S02E29: Tom Livne, Verbit

Our guest in this 24th interview with a unicorn start-up leader is Verbit CEO and founder Tom Livne. 

The Verbit Company serves as an essential partner to 2,000+ businesses and institutions. Verbit’s vertical-built voice AI transcription solution that provides its partners with the tools they need to offer engaging and equitable experiences that not only meet accessibility guidelines, but make verbal information searchable and actionable.   

Tom started his career as a lawyer, so he was directly facing the transcription problem in his profession. Eventually, his eagerness to solve the problem came from being a frustrated customer, so he imagined there was a better way of doing things. In just a few years since its founding in 2017, Verbit has grown into a unicorn company with a $2B valuation and a global presence. Verbit employs the largest professional captioner workforce in the world and has emerged as the leader in the $30B transcription industry. 

In this episode, Tom explains how Verbit, which has a workforce of 600 employees and +35,000 freelancers across the globe, approaches communications and engagement. According to Tom, one of the most important lessons he has learnt over the last five years is you cannot build a company alone: it’s all about the people. He says, “always hire people that you feel you could work for them too.” 

Two of the most critical areas that Verbit’s culture focuses on are creating more jobs for people to work from home and accessibility. Tom is excited about the opportunity that his business generates for people with disabilities and, curiously, that’s where his company name comes from too. He thought about the process of looking for verbal information, just as a transcription is, and “just Verb-it!” came to him. And the rest is history, he says.  

Finally, Tom shares a piece of communications advice for those who want to succeed in business: patience is key. When he was younger, he states, he didn’t have as much patience, and he believes this ability to choose balance over impulsiveness in communications is one of the key factors that affect the performance of the business. Tom also explains that especially when working remotely, “you need to make sure you’re investing in tools, and you know how to communicate as a professional.” 

The interview, as usual, was co-hosted with Russell Goldsmith of the csuite podcast. 

We have distilled the most valuable, actionable insights from our first 15 interviews with leaders of unicorn companies and bottled them in our book ‘Growing without borders: The unicorn CEO guide to communication and culture’. You can download it here


Russ: [00:00:01] Thanks for downloading the 24th in our series of episodes of the csuite podcast that we’re recording in partnership with the European PR Agency Tyto and their Own Without Borders podcast, where we are interviewing leaders of unicorn companies to find out about the key issues, pain points and challenges that start-ups face and how they can address them with a strategic approach to marketing and communications. My name is Russell Goldsmith, and my co-host for this episode is Tyto’s Senior Partner Holly Justice, and today we’re thrilled to be joined online from Tel Aviv by Tom Livne, CEO and Founder of Verbit, a company that employs the largest professional captioner workforce in the world, and has emerged as the leader in the $30 billion transcription industry.  Founded in 2017 Verbit reached a unicorn status in June 2021 after securing $157m in Series D funding and now has a valuation of over $2bn dollars. Welcome to the show Tom. Can we start by you giving us a quick overview of your company and why it’s so relevant today? 

Tom: [00:01:00] Hi, Russell. Hi, everyone, thanks for hosting me, it’s a pleasure to be here. So, I always feel lucky that I can say in three words, what is Verbit, Verbit is the world’s largest AI powered transcription platform. We employ almost 600 people. We founded the company, as you said, only five years ago, we raised more than $600 million from Tier 1 Investors and growing rapidly. We kind of specialise in each industry, you know, if it’s education, legal, media. So, we provide eventually professional transcription solutions and why it’s needed in those days because we are, you know, maybe a bit after the Covid pandemic, right? But everyone was talking about in Covid about digital transformation, right? When you were learning remotely and then you still need to have the transcription, etc. So, we were the go-to company that help all those companies to comply with the regulation of accessibility, etc. and in general, all this digital transformation this is exactly what we’re doing. We’re doing big existing market that operate manually and transforming to the digital world. 

Holly: [00:02:12] Tom, I think I’m right in saying you started off your professional career as a lawyer, not in the IT sector at all. So how did you make that transition into tech and specifically in the AI sector? 

Tom: [00:02:26] You know, as you said, I started my career as a lawyer, and I was facing the transcription problem while I was a lawyer. So eventually my eagerness to solve the problem was from being a frustrated customer, so I have my own pain and I said, OK, it’s ha to be a better way, right? And in general, you know, as an entrepreneur, when you’re looking for a problem to solve, you’re looking for a problem with high friction, low efficiency, where you can bring technology and literally change it around to make it much more efficient and frictionless, with just a click of a button, for instance, what Uber did for the taxi industry, before Uber, you had to call to a taxi and then you had to go down and wait to get wet in the rain, then to tell the taxi where to go and they will hear different places and different location and then you have to pay them to get the change back. So, it was really many frictions, not efficient, right? So today, just with one click, you can get everything done. So then, as a frustrated customer, understand that you know, the transcription is outdated, manual, a lot of friction, low efficiency. And I just said, OK, I want to apply technology to kind of revolutionise the market, and when you’re talking about automation and digital transformation, usually it’s driven by AI. And this is how I found myself establishing Verbit five years, and again, never imagine, even if our wildest dreams that will be in five years where we are today, if we have more than two thousand five hundred enterprise customers, etc. So, really excited about our journey and the good thing that we were not getting started in the first five years, you know, we worked hard and then, reaching more than 100 million in annual recurring revenue, and in the next five years, we’re aiming to be a billion-dollar revenue. This is how we were thinking about it. What’s happening in the first five years, what should happen in the next five years? So really looking forward to the journey ahead because the market is there, we just need to consolidate it with our technology and our strategy and its execution risk, what I call it. 

Holly: [00:04:38] And you mentioned there, Tom, some of the many successes that you have achieved since launching Verbit from building the team to 600 people, offices internationally. What are some of the key lessons you’ve learned over the last five years? 

Tom: [00:04:54] So, the number one lesson you have to do something you’re really passionate about it. So, before Verbit, I had another company in the cybersecurity space. I have zero background that related to cybersecurity, and I didn’t have the passion, and this is why it didn’t succeed so well, and with Verbit as I said, I was really the frustrated customer. So, I make really easy to be an entrepreneur we need a lot of luck and things to get together to be successful. So, there’s certain kind of characteristics you need to have. And it’s not a trivial decision to be an entrepreneur. So, if you want to go for something, so you need to be passionate and the number one lesson is like, it’s all about the people. You cannot build a company alone. So, your decision around who you’re going to start your company with, who you’re going to hire for the management team, when you identify that, OK, this person that I hired three years ago is no longer good enough like to take us to the next level. We say, OK, five years we reached to where we are, and then in the next five years, we want to be building revenue. So, all the time you’re looking at the management team, are there the right people to help me drive the company to the next level? That’s all the time you need to really work with the great people and give them the freedom to operate like, OK, we aligned on the goal and everything. But because they are much better than you in their domain in general, another tip is always hire people, you would work for them. So, when I’m talking about people with people, oh I would like to work for this guy or girl, we are more than 60% women. Yesterday was the International Women’s Day. So, you know, Verbit we have more than 60% of our employees are women. So, going back to this, was so always hire people you would work for them,  

Russ: [00:06:47] Just picking up on what you just said there about having the cybersecurity business that didn’t work. Do you think that has helped in making Verbit a success by having one company that wasn’t so successful? 

Tom: [00:06:59] Yeah, so I think I learned a ton from my previous company. And, you know, I think all those learning helped me when I started Verbit to avoid those mistakes. But like, really, really, quickly you came out of the comfort zone, right? So, like, for instance, now everything that I’m doing, I’m doing it for the first time, I never managed a company with more than almost 600 people with more than two thousand five hundred customers, and that valuation and that kind of growth, etc. So, it really helps you to build the fundamentals, the foundation, right? But then once you kind of, outperform what you did in the previous one, so then it’s everything you’re doing for the first time. 

Holly: [00:07:43] Thinking about those foundational pieces. What would you say is the most critical foundational step in building a company that’s going to endure the long term? 

Tom: [00:07:56] I think it’s, find the product market fit and getting your team right, and the right for this stage, right? Because you know, there are certain people that good for like very, very early, building chaotic environment, etc. and people are more scaling the business, right? So, we really need to understand the type of people you want to bring to the business. 

Russ: [00:08:16] Tom I mentioned in the intro that it only took you four years to reach unicorn status. Has getting to that milestone changed the perception of the business in any way? 

Tom: [00:08:27] No, just like a good reason to celebrate that, we’ve been working hard for four years and reach this milestone. It doesn’t mean anything. It just means that there are a lot of investors that believe in us and think that, as you mentioned, this $30 billion market opportunity is really there and that we are the winner that’s going to consolidate. This is it means that, that they checked our technology, think that we have the best technology in the market, that we have this product market fit that I mentioned earlier? So, like the definition for product market fit, maybe that, the average salesperson in the company is selling to average customer? And what does it mean that, OK as a founder, you always need to be, and CEO, the best salesperson of the company, right? If you sell to investors, you sell to employees, you sell to customers, etc. So, you know how to sell, or you should know how to sell and then if like a just an AE, a random account executive selling really typical customer and really doing it repeatedly, so, OK, you have a product-market fit and then, OK, you need to press on the gas and really scale that. And your question like regarding that, so as I said like this was a good reason to celebrate. We were happy, but we also understand the responsibility and what are the expectation from us and how we need to deliver and really keep growing the business. 

Russ: [00:09:54] And you mentioned, you know, just how clients you’ve got. If I’ve got my research right, they include the likes of Fox, CNN, London Business School, Harvard University. What we were keen to understand is, in terms of convincing new clients to choose your products and services over your competitors, how do you achieve that?  

Tom: [00:10:13] Yes, I think eventually when you come in to choose your provider in our space, so you usually look at OK, how much they are charging? What is the price? How fast is the turnaround time and what is the accuracy level looks like? Do they have unlimited capacity so we can scale with them? Is there a platform that’s well secured and like, is it easy to use? Right. So, if you check all one of those parameters and you know, each companies have or each customer have their own criteria like, OK, for them, price is the most important for them, accuracy is the most important, and for them, capacity and unlimited usage is the most important. So, each one, kind of ranking that? And you know, eventually, if you go one by one right and choose it, you know, we’re going to be number one in everything because of our technologies that we invested, I think it’s over, a lot of millions of dollars, let’s put it this way, into our technology and then because of the technology, OK, so it’s 90% being done by machine and just the last mile, 10% being done by human and therefore our cost structure is better. Therefore, our turnaround will be faster, right? Because AI is doing the job quickly and then it’s really much easier to just correct less 10% rather than to write everything from scratch. So, you’ll be faster. Then in terms of the accuracy, the machine, there is no bad day. Once you train your technology and your AI for this customer, for this specific use case, then the AI will be better, and the accuracy will be more consistent. We invested a lot in the integration and to make the ease of use of the product. Unlimited scale because of our technology and everything, we have unlimited scale. We invested a lot also to be the most secure platform with HIPAA compliance SOC2, so then when you go into each one of those criteria, we will definitely going to be the number one. So, this would be a no brainer for every new customer to choose Verbit. 

Russ: [00:12:19] Very good and thank for battling through the sirens going off in the background. Sorry, Holly, back to you!  

Holly: [00:12:26] That’s alright. So, you’re involved in a business where AI is crucial, as you’ve just mentioned, to the growth and the success of Verbit, yet you also have a huge team of transcribers working for the company. So, I was just quite interested to get your view on the topic of machines versus humans that is quite often closely discussed alongside the growth of AI. How have you seen AI affecting the work of humans and what are your predictions for the future?  

Tom: [00:12:54] Yeh, this is a really great question. So, I think eventually I think there are people that are afraid from AI that it’s like this automation going to replace them and eliminate them from their job. I don’t think this is the case, and this is also not our strategy in the way we are thinking about it is how the AI can make the human more productive, right? So, for instance, OK, if you need to transcribe this podcast, if you’re going to sit down and listen to it and type it from scratch, OK, you’re going to have a lot of more manual work. If the AI going to give it the 90% accuracy because you hear, for instance, my terrible Israeli accent, right? So, accent is really tough problem to handle with AI for speech. So, then I’m pretty sure the AI won’t get it 100% correctly, and then, OK, you already getting automated transcript with like very, easy to use machine-human interface and much really optimised to do so. So then, it’s just making it more productive, easier and you can complete more transcripts this way. So, I think that the role of AI is how we can really optimise and improve and make the human more productive. It’s how I think about it because in areas that require 100% accuracy like we need in transcription. So, there is no AI, in my point of view, they can get it to 100% accuracy.  

Holly: [00:14:23] Did it take you some time to get that balance right between kind of how much a human should get involved in reviewing the content?  

Tom: [00:14:30] I think this is our constant challenge on how we can improve the level of automation to make the human life easier. To reduce their involvement, to make their life easier so the AI will get better, and sometimes it really depends, in our case with the audio quality, right? So now if the recording is sucks and you have a lot of background noise and everything, it will make it much, much more difficult for any human being to transcribe it. So, the same is making it much more difficult for the machine to transcribe it. 

Holly: [00:15:02] And Tom, as we record this episode, we’re coming towards the end of the first quarter of 2022. What’s next for Verbit? What have you got planned?  

Tom: [00:15:12] For now, we operate only in three main verticals, and we want to enter into new verticals. We want to expand our footprint in geographical like to different countries, different regions, different languages that we transcribe, different use cases, different verticals, I said earlier. So, a lot of growth ahead. So, it’s mainly, keeping the culture and the team that are really motivated and enjoying to work with us, and then, to make the customer happy to support them, make our shareholder happy, and then I think eventually in this timeframe, we also are going to go public, we’re still an independent company, and also, part of our growth strategy is acquiring manual related transcription businesses and kind of help them with our technology to perform better. So, we’re really excited about this strategy and looking forward to do more of those M&A’s. We just announced last week on additional deals, and we have few in the pipeline. 

Russ: [00:16:14] Fantastic. You just mentioned culture just then Tom. I want to come on to that. It’s one of the things that we’re keen to talk about, culture and also communications. I guess on the first of that, in terms of the comms, I mean, we talked about you differentiating between your competitors, but what I was keen to understand is what your approach is to raising awareness of Verbit.  

Tom: [00:16:34] So, I think this is also related to our culture and to really critical areas that we’re focusing on. One, think, we have 35,000 freelancers that work for Verbit for more than 120 countries, and we are getting emails on a weekly basis ‘because of Verbit, we have the ability to feed our family, take care of kids’. So, for me, it’s really heart-warming, and when I see those emails, it’s kind of really motivates me to keep doing what we’re doing and to create more jobs from people to work from home. Right. So, this is one, and the second is around accessibility, right? So, think, if there are deaf people that want to listen to their podcast right, they can’t, right only if they’re going to have a full transcript so they can read, OK, they can really enjoy the content, the same as the other people that are listening to us right now. So, we help people with disability mainly hard of hearing or deaf, you know, to enjoy verbal content, the same as me and you are enjoying it, right? So, like for me, when I was choosing the name Verbit I had in mind like, OK, if you want to search something on the web, Google it, right? So then if there is something you want to do that related to any verbal information, just verb it, right? And this was like the aha moment for me with the name, and the rest is history. 

Russ: [00:18:03] Very good. And in terms of that culture then, obviously the company has grown, probably where people have been, well, you’ve got transcribers working everywhere, but obviously employees as well working remotely. How do you build a company culture, over that period of time, particularly when it can sometimes be difficult when people aren’t together to get that culture across, can’t it? So how have you achieved that over the last couple of years? 

Tom: [00:18:30] It’s a constant effort. It’s not like something that’s just happening and that’s it. But I think it’s all start from the head, like literally starting from me around how my work ethic and how to behave. And then this is, like, really affect the people that I hire in the c-level that reports directly to me, feel the energy, feel the dynamics, and then, they want to see that they are actually connected to it. And then like, those are the kind of people they’re hiring. The questions that we are asking the potential employees in the interview are related to that to check if this is something that you know they will enjoy. But eventually, it’s all about, doing good, doing well, help people with disability, create more jobs from home. So, this is a key area of focus, and also for us is around enjoying the process, right? So OK, we’re working hard, like work hard, play hard, etc. We really want to make sure that we are enjoying and having fun to work together and eventually we’re going to win. We’re putting ourself ambitious goals, but we want to make sure that we’re actually delivering on it, and actually, everyone is really excited and hungry and humble and really want to keep working hard and execute it. And again, starting from me, I’m working very hard for many years, and you know, they see how I still really care about my baby, which is Verbit. And it’s all like, OK, there’s so many things to do, and they kind of get into it and really like the dynamic. And allowing themselves eventually to be the best version of themselves. Also, working on myself or the other management team or any employee. So, we want to make sure that our employees are really giving 100% of themselves and allowing them to get better, get more responsibility to be promoted, etc. 

Holly: [00:20:27] And building that excitement and that really important culture that you’ve just mentioned there. I suppose a big part of that is internal comms. And I just wondered, how do you navigate that need to communicate with individuals or parts of the company versus addressing the whole team, particularly if you think that you’ve got remote workers, a team that’s geographically, quite spread out. How do you balance that?  

Tom: [00:20:55] So I think we know we are having once a month all hands meetings to all of our employees from all locations, over Zoom to make them connected. And then we are updating them on the situation on the business and allowing them to ask questions, etc. So, really sharing with them, everything is going positively and even negatively in the company, like they need to be aware to everything because they are part of us and, need to be aware to everything. So, this is one, but eventually, it’s all about the tools, right? So, if using Zoom, you’re using Slack, using email, right? So, I have weekly meetings with like my direct reports, right, that I’m kind of having them weekly on the agenda. We have a weekly management meeting and then we kind of syncing on everything and eventually each manager has their own styles on, you know, how they want to manage the team and they give them the, you know, the flexibility and the freedom to do so. We just need to make sure we are aligned on the goals and going to execute them. And yeah, so like we invest a lot in communication, right? So, we need to make sure that the employees feel part of the company, of the family, right? It’s like now working remote. So, you know, sometimes we’re doing those kind of activities online via Zoom, right? So, like you find creative ways to make them engage, etc. And you know, we’re investing a lot in the tools that we use are just mentioned like Zoom, Slack etc. But there are many other tools that we’re using in order to make sure we’re communicating well and really having fun to work together and collaborating with. 

Holly: [00:22:40] And one of the things that’s probably quite unique for Verbit, is that workforce of I think you said 35,000 freelancers that work across the globe, how do you approach communicating and engaging with that vast number of people? 

Tom: [00:22:55] We kind of dividing it to like a few elements. One, is like how you recruit those people, how you create the awareness, which kind of people you recruit, etc. So, we have a team just focusing on recruiting the new transcriber, then we have a team onboarding the new transcribers. So, once they got accepted, we’ve all the tutorial, really explaining them what to do, how like what we expect from them, but so we streamline the process. But still, there are people that are in charge of like the training. Let’s put it this way and the qualification of the transcriber. And then you have the third group is more about the monitoring and ensuring the quality. So, if the transcriber messed up once you give them a warning, you mess up twice, you say this is the last warning and then the third time he or she is out, right? So, like, you don’t play games and then and we explain them really carefully the training and the onboarding. Yeah, that’s what we expect. You’re going to have a team that constantly monitoring your performance to ensure that we’re giving to our customer top quality, we obviously build a lot of IP around that. It’s not like someone is reviewing all their work. So, you know, a lot of technological tools to help us to do so. This is how you kind of professionalise in each element and is how you managed 35,000. 

Russ: [00:24:19] And switching from internal comms to external, how do you view your role as an external spokesperson and representative of the business, and yeah, is there anything you’ve learned along the way? 

Tom: [00:24:34] Oh, sure, I’m the face of the company, right, I’m the founder, I’m the CEO. So, all the eyes on me and they really expect me to be this visionary leader that really knows how to articulate well, the story. And I think you know what you said about what I learned is that eventually, it’s all about storytelling, right? If you know to tell your story well, to understand who is sitting in front of you, what they like, right? So, invest, or sometimes they are more financial people, and sometimes they are more tech product people. We need to understand, OK, this guy is more techie, so you need to focus on that and make them excited. They said, oh, this guy is more a banker. Kind of OK, this is our revenue model, business model, this is how we bring customers, this is how we move money, this is the potential it could be. So, you know, you really do understand who is sitting in front of you and how kind of to articulate, well, the story that will resonate with them. And you need to practice a lot. I think I did it, you know, more than one thousand times, and I still really enjoyed to tell the story whenever I need to do it again.  

Holly: [00:25:42] And what’s been the biggest communication challenge that you’ve faced along the journey? 

Tom: [00:25:48] Oh, so once you if you remember we discuss about the people in the management team that, not necessarily are suitable to the growth phase that you’re at right now. So, having those conversation with the managers that are not necessarily suitable for the face of the company right now. So, you need to tell them either, OK, I’m bringing someone that you now are going to report to. Like he is going to be in charge and you’re going to report to him or just saying, look, it doesn’t work well. You know, we hired someone else and, you know, we need to say goodbye. So those kind of communication always is really difficult for me. 

Holly: [00:26:30] And how do you overcome them? How do you face those? 

Tom: [00:26:34] A lot of grit and empathy also, and eventually the way to overcome it is like, look, my role and always, I think it’s kind of on top of my agenda. What is the best interest for Verbit, I’m not taking any decision that it’s good for Tom because I like always what is the best interest of the company in mind? And this is how you get the decision. And if you get, look, this is the right thing for the company and then you can make it easier for everyone to get in alignment around them. 

Russ: [00:27:11] Tom, we have one final question for you that we’ve asked all our unicorn leaders in this series. If you were to go back in time and speak to your old self, what guidance about communications would you give yourself, and what steps would you encourage yourself to take in order for you and your business to excel in communications? 

Tom: [00:27:31] So I think if I tell it back to myself, so, patience is not my strongest characteristic. So, when you are communicating, you need to be more patient to listen more carefully, etc. I don’t think that you know everything and sometimes you do really impulsive the response and decisions of maybe more kind of OK to think about it more and not just say whatever you have in mind. So, to be more count until three before you really answer anything. So, I think this is important one that I’m kind of learning over the years. I’m still not perfect, obviously, but like, yeah, this area that I think I managed to improve over time since I was younger was like really zero patience getting everything done, and here you’re more relaxing and balanced. I think eventually, communication, this is one of the key factors that affect the performance of the business, right? If you communicate clearly, you really make sure that everyone understands what they need to do, why they need to do it and how to do it. So, it makes everything really easy. So don’t underestimate, you know, to communicate and overcommunicate now if you are even with like working remotely or hybrid, etc. So, in order to make sure you are communicating correctly, so sometimes even over communicate right, like it’s not the same, you know, people sitting next to you, now it’s all about the Zoom, Slack, whatever. So, you need to make sure that sometimes people misunderstand the way you or like when they read it, they think you actually understand it in the wrong way. So you need to understand the messages are, you know, correct. And you know, I think everyone needed to do to make it better to excel is more around, OK, treat it as something like very important as a priority and kind of be professional in it. I don’t think we are still thinking about communication in general at the level of like top professionals, right? But we need to get there. And you know, whenever you have a meeting, Zoom meeting, in-person, presentation, etc. you need to really make sure you’re investing in tools and everything and you know how to communicate as a professional. And then, you know, everyone will look at you and respect you this way and this is how we can win together. 

Russ: [00:30:06] Tremendous.  Tom Livne, thank you so much for taking the time to join us online and record today’s episode. Really appreciate it. 

Russ: [00:30:15] Holly, thoughts on what Tom had to say? 

Holly: [00:30:17] Yeh, what a fantastic chat. I think one of the things that shone through, and a lot of the answers and points that Tom made was that importance, when you’re building a company, of investing in the basics. So, from investing in the right tools at the start, investing in the right people for the moment of the company’s growth, the right product development, investing in comms techniques and building a right culture, I think one of the key things that you can always think about, when building a fast growing company is, those things can come later.  But actually, I think real testament to Verbit’s success is they focused on those really core elements upfront that’s set them up for that fast growth and better success more quickly. 

Russ: [00:31:04] I picked up on the bit with him talking about doing something that you enjoy, which obviously is going to make such a difference, isn’t it? 

Holly: [00:31:11] Yeh, totally, like, how he has built a clear passion for the area of transcription, but I loved how it was borne out of a really frustrating moment for him. So he was frustrated as a lawyer because of the service he’s built this huge company and passion area off the back of that. 

Russ: [00:31:29] Definitely.  Twenty four interviews down.  So that’s actually it for this latest episode in that we’re producing with Tyto If you want to find out more about Verbit, then their website is simply verbit.ai   

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