Inspirational Women Leaders Of Tech: Nicole Schmidt of Source, On The Five Things You Need To Know In Order To Create A Very Successful Tech Company
“Understand you don’t know everything about everything. Hire talented people that can drive you and your company forward. My leadership team is filled with people who I disagree with, who have a variety of world experiences, and who are incredibly talented. At the start of the COVID-19 pandemic, we came to a crossroads as a company and had to make some hard decisions about what to invest in and where to make painful cuts. I strongly wanted to go in one direction, but my Head of Product convinced me to go in another direction. Looking back, he was right, and I’m grateful we have the kind of culture where everyone has a voice and ideas are thoroughly vetted.”
As a part of my series about “Lessons From Inspirational Women Leaders in Tech”, I had the pleasure of interviewing Nicole Schmidt, Founder and CEO of Source. She started Source with 15 years of experience in commercial design, where she held a variety of roles in both interior architecture and product manufacturing. A lifelong learner, she originally launched Source in 2018 by teaching herself to code in her basement. Less than two years later, she grew the team to 15 people, raised two rounds of venture capital, led her team through a rebrand and complete rebuild of their technical infrastructure, and brought Source to a national audience. She loves camping with her husband and their two children, blasting inappropriate music in the office, and bubbly rosé.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a story about what brought you to this specific career path?
I grew up in a house that was deeply entrenched in construction and entrepreneurship. My grandfather owned a steel company and my father worked in construction. That generational legacy of entrepreneurship instilled the desire and risk tolerance for starting my own business from a young age. As a young girl, I was also fascinated by design. As other children dreamed of being astronauts or doctors, I always knew I wanted to pursue design. I followed that dream into design school and a 15-year career on both the design and manufacturing side of commercial construction. Starting Source is the culmination of a lifetime of influences and passions to engage with and improve the built environment.
Can you share the most interesting story that happened to you since you began at your company?
About a year into starting Source, I was in a Lyft heading to our headquarters in downtown Portland, OR. My driver asked what I did for a living and I told him that I worked at a tech startup in commercial construction. He asked a few clarifying questions and then exclaimed “Oh I’ve heard of you! I just moved here from Austin, TX and I’m a designer focused on sustainability. My colleagues and I are excited about what you’re doing.” At the time we were still very much a local player and had done no advertising outside Oregon. It seemed implausible that my Lyft driver from out of state had heard of my company. It made me realize we had something and that it could work.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
I learned the value of proper software development the hard way. When I first started Source, I taught myself just enough code to make things messy. For example, I thought it would be fine if our first database was in Google Sheets! I think one of the formulas that I wrote was over 15 lines long, and our engineering team had some fun unraveling some of my initial logic. I think when people say do things that don’t scale to test them out, this isn’t exactly what they had in mind. You have to start somewhere, but I learned that the choices you make early on can have compounding effects into much later stages of your company.
Can you tell us a story about the hard times that you faced when you first started your journey? Did you ever consider giving up? Where did you get the drive to continue even though things were so hard? Do I ever consider giving up?
Never and every day.
I had, and still have, an unshakable desire to make this industry better, to support the incredibly talented people who construct our built environment, and to address some of our world’s most pressing environmental and equity issues through the far-reaching impacts of commercial construction. I return to those initial motivations every day because the difficulties you encounter when you first start your business don’t ease as time goes on. They become more complex, and also more rewarding.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
When I first considered starting Source, my husband said that he thought the business was a good idea but that he didn’t want the entrepreneurial life for our family. He very explicitly said, “Please don’t do it, but I’ll support you if you choose to anyways.” It put a lot of strain on our marriage at first because he wanted to support me, but didn’t want me to quit my day job. We’ve worked through the difficulty of those early days now, but there were times where I had to really feel into my motivations for starting the company.
Despite his initial trepidation, my husband is the reason I could do this. When I started Source I had two children under 5, and he took on family responsibilities so that I could focus on starting and growing my business. He is an electrician and helped build parts of our first office. As recently as this month we spent the weekend as a family doing renovation work in our recently expanded office space. We’ve both poured literal blood, sweat, and tears into Source (well, maybe the tears have mostly been mine!), and I owe a debt of gratitude to our partnership.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again… who at the best knows, in the end, the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly.”
I fundamentally believe that you will only regret what you don’t try. I’ve always had this ethos that it’s okay to try, and it’s okay to fail, but it’s not okay to be scared and not try. When I look back on my life to date the only things I truly regret are the things I never tried. There are certainly things I wish I would’ve done better or differently. But when I look back on those moments and the feeling I have around them, I could not describe it as regret. Those feel more like learning opportunities to me. True regret for me comes from the times I didn’t even step up to the plate.
Ok super. Thank you for all that. Let’s now shift to the main focus of our interview. We’d love to learn a bit about your company. What is the pain point that your company is helping to address?
Commercial architecture and design are around us wherever we work, eat, socialize, stay, shelter, and travel through. Even when we aren’t consciously paying attention to it, the built environment fundamentally influences our behavior, experience, and even well-being. Despite its pervasive impact, the designers who create these spaces encounter problems of transparency, trust, and time during the process of finding and specifying the products that make up their designs. We exist to bring transparency, objectivity, and efficiency to the process of specifying products, and to improve the cost of doing business for firms and manufacturers alike.
What do you think makes your company stand out? Can you share a story?
At Source, we say that “the built environment is not inanimate”. Design is a uniquely human endeavor that serves human experience, and we’ve been focused on that from day 1. We are a tech company and we absolutely leverage technology where it makes sense, but always to support rather than replace the human brain.
Our in-house team works with designers every day to help them find products in a way that technology wouldn’t be able to. Last week, we had a designer who wanted to track down the manufacturer for a curved ceiling product in an existing building that they were inspired by. Our team was able to identify a few manufacturers who could meet not only the design intention, but also the application, budget, and unique aesthetic of that firm. Our proprietary database helped our team evaluate the options to meet some of the desired criteria, but there was an element of taste and judgment we brought to the table that made our team more helpful to the designer than any software alone.
Are you working on any exciting new projects now? How do you think that will help people?
We’re a startup, we’re always working on exciting new projects! Right now we’re focusing on improving our product so that it facilitates better communication between the various stakeholders on a commercial construction project. This initiative strikes at the center of the three main problems our customers face: transparency, trust, and time. We think that what we’re developing will change the way specification is done and result in healthier, less compromised designs with more efficient budgets.
Let’s zoom out a bit and talk in more broad terms. Are you currently satisfied with the status quo regarding women in Tech? What specific changes do you think are needed to change the status quo?
No. I’m not satisfied with the status quo of women in tech, and unfortunately, we have a long way to go.
There are so many changes needed, specifically around opportunity, but I’ll speak specifically to a portion of the opportunity discussion that I feel is the most critical. In 2018, Juul raised $10 billion more in funding than all-female founders put together. When women receive funding, especially seed funding, it’s so much less than their male counterparts. This matters because it means the women who do manage to receive funding have no room to fail, and early-stage companies need to fail to eventually succeed and find product-market fit.
If we want to change this we need women who take investment dollars to ask for more money when they are starting their companies, and we need investors who are willing to make sure their portfolios are diversely balanced. And not just from a “number of diverse founders” perspective. It needs to come from a “percentage of capital deployed perspective”.
In your opinion, what are the biggest challenges faced by women in Tech that aren’t typically faced by their male counterparts? What would you suggest to address this?
In addition to the funding gap, I think access to networks is critical for women to succeed in tech. If there was one thing that successful leaders could do to improve gender equality in tech it would be to mentor a female entrepreneur. Some of my strongest advocates as I started my company were white men who saw potential in me and in what we were doing. We need more men like that.
What would you advise to another tech leader who initially went through years of successive growth, but has now reached a standstill. From your experience do you have any general advice about how to boost growth or sales and “restart their engines”?
The world isn’t static. Things are always changing and evolving, which means new problems are always emerging. Find leading indicators of what’s shifting, and get with your customers to intimately understand those problems as they develop. This will require you to be honest with yourself and your company and to avoid relying on assumptions that were true in the past. After you’ve identified emerging problems, it’s the classic startup cycle. Iterate, test, try new things. Dig into the data, trust your instincts, and get outside your comfort zone. Success is not something you can attain. Success and failure are a continuum, and you have to constantly be in motion to remain in an acceptable place along that continuum.
Do you have any advice about how companies can create very high performing sales teams?
Care deeply about them. People typically want to be successful. Care about them personally, make the company a great place to work, reward them fairly, and give constant feedback.
In your specific industry what methods have you found to be most effective in order to find and attract the right customers? Can you share any stories or examples?
We are in a very relationship-based industry. Early on we tried classic strategies like PR and digital ads, but none of them proved as effective as leveraging existing networks of relationships. At the core of our growth strategy now is referral and word of mouth. We incentivize network “nodes” (individuals who have strong existing relationships with our target customers) to share our platform, and we create genuine value for both the referrer and referee. By shifting our mindset from a funnel to a growth loop, we’re investing in sustainable long-term growth that prioritizes compounding product value through network effects.
Based on your experience, can you share 3 or 4 strategies to give your customers the best possible user experience and customer service?
Listen. Too often in sales and customer service, we try to find a solution for our customers before we fully understand their actual problems. If you start with actually listening to your customers and understanding why they’re coming to you for help, you’ll have a better shot at understanding what they truly need and how to give it to them.
Adapt. The experience of your clients is changing every day. Pay attention to the changing landscape of your customers and see what you can do to delight them today because tomorrow that will be table stakes.
Delight. Don’t deliver on the bare minimum. Deliver on something that is going to truly bring joy to your customers, and they’ll remember you for it.
As you likely know, this HBR article demonstrates that studies have shown that retaining customers can be far more lucrative than finding new ones. Do you use any specific initiatives to limit customer attrition or customer churn? Can you share some of your advice from your experience about how to limit customer churn?
Invest in a human client services team, and enable that team to go out of their way to support your customers. We care about our customers. We know them, their pets, their preferences, and their troubles. The relationship we’ve built with our customers ensures that if they’re considering churning they’ll view it much more personally than “breaking up” with a computer.
Here is the main question of our discussion. Based on your experience and success, what are the five most important things one should know in order to create a very successful tech company? Please share a story or an example for each.
First: Never follow lists like this. Believe in yourself. You know your market, your customers, and your company better than anyone else. Believe in your ability to lead and then navigate the waters the best you can. There are countless times when people will tell you what you should do for your business, especially early on I got a lot of this. I don’t think you can stop this from happening, though you can change how you ingest it. Listen to what people say, check it against your own beliefs, take what you need, and throw away the rest.
Second: Understand you don’t know everything about everything. Hire talented people that can drive you and your company forward. My leadership team is filled with people who I disagree with, who have a variety of world experiences, and who are incredibly talented. At the start of the COVID-19 pandemic, we came to a crossroads as a company and had to make some hard decisions about what to invest in and where to make painful cuts. I strongly wanted to go in one direction, but my Head of Product convinced me to go in another direction. Looking back, he was right, and I’m grateful we have the kind of culture where everyone has a voice and ideas are thoroughly vetted.
Third: Never stop learning. Read everything you can about everything you can. Dive deep into subjects when you need to, but learn always. Learn about markets, learn about behavioral psychology, learn, learn, learn. My team knows to expect that I will have at least 10 questions about anything we’re doing, and it’s coming not from a place of judgment but of curiosity. Constant learning requires humility. My company wouldn’t exist if I wasn’t open to learning how to code, and then learning how to raise capital, and then learning how to become a technology leader. Our world is always changing, so I’ve even had to re-learn the playbook on the things I thought I knew deeply like sales and the design process.
Fourth: Get and keep a couple of core groups around you. Make sure you have a core friend group and a core group of business leaders and entrepreneurs. Make sure you can be your whole self around both groups. I have my beloved Foxes: a group of strong entrepreneurial women like myself that I lean on for so many things. Also, I have a pretty small but tight-knit group of working parents who gather for kid play dates (pre-COVID) and adult support. Both groups are free of judgment, and that makes them safe spaces for me. I get things wrong all the time, and we help each other learn and grow.
Fifth: Self-care. I wish I had learned this earlier. Much earlier. You cannot bring your whole self anywhere if it’s tattered and worn out. Rest, eat healthy, exercise. Act like you are training for a marathon because guess what? You are. It’s the onset of the COVID-19 pandemic in our country that hit this home for me. I am typically one who puts family, work, and friends ahead of myself. And it took the onset of a major pandemic to make me realize that it’s all for naught if I don’t have my health. I make sure and take time for myself every week now. And maybe one day soon I’ll be able to say I do that every day. It’s a work in progress.
Wonderful. We are nearly done. Here are the final “meaty” questions of our discussion. You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
Be a force for JEDI. Justice, equity, diversity, and inclusion. We have so far to go in this world toward those efforts and it will take all of us working together to make any progress at all.
We are very blessed that very prominent leaders read this column. Is there a person in the world, or in the US with whom you would love to have a private breakfast or lunch with, and why? He or she might just see this if we tag them :-)
I’m such an Oprah fan. I think she is the epitome of someone I would like to be when (and if) I ever grow up. She believes anything is possible, and that nothing can stop a determined person from achieving their dreams. She works hard to make sure that determined people have more equitable access to follow their dreams, and she inspires me to hold those same truths and actions at the center of my life.
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