The Best Team Wins Podcast: Kayne Grau, CEO and Founder of Drivin

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Adam Robinson: Welcome to the Best Team Wins podcast where we feature entrepreneurs and business leaders whose exceptional approach to the people side of their business has lead to incredible results. My name is Adam Robinson and for the next 25 minutes I’ll be your host as we explore how to build your business through better hiring. Today we have Kayne Grau, co-founder and CEO of Drivin, founded in 2015. They are a 50 employee company based in Chicago, Illinois and have raised approximately $26 million in fundings. Kayne, we’re pumped to have you on the program today. Thanks for being here.

 

Kayne Grau: Hey, thanks Adam. I appreciate you having me on the show.

 

Adam Robinson: We know the best learning happens through sharing the really experiences from fellow entrepreneurs and so Kayne, we’re excited a lot from you today, but first as is the tradition here on the Best Teams Win podcast, we always start off on the right foot, that’s the best business or personal news that happened to you in the last seven days. Kayne, what is your right foot for last week?

 

Kayne Grau: Let’s see, a lot going on. We rolled out a new product called Marketplace and we’ve been very excited about the traction there. We’ve got a real high employee engagement, ending the year on a strong note. Holiday party on Wednesday to celebrate a lot of success. We’re very excited of what we’ve accomplished in 2016.

 

Adam Robinson: Excellent, hopefully no early meetings on Thursday.

 

Kayne Grau: No, no!

 

Adam Robinson: That’s good. Well let’s jump right in and start off quickly, tell us about Drivin. What are you guys up to?

 

Kayne Grau: Yeah. We started the company in late 2014, but most of the traction came in ’15 and ’16 where we were set out to really kind of redefine the way dealers acquire used inventory. It’s a pure play business to business model. Our goal is to really help dealers source acquire and sell inventory. We think that the days of a wholesaler, the days of using a traditional auction need to be redefined and we really want to allow the dealer to locate quality of inventory in a more efficient manner than they have been able to do to date and then also dispose inventory through us and really allow us to remarket that inventory across the United States in desirable markets.

 

Adam Robinson: Just to give our listeners some perspective, what’s the annual dollar volume that flows through acquiring used car inventory at dealerships? Give our listeners a sense for just how big this is.

 

Kayne Grau: The entire market’s $700 billion, but really sort of what is going through the dealer ecosystem today is about $500 billion a year. I mean it’s a lot of volume, that’s both from the new and used side. Tens of millions of cars are really kind of going through the used channel and we really think that either through a company like Drivin, obviously through the auction which we know are going to be around, and through just a trade-in network, there’s a lot of volume. We know that dealers will continue to pursue consumer trade-ins. We also know that they’ll use the auction the way it’s set up today, but there’s definitely room for disruption and there’s definitely a room for efficiency within the marketplace today.

 

Adam Robinson: That’s incredible. Most people listening would be pretty excited to be selling into a $500 billion market opportunity, that’s just staggering how big it is.

 

Kayne Grau: Second only to real estate. It’s a very big market.

 

Adam Robinson: Big opportunity. Let’s talk about the people side of your business. You’re a funded company, you have about 30 employees. Our audience is always asking to hear more about how organizations are organized at the top. Let’s start at the top. Walk us through your leadership team. When you have your weekly meetings, what roles are sitting around the table? How do you run this thing?

 

Kayne Grau: Yeah. Actually, we’re up to 50 employees. The way it’s set up today, it’s a pretty traditional organization. We have a senior leadership team that meets on a weekly basis. I have a heavy, obviously, reliance on the co-founder who’s built the company with me, Justin Mahlik. He really controls our operation, which is a very large part of our organization, a large part of our success. The big differentiator with Drivin is that we take acquisition the vehicle from the seller and we take chain of title, we do payment, we do transportation to the buying dealer. Now we obviously utilize some partners within that ecosystem, but all of those partners have to be managed. Justin has a very difficult and challenging job working within that operational framework. He has a Vice President of Operations that’s also at the leadership table. We have a head of finance and then we have a head of sales, a head of marketing and a head of technology, so pretty traditional organization.

 

Another part that’s quite interesting and ever changing within that team is our data science team. We have two PhDs on staff. We put a lot of time and attention into our intellectual capital, or our proprietary algorithms, that product team and that data science team is extremely important to the way that we service our dealers today.

 

Adam Robinson: How is the way that you organize the company perhaps changed over your three years?

 

Kayne Grau: Yeah. When we launched the company, it’s funny, we launched in a broker model. We then quickly moved into being an acquirer and a business process outsourcer and acquiring the vehicles, which really sort of changed the model fundamentally so that operations team that I was telling you about has become so critical. Then later this year, we released Marketplace and now we’ve really become sort of a SaaS play in the sense of allowing dealers now to be able to come in and do some self service, which we didn’t have available to us earlier in the lifecycle. With the introduction of Marketplace, it’s really sort of changed our product positioning, our marketing positioning. Although we still offer the high touch service via our sales channel, it really has become a much more product oriented organization.

 

Adam Robinson: Okay. As that shift focuses the product, I’m sure it changes the type of folks that you’re trying to recruit and hire. Let’s say I’m a perspective employee for Drivin. What’s your 30 second pitch. If you’re talking to me versus all the other things I might have going on, why am I getting excited about working for your organization?

 

Kayne Grau: Let’s take an industry that has not changed in many years, if not tens or dozens of years. Even with the internet, I think there is a massive room for disruption. Take a $500 billion industry and insert ourselves to be able disrupt auctions, to be able to disrupt the wholesaler, really sort of leverage data science, leverage data that has never been seen in an industry before and really have some innovative products, something very exciting to offer to our dealer partners. I think when you really come into our building, you see the flow. You see the energy. You really sort of see the vibe of Drivin. It’s pretty spectacular what we’re building in such a short period of time.

 

Adam Robinson: From the core value standpoint, you get people in the door and show them a little bit of the energy of the place, which I’ve seen it, it’s pretty awesome. Talk about the values of the business and how you manage the cultural aspect of growing a business as fast as you are over there.

 

Kayne Grau: Yeah. We don’t … I’m not saying this is right or wrong, but there’s not necessarily published core values. We don’t have them hanging on the wall, but what we do discuss on a monthly basis at every company all-meeting is four sort of pillars, I call, of the organization.

 

Number one and most important is the employee. We constantly talk about what are introducing into the organization that helps the employee? Whether that’s employee engagement, that’s employee retention, but really focusing on the employee. The second thing we talk about is what are we doing to differentiate ourselves from our competitors and what are we doing to add value to our dealer partners. I think it’s very important that we always remain focused on the end customer or the end partner, which is our dealer. The third thing we talk about is innovation. We talk about what is happening in our product teams. We talk about what just is happening in the industry in general, who we need to keep our eye on. What are we doing internally to really, again, differentiate ourselves? The fourth thing is we talk about how are we fiscally responsible to our shareholders. We talk about finance, but we really talk about sort of the good news and the bad news. I love transparency. I love telling the employees everything that’s going on a given basis. We really just sort of glaze over, talk about the financials and what’s really sort of happening within the organization on a month to month basis.

 

Adam Robinson: You talk about … Yeah, you keep referring to monthly. Is this some kind of a town hall or is it a-

 

Kayne Grau: Yep, exactly.

 

Adam Robinson: Okay. Take us through it.

 

Kayne Grau: A town hall meeting, everybody’s invited. Because we have a lot of remote employees, we have people in the field, it’s very interactive in the sense that it’s a webinar. We make it very interactive for them so that they have a voice. I’m super passionate about trying to integrate the remote employees, they’re obviously included. Yeah, it’s a very typical town hall meeting.

 

Adam Robinson: Yeah. We have a similar model at Hireology with a remote workforce, mainly in the product and engineering side. Talk about the percentage of your team that is working outside the office.

 

Kayne Grau: Yeah. We have six sales associates that are in different markets across the United States, primarily the Northeast and the Midwest. Actually our Vice President of Sales, who is a key part of our entire organization and leadership team, she’s actually based in Charlotte. As with any organization, I think you find the challenges with working with remote employees. We try to put as much time and attention into teleconference or video conferencing and making sure that they’re part of what’s happening in the day-to-day of corporate. It’s something really fun. We did a really large campaign to drive higher level of sales in October. We did some fun videos and sent it out to the field and to kind of show them what was sort of taking place in the day to day at the office in Chicago.

 

Adam Robinson: Very cool. Let’s talk about something that we refer to as the “people model.” For your company, that’s your business model on the people side. For example, are you hiring entry level high potential hires and investing in training and development or are you an organization that spends more to hire experience and specialized skills? What’s your lens through which you’re hiring right now?

 

Kayne Grau: Yeah, I’ll tell you. It’s a little of both, Adam, in a couple of different ways. Number one is I would say like in the engineering and the product and data science side, we’re typically looking for probably more seasoned developers. Now, we have taken a couple of entry level people and trained them in those specific areas, but I would say for the most part, they’re probably coming in as seasoned veterans within those respective areas. That said, on our sales team, we have focused a lot on entry level hiring. Typically first year out of college, first job out of college, putting a lot of development, a lot of job shadowing, a lot of professional development. Then for the leadership team and actually for the sales team, we’ve done some training at Northwestern on negotiating skills, sales skills. We’ve brought in outside speakers. We have a monthly fireside chat where we bring in industry veterans to talk about what is actually happening in the industry or happening at a startup, really kind of allow these people to understand that it’s not easy to build what we’re building.

 

Yeah, I mean we put a lot of time and attention into training. It’s a huge part of I think my job in particular is the development of our employees and making sure that they have a long term career at Drivin.

 

Adam Robinson: What’s one of the most important thing you think you’re doing consistently to ensure that you’re hiring and retaining the best people there?

 

Kayne Grau: I just think it’s interviewing. I’ve personally have been fortunate enough to be around people that do a really good job of building teams and I’ve learned a lot of skills I think through my years in hiring. We don’t just want warm bodies. I mean we really people I think that are energetic to come in and make a change at Drivin. I think the biggest thing for me and I constantly harp on this though, I may give somebody a job description, I may give somebody something that really sort of explains the role, but I never want that to be the role that they’re living into a year later. I want them to reinvent the role. I want them to bring skills or find things that we can be doing differently within Drivin and that is a huge part for me in the interview when I talk to people and just see how they’re culturally going to fit within our organization.

 

Adam Robinson: Do you have a favorite interview question or line of attack that you take in an interview?

 

Kayne Grau: I think it all depends. I will say this: I very rarely look at resumes. I’m usually the last person not go in most cases and for very specific roles. For me, a lot of it is is just really the feel. I’ve talked to a lot of leaders that talk about this feel and it’s unfortunately or fortunately, I don’t know how you want to describe it, but a lot of people relate it to dating. I think you really know within 30 seconds or 45 seconds that the interview is going to be 10 minutes or is going to be an hour or is going to be longer. I love when you really kind of get into a flow with the employee or the prospective employee and you’re talking about things that really have change. That’s something that comes in experience or inexperience. I actually very refreshing when somebody comes in an entry level job and has a lot of ideas or has done the research on Drivin and has really sort of taken the time to understand our company and what we’re trying to accomplish and just brainstorming on a whiteboard. I think that’s sometimes some of the neatest interviews you can do.

 

As far as just a question, I mean I think it really sort of depends on the interview itself. I’m a lot about feel, I like to learn what has a person done, what are they looking to do, what are they most the most passionate about, where do they want to be in five years. Not just a “Five year, give me your plan,” but really like “What do you want to be as a human being in five years?” That’s a very important part of how I then can shape their career at Drivin.

 

Adam Robinson: That’s great. What do you think is the biggest people related lesson you’ve learned since launching the company? We’ll talk in a second about all the stuff you’ve done individually, that’s pretty considerable, but at Drivin. What lessons are you taking forward as you grow the business?

 

Kayne Grau: That’s a good one. Yeah, I mean I think the biggest people lesson is you have to be patient, right? We all have a sense of urgency to want to change, we all want to be out in front and be first movers. I had a really interesting fireside chat with Rob Chesney, the former CEO of Trunk Club. He came in and he told the group, he said “Look, Kayne doesn’t have this magic playbook, he doesn’t have something that he can go to chapter seven and tell you exactly what to do.” That really hit me after he left to kind of walk around and find out from people, “Are you nervous? Are you anxious? Are you excited about where we’re going?”

 

All of those different things really come in the day-to-day. I think the one people lesson that does stick with me day-to-day is walking the floor, we have no offices in our building. In our office space, we have no offices. I want all the leaders out on the floor. A big objective of that or a big reason of that is to feel the flow of the office. If you cannot feel the flow of the office and you cannot feel the vibe, I think it’s very detrimental to the day-to-day. When the lull is happening, you got to get around, you got to get people excited, you got to get them out of a rut or you got to get them moving. Some jobs in our company are mundane and they’re tedious, so you go to get them excited about where we’re going as an organization and what they’re doing to improve the results on a day-to-day.

 

Adam Robinson: That’s great. All right, a little bit about your past experience. You’ve been part of several high growth, very well-known companies. You’ve got cars.com, you’ve got apartments.com. You’ve got other experiences that led you this point. Is there any difference that you’ve seen or in the arc of building a team? Think back to cars and apartments.com to now, what’s changed, what’s stayed the same? Is it different now than it was back, let’s say in the first cycle?

 

Kayne Grau: Yeah, totally. I mean I think when you’re … You probably know this too, Adam. It’s different when you’re not the CEO, let’s put it that way. When you’re a CTO or you’re head of product, you’re whatever. You’re really sort of tunnel focused on hiring people for that specific vertical and how do you sort of make the team sort of understand what you’re doing in technology or product or whatever you’re managing for that discipline. I think as a CEO, you have to be very understanding of the profound effect of how you’re hiring, what you’re building and giving that candidate really the vision and the understanding of what Drivin is going to be, not what it is today, but what it is going to be. I spent a lot of time of just time and attention on, again, the culture and the hiring because a bad hire, and I think Tony Hsieh has talked about this relentlessly within Zappos, a bad hire has a costly and a very profound effect on the long term of the organization. We want to get it right up front and I really try to focus on the human qualities of the people we’re bringing in and make sure it’s appropriate.

 

Adam Robinson: That’s great. Some bonus content on the differences between being a CTO and a CEO from a hiring and vision perspective, very cool. Thank you for that. All right, got a couple of minutes left here. We’ll fire some lighting round questions at you, get a barometer reading on some big picture stuff. Do you think the US economy is getting better or worse over the next 12 months?

 

Kayne Grau: I will say neutral.

 

Adam Robinson: Okay, we’ll declare that flat. Do you think it’s getting easier or harder to hire people over the next 12 months, to find and hire people?

 

Kayne Grau: I think it’s harder. I think I still firmly believe that the talent pool is shallow. It’s not just Chicago, I think it’s everywhere. I think we’ve got to put a larger investment in the universities. Chicago in particular, I think we need some different type of funding structures to keep people here in Chicago and not let them go to the coast. I think there’s a lot of work that’s been and positive work, but we need the leaders of this great city to step-up and keep the people here.

 

Adam Robinson: All right, plug for Chicago. There we go! Then, what book is on your nightstand right now and would you recommend it to our audience?

 

Kayne Grau: Absolutely. 21 Irrefutable Laws of Leadership by John Maxwell, probably one of my favorite authors. There’s a couple of books that I reread on a yearly basis, he’s one author that I take a couple of books from and just get a refresher on human capital.

 

Adam Robinson: Okay. All right, closing question. If you’re to come back on this show one year from now and report on whether or not you accomplished the most important thing on your plate right now, what is that thing?

 

Kayne Grau: I would say that Drivin is up running, continues to have great growth, but most importantly that our employees are happy and we retained a large portion of the workforce that we have today.

 

Adam Robinson: That is the final word! You’ve been learning from Kayne Grau, CEO of Drivin. Kayne, thank you so much for being on the program today.

 

Kayne Grau: Thanks, Adam. Such a great show, thank you.

 

Adam Robinson: All right, that’s a wrap for this week’s episode of the Best Team Wins podcast where we feature entrepreneurs and business leaders whose exceptional approach to the people side of their business has led to incredible results. I’m Adam Robinson, the author of the book “The Best Team Wins,” which you can find online at www.thebestteamwins.com. We will see you next week. Thanks for listening.

 

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