ABOUT THIS EPISODE

with David Ulevitch (@davidu) and Sonal Chokshi (@smc90)
Since the startup (and founder) journey doesn't go neatly linear from technical to product to sales, tightening one knob (whether engineering or marketing or pricing & packaging) creates slack in one of the other knobs, which demands turning to yet another knob. So how do you know what knob to focus on and when? How do you build the right team for the right play and at the right time?
It all depends on "What time is it": where are you on the journey, and where do you want to go... In this episode of the a16z Podcast, general partner David Ulevitch (in conversation with Sonal Chokshi) shares hard-earned lessons on these top-of-mind questions for founders; as well as advice on other tricky topics, such as pricing and packaging, balancing between product visionary vs. product manager, how to manage your own time (and psychology!) as your company grows, and more. Much of this is based on his own up-and-down, inside-outside, big-small-big-small, long journey as CEO (and CTO) for the company he co-founded, OpenDNS.
The company was later acquired by Cisco after it pivoted from consumer to enterprise. Speaking of, what are the latest shifts and nuances in selling and buying enterprise products, beyond the phrase "consumerization of enterprise"? Or beyond the cliché of "design thinking" -- how does one go beyond user experience and beyond things like fun gifs (which are pronounced, ahem, "jifs") to focusing on the whole customer experience, and earning the right to be complicated? All this and more in this episode... plus the magic 5 words that will help any CEO (and anyone, really).
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TRANSCRIPT

00:00:00the content here is for informational purposes only should not be taken as legal business tax or investment advice or be used to evaluate any investment or security and is not directed at any investors or potential investors in any a16z fund for more details please see a 16 d.com disclosures
00:00:19everyone welcome to the a16z podcast I am sonal and I'm here today with David ulevitch whenever a new general Partners who covers all things Enterprise but honestly that can mean so many different things to different people so we briefly discuss what Enterprise Products really mean today for entrepreneurs companies and users especially given the latest shift driving SAS beyond the cliche of consumerization of the enterprise we also cover specific advice on the topics of pricing and packaging had a balance being a product Visionary with bring a product manager when and how to scale out and hide your leadership team and how do you know that's working or not plus how to best manage your own time and your own psychology as a leader while doing all this for contacts David founded OpenDNS the way he actually went through a rough period and going from CEO to CTO in 2009 and then back to CEO again in a company that itself pivoted from consumer to Enterprise we just got a cavity make a comeback I mean it's not like he changed instantly overnight so what and how were the lesson
00:01:19weren't in 2015 Cisco later acquired OpenDNS and David ran their security business where he also led the acquisition of three companies before coming here so he seemed start up from all sides from being acquired to be in the choir from small to big to small to big again from on the inside and the outside but the real theme of this episode is the journey many Founders make from technical to product sales CEO and while we end the story of OpenDNS and the most important lesson learned there we began with what is the one piece of advice David has four Founders kids were you just like say one thing and if I see everyone we can just never one thing that makes the difference between success and failure as a Founder generally you're a different stages of the company building Journeys in Ozark technical CEO daughter products to make sure it actually is feasible that you're constantly in the market with customers and customer Discovery making sure that you are solving the problems between us all you end up becoming Zara products CEO making sure to get product Market fit
00:02:19give me of sales to you on the Enterprise side we are trying to generate revenue and figure out how you can require more customers and then if that works out you become this really General sort of manager I go to market CEO you think about how do you scale and accelerated business and I like to think about those different Journeys as where there's like the right the right decisions for the right time and really trying to help don't understand like what time is it and where are they in that journey and where they want to go possible to be all four at once or is it really tired of the stage of a company for not all those things at the same time it's like a company's asset to me of interconnected little nods and you can never just like optimize one and then forget it and not come back to it you end up going to another Knob like if you fixed pricing and packaging the phone on if you fix that then you want to make sure that you were FDR's and sales people are like making sure they're converting on the marketing leads in the club I leave then you're closing manager and customer success and like once you once you tighten one of those knobs just crates
00:03:19one of the other knobs she might switch to the touch from time to time but I think you're really going to be wearing more than one of those hats at the same time I have to ask the customer and the customer journey and understanding the customer on its own I hear that I'm like they can put in a million different directions to know what to do if your a technical founder you don't know what it's all the Fortune 500 like this is a bit of a chicken egg so how do you sort of figure out how to dial to the right customer zactly they want to go after the consequences of the customers are there targeting I think we're leaving today they were the best times to be on a prize software startup and to me one of the reasons is that we're at it because somebody comes to their ass ass and subscription software companies with his recurring Revenue component it's better for the customer cuz they know that the customer is going to be good or no stop paying for the subscription right
00:04:19make sure you renew the account to go to the account it's actually it's a way of killing back that I need to figure out like how confident are you and where your product is today because of you say oh we're only doing three or contract is that because it's really hard to talk to get customers on boarded until you need Runway to get them happy or is it because you think you're over selling your capabilities that and you just don't want a customer to figure it out within a year and not renew talk to you when we did a couple 3 or contracts but we realized that we were luckier price for Lilo and turn out the customer wanted to be a contractor charge them more in the out years without tells me you're probably just really good and getting better that's fascinating thing about that is that what you should just be like a product experience is now much more of a customer lifecycle experience it starts before you sell building evangelist then there's an onboarding part and they're taking him to Crossroads really happy how do you Market your existing customers to make sure they're getting full utilization of your product is that customer lifecycle it makes it much easier as I start up is getting started to start to really done if I like who is the target
00:05:19and I'm thinking about does that actually map to the dishes I want to build is it a big Fortune 500 the global 5000 is it a Sundays because I have all these are Downstream effects so a lot of startups what will come in here and get my first 6 months you have now met with over 200 companies and a lot of them like they really have liked his ambition to go after a Sundays in one of the cool things about sass is that sass can take something that in the olden days of Enterprise Computing you have to like by the biggest server the biggest box to get the best solution but with cloud and with sass applications you can have the power to get massively great serum system this massively great HR System about it as fast as rated by the accesses to big companies resources I don't have as a service it in their company absolutely it's more companies have unlimited compute they have unlimited storage unlimited bandwidth now and so when I meet with start-up they often one alike ambitiously and actually mystically I want to go satisfy this pain for Some D's
00:06:19but it turns out that the reality is if you want to charge a high price point if you want to pay inexpensive sales for then you and you're going to realize that Your Average Joe's I just have to be higher if I really want to go after her target market where the price went to be lower than I have to think about the bottoms up sales. Self-serve offerings these are not going to be able to afford to have a Salesforce where he was customer success for they build that into their holes for the customer experience remodel like marketing programs pricing and packaging renewal sales in the whole business model let me know how it is think about how many emails you get remind you of a new feature that you may not even known existed princess like I'm using an email from a cop superhuman and every week I baste get an email from the team saying did you know that you could use this function out if you press Apple ID automatically route someone to BCC in the reply or you just press Apple see you in a copy the whole United Artist Electric Forest
00:07:19user experience interaction Paradigm that will eventually Cascade into other products much like Steve Jobs did with like letting us learn new behaviors like how to touch a phone it helps teach me these new things that they've unlocked did he come very intuitive Easter to learn about them one of the best things about doing a company today is it's easier than ever to get close to customers to get constantly get interactive real-time feedback both differ from an analytical standpoint and just from customer surveys NPS scores all these kinds of thinking about all the products we actually see how people use your products but the second thing that's happening is people talk about this like Bottoms Up to a special Minnesota always just that it's really about making sure we understand that there are evangelists that you have to win over before you're going to get sign off from the CFO of the CIO the sea so here she is and makes a decision you're going to have to get some Champions underneath that person to be your Vangelis and turn away
00:08:19location of the Enterprise type of Founders make is that they go too heavy on bottom up to the point of ignoring the importance of top-down fails what's your view on that they are being bombarded by so many different vendors their attention span is so limited that the products today but you're getting a consumer they mean easy they don't really need the value proposition that I'm hearing when I talk to customers is it the time to Value needs to be sure there's actually two parts the first is I want value almost immediately sometimes even before I pay for it like I want to trial already up and running on my own and then I'll talk to a salesperson should have time to die you can either be like nicotine - 0 days late negative time or it has to be very short from hours to days until I always encourage Founders think about like the first shower the first day experience the first week experience first month Experian the second part is quite complex and so I can zoom is in the news because they went public
00:09:19resume the great example of something where they earn the right to be more complicated the right to be more complicated but we know that I like you and I could download zoom on our phones and being a video conference call with an hour then wait a minute maybe all of our conference room should I was Jim maybe we should integrate Zoom with our Google Calendar G Suite you've earned the right to do that can park tickets already proven so much value and only. The value you get by doing the integration with G Suite or by adding some cameras to your conference room so you can have room based Zoom rooms that complexity is commensurate with the value of getting into consumerization of of Enterprise just means I have to be easier some pool that's not quite what it is it's to me it's two things it's a short time to value and then the complexity curve is commensurate with the value proposition so then I want to ask you more about what that what needs to go to that time to Value so let's be a little bit more specific I mean I get the point that you're talking about was incredibly competitive so you got to differentiate fast and show the value
00:10:19what are things that drive that is it a great like a cute little giphy that you know that jumps out at you in like makes you like a clippie type of thing I mean what is it like what is that way I can let her know if we can do this or not
00:10:37I'm one of the people who calls just just not gift I hate that you know there's a girl that people think they should be j7 you're at your it I'm out of him on the podcast cuz I know you and him are so smart but you also call it a Jeff I got to know what to do right now
00:11:21black for instance did a lot of really creative things I remember I was at wired and the product that we use with hipchat and the thing that kind of eventually got me into slack was a fact that you could do some things like just whatever you could do kind of more fun things other things could drive information into your slack channels for a long time that's right leg Google documents and if your developer when somebody would do a push to production they could notify people inside the Fox channel that's not a case where I T has to decide the integration true if anybody could basically set up a fractional inside the organization after a while they wait a minute we have all these teams that are chatting on this thing they're doing Integrations files are being shared we need to have a little bit more visibility Livermore access control and even for like security compliance became
00:12:21for sale that won't wall-to-wall it's already Integrations happening with some of the developer tools and workflows and that point they were in the right to be more complicated by staying or just ain't no anecdotal evidence of design Focus start up precisely because of the thing you're saying because that's one of the ways to instantly differentiate hate that phrase holistic approach it's not just about the UI it's not even just about the user experience of a particular workflow it's not that whole customer experience we're actually entering a period of time or more and more people in the workforce of a digital Natives and they want to be power users you know why isn't there an equivalent like Microsoft Excel on the web like Google Sheets is not Excel the current state of collaborative tools and in the end it's just so we can they don't let you be a power
00:13:21user also I think ignoring the realities of organizations today and now you have people collaborating cross-functional in different ways it was just so go to the garbage experience more functionality standpoint natively OJ Google G Suite is not on Google shut down G Suite all together even though the whole Silicon Valley with your crazy like that mean there are rounding error in their business and surrounding air to productivity like versus what Microsoft has I don't do that but but but strategically is so unimportant but I would say though is that I like software that is easy to use that has that short time to Value but allows me to be a power user if I want to be an impact as an investor when I talk to companies I was trying to figure out like what is their pricing and packaging strategy
00:14:21what set of features are you going to put into an offering to a customer you want to make it easy for your customer to give you money like that. Another foundational principle for me and show packages our way to do that we've all been to the restaurant where Dollar Car minis all over the place but sometimes restaurant you say when he was like the three options comes with me one of these appetizers you get this main course and get this dessert so if you want to make it easier for me to give you money Jim German people come up packages the friction is removed to becoming a buyer so in the SAS World sometimes there might be a tear that says you're going to get you know the full functionality the product we're not going to get archiving and logging in all this detailed reporting analytics soda company that has big to get the full function out of your product but then there's like a hurdle and usually when I think about packaging usually there's like a key product Milestone it happens that forces him to jump to the next two years
00:15:21what you create account and use a product but if you want to try it to your active directory or some other directory service you're going to have to jump to a much more expensive tier but generally the customers that have to jump that tear are more Enterprise companies they have a directory service they have a single sign-on service they might want two-factor authentication with tokens the security person if he doesn't love that one being a teacher cuz I always I always think you want all your customers to be security compliance if you're in a regulated industry you might not just be satisfied with 30 days of logging you might need 365 days of logging you might need to be able to export your logs to another datastore would assume that all packages are cheered are there uncheered packages where is just like a different combo that's all that kind of horizontal previous backups has usually a number of features that get unlocked when you go to the next package to me is always one that has that forcing function of packaging it's often
00:16:21two segments your customer base is you're going to stay like we know SMB mid-market under a thousand play cumbias. Going to be this package everything we do the product manager in a package of thinking about those features the next package the person saying wait a minute I want to go after the 1000 to 10000 employee company in this is what they need this is how I communicate with him this might be how I do webinars to them this is how I'm going to do pricing that maybe that maybe you can't do it through your contract if you're on the low and products are all the all these things are puts and takes that reflect where is the product who is the customer targeting and then how do you want to Market and get the Kratom and without audience there a balanced or rule of thumb I'm sure it must very buy business in what the ideal number of packages are or how many customer segments you should be trying to reach as a startup free of us is more like time is always most valuable currency in an individual's life and accompany life until then a whining all that time behind the most important like finding a more wood behind fewer area is to me is always more
00:17:21what's more important like two packages three packages when you make it too complicated for the customer to figure it out that creates friction to the cell cycle racing public on the site and the engineer and all of us like the pragmatic person and all of us will a golf course we want to share pricing cuz that's customers we hate not knowing the price but as Parks get much more nuanced and organizations are buyers and you actually don't know what your pricing Discovery looks like you're better off not sharing your pricing and want one way you know you have a great product is when your salespeople are the one too demanding you remove the pricing use that means if they're telling you you can get more money more money maybe you're a you're a technical CEO who's becoming a product CEO is becoming a sale CEO if you're listening you're going to do is wait a minute they're telling me we're leaving money on the table and external a very strong signal definition it's a business High condition of uncertainty compared to more established business I won't even package
00:18:21particular side and given that I started as an experiment you're running an experiment and the product can you can run multiple spirits in the same time we've heard of the famous pivot your the dreaded p word there's all these different flavors of this how do you run multiple experiments and also strike a balance with focus and the pricing and packaging strategy of smart people paying attention to the numbers pay attention the data collecting the analytics and giving yourself enough time to collect that data like the worst thing for him to do is make a decision and then like not allowed to be enough time to collect the outcome of that decision to understand the consequences that decision and then make another decision to the question I like how do you make decisions and I don't think it's not complicated as long as you're paying attention to what are the outputs from those decisions that you should be looking for and you should be looking at what's changing across the business we're living in it in an era today of running companies where it's much easier to collect and analyze data than it ever has
00:19:21you have data lights we can bring him product data your CRM can tie into that probably data that we've never had that we have bi tools now that we have open source to HDMI that's open source business analytics is a wait a minute by West Coast territories is doing so much better than my East Coast territory what is the difference is pushing their is it because we actually are running more demand gen campaigns on the west coast in the marketing team of the West Coast and separated or is it just to the West Coast sales rep to better but it's easier to get access to the data and analyze it quickly and avoid that sort of like in the house as paralysis then I think it ever has been in the past are the two of the big DM I'm hearing from you is intentionality even if you don't know the outcome and that you can actually control that intentionality by kind of being introspective understand your decision making moonshine what works that sounds great now as a leader of the company how do you the CEO figure out what to work on and depending on what stage you're at this whole journey from technical to product to sales to go to market
00:20:21that's not necessarily perfectly linear so how do you figure this out I mean like to look and think that it was win here I am where do you spend your mental calories, editing which is r o e desert turn on energy output is going to be awfully low proportion outside win to what the amount of work energy created so I have a whole framework were thinking about this ridiculously protective question to ask him tonight is the active asking that question itself is just like part of the process of figuring out how to spend your time and spend it wisely and it's different things that happen during different stages if you're like I was just looking like
00:21:21is the problem in the company is it that we can't get customers and then figure out who that right customer is but as a company starts to mature in like 2 million 3 million and a very few companies ever get there but yet it's tiny when you should be doing 20 million 30 million you aspire to be there like Legion celebrate the the Milestone but it's clearly have a long way to go to build an enduring iconic company into the dark point though you start to have a leadership team the biggest things that we see when we give advice as they need to bring on like a VP of engineering they need to bring on like a head of sales and they keep resisting this thing but they're kind of attached to the early startup team so how did they figure out when to really does a lot of religious advice in debates around this actually it was like what time is it like what is the priority like are you trying to figure out product-market fit are you focusing to go to market like what time is it are you hiring sales people tramping up are you like figuring out the customers of turning you better go fix your product
00:22:21focus is so important that if you were to ask Ali your leaders and all the people in the organization like what is the most important thing for a company right now they should have an answer but one of them could just one of them or tactical conversations that I have a Leader's when it when it starts with our startup now the score founding team and then there to think about CLA and that it will not have this engineering manager he or she was with you from the beginning I think I think they're doing a great job managing one of these are highlighters at work bringing in a world-class VP of engineering that could cause Rock to go to could cause issues but it's not an indictment of your current engineering manager like that song what's happening part of bringing on these high-performing leaders it is really well respected leaders that have cult-like following with the people that have worked with them and for them before is it they are going to help you accelerate your booty recruit world class talent and when you deliver that message to that person on your team has been there from the beginning is doing a great job like that should resonate it's like a wait a minute yeah we can get way better keep away faster or like yeah let's bring that person on a very careful about knowing what are the problems do I solve any organization
00:23:21but often times you know it and I think QVC's have a bad rep for this is it like they shove in somebody's way to seniors is come from away too big of a company like what is the right team I need for the right time I think Ben wrote this in his book actually which is the mistake that people hire for the future instead of the higher for the thing they need now is to 500% Chelsea more people often think about the executives are hiring like was this person to do things for 4 years or 5 years for 6 years I had a board member wants to Dave Strom is like having a mentor to me I think it was like the Yoda in my life and he wants an expression that I never heard before horses for courses so if you ever heard the expression horse track racing you know they're like dirt courses does grass courses and you want to run the right horse for the right course
00:24:21play Bad connotation which is that sometimes when a horse's they run their few races and then they're finished you know what happened into gelatin from I always used to joke it was nice probably but I would joke with a VP of sales ad open yes no maybe every quarter was the last quarter because there is this guy going to scale now he scaled wonderfully he's an incredible sales leader he went from you know a 20% sales team to ultimately a 200 or 400 person Chelsea and then went to go to Cisco you did wonderfully but we didn't know we had him how far you get past 20 people you got to hire horses for courses of really figuring out like is my leadership team adding capacity for me are they helping me understand what's happening the business because as a certain point as a CEO you're going to start to spend last time and Engineering the last time on product ID leaders are more time in the field with customers with partners with customer success
00:25:21and as you start to spend less time with any individual function you're going to need to have leaders in place that really spending all their time really understanding closer to the metal what is happening exact phrase I used I think of this affect their metal leadership Tori cuz if that's the biggest challenge of the product oriented person or a Visionary for whatever the product is in any field is how do you kind of keep that close to the metal inside yet you can't actually be closed the metal if you're scaling manager for a company and organization and I think it's important to differentiate the product manager from the product Visionary but there's going to be a time when you're not going to spend hours of time with the engineers hearing Heather working on a product without technically going to work you're not going to spend hours and hours of time looking at all the NPS survey.
00:26:21for the customer support tickets that are coming in until I got off and I was on media server for like oh I can't hire Colin and Ryan the product manager 5 Seconds a day to think about different decisions you make and took your engineering team investor relations constantly coming to you at your Nana's getting paralyzed the worst thing for a Visionary is to make some decisions and then they know where the wrong decision because they lack date are they lack the time to be thoughtful about it and then they start to undermine their own thinking about whether or not they even our product Visionary when the reality is just a product manager the product Vision to that person we are offloading is the day-to-day ground war of figuring out what is customer support telling me what is sales telling me what is engineering telling you what our customers telling me synthesizing analyzing prioritizing sorting that data and obviously isn't down there Vision that you have ultimate say that you're going to be armed with so much more inside information that you're into
00:27:21which plays a big role to is it going to be that further and half as a Visionary you're going to have some special secret some earn power do you have over the lifetime of your experience with your the domain expert in a problem set due to no more mermaids really lived and breathed this thing you built the country started it because you literally have it seeping out of your pores and so not only did he have himself but you had like Tim Cook and John yet but also you think about the story of the iPhone the app store was actually result of his team coming up with the point that hey you can't just have Apple apps on this table to use this answer people in your product managers will come to you and they'll when they have conviction on something and they have the data and they have the view you will then be able to make those bets and nobody would say that he wasn't Pride Visionary just cuz he think about the App Store not know till just wondered about this there is a tension between if idea like I hate this idea of the head of the hand you can't have one person be the other person beating and how do you reconcile
00:28:21I guess what I'm asking how do you calibrate a longest line of visionary to manager and you might need the different kinds of people different got the time so I think it would be for a self-aware and be really annoying actually honest because if you actually need someone who is more Visionary then you're not to deal with the fact that you're going to be going to battle and sitting in a room and you can get out of her ideas it leads to a secondary inside which is that if you're a CEO of a company and you do not trust the information you're getting from one of your leaders is what actually happening on the ground that's a tremendous power and move on Earth are you able to communicate it to you and the rest of the leadership team I was like to think of us not just this like oh the head of sales report to the CEO that a market report to the CEO of these like Silo do you know sort of Paris
00:29:21this conversation's the leadership team needs to be working together as a team and communicating with each other because it's as a CEO you don't want to be in Uno interjecting and intervening and every conversation every decision and so hard to figure out like are they collaborating are they sharing each other's experiences do they understand what's happening to his businesses are they meeting on their own I think it's up to you yesterday while your leadership team to meet independent as a sea of the CEO really interesting encounter an important and I think it does happen in a lot of high-performing teams are commonly maybe not explicitly but it happens and then it obviously I think it's some places you can do it explicitly it would have done a productive and positive way. Because if she is a distraction date but I do need to see you about doing something that's high value the company you do not have confidence that you are getting the best information from your leaders if you don't resolve that then you have been you have to find some news about fit whenever I hear when I talk to the CEO is having a tough time in the company and they're telling me about like what's happening I'm like woah I just tell me like you
00:30:21really believe that that is what's happening and you have to go deep in the NFC or you do get the occasional bullet or you can cause a little bit of like organizational stress to like go three levels. Even really figured out what did you find out what's happening is not we were being told you got to make a change in leadership by the way I should just say that all my lessons about leaders were management I pretty much learned the hard way. I just I'm just trying to help save other people from making the same mistakes I made talk about your stories so you're the founder of a company called open PS4 salt what is it on a 25 year old technology used to be a cost center then nobody want to innovate on we actually prove you catch to build a business on top of this I think that used to be free if you make it better so speed was one part but then the other part was security say you tie pins amazon.com your meeting to go to amazon.com that could be a phishing site trying to steal your credentials we know that you know tens of millions of users what you really meant
00:31:21amazon.com your page is it hey, we think it's a fraudulent site did you really need to go to amazon.com that may help protect you from getting fished who is the first part of the company some of the tiger the greybeards of Internet do I respect you tremendously they told me a when I want to do was impossible and be even was possible nobody would want it be okay by my favorite stories is I saw these old for him that he was on when he was proposing like more of a graphical user interface and the thing that I thought was kind of old fogies they don't like the change ironically even though they were very revolutionary the time you mentioned a 25 year old technology why was that almost impossible to them he was not just give the same phone book to everyone but we want to give a custom phone book to every person which meant let's save you typed in Playboy. Com for some reason over here they may not want content filtering so they want the answer for
00:32:21what has four kids at home they want a different answer and doing this at very high speed was thought to be impossible for you when you have inside that you wanted to build OpenDNS sure I did a different kind of DNS and through that I had gotten super interested in cybersecurity and so I met an investor when I moved out to California who had asked you nicely why wasn't doing more with my original company then we pivoted the business and then in 2009 they having the people that use our service people to pass for a service which is a much better alignment of interests in so that that Journey took a long time and by the time we visited the business it really was a different business then we started in I don't we sold in 2015 to Cisco is really a full-blown cyber security company what happened between us a 2007 and 2015
00:33:21the iPhone came out good more more people working from coffee shops at all had Wi-Fi you at workers working from the road he wheezing mobile devices to installing like Norton Antivirus or McAfee antivirus on your desktop with no longer sufficient security into our service opening ass was delivered with cyber-security delivered as a service and it happened just intrinsically and as a part of your internet connection to have special software to install a financier piece of hardware and so as people were working differently in the networks are coming more ephemeral Cisco which is a major cyber security cameras security company wants to evolve Two Notch that shifting it landscape he mentioned the pivot a few times tell me about that because I thought if overused by the plot of Duty world like Big B little B whatever and I know you mean it and actually what happened but give me a little bit more the best time I never want to have again I mean fired me I was CT
00:34:21converted one day where she got a call from a major oil and gas company that have been using it so we knew they were using us globally like on oil rigs at their headquarters of other distributed offices and to them they finally got an email like we need to have a support contract like as a matter of are just like corporate hygiene so I can figure it out in like give us a quote we need that I have a way to call you if there's a problem and so we went and got one of those like virtual phone numbers on the internet that would like route till I can Engineers phone number in IT. Person didn't pick up with rats like the next Engineers phone number if that's a person to make up a rap to my phone number three people and we send them a quote for a hundred grand and I signed it immediately returned it and then I went from like us making $2 a year in advertising which we hated to pay us a hundred grand for something we're already doing and we get to turn off the ads
00:35:21rocket science if you got a minute maybe there's something here and we had two or three other companies that had to ask previously or something like that so we wouldn't send them quotes and then I'll sign them to return honestly not to sound judgmental at all it seems obvious to me when you say it in hindsight so I'm confused why you didn't see that coming up I'm going out for individuals like when he was weird Partnerships with Netgear and do you think of these people that sold consumer routers and so we serve ignore the option is right in front of our face but as soon as I get a raise money and I guess you have to build a business you start to like open your eyes a little bit and so we did that and then I heard Michelle who actually spent seven years of graylock to run DD for us and I want to assure him I see a while I wanted a wonderful person and a good friend and she she basically had seen Enterprise companies many times it's just a bunch of the team had to change first
00:36:21half the team just like didn't care about building enterprise South Africa mostly just quit the team just like could not internalize that we can just like change the UI overnight because it turns out some of our big customers had their own manual they had built with screenshots of our product we got a nasty email once from this major oil and gas come and see if I was training material and screenshots and videos we made and you just totally changed your whole dashboard like you can't do that and you have to learn how to manage those things are like then you do feature Flags which way things are like common today than 2009 like future flagging things in potential Black Ops 2 Dakota customers access to feature a new look and feel for a b testing to see if mine works you can also use it just so I keep certain customers on certain packages on order features our order looks and feel so it's not like you sold one code base hope you are slightly different experiences we were starting to do those things like we start implementing feature flags and things of that nature but it meant over the course of about 12 to 18 months of the 30 people before the today
00:37:21only three were left at the end of the CTO most 2008 and then the only good thing that ever came out of the total Global recession and economic collapse was in my early investor of needed cash and so we found two investors message me when I first met Mark and Ben had to investors to come in and buy out my early investor those investors came in to show to rebuild the, to make it seem it's fascinating to me as you came back as a CEO so what changed that you didn't make this I mean cuz you're the same person you didn't change overnight like how did you pull that ya coming back as CEO the second time after spending almost a year is CTO one of the things I saw when I wasn't here with all these things that weren't happening in the company that should have been happening and of course I blamed the current CEO but the reality was actually was not doing them either what I would see you soon as you just have to have this like outside the glass box got it to you wait a minute don't know what's important wait a minute
00:38:20I'm making it clear what the priorities are wait a minute we're not firing these low-performing people but I wasn't doing any of those things either and do that to me was very eye-opening so when I came back as CEO I think I was a much better listener I think I dislike believe me the first time I see you then I'm expected to have all the answers it's just not possible to make decisions and I think that articulate their decisions smartest person in big difference between an answer in a decision because I often tell CEOs dry eye look like even before I joined a new store with people call me for advice and that's one of the things I really enjoy kinda tough moment or they need help what are the news off until she is like you know I actually like when you think about the table of leaders around you like there's actually room around the table for one person who has no idea what they're doing and that's you a CEO
00:39:20if you have the right leadership team they're adding intelligence for you and I should have gone from tetanus a year to park Co to sell CEO but my it my fault as a sale CEOs and I love the dog and pony show I love the pitch I hated the clothes why is that that's fascinating ignorance and negotiate
00:39:55Ron guy to bring at the closer look at that time and where I was going to see you I hated the negotiation I got uncomfortable everyone they taught me so much because there was only rumor on the table for me to not really know all the answers I will often say that my CMO it at El poninas Jeff Samuels I think it is not just as my CML but as a mentor to me and he taught me so much about my engineering might have sales are at my VP of sales I could take the inputs and you don't have to make a decision and I felt very good about this as soon as I made I think CEOs finding a huge relief when you tell them you're allowed to not know and thank you kind of that you have the best people you're going to know the least it is not uncommon for a CEO or a leader by managers just a good General that have ice as I know you don't want to be like the whiny person constantly like harping on something but what I would say is like you do sometimes need to pretend tonight
00:40:55you're more than once my old to finance who who ultimately became my best friend used to always joked with me that like you just tell me everything you said twice because I knew the first time I'd ignore him he would tell me like some statistics about what happened with marketing spend it with hiring ourselves plants and I'd like a problem like whatever like I don't care like you're just like a crazy Finance like being counter like I don't care if you come back like a week later okay I have more data like I did further analysis like you that you ignored me like I know I'm right here
00:41:29Mikasa CEO can get answers from their management team and then make a decision based on all the answers are hearing speaking of this telling people more than once and learning to listen that was your big shift between when you came back to be CEO and you kind of learned your lesson so to speak some better I hate the Spy thinking mindset around 4:54 and this scenario and this Persona and it's so that I can really means understanding it doesn't mean accommodating there were situations all the time that sounds like you may not resolved that thing you can still understand it'll be empathetic I got to be like that is terrible thirst and what you're saying I'm hearing you a relationship
00:42:29do you really want to be a great listener and to actually a friend of mine Wendy macnaughton she doesn't like me or X thing every other week when she really goes deep into a topic these books are just an entreprenuer one of the things that she taught me about a year or two ago was like when she's trying to teach people like how to sort of be a really really saw a listener is it when someone can you tell me more about that. Just tell me more about that the driveway that your first question like how are you thinking about that what is happening what's the frustrating part about annual planning tell me more about that interesting to me about that is to me this is the difference between a focus group focus groups and surveys are asking questions for things you already know to ask embedded in an organization or sitting is essentially just listening to learn and observe and letting those patterns reveal thing
00:43:29insides come out when you go down there like tell me more about that now I'm planning sucks that you're having budget issues that aren't being resolved in the way that you need or that maybe your tools you're using between you're planning on your way you communicate and collaborate on team contacts to know what I'm not hearing to really understand so it's interesting because on the attacker for side I don't think people know this about you but you started off your career or academic career because you actually started working when you were like what. What is that like 14 or 15 in San Diego and I went to Washington University of st. Louis I applied to the School of Arts and Sciences when I went there to interview they actually then had the interview with somebody in the School of Engineering and computer science department by the end of first semester of
00:44:29watch me ride switch back to the School of Arts and Sciences in the reason I ask is I took a class and introduction to human evolution and I just found it so fascinated like I've always wanted to my life I do best of the things I really enjoyed working on like I have trouble doing things I don't want to do so I thought I had trouble in school with things I really did enjoy so I learn how to optimize for the things that I like doing Anthropologie like I did every book I read I thought was so interesting I learned about like how women and you know I'm 4th power hierarchy of South America in a way that we don't have elsewhere in the world I learned about like what happens in Southeast Asia around farming I'm going to the Green Revolution in Africa and then I find it like in my life actually think about these things all the time that she is useful in your career or a technologist absolutely I think about demographic transitions I think about when I read about in Japan it makes me think about going to change
00:45:29constantly it comes up both but tactically as you need a ride or something like leadership and organizational Dynamics appreciation that there's many perspectives in the world and I can give you an appreciation that more perspectives are more better and you want more that is been a perfect way to close this episode David ulevitch you've made a journey from Anthropologist to technical CEO to products CEO to sell CDs to go to market CEO and now investor welcome to the exits and see podcast

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