Growing and moving to fully remote teams with Todd Ross Nienkerk of Four Kitchens

Maren Kate
So I'm here with Todd from Four Kitchens. And that's fourkitchens.com for those of you who are on the interwebs. Yeah, welcome to the show. Thanks so much for being here.

Todd Ross Nienkerk
Thank you for having me. I appreciate it.

Maren Kate
Awesome. So over the next 20 minutes, we're going to talk about how you built Four Kitchens, especially focusing on the pros and cons of remote teams, open-source business models, and your approach to hiring. Does that sound good?

Todd Ross Nienkerk
That sounds great.

Maren Kate
Great, let's jump in then. So first off, when did you found Four Kitchens, and what's with the name? That was the first thing I want to know.

Todd Ross Nienkerk
Sure. So we started the company in 2006. We just celebrated our 13th anniversary a couple weeks ago.

Maren Kate
Wow, congrats.

Todd Ross Nienkerk
Thank you very much. And just to kind of set the stage like context-wise what is it that we do. We make websites and apps. We're a digital agency. And we focus primarily on really complicated technical implementations for content management systems and apps and APIs and things like that. So we work with a lot of publishers, media companies, universities, some corporate clients. Lately, though, interestingly, found a bit of a niche for ourselves working with public media outlets. A lot of them are shifting into a lot of digital distribution, podcasting, things like that so they're in the need of, or they need more robust digital strategies and that's something that we've started to provide. So we're consultants and we build things.

Maren Kate
And the name?

Todd Ross Nienkerk
The name. So, there are four original founders, that's where we get the four, and we use the kitchen as a metaphor for what we do, creating digital strategies, making big websites, building apps for people. It requires lots of people with highly specialized skills all working in unison to create something that other people have to enjoy, much like preparing the feasts.

Maren Kate
Ah, I love it. Okay, that makes sense. And so you founded it with three additional co-founders, besides yourself. Is everyone's still involved, or how does that look?

Todd Ross Nienkerk
There are two people who remain, myself and my business partner and Aaron Stanush. And the two other co-founders, one is my wife, Kristin Hillery. She currently works on brand and content at InVision. And the other’s, David Straus, left Four Kitchens to co-found a hosting and DevOps platform called Pantheon.

Maren Kate
Okay, I feel like I've heard of that. So what was the why behind when you guys first started? What brought you together to build a company? And really quickly, what was your background?

Todd Ross Nienkerk
Well, those are, kind of, one and the same. So Four Kitchens first started within a year of my graduating college. We all attended the University of Texas at Austin and we all met and worked on the student humor publication called the Texas Travesty.

Maren Kate
Okay. Love that name.

Todd Ross Nienkerk
Yeah, it's kind of like the Harvard Lampoon, but, you know, not Harvard. So we all met in publishing, which is how we really got started, and Four Kitchens was originally created as a publishing company. And in order to launch this online publication that we wanted to create in Austin we wanted to compete with The Austin Chronicle, who, of course, runs South by Southwest. So they have, you know, quite a foothold already in Austin. But in order to compete with them, we wanted to launch digitally first and this was back in 2006, which was and still is to some degree, a difficult time to start publication. We were totally bootstrapped. We had no plans or interest whatsoever in finding funding so we had to do everything ourselves. So we had to build a website and we built it in Drupal, which is an open-source content management system that was just starting to gain traction back in 2006. And shortly after launching that publication, which we called That Other Paper. The joke was there's The Austin Chronicle and then there was “that other paper”. We started getting phone calls from people saying, “Hey, did you design this website? Like it looks really great. Can you do that for me?” and we didn't have any jobs, we didn't have any income, so we started doing some web design stuff on the side. But it became very clear quickly that we had a real aptitude for that and we essentially shifted our work towards web design and development with a specialty in Drupal. And later on, we embraced open source and free culture more broadly and everything that we did. And from there that's where we started doing, where we’ve landed now.

Maren Kate
Okay, and so 13 years is, I mean, that's a long time in the world of starting a business and growing it. What is your growth looked like over those 13 years?

Todd Ross Nienkerk
It's generally been modest, but consistent. And that really reflects the core of our culture and who we are. A lot of people, they use the word startup a lot, they overuse the word startup to mean either a new business or a technology-focused business and it doesn't have to be either. So for the first, I don't know, 10 years we were in business people kept referring to us as a startup, for some reason, although I think 10 years is well past starting up a business. Nobody calls us that anymore. But I think there's this sort of confusion about the startup. What does that mean? But we are distinctly not, in every category, a startup. So we do not try to grow like one, we do not have funding, we do not have investors, we don't have debt. We are purely bootstrapped. Every dollar we spend is a dollar we've earned. We're very focused on creating a sustainable, maintainable business model. A consultancy, that can grow according to our client demands, and according to the expectations of the industry, and new and exciting services that we want to provide. So our growth plan is not about, you know, trying to reach certain revenue targets or wanting to grow to a certain headcount. Those things are really the product of wanting to do increasingly more interesting work.

Maren Kate
So is there any kind of number or range that you'd be comfortable sharing that kind of gives a sense of where you guys are at now in terms of revenue, clients, anything like that? It always helps to get a sense.

Todd Ross Nienkerk
I'd be happy to share all of that. We're very transparent in everything that we do and maybe to a fault. Maybe we tend to overshare information about ourselves. So I'm happy to do that because I want other people to, if there's anything we can learn from our experience, I'd be happy to share.

Maren Kate
Exactly, exactly.

Todd Ross Nienkerk
So over the course of 13 years, we've grown to be a shop of 42 people. Our revenue is about $6 million dollars. Our profit margin…

Maren Kate
Now, 42, are these are these employees or contractors?

Todd Ross Nienkerk
Yeah, if I wanted to include contractors….yeah, full time.

Maren Kate
42 full-time employees - 6 million revenue. That's a lot.

Todd Ross Nienkerk
It is. It is. Profit margins within consulting tend to be a little thin and ours are even thinner because of the benefits package that we offer. For example, we offer very generous paid time off. In total, if you add up all holidays, all time off, everything, everybody at Four Kitchens gets seven and a half weeks a year.

Maren Kate
That’s amazing.

Todd Ross Nienkerk
Plus, we have a parental leave policy that we're really proud of. Primary caregivers get three months fully paid and secondary caregivers get a month and a half fully paid.

Maren Kate
Oh, that's awesome. That's so great. So I'm just like I did the back of napkin math, and I mean, 42 people, 6 million, you guys are pretty much, each person's almost contributing $143,000, which especially I think for consultancy, is pretty good. In terms of revenue per head.

Todd Ross Nienkerk
Yeah, that's true. All though our structure one of our inefficiencies is we have more nonbillable people on our team than most consultancies probably do. And a lot of that contributes to us wanting to provide lots of support for our own team. Some of that has to do with that we're sort of perpetually building towards being able to grow when the opportunity presents itself. So when I say we grow modestly I'm talking about like over 13 years we went from 4 to 42 people. If you break that down into year over year growth that's quite modest but there have been years where we've grown really substantially. There have been times where you've seen 50% growth but that's not really something that we are deliberately going after. However, recently we have adopted a, well it's called a business operating system. We've adopted this model called EOS, the Entrepreneurial Operating System.

Maren Kate
I know that model. I've recently read that book.

Todd Ross Nienkerk
Fantastic.

Maren Kate
I hear a lot of good things about that. I know a few founders friends that swear by it.

Todd Ross Nienkerk
Yeah, it's been really, it's not for everybody, it's been really good for us. And one of the things that I like about it is built in its core is the notion that the business has to grow to succeed. And I do agree with that. But it's the degree of growth that I think people need to maybe become a little more realistic about. One of the tenets of EOS is that everybody has a number. So everybody has some kind of a goal, a metric, that you're shooting for and that you need to be very metrics focused. And wrapped in that is setting big, long term goals so the typical one year, three year, ten year goal kind of structure. And our 10 year goal, which we set a year ago so it's 2028, our 2028 goal is to have 80 active accounts with an average spend with us of $180,000 a year. And so from there, of course, you can extrapolate what our revenue would be by 2028. But by shooting for that, by becoming account focused and not project focus, really trying to bring a client partner into our ecosystem and allow us to grow with them, and vice versa, it is forcing us to grow a bit more. So we can get there if we have, I think we forecasted something like 20% growth this year and then 10% growth year over year until 2028 to hit that goal. That’s what we’re shooting for.

Maren Kate
That’s gonna be about 14 and a half million at 180 people. Okay, so this is so interesting and one of the things I really was fascinated by when we started engaging and I asked you to be on the show was I found out about Four Kitchens from a list my virtual assistant pulled of fully remote startups that were hiring. But then as we started to chat you mentioned that you guys had done remote, but you do either, what is it, some or all full house? How does that look now?

Todd Ross Nienkerk
Well, when we started back in 2006 we were all co-located. First we worked out of our apartment in Austin, a lot of us live together, actually. And then we landed a client that allowed us to actually get an office and we had to start hiring and it's kind of the typical consultancy model of like, whoops we started a company and now we’re hiring people. And lots of lessons learned in that process, of course, but we had an office. The point is we had an office for many years. So for the first 10 years we were in business we had an office but as we approached year, I think it was eight or nine, it became clear that we could not continue to hire the kind of people that we wanted to hire, the degree of experience that we wanted to hire for and demand that everybody live in Austin and drive to an office every day. Austin had received a massive influx of venture capital money, which was inflating the cost of salaries, honestly, and we couldn't really keep up with that being a lifestyle business, being a consultancy, being bootstrapped with no plan to to exit. That's another key part of our culture is that our exit plan is to sell to our team, to our employees, and become an employee owned business. So there's plans in place. We can pin that for later, maybe. But we realized eight or nine years in that we would have to start adopting a, what we thought at the time would be a, hybrid model. So some people would work remote, some people would work in an office in Austin. So we pursued that for a couple of years and it worked really well. And it worked well because, dirty secret, we tried it once years before and absolutely fell on our face. It was a huge disaster.

Maren Kate
So you learned a lesson.

Todd Ross Nienkerk
We learned a lesson. And stupidly the first lesson…

Maren Kate
What were the biggest things that you were wrong about the first time? Like the top three.

Todd Ross Nienkerk
Well, there's one big one and it encompasses everything, like if you're going to be a remote company, if you're going to be hybrid company, let me put it this way, if you're going to be a hybrid company what you need to do is in fact become remote-first. In the same way that you design websites global-first, right, you need to design your company remote-first.

Maren Kate
Remote-first culture

Todd Ross Nienkerk
Yep. So the idea of like, hey let's all get together in the conference room and then we'll have somebody call in on the polygon and at the center of the table, that idea was dead. That was never going to happen ever again. Everybody would call in from their desks on video chat, one face, one laptop, even if only one person on the call was remote.

Maren Kate
Okay, so that's what you did to change the second time around. Which makes total sense. I mean, I completely agree. It's actually funny, I've been having more and more conversation the last few months with founders that I know in different parts of this country that are talking about either going partially remote and they're all asking like, “what's the playbook for it?”. And what I've said, because I've always started my companies remote first, and from day one, it's like the thing is you really have to invest in that communication upfront and those processes. So I totally see what you're saying. So the second time going remote, now take me from there to today. Are you still mostly remote? Or how does it look now with the 42 people?

Todd Ross Nienkerk
We're 100% remote.

Maren Kate
Okay, you are 100% remote.

Todd Ross Nienkerk
We’re one of the few companies that I know of, I mean we're not the only but one of very few, that have made the transition from fully co-located to fully remote.

Maren Kate
Yeah, and done it successfully. That is really interesting. It’s difficult

Todd Ross Nienkerk
I would think so. We continue to improve the model.

Maren Kate
Also, with the amount of people you have and the revenue, if you had 42 people co-located that would that would just crush margins.

Todd Ross Nienkerk
Here's the thing though, if you do it right remote is more expensive.

Maren Kate
Really? Talk to me about that.

Todd Ross Nienkerk
Sure. So I'll give you hard numbers. Back when we were in Austin, we had an office that could fit, you know, I don't know, 30-something people. We weren't quite that big. We were in our mid 20s at the time but the all in cost of this office, and we were getting a deal even for Austin so I know that our numbers here are a little bit low. but all in on the office, internet connection, you know, snacks in the break room, everything, it was about $100,000 a year to maintain that office. And then when we went remote, even hybrid, we needed to have all hands retreats, we needed to get everybody together at least once a year to see each other, right. There goes the $100,000.

Maren Kate
Oh, you're so right. I didn't even think about that.

Todd Ross Nienkerk
Here's another thing that we did. So when we ultimately shut down the office we realized that when you have an office there are certain things that people come to expect that a company will provide. And I shouldn't even qualify it by saying when you have an office, there are just certain things that, as an employee, you kind of expect. For example, you kind of expect the company to supply your laptop, right? That's pretty reasonable. And also you don't want the security issue of somebody doing personal and business stuff on one machine so you would actually want them to get a certain laptop so that means you’ve got to send everybody equipment. Well, if they leave and they say like, well I want to send this laptop back or whatever, where does it go? Who's responsible for that laptop now? Like, I don't want to put it in my garage. Is it my responsibility?

Maren Kate
It's totally true. My last company, at our peak we were about 400, everyone was an employee, which was actually part of our issue, and everybody had company machines, Chromebooks, and there was pretty much a full time job. And we had like one kind of Vegas office where people just sent and picked up Chromebooks. It was all encompassing.

Todd Ross Nienkerk
Yep, exactly. And that kind of, when you go remote, that kind of infrastructure, managing that kind of stuff just feels so weird and it becomes oddly expensive. So what we have done to counteract that is, and we borrowed this method from another remote company called Lullabot, they do very similar consulting work.

Maren Kate
What’s it called?

Todd Ross Nienkerk
Lullabot. They're one of our peers in the web design and development space and they have been fully remote. They started in 2006 as well but they've always been remote so we've actually learned a lot from them. There are very few things that we really innovated on our own. The vast majority of things that I'm telling you about, things that we do, we just learned from talking with our peers about what they do. So we tend to cherry pick ideas and assemble them for own needs. So what we did with all the hardware related stuff is, when you join Four Kitchens, you get kind of a startup kit. You get your laptop, display, webcam, mouse, keyboard, headset, all the things you need in order to work remote. You, as the web chef, which is what we call people, you need to provide the space. So whether that's you going to WeWork or working out of your bedroom or working out of your kitchen or whatever you do, you have to provide the space, we’ll provide the equipment.

Maren Kate
At a designated space.

Todd Ross Nienkerk
Yes. Definitely find a permanent, designated space.

Maren Kate
Now if I'm a web chef and I say I can't get anything done when I'm in my house, which is true, so I always go to coffee shops or co working spaces, do I pay for that co working space? Or do I get a stipend?

Todd Ross Nienkerk
Here’s what we did about that. So when you start you get all that equipment and that equipment is company property until you quit or until you leave at which point you sell it back to the company for $1. And that way all the tax stuff works out the way it should work out. But in between, you have access to something called a personal expense card that's a debit card. Every month, you get $150 added to that debit card, and it accumulates. So you can spend it, as long as it's helping you do your job, you can spend it on whatever you want. So if that means you're going to go get a desk at WeWork, do it. If it means that you want to buy a new laptop every year or two, do it. If you want to buy a fancy chair, a new desk, whatever.

Maren Kate
If I eat well, if I work well out of sushi joints, whatever works.

Todd Ross Nienkerk
Whatever works, right? Just make it an appropriate expense. So then when you add up all of that, you know, 42 people times 150 times 12 months out of the year, you're looking at a pretty significant expense. So again, going remote, done well, can wind up being more expensive than having an office.

Maren Kate
Now I totally see what you're saying about, you said that you were, when we talked before the interview, you said that you were a strong supporter of remote culture but that you were also highly skeptical of it as as the panacea and I see why. And I do think that's true. I think, you know, even I do that, where I tend to think of remote just like, there's the only cost you have a salary but that's totally not true. That being said, I will say one thing, here's a good question. This is so fascinating. I literally had more questions for you on different types of like I was going to talk to you about hiring, I was gonna talk to you about open source business, but the remote stuff is just so fascinating that’s what I want to spend all my time on. So the one thing that I've always found with hiring is that when you hire remote, if you do it right, the quality, its just because you're casting such a wider net. Like when we'll hire a position we could get 1000 applicants depending on where we post it. So in terms of hiring, how do you guys approach that? You know, concisely, how you run that. And then how do you pay? Do you pay based on the state? Do you say this is our base, right? Like I think WordPress says they kind of like tagged theirs into the Bay Area pricing within a certain band and then they pay that whether you're in Timbuktu or whether you're in Manhattan.

Todd Ross Nienkerk
So recruiting, I'm not the right person to ask about recruiting. There’s whole different department that handles all of that stuff, like where we post jobs and all of that. But what I will add regarding were recruiting and remote work intersect is, I mentioned earlier in the call that when we were around your eight or nine we realized we couldn't continue to hire in Austin or try to relocate people to Austin. To finish up that thought, going remote has allowed us to grow; has allowed us to recruit from anywhere in the country. And we recently joined a PEO, a Professional Employment Organization. We joined TriNet, which now allows us to hire directly out of Canada and some other countries as well.

Maren Kate
Oh okay, so you are open to other countries. It's more the legal infrastructure.

Todd Ross Nienkerk
Yeah, we're totally open to any of that. And we do some of the contracting work that we do is outside of the US as well. But yeah, currently all of our full time employees are within the United States but we're open to more possibilities now. So the other question that you mentioned was about….

Maren Kate
So this has allowed you to grow.

Todd Ross Nienkerk
Yes. Oh, absolutely. We would not be at 42 people now.

Maren Kate
You think you would have been able to do it in Austin?

Todd Ross Nienkerk
No, no, we wouldn't have. We would have been able to afford it. Austin was becoming too expensive for the kind of work that we do. We would have had to drastically shift.

Maren Kate
Then how do you pay your people?

Todd Ross Nienkerk
So yeah, so that was your other question is what does compensation look like. We follow a model kind of similar to what I guess you said it was Automattic, right, that’s doing.

Maren Kate
Yeah, Automattic. I think.

Todd Ross Nienkerk
I did talk with somebody over there about how they handle their payment structure. And what they do and what many remote companies tend to do is similar to what we've done. So we brought PayScale onboard. PayScale is a company that provides compensation data and payment strategies. So we partnered with them to set a compensation strategy. And our strategy is this, we want to base our pay on the national average. So we're not tying it to a city in particular. The national average, by the way, tends to be a little bit higher than Austin so if we had targeted Austin itself would be a little bit lower. But we shot for nationally, we shot for companies roughly within our size, we targeted pay for technology companies, consultancies, agencies. And then we shot for the 50th percentile, which means 50% of companies pay more 50% of companies pay less. And that then gives us pay bands for each role at the organization. And from there, we can make compensation really intelligent compensation decisions based on experience and things like that.

Maren Kate
Yeah, and it's nice too because then you're not leaving it to each individual to negotiate because, as we know, that often leaves certain demographics, like women, getting paid a lot less because we're just less likely to negotiate. So I love that that takes that away. So instead, there's a band, and that's based on experience versus maybe some guy that just got out of Wharton values himself a lot more than I do and I might have 10 times as much experience, but I'm awkward and shy so I'll be like, “it's cool, I'll take whatever you pay me”. I really like that. I've actually had that happen so many times in my life. So this is fascinating. I always undervalue myself. It's a problem. No one lets me negotiate anymore at my company. They're like, we're gonna do the negotiations Maren, you’re the worst. I'm like, “I'll do it for free”. So it's so great. I like that you're bringing a really honest perspective to the remote work. And I do completely agree that if you're going to do that hybrid remote model, you do have to, it can't be one person in a conference and everyone else dialing in. That just, it really breaks down. Interesting. So everyone's remote now. And how many states do you guys span?

Todd Ross Nienkerk
I’m going to guess just off the top of my head, I think it's probably like, 15 or 16.

Maren Kate
Cool. And how often do you do on sites or all hands?

Todd Ross Nienkerk
All hands is once a year and we always pick a place that requires everybody to travel so that nobody gets that experience of, you know, I'm going to a conference in my hometown and then I come home at night. I'm so more engaged with my day to day life than I am this retreat experience. So we pick a place that nobody lives in. So we do that once a year. And then we were trying to get to the point where we can afford to do smaller team retreats on a more regular basis. So maybe our support team would meet up once a year at the mid-year mark or get all the project managers and product owners together once a year. But the way we're able to maybe, I don't know, do a little bit of that more informally is a big part of our marketing strategy is attending, speaking at, sponsoring events in the technology space. So that gives people a lot of opportunities to, you know, all four or five people wind up at a conference.

Maren Kate
I love it. We're starting to do that at my company Avra too and it is nice to be able to see people face to face. This has been super interesting. Thank you so much for just, kind of, getting real with the numbers. I love how open you are. I can see the authenticity is really, really nice. So I have three final questions that I like to ask everyone. First of all, what's your favorite book or podcast from the last year?

Todd Ross Nienkerk
Book or podcast?

Maren Kate
Yeah. What content have you ingested that you were just like, “oh my god, that was everything”?

Todd Ross Nienkerk
Man, um, so I oddly I listened to a lot of podcasts. I'm a big public radio fan. I have been forever but I don't listen to work related podcasts. They're like, purely escapism.

Maren Kate
That’s fine. It doesn’t have to be work related.

Todd Ross Nienkerk
Let me look at my list because there's so many I have to refresh myself. Well, you know, I think actually I’ll go with a book. So the book that I read in the last year that I think has left the biggest impression on me is Lilith’s Brood, which is a sci fi novel by Octavia Butler. I'm really into like, I don't know, this, of course, like everybody else in the tech industry, I'm really into sci fi. But this this was such an interesting book because so much science fiction is about technology and what if we had this technology and that happened? You know, it's kind of the very like, Asimov definition of science fiction. But this science fiction is more about, what if creatures, what if an organism, a human like organism, just behaved differently, like had a completely different perspective on its place in nature? How would it behave? And how would it evolve? And so there's this alien race that moves through the universe by combining itself, by kind of like, finding other intelligent species and combining their species with them and that's how they move through the world. So it's kind of an interesting thing. It's an allegory for things like racism, and colonialism, and all of that, but it's just such a departure from the traditional stuff.

Maren Kate
I really like her as a writer. Okay, so what are your top three business tools that you guys really rely on, you couldn't run the business without?

Todd Ross Nienkerk
Oh, well, the first is we built this dashboard that integrates our sales numbers and likelihood with current book work and it also ties in with our time tracking system. So it takes like all of our stuff, time tracking, ERP, financial goals, all of that, and puts it into one big dashboard that shows me updated multiple times a day, like, are we on track to hit numbers and can we sell into that in the future. So that's the first tool just, kind of, homegrown. The second thing. You said three, right? I think the second one would be, well, we use Scrum for the the engineering and development side of our projects and that's been fairly transformative. We adopted like 10 years ago. And then I'd say EOS. EOS is up there now because it's much more focus on how we spend our time as a leadership team and then how other teams organize and discuss issues and solve issues. So it's been really transformative in those areas.

Maren Kate
That's great. And that's from the book Traction, which has been like a, it feels like it just rocketed back into, kind of, a pop hit. When I'm in San Francisco or New York everyone's talking about it. Really interesting. Okay, last question, which is a strange one, and this is one of the questions I use when I'm recruiting. If you had to fight 100 duck-sized horses or one horse-sized duck, which would you choose? And why?

Todd Ross Nienkerk
One horse-sized duck because there's something about, I don't know, I think the idea of 100 things attacking you all at once is just kind of terrifying. So I think I'd stand a better chance.

Maren Kate
But the horse-sized duck isn’t?

Todd Ross Nienkerk
Yeah, I’d go with horse-sized duck, right.

Maren Kate
Oh, my gosh. Okay. All right. I love it. Everybody has a different answer and I'm always fascinated. Cool. Well, Todd, it was super great chatting with you. So if people want to follow up and connect with Four Kitchens, based on what you do, how is the best way for them to get in touch with you, get in touch with Four Kitchens?

Todd Ross Nienkerk
Well, our contact form on our website is probably the best place to go. So fourkitchens.com that's all spelled out, four kitchens plural dot com. And then if somebody wanted to get a hold of me individually, my email address that's todd@fourkitchens.com.

Maren Kate
Makes it easy. Awesome. Well, Todd, thank you so much. I really appreciate you being on the show.

Todd Ross Nienkerk
Thank you so much. I appreciate the opportunity.