The Exchanges

Q I've got to ask about two people, and then we'll do a quick fire, but one, ah, is the LaFontes. You work with them now. What are the biggest takeaways from working with them?

A The reason I picked KOTU out of all the firms I was looking at was they themselves are innovative. They themselves are entrepreneurial. They themselves are trying to build the best company in the world in the categories that they serve. They're not afraid to try something. And Thomas had great vision. He said the color of money isn't going to change. It's going to be green in the case of the US dollar. But the way in which we can service our investments will have to change if we want to be world class. And so he went out and recruited guys like me and Dan and Karen and others to join the firm to make us different than everybody else who was just doing traditional growth investing.

AI assessment note: “Thomas had great vision. He said the color of money isn't going to change.”

Q I've got to ask about two people, and then we'll do a quick fire, but one, ah, is the LaFontes. You work with them now. What are the biggest takeaways from working with them?

A The reason I picked KOTU out of all the firms I was looking at was they themselves are innovative. They themselves are entrepreneurial. They themselves are trying to build the best company in the world in the categories that they serve. They're not afraid to try something. And Thomas had great vision. He said the color of money isn't going to change. It's going to be green in the case of the US dollar. But the way in which we can service our investments will have to change if we want to be world class. And so he went out and recruited guys like me and Dan and Karen and others to join the firm to make us different than everybody else who was just doing traditional growth investing.

AI assessment note: “The reason I picked KOTU out of all the firms I was looking at”

Q I'm so enjoying this. You said there about kind of bringing someone in versus hiring internally or promoting internally. It is one of the biggest problems for many founders of when to do that versus when not to. How do you advise them?

A It's a special place in my heart on this issue, because on my journey at Data Domain, there was a moment in time where Frank could have brought in somebody else to run sales. Well, our first year was three million dollar goal. I did 2.97. My, I missed, right? 2.97 is three. That to me is as big a miss as if I would have only done one and a half, right? So that was a miss. The next year, we were gonna do, call it, nine million dollars, and they were getting nervous, like, did, was I the right guy or not, and, you know, it was, it was not apparent to me that even I thought I was the right guy, but I was gonna go convince them I was. Well, lucky for me, we, instead of doing nine million that year, we did 15. And then we did 45. So, by the time they figured out I may not be the right guy, we'd already blown through that issue, um, and they kept me, but they, they, What Frank made the decision is, I'm going to ride this horse. He's got the energy. I think he, I, you should probably talk to him, but I think he's got the energy, the intelligence, the willpower, the fear of failure that we need to drive this company forward. And whatever he doesn't know, we'll get mentoring for, we'll get coaching for, but the good way out, it outweighs the bad by a long shot. And so for me, it was that opportunity. So when I look at the, the young people in that role today, I'm rooting for them. I wan…

AI assessment note: “whatever he doesn't know, we'll get mentoring for, we'll get coaching for”

Q Have you ever had a time, I'm sure, but like, when was a time when your GTM team was not crushing? When it was just not decimating? And for the many founders in that position now, How do you rejuvenate them when that is a palpable feeling?

A Most of my team would be crushing. Um, and partially because there's a way to get them to be effective. And I think when you, when you are, this is going to go into the how do I build a company and how do I think about it. I think the way you get sales teams going is you identify what your target customer is, the ICP. Ok, so know where you need to play. Know what the issues are that they're facing. Listen to the other customers who are already using your product. Use those stories to tell the stories about transformation, difference making, et cetera, to the other prospects you're working on. Teach your sellers those stories, the playbooks, and we'll talk about playbooks. What do I say? Who do I say it to? What's the profile of the customer that we want to go after? What's the likely objection they're going to give us, and how do we overcome it? All of that's inside of the realm of possibility for training and onboarding for my go-to-market team. Then I got to hire a bunch of people that just have to want it a lot more than everybody else. And I look for people with a chip on their shoulder. I look for people that have something to prove, where the best days are in front of them. And I want, I, I called it at data domain, the land of the misfit toys. I wanted people that didn't fit in normal places to Because I wanted to give them a home where they could do incredible things an…

AI assessment note: “this is going to go into the how do I build a company”

Q Have you ever had a time, I'm sure, but like, when was a time when your GTM team was not crushing? When it was just not decimating? And for the many founders in that position now, How do you rejuvenate them when that is a palpable feeling?

A Most of my team would be crushing. Um, and partially because there's a way to get them to be effective. And I think when you, when you are, this is going to go into the how do I build a company and how do I think about it. I think the way you get sales teams going is you identify what your target customer is, the ICP. Ok, so know where you need to play. Know what the issues are that they're facing. Listen to the other customers who are already using your product. Use those stories to tell the stories about transformation, difference making, et cetera, to the other prospects you're working on. Teach your sellers those stories, the playbooks, and we'll talk about playbooks. What do I say? Who do I say it to? What's the profile of the customer that we want to go after? What's the likely objection they're going to give us, and how do we overcome it? All of that's inside of the realm of possibility for training and onboarding for my go-to-market team. Then I got to hire a bunch of people that just have to want it a lot more than everybody else. And I look for people with a chip on their shoulder. I look for people that have something to prove, where the best days are in front of them. And I want, I, I called it at data domain, the land of the misfit toys. I wanted people that didn't fit in normal places to Because I wanted to give them a home where they could do incredible things an…

AI assessment note: “I think the way you get sales teams going is you identify what your target customer is”

Q Do you think every great company is competitive?

A It's rare. And I think, um, now the, the benefit is I've had founders specifically tell me they want me on their board. And so then it's a question of, can we get close enough to what expectations are to what makes sense? You know, there was a specific situation where it was a light speed earlier stage company. Um, the founder was selecting for, uh, board members that could help scale the company. And help with no route to market, and he selected Karl Eschenbach and myself. We split it around with Sequoia, fifty-fifty, and Karl and I both joined the board. Probably the two, I, I can say this for, for sure with Karl, one of the best executives out there who knows more about revenue generation and leading companies than almost anybody in the valley. So to be alongside of him on this journey and build out this company or at the request of this founder, Was phenomenal.

AI assessment note: “It's rare. And I think, um, now the, the benefit is”

Q One question I always ask when I'm investing today is when we're analyzing how a company can integrate a tool into that existing stack is, are we adding a line, like a line item on the budget, or are we actually removing one? Like, how important do you think being able to answer that succinctly is? And is it a problem if you are adding one now?

A I think any time you bring a new solution forward in an enterprise, anybody who's bringing something in, today has to be asked, what are we taking out of the budget? What are we replacing? How is this augmenting? How is it going to make our world better? And we'll get into it more, but what I always try to tell my team My whole team, the engineering team, the product team, is people buy product for three reasons. They either buy it because it's gonna help them make money, they buy product because it's gonna save them money, or it's gonna keep them off the front page of a newspaper, which is usually what security products are being bought and sold for. So, that's the reason why. So, you gotta show them how they're gonna make money, save money, and that's really important.

AI assessment note: “anybody who's bringing something in, today has to be asked, what are we taking”

Q That is a big lift. Final one. What question are you not asked often, or ever, that you should be asked more?

A I think my, it's probably part of my superpower, and it's part of what Uh, drives me, is I'm a fear, I fear failure, even though I don't know what it looks like. Meaning I'm afraid of not doing my best work and somehow dropping the ball or disappointing someone or something in the process. And so for me, it's this drive to constantly think about all the different possibilities so I can do the best job of stewarding a team myself through a situation and get to the outcome. So, you know, when I go to sleep at night, I'm thinking, yeah, The day was pretty good, but I'm also thinking about, ok, what do I need to do to improve for tomorrow, and how do I make it a better day? And I think that's part of who I am. Now, I've tried to harness that in some kind of mindfulness exercise, be a little more sane in my approach, but I was always kind of unsettled, thinking I needed to do more, um, was part of my, my issue.

AI assessment note: “I fear failure, even though I don't know what it looks like.”

Q home is generally kind of Series B, maybe Series C. Uh, you know, we had Sam from Greylock on the show, and he said that actually this vintage of Series B and C would not be positive cash returning to LPs. The entry price is too high, with revenue multiple compressions being where they are from public markets. It's just too difficult to make money. Do you think he's right?

A I think you have to be careful. I think, um, I think every, Everyone needs to, every opportunity is worth diligencing on its own, and you've got to be able to underwrite what you think the value is going to be. The biggest risk factor is something starts slowing down before you expect it to. So you make the investment, you think you've modeled it out, it's going to go from X to Y to Z, and we usually even take a haircut on that model from whatever the company tells us, and for whatever reason, it slows down too fast. And then we don't get to the kind of return multiples we want. So, again, enter Dave Schneider. My job is to help you make sure you're hitting and beating your revenue goals. So, again, if you're a Series B or a Series C founder, the opportunity is right now, pick the right investor for this stage of your company that's gonna make a difference in your business.

AI assessment note: “My job is to help you make sure you're hitting and beating your revenue goals.”

Q Do you think every great company is competitive?

A It's rare. And I think, um, now the, the benefit is I've had founders specifically tell me they want me on their board. And so then it's a question of, can we get close enough to what expectations are to what makes sense? You know, there was a specific situation where it was a light speed earlier stage company. Um, the founder was selecting for, uh, board members that could help scale the company. And help with no route to market, and he selected Karl Eschenbach and myself. We split it around with Sequoia, fifty-fifty, and Karl and I both joined the board. Probably the two, I, I can say this for, for sure with Karl, one of the best executives out there who knows more about revenue generation and leading companies than almost anybody in the valley. So to be alongside of him on this journey and build out this company or at the request of this founder, Was phenomenal.

AI assessment note: “I've had founders specifically tell me they want me on their board.”