起業についてビジネススクールで教えてくれないこと (What They Don't Teach in Business School about Entrepreneurship)

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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.
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