Philip Krim and his cofounders wanted their company Casper to change the mattress industry, but even they were “shocked” by its successful launch, the CEO told Business Insider.
“And so from that point on — at first it was very exciting, we were getting our first orders — and it was a little terrifying,” Krim said.
But the fear over the constant feeling of do-or-die forced Krim, now 33, to mature as a leader, and one of his most valuable lessons was about transparency, he said. He’s learned that it’s better to over-communicate as a CEO than risk under-communicating.
Krim — along with Neil Parikh, Jeff Chapin, Gabe Flateman, and Luke Sherwin — launched Casper in April 2014 to bring the direct-to-consumer model made popular by brands like Warby Parker to mattresses.
The idea was to remove the stress and mystery of the bed-buying experience and make Casper a one-stop shop for a premium mattress sent directly to your home, squeezed into a golf bag-sized box that allowed for easy unfolding.
It took off. The company sold $US1 million of product in 28 days. The next year it made $US100 million in revenue, and in 2016 brought in $US200 million. It has 300 employees between its New York headquarters and San Francisco design studio, and the team is expanding. In June, Casper raised $US170 million in a Series C round at a valuation of $US750 million, and Krim told CNBC that the capital will “accelerate” growth leading up to a possible IPO.
“We know that great brands aren’t built in a day and certainly the business is bigger than we anticipated but that just means that we have to now push ourselves to really think bigger than we had ever thought in the beginning,” Krim told Business Insider. “If anything, the challenges get bigger.”
One of these challenges is maintaining a semblance of company culture and focus as the team scales.
“We’ve been very lucky that almost all of our early hires are still with the company,” Krim said, noting that those who have stayed with the company over the last three years have grown alongside the company. That required some careful leadership, based on the principle of transparency.
Krim said that he first learned the advantage that transparency could bring to a CEO when Casper could not keep up with demand in its earliest days. Customers would be promised a shipment within two weeks, for example, and not receive their mattress until six weeks later due to backorders. Aside from having his team address production issues, Krim also had them focus on how they were communicating with both customers and vendors.
As they adjusted, promises were replaced with upfront realistic estimates, and apologetic explanations were sent with gifts to customers affected.
When this approach improved the customer experience, as well as the experience with vendors, Krim realised it should also be applied internally.
To avoid having his most loyal employees feel alienated as their team rapidly doubled in size, Krim decided to start sharing some aspects of high-level growth plans company-wide.
“If you’re planning to bring on senior leaders in six, or 12, or 18 months,” Krim said, “communicate that with the people that will ultimately report to them, so that everyone has an idea as to how you’re going to evolve the org when the timing is right.”
This allows employees to prepare themselves for changes, and gives managers a chance to adapt workflow, if necessary. The last thing Krim wants is a team to walk in one day and see there’s a new manager in charge.
One of the requirements of scaling is building new levels of leadership within a company, and this can mean that a dedicated, talented manager will have to report to a new manager with a different set of talents rather than being promoted into that role. Krim said that sharing long-term hiring plans with all employees significantly reduces the risk of these necessary changes feeling like demotions or lack of recognition.
By letting employees know how he and the leadership team plan on growing over the next year, “people feel bought into the strategy around your organizational design and development.”
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