Behind the Brand®

Jeff Adamson [00:00:05] Welcome to Behind the Brand presented by Neo. We take an inside look at the leaders behind today’s most influential brands. I’m your host, Jeff Adamson. As co-founder of Neo Financial and SkipTheDishes, I’m fascinated by what it takes to build great companies.
On this podcast, we’ll learn from leaders that are reimagining, transforming, and innovating in the financial and retail industries across Canada. Let’s get going!

I am excited to introduce Ray Reddy, Co-Founder and CEO of one of Canada’s foremost consumer brands Ritual. Ray is a self-proclaimed technology optimist and one of Canada’s leading thinkers on product and technology. Ray has started two companies, PushLife which was acquired by Google in 2011, and Ritual.

Founded in 2014, Ritual is a social ordering app that taps networks of colleagues for fast and easy ordering at a variety of local restaurants and coffee shops. With his Ritual co-founders, Ray is solving problems that weren’t being solved and building the future of local commerce.

Welcome to the show, Ray!

Well, to start out, Ray, and this might embarrass you a little bit. I'm extremely excited for this conversation because you're one of the few people that, you know, you get to meet where you have a five minute conversation with you and I'm left thinking about it for weeks on end.

Ray Reddy [00:00:54] Thanks, Jeff, and I appreciate you saying that. That's very complimentary of you and I appreciate you saying that.

Jeff [00:01:00] There's people talking about economic recession. There is talking about pull back. It's hard enough running a company, but what's keeping you optimistic these days?

Ray [00:01:07] It's been a tough two and a half years for us because I think a lot of companies are seeing headwinds now as the recession sets in, but we've been seeing that for two and a half years. So I kind of feel like we've been at this party a long time and a bunch of new companies are just joining it today. So I think we've been forced to kind of remain optimistic and just try to have a perspective on things for a while. In a strange way, for us, heading into a recession is actually probably a net positive for us overall versus the other way around. I think, you know, one of our beliefs as we were building consumer products was you have to deliver value to consumers ideally without increasing price, ideally keeping price the same. So I think, you know, the special equation for consumers is if you can deliver more value at the same price or even at a lower price, and I think that's what we've been really focused on. You read a lot of articles out there about, you know, the price markup on food delivery, and I think people were willing to pay those premiums when they're going through a pandemic. It can often be 50 to 90% more than in-store. Our focus now is actually as people become more price sensitive, I actually think and that's where Ritual really shines and delivers a lot of value both to people and companies. But I think throughout, you know, just to go back to your question, what keeps us optimistic? I think we just believe that if you look at the overall arc of technology local, that consumers increasingly want convenient digital ways of interacting and transacting with local businesses. And we think that that arc is not going to change. Where, in fact, to some degree, in the infancy of all of it, as the world changes, that we have to kind of rethink and reposition yourself along those lines. I think sort of the ground truth hasn't changed, which is there's just so much opportunity for how to enable better digital relationships and better digital transactions between consumers and businesses. And I think there's going to be problems to solve there for decades. I guess what keeps us optimistic is there's just such big problems to solve always, that we try to focus on the opportunity.

Jeff [00:03:10] You're thinking the long game where I think some people might be thinking, all right, we're going to go through a year or two recession here, but that's not going to make people not want to order things online. They're not going to stop wanting things to be digital.

Ray [00:03:22] Yeah, and I think the real things you have to tackle as a leader, these are sometimes very painful things and I'm not trying to make small of them. I do know when you have a slowdown in growth, when people become more price sensitive, it doesn't mean that there are tactical changes you have to make in terms of how you think about your marketing budgets and headcount and people. And we've seen many examples of companies who made a calculated decision to grow because of what they were seeing. And then the world changed again and they had to adapt to it. And so adapting is painful, especially when the easy ones are numbers on a spreadsheet, but the tough ones are when you're talking about real people and I think most leaders take that responsibility very seriously. But you can't, you can't always get them right. And so I guess I view it as like we're very long term optimistic on technology and its ability to change things and make the experience of connecting consumers with businesses better. So I think we, we're big believers in that. I think there's going to be a lot of bumps along the way though, and you need to have the right focus on tactically solving short term problems while still keeping your eye on the ball. And I found that to be a very difficult skill. That's a work in progress.

Jeff [00:04:31] So much is happening in the 24 hour news cycle and you can't be chasing headlines and you can't be doing, you know, the flavor of the day. You know, a lot of leaders will be feeling the pressure of responding to something that's happening in the moment. But at the same time, it's saying like, listen, yeah we acknowledge that these things are happening currently, but we've got to stay focused on our long term bet. And those fundamentals haven't changed. But this isn't your first company, Ritual’s not your first company. You started another company in 2008, which was, you know, in the wake of the last recession. How does this feel different coming through it the second time? And are there any lessons that you are drawing upon this time around that you're like, “I remember what this was like and I can do this again?” And then are there also some that you're like, “No, it's different. And I actually need to ignore what happened previously and do it differently.”

Ray [00:05:17] The things that are easier the second time around tend to be capital and early brand love. I think that I would say that as a first time entrepreneur, often it's almost like you have to gain a lot of credibility. And so it makes the first hires difficult. It makes the first fundraise a bit difficult, at least back in 2008. Because at that point, building a tech company in Canada, like just it's not even the same thing. So I actually don't even know how much of that experience really is even applicable because it feels like an entirely different ecosystem. Raising a million dollar round for even a post revenue company was so challenging back in 2008. And I feel like we're in a world today where that's like a reasonable person, with a decent idea in the last decade kind of raises that based on a PowerPoint presentation. So you know, in some ways it's good, but I think the part that doesn't change is, no amount of capital can buy you product market fit. And I feel like it is like the ultimate leveling of the playing field. You see examples of companies who raise lots of money, who are not successful, and you see examples of people in their basements who bootstrapped and in the end, less of that they’ve built very large companies but I would say that they've solved important problems for consumers and aren't rewarded for it. And so I think that sometimes it's hard to lose track of that. I think a lot of people equate raising capital by being able to hire people as success to some degree. And I think all of those people learn, learn, you know, a painful and hard lesson that capital buys you time. But at the end of the day, you have to actually solve an important problem for somebody and if you don't do that, no amount of capital really can really save you. And I think that's the challenging part of that, is there's also some luck involved. It's arrogant to think, I mean, if you put me in a lot of the same situations, again, like I don't know that you can continually repeat success over and over. I think a few things are true, but I do think that to build large companies, there's definitely an element of luck and timing and getting a lot of that right and it can be daunting.

Jeff [00:07:22] I love the comparison about no amount of money can buy you product market fit. It reminds me of competing in sports. Even in my own life, I went overseas and competed in fairly impoverished parts of the world. I remember one time I was in Cuba competing against athletes that actually had no real equipment or anything at all, and they were incredible world-class athletes. So it doesn't matter if you come from a wealthy nation like Canada, at the end of day, once you're competing, you know, we're all on the same playing field and you can't buy that success.

Ray [00:07:50] It's one of those things where I feel like a lot of capital can actually be like super destructive to leaders and to companies. And you see, I've seen many, many examples of companies who’ve done that where the abundance of capital just ultimately means that they have negative contribution margins. And it's weird that that is such a, I don't know that there's ever been a decade where you would find so many companies as you would find in this decade, where that's been true, because having that much capital allows for things like that to happen and for them to not be caught early. So I guess like, capital when used well is a wonderful tool to have but very often I think people see that as like the solution and I think it just becomes a crutch for not doing all of the other hard work that is required to solve a problem.

Jeff [00:08:53] Yeah, I think it was Sarah Tavel that said you want to use capital as a weapon, not as fuel. When capital is in abundance, you see a lot of people using it as fuel and depending on it and you know, the capital can come and go. You went from PushLife, you were acquired by Google. And I'm really interested in this because a lot of people will go from a small company to a big company or a big company to a small company, and they find that transition quite difficult. What was that like for you going from being an entrepreneur? You know, you're the captain of the ship and then you basically go to the mothership, now. You're one guy in a company of 150,000 people. How did you make that transition? And then how would you think about going it back the other way? Back again to starting your own company again?

Ray [00:09:40] Google was a lot, I mean, there were probably about 20,000 people at that time, which is still very large. The transition to Google was a very positive experience. I think that they really figured out a lot of processes and things that have enabled them to scale and I actually think that I learned a lot in my time there. It was a good trade [laughs]. I contributed value, but I also got a lot out of it. I think one of the biggest ones was Google's one of the few companies that really knows how to like attract and retain world class talent. It's a phrase that's thrown around a lot, but I think it just helps you really calibrate. For me at least, it helped me really calibrate on like what does a good product manager look like? And what does a good engineer look like? I don't mean good based on, maybe, the part of the country that you're in. I mean, what good looks like at a world class level? Because, you know, they truly are and they truly do hire the best in the world. So I think that was a big deal and it's hard to get that. Those are the kinds of things that you can't really read about or learn in school, like you can't really define what a good product manager looks like. But you know one when you meet them. And I think when you meet a few people like that, you start to kind of just pattern match and see what they have in common and how they hired them, how they behave in different situations, good and bad. And I think that being just immersed in that environment, you just get very calibrated on talent, which I found to be, not being in the valley, I found that in 2008, a very hard thing to do in Toronto. The tech talent was just so sparse that oftentimes it was like, “Well, here is an engineer or you know. And I think that was one big one. Google has their culture and they try to infuse the culture with a lot of entrepreneurs. And at least during that period of time, I think Google really didn't want to lose their like startup hustle culture. And so they acquired a lot of companies and actually went out of their way to try to retain and empower those entrepreneurs. Most entrepreneurs became PMs at Google, and I think they found that to be like a nice way of injecting a lot of entrepreneurial energy in the company. You fight different battles with large companies, you know. The good news is there's a lot of capital, so you don't have to, you don't spend your time fundraising and having to spend all of that time with investors. But managing internal stakeholders is like a thing. It's not that one’s better or worse, it's just stakeholder management, but a different set of stakeholders. And you trade the problem of not being on the capital raise treadmill for, you know, a different problem of just knowing how a company works internally and how to get things done and that that takes a while to figure out at every company. I would say like overall, it was a learning experience.

Jeff [00:12:12] Is it universal though? Like I think a lot of people who work at larger companies, they have ideas, they want to get them done. Sometimes they feel constrained that the company takes too long to make decisions.

Ray [00:12:22] The way you would do it in a startup is definitely not the way, I think it's kind of like, it's a different game. And if you try to play the game the way that you would at a startup won’t work. And if you try to play the startup game the way that you would at a large company, that's not going to work either. So I do think that it's definitely a transition, it's a different skill set. And so that's why I think most people who are really good at small company stuff tend to not be really good at large company stuff and vice versa. I think that Google and Amazon, a lot of large companies understand that the only path to not being a large company and having all of the negativity associated with it is you have to proactively break yourself into small companies. You know, and Amazon has their two pizza thing approach and I think even Google has really gone out of their way to really separate properties and give them a lot of independence. And you can view Google as one large company or a hundred different, smaller, small to midsize companies that are also there and and you can get a very, what I’ve at least found is that at Google you can never have the startup experience, but you can definitely have the feel of working at a multi-hundred person company there, and I think a lot of people chose to do that. It certainly wasn't like one large behemoth, and I feel like companies who operate in that way probably struggle, really struggle to retain early stage.

Jeff [00:13:41] Presumably after selling PushLife, working at Google for three and a half years, you weren't desperate for a job. Why go back to Ground Zero again and start from scratch?

Ray [00:13:53] One of the things that I formed a lot of conviction in, while I was at Google, so I actually ran the product team for mobile commerce globally there. And one of the things we spent a lot of time on was local. And I think what was clear was that while retail and travel had gone online a decade or two ago, one of sort of the last remaining large segments of consumer spending that was still very, quote unquote, analog was local. Right? The way that people transacted not just with restaurants but with most local businesses was really quite disconnected from the Internet. And I think we really believed that this last decade was the one where local would go online in a pretty big way. And I think that ended up happening and that the pandemic certainly accelerated it like four or five years. But I think that's what I’d believed. It wasn't clear sort of what the end state would be, but I just really felt like that was a very, very large opportunity there and I was very excited to actually build a product and be a part of that transition. I really enjoy exploring cities. I find that local businesses are, I found I had a lot in common with them. They're entrepreneurs, they're very passionate about their products and they're inventive, they're artisans. And I find that I really relate to them and connect with them and I actually really enjoy spending time. And so I think I was just like naturally drawn to this group of people and just I kind of knew I wasn't sure what the shape of a solution would look like, but I kind of just felt like this is where I want to spend my time. And I think the other thing that was clear to me was that Google had tried a number of things in local and again, like what Google is very good at doing is they'll try, they’ll shut things down and they'll try again and they'll just keep going at it. But at least in the time that I was there, one of the things that I observed was, and this is a good example of a problem that large companies are ill equipped to solve. My conclusion was that local would be won not at a country level, it would be won at a city level or even a neighborhood, because that's just how the nature of local is. You don't have people traveling around the country transacting with small businesses. They tend to be, again not just in s city, they tend to be hyper-local. And large companies really struggle, that idea that you would build a solution that would only work in a city, let alone a country. If you're a company like Google, it's actually really hard to build a product that only works in a single country. And so I just found that there was this like deep incompatibility between how a large global online company thinks about the world. There's just, like, so many constraints with what the shape of a solution has to look like, “It has to be global”. And I just think with that starting point, it's hard to build something from the ground up. So that was kind of my conclusion after a number of conversations, I was just that like, “This just wouldn't, this is not the kind of thing that could organically happen at Google. And that's why I decided that it was more that I wanted to be part of this space and just figured that it could happen inside of a large company, so I should go do it myself.

Jeff [00:16:42] When you were thinking about Ritual then, like Ritual is kind of aggregating together all sorts of different shapes and sizes of restaurants. Did you hyper-localize the product? Or did you rely on just the local supply to really drive that local feel?

Ray [00:16:56] It was both. You know, I think one of our big insights was that you would win at a neighborhood. Especially when it came to, maybe you can divide up local into sort of two things. One is where the store comes to you, which is delivery and one is where you have to go to the store, which has many segments in fact, right? It's health and beauty. It's the vast majority of food is still picked up in store, even if it's digitally ordered. And so we believe that in those examples, it was all about building a very good density of assortment in a very, in a small area. And to kind of do that repeatedly over and over again. So, in fact, I think our success was we didn't actually try to solve the problem at a city level. We solved the problem at a neighborhood level. And we went very, very small in a way that most people would even question in the early days, it seemed like it was too small to talk about neighborhoods. I'm a big believer in trying to test the gist of an idea very fast to build conviction and then double down on it. And we kind of concluded, why do we have to even do a neighborhood? What if we could just do a single office? What if we could simulate having good coverage in an office building and providing those office workers with a more convenient way to access their workday meals? And so we actually didn’t even publish an app in an app store? We actually didn’t even have a name, even for the company. We were going through the process of developing one. And we were able to get our app onto a few hundred employees' phones and with less than 20 restaurants around that building, we proved product market fit. Our perspective was, if you're solving an important problem and delivering convenience then how beautiful the pixels of the app are don't really matter. You just, you know it's sort of a remote control for the real world. As long as it just kind of works you would be able to get the gist of it. And it worked and people loved it, even though it was, in my opinion, a crappy, quickly, it was an app that was built by a handful of people in less than three months. But I think it kind of proved the core concept that if we had good coverage and the right assortment, that this was something that people would do as, would do every day, hence the name Ritual. Ritual actually almost came out of the observation of how people were using our product.

Jeff [00:19:01] At what point did you feel like you had product market fit? Sometimes someone will kind of do what you just did and they'll go out and maybe the product just isn't good enough yet, or they don't maybe know how to position it properly and they don't get enough traction and they actually end up giving up too soon. How did you know that you had enough and there was, you had enough conviction to say, “Hey, I'm going to go raise some capital for this idea.”

Ray [00:19:25] I think some of the hardest questions are ones where there isn't like a binary answer. There's not like you have product market fit or you don’t have product market fit.

Jeff [00:19:35][Laughs] Yeah. It's green or red.

Ray [00:19:35] They're always on a spectrum. And that's what makes them so difficult. And I think no matter how strong your product market fit is, it could always be strong [laughs]. That’s the other problem. And so it's really hard to say. To answer your question honestly, I think that it was probably three years into Ritual. And multiple VC rounds of funding where my personal answer was, “I think we have product market fit.” Because I just tend to be very skeptical of things. And so, even after we raised money, I was just very nervous and probably appropriately skeptical, like, “But it could be better, like not just a little better, like a lot better.” I think that that's not a bad mindset. It's just the recognition that, I think it was Jeff Bezos who said this is “The one thing about building consumer products is that consumers are eternally unhappy.” And no matter what you do, it can be, it can always be a whole lot better because their expectations just keep going up. And so it's a little relentless. And I say you kind of have to enjoy that because it could be a little sadistic otherwise.

Jeff [00:20:37] What are some of those mistakes that you see in product strategy or go-to-market in people who you talk to in the circles that you run in?

Ray [00:20:44] It's this idea that I think that I believed for a long time that product market fit was like an on-off switch. And you think that the problem is even when you achieve it, maintaining it is an entirely different story because the world is changing around it. I think that we've gone through this like multiple times where it can feel really good in a moment in time. And I think again, that the challenge of these things is there's no formula to define it, but you can feel it when you have it. You can feel it in the organic traction that you have. The only way I could describe it is when you have it in a very strong way, it feels like you're pushing a boulder downhill and when you don't have it, it really feels like you’re pushing it uphill. And that's not very helpful, you can only kind of calibrate on that if you've been on both sides of it and you kind of see when you have it, how much easier it is, right? It's almost like you can make a whole bunch of mistakes and things still work and when you don't have it, you can execute so perfectly and it feels like you make so little progress because you're pushing a boulder up a hill. And I think the challenge is that I think there's maybe very rare examples of companies who have just like, such strong product market fit that it's just so obvious and it's so endearing. I think for many companies, in many spaces over a long period of time, you kind of seesaw between those states, right? Because the world changes, innovation happens, competitors emerge, consumer expectations… Actually just if nothing else, consumer expectations change. Just that is enough. Like what was good enough two years ago, just isn't. So I think you're probably in a constant battle with yourself. And I think the mistake is probably to think that once you've achieved it, it's not like a summit. It’s not like “Oh, I've gotten there, now I’m king of the hill and I just have to do a little bit of work to maintain it.” I think it's just as much work to maintain a strong product market fit as it is to achieve over a long period of time.

Jeff [00:22:26] When I think about you, Ray, like you're one of the probably most brilliant product guys that I know. I wonder about the relationships between product engineering and marketing and like, how do you think about those relationships both within your experience at Google, Ritual, PushLife? Is it product led or is it marketing led or is it engineers? How do you get these groups of people who all feel really strongly about their area, to kind of work together and build something that consumers are going to love?

Ray [00:22:53] I’ve observed that the best teams and the best outcomes are when you have mutual respect, but a lot of disagreement and you actually don't have a de facto type, which creates a lot of confusion and chaos. But what it does is that it forces people, like I almost think of it as three legs of the stool, which is engineering, product, and design. Marketing is a part of that but I would say, like at least from our lens of things, we call it EPD, engineering, product, design and those are the three legs of the stool. There's a lot of other considerations that I would say are inputs like marketing, consumer surveys. If those three prongs are strong, they are working well cross-functionally across the company, so they're not doing things in a silo. But I think those three people or those three groups, you need a healthy respect but tension between them. The pragmatic solution versus the problem you're really trying to solve and what does V1 look like and what is good enough for an MVP? How do we test something like just something as simple as that, which is one of the ways that we like to build products, is we like to test and get and get a signal before we double down on it. And so we actually spend a lot of time debating, well, what is a reasonable test? How do you get 80% of the signal with 20% of the work? Which is very tough. Sometimes if you don't, if you don't invest enough, then you get a signal that isn't worthwhile. And if you invest too much, you go too slow and things don't work out. I don't think that there's a formula, but what I've observed as well is when you have strong leads in all of those three areas and they're constantly disagreeing, but in a way that has a mutual respect for their disciplines, you get to an outcome that is better than what any one of them individually would have come up with. And it's almost like if the outcome is what nobody proposed in the first place, that's how you know you got to somewhere good. That's what you strive for. What inevitably happens is in many companies, one leg of that stool can become very strong or the other ones become weak. And so that's how I think you can see companies who tend to be more design-led or product-led or engineering-led. I don't know that that's necessarily an intentional strategy. I think over a long period of time, that just becomes the outcome.

Jeff [00:25:06] Just saying strong beliefs, loosely held.

Ray [00:25:10] Yeah.

Jeff [00:25:10] And that healthy tension between teams but at the same time knowing that hey, we are all working towards the same outcome and if you believe in something enough that you're going to kind of fight for it, but at the same time be willing to back down when you actually think someone's got a really good point and you respect that they know their area and that you actually could be wrong.

Ray [00:25:29] Totally.

Jeff [00:25:30] That's something that comes with experience and it's something I think we're all working on constantly.

Ray [00:25:36] 100%. Yeah, and it's important enough that that's actually in our values. We want people who have a lot of passionate opinions, but you're also willing to let them go and get on board.

Jeff [00:25:49] One of the things that leaders are really, really challenged with today is how we work together in this new world. Walk me through, for a moment here Ray, of what has occurred over the last two and a half years. From your perspective, what's happened?

Ray [00:26:04] It’s a very simple question, a very complex answer that I don't even know that I fully understand. I'm actually very curious about this problem. And I've spent a lot of time, actually and I’ve spoken to a lot of people about this and happy to sort of share my conclusions after, you know, many of these discussions. I’ll start at a surface level and then maybe start to zoom out a bit.

I think we all know what's happened at the surface level, which is the pandemic forced people to work from home, for those who could. And I think that the result of that was a fundamental renegotiation of the relationship between people and their employers. You can use a lot of other words for it, but I think that's at the highest level, that's what's happening. And I think the question is, how is it all going to net out? My conclusion actually, that the funny thing is that there's so many heated discussions about what's right and what's wrong and a bunch of pro-remote work people who are very well organized, who have very loud megaphones on LinkedIn, they can kind of drown out what's going on.

My observation is, anything can work. Let’s just start with that. This idea that there is a right and a wrong, is just wrong. That's like saying that there's a right and a wrong way to build a company. People have different strengths and weaknesses. For example, I'm strong at product, so because of that Ritual tends to be product-oriented and product-centric. I have met many other CEOs and founders who are maybe strong in engineering or strong at sales and marketing. Look, a company has a DNA and to just assume that all companies are the same and a company can just decide one day that they want to be good at something different that they're not, that's a fallacy. Right? And so you would never go to a company who's like, for example, a very strong sales and marketing led company and be like, “Hey, why don't you guys become a product-centric company?” Could they do it? Yes. With enough time, energy and resources, anyone can do anything. Any company could be anything. That's all like academically true. But pragmatically, those shifts just don’t happen.

I think that there's a good parallel to the discussion that's happening right now around remote hybrid and in-office. Which is certain companies, whether it is their founders or their management team, they tend to be very good or that their processes and the way that they work align really, really well with remote. They tend to be written cultures, they tend to be heavy on documentation and process. And so it's been in their DNA from the beginning. This isn't like a new thing that they adapted to. Not to say that you can’t adapt. It's like my previous comment that it's kind of like trying to change the DNA of your company. It's possible. It's really, really hard. And most companies fail. And we've seen examples of companies who had a founder who was for example, a product-driven founder, and they install a new CEO who has a different skill set. And we've seen this story before. It tends to not work because getting large cultures and large groups of people to change how they work is very, very hard. And so I think that's kind of where we are today, is that certain cultures were built in certain ways of working. Our company even, I would say that probably half of the information flow at our company happened through informal information networks of people being around each other. And again, you could say “Is that good or bad”, I don't know. But that's how we worked. And when that gets stripped away, it had a meaningful impact on our velocity, on how, just because we didn't have the official documentation and channels for information to disseminate.

I think what's strange about what's happening right now is that there are a lot of companies who really, their DNA needs people to come together more often. And I don't I don't mean once a week. I actually think that strangely, the companies who I found are struggling the most are the hybrid ones, because I feel like they commit to neither side. Because to make a real, concerted effort to have remote work be great takes exactly that. It takes like a top down commitment. It's kind of like saying we're going to fundamentally change how we work as a company. We are going to change our DNA, that's a big deal. And again, it's not that it’s not possible, it just takes a lot of energy and resources, time, commitment. Conversely, you know, going back to the office has a lot of other challenges. Again as part of this renegotiation between employees and employers of what that all means. I feel like the strange middle ground is actually hybrid because you're neither doing a good job of [being] remote, because you say, “Well, we don't have to get really good at this because we're all going to be in the office. We're going to be in the office once a week or twice a week.

And so you kind of end up with the worst of both, I feel. Where it sounds like you're getting the best of both, but you actually end up with the worst. And again, I’m making very broad generalizations, I'm not saying that’s true for everyone. I think for certain companies, that's worked out but I would say the vast majority of people I talk to, I think this is deceptive. What I want to underscore is that it is not that one is right or one is wrong. I just think that people in companies aren’t substitutable. Certain companies have a DNA, certain CEOs and management teams have a DNA for how they work. And you can't just like, wave a wand and wish that it would be something different. That’s just not how it works. And so I think for some companies who have taken this very seriously, they will make the shift. I think many will fail on making the shift.

But I think the other side of this, too, is you look at the employee side. I actually think it was a net positive that there’s a societal renegotiation of what an employer-employee relationship is. I think that there were many companies who perhaps crossed the line in terms of their expectations of employees, in the past. I don't think it was everyone, I think it was a few. I think the problem now though is, it's this fundamental supposition that people do what's in their best to long-term interest. And I think that we can see across society that that's just not true when it comes to our attitudes around exercise and working out. When it comes to our attitudes around eating healthy food, when it comes to attitudes about climate change. And some of the biggest problems we have as a society, the root cause of most of them is people forgoing what the right long-term thing is for the short-term most convenient thing they can do.

Jeff [00:32:40] Their own self-interest versus the interest of the group. Because you hear a lot of people saying, I work better from home.

Ray [00:32:47] But see, I would challenge even that. Because this idea and I can tell you that, what does that actually mean? I think what I think the true statement is today, I would prefer to work at home. This idea that I work better at home, I think is something that a lot of people think is true and it might be true for short periods of time but I'll give you just a simple example on sales. In theory, you know, we have sales people who call on restaurants and merchants, and it's a job that involves getting a lot of phone calls. And in theory, this is a great example of a job where you should be more productive. In theory, if you don't have commute time, and you can be sitting at home. It has all the checkboxes of, in theory this should be better for an individual. I don't have to leave my house, I don’t have to commute. My house is quiet, so when I have to call I don’t have to deal with office distractions. So in theory it sounds like this is an optimal job for doing ourselves. But what we found was the exact opposite. It's true for 30 days or for 60 days, but in the end, what we found was it's a tough job being on the phone for 6 to 8 hours a day and it's isolating. And when people work in an office and again, I don't mean what people say and what they say in surveys, there's a big difference between what people say and then what the actual results are. So I’m talking about the results. And the results are, our tenure would have been two-three plus years where people were together. There was a sense of camaraderie. There was a sense of ‘We're in this together’. There was a sense of how the pieces all connect. Of like, this is not about sales, it's about advancing the business and I can see the impact it's having on other teams. And I think, and yes people would say, “Well, you can simulate all of that through Slack and good documentation.” I just don't think that's true. At least I don't think that's true today. And what we found now is that a lot of people struggle. They struggle with burnout, even though I wouldn't actually say that they're working more hours or doing anything more. I think it's just the isolating effect of it where it doesn't feel like you are part of a larger team trying to solve a problem on a mission. It feels like you're a cog in the wheel. And I think that that burns people out. You know what I mean? There is a lot of discussion about burnout. But again, like my observation at least is that, when you have a slowdown in productivity and more people complaining about burnout, there's only one thing in common here which is like, we've all changed how we work and it's good for some. There's some very convenient things about it, but I think there's some isolating things about it as well. And we've seen a dramatic drop in tenure and just how difficult these jobs can be on people when they don't come together.

Jeff [00:35:20] Well and I think it's absolutely okay for someone to be not wanting to be in a car commuting an hour, one way to get to work. I can understand why someone wouldn't want to do that.

Ray [00:35:31] Totally.

Jeff [00:35:32] But at the end of the day, if you really believe in, especially for Ritual, if you want to bring communities online and really kind of digitize the local communities. That mission is done by a group of people working together. While you may, in the short term, not want to commute or not want to go to the office. It's harder for other people to work with you, if you're not there. Like you can't Slack your way to a great culture. You can't get great culture through a Zoom call. You don't get that glue that brings everyone together as much when you're at home.

Ray [00:36:01] Yeah, I think you hit the point on the head, right? Which is, we all wear two hats. I wear the human-being hat. As a human who is an employee of a company. If you asked me, “Would it be nice to be able to work in remote destinations or work from a cottage from time to time and not have to spend time commuting?”, like yes, yes to all of those things. And I think this is actually why it's such a struggle for management teams is that we all see the benefits, the individual benefits of remote work and it's wonderful. The challenge is when you put your team leader hat on, and you ask the question you just did. Let's just say that for some people they do actually, let’s just say 10% or 20% of people are very effective working remotely. Well, what about the other 80%? If you're a manager, you're not just responsible for that 20, you're responsible for all of them. I think that's one of the really difficult pieces here, which is you can't just separate a company in that way and say, “Well, you all can work remotely and you all have to come into the office.” It's tough. My sense is that teamwork suffers in a big way, it is possible that the digital tools will catch up. You know, we've made huge strides. So again, this is not one of those, you know I’m not trying to be like a dinosaur and be like “Well, it’s not going to happen, in-person work is necessary.” I think we've made huge strides. I mean, just think about this conversation 10 years ago. Imagine if the pandemic that happened 10 or 15 years ago and we’d be on phone calls with everyone and couldn’t Zoom. Like you can imagine the same debate happening then. It’s like, in theory you could do your work. In theory, you could. It would just be very ineffective.

And we've made a huge stride forward now with, you know, with video communication and we do our work a lot better with Slack and things like that. My sense is that there's probably one more very big requirement, whether that's AR or VR or whatever it is. I’m not sure what it looks like, but I think that we're still quite far away from our digital interactions, feeling anything similar to what they would be in person and I feel like they're magnified in a group.

Jeff [00:38:01] It's to their point though Ray, about the DNA of your company. Like if you are a steady-state, single-digit growth year-over-year company, everything is documented, you have all the systems and processes in place and that's kind of like the DNA of your company. Those companies will naturally be able to adapt to remote work and maybe that will be the dominating model. You can't expect every company to also be like that. You know, like when you started Ritual, you didn't mimic everything after Google and have catered lunches every single day and you didn't, you know, have Fridays off. And because some things just aren't going to make sense. And I think we do need to take a step back and say, like, just because it's right for someone who you saw on LinkedIn, who's working on a beach, you know, in Mexico, their context might be totally different. Their job, their company, different stage, different industry, different DNA of the company. And I think that that does seem to be lost in some of the narrative around the remote work, where it's okay if you're a fully remote company, it's okay if you're not a fully remote company. It just comes down to what's going to work for your specific context at this stage in your company's lifecycle.

Ray [00:39:08] 100% agree, and I think it takes the right question. You said this a few minutes ago. Is the right question what's best for you or what's best for a team of people? And I think this is actually a very, it’s a question that will really divide a group. I think that's what we've tried to focus on, which is and by the way, in none of this do I believe I have the answer. Unfortunately, the deeper you go into this, there's actually more questions that come up than answers. Yeah, but I think the overarching principle that we've tried to do, the thing we've been clear about with our employees and by the way, we’re trying to take the same approach we took with product, which is, ‘let's test things’. I don't have the answer, let's test it. We know what it feels like to be fully remote. We know what it feels like to be hybrid. Let's retest what maybe spending more time in an office would feel like. And by the way, if it doesn’t improve things, that's okay. The crew will do it the way we would do anything else, which is run some experiments, see what it feels like. But the question is, again, we all have to be aligned and what problem we’re trying to solve. And the problem is not what is most convenient for employee X, Y, Z. It is, what enables our team to do their best?

Jeff [00:40:11] And the customer does seem to be being left out of that discussion because ultimately it comes down to what's best for the customer. Are we going to be able to build better products, offer lower prices, more convenience if we're together or remote? And I do think it does kind of get at the fundamental question of is what is right for the individual, what's right for the group, or vice versa?

Ray [00:40:30] Sometimes it is and sometimes it isn't. And that's where leaders have their work cut out. And I think the point I can't emphasize enough is that companies and people are not commodities. We're not, we're not all the same. You said this but it's like I think this is the salient point in all of this. It's like, companies have a DNA. They have people that have certain strengths and weaknesses. Companies have certain strengths and weaknesses. You can wish them to be different, but it doesn't make it so.

Jeff [00:41:08] Yeah, and I think it is, at least we're able to have these conversations where I'm not judging any companies for doing either. You know, if someone wants to go full remote, that's amazing. If they want to go full in person, that's great, too. But at least COVID has forced us to have the discussion about it. And I think a lot of employers are, you know, a lot more open to flexibility.

Ray [00:41:27] Which I think is very positive. Yeah.

Jeff [00:41:29] Yeah, absolutely. And I think that we have gotten accustomed to working from home when necessary and whatever the dominant model will be for an individual company is really what's going to end up making that company successful and I really appreciate your perspective on that, Ray. I think it's very timely too, as a lot more people talk about coming back to the office. It'll be interesting to see kind of what comes out, but more on an individual level, not necessarily on like, okay, all of Toronto is back in the office. It's like, well, yeah, maybe some will and maybe some will stay home.

Ray [00:41:57] You know, the last thing that I would add to this discussion is I think the net positive in this overall is that historically there was always a bit of a supply demand problem with talent and technology, right? There's always been more demand for tech workers than there was supply. And so as a result, most tech companies had a lot of perks and benefits and just treated their employees really well. One of our beliefs all along was, we treat people like adults. These aren't children. You don't have to set all these weird rules. And we've always had a lot of flexibility as a company. We're not going to question why you need to work from home because you know, you have a childcare issue or whatever it is. That's your life and we just trust that in the grand scheme of things, if you're bought-in and you're going to help advance our mission, wonderful. And you do it however you see fit. And most people chose to come together to do that. I think what's all, what's happening now as this renegotiation happens is more and more companies are going to behave like tech companies. So what I mean by that is they're going to value their employees. We’ve already seen that.

Jeff [00:43:01] And that's not a bad thing at all.

Ray [00:43:02] And that's a wonderful thing, in my opinion. Right, where we're seeing companies who never had those types of perks before and didn’t have flexibility. Because when I say treat employees well, that's all I mean, it's treating people like adults, being as thoughtful as you can about the workplace and their experience and things like that. And out of all that is where we've, you know as Ritual, have seen a large opportunity that as more and more companies think about how to redesign their in-office experience, a lot of them are finding that they can't operate their cafeterias anymore because in a hybrid world it's too unpredictable. And a lot of them want software solutions, like easy software solutions to, you know, they understand that employees maybe do a commute now that they didn't have to do it for the last two years. And you know, that's a little inconvenient. And it's like, can we do one extra thing to make your day a little easier? So that maybe you don't have to brown bag a lunch and we’ll give you a lunch when you're at the office and simulate having a cafeteria. You know, this is almost, I would say, like the market evidence of the trend where we’ve signed up hundreds of companies now who want to provide food as a workplace benefit for their employees in a software model, right? They don't want to deal with physical sort of catering and platters and all that other stuff. That's good for us. But it's also, we think, a huge net positive for workers and workplaces. It's creating a lot of opportunity as well.

Jeff [00:44:26] So how does that work Ray? A customer or a company can go to Ritual and they can sign up their company for an employee benefit that gives them access to the Ritual network?

Ray [00:44:37] Yeah, exactly. So what we've kind of built is a software cafeteria, to call it that. I think our observation, again, going back to the neighborhood model is that you don't need a, you don't need a cafe if you're near a food court or you have nearby local businesses that have great coffee and sandwiches and lunch options. Why don't we create a virtual café of all of the nearby businesses around you? We're seeing that companies really, really love the, because of the unpredictability of hybrid, of this period, one of the things that companies really dislike is wasting food or catering a lot of food or having their cafeteria open. And they can't predict how many people are going to be there. So there's a lot of food waste and a lot of cost. And we kind of have a software model where people, employees get credits going when they’re in their office or whatever is the policy that the companies choose. Some choose to give people credits at home when they're working remotely. Some choose to do it when they’re in the office. What we've been working on for the last two years is really supporting groups of people, how to have an amazing experience with food in the workplace for either an individual or groups of people. A lot of companies have a lot of corporate policy around how they want things to be issued, how they want multi-office. A lot of large companies have, you know, a lot of multi-office travel that happens sometimes across cities. And they just want a seamless plan that works for all people across all of their offices, invoiced with one daily bill and they only want to pay for what they use. That's kind of been a big criteria for us.

Jeff [00:46:04] Ray, where can people find you? Where can people find Ritual?

Ray [00:46:08] So, Ritual.co. If you're a restaurant or a consumer or company that’s looking into office benefits, our website has all of that information. And you know, I’m on LinkedIn and happy to connect with anyone out there and yeah.

Jeff [00:46:21] Ray, I'm a big fan of you, big fan of Ritual. Incredibly grateful for having you on. Thanks for coming on the podcast.

Ray [00:46:27] Yeah, of course, Jeff.

Jeff [00:46:28] Thank you for tuning into Behind the Brand presented by Neo. If you enjoyed today's show and are interested in joining Neo, head over to join.neo.cc/podcast50. This link will also be available in the show notes. And don't forget to subscribe on Apple Podcasts or Spotify so you never miss an episode. See you next week.