Transformation in times of transition

Reese Witherspoon, Rachel Carlson, and Chris Comparato discuss how technology is enabling entertainment, education, and hospitality to come back, stronger than ever.

The Cloud 100 Team

On March 11, 2020, Reese Witherspoon was in the middle of shooting The Morning Show in downtown Los Angeles when life, it seemed, abruptly screeched to a halt. “Jennifer Aniston, my co-star, called me,” she recalls. “She was like, ‘Do you see what’s going on in Italy? We have to shut this down.’” Within 24 hours, Reese was on the phone with top executives at Apple who dealt a blow—they were immediately shutting down production for all shows at Reese’s studio, Hello Sunshine.

Reese was in disbelief. “Once you’ve started a production, it’s a speeding train moving forward,” she explains. “You lose so much money every single day.”

At the same time, Rachel Carlson, CEO and co-founder of Guild Education—a three-sided education marketplace—was juggling three distinct sets of customers dealing with different but all devastating effects of the upheaval. Meanwhile, Chris Comparato CEO of Toast, Inc. was inundated with urgent feature requests from restaurateurs who were fiercely fighting to stay in business.

As part of this year’s Cloud 100, these three visionary leaders share the top lessons that helped their businesses not only survive, but thrive, despite a period of immense chaos.

Always be one step ahead of your customers

In addition to a wildly successful career as an actress, Reese has an impressive cachet in the business world. She’s had the entrepreneurial itch since childhood, when she was always running one small business or another out of her desk in elementary school. Today, in addition to founding the media production company Hello Sunshine, she has launched a popular book club and started a clothing line called Draper James.

Since the early days of her production company, Reese has prided herself on catering to underserved audiences. “When I looked at Hollywood, I started to see that women as audiences were migrating to different platforms. But they weren’t really being spoken to on those platforms. So much of my industry was focused on movie-going.” The emergence of streaming, coupled with the popularization of social media—where women were very early adopters—revealed a gap that Reese was delighted to help fill.

“I wanted to bring entertainment to women where they were—whether it was on their phone, their TV, or their computer screen. Instead of asking audiences to come to us, we were going to them,” she says.

More recently, with the drastic changes in viewing habits and preferences elicited by the pandemic, Reese has kept on top of the changing zeitgeist. “We’re talking a lot about how to bring more marginalized voices to the fore. We’re talking a lot about this as we incubate new ideas and find new scripts.”

“It’s about representing women of color, LGBTQ folks, differently-abled women,” continues Reese. “These stories have not been told for hundreds or thousands of years. But we’re in a unique spot where the convergence of streaming and the tailwinds of movements like #MeToo and Black Lives Matter are opening up new possibilities.”

In addition to meaningful stories from underrepresented groups, Reese has also observed that many are craving more light-hearted content as they emerge from an exceedingly difficult period. “People are going to want to see hope and optimism. Audiences are craving humor, comedies, things that lift you up.”

Help your customers adapt to a world changing at a breakneck pace

Back in 2014, Rachel Guild had a powerful instinct that the world as we know it was changing. “The need to upskill America’s workforce was prescient in a way it hadn’t been for any other generation,” she says. “If you think about the average American family, the grandfather was part of an agricultural economy. The son worked in the industrial economy and saved money for his kids’ college. The grandson moved into the knowledge economy. That’s how we used to make change—over generations.”

Fast-forward to the present, and the half-life of a skill is no longer a generation. It’s only a handful of years. “Now it’s the great-granddaughter, and she’s going to have to reskill herself continually. It’s not her children who will enter the next economy. It’s her—roughly every five years.”

Guild Education is a three-sided marketplace that facilitates upskilling between learners, their employers, and universities. Many of their learners are frontline workers—precisely the folks who were undergoing the most intense impacts of the pandemic. “When you think about employees who work at a Walmart, or a hospital, or in a Chipotle—who suddenly had to move to all app-based orders—these are our students,” says Rachel. Guild has always existed to help learners adapt to a changing economy, but nobody could have predicted the sudden and jarring changes that the pandemic would bring about.

“Empathy became the driving theme for Guild during the pandemic,” she says. “Our average learner is a 32-year-old-woman of color who makes $14 to $20 per hour. Fifty-six percent of our students are students of color.” Since Guild largely caters to demographics who were disproportionately impacted by the pandemic, Rachel and her team became razor-focused on supporting learners through this troubling time.

“This was a tough year for moms,” she continues. “Fifty-four percent of our students are women, and 70 percent of Guild employees are women. Empowering these women has always been core to our mission, but never more than this year.”

“At times, prioritizing our students felt at odds with serving some of the other stakeholders we serve, like our employers, or our university partners, who all come together to do this upskilling. Everyone was struggling because employers were trying to figure out how to keep their people safe, while keeping their stores open. Ultimately, it’s a balancing act to keep everyone happy.”

Be agile to enable your customers to be agile

Of all the industries that were hit hard by the pandemic, the restaurant industry was amongst the worst. “When the restaurant community started to feel pain, we felt their pain,” says Chris. “When your whole customer base is suffering, you suffer.” Restaurateurs were suddenly forced to adopt decades worth of technological advances in mere weeks to stay in business. This was all the more painful given the restaurant industry had fallen behind other industries in modernizing their technology. Most receipts were still paper. Most transactions, still cash.

This expectation of dizzying speed jolted Toast, a cloud-based end-to-end platform that powers the restaurant industry, into action. Chris acted decisively to expedite the process of delivering products that were in development. As a technology company, agility is de rigueur. For restaurants, not so much. This meant Toast was uniquely positioned to use their finely honed agility to help restaurateurs learn to be nimble themselves.

When indoor dining came back with limited capacity, Toast released new features that enabled customers to order and pay at the table without touching a physical menu or a payment terminal. “Products like order and pay at the table and scan-to-pay, which used to be optional, became really indispensable products for the industry,” says Chris.

Once restaurants were relatively stable with orders coming in, the question for the Toast team became: How can we empower restaurants to increase efficiency? Many were struggling with staffing, safety protocol, and compliance. Managing these logistics effectively became a key factor that separated restaurants who could sustain a reasonable profit margin and those who could not.

After developing features to increase efficiency, the team realized their customers were turning their attention to a new guiding question: How can we maintain excellent operations and still delight our guests? This is an ongoing question that Chris and the team are grappling with to support restaurateurs through the next phase. But the pandemic experience has changed one piece of Chris’s philosophy as a leader: Roadmaps are negotiable, but customer needs are unyielding.

Reese Witherspoon, Founder of Hello Sunshine Rachel Carlson, CEO and Co-founder of Guild Education\ Chris Comparato, CEO of Toast

Full Transcript

Transcript

Reese Witherspoon:

Hi, I'm Reese Witherspoon and I'm the founder of Hello Sunshine.

Rachel Carlson:

Hi, I'm Rachel Carlston and I'm the CEO of Guild.

Chris Comparato:

Hi, I am Chris Comparato and I am the CEO of Toast.

Rachel Carlson:

All three of us spend time in big industries in the US that have really undergone an enormous amount of change over the course of the pandemic in the last, almost year and a half now. I'm curious as you think about the broader change, but more specifically changes leaders and how you figured out how to lead during this crazy period that we've all gone through. What are the leadership changes you've made or any leadership resolutions that have been impactful for you as you've navigated leading? I'll ask Chris to start.

Chris Comparato:

Toast is a cloud-based end to end platform that powers the restaurant industry. As a backdrop, the COVID pandemic had a pretty significant impact and it threw a punch into the restaurant community. When the restaurant community started to feel pain, we felt pain. When your whole customer base is suffering, you feel that pain. If you go back to last March and April, it was pretty tough. While you're reading signals from different sources, you've got to make some calls. For me, one of the biggest self improvements is really about decision making. Then on top of that, how do you communicate? When you're in a little bit of a crisis and you're analyzing where to go next, how do you communicate to your team? How do you communicate to the customer base and all of the key stakeholders?

Chris Comparato:

I think that's one thing that jumps out at me is really decisiveness and resilience, and then also communication because it's important to stay aligned and give people clarity. It's continuous improvement, so I think I'm always looking to up my game and continuously improve and that part continues.

Chris Comparato:

Reese, how about yourself in the media industry? The media industry has gone through amazing transformation in the past year and a half. When you look to your role as a leader, can you reflect on any changes that you had to make within your space and your industry?

Reese Witherspoon:

Yeah. I think, March, I want to say the 11th, we were in the middle of shooting The Morning Show in downtown Los Angeles and everything just came to an abrupt halt. I remember Jennifer Anniston calling me and saying, "We have to shut this down. Do you see what's going on in Italy?" Within 24 hours, we were on the phone to the heads of Apple and just saying, "We've got to shut the show down."

Reese Witherspoon:

At Hello Sunshine we had four shows in production that just immediately stopped. It was very abrupt. We were all told we were going back in two weeks. It was not two weeks. That's hard. Once you've started a production, it's a speeding train forward. You lose so much money every single day. I have to say that our corporate partners, our studio partners, were incredible with the way they took care of our workers, really compensating them, making sure that they were still paid for as long as they could be.

Reese Witherspoon:

I would echo what you said, Chris. It was a lot about learning to communicate with people. It was wow, we all got on Zoom really fast and started connecting and reassuring. Not just those every day scheduled meetings, but it was picking up the phone and calling people and going, "How are you managing this? Because we're now talking all day on screens. How are you handling that with your team?" Mental health check-ins. Zoom Free Fridays became really important as the pandemic progressed.

Reese Witherspoon:

Come back October, we were back to production again, and that was a great relief to us, but then we had to implement tons of COVID protocols. It's been a really hectic, crazy time, but I feel really optimistic that those skills that we learned during that time are really going to help us grow and feel even closer as a company.

Reese Witherspoon:

What about you, Rachel?

Rachel Carlson:

For us at Guild, we are focused on up-skilling all of America's workforce, but with a real focus on the frontline workforce. The frontline really were undergoing, I think, the most intense impacts of COVID. When you think about employees who work at a Walmart or a hospital or in a Chipotle, and had to move to suddenly all app based orders, you name it, those are our students. Empathy became really the driving characteristic that we had to focus on at Guild, because of course we're deeply empathetic to our students. At times that felt at odds with some of the other stakeholders we serve, like our employers or our university partners who all come together to do this up-skilling, but really everyone was struggling because employers were trying to figure out how do we keep our people safe, but keep our stores open.

Rachel Carlson:

Then universities had an incredibly difficult time during the pandemic, particularly the schools we work with that have both on campus footprints and online. Empathy became the driving theme for Guild.

Rachel Carlson:

Then for me, as a leader, it became wildly important. 54% of our students are women. 70% of Guild employees are women. This was a tough year for moms. 56% of our students are students of color. This was probably the most important, but most difficult year of conversations, decisions around race. For me, just trying to constantly find a way to connect and stay aware of what my team and my customers were going through became my north star. It was hard, and I've learned so much. I look back with a lot of gratitude for what I learned this year.

Reese Witherspoon:

Chris, speaking of your business, so many brick and mortar locations of restaurants had to pivot to digital solutions. Where did Toast jump in and help with those solutions for restaurant owners?

Chris Comparato:

Sure. Before jumping into, really 2020, I think it's important to zoom out and talk about the industry at large. The restaurant industry is this amazing diverse industry that we all love and cherish so much, but it's been underserved by technology firms and financial service firms for decades. It's fallen behind other industries in modernizing around technology. When COVID hit, I'd argue that some of the products which used to be optional became indispensable and must have. If you think about the restaurant which typically served their dine-in population, and maybe they had delivery or maybe they had takeout or online ordering, all of a sudden when COVID hits, people are not coming into the restaurant, obviously, and restaurants really had to pivot. How do you drive those orders into the door? Whether it's first party delivery to get orders in on delivery, whether it's curbside pickup and take out, whether it's online ordering.

Chris Comparato:

At Toast, we very much tried to expedite products that we already had in motion, but really turbocharge them and get them into the hands of restaurants so that restaurants could get orders in the door. Then once the restaurant had consumers and guests orders, how do you increase efficiency? Because these restaurants were struggling when it comes to staffing and employment and safety protocols and compliance. How do you enable that restaurant to really run efficiently and run a streamlined business and get those meals and orders out the door, whether it's to frontline workers or to consumers. Then lastly, how do you do all of this and still delight your guests and make sure that as an entrepreneur and as a creator and an artist, you're still making these fantastic meals, but you're delivering them through different channels. How do you still make sure that you've got this edge on delighting your guests and creating a fantastic experience?

Chris Comparato:

If the three of us were sitting on my patio, how do we enjoy a great meal, but we're on my patio, or maybe we're doing takeout and we're going to go in and do curbside pickup and sit at a park. How do you make sure that you're also delighting the guests? I think a lot of this came front and center, I'd say in the middle of 2020. We had to expedite products that we had already been working on.

Chris Comparato:

Another good example is the ability to, when restaurants came back for us to walk into a restaurant and order and pay at the table, but perhaps not touching a menu, not touching a terminal, but the ability to have the health and safety of the consumer and the employee in mind. Products like order and pay at the table and scan and pay became really critical indispensable products for the restaurant industry.

Chris Comparato:

Reece, what about media? Media has gone through an amazing transformation. Maybe you can comment on some of that same transformation that's happened within media.

Reese Witherspoon:

Yeah. I mean, it's been really interesting to watch audiences shift their viewing patterns, so watching that behavior change so rapidly. Unfortunately the decline of movie going definitely impacted my business greatly. We were a primarily streaming based company, so our scripted and unscripted pretty much lives on streaming. Just doubling down on those strategies and also thinking about what... Kind of trying to predict what the future will be, what do people want to see? I think it's going to be really important as we emerge from this time that people are going to want to see hope and optimism, humor, comedies, things that lift you up. It was also really hard too, because a lot of shows came out and they were very, very hard and dark. It was hard to watch, so I think a pivot there too, about what we're making, not just how we're making it, but the content inside, how audiences are going to want to feel cheerful. That's something that we were really talking about a lot and incubating new ideas and finding new scripts during this time of quiet.

Rachel Carlson:

Reese, I'm really curious, your career has spanned so many different industries and you've been quite entrepreneurial in a number of them between the work in media and Draper James and the book club. I'd love to hear what inspires your entrepreneurship.

Reese Witherspoon:

Well, I just have a billion ideas and I like to... sometimes they're terrible ideas and then sometimes they're good ideas, but I've always been entrepreneurial ever since I was little. I always had some business I was running out of my desk in the third grade, or doing something enterprising when I was seven. I don't know, it's just, I've always thought of myself as a problem solver. When I see a very clear glaring problem, I'm always trying to figure out my way to fix it. When I looked at Hollywood in general and media in general, I started to see that women as audiences were migrating to different platforms, but they weren't really being spoken to on those platforms. My industry was pretty much focused on movie going. With the emergence of streaming, it created this real white space, and social media I would say, where women were very early adopters.

Reese Witherspoon:

I think it created an opportunity to build a multi-media brand that could really bring entertainment to women where they were, whether it was on their phone, whether it was on the TV, whether it was on their computer screen. Instead of asking audiences and consumers to come to us, we were going to them and that was why we were very consumer forward and trying to just always keep on top of what women are looking at right now. In the process, doing it with authentic authorship across all marginalized voices. It isn't just about women per se, but it's about women of color, LGBTQ representation, differently abled women. These stories have not been told for years and years, hundreds, thousands of years, because the creators couldn't authentically tell those stories. We're in a unique spot where the convergence of streaming and the secular tailwinds of Me Too, or Time's Up or Black Lives Matter has really brought a consciousness to audiences and companies alike. I think, whereas I used to be talking in an echo chamber 10 years ago about these things, now studio heads are like, yes, bring us all that content, we need it. It's actually been a really encouraging time for change in my industry.

Reese Witherspoon:

This dovetails with what I was talking about. There's been major resets in so many industries. I wonder how you have perceived that and been in front of all of this progress and how you chart that with your business.

Rachel Carlson:

Yeah. For Guild, we, in 2014, felt like the future of work was coming and the need to up-skill America's workforce was prescient in a way it hadn't been for any other generation. Because if you think about it, the grandfather was maybe a member of an agricultural economy, the son was then in the industrial economy, saved money for college... College was quite affordable then, and the grandson moved into the knowledge economy. That's how we used to make change over generations. Now it's the great granddaughter and she's going to have to re-skill herself every five years. She can't wait for her children to enter the next economy or to learn the next skill because the half-life of a skill is no longer a generation in length it's four and a half years. What that means is, for the average American, they're going to have to re-skill and up-skill themselves every five years. That doesn't mean a four year degree every five years, but it does mean three, six months, sometimes one to two years of learning a new technology or a new set of people leadership skills or elevating themselves into the next step of their career.

Rachel Carlson:

We had pretty deep conviction on that seven, eight years ago, but it took a long time to convince organizations to follow. We had to find the more innovative companies and the more innovative universities to build this two sided marketplace who were willing to take a risk. Some of those are companies and schools you've heard of like the Walmarts and Chipotles and the University of Arizona, but others are ones you've never heard of that were just on the tip of the spear, where they had leaders... It always comes down to leaders who see what's needed the same way you mentioned, knowing what women need from media. I'm a happy, grateful customer of that from your behalf, so thank you for your book club and for Draper James and that type of innovation.

Rachel Carlson:

I think it's about understanding what does the mass American public need. That's something I like about the work that all of us do, none of us call Silicon Valley home, but we are doing innovative things that live in streaming, on the internet, but from what I would call mainstream American perspectives.

Reese Witherspoon:

I love hearing that Rachel. It's so interesting because I've never really thought about every skill that you have, because we all have skill stacking in our careers, but that it's so important to stay nimble and continue to learn every four years new skills. For us it's about all the new social media platforms. Sometimes I'll have a moment where I think, ugh, another platform and we have to learn it. The answer's yes, we do. We have to adapt and innovate at all times if we're going to stay current and part of the creative economy.

Rachel Carlson:

Yeah.

Reese Witherspoon:

I think that's really interesting that you say that, but I've never heard anybody talk about it as every industry needs that kind of constant updating and learning.

Chris Comparato:

Yeah. One of the things I was going to mention is Rachel, I applaud you because you're making it so accessible to everybody. I guess a question for you is, how do you think remote learning long term will have an impact on how we all learn? Can you comment on remote learning and the virtual environment and what that's going to look like long term?

Rachel Carlson:

Yeah. I like to think about it from an entrepreneurial framework of what's the job to be done. Y'all might've heard that theory before, but I think we sometimes forget school is a lot of things. The job to be done for school looks very different depending on your age.

Rachel Carlson:

The job to be done for a kindergarten through sixth grader is often social emotional learning. The job for middle and high school is often more social than books. Even though we talk about the SAT scores, you're really becoming a human, you're finding your through adolescence. The job to be done for 18 to 22 year olds going to the classic college experience, that's a coming of age experience, with the football games and the experience you might have on a campus. The job to be done for the average American learner, who today is a 32 year old single mom, probably a woman of color, probably working a job between 14 and $20 an hour, she's actually the new normal student. What she needs is she needs skills. She's hiring college or hiring school for skills acquisition. She doesn't care about the football games and she doesn't care about the campus. That doesn't mean the campus isn't important. It's wildly important to that 18 to 22 year old, but today only 27% of students have ever slept in a dorm, and that number is declining. When we talk about the other 73% of learners, they're hiring college for something else.

Rachel Carlson:

That's my take on remote learning is, for those who are hiring school for this social emotional coming of age experience, we need to preserve the classroom, the campus, et cetera. For those who are hiring it for skills acquisition, remote learning's an awesome tool.

Reese Witherspoon:

I could talk about that all day, Rachel, because my kids are applying for college. One daughter's in college another one is applying to college at night. This crush in New York and Los Angeles and maybe other metropolitan areas, this academic stress on the children, I think is so misplaced because it's so much about social emotional learning that I see... I value most in my employees. My most valuable employees are ones that have social emotional intelligence, the ability to work well with others, are great team members and pivot quickly and find solutions. When I see all this crush about the SATs and studying for the honors and the APs, and I think, have we lost the importance of soft skills and social learning? I do think that pivot within remote learning so that you get what you need out of it, but to really nurture that artistic and social side of yourself as important. Anyway, I could talk about that all day.

Rachel Carlson:

I love that. That's a perfect pivot to the last question, because the question I was going to ask is about waving a magic wand. If you could make one change in your industry, because for me, it's what you were just hitting on, Reese. We call it durable skills. How do we turn the conversation away from skills that expire, which are often the ones computers can do as well. The computer is going to be able to do great on the SATs, but what are the durable, soft power skills that we need all Americans to have so that we can have a nimble economy that can survive the next big pivot, which I hope isn't a pandemic, but is some other industrial change we haven't seen yet. That's my wish. I'd love to hear Chris, what would be your magic wand you could wave for your industry?

Chris Comparato:

Yeah. As I mentioned, it's an industry that's been underserved. If you are a minority entrepreneur or a black entrepreneur, and let's say you want to start a restaurant, the odds are even more stacked against you. If I were to wave a magic wand, I'd say, what can we do to help the artists, the entrepreneur who's underrepresented? Maybe they can't secure capital. Maybe they can't secure the right technology tools to be successful. Maybe they can't secure the right education and the skills training and the consulting around running a P&L and running a restaurant. I think it's important to focus on that because especially given the past year and a half, the impact to these communities and especially restaurant entrepreneurs who have been underprivileged, what can we do to change that? I think we have an opportunity ahead of us to create systemic changes, to help any entrepreneur, no matter what your background is to start a restaurant and run a great business.

Chris Comparato:

I think that's an important magic wand. I think many people are leaning into it, whether it's banks that are sponsoring entrepreneurs of color funds. We are leaning into it with pilot projects in Boston to help minority restaurants try to be successful. I think we're going to learn a lot. Back to this educational journey, I think we're on an educational journey to help everybody be successful, especially when the odds are stacked against you. I think that's going to be an important piece of the puzzle moving forward.

Chris Comparato:

Reese, how about yourself? If you had a magic wand, what would you do with it?

Reese Witherspoon:

You know what, it's such a great question because I think a lot about, and I've thought about this a lot, about how artists get paid. I think that is revolutionizing right now. When you look at the emergence of NFTs and the ability to have direct payment from the artist to the buyer and have this continued connection, that's something is really encouraging and I think I hope to see more of, because growing up in this business, I've been in Hollywood and media for over 30 years. Oh God, I can't believe I just said that. What has really been... Always gnaws at me, is how artists are not directly paid for their work and have no ownership over their work. As more work is done to connect the financial economy with artists, and we're cutting out the middle distribution piece, I think we're seeing more money and financial stability go to the actual creators. I find that enormously encouraging. If anything, I would love to wave a magic wand and make that happen even faster.

Reese Witherspoon:

Thank you so much for this great conversation. I really enjoyed this time. I could talk all day to you guys, but we're going to wrap up now.

Chris Comparato:

Thank you both. This was exciting. I think just within this time I learned a lot. Rachel, we should be partnering on education, and Reece, maybe there's a way to partner within media. I really enjoyed this.

Rachel Carlson:

Reese, Chris, thanks so much for an awesome conversation. Excited to figure out how to partner more with both of you.