Alexander Gornik, co-founder of innovative, technology-driven companies offering premier solutions Mindbox and Maestra, explains how the principles of usefulness, self-management, and evolution help his company grow by 50% per year despite crises.
Tell us a bit about Mindbox and Maestra, and your role as a product executive and technology expert there?
Mindbox is a personalized marketing platform that helps increase marketing efficiency by personalizing and improving the customer journey across various channels. More than 800 companies, including Tefal, Metro Cash & Carry, Miele, L'Oréal, Burger King use Mindbox services. Despite the crises over the past 4 years, the company continues to experience an average of 50% annual revenue growth, which in large part is due to its teal corporate culture.
Maestra is a groundbreaking project launched by the Mindbox founders in the US market. We help clients grow sales by improving the customer journey. We focus on the e-commerce segment, working primarily with companies in the US and Western Europe, building on Mindbox's code base and our international experience. My job at Maestra as its Chief Product Officer is to oversee product innovation and implementations, as well as to scale teams and develop an effective go-to-market strategy.
Why have you decided to apply the new corporate culture at Mindbox?
Personally, I initially joined Mindbox as a developer, implementing my own innovations and executing projects for clients. My first successful project was with my current business partner, Ivan Borovikov. Due to limited resources, I had to not only develop programs but also manage customer service, conduct sales, and organize the work of all departments of the company.
After becoming Chief Product Officer and Chief Executive Officer, I expanded agile approaches to other areas, recognizing common patterns and challenges, as well as the importance of culture and personnel. We defined three principles: benefit, self-management, and evolutionary purpose, based on our own experience. Only later, after reading Laloux's book, did we realize that we had been following the principles of teal organizations all along. I led this process because, for me, the issues of employee well-being and management efficiency were as important as business success. Perhaps even more so.
Having created and developed a truly unique culture, my colleagues and I attracted major clients, which led to the company's rapid growth and inclusion of Mindbox in top rankings, that included those of the largest IT media CNEWS, and also the rankings made by the CEO of Kladana, Askar Rahimberdiev, where Mindbox consistently appears as one of the top 4 SaaS companies in Russia.
What are the similarities between Mindbox and Maestra?
Interestingly, the IT startup is both similar and different from Mindbox. On the one hand, we see no difference in customer needs and products. At the same time, Mindbox's path was through the stage of development from scratch, without large clients and some kind of start-up reputation. More than that, the sales process in the US is very different from that in Russia.
Today, our main clients are e-commerce companies from the US and Western Europe. Over time, our startup has grown noticeably: my partner and I launched it in 2022 with investment from Baring Vostok, and by the end of 2023, we doubled the number of clients and reached almost $1 million ARR.
What exactly are the differences between the US and Russian IT markets?
One of the striking differences in the US market is that there is significantly more competition. To put it simply, the market itself is larger and, as a result, more segmented. In the USA, we have a large number of competitors.
Due to competition and the decentralized information field, sales are very different. In particular, the U.S. market requires more sophisticated techniques for setting initial meetings, with more touches with LPRs, and polished materials on value propositions. There are also striking cultural differences that demand different negotiation techniques.
At Maestra, we decided to focus on the e-commerce niche and the mid-market segment, which is relatively untapped. In our chosen niche, our platform differentiates itself from major competitors by its broader and better-integrated functionality and real-time capability, which leads to more opportunities for customers. What sets us apart from the big players is our e-commerce specialization and competitive pricing. Moreover, what also sets us apart from all the players is that we not only sell software on a subscription basis but also implement it, being responsible for the results at no additional cost.
Tell us about successful implementations of Maestra solutions.
We have already managed several successful implementations with local clients. Over the course of several months, I managed to collect a large list of target companies from a huge number of different sources, with a hit quality of more than 80%. I personally automated the search for contacts on this list and data quality control; and set up a process of constantly adding and updating the data.
By conducting about 30 product interviews on this list, we confirmed the size of the market, the value of our offered solutions, and the core hypotheses. As a result of this work, we've seen a steady stream of targeted meetings. For instance, our partnership with global software company Movavi was aimed at increasing revenue through email marketing. Over the period of 15 months, we implemented omnichannel marketing, revamped the design and communication approach in email, and segmented the audience by various parameters. Then, we launched 60 newsletter streams and pop-ups in 5–9 languages and improved communication through regular A/B tests. These efforts led to a 27% increase in email's contribution to total net revenue.
Mindbox is organized according to the principles of Teal culture. Do you plan to organize your work in Maestra according to the same principles?
Yes, we are building our American company culture on the same principles. For example, we started working with open salaries right away. The amount of the salaries is set by the employees themselves.
Mindbox has gone through four recessions over the years, but all the while, has continued to grow at about 50% per year. I believe that we owe this success to our Teal culture.
The first experience of interviews in the USA shows that the employees we are interested in are attracted by the same values we attracted people within Russia: benefit through transparency, maximum autonomy, and decision-making through the integration of opinions as opposed to coming from the top.
Can you elaborate a bit more on what the Teal culture is?
The term "Teal organizations" first appeared in Frederic Laloux's book "Reinventing Organizations" in 2014. There, Laloux defines Teal culture through three attributes: the presence of evolutionary purpose, self-management and integrity of employees. The concept of absence of formal bosses and approvals has not been widely spread in the post-Soviet space: only a few companies have implemented the Teal approach.
Mindbox culture has three principles: usefulness, self-management, and evolution. Can you elaborate on them?
These three consistently implemented principles are my interpretation of the concept of the middle path in business. In short, it integrates research on employee motivation by Daniel Pink and the ideas from Laloux's book.
The first principle is the pursuit of benefit. The main tool here is the elimination of harm through 100% transparency. That means that our goal is not just to generate revenue but to ensure the success of our clients, to pay attention to their interests, and to search jointly for effective solutions. This is especially important in times of crisis when companies drastically reduce their expenses. In every crisis, I see the benefit principle bear fruit.
Take, for example, the year 2020, overshadowed by the COVID-19 pandemic. During this period, Mindbox's revenue grew by 44%, recruitment continued almost non-stop, with one in three employees being newly hired. Moreover, the demand was also growing: we attracted 175 new customers. In addition to that, we supported existing customers by proactively supporting affected sellers with discounts worth tens of millions of rubles.
The next principle that we believe in is self-governance. We give employees the right to make and veto decisions. The basics of self-management include access to information for decision-making, which is transparency. So, we provide a fully open profit and loss (P&L) statement, including the salaries of each employee. This encourages us to consider the financial well-being of the company as our own.
Then, we especially encourage autonomy. For example, we do not have a fully paid social package, including VHI; everything is done only through co-financing. Each employee is allocated $2,800 a year, and they decide for themselves what they want to spend this money on, be it medical treatment, education, or recreation.
When the right goals are set and people are trained to work with a high degree of autonomy comes the principle of evolution: decision-making by integrating the reasoned opinions of the involved people and not the manager. This strategy ensures a stable development of the company, which involves growing employee engagement and avoiding the negative effects of hierarchy growth.
How do you put the principles into practice?
To give you an example, let me tell you about the manageability norm—the number of line employees per manager. Usually, it is about seven people, whereas in our company it is 15. Taking into account the doubled manageability rate, we save a fifth of the payroll, which certainly helps to strengthen financial stability, especially in times of crisis.
Even such a seemingly controversial aspect as self-setting of wages (when employees initiate raises themselves) contributes to cost reduction. It turned out that people are reluctant to ask for a salary increase on their own: they have to be persuaded. All decisions on raises turn out to be well-considered and justified.
The principle of self-management also implies that employees do not expect directives from above. That means that decisions are not made by top management but by various departments, such as marketing or sales. This avoids dependence on a specific person. In times when adaptation is required, we quickly adopt the necessary changes.
For instance, I want to share an amazing example of self-management efficiency. Before the coronavirus, all our processes were office-oriented, right down to the use of physical whiteboards with tasks for each development team. When the lockdown occurred in Russia, I didn't even have time to give any instructions: our developers switched the system to electronic whiteboards by themselves, office managers set up the delivery of laptops on their own, and so on.
How to implement the principles of Teal organization in the company?
The most important thing, I believe, is to realize that these changes cannot be implemented as a single project; everything must be developed gradually. To start with, I would recommend reading the literature on this topic:
- Frederic Laloux "Reinventing Organizations"
- Valery Razgulyaev "50 Shades of Teal Management: Practical Cases"
- Reed Hastings and Erin Meyer "No Rules Rules. Netflix and the Culture of Reinvention"
Another good step involves conducting a burnout survey among employees to identify points in order to increase people's engagement in the management of the company. Indeed, researchers from the University of California at Berkeley have identified six early signs of burnout that should be checked.
Thus, if the survey results indicate that employees feel that decisions are unfair, it is necessary to improve the transparency of the process. So, by implementing elements of Teal culture step-by-step, you'll notice an increase in employee engagement and performance.
