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  • [MUSIC]

  • A session on, what they don't teach in business school about entrepreneurship.

  • Having taught entrepreneurship in Stanford business school for something

  • like 13 years, I can tell you there's a lot.

  • Some of it we know we don't teach, and some of it

  • we probably should teach if we knew a little more about the subject.

  • So, I think it's a very pertinent subject today.

  • So Mike, why don't you introduce yourself and tell us a little bit

  • about what you did, and just remember, I've got a little bio here.

  • >> Okay.

  • >> So if you don't include things, I can include it, and if you, if

  • you do include things that, that aren't in here, I may question you on it.

  • >> Okay.

  • It's like the Senate Investigation Committee.

  • >> Exactly.

  • >> Except you're not sitting out there.

  • >> I do have lights flashing at me.

  • >> That's true.

  • >> So I've been the CEO and co-founder of four startups.

  • I was very lucky with the first three.

  • One was, the first one was, I started with $500 of myself

  • and each of my two partners putting $500 so we had $1,500.

  • We started in my second year of business school at

  • the business, the Stanford of the East Coast, in Boston.

  • >> You're very kind.

  • >> [LAUGH] We, we never raised venture capital.

  • It, it started as a company called Dialafish.

  • It was where you could order groceries from home.

  • It was insane.

  • This was before the internet and everything.

  • We eventually sold it for, we had to change direction

  • because that was not gonna work into a computer telephony tool.

  • We sold it for $13 million a few years later, which was tiny for

  • Silicon Valley standards, but, you know, a

  • fair New England return on the $1,500 investment.

  • The second company was Direct Hit, which was an internet search engine.

  • Nobody ever heard of inter, of Direct Hit, but

  • we were providing search results to Microsoft, AOL, Lycos.

  • We're kind of a behind-the-scenes provider.

  • And it was the right time we grew to a market value of $500 million.

  • 500 days after we launched it, and we sold it in January of 2000.

  • And then the third company was X-fire which

  • is an instant messenger for PC video gamers.

  • It spread virally.

  • We got to about three million users, two years after launching.

  • We sold it for a $100 million to

  • MTV and now there's fifteen million users, using it.

  • And I'm now work on my fourth one, which I could end up being, I want to be four and

  • o but I couldn't be three and one because we

  • haven't sort of found the formula for success on Ruba.

  • Ruba's a travel site, so that's sort of my background.

  • >> And when did you graduate from Harvard?

  • >> A long, long, time ago.

  • >> Look.

  • >> We have to get into numbers.

  • >> Oh, yeah, the rea, yeah, well, the reason why, is, is sort of interesting to

  • know the timing of your first venture, right,

  • because, that was, you say, prior to the internet.

  • >> Yes.

  • >> But, so you were, you were actually a leader

  • in that, others came after you, also didn't do very well.

  • Right?

  • >> So I would.

  • >> You may have been the, the, the biggest

  • winner in that whole space of ordering food from home.

  • >> If we'd started a different time.

  • >> Well, you, you sold it for $13 million.

  • >> Yeah.

  • >> Most of the other companies I know lost money, right?

  • >> [LAUGH] So win by default.

  • >> Yeah.

  • >> sure.

  • So I decided I was going to stop aging at age 31.

  • So, I graduated Harvard from 1991.

  • So I must have graduated around age 11.

  • >> 11.

  • [LAUGH].

  • >> You can figure out.

  • >> Good.

  • All right, thank you.

  • Zila.

  • >> So I'm Nazila Alasti and I started life as an engineer.

  • I'm Iranian originally, and in my country if you're a

  • good student you either become a doctor or an engineer,

  • so there was, that was the choice and I was

  • scared of blood so off I went into engineering school.

  • But it was actually a really great background I thought for Silicon Valley.

  • I didn't know I would end up here, but I did.

  • And I was thankful for my parents for having pushed me into engineering.

  • Fast forward, five years of working, at a technology company at Mass Microdevices.

  • I became a project designer, project lead, went to business school,

  • and learned that people can actually, make money selling pencils.

  • And that it doesn't have to be semi-conductors.

  • That was my big, learning from, from business school.

  • Entrepreneurial activities at the time were not as hot as they are now.

  • >> What was it, when did you graduate?

  • >> I graduated in 88.

  • >> 88.

  • >> So, I also stopped aging at 30, a few years earlier than you, yeah.

  • and, and, I have to say that my experience at business school, was really

  • eye-opening, broadening, but I wouldn't say that

  • I was focused on necessarily becoming an entrepreneur.

  • It seemed very risky at the time.

  • However after I got out and experienced the venture capital world for

  • a couple of years and then went on to work at Apple, which

  • I consider really my formative years at Apple, and worked on a

  • big failure of a project called Newton, which was the original hand-held device.

  • I came to understand that I really needed more freedom in my life,

  • and that the corporate structure wasn't providing that, and I was stupid enough or

  • naive enough to say that I could do things on my own, so I

  • started a long line of all sorts of startups, failures as well as successes.

  • And ended up now running Jooners, which was my first, from Powerpoint, to funding,

  • to product startup, where I'm CEO, founder and I'm growing that business.

  • So, that's a little bit about me.

  • >> Zila's also the mother of two daughters.

  • >> Yes, I am.

  • >> And, someone who is passionate about trying to help those

  • of you who are thinking about entrepreneurship learn more about it.

  • So that's why she's here today.

  • >> Yeah, let me add to that Chuck.

  • Thank you for bringing it up.

  • I also want to talk to the women

  • in, in the group if you're interested afterwards about

  • why I believe entrepreneurship is actually a very valid

  • choice and, and, and compatible with being a mother.

  • So anyone who is interested in discussing that, I'm open to doing that.

  • the world will tell you no, it's 24/7, etc.

  • Unless you burn the midnight oil, you won't be successful.

  • I happen to have a different story.

  • So if anyone is interested I'm happy to share that.

  • >> Great.

  • Thank you.

  • So we, we talked to, we've heard

  • from two people who actually had technical backgrounds.

  • Will, give us your background and what you're doing now.

  • >> Thanks, Chuck.

  • So I graduated in 1999 from Kellogg, and I've been in the valley since then.

  • I've done a combination of both startups and venture capital activity.

  • So currently I am the CEO of

  • Sequoia Hummer-Winblad funded company called Widget Box.

  • And I joined Widget Box two years ago.

  • And before that, I was a managing director at

  • Hummer-Winblad and spent six years in the venture capital business.

  • So since I got out of business school, I've

  • had kind of the opportunity to see both, entrepreneurs in

  • action as a venture backer, and thinking through business models

  • and deciding who to finance and who not to finance.

  • And then also, having decided that to become an entrepreneur myself

  • and it's only recently I even considered myself one, quite honestly.

  • But the last couple years of running a small

  • startup that's not profitable makes you one, I think.

  • It's been it's been a very interesting time to run a, run a company.

  • So, now I'm definitely excited to be here today and

  • kinda share my thoughts about what business school taught me, what

  • it didn't taught me, to, teach me about, you know, how

  • to, to lead a company, bring products to market, sell, etc.

  • And Chuck's right, like in terms of backgrounds, I went to Harvard,

  • studied East Asian studies and finance and started my career actually in Asia.

  • So I worked in Hong Kong, and Singapore, spoke Mandarin

  • Chinese and thought I was going to be part of

  • the Asian miracle, and, but so that, so I've done

  • I'm not coming from an engineering background, in other words.

  • And so part of, you know, one of the questions today I

  • think is, how do MBAs and finance people fit in to a

  • culture that's really run by, by engineers, as opposed to business types,

  • and kinda the MBA being a joke, as opposed to something good.

  • So I, you know, I'm happy to be here and look forward to a good discussion.

  • >> Now one of the things, Will, if I am correct in reading this and listening to

  • you, you formed, you joined Widget Box after it had actually been founded.

  • >> That's correct.

  • So there were three technical founders.

  • They'd actually raised $10 million before I got there.

  • >> Some from you.

  • Some for me, I was the seed financier and then Sequoia did the A

  • round and then Brent Jones and Tommy Vardell at Northgate did the B round.

  • And at that point they were looking for a CEO and

  • the, they did a nine month search and the last guy

  • that we made the offer to, I told myself at the

  • dinner if this guy doesn't take the job, I'm doing it.

  • He didn't take the job.

  • [LAUGH] So, yeah.

  • >> So, so, so some different paths here, I

  • mean starting their own company, going out and trying

  • to find the idea, put the team together, versus

  • joining a startup after it's had the initial founders.

  • The way we want to start this is to, is to ask them

  • a little bit about what led them to decide to follow an entrepreneurial path.

  • Because many of you are in business school, or

  • not in business school, you're thinking about this and you've

  • got a set of ideas in your head as to

  • what it's going to be like to be an entrepreneur.

  • And then, what has been the biggest surprise

  • for them as they joined the entrepreneurial world?

  • So you got a vision, what led you to, to, to do this,

  • and then, what's been the biggest surprise once you, once you jumped in?

  • Let's start with Nazila.

  • >> So I, I, I think I touched on that.

  • For me, the, my job was such a big part

  • of my life that, unless I was very creative and

  • had the freedom to do what I wanted to do,

  • didn't have to explain myself too much, I was unhappy.

  • So I thought that a smaller

  • environment, less bureaucratic environment would afford that.

  • I wanted to be my own boss, and, kind

  • of live and die by the decisions that, I made.

  • I also like adrenaline, I like living on the edge.

  • I like being pushed to make decisions.

  • I, felt that I had too much cushion at

  • Apple, frankly, my decisions really didn't make a difference.

  • The juggernaut was going on, and I was doing my best

  • but, you know, er, wh, wh, where was my contribution really.

  • So those were some of the reasons that

  • I decided to jump into the entrepreneurial pool.

  • Er, the biggest surprise though, and this, probably you all are smarter than I was.

  • I, I'm an immigrant so I always thought of myself as someone who

  • can do anything, just, just, give the problem to me, I'll do it.

  • I'll take care of it.

  • I really never put too much emphasis or

  • attention on partners and I learned the lesson the

  • hard way, that in the startup environment, the biggest

  • surprise for me was how much you needed partners.

  • Just like you can't have a, well you can have a baby on your own I

  • suppose, you can adopt one, and maybe that's

  • what you did, coming in late as a CEO.

  • I don't know.

  • The analogy stops there.

  • but, but, but, you know, I cannot emphasize the importance of partners.

  • And I cannot emphasize how much I was lacking in that dimension.

  • And how much I wish, had I done things a different way,

  • to go back and make ideas, joint ideas as opposed to my idea.

  • So that was the biggest surprise for me.

  • >> You thinking about a, a partner, is this a founding partner, or you thinking

  • about a partner in terms of somebody in

  • the supply chain or the distribution chain or?

  • >> Oh, the founding partner more.

  • Yeah, and I also, just let me briefly say that I think, my

  • experience in business school told me what I was good at, not was I was lacking.

  • And, so I, if I were to do it again, I would emphasize a lot

  • what I'm lacking, so that that defines the type of partner you'll be looking for.

  • So more on that if the discussion goes that way.

  • >> Okay.

  • Will?

  • >> Yeah, for me I think it was

  • just, a combination of a lot of different variables.

  • But if you, if you think about where we live today, right

  • now, in this valley, it's almost like how could you not do it.

  • You know, if not now, when, you know.

  • And this is, the whole ecosystem here

  • is geared toward risk taking, testing yourself.

  • There's a whole, you know, obviously, a

  • huge base of institutional venture capital support.

  • Legal systems are here.

  • And it, really it came down to, I remember to doing investment when

  • I was in the, in the investment side about how to test semiconductors.

  • And at the time there was, the state-of-the-art

  • was testing a quarter of the wafer, and

  • then it was half the wafer, and then

  • finally this breakthrough to test the full wafer.

  • And I feel like entrepreneurship is a full wafer test.

  • It's every, testing every part of who you are.

  • It's testing your passion, your endurance, your perseverance, your leadership

  • skills, your sales ability, you know, it, it, it, and I just felt that if I was

  • 65 looking back on my career, I would never forgive myself for living

  • in this environment, at this time and not testing the whole wafer, you know.

  • And so, venture capital is a great job

  • but it's, it's literally it's it's a research job.

  • You know, where, and, and it's a job where you make investment decisions.

  • And I always felt when I met with the entrepreneurs, I'm like, God, these guys.

  • You know, I admire them so much, and it just got

  • to the point where I, I couldn't imagine not doing it.

  • >> And once you jumped in, what was the biggest surprise?

  • >> The biggest surprise was, it being okay that you don't have all

  • the answers, and trusting in process to help you get to an answer.

  • Like I really thought, cuz as an investor you're hypothesis driven.

  • You believe that you're making an investment based on

  • the following characterization, a, b and c, therefore, d.

  • And as soon as you start running a company you realize none of those hypothesis

  • work, and because the venture guy, you're paid to have an opinion.

  • When they say, Will, what's your opinion on this deal uou have an opinion.

  • And all the sudden I realized, like, shit, I don't even know what to do now.

  • And realizing that that was a very unnatural feeling because I.

  • I'd find in myself of always knowing of you and realizing now that I don't know.

  • And we've basically, in the context of this is

  • we had no idea how to make money, none.

  • And like dealing with that and accepting that and then realizing,

  • like, well how are we gonna get out of this problem?

  • And just deciding that, okay, this, I'm reminded

  • of when Nick Saven won the national chair and

  • he said that hey, we believe in process

  • not results at Alabama and what did that mean.

  • What he meant was that if you know how to block,

  • you how to play defense, you know how to do these

  • things, you just play the game and then you trust the

  • process to help you get to the result that you want.

  • But, so rather than a random act of

  • heroism where you're gonna have this flash of

  • genius that's gonna make you rich, just deciding

  • slowly steadily plod your way in a predictable

  • way where you're going and then trusting that

  • that's gonna have you arrive at the right

  • answer as opposed to a prior saying I

  • have the answer, now we'll just make that happen.

  • That was a really hard transition from you know being

  • an investment hypothesis driven thinker to being a process driven thinker.

  • >> Mm-hm.

  • >> MIke [COUGH] out, out of engineering school I

  • went and worked at place Hughes, Hughes Aircraft Company.

  • And one of the projects I got to work on wa a solar powered race car.

  • And it was a totally cool job.

  • We raced across Australia from Darwin to Adelaide.

  • And this car, before we built this car,

  • the fastest, again, this was a long time ago,

  • the fastest solar powered cars were going maybe

  • 20 miles an hour, maybe 22 miles an hour.

  • and, we built a car that could go 55 miles an hour forever, just on sunlight.

  • Which is, from a knee jerk perspective like it's an amazing accomplishment.

  • And we won the race and we came back and

  • I remember clear as ever my boss saying that's amazing.

  • You know, I just wanna let you know the average race

  • at Hughes Aircraft Company is 6%, you're gonna get 6.5% this year.

  • [LAUGH] And just the feeling at that moment of you know, your fate

  • being in your own hands was like okay this is not gonna work.

  • [LAUGH] I was also fired between, between first and second year at business school.

  • I went to work with a consultant company.

  • At the end of the summer everyone got an offer to come back except for me.

  • And they fired me because I scowled at people senior to me in the firm.

  • And they, they told me that I, I admired them for at least telling me that,

  • but you know, talk about wanting to be

  • in control, these are all, sort of, strong influences.

  • [LAUGH] and, and one other thing, sorta, how you get into

  • entrepreneurship I, I was I was interviewed on Japanese TV actually

  • and I said, well I think one of the key tests

  • is how do you feel at 9 o'clock on Sunday night.

  • If you feel like oh, you know yeah, it was a great weekend.

  • I'm looking forward to this week cuz of cool projects, that's one thing,

  • but if you feel like oh, man, I can't believe the weekend's over.

  • I'm really not looking for work, it's time to change.

  • Well they show this on Japanese TV and actually showed

  • this at 9 o'clock on Sunday night and apparently they

  • got flooded with 12,000 phone calls to the switchboards or

  • whatever saying, yes, we, I need to get a new job.

  • [LAUGH] So so, so, so, so those were my influences doing a new start up

  • and the biggest surprise for me at the risk of Chuck's wrath because this

  • is one of the Ben said things yeah, in terms of, I believe the most important

  • things are a small team with high morale is really hard to defeat.

  • And you can, we had to change, three out of my four companies had to change.

  • Original idea completely failed and had to change to

  • a new idea and that was a surprise to me.

  • It wasn't so much the quality of the original idea, but it was the quality

  • of the team and the morale of the team that I think we're, the key think.

  • >> Yeah, interesting, so yeah.

  • Interesting so, similar to the point, is that you need a team, you need a high

  • performance team, because let me just generalize what you just said Mike.

  • There are very few companies that start off maybe here, and just go like that.

  • Most of them go, like this, even if they get there,

  • and many more go like this, and end up over here.

  • >> Hm.

  • >> And, the question is, how do you, how do

  • you do, this, sometimes what's called the art of small-boat sailing.

  • Any of you who're sailors, you know, you tack back and forth.

  • And a good team is the, is the way to do it.

  • >> Yeah.

  • >> So, so now we're gonna, we're gonna sort

  • of turn a little bit to thank you very much.

  • We're gonna turn a little bit to lessons learned.

  • And, and to start off just asking each one of the panelists so

  • what what are the two key lessons, one of two lessons that have

  • been important to your success, lack of success, you know, if there'd been

  • failures, you know, you, you, you learn

  • more from failures often than from successes.

  • And how and where did you learn it, and then we're gonna,

  • gonna, after we leave that, we'll come and talk about reflecting back

  • on the your business school experience and to find out sort of,

  • what you think was, was most important about your business school experience.

  • So let's start with what are one or two key lessons that

  • have been important to your success, lack of success in your entrepreneurial career.

  • How and where did you learn them, and,

  • let's get started with let's, let's start with Will.

  • >> Hm.

  • [LAUGH] I, I would say [COUGH] the kinda, I don't

  • wanna repeat myself a little bit, but I think what Mike said is

  • also really important, too, like, you know, Andy [INAUDIBLE]

  • wrote the book Plan B, and they basically, it's,

  • it's the same point Chuck made about tacking back and forth.

  • It's, it's, it's being, having a smart, high-energy team

  • that learns really rapidly what the signals the market are giving it,

  • and you know, we, we have a thesis about our

  • business and now we're on like thesis four I think, probably.

  • And recognizing that like I use to remember Chuck was on the board of ConEd

  • and the founder of ConEd told me once,

  • when I was thinking about starting a company.

  • He said, hey listen the first step is the hardest, but once you

  • start [COUGH] your just on a journey and process, and I think that;s right.

  • Like so beginning this work, be very, very aggressive about it.

  • But at the same time be very flexible as a team about

  • how to attack based on what you're hearing so thesis around revenue or

  • monozation or customer acquisition, market segment

  • positioning all that you it should be

  • taken with, with a degree of flexibility so you can re, reconstitute yourself.

  • And then being able to work with investors is really critical around that.

  • Because investors again, going back to my original

  • premise about difference between start ups and investing.

  • Investors are thesis driven.

  • So if you say we are gonna go do this.

  • I'm raising money for this purpose, and we are gonna attack this market this way.

  • We are gonna characterize revenue model this way.

  • And, the first board meeting you are like, well,

  • [LAUGH] that's not why it not work, you know?

  • Having the ability to have that conversation with them.

  • So their with you through the journey as opposed to being surprised by the attack.

  • And so I would say being able to work down with your

  • team and try to attack the market and learn and then other

  • challenge is how do you work back up with your investor group

  • to basically say, okay, well, here's what we're seeing in the market.

  • Here's the data points.

  • Here's how I'd characterize those.

  • Here's why I think we need to move

  • direction a little bit, and then, making that an

  • open conversation, so they become part of the

  • solution as opposed to like, critically observing your problem.

  • So, I don't know if that makes any sense.

  • >> So, so the lesson is, I'll be ready for changes of course, and embrace them.

  • >> Yeah.

  • >> And also, have the courage to go back to your investor group and

  • explain to them, this is not, this company is not doing what they invested in.

  • >> Yeah.

  • >> And, and your point, your point about as an investor,

  • you've got a thesis, and you are investing in a market.

  • And if at the first board meeting, they come back and

  • say, oops sorry, guys, I just took your $10 million, but-.

  • >> Right.

  • >> You're not going there.

  • >> Right.

  • Another thing I've, I've, I really learn I think, and I say this with all due

  • respect is that investors are extremely opinionated, like, you know, alpha male.

  • Type people typically.

  • And they, and they have a lots of opinions.

  • The other thing I learned was to

  • acknowledge and be respectful and listen to all

  • of them without being overly reactive [LAUGH]

  • to respond to any particular one of them.

  • I got, what I mean by that, is I'm gonna say you know, you should do this,

  • this, this and this and I'd go back and I'd go okay well that doesn't make sense.

  • Why would I do that?

  • And but, I, I was over, so I guess there's

  • a fine line between having an open conversation with investors and

  • being extremely respectful of there opinions because CEOs that don't

  • listen to their investors get fired relatively quickly in my experience.

  • So, you listen, but then you still are in charge.

  • And so, you have to decide how you incorporate

  • their feedback, make them feel like they've been heard without

  • making decisions that you go against your own gut

  • feel or what you think the business should really do.

  • That's something that's also hard to learn, I think.

  • >> Just, so, you were, he was an investor with a firm called Hummer Winblad.

  • One of those two was Ann Winblad.

  • so, if we change a little bit the

  • alpha male to very determined and, and opinionated.

  • >> Yes.

  • >> How is that?

  • >> That's very, very fair.

  • >> All right.

  • Mike.

  • >> So for me, one of the golden rules is speed is the ultimate weapon.

  • And I've learned that in, in a good way and a bad way.

  • I have all these little sayings.

  • [COUGH] I think that the probability that any business development

  • deal ever happening declines by 10% everyday it doesn't close.

  • And I really believe that.

  • so, you know, mi, we closed the Microsoft deal with direct

  • hit where our results were shown on the Microsoft search result page.

  • And that deal was done in, in less than ten days.

  • And I think if it stretched on to, you know,

  • six weeks or something it would have never even gotten done.

  • Same with the AOL deal.

  • I've just seen from my you know, history which ones close and which ones don't.

  • Same thing with, with raising money.

  • I think I've raised seven rounds of financing and six out

  • of the seven had a signed term sheet the day I pitched.

  • And I think if we stretch it out longer, all these questions and second thoughts,

  • and more market research and whatever comes up and, and even closing employees.

  • I, someone comes in for an interview, we'll do

  • do diligence checks while they're still interviewing other people in

  • the company, and before they leave the building, we'll give

  • them an offer and say, are you ready to accept?

  • And they're like floored.

  • And right now?

  • [LAUGH] We say you know yeah.

  • And we don't wanna rush you sleep and let us know 9 o'clock tomorrow morning.

  • [LAUGH] But we get a lot of those people, and if we don't,

  • I've seen people spread out and then you, you know, you lose them.

  • Also, launching products, all my company we've launched, launched a product within

  • three months, three and a half months of, of starting the company.

  • And then you, it's not a very full-featured product

  • but you get the feedback from the market and everything.

  • So speed for me is far and away the, the most important lesson I've learned.

  • >> So, one of the points you made there had to do with with raising

  • money and, and signing the, the deal the same day you, you pitched it.

  • >> Yes.

  • >> Were you able to do that the first time out?

  • Let's assume that, that, that, that these people

  • are all gonna be the first time out.

  • >> Yes.

  • So, people always ask that.

  • And so let me just say, part of the, part of the, the, party

  • of the reason all of us I think here are doing this is for aspirations.

  • To sort of get you guys, you know, motivated and excited so

  • some of these things may seem like oh, I can't believe that.

  • But it's sort of a goal to go after.

  • But actually J for Jertson my second company so

  • I had one under my belt, $13 million one.

  • We pitched them at 8:15 on a Tuesday morning in April of

  • 1998, and we got a signed term sheet from them by 4:30.

  • And the way you do that, anyone in this room can do that.

  • I think some of the techniques are you come into

  • that meeting with what I call and if then contract.

  • And if then contract I go get a customer for

  • the, for the product and, and make this amazing claims.

  • Like, if we can provide search results in

  • 50 milliseconds that 80% of your users think

  • our results better than your [UNKNOWN] results, would

  • you buy them for a dollar per thousand?

  • And almost anyone will say yeah, okay.

  • So, they sign a letter or whatever and, and

  • then walk into the troops Trevor Fischer with this letter.

  • Now there's all sorts of caveats and clauses and no legal contract, but

  • at least Trevor Fischer says okay, you know market risk has been eliminated.

  • He's got a customer.

  • And also you walk into that meeting with sort of how your gonna build that product.

  • Here's the Gantt chart, here's the people.

  • Here's the three people I'm gonna hire.

  • I've already talked to them, they've already committed to joining.

  • Here's the, you now, the database schema.

  • Trevor Fischer doesn't know whether the scheme is right or

  • not right, or which way they are going to take six.

  • But at least they think, okay, this person seems to know where they are going.

  • And so, it is much easier for them to say okay, yeah.

  • And of course you also play competitive pressure.

  • I always do my meetings, I'm meeting, you know,

  • Will's been on the receiving side of this probably.

  • I meet with three VCs in the same day.

  • And I say it's moving fast, and I'm

  • actually expecting a term sheet by 5 o'clock today.

  • And sometimes, they'll call me back the next day and say, we're in.

  • And I say, it's gone.

  • And they're like, what do you mean it's gone?

  • And I say, I told you 5 o'clock.

  • And they say, but all entrepreneurs say that.

  • And I say, well, sometimes, it is gone.

  • So I think if you just project this, if you project this, you can get it done.

  • And a lot of times, you know, the venture capitalists will sense this.

  • And they say, wow, this is, this is moving.

  • >> Who were you dealing with at Draper.

  • >> On that day?

  • >> Yea.

  • >> I had Tim Steve and John all in the room at 8:15.

  • >> Yeah.

  • They are a group that can and does,

  • and do make quick decision, so that's pretty good.

  • >> Yeah, yeah.

  • >> Let's see, who do we [UNKNOWN].

  • >> Yeah wow.

  • I'm floored.

  • [LAUGH] I want you on my board.

  • My experience has been very different.

  • The small sailboat analogy I think corresponds to our

  • journey definitely with Juners the company I'm leading right now.

  • It was different with e-circles this was late 90s, you

  • know 98 99, we raised $27 million and it was very

  • much of this quick you know, now or never but

  • I guess my biggest lesson is that you shouldn't give up.

  • And if 9 o'clock at night on Sunday you still feel that you

  • have the passion, it's an it's, it's, it's an affair that's not finished.

  • If you're still coming up with good ideas.

  • Then keep on at it, even if you don't have the term sheet, right?

  • so, so persistence, always pays.

  • And it's kind of what Will was saying about the process.

  • Be very, focused on what you're doing, where you

  • are in the process, and don't give it up.

  • Don't let people derail you.

  • Because they will try to.

  • The other lesson I learned is that, maybe I'm too much of an engineer.

  • I, I really don't have it in me to go and bluff like that.

  • >> Yes you do.

  • >> [LAUGH].

  • >> yeah, exactly.

  • So I need you as a coach.

  • I, I, I, I will urge all of you to find a mic and learn from.

  • Seriously, there have been board members in my company that have told

  • me, you did this and this is how you spoke about it?

  • I think it's also, perhaps, not too fine a point on it, a female characteristic.

  • Well, you know, yeah, you were expecting me to do this, right?

  • Why should I even brag about it?

  • As opposed to, because you're dealing most of the time

  • with these alpha males, that are, I characterize them as lions.

  • Right?

  • I am an ant.

  • You know, I build.

  • [LAUGH] And then I face the lion, and the lion just basically, all

  • he does all day long is sit under the shade [LAUGH] and watch.

  • [LAUGH] Ooh, that looks like a good prey over there.

  • Attack.

  • And that, when the lion is attacking Mike, Mike

  • is like, whoa, I've got 3 other lions coming.

  • Quick.

  • Whereas with me, I'm [LAUGH] okay.

  • So we're laughing about this, but this is a serious point.

  • Find out if you're an ant, get yourself a lion partner

  • somewhere, [LAUGH] if you're a lion, get yourself an ant partner, right?

  • Because both are necessary and that's the combo is really unbeatable.

  • The combo is what lets you do the speed.

  • Right?

  • And the ant and the lion better trust each other.

  • You don't look like me.

  • [LAUGH] Yeah, yeah, yeah, I know you wear lipstick.

  • Yeah, I know.

  • But I have, I have a brain I can help, you know.

  • Let me also share since I've got the

  • audience laughing, I think I have permission here.

  • [LAUGH] I was 6 months pregnant with my second daughter.

  • Amazon made an offer for the company I was at.

  • E-Circles, at the time for $250 million.

  • $245 million to be very precise.

  • Imagine, second child, belly comes that much faster.

  • I am this big, and I'm literally jumping up and down on

  • the table saying to the CEO, take it, take it, take it.

  • And he looks at me and he says, you're not an entrepreneur.

  • You really don't have the balls.

  • [LAUGH] An entrepreneur will say no to them.

  • I'm like, no, this is $245 million.

  • Don't say no.

  • We sold that company for $13 million to classmates.com

  • 6 months from that point, right after, you know, whatever.

  • February of 2000, April of 2000, right?

  • So at that point, I really felt this small.

  • I'm like, oh, yeah, that's right, you know, I'm pregnant and my

  • hormones have gotten the better of me, and I'm definitely not an entrepreneur.

  • That's why I'm working for this guy as a VP of Marketing.

  • I may have all these ideas.

  • I may know where I'm going, but yep, I'm not an entrepreneur.

  • Don't let ever the world tell you that even if you're 6 months pregnant.

  • [LAUGH] Right?

  • Seriously.

  • Stick to it.

  • Go to the board.

  • Do whatever you need.

  • You know.

  • Because sometimes right.

  • People come in different packages.

  • And don't let the world tell you that you need to look different.

  • anyway, I stop.

  • >> All right.

  • And there's a, there's a a female intuition in

  • some of these things I think that's pretty important.

  • I'll tell you one other story.

  • Hotmail Samir Bartia had an offer from Microsoft for $250 million.

  • >> Mm-hm.

  • >> Samir's from India.

  • Samir called home and he's talking to his father and he said we just had an

  • offer for $250 million from Microsoft and his father says that is really great.

  • And he says I turned it down.

  • [LAUGH] His father hangs up.

  • [LAUGH].

  • >> A nanosecond later his mother's on the phone saying, Samir,

  • call that man back and tell him you'll take that offer.

  • [LAUGH] He took the offer.

  • [LAUGH].

  • >> So the moral of the story is better be a mother than an entrepreneur.

  • [LAUGH] [INAUDIBLE].

  • >> Yeah.

  • Exactly.

  • >> And Steve Jurvetson was on the board saying don't take the offer.

  • >> Yeah.

  • >> Yeah.

  • Yep.

  • >> well, so let's turn now to to Business Sch, School education and

  • how that might, or might not, have helped prepare you for your work.

  • In general, and in specific, instances, sort of,

  • in general, but then, they did or didn't.

  • And then what were the most valuable classes you took and what classes didn't

  • you take that you wish you had taken and I guess we'll start with Will.

  • >> Okay.

  • I've thought about this quite a bit.

  • I guess I have 3 comments that I thought of.

  • This is more about what I didn't learn.

  • The first is that risk is really relative.

  • People think that doing start ups is risky.

  • My, a lot of the guys that when look

  • back, I went to my tenth [UNKNOWN] this past year.

  • Went to Merrill Lynch, Morgan Stanley, BCG and McKenzie.

  • They all got fired.

  • All of them.

  • And fired in two different waves.

  • The first in 2002 and then again in the last year.

  • There's no such thing as a safe haven in this economy.

  • People will cut jobs as soon as they decide.

  • And by the way, you're like a number in some budgeting exercise.

  • The CFO says, we gotta cuts heads, you know, 15%.

  • And there's like all right, take this whole department out.

  • So, just first think I'd think is just, there's no

  • such thing as a safe place so if you're gonna take

  • risk, which you are, whether you realize it or not you

  • might as well be in control [LAUGH] of your own destiny.

  • That's the first thing that, that I think a lot of my classmates got wrong.

  • And by the way, when you're a 10 year Merrill Lynch vet and

  • you get whacked in New York City, in the meltdown of a financial market.

  • What are you gonna do then?

  • You're screwed.

  • If you're an entrepreneur in Silicon Valley and it

  • doesn't work out, there'll be plenty of things to do.

  • I guarantee you.

  • Sec, second thing is I really think

  • business schools overteach how rational organizations are.

  • [LAUGH] They basically, basically make up this thing that

  • business, every businesses some DCF model or some rational

  • exercise and then everyone gets around and they make

  • a logic based decision about how, what to do.

  • When I first got out of the business school, I

  • remember going into meetings and going, what the fuck just happened?

  • Like, how did that decision just get made?

  • It makes no sense whatsoever, and I literally was like, this is so weird.

  • I, I was like, disoriented for like weeks and

  • just like, I don't understand how anyone's making their decisions.

  • Like, no one's even doing any analysis, they

  • don't understand what they're talking about and I read

  • this book and it was kind of a cliché',

  • but it basically said there's two types of companies.

  • There's companies that are idea driven, where they're

  • flat, they're merit based, and people, and they're

  • generally engineering companies in a lot of ways,

  • and they make decisions based on rational logic.

  • And then there's people driven companies that are driven by politics

  • and personal affiliations, and logic has nothing to do with it.

  • There may be this kind of pretend that there's

  • a process but basically, there's some decision that gets made

  • based on who knows who or this or that, and

  • all of a sudden it gets announced to the company.

  • And what.

  • Generally if you work in those companies, everyone goes, whoa, what is going on?

  • And I worked in a lot of people call up political based organizations and, and

  • as a MBA, a business person, I just

  • was completely dumbfounded by how companies were working.

  • And I, I think that there's, you know, there's like OB and people talk about

  • that, but it really, I think one of

  • the challenges about business in general is [UNKNOWN]

  • economics or finances, people presume logic is

  • the basis for how large companies make decisions

  • and all we have to do is look

  • at Washington D.C. to realize that's not true.

  • [LAUGH] The last thing I would say is some,

  • for some reason business schools are prejudice against sales.

  • And like they're, I guarantee you when you

  • graduate none of your classmates will become sales people.

  • And yet John Thompson, John Chambers, Sam Polusamo, the guys who run

  • >> Cebo.

  • >> Cebo.

  • >> John Mortgage.

  • >> Yeah, John Mortgage Steve Ballmer ran sales with Microsoft.

  • Sales people run the world.

  • [LAUGH] You know, like they, they are the guys that go and like, and

  • this, it's very rare that a marketing person is gonna run Cisco or IBM.

  • You know, it's sales people.

  • So, why is it that business schools don't, don't

  • embrace sales in sales cultures, and variable base compensation?

  • Like, all right, we're gonna pay you 100, but you can make 300 if you knock it out.

  • Most MBAs are like, no, I just want a 125 and a little bit of variable.

  • But it's like why?

  • Like, if you're good and you can sell, then you should go and sell.

  • Certainly, whether you're selling to raise money or selling your product.

  • Like, sales is the heart of everything we do.

  • And I just wish that someone had said to me like, go become a sales guy.

  • You know, or like learn sales or sales management.

  • Or like, and it's kinda like this dirty thing, like yeah, I will do

  • product management I will do business strategy

  • oh, and then someone's gonna sell it.

  • Well, who?

  • You know?

  • [LAUGH] And, and if you're gonna manage sales

  • people it would probably be good to do that.

  • So I, I, I just don't get that part of it.

  • MBA's all have the same mental frameworks rather than make decisions, and

  • when you go into a company you have to, you get almost challenged a little bit.

  • Like, you went in with a visual designer and they're very

  • creative and they think in terms of pictures and, and, and design.

  • And then engineers are very logic architectural driven and

  • they won't understand scale and all the other things.

  • And when you do a lot of group work at business

  • school, everyone's kinda sharing a common framework, cuz they're teaching you a,

  • a frame, a method of decision making, and then you get into

  • a company, and you realize there's a lot of this communication problem.

  • You're like, how does this person not understand how they

  • think, or it makes no sense what they're saying to me.

  • Well, that's because they, they're looking

  • at the problem completely differently than you.

  • And I would say, the other thing I wish I had done more of

  • in business school is do cross-discipline work,

  • like with other people not in my school.

  • And I think that D school here's a great example of that, where you can go

  • work with some creative designers and some engineers,

  • and, and you can really realize that to

  • solve a problem with people from different disciplines

  • requires to be a flexibility in how you

  • communicate and how you think about it, and that was a real shock to me too.

  • And you end up like, I have a of couple people for me who are designers.

  • And like whenever I talk to them,

  • I realize like, wow, I don't, they're looking

  • at this problem from such a different vantage

  • point than me, but yeah, it's very valuable.

  • The way they're thinking and they're better at it than I am.

  • So, those are all things that I wish I'd learned more of I suppose.

  • >> [COUGH] so, a, a while ago I had this, this dream, this fantasy, I like

  • gosh I wish I had this magical power that I could get my company to work.

  • I could control the brain of someone I'm trying

  • to get a business development deal with [LAUGH] you know,

  • get inside, get Google to do this, get Google

  • to up you know, change my page rank or whatever.

  • And I'm trying to get around to supporting Will's

  • point that and then I realized you actually can.

  • And that's through this, this persuasion, this charisma, this

  • sales technique that I think is the most important thing CEO's do.

  • One way that I got a lot of experience was in my first company, we were selling

  • this software product, $500 software product over the telephone.

  • And there were 3 people in the company.

  • And we had just gotten this article in this magazine, and sure enough, 300

  • people called [LAUGH] in the next two days saying yeah, we wanna get the product.

  • We didn't even have it finished yet, we were a little bit, jumped the gun.

  • And so we cr, yeah, we created this database and

  • we started to put everybody's name down and call 'em back.

  • And then more people would call in about the product.

  • So in the beginning, out of every 100 calls,

  • you know, I would take their information down, I

  • would send them a brochure and I, you know,

  • I'd say okay, I'll follow up or something like that.

  • I basically was closing nothing.

  • In 10 weeks later, out of every 100 calls, I could get 33 of

  • them to give me their credit card number by the end of the call.

  • And you just learn to say well look, you know,

  • we have a 30 money back guarantee, so why don't

  • you just give me your credit card and I'll send

  • it to you, then you can just do the tutorials.

  • You don't like it, why do, why do you wanna spend time reading the brochure?

  • Why don't we just have the product in your hand?

  • And you can try different techniques and

  • different approaches, and learn which ones work.

  • And the other thing I think that happens, that's

  • very powerful is when you ask for something huge, something

  • you think is maybe a little bit outrageous, and someone

  • gives it to you, it's a very eye opening experience.

  • When you say to AOL, you know why don't you put our

  • search results right here and split the revenue 50 50 with us.

  • And when they say okay, you're like, oh my goodness, [LAUGH] you know.

  • There're some other analogies I could give maybe, probably

  • not appropriate in this environment but, where if you

  • go for something you think is maybe unattainable and

  • sometimes they say yes, it's a very powerful experience.

  • And it makes you try more

  • often.

  • So.

  • >> Good.

  • >> Okay.

  • So I, I said that business school should require

  • every student before graduating to sell $10 worth of goods.

  • $10.

  • I second your point, and I'm gonna move on.

  • Selling is underestimated, and it is hard to get $10 out of a person, believe me.

  • It doesn't matter the age, doesn't matter the size, doesn't.

  • So, in our company, at Jooners, we started as

  • a free service, we debugged it and then realized that

  • we have a long way to go for this market

  • to realize, and we'd better have some money coming in.

  • So, we turned it into a subscription service.

  • And, the amount of effort and thinking that

  • went into this exercise, I can write books about.

  • But, the net result of it is that we became

  • the, the, the masters of our own universe, if you will.

  • It's a very small business, but it is self-sustaining.

  • Right?

  • So, important stuff: sales.

  • I can't, I can't highlight it enough.

  • similarly, I thought that in business

  • school my biggest learning was on organizational

  • behavior, just because I love to learn more about people and how minds work.

  • And accounting, because I knew nothing about it.

  • Right, so it, those were the courses that attracted

  • me the most and I learned the most from.

  • I, I think there is an over emphasis, at least in my years.

  • But, I, I, I'm sure things have changed on maximizing

  • revenues and profits, as opposed to maximizing value.

  • And that's a critical question that.

  • And the reason for it, I think, goes a little bit to the fact that all of us

  • living in U.S capitalist society, and so for, I, I don't know what the reason is.

  • But we always think bigger is better.

  • And, I'm not sure if that's the case for everyone.

  • So, understanding on the spectrum of very, very, very small to very, very,

  • very large where your idea, product, mentality,

  • personality, wish for life, you know, what,whatever.

  • Where that fits I think we'll with the question what am I maximizing?

  • Certainly you can't create Cisco, just maximizing value.

  • Although some would argue that if value wasn't maximized

  • in some form or fashion, Cisco wouldn't be created.

  • We can have a debate about which one comes first.

  • But at the end of the day, the question that I face

  • as a CEO in my company right now, is, what am I maximizing?

  • Right?

  • Certainly I'm not maximizing number of people coming to the site and registered

  • members because I am putting in front of them a 1995 barrier, right?

  • Subscriptions.

  • Give me money.

  • Otherwise, you can't use the product.

  • But I'm maximizing.

  • The fact that I know the people that I have are going to

  • pay this money, because there is a pain that I solved for them.

  • That's, that's what I'm maximizing right now.

  • So, so, so, on that.

  • Another point scale.

  • When I was at Apple, I was so ignorant.

  • I would look around and say this is so stupid.

  • This is so big.

  • And they don't really see the value of my great ideas.

  • You know, what, what is going on?

  • I, I was like you.

  • I was like I have, I'm an MBA!

  • Use me!

  • [LAUGH] You know?

  • I'm smart.

  • I can do, you know, etcetera.

  • But if you end up in a big company, please, do

  • me a favor and take the time to learn about scale.

  • You know just watch it.

  • Just watch how organizations are billed, watch how products are shipped.

  • Just watch it.

  • Cuz there are a lot of lessons that you'll learn, that you

  • don't know where did, when and where they'll come handy, but they will.

  • I guarantee you.

  • So scale, it's kind of.

  • If you don't understand it, like I was when I was at Apple, it's easy

  • to pooh pooh at and just say, ugh, I'm just gonna go be an entrepreneur.

  • But, if you pay attention and learn from scale,

  • then you can be a better entrepreneur, I think.

  • And I would harp once more, again, learn where you are weak.

  • I think, in business school, because it's such a selective program at Stanford.

  • People that come in, we all felt we were the

  • chosen and the school does nothing to diminish that, right?

  • We're, we're continuously pumped, at the very same time that

  • I was going through business school my husband, my now

  • husband, then boyfriend, was going through a PhD program at

  • Stanford and every day he was told how stupid he is.

  • >> [LAUGH].

  • >> Seriously.

  • He was writing a thesis, he was doing cutting

  • edge work, he was doing modelling like you wouldn't believe.

  • And every day, they were telling Murph.s, yep, you came short, you came short, you.

  • And every day, I was, just for sitting in

  • these great chairs, I was being told I'm wonderful.

  • And and, and so what happens is that you

  • really, I think, gravitate towards what you're strong at.

  • As opposed to finding out what you're weak at.

  • And, you know, you may, you may be fine, you know,

  • I'm good at talking, so I'm just gonna keep on talking.

  • I may not be very good at thinking, or understanding

  • people's feelings, so I'm just going let another person do that.

  • That certainly is a strategy, nothing wrong with that.

  • But, if you want to be a

  • more holistic manager, and more well rounded entrepreneur.

  • I would definitely pay attention to the negative space.

  • And what it is that you don't do well.

  • And why and how can you, how can you beef it up?

  • [SOUND].

  • >> Thank you.

  • So, we've got a couple other questions that we can.

  • Throughout here the panel.

  • But let's open it up here and see if there's any questions from the audience.

  • >> Nobody's mentioned financing on your, on your own.

  • Growing organically.

  • I actually have started a number of businesses one

  • of which 30 partners who are each partners have made

  • a million dollars and the company is now the

  • biggest company in the United States in this particular field.

  • Can anybody comment on that I never think on any of it in any business.

  • >> Anybody want if not we'll.

  • I can so my first one was self financed with 1500

  • dollars we never raised debt or equity from investors.

  • It's quite painful to run a company with 1500

  • dollars in invested capital it reduces your flexibility about.

  • Having any computers, for example, in the company.

  • So I don't think you have to raise venture

  • money, but it's a sort of an optimization decision.

  • The fastest way to get there a lot of ways is to raise venture money.

  • Now I actually haven't raised a lot of

  • venture money, Direct Hits started with $1.4 million.

  • The next par share was $1 million.

  • so, I think you can do just fine with with.

  • See?

  • I'm even, Evan drink the Kool-Aid in Silicon Valley.

  • Even small amounts like a million dollars.

  • I think you, you can get quite fine with that.

  • >> Any question?

  • Right here.

  • >> Yeah, I just, thank you, by the way.

  • My name's Erica, and I'm a first year, PSP.

  • And we've had an ethics class and an OB class,

  • and in both of those classes we've been talking a lot

  • about biases recently, and just how we're inherently biased, kind

  • of like self fulfilling nature, and I'm, I'm constantly struggling with.

  • Going with that, and then also looking at entrepreneurial spirit, because it's

  • like, head down, get it done, like, how do you, there's a little

  • bit of talk about in attacking and reacting to the market, but how

  • do you reconcile your own biases with also just moving straight forward ahead?

  • >> By biases, you mean, in terms of.

  • Of thinking about what, t, what consequences might be of a particular

  • action or or you're thinking about

  • biases against entrepreneurship or for entrepreneurship?

  • >> It was just the, the [INDISCERNIBLE]

  • >> How do you deal with your personal, your, your, your your,

  • your personal might call prior, priors in terms of how the world works?

  • Yeah.

  • Anybody wanna?

  • >> I'll take that, so, I came in with my

  • biases about where the direction of the product should be.

  • And, was fortunate that I had team members that helped me

  • see how the market was reacting, what was good and bad, we.

  • Switch that.

  • But I had very strong values and I went to school that

  • says, you know, if you don't believe it, nobody else will believe it.

  • Right, so in that I drove really hard, and people kept presenting

  • me with data of here is how it is not going to work.

  • Other times I haven't done so well So it's a continuous struggle.

  • But, you know, one of the things I do at the end of everyday.

  • I allow ten minutes to just sit.

  • And it's amazing the things that occur to you in the, to me, in those ten minutes.

  • I would highly recommend you doing that

  • because those types of answers come by sitting.

  • And, and thinking about it.

  • You, you, you know what I mean?

  • You just need to let them percolate a

  • little bit and then the answer will be self-evident.

  • But if you don't believe as

  • an entrepreneur, nobody else will believe, so.

  • >> Yeah, the only thing I've found is that's really

  • been helping me through that is being very authentic with people.

  • And you know you think of entrepreneurs maybe you know

  • there's a fine line between being constant salesman optimism and being authentic.

  • You know and we've all met plenty of people

  • where you're like this guy is such a snake.

  • So you don't believe it.

  • So, what I've found that's been really helpful is having access to people that.

  • Or I can just be completely honest with and let my

  • guard down and say here's I'm really struggling with this and I

  • have you know you know obviously if you're a leader you don't

  • wanna panic people by making it seem like it's hopeless or anything.

  • But if you can have access to people.

  • You can just generally lay out your concerns and get feedback.

  • You, you really find out that having

  • [INAUDIBLE] with the David Hornik's Conference, the lobby

  • in Hawaii and it was just great for

  • almost like just the people sharing pain basically.

  • It was willy.

  • But in a way, that was very cathartic in

  • the sense that you realize like everyone goes through this.

  • Even people who are super confident super accomplished have gone through very dark

  • moments and they have, even you're going through that and you're concerned, you

  • can get recharged by just having that kind of conversation and being able

  • to go back and get stronger to deal with, you know, your issues.

  • >> [INAUDIBLE] >> Any other questions?

  • Right here.

  • >> You mentioned that the things you learned from [INAUDIBLE].

  • [INAUDIBLE] I'd be interested in hearing some of those

  • lessons and takeaways [INAUDIBLE] aeronautics [INAUDIBLE].

  • >> Well, Mike, I already told you you get a 6% raise.

  • [LAUGH] >> Six and a half.

  • >> The average.

  • So.

  • Mike, so what do you think?

  • Other than the fact that you learned you wanted to

  • be

  • an entrepreneur?

  • I mean, Will's point made me think about why some decisions are made.

  • I mean, I was at, let's just say an unnamed big company where.

  • All day long people would go into meetings.

  • There would be no agenda.

  • People would talk for an hour.

  • There would be no action items taken.

  • People would walk out of the meeting and it's as if the meeting didn't happen.

  • It's kind of like, why?

  • So we don't have very many meetings at my companies.

  • We have a 12 minute weekly all hands meeting on Monday and.

  • We have one on ones you know at 30

  • minutes in between back and forth and it's about it.

  • >> So, you gave some examples of the problems that you saw.

  • But was there anything you took away from that that was valuable.

  • Yeah.

  • >> Further question.

  • >> So one thing to do is watch executives.

  • How they run meetings.

  • What they do.

  • What they're paying attention to.

  • And the best way to do that is to get to know their admin.

  • If the admin knows and likes you, you've got access to the executive.

  • So.

  • And don't be shy, you know, go and ask them all your dumb questions.

  • How do you run meetings and why?

  • What kind of, so those types of access to people that when

  • you come out of that company you will not have access to.

  • The other things I learned was the decision making process in a big company.

  • Company.

  • So if you're searching for a partnership with an AOL, what you wanna do

  • is understand how AOL works inside so that if you have a notion of

  • what a VP looks like and what type of decisions and the size company

  • they concern themselves with, what a director

  • looks like, what a manager looks like.

  • Then when you're facing them, you speak to their concerns.

  • You're not speaking out of context, if you will, their context.

  • Lots of lessons about, you know,

  • effective meetings as well as non-effective meetings.

  • Again, depending the executive, depending on how the meeting was run.

  • And then the whole idea that, you know, how

  • do you make a ship move when there are thousands

  • of people involved and are there any lessons that can

  • be taken from that to apply to a small company.

  • so, yeah, I think it was a really rich environment.

  • Oh, one last thing, lots of training.

  • Classes and so forth as they look at large companies.

  • Come to a small company, there is none of that.

  • You have to beg your boss, can I please

  • go for this $200, you know, entrepreneurship conference whatever.

  • The answer is, in my company, no.

  • And so, so, benefit from those because.

  • Larger companies are more accommodating.

  • >> Yeah, I started my career at Morgan Stanley.

  • And I went through the analyst training program there, and I

  • learned excellence, work product, and how to just get stuff done.

  • And that was just, you, you're like Friday 4 O'clock, MD calls and says.

  • Alright, we're gonna go see a client on Monday.

  • We need to build this gigantic model and run these 50 different scenarios.

  • And by the way, there better not be any mistakes.

  • And have it printed, bound, and at my, at my home in Westchester by 7 a.m.

  • Monday.

  • And and I just remember there at Morris Stanley,

  • they taught me once like, hey, the difference between good

  • and great is ten minutes [INAUDIBLE] you do something [UNKNOWN]

  • go walk around the block, go get a coffee [UNKNOWN].

  • If you print it out and take it to him and put it onto his

  • desk he will find it for you or she will find it for you and

  • Big companies that are, that maintain a

  • culture in excellence in execution can really teach

  • you how to be very personally effective

  • and to learn, to functionally execute very quickly.

  • Like build this DCF, now and do this and do that.

  • And so Golden sales that are companies that are big companies but.

  • They're high performance companies where a lot of good work gets done.

  • I remember joking like, those army commercials we do

  • more by six am than most people do all day.

  • I used to say that, you know.

  • I'd go down to the lobby at Morgan Stanley and you

  • go to work at 5pm and everybody would be going home.

  • You'd be like alright, shift two is about to start,

  • let's go back up and crack some more stuff out.

  • You know, you learn to work.

  • And that, that I take, I took that away.

  • For sure.

  • >> So some of you have probably worked for, or are working for large companies.

  • I mean, I think one of the things you should

  • do is take from that that there's things to learn.

  • And it can be important to you as an entrepreneur.

  • 15 years ago, certainly 20 years ago, but even 15 years ago if you asked.

  • A venture capitalist in Silicon Valley, what was the

  • right profile for an entrepreneur they wanted to back.

  • It would be, you know, five or ten years at

  • Hewlett-Packard, or some other company to learn these life lessons.

  • If you ask them now, they don't say the same thing.

  • And the reason why.

  • >> Is because you have people like these three people here.

  • [COUGH] You can go to work for an entrepreneurial

  • company, and you can learn these lessons because you

  • have a, a set of managers in there who

  • really are, really excellent and can teach you that.

  • other, other questions?

  • Right here.

  • >> I'm an engineer and I don't know if I would learn sales.

  • [INAUDIBLE] Business.

  • How am I going to get sales?

  • >> Well, you could try selling.

  • [LAUGH].

  • >> I mean, like.

  • >> How do you get in there?

  • Well, on sales, let me just reinforce what your panel has said here.

  • You think about this, so you, you, you have a company, and you're

  • generating revenue, and it comes time for a vacation.

  • So who do you want to go on vacation?

  • Let's say you're going to take a month vacation.

  • Could you get by with the marketing people gone for a month?

  • Could you get by with the finance people gone for a month?

  • The only people you couldn't let go for a month, are sales and operations.

  • You've gotta ship the product, and you gotta

  • have someone to sale it, to sell it, right?

  • So it is, it is really important.

  • Now, your question is, how do you get a chance to do that?

  • Is that right?

  • >> Yeah.

  • How do I get a chance ,but also I never had an

  • opportunity to work at like a telemarketing firm or something like that.

  • >> It's only one kind of sales.

  • >> Right.

  • >> Yeah, right.

  • So let's get to the panel here.

  • >> All right, I, I, I have the answer for you [LAUGH] I, I think any company

  • you work for as an engineer would welcome

  • an opportunity for you to sit on help desk.

  • In my company, I am on help desk at least

  • one, once a week, at least for a couple of hours.

  • You'll answer emails and technical problems or issues

  • people are having using your product and so forth.

  • And then through answering those, you will learn

  • how you can shift their perception of the product.

  • That's like step number one in sales.

  • You don't have to necessarily get dollars in

  • exchange but you help the company maintain that customer.

  • Right?

  • So if you're an engineer, best place for you would be to sit on help desk.

  • And do it and offer yourself, and I know wherever you're working, people

  • will jump at the opportunity because, you know, you have the technical know-how.

  • You'll learn a lot that way.

  • Then tag along to the sales people as, as the expert, right?

  • They always know how to sell, but they may not

  • have as much in-depth knowledge of the product as you do.

  • So, just ask them you know, hey, take me with you next time

  • you go on a sales call, I promise not to open my mouth.

  • Or, if this is a really hard customer that has technical problems,

  • tell me what they are and I'll come prepared to answer those.

  • I, so I think the first step is just observation.

  • I'll also say that when I was an engineer I

  • wanted more money, and so I looked around at AMDM,

  • and I saw sales people making a lot of money,

  • so I said I want to go be a sale's person.

  • So I went and applied.

  • And they told me, what you're an engineer, go back to

  • your corner, what, what do you mean you wanna be a salesperson?

  • You're an engineer, sit there.

  • And that was the reason why I applied to business school,

  • because I thought okay in my limited worldview, if you wanted

  • to sell, you have to go to business school only to

  • learn that there's really no selling happening in business school, right?

  • >> [LAUGH] >> So anyway, they're our avenue.

  • >> We now have a sales course.

  • >> Oh, good.

  • >> Yeah.

  • This course was created, because I was teaching a class

  • on Netflix, and Reed Hastings, the founder was in the class

  • and John Morgridge was there and So,

  • John asks the question, he says how many, and also there were Frank Capone,

  • who was the guy who took them public, and the lawyer who took them public.

  • So John asks the question, he says how

  • many people in this room have been in sales?

  • And, so one person raised his hand, John none of the students raise their hand.

  • So he looks at Frank Capone.

  • Says what are you doing these days, Frank.

  • And Frank finally looks at him and says, oh, I get it.

  • Raises his hand, okay.

  • And then of course Reed Hastings of the CEO raises his hand.

  • The only person that doesn't raise his hand

  • is the lawyer sitting over there, taking notes.

  • [LAUGH] So John what's the reasons.

  • So, what are you doing these days, instead of just, oh, raises his had.

  • So we left, we left that meeting and went out and

  • decided that, that class, and we decided we needed that sales course.

  • So we have it now.

  • I don't know how many of you students have taken it or.

  • Thinking about taking it.

  • And this is something that I think a lot of students are taking advantage of.

  • I think we have four sections this year.

  • >> That's great, great.

  • >> Anything else on this question?

  • >> Right here.

  • >> [INAUDIBLE] Question for, for you guys, because, so far I've

  • been hearing two years, three years cycles and you sell your companies.

  • So I've been running my company for about nine years, now.

  • Have you guys have any experience of other people that, you know, really,

  • [INAUDIBLE] at a small medium size level could be plus 50 or 60 people.

  • In nine or ten years do you

  • see [INAUDIBLE] getting tired or impatient and stuff.

  • And how do you handle that?

  • >> Michael you start.

  • >> That's one of the reasons why I like to sell my companies in two years.

  • I, I think there's, there's all sorts of benefits you get from exponential growth.

  • From evaluation standpoint, when you're raising additional financing.

  • From valuation standpoint when you're selling the company.

  • From an employee morale standpoint, you know,

  • literally if you show this exponential growth.

  • Of any metric then everyone's so excited.

  • Every-, with the meeting, behind the numbers up you know.

  • I think it's really hard to have to maintain

  • the intensity and drive over longer periods of time.

  • I think there are different sets of people.

  • There are certain sets of people who they couldn't do it.

  • I mean I couldn't do it.

  • And I guess the only other comment I have is I, I, I sometimes advise start

  • up companies, and they say oh, yes, you know, I'm engineering

  • team's feeling a little bit, you know, not driving as hard, they're.

  • You know, they're leaving early and whatever, and

  • how do I get them to work harder?

  • And a lot of times I say, that's the wrong question.

  • The question is, the problem isn't what they're doing now.

  • The problem is who you got in the company in the first place.

  • It's a little bit simplistic, but I think it comes

  • down to the questions you ask during interviews, and the type

  • of people you get in the first place, so you

  • may wanna consider switching the team out to people who are.

  • I mean, you don't have to worry

  • about motivation and drive issues, that they are,

  • it's so much an internal part of them that it's not an issue for, for you.

  • >> Greg, you had your hand up?

  • >> Well, I was just going to say that I'm the anomaly in the room because.

  • I'm soft drink company, and not a software company but we, sales and

  • marketing has been very much a part of we have been doing and a

  • more important part of course is the next session in which I'm going to

  • which is on angel investing, because we're at the stage we need more money.

  • But, I think that there are so many companies out there.

  • Where there are opportunities to get sales experience.

  • And it doesn't even have to be in your particular

  • field either, and that's something that I want to emphasize.

  • That if you can get any kinds of sales

  • experience, if for example you are in engineer you can.

  • Why that is important to another area.

  • So, I was wondering why any of you enjoy careers.

  • And everything with technology is focused obviously, because where we are.

  • But I guess you have had experiences in your

  • lives that taught you that sales experience for marketing outside.

  • >> [NOISE] I, I remember, working for an entrepreneur and he said, told

  • me that every CEO has basically has two jobs, to sell and raise money.

  • And, and so I've had two, I've been CEO

  • twice now, and I've basically my view is like.

  • You know I've subscribed to Mark Lesley philosophy on this.

  • You know, crack the sales code the formula for

  • sales yourself, get renaissance people who are not typically functionally

  • aligned in any one area but they can do

  • everything and work out the process for how you sell.

  • And as soon as it's starts to be codified and repeatable then

  • you can bring in execution people who are expert at a discipline.

  • >> And so, I, I think that's been my approach to make the first five

  • or six sales, what works, what doesn't work and soon as I feel like you

  • know, this kinda be guarded then, then you ca go hire someone who is little

  • [UNKNOWN] sales person, okay here's the sales process,

  • here's the [UNKNOWN] or here is your number.

  • Let's go do it together three, four times

  • and then [SOUND] like launch them off, and so.

  • just, that's, that's kinda what I did, yeah.

  • >> Big [UNKNOWN] right here.

  • >> I just want to follow up on your

  • [UNKNOWN] PC saying you should work for HP for-.

  • >> Yeah.

  • >> What do they say now.

  • >> [LAUGH].

  • >> Now, now they, now they, they don't say

  • that anymore, because the, because the people who are running

  • start up companies often have the same kind of

  • experience and their sophisticated, so you can learn from them.

  • They don't say don't do it, but it used

  • to be that's exactly that's the past you know,

  • we want invest in you Kleiner Perkins unless you've

  • been at HP for ten years, not quite like that.

  • >> Chuck did you see what Leoni said when he went to give a talk in San Jose?

  • >> No.

  • >> They said no one over 30.

  • >> Yeah, >> Seriously.

  • That's what he said.

  • He got a lot of trouble for it.

  • But Sequoyah they were quoted as saying,.

  • >> Well, Sequoyah is extreme in not over 30.

  • >> So.

  • [LAUGH] I was like okay.

  • >> Sequoyah, Mike Morris told me the other day.

  • But he doesn't believe in market research.

  • So, what do you mean you don't believe in market research?

  • He says, he says the end of entrepreneurs needs to

  • understand the market, so well, and have you know, the

  • million other people that are just like him or her,

  • or else we are not going to invest in them.

  • So that's, I would say that is an extreme approach.

  • >> Yes.

  • >> Let's see we have one here.

  • Anybody else?

  • Right up here.

  • >> So, you all have kind of a

  • long term experience around, and you've seen several cycles.

  • Can you comment on opportunities in this, this specific period

  • in time [INAUDIBLE] economy [INAUDIBLE] model that is maybe broken [INAUDIBLE].

  • >> [SOUND] I, I, I, I would say that one of the big challenges, the [INAUDIBLE]

  • business, of course everyone's talking about is, there's a surplus of

  • committed capital and there's no public market, [INAUDIBLE] exits are challenged,

  • and so, you have this situation where the media and ITX is like fifty million bucks.

  • And, you know, the average company raising [UNKNOWN] company is raising you

  • know, 18 million or something, so like how does the math work?

  • So, I, I would say there's this rise of the Mike Naples the first rounds, the true

  • ventures founders fund there's this whole new class inve,

  • investors who are trying to be super capital efficient.

  • Y Combinator would probably be the best example of that.

  • And so I think, that, combined with, huge differences in the cost of operations.

  • You know, the rise of Amazon EC2S3.

  • The ability to not own a single machine, and run a pretty big web application.

  • So I think the, the rise of capital efficiency, and, And, And, and a new class

  • of investors whose expectations are slightly different from

  • someone who's got an $800 million committed capital fund.

  • It's pretty interesting.

  • And it makes it possible, especially if you're

  • a software guy, to be very capital-efficient and find

  • access to capital where people have expectations where a

  • $50 million exit is actually part of their model.

  • >> I analyze something else with i, i I

  • think every interaction now is so dependent on email.

  • That there will be a shift towards actual customer support and customer service.

  • So, to the extent that you can have more hand

  • holding you can have a more complicated product that's web based.

  • Not just rely on user experience for that and how you

  • train these people to help you and what technologies they use.

  • I think that's going to become a very rich environment.

  • You know, the whole idea of customer support

  • and customer education I think we'll see a renaissance.

  • Tagging along all the things that [UNKNOWN] said.

  • >> Mike, any last comments?

  • >> I think, I think you should, I

  • think you should ignore whatever macroeconomic trends are around.

  • I think, sure there's disadvantages in some situations cuz it's hard

  • to raise money, but there's counterbalancing,

  • positive [UNKNOWN], it's easier to hire

  • and retain people now, and it's easier to get cheaper office

  • space now, and the competition is lower because they can't get funded.

  • So.

  • I really think you should ignore macro things and

  • just build your company and just not worry about it.

  • >> I think we're going to close with that.

  • Thank you very much, and we appreciate your feedback.

  • [SOUND].

  • >> It's nice meeting you.

  • >> Yeah, nice meeting you.

  • [BLANK_AUDIO]

[MUSIC]

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