Management Skills

New on the People Leading People podcast: Mike Katchen of Wealthsimple

28 min read

We’re launching episode five of People Leading People, the Hypercontext podcast! Listen to the episode on Apple PodcastsGoogle PodcastsStitcher or wherever you get your podcasts (be sure to subscribe and give us a review!).

In episode five, we chatted with Mike Katchen, co-founder and CEO of Wealthsimple, a global digital investment service that’s turning the wealth management model on its head by making smart investing easy, low-cost and transparent for everyone. Wealthsimple was founded in 2014 in Toronto, and has grown to 165 employees across three offices in Toronto, New York and London.

We talk to Mike about scaling people management at a rapidly-growing company.

The full episode and transcript are below, but here are a few of our favourite things Mike had to say:

On keeping people aligned to company goals

“When we were smaller it just happens naturally. It’s almost like I got to hang out with everybody on the team, I got to work with the people on the teams on product and marketing. You don’t have to put much thought into it. When we really started to scale the team and I started to get to know people less and less, and started to depend on these levels in the organization to lead the day-to-day operations in the business, setting their structures in place became much more important.” (Skip to 9:45 to listen to this part!)

On weekly “holy time”

“We have a weekly all-hands meeting. That’s the chance I get every week to get up in front of the company and talk about values and vision, celebrate success stories. It’s a half hour every Friday, 165 people. It’s called holy time because the implication is you have to be there, it’s not optional. It’s holy, it’s special.” (Skip to 10:15 to listen to this part!)

"It's a half hour every Friday, 165 people. It's called holy time because the implication is you have to be there, it's not optional. It's holy, it's special." – @mkatchen of @Wealthsimple on their weekly all-hands Click To Tweet

On the management career path

“Not everybody wants to be a manager. I think that traditionally that was the view. That’s how you were successful is, you followed this very structured path where the more people you managed the more successful you are. That’s just old-school thinking and not what everybody wants. You suddenly become a psychologist and a motivator and a leader who’s dealing with people issues. If you love technical issues it’s not necessarily where you’re going to be spending your time on anymore.” (Skip to 20:30 to listen to this part!)

Check out the episode below – and scroll down for a full transcript. Be sure to subscribe and review us in Apple Podcasts or wherever you listen (and we’d love for you to give us a ⭐️⭐️⭐️⭐️⭐️ rating!).

Happy listening!

People Leading People episode 5 | Mike Katchen of Wealthsimple on building amazing teams (transcript)

Jillian Gora: Jill and Brennan here from Hypercontext. Welcome to People Leading People. Today, we’re chatting with Mike Katchen, co-founder of Wealthsimple, a global digital investment service that’s turning the wealth management model on its head. Wealthsimple’s mission is to make smart investing easy, low cost, and transparent for everyone. Welcome Mike.

Mike Katchen: Thanks for having me.

Brennan McEachran: Again, for maybe a few that don’t know, Mike and I now go back a little while.

Mike: Just a couple of months.

Brennan: Two years? I joined this group, basically, because I saw Mike’s name and I was like, “Yeah, I’ll hang out with Mike.” Mike probably didn’t see my name at all, almost like how you do someone a favor and show up. I had the fortunate experience to get to know you and learn about your business and how you manage people. The coolest thing for me has been seeing your business, basically, explode, which has been really cool and I’m sure exhausting for you, but really fun for me to watch from the sidelines.

Mike: Thanks Brennan.

Brennan: Thanks for being here.

Mike: What do we do at this group?

Brennan: I don’t know.

Mike: We talk about our feelings [laughs].

Brennan: Yes, it’s true. It’s the craziest anonymous cult-like thing. I’d describe it as alcoholics anonymous for start-up founders, that’s for sure. It’s great. It’s needed. I’m glad we do it. This has been an interesting thing I’ve been talking about for a while, and some of these conversations that we’ve had in the forum have been incredibly valuable for me as a manager and a leader and I’d like to just spit them out if we can while still being confidential or anonymous and all that fun stuff.

Again, you’re known and Wealthsimple’s known all over the world now and you have the best ads. Maybe you should be in them, but you’re not. Why don’t you tell people a little bit about yourself and how you became the CEO of Wealthsimple.

Mike: Sure. I grew up here in Toronto and never really knew what I wanted to do, almost started a few businesses but never quite had the guts to do it. I ended up when I started my career in consulting, which a mentor of mine convinced me would be a great way to get started, learn some skills that would serve me well later. I worked in that for a few years working for big banks and technology companies on strategy. The best I got out of my consulting years was, I met a few folks that ended up founding a company in California called 1000Memories, which was part of Y Combinator in 2010 before anyone heard of Y Combinator really.

One day they called me and said, “Mike, we got into this thing called YC. We don’t really know what it is, but we’re trying to build a business and if you want an unsolicited offer, come down to California and help us do it.” I moved down to San Francisco, we built a company–

Brennan: There must have been more thought behind that, Mike. What did you–

Mike: Well, the full story, which I’m not usually very public about is I’d actually signed an offer to join another company in Toronto. The reason I signed that offer was, it was in private equity. I was trying to convince myself I was going to do private equity different than everybody else, and the only reason I was doing it was to get close to the CEOs of the portfolio companies and try to learn from them what it was like to build business, to be a leader, to be a manager, before doing it myself.

When I got the call, “Come join us,” it was pretty obvious that that’s what I wanted to be doing, but I had this great fear that I would blackball myself from ever working in Toronto again for reneging on a signed contract. Anyway, I did. I moved to California, we built that business, we sold it. It was actually the process of selling that inspired Wealthsimple. We suddenly had a group of friends that had some money to invest, and they asked me for help. I love investing, I’ve been doing it since I was 12 when my sister entered randomly into a stock picking contest that I won and it just inspired this life-long love of investing for me.

My friends asked me, “Mike, what do we do? Help us figure this out.” I built a simple spreadsheet that showed you how to manage your own money, how to build a portfolio, how to rebalance it. The feedback they gave me was, “Mike, we love this approach, but heck we’re lazy, just do it for us.”

They became the first clients and the first employees and cofounders of Wealthsimple. We’ve been iterated on that problem ever since: how do you make investing, which most people know is important to help you live the life you’ve always dreamed of, to reach your goals long-term, how do you make it simple and accessible through great technology? We’ve been fortunate that that’s resonated with lots of people.

Brennan: Tons of people. It’s been interesting even to see, I remember, I think it was the first TechToronto or one of the first TechTorontos, and you showed this spreadsheet or something. I was like, “Oh my God,” that’s like early beginning days. The cool thing for me and I’m a Wealthsimple customer, user–

Mike: Thanks for your business.

Brennan: –and convincing the team to join is, I think you’ve really turned investing on its head. Where most of us think of we want to retire one day, and we got to put money aside and we don’t really know how to do it. Wall Street is probably where money should go but it’s scary and a lot of people are down on the training floor, throwing hand signals at each other, which is totally wrong, and made it something that’s approachable and normal and simple.

It’s been really cool to see that message just resonate and for me the funny thing, and maybe it’s not funny for you, I get the privilege of being on the sidelines of your business, is seeing the big banks and firms take notice and chase you around town with billboards and–

Mike: It’s cool. When we launched the business, most of the current traditional investment industry was pretty dismissive. “This is a cute idea but they’ll never really get anywhere because we’re the banks, and everybody trusts the banks.” Today, we have more than 70,000 Canadian clients, more than $2 billion in assets, and some of the banks have entered our space directly or are competing with us, but we’ve still managed to maintain – the latest numbers I’ve seen there’s like an 80% share of the clients in the space in Canada. It’s been pretty cool.

Brennan: You have this idea, you want to grow really, really quickly, thinking big about it and you know you’re going to have to go on aggressively to customers. One of the things that I think I’ve learned the hard way is relinquishing a little bit of control so that you can grow faster. You must have done it, and in my head, it would have been a crazy pace to go from 20 people to 150 in like 2 years was something crazy. What was that process like, as you crossed the 10 people mark, the 30 people, the 100 people? How many people are you now?

Mike: I think the latest we’re about 165 across three offices; we’re in Toronto, New York and London. It’s been tough. The toughest part for us is you often hear founders that have built really great businesses you admire talk about how the early years are all about get your culture right, solidify your culture, get the core working and then scale. We didn’t really have time for that. We’ve had to build the company in parallel to building the team, so figuring it out along the way. I think the only constant that has been clear for me, is change. I have a different job fundamentally every six months and my co-founders and our leadership team feel the same way.

Brennan: What would you say your job is now at 160 people?

Mike: Great question.

Brennan: Right now, you’re probably figuring out what your job is, six months ago what was your job?

Mike: I try to split my time these days between three broad areas of the business. One would be the company, so company building. Recruiting talent, culture, values, spending time with the team and ensuring that that part of the organization is humming and people know where we’re going and are excited about the mission and all that really important stuff. The second piece I try to spend time on is, the outward facing stuff. Fundraising, spending time with our shareholders and stakeholders, press and things like that, trying to be brand ambassador for the business which has really been a helpful driver of growth for us. That’s a second category.

The third I like to think of is, everybody in the company knows how to double the size of the company. That’s what everybody does every single day, but how do we 10X the business? Very few people have the bandwidth to make time for that kind of problem-solving. I try to spend time in that area and place bets that may take years to pay off, but if nobody did, we wouldn’t have those channels when we need them two or three years from now.

Jillian: You’re talking about constant change and one of the things that you try to do is keep people aligned to the vision and mission, all that. What are the things that you do now to help keep people aligned, and understanding how that impacts your greater goals? How has that changed since you were a smaller company?

Mike: I’d say when we were smaller it just happens naturally. It’s almost like I got to hang out with everybody on the team, I got to work with the people on the team on product and marketing. You don’t have to put much thought into it. When we really started to scale the team and I started to get to know people less and less and started to depend on these levels in the organization to lead the day-to-day operations in the business, setting their structures in place became much more important.

A few that have been helpful. We have a weekly all-hands meeting which we’ve had to iterate on the content, the design, when it is, and many times to make sure it stays useful and helpful and relevant. That’s the chance I get every week to get up in front of the company and talk about values and vision, celebrate success stories. We’ve actually started rotating it, so it’s not just me that leads it, but it’s actually anyone on our leadership team which I think people have really appreciated.

Brennan: You have three offices, right?

Mike: Yes

Brennan: Do you do three different ones or is it have one big video conference?

Mike: We’ve invested probably too much time and energy and money in trying to build a video conferencing. It feels like everybody’s in one room, though video conferencing always sucks. New York and London, I think, do always miss a little something of the special sauce, but we try to also make sure people have the ability to travel. A lot of people move between offices quite regularly to ensure there is that connectivity.

Brennan: Just to jump right into it. That all-hands, we do one here too, which my agenda is different every single time. Do you have a stock what you go through in order? How’s that involved, what do you cover? What’s important? How long is it actually?

Mike: It’s a half hour every Friday, 165 people, it’s called holy time because the implication is you have to be there, it’s not optional. It’s holy, it’s special.

Brennan: It’s a ritual.

Mike: The contents change. Today we spent time on news and updates in the company that are relevant. Metrics, we’re really metrics driven so we talked about how we’re doing against our goals. We spend time on a few maybe more distinctive things. One is FUD, which is a concept we stole from Stripe: fear, uncertainty and doubt, gives anybody in the company the chance to air what we call an existential concern about the business. The defining part is, it doesn’t get a response. It’s cool. You just let people say things that are on their minds that are concerning and you just let it linger.

Brennan: You must have started that when you were small. That’s not something you start at 150 people.

Mike: We probably started it at about 50 people. We try to spend about five or 10 minutes every week on an AUA, an Ask Us Anything, where you can ask the founders anything you want. Then we do kudos. Kudos is celebrating values. We have five values which we’ve tried really to make something that aren’t just posters but are things we live. The way we do that is we celebrate people that have lived up to them. We hire against them, fire against them and make it part of the company conversation.

Jillian: Back on this FUD thing, I think that’s an interesting concept. Two questions. I personally would think that could be intimidating especially as the company grows larger to just stand up and say, “This is the thing that I’m worried about,” and maybe other people aren’t worried about that because they know something I don’t know. I’m putting myself out on a limb to say this. Do you notice that people get nervous about it?

Mike: For sure, but I would say we care deeply about transparency. We want people to feel that it’s okay to have those concerns. Example, our board documents are made accessible to everybody in the company. We feel like Slack is generally open. We try not to use email, but then the concept behind it is smart people when given access to information make smarter decisions.

We try to have this culture where it’s okay to ask tough questions or to be concerned and there are no repercussions for doing that. It’s funny. I was debating with a co-founder last night because we actually – To address that, because for sure still people feel a little bit uncomfortable. We made it possible to submit an anonymous FUD.

Jillian: AFUD. [laughter]

Mike: We were debating its merits because on the one hand maybe you get more FUD, on the other hand, it undermines that culture you’re trying to create where you feel comfortable saying things. You don’t want people to perceive FUD as like internet trolling, where it just places the bash ideas or concepts.

Jillian: It could bring down morale because somebody else could just say, “Yes, that’s weird and we’re not addressing it.”

Mike: I’m not sure there’s a perfect answer, but for us, people appreciate that they can do that. I think there’s a value in that to the culture.

Jillian: In terms of the not answering and letting things linger, I would think that could be very interesting, but also could become frustrating for certain people if you’re saying, “I’m trying to tell you that something needs to change and I don’t maybe have the answer but I want to know that it’s being worked on.” Are there other mechanisms in place to follow up with these people or to let everyone know what’s being done with these existential problems?

Mike: Yes. That is an issue. I would say that the way it’s evolved for us, we introduced about six months ago in addition to FUD an Ask Us Anything section which if you’re looking for a response or you want one of us to talk about “how are you going to react to this,” that’s your place to really get that answer. FUD is shared and sometimes it is really important for us to follow up on it. We make sure to do it. It’s just we don’t do it in the meeting.

Brennan: Write an article or better write something about it. You mentioned there that you really don’t want to create a culture where– or you really want to create a culture where anyone can ask anything and it’s fine. It can be uncomfortable, it can be whatever and it’s okay. Then just prior to that, you mentioned you’re now starting to rely on the layers of management in between you and your employees to actually grow the company and manage the company.

How do you find those managers that also feel the same way? Is that something that is actually becoming easy or was always been easy? The first part of your job, recruiting, what have you learned from that experience?

Mike: I spent a good part of our early days running recruiting myself. I would say until we were about 45 people, I led recruiting at Wealthsimple and I think that was really important. For us, we try to find people that will fit into our culture and believe in our values. This whole values thing, I think it was easy– Before I was a founder, I probably didn’t care enough about values, but it’s clear that done correctly, a really helpful and important way to build a business, is to define your values and live them.

For us, finding great managers and leaders in the business has been around, are these people that represent our values, that are going to live up to them, that are going to do it in ways that are better than we can ourselves? That’s been our strategy: hire people that are smarter than us, to take all pieces of the business and give them all the support in the world to do the very best work of their lives. That’s the way we think about recruiting.

Brennan: Yes, and by default let them be themselves, which is smart, talented people.

Jillian: As somebody who is in the process of becoming a Wealthsimple customer–

Mike: Thank you for your business.

Jillian: Yes. Just going all the steps, it is a nerve-wracking thing for people who don’t have a ton of experience with investing and who’ve just let the big banks do what they do because it’s easy to trust a big bank because you know that they exist, you’ve heard of them, they have a track record. I’d imagine that in departments like customer success and in those more customer-facing roles, are you also looking for people with experience managing wealth or is it more of we teach you the fundamentals and our tool really does the heavy lifting and we’re here to provide amazing customer support and we’re looking for people who have that customer experience?

Mike: It’s a mix. In our customer support team, there are customer support representatives and then there are also financial advisors. Part of our job when clients call is making sure that if they’re looking for financial advice that they get routed to the right place, but if they’re looking for more technical support someone else can handle that. Actually, we invest a lot in training. One of the career trajectories or paths for our customer support team, that’s a whole new thing, by the way, creating career paths, is to become a financial advisor. We will give you the support and training required to help you pass your exams and actually become a licensed advisor if that’s something that’s interesting to you.

Jillian: That’s very cool.

Brennan: Super cool. You brought it up yourself, career paths. When did that become an urgent need for Wealthsimple and how did you build it out? What did you learn in that process?

Mike: I don’t think that became important by size of team, I think that became important by tenure. After someone had been around for a year or two years, they start asking themselves, what’s my next challenge and it becomes really important. We’ve learned to create that challenge and opportunity at the company because you don’t want your best people that have been doing great work and have been trained up in your way of doing things to leave.

When you’re growing fast, you’re fortunate to have all sorts of cool opportunities both more traditional like the next stage in your career is to become a manager or a senior manager, or totally different parts of the business if that’s interesting to you I’d say probably around year two for us is when that really started becoming important.

Brennan: The interesting thing I’ve always thought about career paths is, by default, if you’re not really purposeful about them it becomes the track of management. It’s like you’re a support person, now you’re a team lead for support people, now you manage support people–

Mike: Made that mistake, sure did.

Brennan: Walk me through that. What was the mistake you learned there and what did you do to not do that again?

Mike: Not everybody wants to be a manager. I think that traditionally that was the view. That’s how you were successful is, you followed this very structured path where the more people you managed the more successful you are. That’s just old-school thinking and not what everybody wants. A perfect example on our engineering team, our best engineers that love to code, that if they had their way all they’d do all day is code. We said, “You’re doing an amazing job coding, why don’t you become a manager? You’re doing so well at this, why don’t you do something entirely different?”

Brennan: Management, especially for engineers, salespeople, it’s a career change. It’s basically a career change and we think of it as–

Mike: You suddenly become a psychologist and a motivator and a leader who’s dealing with people issues. If you love technical issues it’s not necessarily where you’re going to be spending your time on anymore. We had some people do that and it was clear that they were very unhappy with that path so we backtracked and we created–

Brennan: Can you backtrack on those people?

Mike: Yes. This all goes back to this culture you create. If you have a culture where it’s okay to make mistakes and people are okay to talk about it, “Hey, I have FUD. I don’t like what I’m doing right now and I loved what I was doing a month ago.”

Jillian: That’s a brave FUD.

Brennan: That’s a brave engineer leader you have.

Mike: Yes maybe. I think that’s just part of the culture we’re trying to create. I wouldn’t want that just that’s he’s brave, I just want that to be honest and part of a conversation. We backtracked and created the principal engineering role which now we have a whole bunch of our technical team move into, which is you can have the same career trajectory, the same advancement in compensation, the same advancement in terms of stature and status and visibility and seniority. Not that we care about hierarchy, but just the roles that feel like you’re progressing in your career through that path rather than having to manage people. That’s been a really powerful change for us and we’ve implemented it not just there, but in other parts of the business too.

Jillian: That’s actually so interesting because I feel like I’m more on the first-time manager just kind getting to that point where I’m starting to manage people and not just do my own job. My friends and I talk about that all the time. I have a lot of friends who work in advertising who are amazing art directors or amazing writers, but they don’t want to be creative directors because then all of a sudden 100% of your time is spent in meetings and talking to the client and negotiating and doing all these things.

Those aren’t the skills that you have been working on for the past 10 years and really trying to perfect. I think that’s really cool that you guys are doing that. That’s something that I think a lot of people are looking for.

Mike: Yes. Even if you do want to go the management route, you need to brace yourself for it. I love product, I love doing product. I don’t get to do product anymore. I spend a lot of my time in that firsthand bucket of team and spending time with people, hearing about people’s problems. Unless you’re okay with that and want that – that’s part of how you build a great company – for me that’s important and I do enjoy it. Thank God my mom’s a psychologist. I grew up around talking about your feelings, all your problems, but you’ve got to know that that’s what you’re getting yourself into.

Brennan: For you, 30% of your time is dealing with random problems, most of them people problems.

Jillian: All right, cool. We are at the five-minute mark which means it’s time for our secret question; best part of the show. Mike, you’ve got three cue cards in front of you, labeled one two and three. I want you to pick one. You can’t see what questions are under it just so the audience knows. I want you to read the question out and give us your most honest answer.

Mike: I’m picking question three. What’s the hardest conversation you’ve had with an employee?

Brennan: You did it to yourself.

Mike: It did it to myself.

Jillian: You do not need to name names.

Brennan: Please don’t.

Mike: I think one of the hardest things that happens when you scale an organization is, you start a business and your first few teammates that you’re working with become like family. You spend all day with them, you’re trying to wheel something into existence against all the odds, and you develop this just deep caring for those people. Maybe this is the cliché example, but as you build a company sometimes people are no longer in the right roles, and sometimes people don’t scale in the same way or at the same speed as the business or don’t like the direction that you’re going as a business.

The hardest conversations I’ve had to have, have been around that, have been around someone that was so capable or is so capable and is doing an awesome job, has had such meaningful important contributions to the business, you wouldn’t be here without them, and yet for whatever reason they’re struggling with this next change or this next scale up. In a couple of cases, it hasn’t worked out and it was absolutely heartbreaking; having that conversation with someone who feels like family and having to part ways. Those have been the absolute hardest conversations I’ve had to have.

Brennan: I’m going to push you to go, you’re having coffee with the founder, you’re having coffee with a manager or leader and they ask, “Hey, I’m about to have one of these heartfelt painful conversations. How do I bring it up? Where do I sit? What do I say? How do I push me through it? What do I do?”

Mike: I’d say of the things I’ve learned one is, you usually feel worse going into the conversation than you do on the other side, trust that. Don’t put off the conversation, which I think a lot of people tend to do because they have so much fear about it. Second is, be honest and be upfront. Don’t ramble, be direct. Unfortunately, if you have to let someone go, it’s almost that’s the first thing that should come out your mouth and you should do it with all the empathy and sincerity in the world and be honest.

In general, I think that formula is the one that works and they’re not easy conversations, but they’ll generally go better than you think. If you’re at the stage where that has to happen, often it’s not a surprise to someone or they’re unhappy because obviously, something’s not working. If you care about them, the answer isn’t, “Hey, this isn’t working out, go away.” It’s, “I care about you and I want you to be successful. Here are some things that I’m willing to do and I’m going to invest in to be helpful and supportive.”

Brennan: I’ll keep pushing. What are those things that you think are worthwhile for an average person to offer?

Mike: To be supportive?

Brennan: Yes, to be supportive. If the answer isn’t, “Hey, we’re parting ways,” what are some of the other answers?

Mike: Often, even when it is parting ways, some of the things we’ve done to be supportive include career counseling. We bring someone in to come and do a career assessment, give suggestions on where a next path would be. Introducing the recruiters that we respect that can help them find a position and marry that with a reference. A lot of these people are strong. For us, in our case, we’re incredibly strong performers, just not necessarily in the right role at that time. I have no problem giving the most glowing references in the world and being as the part of is possible for these folks to be successful where they end up. That doesn’t mean it’s not heartbreaking.

Brennan: Yes, it’s still heartbreaking, it still sucks. Awesome.

Jillian: We’re just put to wrap up, but before we do, we wanted to hand the mic over to you for 30 seconds. If there’s a pitch you want to make or any last words you want to leave us with, it’s over to you.

Mike: My pitch is, everybody should be a Wealthsimple customer. My true pitch is, we’re talking to people that care about leadership and management. I think that it’s never been a better time to be an entrepreneur whether or not you’re a founder or working in a start-up. I think we’re in the most incredible time to try and make a difference by solving big problems and by doing them the businesses that we build.

My pitch is that everybody should go, be an entrepreneur and go solve problems. There’s never been more problems than need solving, and to think big about the problems you’re solving. One of the things I care about as a Canadian, which may not be relevant for everybody that’s listening but for Canadians is, we need to go build more global companies. Think big about the businesses we’re building and go have fun.

Jillian: Amen. That’s very inspiring. Thanks so much for your time, Mike.

Mike: Sure.