Many GC’s in the VC-backed community report to CEO’s with heightened visions for the future and for their company. As a result, General Counsels often find themselves performing a difficult balancing act between supporting their CEO and protecting their company. This Fireside with Sydney goes into the topic of managing the nuances of a visionary CEO, but also how to act as a visionary to your outside counsel to enable the CEO vision.
Though I’ve worked for a range of different tech companies, the common thread is that every single one has been led by visionary founders. Google, Square, Rent the Runway, and Gemini all have founders or co-founders who were leading or heavily involved in the management of the company when I was there -- and in some cases, to this day. There is something special about being a key advisor to someone who is as invested in the success of their business as its founders are. And I have great respect for anyone who creates a thriving company out of their own idea -- particularly Jenn Hyman and Jenny Fleiss, who conceived of and raised capital for Rent the Runway at a time when few women were getting venture capital funding.
All of these companies have taken on established systems in huge industries and completely transformed them. Square and Gemini in particular are doing so in heavily regulated industries with a number of entrenched, legacy players. The audacity of taking on that challenge is incredibly inspiring, and the legal issues associated with the business tend to be front and center, which is fun for me because I like how innovative this forces lawyers to be. Existing law is usually not a good fit for disrupters’ products and services, so we as attorneys have to be creative in applying that law and tenacious in molding and changing it. Maybe it’s the contrarian in me, but I like that challenge. It’s never been done before? Great: we’re going to do it.
All of the companies I mentioned above have strong mission statements and a very specific culture. Sometimes the mission evolves as the company grows in size and complexity, but by and large, the founders imprint their essential vision of the mission and energy of the company early on and stick with it. At Square, for example, Jack Dorsey was, and is, relentlessly focused on a mission of economic empowerment. I knew that every project I worked on at Square was in service of giving more people access to the payments and financial tools that were previously difficult or impossible for our customers to access. The ability to take credit card payments, send funds easily through email or an app, get access to working capital, promote a business: Square’s mission was and is to make those tools as available to a small coffee cart as they are to Starbucks. We repeated the mission at every company all-hands, and it was front and center in our external communications. For example, at Square’s IPO, the banner across the front of the NYSE showcased the logos of the merchants who had used our products, with Square’s logo tiny in the middle. Because Jack and the rest of the team repeated it so often internally and externally, that mission flowed into our products, it was always at the front of my mind, and I’m confident that the rest of the company felt that way, too.
To start a disruptive company, I think you have to be somewhat disconnected from reality. You have to envision something that doesn’t exist and that flies in the face of existing systems, some of which are deeply entrenched. So yes, a strong vision perhaps necessarily disconnects visionaries from reality. But if you can’t see the steps between the current state of the industry or the world and the end state of your vision, that’s where the problems arise. In my experience working with visionary CEOs and founders, the most effective of them are relentlessly, optimistically focused on their vision but also see the gulf between the world today and the world they want to create. Those founders work collaboratively with the management teams they have built, including their General Counsels, to bridge the gap.
At Gemini, our mission is to use crypto to empower the individual, but we often talk about building a bridge to the future of money. I like that analogy, because there are steps we need to take to move the industry and our customers away from the way they are accustomed to transacting and storing value toward the way it will be done when blockchain technology is dominant. Gemini’s founders understand that. If they didn’t see both their vision and the reality of the systems and regulations we’re dealing with today, we wouldn’t make progress.
I as General Counsel have to buy into the vision and inspire my team to do so, too. When my CEO and President see that I believe in the vision and that everything my team is doing is in service of bringing it about, they’re more receptive to the legal concerns we raise. There is almost nothing less helpful than raising concerns for the sake of doing it. General Counsels should raise concerns that threaten the future of the business or the product or service -- without a business, no founder can realize her vision -- and frame the issue that way. I also tell my teams “no problems without solutions,” and I try to live by that mantra. Sometimes the problem is urgent or thorny and you have to raise it without having completely worked through how to solve it, and it’s also necessary to take into account your founders’ and peers’ ideas for possible fixes. But just the exercise of coming up with a potential solution helps me to communicate the problem in an optimistic manner.
At one point at Gemini, we hit a roadblock with a regulator, and being unable to launch the product without regulatory approval was going to have a pretty profound impact on our ability to meet our financial goals. I couldn’t force the regulator to approve us -- that’s almost always impossible. But I could think through and articulate all of the steps that the company could take to persuade the regulator that it should be comfortable with our product. That’s what I did, and the conversation with the founders was much more constructive and productive than it would have been had I just told them “this can’t be done.”
It can be challenging to find outside counsel who buys into a disruptive company’s vision and wants to partner with me to bring that vision to life. I find that it’s important to identify outside lawyers who are experts in their subject matter -- who can go all the way to the ocean floor on a topic -- and who are passionate about the topic. When a legal expert is both of these things, they are usually more open to being creative and brainstorming with me and with my team. For example, when counsel knows a statute and the related guidance so well that she knows where the gaps and ambiguities are, we can leverage that knowledge to suggest interpretations or changes that allow us to launch innovative products.
Anyone can read what a statute says on its face. I don’t need an outside expert to do that. The valuable experts also know all the guidance, what is happening generally in the industry -- how our competitors and peers are interpreting the law, and how the relevant regulators think -- is this a hot-button issue for the decision-maker? Is there a champion elsewhere in the agency who can be helpful? Of particular value is outside counsel who has been in-house and/or has been a regulator himself.
I try to model the “no problems without solutions” approach for outside counsel to inspire them to do the same for me: tell me where the challenges are, but also come prepared with some work-arounds. I also ask, what is the worst-case scenario if we proceed where the law is unclear or contrary to what we want to do? What is the most likely scenario? How confident can we be that enforcement risk is high or low and that the penalty is light or punishing? It’s not my job to tell the CEO that we can’t do something. It’s my job to tell her what could happen if we do it, and if at all possible, to give her a menu of alternatives. I communicate and expect the same from the outside counsel who advises me and empowers me to bring about my founders’ vision.