Brex Founder Spotlight | How Bounce founder Cody Candee is ditching confirmation bias to better serve his customers during the COVID-19 crisis
When starting a company, some might argue that founder optimism is necessary to combat the seemingly irrational task at hand. But beware of the fine line between optimism and confirmation bias, or the instinct to look for and favor information that confirms or supports our personal beliefs. It’s human nature to overlook negative or hindering input and focus on the information that will help us move forward in our preconceived direction. And as individuals driven by the need to create, accelerate, and achieve success, startup founders are no exception. In fact, their relentless confidence may make them even more susceptible to bias and its unanticipated consequences.
In the face of COVID-19, business leaders have had to make tough and critical decisions about how to respond to the pandemic. Many times, this means turning off their founder optimism, setting aside their biases, and acknowledging what is best for their company’s long-term success. Brex recently sat down with Bounce co-founder and CEO Cody Candee to uncover the challenges of turning off founder optimism and confirmation bias during a global crisis. And it turns out the advice applies to large companies like Apple and Google as much as to new businesses, series A startups, and earlier stage companies alike.
Solving a problem with a startup
As a self-proclaimed minimalist and a global traveler, Candee saw first-hand how much time people wasted planning their days and lives—and their travel—around their things. “I can fit all of my possessions into three suitcases,” he says. “And I travel really light.” Noticing that people would go out of their way to drop a bag at home or a hotel, or skip an entire day of travel because they were saddled with a suitcase before a flight, he was inspired to give people back their time—and their experiences.
Enter Bounce. Offering short-term storage in urban areas, the Bounce app allows users to instantly find nearby local businesses to store belongings while you explore. Originally operating out of New York, Bounce now has lockers in San Francisco and 100+ major cities around North America. And starting this summer, the SaaS platform is adding Europe to its docket. Travelers can land, stash their stuff, and forget about it until they need it. In other words, we all have baggage—Bounce gives you a place to store yours while you go live your life.
When it comes to both product-market fit and founder fit, Candee attributes much of Bounce’s success to the problem he’s trying to solve. “While there are a lot of characteristics that any entrepreneur needs — persistence, determination, velocity of iteration, for example— what makes a great founder is the desire to solve a particular problem.” Candee says his extreme minimalism, thirst for travel, and obsession with a hyper-efficient world align him perfectly to the Bounce mission. “Bounce feels like my life’s calling, and that really drives me as a founder.”
Adapting your business model through an economic crisis
Prior to the coronavirus outbreak, Bounce’s biggest challenge was hiring. “Our business is evolving so fast, and every role has so much breadth—which makes each one a moving target,” says Candee. But since the pandemic and ensuing financial crisis, the startup has taken a hit in more ways than anticipated. “When a business is projecting to grow at 5x and only grows at 2x, it can be catastrophic,” he says. “When COVID hit, not only did our growth slow, but our entire revenue base plummeted 99% overnight.” This really threw a wrench in Bounce’s plans. It forced the co-founders to cut costs immediately and adapt to slow their burn rate.
In 2020, layoffs are not uncommon. And Bounce was not immune to cuts. After laying off two employees, the small business doubled down on longer term growth initiatives. Its leadership focused on six months and beyond, rather than immediate payoff. “Each day felt like a month at that point,” recalls Candee, “and our strategy evolved daily.”
Overcoming biases in the face of uncertainty
Throughout the experience, Candee admits that confirmation bias was his biggest mental hurdle. “I could find articles or research that would tell me the most comforting predictions,” he remembers. “Things like Travel will bounce back in three months.” But he knew better than to rely on that unfounded reassurance. “I could have assembled a narrative convincing me and my co-founders that everything would turn around and we would continue as we had before.” And he could have bolstered that narrative with pretty credible sources.
But Candee knew his confidence would be biased by what was convenient under the circumstances. “It's human nature to confirm what we believe,” he says. As the founder of a company that operates in the travel space, it would have been easy to fall back on optimistic anecdotes about the future of the industry. But that wouldn’t have helped Bounce in the long run. “While I love hearing predictions that travel will bounce back soon and this whole thing will pass, it is more valuable for me to anticipate the worst case scenario and make sure we're positioned for that, as well.” In other words, hope for the best while preparing for the worst.
Generally speaking, this mindset hasn’t appeared to be particularly popular during the coronavirus pandemic. Candee watched as founders and news outlets made predictions based on wishful thinking, painting a rosy picture of an otherwise unknown horizon. As those unfounded predictions gained traction, nods, and shares, he says, “It was pretty clear there was a lot of confirmation bias going on.” Acknowledging human susceptibility to confirmation bias—and witnessing it in others—is the key to checking it in yourself. At the onset of the pandemic, Sequoia provided a grim analysis. The forecast suggested that the companies most likely to survive the global crisis would not be the smartest, but the most adaptable to change. Candee is one of few leaders who seems to acknowledge that adaptability requires assessing all available information. Not just the stuff that makes you feel warm and fuzzy inside.
“There’s a book called Thinking in Bets,” says Candee, “which proposes that if you bet someone that what you believe is true, it makes you think much more critically about it.” Raised stakes force the bettor to consider possible alternatives, rather than just asserting an opinion with nothing to lose. So instead of relying on a fabricated—albeit reassuring—narrative, Candee and his co-founder put aside their unbridled optimism and mapped out scenarios in which the company wouldn’t recover for months—or even years.
Mapping a future in uncharted territory
Moving forward, Bounce will keep its vision. Acknowledging that 2020 has likely set the company back, Candee is confident that this year will be an important chapter in its story nonetheless. The aggressive growth mindset of Silicon Valley has taken a backseat in recent months. Companies are shifting their business models in the face of reduced cash flow, and venture capitalists are reprioritizing their funding. Of the collective lesson learned, Candee says, “I think we’ll keep profitability more within reach than before.”
And while hiring has also taken a hit, Candee remains an optimist. “We’re a little leaner as a result of the pandemic, but I think that will actually give us an advantage going forward,” he says. “Everyone on the team is being pushed to give their best, and they wouldn’t have had that forcing function otherwise.” With a team of just a few full-time employees, Bounce is pushing forward. It’s added tens of thousands of customers across nine languages, and almost 1,000 storage partners this year. And the company isn’t letting a little thing like a lockdown keep it from dreaming big. “It’s crazy to think that someone who speaks a language we don’t know will use our app to find a store in a country we’ve never been to,” he says. And every 5-star review reminds team members what they’re working toward. In the midst of global uncertainty, “I think we’ve really nailed our approach to scaling.”
Of his own personal evolution as a CEO, Candee says 2020 has been a very humbling year. “Every business in the world seemed to be an optimist, operating and projecting as if we would be in this bull market forever,” he admits. “Then, boom, COVID hits everyone in the face.” Suddenly, the next five years don’t look much like the last. In fact, today doesn’t even resemble last month or last week. This setback reminds startup founders how unpredictable the world is, and how quickly it can change on a dime. “I think if you know that, you’ll operate a little differently moving forward.”
That said, perspective is also more important now than ever. It’s easy to feel overwhelmed when focusing on the one-year mark. There’s no playbook for this, and things can seem pretty bleak. But if founders think of—and plan for—their companies in the long-term, the future becomes easier to digest. “We see Bounce as a 50+ year company,” says Candee. “What is one bad year in the context of that amount of time?” Think of this year as just a part of the journey, and keep pushing yourself and your team members forward.
Keep an open mind—to new ideas and potential biases
In the midst of uncertainty, our minds immediately gravitate toward what’s comfortable and reassuring. That guiding intuition can be a good thing when you’re trusting your gut, especially if you’ve worked on refining it. But founders must also open their minds to new, conflicting information if they want to make sure they’re really making the best decision for their company. Those decisions should be made against all alternatives—not just the reassuring ones. Acknowledging that biases exist and might interfere with decision-making can set you lightyears ahead. Candee recommends Malcolm Gladwell’s Blink for insight into gut instinct and avoiding confirmation bias. He also relies on a bookmarked list of cognitive biases, saying, “If you can clear the path to achieve ‘perfect logic,’ you will make better decisions in the end.”
Following COVID, everything is up in the air. In the era of Zoom video conferencing, dwindling in-house perks, and declining venture capital funds, it’s easy to feel defeated. But while startup founders should remember the Ubers and Airbnbs that emerged from the 2009 wreckage, those companies were successful only as far as they took advantage of their environment and planned according to their companies’ best interests. Optimism can take you far, but it stops being effective when it interferes with a leader’s ability to see clearly ahead.
Tech startup founders tend to possess qualities like vision, passion, innovation, and persistence at higher rates than the average person. And they’re more likely to take risks and think they control outcomes. But during times of crisis, risk and control are seldom options. Founders must take off their blinders, put overconfidence aside, and acknowledge that external forces can shape outcomes. Most of all, they need to exercise self-discipline and put their companies first. In other words, don’t let unbridled optimism fog up the windshield view to your company’s future. And while overcoming a very basic human flaw like inherent bias can seem daunting at first, acknowledging it exists is the first step in surviving—and thriving through—an unexpected crisis.