Episode 16: Tanya Baker – Global Head of GS Accelerate, Goldman Sachs
Tanya Baker is the Global Head of GS Accelerate. A new initiative inside Goldman Sachs that is “ a platform for people at Goldman Sachs to be able to apply, submit an idea, and go through various rounds of pitching and ultimately they get funded, be an intrapreneur, as we call it within Goldman Sachs.” In many ways, this is similar to many other corporate startup labs being set up at other Fortune 500 companies but they also are taking a very Goldman Sachs approach.
Show Links
- Tanya Baker’s LinkedIn
- GS Accelerate Career Page
- Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs Hardcover by John Doerr
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Full Transcript
Sean Ammirati: 00:08 Welcome to Agile Giants, Lessons from Corporate Innovators. I’m Sean Ammirati, your host, co-founder and director of the Carnegie Mellon Corporate Startup Lab, and partner at the early stage venture capital fund Birchmere Ventures. Each week, I’m going to talk to guests who are experts at creating startups inside large corporations. I believe fundamentally, a startup within a company is the same as one inside the proverbial garage. A group of entrepreneurs trying to make the world a better place using new ideas and inventions. However, I also believe some of the techniques and processes are just inherently different. This podcast is going to explore the similarities and differences.
Sean Ammirati: 00:57 Welcome to another episode of Agile Giants. On this week’s episode of Agile Giants I’m joined by Tanya Baker. I actually went to Tanya’s offices at 200 West Street, which for those of you who don’t know, is the Goldman Sachs headquarters, to talk to her a little bit about her experience leading up GS Accelerate. Her official title is the Global Head of GS Accelerate, which is the firms internal innovation engine where Goldman Sachs identifies, invests in, and incubates new businesses for Goldman Sachs and a broader fintech ecosystem. Previously she ran digital strategy for investment banking at Goldman Sachs, and started her career at Microsoft. You’ll hear on the episode she actually worked for Satya Nadella, the current CEO of Microsoft early in her career there. She went to the Stern Business School at NYU, and then came over to Goldman Sachs.
Sean Ammirati: 01:52 It’s a really interesting conversation because I think what you’ll hear in this conversation with Goldman Sachs is, the firm is doing things that I know a lot of the listeners of this podcast are doing, but you’ll see that they’re taking a very Goldman Sachs approach to it. Unlike a lot of companies, there’s a ton of people who have a lot of experience investing at a place like Goldman Sachs, they’re taking a pretty disciplined approach to it, but I think they have a lot of the same struggles that a lot of your companies do as well. So hopefully there’s some things you can pick up from this interview that you can apply to how you’re doing innovation and ideation within each of your respective companies as well as I think hopefully some things that maybe will be comforting to hear that challenges that you’re facing in your organizations are faced across the board at these large organizations as they tackle these problems.
Sean Ammirati: 02:41 So with that, one last note. If you’re enjoying each of these Agile Giants episodes, I’d really encourage you to go to iTunes or wherever you listen to your podcasts and give this a five star review. If you’re not, please send me an email, let me know what we could do to earn one of those five stars from you. It’s amazing how the reviews and the ratings really help other people discover this content. Thanks so much, I hope you enjoy the conversation with Tanya.
Sean Ammirati: 03:15 All right, welcome to another episode of Agile Giants. I’m joined today by Tanya Baker, and I’m at Goldman Sachs headquarters, which is pretty exciting for me. Tanya, why don’t you talk a little bit about what you do for Goldman Sachs and kind of how you got here?
Tanya Baker: 03:28 Yeah, absolutely. So I run a program at Goldman Sachs called GS Accelerate, and I will give you details on that in a little bit, but just some background on myself, I’ve been at the firm for over ten years. It does not feel that long, we joke that it’s like dog years here. We’re here forever. But I came straight from business school, my undergrad was in computer engineering. My first job out of college was at Microsoft, first boss was Satya, which is a pretty awesome experience and after four years there, went to business school, planned to go back and stay in the tech world. I always loved technology and thought I would do something more on the business side, but at the time, and this was, I started business school in 2006, there wasn’t much of a tech ecosystem in New York, which is hard to believe now, but its new and it still continues to be highly nascent and so, as I was looking for my summer internship and networking like crazy and talking to everyone under the sun, ended up meeting someone from Goldman Sachs, interned here, and the rest is history.
Tanya Baker: 04:29 But I’ve always been, and we call it GS, I’ve always been in a variety of different roles that straddle business and technology. And so I started in a business development role in a technology organization and shortly thereafter I moved to investment banking, where I spent six years running digital strategy for the business and then also covering some clients in the tech space. And I saw, I was around a lot of innovators and entrepreneurs and venture investors, and we saw things changing around us. We didn’t feel as a firm that we necessarily had an innovation problem.
Tanya Baker: 05:13 However, we saw an opportunity for us to grow in certain areas, which is what led to the birth of Accelerate, and one of them was being able to get new businesses off the line that are cross divisional. It’s a very typical big company problem. It’s hard to get the right sponsors, the right people in the room, the right people in alignment, and as our industry continues to evolve, it was something that was really, really important that we figured out how to do naturally.
Tanya Baker: 05:47 The other one is setting up new businesses. We’ve done it for years. At Goldman, we pride ourselves in being a highly entrepreneurial culture, but we wanted to really have a platform for anyone regardless of level, tenure, geography, business, to be able to partake in that if they have that talent and if they have an idea.
Tanya Baker: 06:11 And the third one is a people part of it. As I mentioned, we have over 37,000 people at Goldman Sachs globally, and a lot of people leave and go and do great startups, and they go and take on operating roles at large companies and we talk to people who have left and anecdotally, you hear the same story over and over again that they loved the firm, but they wanted to experience building or operating a new business, and they didn’t see that path here. And so, that is all what led to the birth of GS Accelerate, and Accelerate is exactly that. It’s a platform for people at Goldman Sachs to be able to apply, submit an idea, and go through various rounds of pitching and ultimately they get funded, be an intrapreneur, as we call it within Goldman Sachs.
Sean Ammirati: 07:00 That is I think a great framing of the problem, and I imagine if I ask most of the people in the audience if Goldman Sachs has the same problems that they do, your brand is so strong that there’s probably a little bit of leaning in now, like wow that’s great to hear that they’re wrestling with some of the same things that we are. Can you talk a little bit more about the origins of how it actually came to be, like who did you pull in, what was the process like, how did it actually go from this … I think you’ve done a nice job of articulating the problem, the sort of framing out the solution for GS Accelerate.
Tanya Baker: 07:34 Yeah, no absolutely. So the origins of Accelerate are pretty interesting, because they came from a series of parallel events that all happened to triangulate at the right time, which is what led to the birth of GS Accelerate. We had some very senior partners at Goldman Sachs go to Bangalore a few years ago on a leadership offsite, and one of the big themes that they came back with was that there’s an opportunity for us to really drive more of an entrepreneurial culture, and something that we’ve always prided ourselves in having as a firm, but as we’ve grown and with increased changes in the environment and in the firm, it’s something that we had an opportunity to do better at, and they were very focused on figuring out how to infuse it into all layers and all levels of the organization and that was their big take away coming back. So there was already energy from some very senior people at the firm to do something.
Tanya Baker: 08:33 Another event that happened is we were, and this is in investment banking, we were looking to buy a very small business that was trying to disrupt the way that we did financial modeling, because as it may or may not come as a surprise, is that we’re still heavy, heavy excel users in our industry. And excel is great, and it’s stable, and it’s been around for many, many years, but as we look to evolve and collect more data and streamline a lot of our workflows, Excel is highly, highly limiting. And it’s been really hard to displace, and so we were looking to buy technology, and what we found was that structurally we were limited, because although in investment banking it was going to be highly beneficial, candidly we do digital modeling in many businesses across the firm. And so the question was is there a central place to be able to make the decision and buy it rather than each business doing it on their own, and although we found it attractive we found that it was a structural gap and an opportunity for us to do better as a firm.
Tanya Baker: 09:33 And the third one, and I’d argue that this is probably the most important, is Stephanie Cohen who was a senior partner and ran M&A for financial sponsors was asked to be chief strategy officer of the firm. And when she came into this role, she had a very different view for how the role would be, and her primary focus is that there should be no daylight between the firms strategy and engineering and innovation. So her coming into this, and the partner offsite ending, and then us having worked through along with Stephanie this acquisition where we saw this opportunity really led to the birth of Accelerate, and she called me and said “We’d like to figure out what it is going to be.” And at the time we didn’t have a name, we didn’t have a structure, but we did have very focused areas that we wanted to build a platform to address, and it led to the birth of Accelerate.
Tanya Baker: 10:25 And what I would say that was probably most important to this, looking back, was that we had real senior sponsorship from the top of the house from day one. Because we’ve seen a lot of these fail, and candidly if they are side, organic, grassroots projects, especially in such a large organization, it’s really really hard to have them work. For me, having spent so long at the firm, I wasn’t going to go and do this unless I really knew that we had the full, full support of the right people, and we did.
Sean Ammirati: 10:57 Yeah I think that’s true across all the ones we look at, the senior buy in is essential. Could you elaborate a little bit more on what you mean by no daylight between the strategy and the engineering group, that’s an interesting phrase that I think I know what you mean by that, but what does that mean operationally at a place like Goldman Sachs?
Tanya Baker: 11:16 Yeah, absolutely. So in the past we’ve had our businesses, so we have our asset management business and our investment banking, and our securities business, and they all have technology teams that are partnered with them to help underly and candidly support the business, and we have our core engineering. But, now with all of the changes, is that any new business, number one, is probably going to be a digital business. And number two, any new strategy of the firm is going to be highly informed by the technology strategy and the digital strategy. It’s no longer a world where you come up with a new business and then you call your engineers and say how do we implement this?
Tanya Baker: 11:54 It has to be a strong partnership from day one. And our new business, our new retail business, Marcus, which I trust you’ve heard of, is fully digital, fully API driven, a brand new business for the firm that’s being led by engineers, which is new for Goldman Sachs, it’s not what we had done before but it’s critical for us to focus on going forward. And so when Stephanie came in and recognized that, and had that focus, it really enables a lot of these new initiatives and a lot of these changes to take form.
Sean Ammirati: 12:27 Awesome. Okay. So I think that’s really helpful in terms of how this came to be. Let’s step back to something you mentioned just briefly in passing earlier, which is the stages or the milestones that an idea would go through being part of GS Accelerate?
Tanya Baker: 12:42 Yeah, absolutely. Happy to. So we wanted to make the barrier to apply to this program really low at the beginning. People are busy, whenever there’s something new, candidly people are skeptical. So when we initially launched this, we had a web form, and it was very high level. What’s your idea? What’s being done now? Why are you the right team to implement it? What’s your elevator pitch? But it was really something that anyone could apply to, and we didn’t even require a teammate. And what happened was we had 1,000 ideas on our first run, which was great but they were also a little bit random.
Tanya Baker: 13:24 And we knew that it wasn’t going to be an efficient process day one, and we had this debate at the beginning of do we give people more direction, and we landed on no because we wanted to see what people were thinking, but we had everything from super substantive business plans to an entire business plan on why the Salt Lake City Gym should be open for 24 hours. So we had the full gamut. And what we did here was, because we knew, number one, when you have over 1,000 ideas, you’re not going to necessarily guarantee that you pick the best ones.
Tanya Baker: 13:53 But we really wanted to make sure that the organization all felt that this was their platform and their vehicle, and not just by a tiny team within the executive office, and so we had senior people from each division at the firm from each region representing different subject matters, each pick their top ten. And there was a lot of overlap in those selections which was great, but at the end of the day, if someone said “This is not a great idea, why did you put it through, Tanya?” I could say “Actually, so-and-so person who runs this region thought it was interesting.”
Tanya Baker: 14:25 So it was really helpful and it was great to see the firm coming together to make those selections. And so we went from 1,000 very quickly down to 120, and from those 120 we asked everyone to prepare a two to five page business plan and do a ten minute pitch. And what as most fascinating about that, is that at Goldman Sachs we have the range of people that pitch for a living, investment bankers are sales people, they’re pitching for business, putting together this pitch is not such strenuous exercise or such a big ask, to people who candidly, in some of our more back office functions, have only seen pitches on Shark Tank before.
Tanya Baker: 15:04 So we had a full barbell and it was very interesting, so we had people prepare, again, still high level, and do their pitches, and it was really really cool to see. It was great to see people come out of their shell, present their idea, field some of the questions, people put a lot of work into it, and candidly, the people that weren’t selected, many of them came back and said this is one of the best experiences they’ve had thus far in their career. And so we had those 120 pitches, we then went down from 120, we took another large cut and went down to ten. And that selection was made a little bit more by a smaller group, so we have our Accelerate sponsor group, but with heavy, heavy impact from the businesses.
Tanya Baker: 15:44 Because what we’ve realized from the beginning and what we’ve recognized is that if there’s not broad organizational supports in the ideas that we’re picking, and it doesn’t have to mean that they would spend their own budget to do it, but if there’s a full allergic reaction from a relevant business to us doing, it’s just going to be hard. It’s going to be hard to get done, it’s going to be hard to get through the system, maybe in a few years from now as Accelerate is more mature we won’t have that limitation, but we knew that there had to be the organization embracing the ones that were going forward. So we selected the ten based on teams, but also based on the firms priorities of where we wanted to be innovating, and we took those ten teams offline, so out of their jobs for a week, put them through a heavily chaperoned and coached one week sprint, which got them from two to five page business plans to something that was actually pitchable for funding.
Tanya Baker: 16:37 Those teams then pitched to a very senior group, a bunch of management committee partners and we ended up funding eight of them.
Sean Ammirati: 16:44 I mean that’s a remarkable pipeline. To go from 1,000 to 120 to roughly a dozen to eight is a strong pipeline. You’ve got, I think one point that you made that it’s fascinating as someone who spent his career in more traditional entrepreneurship is talk to corporate folks like yourself, the weight of a no is so much heavier inside a corporate entrepreneurship activity than it is in traditional entrepreneurship. If I meet with an entrepreneur and I tell them that their idea is bad as a venture capitalist with my day job, they can say thank you very much and go pitch to the next VC and kind of forget about that conversation immediately. The wrong no in any of these corporate environments is significant. So I think you’ve done a good job pulling from across your organization, but can you talk just a little bit more, when you got beyond that initial filter of 1,000 to 120, who are the people that you’re pulling into this group to review these proposals and sort of look at the sort of bottom end of your pipeline from the 120 to the roughly dozen to the eight that you ultimately funded.
Tanya Baker: 17:45 Yeah. So I will answer your question, but before I answer it, let me tell you one anecdote, which I found fascinating, which goes to your point with the no. There was one team, and they called themselves team Sydney that was pitching something that there was mixed reviews, and candidly, we thought it was an interesting idea that the firm wasn’t necessarily ready to invest in, and we thought that it was going to be a much bigger investment than what they had proposed, and it wasn’t a big area of focus for the firm, so we told them no. They did their phase two pitch and we didn’t move them through to phase three. And so this was now over a year ago.
Tanya Baker: 18:23 For the past year, they’ve continued to work on it, despite being told no. They socialized it to a whole bunch of senior people, they refined it, they’ve evolved it, whatnot, and so we recently relaunched this March, I had no fewer than five senior partners at the firm call me and say “I just want you to know that I’m supportive of Sydney, and we want to put it through.” And we’re putting them through, and we’re actually putting them through now an accelerated track and the proposal has evolved. So you’re absolutely right that there’s no market here, and a no within a large organization can be more meaningful, but what we really are looking for is to identify the people who are scrappy and who have that spirit and take no as a not now, or not exactly what you’ve presented, and continue to evolve it and socializing it to a point.
Tanya Baker: 19:11 Because candidly, some of these ideas are really really good, they’re just not right today, and there are some people that say “Oh shucks” and then they go onto their job, and then there’s other people who say “Okay great. That’s now my opportunity to make it better.” And this team was one example of that.
Sean Ammirati: 19:26 That’s, sorry, I do want to get to who’s in the room, but just to build on that for a minute, there’s a traditional startup accelerator that I did some work with, they’re regularly in the RICE rankings as one of the top ten, and they found their most predictive filter question that they ask entrepreneurs is what will you do if you get turned down by this accelerator? And every company that’s preformed like in their top 20% have said “No matter what you do, I’m going to build this business.”
Sean Ammirati: 19:53 What you’re describing there is sort of the corporate entrepreneur equivalent of it. Like sure, I don’t get accepted but I’m going to keep doing my day job and do this nights, weekends, whatever it takes. That’s really awesome.
Sean Ammirati: 20:04 Okay, so in these later phases, who’s in the room giving them that feedback with you and your colleagues?
Tanya Baker: 20:09 Yeah, absolutely. So we have, and again, this is very much a hallmark of Accelerate is we’ve lined up some of them we have champions, we have sponsors, we have mentors from every business, every region of the firm to be involved with Accelerate. So this really is, we have a small team that this is our full time job and we administer and we run the program.
Sean Ammirati: 20:32 And how many besides you are on that team?
Tanya Baker: 20:34 We have four other people.
Sean Ammirati: 20:35 Four other people, great.
Tanya Baker: 20:36 Yeah, who are full time. But it would be doing the other people a disservice to not mention them. So we have an opps champion, an opps sponsor, an engineering champion, an engineering sponsor, and you name it for every division in the firm, and they play various roles throughout the process. We’ve also been, I have my little note pad where we’ve been collecting the names of anyone at Goldman Sachs who’s either started their own business, or used to be a venture investor. And they’ve played a key role in helping coach for the pitches, helping tell the story, helping with the business plans. And we’ve been really ruthless about anyone who raises their hands who hasn’t actually done this before, doesn’t qualify.
Tanya Baker: 21:16 Because I really do think its a unique skill that’s hard to learn, and the only way to learn is having been through it yourself and these people are amazing and we have now this community of them, they’ve also gotten to know each other throughout the process.
Tanya Baker: 21:28 But going back to your question is in the phase two pitches, there’s always myself and a few members of our team, so we see all of them, and what’s helpful is that we can then connect the dots. Because a lot of these ideas are very similar, a lot of people are looking for teams, we can see themes across it, and we have a lot of visibility, and not only what’s going on in the firm, but also what’s going out there in the venture ecosystem because we should be building something that we can partner provide or figure out another path that we can work with them on. So we provide that broad lens.
Tanya Baker: 21:58 We also have people in the room that have expertise in the area. So if it happens to be a blockchain pitch, we’ll have someone in the room that has knowledge on blockchain who can really push the team. If it happens to be a pitch that’s covering investment banking, and maybe an area in asset management, we’ll try to have people in the room for that. And so as you can imagine, one of the hardest parts of phase two, especially when you have this many pitches is the scheduling, so we don’t require it at this phase, but we really do our best especially when some of the pitches are uber uber technical, to have someone in the room that can really speak the language and provide a view.
Tanya Baker: 22:34 For some of them, and where either we haven’t been able to get the right people in the room for logistics, or there’s been a bunch of followups, we’ve then had follow up meetings with others before we’ve made the right decision, so we always did make sure to run them down to their full effect. But they did have a fairly senior group of people in the room, although not partner level at that stage.
Tanya Baker: 22:54 For phase three for the funding decision, at that point we did have a much more senior group in the room, and so for the first few pitch rounds, you would have my team, you would have our champions, and you would have at that point the initiatives also had sponsors, so you had those people giving them feedback. When they’re actually pitching for funding it’s to a very very small committee of very senior partners at the firm, that ultimately have the ability to write the check off of our balance sheets.
Sean Ammirati: 23:23 When you say very very small, like how many roughly are we talking about?
Tanya Baker: 23:26 So Accelerate itself has eight what we call PMD sponsors. There’s three of them that are on the hook for the financial decisions, however, we’re a highly consensus based culture and so we try to get as many of those eight people in the room as possible. It’s usually about five, just for scheduling reasons. And there’s a lot of debate after, and ultimately we either make a decision yes, or we make a decision no, or there’s a lot of opportunities for gray areas. We want them to do more homework for three months, we want them to blueprint it and really validate customer demand, but not leave their jobs and then come back and pitch.
Tanya Baker: 24:07 And so what we’re actually learning through this, and this is what we’re changing a lot in this next round is that we can really really benefit from more in between stages as opposed to the binary no or yes just given that people have been doing it up until this stage nights and weekends.
Sean Ammirati: 24:21 Sure. That makes a ton of sense. Interesting. So you got three of the eight who are writing the checks, so they’re I assume always in the room, and then you’ve got kind of roughly two of the other five most times in the room in terms of reviewing this, and so the entrepreneur gives the pitch, or the corporate entrepreneur gives the pitch, and then they leave and kind of discussion ensues. What’s that like, how would you compare that maybe to what you observe with traditional venture capital?
Tanya Baker: 24:58 Here’s where it’s challenging, is that we have many investing businesses at the firm. We have funds, we have balance sheet, we invest client capital, so we have a lot of highly skilled and experienced investors at the firm. Where we haven’t traditionally focused on is early stage. And what’s interesting as well is that building a business within a large corporation is fundamentally by design more expensive than building a business outside.
Sean Ammirati: 25:26 Right.
Tanya Baker: 25:26 And the analogy that I always like to share is that you come and say “I’m building a business, I want you to fund me.” I can write you a check for a million dollars, and you can sleep on your friends couch for a year and you can live off of ramen noodles, and if I don’t think you’re doing a good job, I never actually have to kill your business. Because I’m not getting the money back, so you could pivot, you could change, you could stop for a while, and the only time I have to make an active decision is if you come back and ask me for more money.
Tanya Baker: 25:57 What’s interesting about these people is that because they keep their Goldman Sachs salaries, every day they come to work, it costs the firm more money. So if we kill something one or two quarters too late, there’s actually real dollar amounts that you can attribute to that, which makes it very different than businesses outside the firm. So what we’re trying to balance, and we’ve learned a ton, and we still have a lot to learn is that at this early stage of the business is how much do you focus on the numbers and the financials, and we’re so good at that. We’re so good at that. Versus, treating it a little bit more like a traditional early stage business, and giving them a little runway and focusing on that at a later stage. And I’d say that’s what, depending on the business, depending on the team, depending on the number, we’re still figuring out. But it’s hard, and in our DNA we want the numbers and we want the spreadsheets, and we have to pull ourselves out of it and listen to the opportunity and let ourselves dream a little bit.
Sean Ammirati: 26:59 I think that that’s true. It is an interesting thing, the precision that you can have around these numbers end up being often precisely incorrect, but at least precise.
Tanya Baker: 27:12 Right.
Sean Ammirati: 27:12 Whereas, directional questions like does this have product market fit or not, are very imprecise but are directionally obviously extremely important.
Sean Ammirati: 27:23 I will say one thing, having talked to lots of groups who do this, that I think you guys do particularly well relative to your peers, is you do treat these like investments, understanding that you’re right, people come to work everyday and to some extent that’s an investment, but there are real milestones that folks need to hit to advance to the next phase, there’s not a lot of free passes from the conversations we’ve had to just move onto the next phase. How do you think you created that culture within GS Accelerate, because I think a lot of companies could benefit to learn that from you all.
Tanya Baker: 27:55 Yeah, absolutely. That was one of our obsessive focus at the beginning, and one of my big focuses when we were structuring the program. Because part of it is a little bit of knowing ourselves and knowing that if we did say here’s X million dollars, go and figure out a solution to this problem, and it wasn’t structured as an investment, we wouldn’t have much of an appetite long term likely to continue it. Part of it was also recognizing that we have R&D within engineering, and they do a tremendous job, this is not meant to be R&D, this is really meant to be focused on getting new businesses off the ground.
Tanya Baker: 28:35 So what we did is we really looked at how early stage businesses worked, and tried to mirror a lot of that. So let me give you an example. Each of these businesses has a board of directors. The chair of the board has to be a partner, has to be a PFD sponsor, and everyone around the table is generally cross divisional. And so these meetings have been fascinating, because these are very senior people at the firm that don’t often work together and don’t often interact together but all have a real point of view, and the chair of the board actually has real responsibility and real accountability to this initiative and their name is on it.
Sean Ammirati: 29:13 Yeah.
Tanya Baker: 29:13 And so that’s one of them. We have a board of directors.
Sean Ammirati: 29:17 Sorry, just to pause on that for a minute because that’s amazing. So I assume the entrepreneurs on the board, how many people are on the board besides the PMD and the entrepreneur, who else is on the board?
Tanya Baker: 29:25 So we generally try to keep it to five to seven.
Sean Ammirati: 29:29 So normal, relatively …
Tanya Baker: 29:31 Normal size board.
Sean Ammirati: 29:32 Three to five is probably typical for early early stage, five to seven for a Series A. So you’re not that far off. There’s a relatively normal size, and you’ve got two seats kind of filled by default it sounds like, the PMD and the entrepreneur.
Tanya Baker: 29:43 The PMD and the entrepreneur, and we try to fill it with people that have … we try to have one independent, but we do also generally try to fill it with people that naturally have an interest or a stake in the business, but sometimes thinking about it a little bit creatively. And so, again, this is, one of our focuses is on enabling cross divisional innovation, we found that the boards have been really really key to make this happen, because everyone gets together, and the initial board meetings are quarterly, but we ask the teams to make sure to touch base with them at least monthly. So there is a regular cadence, and with the board meetings, one of the biggest areas of focus, and candidly this is another hallmark of the program is OKRs.
Tanya Baker: 30:28 So I’m sure you know about OKRs, this is another point that we’re really, really obsessively focused on in Accelerate. Some of the businesses are going to have revenue, some of them are not. Some of them are going to be internal efficiencies, some of them are going to be measuring them based on adoption and the dollars are going to come out after, and so what’s really been helpful about having the OKRs is that the board fundamentally has to agree, and I’d say primarily on the O’s, also the key results, but the objectives have to be bought in by the board, and then thereafter, the teams can work pretty autonomously until the next board meeting because they have the direction, and they have the buy in to build what they need to do. But at the next board meeting, we pull up the OKRs and we pull up where they’re at, and if things aren’t progressing, if things aren’t changed, then it gives a really good baseline to have a great discussion.
Sean Ammirati: 31:17 Yeah, and for people who are listening that may not be familiar with OKRs, John Door has written a great book on kind of how to structure OKRs which I’ll include in the show notes. Come back to the independent for a minute, because that’s another thing most companies get nervous about doing, can you give an example of an independent board member, like who do you get to do these and kind of how those come to be?
Tanya Baker: 31:38 Yeah, absolutely. We have found, because the time commitment for the board members is not that high, and generally these businesses are actually really interesting, and really fun. We haven’t been turned down yet, which is great. This may be early luck but no ones turned us down yet.
Sean Ammirati: 31:55 Knock on wood.
Tanya Baker: 31:56 Knock on wood. So let me give you an example. One of the businesses that we’re building crosses over investment banking and our investment management division. And so most people on the board are from those two businesses, we put someone from research on the board, just a really smart person who has an interesting background, but doesn’t have a vested interest in either of these businesses, and that person has very smart comments when we’re in the room, and it’s a very senior respected person, but normally they wouldn’t be in the room for these sort of discussions, so it’s independent. It’s a little bit random.
Sean Ammirati: 32:27 Oh I see, so they’re still Goldman Sachs employees-
Tanya Baker: 32:29 They’re Goldman Sachs, yes.
Sean Ammirati: 32:30 When you say independent, you just mean-
Tanya Baker: 32:31 Thank you for clarifying.
Sean Ammirati: 32:33 You just mean independent from the affected business.
Tanya Baker: 32:35 Independent from that. Now, what I will say, because you say still Goldman Sachs, one side effect of Accelerate, which has been really, really exciting, is we’ve seen some businesses come through and actually we’re working on one of them actively now where we think it’s a really good idea, we think the ecosystem would benefit from it, we’d like to be involved as an investor, but it isn’t something that we necessarily need to build and own. So what we’ve been doing is we’ve been looking to partner more with the venture community and co-build businesses together.
Tanya Baker: 33:06 The traditional Goldman Sachs way of doing things is we build a lot in house, and sometimes we spit it out. And although it works well, there are some challenges with it. And so we’re trying out a new way here, so in this case again, we’re partnering, we’re doing it once, we’re building it outside, we’re going to set up the business, we will take a sub 50% stake and then bring in other investors throughout the process. And so one of the, again, I say one of the many side benefits of Accelerate is we are open to and very much looking to actively partner with others with similar interests. We think there’s a huge opportunity for us, but we think there’s a huge opportunity for the industry to really lock arms and do things together wherever it makes the most sense.
Sean Ammirati: 33:47 Awesome. A couple more questions here, I want to be respectful of your time, but could you give just maybe one success story from GS Accelerate?
Tanya Baker: 33:54 Yeah, absolutely. So I’m going to caveat this with we’re five months into the first class.
Sean Ammirati: 34:00 Sure.
Tanya Baker: 34:00 So I can’t stand up and tell you we’ve created the next multi-billion dollar business, that would be great.
Sean Ammirati: 34:05 Of course.
Tanya Baker: 34:05 But we’re not there yet. But when I think about success, especially at this stage, I really look at the people. Because at the end of the day, for Accelerate, if we can continue to attract really really talented people with an entrepreneurial spirit, or desire or whatnot, great things are going to come from it. And so, one example is, we have this gentleman, let’s just call him Chris, who’s been at the firm for 14 years, and we call it HTM, but it’s essentially HR. And it’s been the same job, and he’s been managing a lot of our financial health and a lot of our benefits plans, and he’s really become one of the foremost experts at the firm on what is now commercially and out there a really really hot topic. And we had this expert sitting in HTM, in an interesting role, but a role that he had been at for a while. And he pitched something in this area that was extremely innovative, but really could only come from someone who intimately knew the industry and was extremely passionate about the space.
Tanya Baker: 35:06 And it turns out that this gentleman, Chris, he’s poised, he’s thoughtful, he knows how to tell stories, he hadn’t had this opportunity before, and from the 1,000 submissions, he was selected as one of the ten, and one of the eight. So now Chris, who also has a partner, has been working through it and we’re having this week actually our first exit from Accelerate because one of the businesses within the firm that’s highly focused on this area has said we want to invest in this and bring it in and really grow, so now Chris is moving and he’s leaving his role at HTM which they’re not happy about because he was great, and taking on a really big commercial role within the firm.
Tanya Baker: 35:48 And so, you know, it’s funny because when I think about successes, the people that we’ve met, and the people that we’ve pulled out of this program and seen people come from initially I’ve never even seen a business plan, to pitching, from management, committee partners, to building businesses, to showing progress, has been unbelievable. And I could probably give ten examples like this, but what’s so great about this one is that now we are actually seeing the end cycle of it, and he’s going to be in a huge role, so career-wise for him this is a tremendous opportunity, but for me, having seen him at the beginning and to see now where he’s at has just been really, really special and really incredible.
Sean Ammirati: 36:27 Awesome. That’s really awesome. So lets do final questions. The first one is just, and the same caveat, that you’re, like you said, five months in, but any lessons learned or things you wish you would have knew five months ago when you were getting this started?
Tanya Baker: 36:42 It’s hard … It’s hard. So people are everything. Some of the challenges are not what we expected, and you have to be creative about solving them. And so, what is one of the biggest, and I say challenge, but this is really an area of focus and opportunity for us, is when you are a startup within a large corporation, trying to figure out your relationship with the corporation is a hard one. Because you’re sort of part of it, and yet we’re sort of trying to keep you away from it and have a different culture, and making sure that people coming into Goldman Sachs through Accelerate for the first time feel enough that they’re part of Goldman Sachs but still part of Accelerate has been challenging and an interesting area of focus.
Tanya Baker: 37:25 and so, where we’ve landed on is that we ask the teams to treat Goldman Sachs as their top and most important customer. So to work with them, to collaborate with them, but at the end of the day, to think of themselves as a little bit independent. And it’s just, it’s something that we didn’t quite have our head around at the beginning because so many of us running this and administrating this have been at the firm for so long, but it’s been a really, really interesting cultural shift when you have the people pitching, go and get funding, go and hire new people who have never worked at Goldman Sachs and are now in this accelerator, entrepreneurial type ecosystem and have to get something done at the firm and don’t necessarily know how to navigate the place and don’t know who the right people to call are.
Tanya Baker: 38:11 And so, we’ve solved for a lot of it, we solved it with a coverage model, we have what we call operating partners covering all the businesses, we now are just launching a mentor program, so anyone who’s just coming into the firm for the first time through Accelerate gets a mentor. But this is one thing at the beginning we weren’t as focused on, and as we’re learning and as we’re seeing, we’re seeing as a really, really key part of the program is to make sure that there is the right level of focus on the businesses and on the people, after they’ve been funded and not just throughout the process.
Sean Ammirati: 38:40 Okay, so one question to end on, and this will feel maybe a bit off the cuff but I like to ask every interview guest this. So, let’s go back to when you’re finishing up at Stern and actually, ironically, I remember the New York economy at that point because I was running a tech startup here in New York at the time, and there weren’t-
Tanya Baker: 38:59 Amazing.
Sean Ammirati: 39:00 There were a lot fewer of us, a lot fewer. I actually sold it to Morgan Stanley, so another one of the larger banks. But you’re coming out of Stern and you’re thinking about what to do and you’ve had a pretty remarkable run, you’ve had an incredibly remarkable run here at Goldman Sachs, if you were to go back to somebody that might be in a similar position today, they’re finishing up their MBA somewhere and thinking about what they want to do next and how to think about managing their career, any advice you would give him or her?
Tanya Baker: 39:29 That’s a great question. I would say many of us, especially people who go and do the business school, many of us are planners, and many of us want to know what the future is going to hold or what their path is going to be, and I would say, A, be open to new opportunities that come your way, and candidly, take a risk, because if you’re good and you have a strong brand and you have a strong network and something doesn’t work out, there’s going to be another job and there’s going to be another opportunity, so go with it.
Tanya Baker: 40:02 The second part of that is really build your network and maintain your network. Because when I look back at the various jobs that I had including, candidly, coming out of Stern, because I did not go through the Goldman Sachs recruiting because I did not think that I wanted to work at Goldman as an investment banker, is it was by talking to people, and it was by keeping in touch with people, and it’s not only the people that are so far ahead of you, it’s also the people in your direct network of peers because people are doing interesting things, they know interesting people, usually the most interesting roles, candidly, are not posted online because they happen through the network, so keep your network and be open to new opportunities that sound exciting.
Sean Ammirati: 40:41 That’s awesome, and a great not to end on. Thanks so much for joining me on Agile Giants, I appreciate it.
Tanya Baker: 40:46 Thanks for having me.
Sean Ammirati: 40:47 Well I hope you enjoyed this episode of Agile Giants, if so, consider sharing it with a friend, and if you think it’s worth five stars, which I hope you do, please go to iTunes and rate it so that others can find this content as well.
