencing, first, the problem is everything is highly intentional and everything is prescheduled out in advance. And when you do that, that's when you slow down. And it can cause slower companies to lack of innovation. And lack of empowerment, the people feel like they can't get as much done. And so I think the tool set in a lot of ways that we all use for distributed work has to be reinvented for distributed work from the ground up as opposed to taking the tools that were made in 2015 and applying them to today's distributed work.

Chris Herd:

How do you think that changes communication and collaboration more broadly? I know you talk about the intentionality of it. I think there's a lot to be said for being able to see that two people are in a conversation and maybe I want to go and just say hello. What are the other things that you see? You've got a bunch of customers now, what are you seeing and hearing from them?

Howard Lerman:

Yeah. Well, the first thing we see in Roam is that the average meeting time is eight minutes. So I want you to think about the last time you scheduled an eight-minute Zoom. It just really doesn't happen that. What you might have done is had an eight-minute phone call, pick up the phone and call someone and chat with them for eight or nine minutes. That's the first thing. Second thing, and I will say that I've been surprised by this, but it's just data and it's an interesting thing, which is 72% of the meetings in Roam are audio only. So I want you to think about the fact that we all live in this world where we're like, oh, the camera, there's always this sort of, is the camera on or off? And it's kind of awkward and some people have it on and off and you have this end, you end up with this mix.

Well, we have a lot of default audio only types of room formats. And I actually see that playing an increasingly important role. For example, last night I was up at 11 o'clock with four of our principal inventors working on shipping a new feature. And I know these guys really well and vice versa, and they're all typing and we're all kind of looking at a screen share. You don't need to have the camera on when you know someone already. So I think that's kind of another thing.

And then just really the third thing is people need to remember that everything you type into Slack is a click away from HR. HR can access anything you've ever said in Slack with one click. And imagine in the real world, if you and I were having, standing at the water cooler, having a conversation talking about something or something that I screwed up. Or you'd probably be yelling at me, "Howard, you fucked that up again." Or whatever. I don't think if HR was stand and I wouldn't be mad about that, I would just take it and move on. But if HR was-

Chris Herd:
Right, you say you change the way you say it when there's different viewers of the thing.

Howard Lerman:

No question at all. And so we have to get to a way where people can be real with each other without fear of retribution from having it taken out of context later on.

Chris Herd:

Well, what's your ultimate concern there, is it that people are almost performing communication rather than just communicating the thing as clearly and cleanly as possib

Howard Lerman:

Chris, that's a brilliant point. I think of a lot with what people say with regard to the Google sort of performance review process, where people end up just trying to game that for their own comp as opposed to actually getting the work done. And if we're looking at what people type into Slack as the ultimate arbiter of your work, I think that is something that we probably want to get away from.

Chris Herd:

Maybe pivoting slightly, you're not in New York anymore, you're obviously there for a decent length of time. And something I spend a lot of time thinking about, and a lot of people have the thought, well, what happens to cities if people go remote? What happens if people are distributed? What's your thoughts on the reshaping of the urban landscape and really the communities in those places having been in different places?

Howard Lerman:

Well, I think it's inevitable and inarguable that there has been a bit of a shift. I mean, I used to go to San Francisco all the time, it doesn't look like it did when I went there in 2019. It's just very different. New York is different as well. I think you have local businesses that aren't there as much. And again, I'm not a housing policy expert, but I don't think it'd be the worst thing if some of these empty commercial buildings were to be converted into different types of living spaces. And Chris, I'll just throw this at you too. While I'm obviously a huge proponent of distributed work and people being able to work in a way that makes them most effective, I think I'm standing here in an office. My wife kicked me out of the house. I guess my mother-in-law didn't kick me out yet. But I like to have a little sort of place where I work, even though I'm by myself; I'm distributed. But I am not sitting in my home.

And I think companies increasingly will probably some of the savings that they get from having no HQ, they could pass that on in the form of credits for people to spend some of that on their own shared space or co-working space if they feel like they're better off working in that. Certainly at Roam, we are assessing that type of thing for our own team because many of our own team want it. They want to be distributed and want to work where they want to work, but they don't necessarily want to be sitting in their house. So I think imagine some of these huge commercial spaces that are sitting empty could be converted to that type of thing too.

Chris Herd:

I think it's a good point, and I think everyone often thinks my view is remote only, and I don't think that is the only view. I think we should encourage people to do work wherever they do their best work. Maybe people in New York, they've got 600-square-foot apartments. Do you want to be sat in that place all day? Probably not. I don't know if you do want to be locked up all day, maybe they don't want work at coffee shops. But yeah, to your point, cool working spaces where people can go, they can hang out. Maybe less kombucha and WeWork, but there are certainly more types of places.

Howard Lerman:

Or I want to get together with eight of my colleagues for three days for a quick little mini-offsite and we need a conference room for that kind of thing.

Chris Herd:

How do you think about, I guess, pivoting to some of the challenges of remote work and distributed work, or however you want to call it? Actually, maybe that's a point. Why do you hate remote work so much?

Howard Lerman:

Well, I think remote work comes with a charge of this sort of battle of people. Remote first off, it's sort of has a negative connotation. You're not present and I feel like you can be extremely present. I mean, the internet is what has enabled all of this. The internet we're all building or a lot of us are building internet companies and agencies and services and that's what ultimately connects us all. So I think being able to bring people together. When you're remote, it sounds like you're calling from a walkie-talkie from the moon. That's a term that I don't love. And then I also just think, like I said before, hybrid. I also don't that term either because it's sort of, think of hybrid, it's like a ugly beast.

Chris Herd:

Well, I mean, ultimately it's just work. Nobody says, "I bought the thing on the internet." You just bought the thing.

Howard Lerman: Yeah.

Chris Herd:

At some point, we delineate these phrases and people realize that remote, distributed, hybrid work is just work. And ultimately I think that's where we need to end up. Do you care where someone is doing the work from, or do you care about the outcome they've produced? For me, if people are working for Firstbase, people are working for Roam collectively, we all care about the outcomes that we're aiming towards together. And ultimately, I think that's all they should matter.

Howard Lerman:

I completely agree with you. And then the challenge and question: how do you measure that outcome? The other thing you mentioned the challenge is, and I think this is a huge one, is mentorship. At this point, I've been running companies ever since I was 22. So I have 20 years of experience with how to run my playbook. I know who to call for accounting, I know who to call for engineering, I know who to call for marketing. So I've worked with people and have these deep relationships over decades. The thing I worry about most is those people that are entering the workforce for the first time.

And on the flip side, companies that are beginning to hire people for the first time out of the workforce and how can we make sure that the next first employee of Firstbase is going to learn from Chris Herd because Chris knows the way of the company. And so how can we impart that knowledge best upon a new person? And I don't think it's only going to be from reading playbooks that have been written so far. You have to spend time with people to really get to train them. There's no book teaching you how to start a company.

Chris Herd:

Well, there there's plenty of them, but they probably don't have much good advice. I've tried to read as many of them as I can, and yeah, you take tidbits from each of them. Maybe leaning in there, what do you think you guys do so well that other companies could learn from Roam? Or maybe it's just some general advice you've got more broadly.

Howard Lerman:

Well, I think that first off, for any entrepreneur out there, the most important thing you do is the decisions. There's two most important decisions. It's the market that you operate in and then the people that you work with every day. And so if you are pre-product/market fit, you basically need to be obsessed with finding product/market fit. That's all that matters when you're starting a new company. And it is ultimately the job of the CEO. It's not the CTO's job, it's not the chief product. You can't hire for that. Everyone gets all caught up, Chris, in raising money. And frankly, I think money should follow product/market fit, not the other way around. Unless you're pioneering some type of new research in R&D in a new technical field like OpenAI or something like that. Generally speaking, you want capital to accelerate your go to market, not as much your R&D. So I would just totally focus on your product and make your product great. And let your customers be your salespeople.

Chris Herd:

Well, here's something I admire about you. It's really that you've been successful in, I don't know how many eras you would define it as. It's definitely two different eras, but you could arguably say it's three, right? Pre mobile, post-mobile, and now whatever today is. How have you personally been able to stay relevant in those shifts? I think that point you're making is so true. I go back to think about how I built the product, it was conversations with people. But why do you think you've been able to do this in the face of so much constant change? What's the key there?

Howard Lerman:

Well, Chris, the first thing I'd like to say is that when we started Yext in 2006, we were a company selling leads to gyms. And then we pivoted to selling phone calls to veterinarians using a Smart Inbox technology and call transcriptions. And then that wasn't good enough. So we sold it to IAC and we purchased, we founded a listing sync company. And our first publishers were MapQuest. I don't know if you've even heard of MapQuest. MapQuest and City Search, which were big deals in the United States in 2009. And the point is that in everything I've ever done, I try to build change into the DNA. And it's natural selection. You literally have to evolve or you die.

I was having a good conversation with my good friend who's the founder of Shutterstock, Jon Oringer. And we were talking about public companies and private companies and long term and all that kind of stuff. And he made a brilliant comment, which was, in technology, there's no such thing as a forever business. You can't just set it and forget it like selling a fashion brand. You have to change or you die. And so for us, your business, my business, and for anybody listening, if you're in the technology business, the minute that you sit still, the minute you think you're set is the minute that you've begun to erode and you're not going to evolve anymore. Certainly you can build up a franchise that will produce cash, but you have to reinvest that into evolving because that's the only way that you're going to have something over the long run.

Chris Herd:

How do you think about the massive conversation that's got ongoing just now around AI? If you were building something new.

Howard Lerman: Who says I'm not?

Chris Herd:
Well, that's a question. What does it look like in Roam? What does it look like elsewhere.

Howard Lerman:

Oh, we're going to have bots in Roam, Chris. I think the opportunity, first off, I think what we've seen recently is absolutely a breakthrough that passes the touring test, it's irrefutable. It is the most impressive demo I've seen since the iPhone, and it's more impressive than the iPhone because the iPhone was much more about interface and this is much more about intelligence. What I believe is that in business you're going to actually see, now, there's a lot of downsides of this thing too. It's wrong all the time. It's overconfident. It sounds like the kind of founder and CEO that would spend a lot of money on office space and for their own ego, which I noticed you said that was kind of funny. And I may or may not be guilty of a big HQ.

But what I do want to say is, I think there's going to be... It's funny, I saw a great tweet from Steven Sinofsky, formerly of Microsoft, about how when a color printer came out, everyone printed shit in color for a while. And then just went back to black and white. So I think you're going to see a lot of summarization that may or may not be relevant. And business points and ChatGPT is a phenomenal bullshitter. So we're going to have all kinds of stuff, extra Slacks and stuff and more meetings. So maybe we can use technology to cut back on that a little bit.

Chris Herd:

Yeah, that's been the most startling thing for me. And I think friends who I've spoken to, where people who are good writers can typically write better things than the output of what ChatGPT is giving them. But as a mechanism to give them intelligence that they can then use where they're smarter, it just cuts down the speed from zero to one so much. And yeah, it feels like a seminal moment, but there's always the risk that these seminal moments come and it's another blockchain. I don't think that's the case here, but.

Howard Lerman:

I don't think that's the case here because I already use ChatGPT probably 15 times a day for different things.

Chris Herd:

Yeah. So I guess maybe final question. I know we're coming up against time. Looking ahead, are there any other trends that you're particularly focused on that you believe are going to have a huge impact over the way we work and live over the next 10 years, beyond just AI

Howard Lerman:

Whew. Well, I mean, I think you're definitely seeing the extinction of traditional offices as we pointed out. And companies are moving their offices to the cloud. And that, by the way, is the way I would really think about this, whether it's a distributor or not, we all moved our work to the cloud, like the productivity work. Now it's time to move where we work. What we work on is in the cloud and now where we work is going to be in the cloud too. And so you see that. But I really think this is, we could talk about other trends, but I think it is irrefutable that we are sitting on the next year of AI. And it is clearly for the next decade that is going to be the thing that's going to dominate the conversation. You're going to see venture funding chasing AI.

I also think it's going to be a little bit of a period, Chris, of a tougher environment in general. We had the zero, we benefited all from the zero interest rate environment for the past decade, where capital was a little bit looser than it's going to be. And so companies are going to be forced to grow efficiently. And they're going to be forced to get profitable and capital won't be in excess. And so we're going to see, I think over the next decade, probably a period where the interest rates are going to be higher. And that means that things that are less speculative, we'll tend to get the nod with companies and innovation. So instead of funding the next blockchain or web three, which is the result of a zero interest rate environment, you're going to fund and see investments in AI, which have very practical applications that save companies money and save people time right away.

Chris Herd:

Well, final question for me, and this is just selfishly a question that I want the answer to. What are the key resources that have been most inspirational to you? Books, articles, podcasts?

Howard Lerman:

Well, besides Against the Herd, I really enjoy this one book that I recommend to everyone and it is called Mindset, and it's by Carolyn Dweck. And the fundamental idea behind Mindset is that, she's a Stanford professor, and the fundamental idea behind Mindset is that your mind is a muscle. And just like you can train your muscle to get stronger and to do more things, you don't have to have a fixed mindset. You can have a growth mindset and your brain, you can get better at getting better. And when people realize that, anything is possibl

Chris Herd:

Well, I think that's a good place to end. And that was a good one. Howard, as always, it's been a pleasure. Appreciate you giving us the time.

Howard Lerman:

Great to see you, Chris.

Chris Herd:
Have a good day.

Howard Lerman: You as well.