4 leadership lessons from the co-founder of a $1.8 billion carbon tracking startup

When Taylor Francis, co-founder of carbon tracking software firm Watershed, was 12 years old, he convinced organizers for former Vice President Al Gore’s Climate Reality project to let him join the program, which trains people to work on and proselytize climate solutions.

“I had seen the ‘Inconvenient Truth’ movie, and I was riled up,” he recalled during the Aug. 28 episode of Climate Pioneers, our live interview series. “I walked out of the movie theater with too much time on my hand and a lot of pent-up anger, energy, motivation to try to do something.”

Sixteen years later, in 2019, Francis and colleagues at digital payments company Stripe, Avi Itskovich and Christian Anderson — who commiserated with him about climate change on frequent backpacking and camping trips — quit their jobs to found Watershed, with a vision to use technology to help companies identify and reduce their emissions.

“We basically started Watershed because we wanted there to be Stripe-quality software, world-class enterprise software for the sustainability space,” Francis said.

Now valued at $1.8 billion, Watershed, based in San Francisco, helps hundreds of customers such as Airbnb, Fedex, General Mills and Walmart track one gigaton of emissions, close to 2 percent of the global footprint. It also helps customers take action to reduce them. For example, Watershed helped graphics software company Canva negotiate a unique solar energy procurement contract that will help its largest printing suppliers reduce their emissions.

Since closing its first deal in late 2018 with restaurant company Sweetgreen, Watershed has stood out in a competitive landscape of more than 90 vendors in part because of its ability to help customers get a handle on Scope 3 emissions.

‘Customer obsession’ is the firm’s first operating principle

Sharing stories of how customers use Watershed’s software — especially actions or insights that weren’t previously possible without it — is the centerpiece of the company’s weekly all-hands meeting. “That concreteness, I think, is what gets us energized,” Francis said. 

The most important email employees receive weekly is a digest of what happened with customers in the past week. “We’ve got a whole set of customer advisory boards in different sectors, but I think that even more important than that structure is just the culture of the company,” he said.

“Be customer-obsessed” is actually the company’s first of Watershed’s five operating principles, reminding employees to keep them “front and center” in decision-making. The other four:

• Stack rank and drop, which guides “hard decisions” about how to prioritize projects and decide which ones to discontinue.
• Cultivate diversity and inclusion, to hire people of all backgrounds, demographics, life experiences and beliefs.
• Bring intensity and care, creating a culture that holds people accountable for results but that also is “caring and empathetic.” One can’t exist at the expense of the other, Francisco said.
• Take ownership for day-to-day work.

Don’t call him CEO

Francis usually represents the company’s strategy externally, while Anderson and Itskovich split responsibilities for product development and engineering. The decision not to add other titles was meant to downplay hierarchy, and it’s a decision that they borrowed from Stripe.

“You want the person closest to the core work closest to the ground level regardless of what their title is,” he said.

One question Francis asks every job candidate

Watershed, which employs about 350 people, seeks team members willing to take agency and suggest ideas that don’t necessarily fall within their official job description.

“I love asking people in their most recent role, if they had been the leader of the organization, either the CEO or the present or the executive director, what they would have done different,” Francis said.

His advice on climate today: Prioritize

As companies prepare for an era of mandatory ESG disclosures, especially for their European operations as the Corporate Sustainability Reporting Directive takes hold, it’s important to evaluate the set of tangible emissions reductions that can make an impact. For an agricultural company, that could be prioritizing no deforestation. For manufacturers, it could mean prioritizing how to get suppliers using clean power. 

“The key in being effective is not to boil the ocean. … Figure out those small set of initiatives that will move the needle in a big way,” Francis said. 

Read more about how mandatory ESG reporting helps Watershed seal deals.