Rob Grazioli started his life in Brooklyn NY, but moved to Italy for his Dad's job, and lived there from age 5 to 13. He ended up moving back to the states for High School and College, and finds that it's difficult to separate tech and work from his life. Outside of tech, he enjoys exercising, and has always been an athlete, most recently picking up basketball. He really loves to make things, learn how things work, and to munch on Oreos.Eight years ago, Rob and his partners started a company called Density, allowing businesses to count the number of people in a room. After growing that business, Rob realized that he wanted to get back to building things. And, after working with early businesses, he found his passion in being founders for hire.This is the creation story of Bread.SponsorsP0 SecuritySpeakeasyQA WolfSnapTradeLinkshttps://www.madebybread.com/https://www.linkedin.com/in/robert-j-grazioli/Our Sponsors:* Check out Vanta and use my code CODESTORY for a great deal: https://www.vanta.comSupport this podcast at — https://redcircle.com/code-story/donationsAdvertising Inquiries: https://redcircle.com/brandsPrivacy & Opt-Out: https://redcircle.com/privacy
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We basically almost bankrupt our business. We built a book of business that was a bit flimsy. We had an account that basically was paying the bills for us, but we didn't like working on it and we didn't fight to keep it. As a result, we didn't have enough money to pay our people, which was probably the most foundational learning experience for me as a business owner.
And our poor decision-making put that at risk for the people that we hired. That was easily the biggest mistake I've made to date, where you essentially put people's livelihoods at risk. It was terrifying. I'm Rob Grazioli. I'm a founder and managing partner at Breadman.
This is Code Story, a podcast bringing you interviews with tech visionaries who share what it takes to change an industry, who built the teams that have their back, keeping scalability top of mind. The stories you don't read in the headlines. To ride the ups and downs of the startup life. All this and more on Codestory. I'm your host, Noah Labhart.
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Join the Wolfpack at QAwolf.com. Rob Grazioli started his life in Brooklyn, New York, but moved to Italy for his dad's job and lived there from age 5 to 13. He ended up moving back to the States for high school and college and finds that it's difficult to separate tech and work from his life. Outside of tech, he enjoys exercising and has always been an athlete, most recently picking up basketball.
He really loves to make things, learn how things work, and to munch on Oreos. Eight years ago, Rob and his partner started a company called Density, allowing businesses to count the number of people in a room. After growing that business, Rob realized that he wanted to get back to building things. And after working with early businesses, he found his passion in being founders for hire.
This is the creation story of Bread.
Bread's a services business, but it's a little weird. We're a little weird. Over eight years ago, my partners at Bread and I started a company called Density. We built devices that you would put above a doorway or in a room and it would count how many people were in the room.
And then we turned that into some kind of analytics and we sold that into Fortune 500 companies so they can make better decisions about their real estate and space. We did that for eight years. We raised over $200 million. We got it to a point where it just felt like we had to decide if we were going to be executives or really grow a team. It was up to 180 people at the time I left.
And I just realized I wanted to get back to building things again. That meant stepping away. And for my other partners at various times, that meant the same thing. But what we started to do was really work with other early stage founders and entrepreneurs on their businesses.
And ultimately, that meant helping give shape to their product, helping them even refine like their sales motion or their just general market strategy. Really, whatever it was from design to engineering, just being in the room, we would call ourselves like founders for hire in a sense. And that started to work. We grew our team a little bit. We're at 15 people now.
And the way we were operating was less like a vendor and more like a partner or even like a venture fund in that we really were helping them get to their next raise or helping them post a raise, really find that market fit or build out their team.
The especially weird thing is we really think of this like a product in that when and even when we were building density, we thought about team building. We thought about company building in the same way we thought about product because we are designers and engineers. I'm a designer and front end developer by trade. So we take six week cycles. We don't keep a backlog of ideas.
That's part of our product methodology is we don't like backlogs. And we really think about everything in terms of like small to mid-sized bets. So think about validating a feature, validating a design. You try to do the smallest thing you possibly can that achieves the outcome. And we think about our business in the same way. So we think we're early.
Like I would call what Brett is right now, the MVP, what it is in the future. We don't know, but we're excited about it. It's potential and we're taking it six weeks at a time, so to speak.
My next question will be interesting given that bread as it is right now is the MVP. So tell me about that MVP. You know, you kind of gave me origination story. Tell me maybe a little more detail on how it got started and what sort of tools you were using to bring bread to life in this MVP form.
We were obsessed with small teams. So we were building that hardware software product and it always felt like we needed more people to do the job. It was this constant struggle around demands and pressure to do more. It was always hard to balance whether or not we were doing the right thing. And then also maybe if we took a little more time to do something, we didn't need more people to manage it.
So this obsession with like, how small could we operate? really was at the is at the forefront of our mvp right now and what that meant for us was like all of our reporting all of our metrics like we basically automated so like we we built an internal tool for staffing for budgeting for our forecasting that's just one tool that we built and it allows
really like a small group of people with very few administrators or people essentially building reports. Like we're really just focused on the computer building and reports for us and us making decisions as operators. And that, that started with like just the partners kind of building those tools. And now we're also doing the work because we've built the tools.
We don't like it reduces our management overhead essentially, but now we can focus on team. I guess maybe we're into the V1, which is, okay, we're actually building team around this operating principle, but it's still the first version of that. And we're still trying to figure out how our roles expand and so on.
Anyway, that's like what got us really excited about doing this, which actually we're doing this for the second time. First gig out of college was a services business with the same crew. So we've been working together for almost 15 years. We certainly did not try to automate our operations, but this time we did and it's working.
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I hear you saying that you've got ideas of what are next, but how are you going to go about deciding what's the next most important thing, you know, to build or to address or to automate or those things with bread?
There's the what, but then there's also the method. And for us, we're super focused on the method right now. I think that's important until it's really obvious what the what is. The method is truly very similar to feature development. That's really the way we look at it.
We're focused on, let's take it away from building a product or how we build product for people and into how we would grow bread. And market and client focus is a thing. So how do we determine who we should be working with and working for? But also how do we attract those people?
One way we think about that is how can we make small or essentially conduct small experiments against different people who need the work that we do? And how do we staff people that understand what those people need and essentially craft a playbook and a team structure that can support people with those needs? So here's an example.
We're obviously super focused on early stage founders because that's what we know. That's what we know how to do. What we know how to do less is how a team like ours could support larger companies. Say like a, we'll just pick a random one. We'll say Google. We're not working with Google. pretend Google's like an old bank or something that is less good at software.
Banks are good at software, but you get what I'm saying. Maybe a legacy business that it wants to inject software into their day-to-day operations, or they have an idea for bringing new product to market. Our theory is we could actually really help them and bring this startup mindset into the way that they operate every single day.
and also provide a way to spin up these activities quickly, where at big companies, sometimes you're a bit bogged down in bureaucracy. It's difficult to get advocacy for certain ideas that could be hard and time consuming, where we could be this quick option for them to at least validate early concepts that they might want to invest in more of. So I don't know how to speak that language.
I don't really know all the pain points associated with that operation.
Can we find a person that does maybe make a small commitment to them to find and feel out whether or not there's real market opportunity for the way we operate there and essentially spin up marketing messaging, spin up a deck and sales motions and go to market essentially with that quote unquote feature, which is like bread labs.
So can we take this concept, which is like bread labs and test whether or not it would work? And if it starts to work, then we can talk about building a more robust team around that kind of function and so on and so forth.
How are you going about building your team, right? You've worked with your founding team, your partners for, you've worked with them in many different capacities and different businesses. I'm curious about how you're building your team and outside of them. And what do you look for in those people to indicate they're the winning horses to join you?
Yeah, I like to think about people and ladders. What we tend to look for are people who know how to climb up and down the ladder. Essentially, getting a big picture view of a particular problem or space would be climbing up the ladder, and then solving a specific problem or writing code would be climbing down the ladder.
And what we really love are people who know when to climb up and when to climb down and who can climb up and climb down quickly. This typically results in like hiring full stack engineers or designers who can also code basically people who are super versatile in their skill sets, but also have maybe played other roles in their journey. They've managed product in some respect.
They've been a staff engineer or run an engineering team before. So we tend to hire more experienced people who have a ton of flexibility, who love the details, but don't get bogged down in them when the situation calls for a bird's eye view.
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But I'm curious about how you're going about scaling bread or thinking about scalability. And do you anticipate areas where it's going to pinch, right? Where you're going to have to fight it as you grow?
Without a doubt. We're in that moment now. And scale is always hard. I think our experience has taught us it's really important to ask why you're scaling and if you need to scale. So that like small team concept and the services business, like it's all about team. That's really what you're trying to scale and you're trying to scale that level of quality.
But for us too, it also means scaling without introducing overhead. So that same idea around trying to automate certain functions that may be required, time spent creating reports. We also don't want to create a middle management layer in our business or for our clients if we don't have to. So I think that's the biggest barrier to scale is we're trying to figure out how we avoid middle management.
Not that all middle management is useless or ineffective, but it's not the thing that really helps our customers and therefore something we want to try to avoid. The main way we're thinking about this is like one, why are we scaling and how do we think about scale in other ways? So do we need to grow our team or can we generate revenue some other way that allows us to keep our team small?
And if anything, just increase the quality or reduce the burden on our services work to generate revenue for us. So this is not a new idea for services businesses are always looking for passive forms of revenue.
One concept that we've been playing around with is spinning up a PE like function where we actually buy small software products and try to grow those software products and staff them accordingly. So basically starting a different kind of business.
But we think the model is actually super similar to how we're operating now, where we're essentially taking on these clients, but we're helping them grow their business. We're helping them get that next wave of funding or get to their first million in ARR. Like that's really how we think about our roles. And that's not so different from the way a PE company might function.
And if you scale that down, it's something we think we can do laterally without needing to really expand our services to the extent where it breaks down how we like to operate. I have no idea if that will work, but these are the types of ideas that we are experimenting with right now.
Okay, so as you step out on the balcony and you look across all that you've built with bread specifically, what are you most proud of?
That's like the easiest question. It's people. Leaving my last business density was... really challenging for me. And it's through that experience in looking back at what we had built. The product was really cool. The market was interesting. There's a ton of potential. We'd built a lot of value.
But man, I was so proud of everyone who walked through that door and made friendships through that, learned so much from other people, changed how I behaved and thought about the world through those people. So without a doubt, if I'm on a balcony looking down at bread, the pride will be in the people that I got to work with every day and also hoping that they found value and shared that sentiment.
If we're able to create that kind of environment, to me, that is genuinely the ultimate success. It's how I live my life every day. The main reason why I'm working on bread is to work on it with the people that I'm working on it with.
Rob, let's flip the script a little bit. Tell me about a mistake you made and how you and your team responded to it.
We basically almost bankrupt our business. This was back in 2013. So out of college, we started a services business with our profits. We would invest in building new product and tried to bring that product, bring those products to market to essentially make more money. We built a book of business that was a bit flimsy and probably overspent on R&D and research into these net new products.
And for whatever reason, we had an account that basically was paying the bills for us, but we didn't like working on it and we didn't fight to keep it. The project was ending and we just let it end thinking that the next project would just be around the corner. And it wasn't.
As a result, we didn't have enough money to pay our people, which was probably the most foundational learning experience for me as a business owner or as really a professional, that work is less about work. It's more just this requirement for us in our society, for better or for worse, to function and to feed ourselves and to feed the people that we care about.
And our poor decision-making put that at risk for the people that we hired and told we could help support them and their lives. That was easily the biggest mistake I've made to date, where you essentially put people's livelihoods at risk. It was terrifying. To fix that, we didn't pay ourselves. We invested in a beans and rice diet. We had just launched Density.
So we were running the services business and also paying for salaries that were working on what would become our future focus and not wanting to stop that, but simply not having the money to really support either.
The most amazing thing happened in that one of our business partners called everyone into a room and had this incredible moment of clarity, but he called us into a room and outlined basically like a three-step plan to reinvest in the clients that we had. We had to think about restructuring our team and ultimately split our team, divide it part density,
part the agency was called rounded at the time that was our first company rounded and claw our way back into profitability we took on debt we basically ran up a an amex bill that we had to pay off over time it was a super challenging period but it just took laying out all the different aspects of our business on the board and making decisions to try to change our future for the better and we did it it was cool but it really sucked and it was a huge mistake
And it's one that I will never make again. And I'll never take for granted the responsibility that I have to the people that I hire.
So this will be super fun. And you've kind of touched on this, you know, sprinkled throughout your answers, but I want to give it focus time. Tell me what the future looks like for Bread, for, you know, for what you offer, what you're going to offer and for your team.
This is something I think more about now than when we first started at this and when I really try to ask myself why I'm doing this and why we're doing this. I think the way we build things and the types of companies that we build can be better. And I think the incentive structures aren't necessarily lined up to promote better businesses and better practices around building things.
And it's really, it sounds, it is super abstract, like what does better really look like? But I think going back to my big mistake, like better to me is just more responsible. And we've been part of this too. We raised a bunch of money.
I think back to some of how we spent that money and how you really regret making those decisions, but you're caught up in these expectations that I think are just misaligned. We just want to reshape how people getting into starting a business or being an engineer or being a builder. We want that to be for the love of the game and less... to live up to some ideology or to be like an idol.
We want it to be about making something meaningful and doing something meaningful. And that could genuinely just mean eating food or like living your life and living your truth. It doesn't need to be like solving the climate crisis. We think meaning is important and I don't think meaning is measured in money.
So changing that mindset, showing that there can be success for everybody involved in the ecosystem with that mindset, both investors, entrepreneurs and builders alike, is really our goal. And we're going to try to lead by example.
Let's switch to you, Rob. Who influences the way that you work? Name a person or many persons or something you look up to and why.
My singular, I think, inspiration in life is a man named Oliver Sacks. He has nothing to do with design or engineering. He's a scientist and just basically spent his life trying to understand how brains work. And along the way, just discovered all the variations of humanity and life and thinking and perspective. And... He was an amazing communicator, amazing writer, and I just miss him a lot.
He's dead now, died relatively recently. And if you could consume Oliver Sacks' material, you really should. But I think professionally, there's another person named Aaron Draplin. He is a designer, mostly like a graphic designer, really focusing on brand. He was foundational for me. him and this other person, Mike Monteiro, who just had this real no bullshit attitude towards work.
And I think particularly craft. I view work as craft, which to me means like this never ending pursuit of better. And I think those two and their attitude towards work, maybe taking it and craft, taking it less seriously, understanding that this is a weird world situation.
No one knows why we're doing a lot of what we're doing if you think about it too much, but you can have fun doing it and you don't need to put up a bunch of pretense to do it well. I'm reading Jane Hirshfield right now, given sugar, given salt, and just totally mesmerized by how she writes sometimes. So... I don't know. Those are what come to mind. Honestly, I don't think about it that much.
I've never really been one to like want to be somebody else or hold someone in that high of regard. But if I think about people who are foundational to my thinking, that's a decent short list.
Okay, Rob, last question. So you're getting on a plane and you're sitting next to a young entrepreneur who's built the next big thing. They're jazzed about it. They can't wait to show it off to the world and can't wait to show it off to you right there on the plane. What advice do you give that person having gone down this road a bit in lots of different capacities?
Yeah, somebody actually asked me this recently. And the first thing that came to mind and will come to mind moving forward is don't build anything with lasers in it. So that's like kind of an inside joke. But that is a lesson learned for us in the hardware industry. Just like lasers are hard to certify. They're super hot and don't do it.
In all seriousness, it's really just thinking about time and how things play out over time. Really just understanding everything takes more time than you expect. But there's a balance to that. Like, I think saying that everything takes time
is not to say don't try to go as fast as you possibly can, but it's just like being forgiving when things aren't necessarily happening at the pace you want and having the open-mindedness and the flexibility to recognize that, oh, it's just taking longer than I would like and that's okay, I need to keep going versus I should give up because it's taking too long.
But everything just really takes time. Timing is important. in a decision being a good one or a bad one. And yeah, everything takes time. It actually reminds me of another great book called The Order of Time by Carlo Rovelli. He's a physicist about time not existing. Time definitely exists for us and everything takes it.
I really appreciate that advice. Well, Rob, thank you for being on the show today. And thank you for telling the creation story of bread.
My pleasure. Thank you.
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