The Exchanges

Q IQ scale just with that, but I'm thrilled that you like it. I do want to start there because you have Literally, I think the most impressive operating career that I've had on the show, definitely for a long time. So when we look at the operating career, what are the single biggest achievements to you that you say to founders as, hey, I did this in my operating career?

A Well, thank you. It was a 30 plus year operating career. So in that 30 years, there were some, some tough years and some good years, but the two things that kind of stand out, I spent Uh, almost nine years at a company called Data Domain, where I joined, uh, at zero dollars in revenue, and by the time I left, we'd gone through an IPO, took it to about a billion dollars, and then we got acquired by EMC in a hostile acquisition in 2009. Whole story about hostile acquisitions, if you ever want to get into that. Um, and then the next one is, I spent, uh, 10 years at ServiceNow, uh, joining Frank Slootman again, who I had the privilege of working with at Data Domain. Um, into that company, which was about eighty million or so in size when I joined, and when I left it was five billion in revenue, and, uh, felt like the job was well done, uh, to make that happen.

AI assessment note: “the two things that kind of stand out, I spent Uh, almost nine years”

Q too soon. They want to expand into SMB from enterprise too soon, and I always say, it is so much deeper and richer than you think, and we've only penetrated one percent of it. Like, let's absolutely double down where our strength is. How do you think about when is the right time to expand customer segmentation, and when is the right time to say, no, we're going to focus?

A What started happening at ServiceNow that we took advantage of was our customers started using our product in places that weren't It wasn't, ah, originally positioned for. Turns out that by 2015, we had hundreds of customers using us in new ways. And so what we started to do is just listen. And then we productized what they did and built full on customer service product. Full on security incident vulnerability products. Full on HR employee experience products. And because we just followed the customer, we had better success. Um, That was not easy, because we ended up creating business units. I had to come up with a different selling model to sell new technology, because the buying persona was outside of the core. I didn't do it until I was fairly penetrated and winning in ITSM. If I didn't feel like I was already winning there, it was not a distraction, then I could do it.

AI assessment note: “I didn't do it until I was fairly penetrated and winning in ITSM.”

Q So the renewal cycle is a big pushback on the three year contracts, because you don't get the feedback as frequently as you would an annual. How do you think about that lack of feedback from the longer cycle?

A So you start seeing it in NRR, right? So even in year one, at ServiceNow, when we sold a contract, it could be a million dollar contract, we never really fully sized what the customer could be, Because they didn't even know, right? They were expecting it to be a certain number of users, what have you. What happened on ServiceNow, once it got implemented, more people would start showing up to use it, it would grow. So six months after the go-live of the system, we used to see 20 to 40% increase in ACV size. So I'm looking for something like that. Did they have this second product that came out? Was it welcomed in the market? If you didn't have a great first experience, you're not going to say yes to the second product. So, there are ways, even in a multi-year relationship, to start seeing upticks in revenue from those customers.

AI assessment note: “So you start seeing it in NRR, right?”

Q you know what I hate in investing? It's competition. And the, the amount of people that are like, you know what, we can help you make more money because we deliver you more leads, we allow you to interact better with leads, whatever it is, like sales analytics solutions, you name it. I hate competition. How do you feel about competition when investing, having won in pretty intensely competitive markets?

A So I think in any market that's worth going after, there's going to be some competition, especially in the enterprise space. So the secret for me was it was easier for me to unlock dollars from existing known spend areas than it was for me to create a new spend category. And create new budgets that didn't exist before. So if I could show more efficiency or better mousetrap type things, I was, I was gonna win more deals faster in those situations. Now the thing about competition is not all competitors are created equal, Harry. So imagine this is the backdrop. You're at ServiceNow in 2011. The transition to the cloud is happening, ok? The market is starting to give signals that everybody wants to move to the cloud. The two companies we were competing with were BMC and HP Software. Two companies that quite honestly were dead already in my book. All they were trying to do is take money out of the revenue stream and drop to the bottom line. They weren't focused on the customer anymore. So now all of a sudden we have this new idea, same kind of product, but just a lot fresher in a cloud, and I unleashed the hounds of hell of an incredible go-to-market team. At the same time, and I just decimate a market that they existed in. Decimate. So, that's the fun part about competition, because if you have singular purpose, and you know what you're trying to do, you can have a lot of fun blowi…

AI assessment note: “in any market that's worth going after, there's going to be some competition”

Q Is it a game of the highest bidder wins?

A It was. In fact, Fourth of July happened, NetApp people went on vacation and EMC didn't, and they knew exactly how much cash NetApp had and what they could do to, uh, Win the deal. And they made the winning bid over the Fourth of July weekend, and we had to respond. The classic point of that was we announced that, yes, we were going to have to accept their offer, that a couple days later I was going to have my sales club trip in Mexico with my team, and, uh, Joe Tucci's like, great, I'll be there. We said, no, you won't. This is our last moment, our last opportunity, and it was one hell of a party.

AI assessment note: “It was. In fact, Fourth of July happened, NetApp people went on vacation”

Q too soon. They want to expand into SMB from enterprise too soon, and I always say, it is so much deeper and richer than you think, and we've only penetrated one percent of it. Like, let's absolutely double down where our strength is. How do you think about when is the right time to expand customer segmentation, and when is the right time to say, no, we're going to focus?

A What started happening at ServiceNow that we took advantage of was our customers started using our product in places that weren't It wasn't, ah, originally positioned for. Turns out that by 2015, we had hundreds of customers using us in new ways. And so what we started to do is just listen. And then we productized what they did and built full on customer service product. Full on security incident vulnerability products. Full on HR employee experience products. And because we just followed the customer, we had better success. Um, That was not easy, because we ended up creating business units. I had to come up with a different selling model to sell new technology, because the buying persona was outside of the core. I didn't do it until I was fairly penetrated and winning in ITSM. If I didn't feel like I was already winning there, it was not a distraction, then I could do it.

AI assessment note: “I didn't do it until I was fairly penetrated and winning in ITSM.”

Q I mean, it's incredible. My question to you, How do you win with so many products? I mean, it is a difficult product marketing challenge. It's a different, difficult go to market challenge. How do you think about the lessons from this insane multi-product challenge?

A So, I think a lot of it has to do with how we manage our teams, and what we did, um, from an extreme ownership perspective. There was one metric that mattered to everybody at ServiceNow. In fact, up until, um, recently, they had a bonus profile that was every quarter, Um, we would fund a bonus pool based on the company's achievement of net new ACV, which was new business minus any churn. So everybody was worried about churn revenue and, and top line revenue, right? New business. So everyone was focused on that. Then as we started to launch these new business units, I remember when Frank and I were talking about it, and this is Frank's genius, he did it before John came in, and it was like his, his parting gift to the business that is still sustainable today. We said, we need people that are going to wake up in the morning and care about this, because I had a business that with ITSM and with our IT operations management products, my reps were already blowing out their numbers. So I needed to worry about the strategic issue two to three years from now. If that market ever slowed down, if we got penetrated, what was going to be the next act? And so we actually launched four products at the same time in 2015, or 2016, I thought we were going to kill two of them, because for me to be viable, it had to be a hundred million in three years. That was sort of the goal we had for each of …

AI assessment note: “a lot of it has to do with how we manage our teams”

Q So the renewal cycle is a big pushback on the three year contracts, because you don't get the feedback as frequently as you would an annual. How do you think about that lack of feedback from the longer cycle?

A So you start seeing it in NRR, right? So even in year one, at ServiceNow, when we sold a contract, it could be a million dollar contract, we never really fully sized what the customer could be, Because they didn't even know, right? They were expecting it to be a certain number of users, what have you. What happened on ServiceNow, once it got implemented, more people would start showing up to use it, it would grow. So six months after the go-live of the system, we used to see 20 to 40% increase in ACV size. So I'm looking for something like that. Did they have this second product that came out? Was it welcomed in the market? If you didn't have a great first experience, you're not going to say yes to the second product. So, there are ways, even in a multi-year relationship, to start seeing upticks in revenue from those customers.

AI assessment note: “So you start seeing it in NRR, right? So even in year one”

Q Does being a sales leader help you on your referencing for companies? Because you are, as a sales leader, probably the most attuned to people, to listening, to knowing what question to ask. It's a real art form. Does being a sales leader Help you do the best diligence and reference process.

A And there's an art of discovery, that is what we call it in sales, where you get into a conversation with a customer, and you start asking questions. And that question then leads to another statement, which then you can probe around, and it's a natural conversation, like this interview is, between two new friends, and we have that discourse. So as I talk to them, I'll be like, okay, well, what do you think about this? Why is this important? How would you sell it internally? What would you be taking out to be able to afford it? Things like that become really interesting to me as I'm doing diligence. So, yeah, I think it helps, but I think it's that art of the question, and not being satisfied with just the first answer, but digging deeper, because the truth is usually the second or third question you ask will, will get you closer to the truth.

AI assessment note: “So, yeah, I think it helps, but I think it's that art of the question”

Q I mean, it's incredible. My question to you, How do you win with so many products? I mean, it is a difficult product marketing challenge. It's a different, difficult go to market challenge. How do you think about the lessons from this insane multi-product challenge?

A So, I think a lot of it has to do with how we manage our teams, and what we did, um, from an extreme ownership perspective. There was one metric that mattered to everybody at ServiceNow. In fact, up until, um, recently, they had a bonus profile that was every quarter, Um, we would fund a bonus pool based on the company's achievement of net new ACV, which was new business minus any churn. So everybody was worried about churn revenue and, and top line revenue, right? New business. So everyone was focused on that. Then as we started to launch these new business units, I remember when Frank and I were talking about it, and this is Frank's genius, he did it before John came in, and it was like his, his parting gift to the business that is still sustainable today. We said, we need people that are going to wake up in the morning and care about this, because I had a business that with ITSM and with our IT operations management products, my reps were already blowing out their numbers. So I needed to worry about the strategic issue two to three years from now. If that market ever slowed down, if we got penetrated, what was going to be the next act? And so we actually launched four products at the same time in 2015, or 2016, I thought we were going to kill two of them, because for me to be viable, it had to be a hundred million in three years. That was sort of the goal we had for each of …

AI assessment note: “a lot of it has to do with how we manage our teams”

Q We have had many people from Founders Fund on in the past, including your Brian Singamans of the world, who very clearly has the belief that the best founders do not need help. How do you respond and think about that?

A You know, my first response is, is probably because he doesn't know how to help him. Um, maybe that's the reason. Um, I think everybody in life could always use a friend to talk to, could use, um, an honest conversation. And there is a difference, by the way, between founder friendly and founder helpful. Um, and I think I have to walk the line between what I call founder friendly. Uh, I'm in your camp, but I'm gonna also tell you the truth. And I'm gonna get you ready for what's coming. And sometimes that truth is hard to hear, but I gotta be doing that. And you have to know as a person like me that your job is not to do it for somebody. Your job is to coach, guide, consult, be a mentor. Almost like being a grandparent versus a parent.

AI assessment note: “my first response is, is probably because he doesn't know how to help him”

Q What are the biggest reasons businesses plateau? We, we see so many between 50 and a hundred, where the growth just comes off a cliff. What are the reasons why Those businesses plateau at that stage.

A Yeah, I think there are a couple things that I look at on why businesses plateau. First, do they know their customer? And who are their customers? If you're a business selling to other young technology companies, and that's your source of revenue, I'm gonna discount some of your future opportunity just from day one. If you had shown me proof of selling to the large enterprise, or a combination of Size customers. I'm going to believe that we can sell to other like size companies in the future, and the smaller companies are more susceptible to the waves of the market, especially with venture funding being hot or cold at any one point in time. If you started winning in pharmaceutical and banking and others, um, other big verticals, I think it starts to get more applicable and it stretches out more. So who are your customers, the source and quality of the revenue? Have you been through a renewal cycle yet? Is a big question that a lot of investors miss. Ok, so, I'm looking for, have they gone through a renewal cycle? What happened? Did the ACV grow at that renewal? Did they add more product to it, or did it shrink or not renew? If it didn't renew, that's a big problem.

AI assessment note: “I think there are a couple things that I look at on why businesses plateau.”

Q Biggest lesson from flying a 100,000 miles a week, ah, a year?

A Biggest lesson is you're there for a reason. It's to go talk to customers and in, in, impart your wisdom on the culture of the company. Every time you're in a city, don't waste any moments. If you're not having a dinner with a customer, have dinner with employees or partners. Understand that the time, the windshield time in a car with employees is valuable. Don't be distracted by your phone or your social media. Talk to them about their lives. Talk about their hopes and dreams, and what you find is people are fairly aligned, and that when they are aligned, you can do incredible things with that group of people. We all have similar hopes and dreams. We may want to get there a little differently, but it's financial security for our families, doing interesting work, maybe get promoted, taking a couple vacations a year. Those are the things that tend to be the most common, Um, and you can really sink into that with everybody.

AI assessment note: “Biggest lesson is you're there for a reason. It's to go talk to customers”

Q Does being a sales leader help you on your referencing for companies? Because you are, as a sales leader, probably the most attuned to people, to listening, to knowing what question to ask. It's a real art form. Does being a sales leader Help you do the best diligence and reference process.

A And there's an art of discovery, that is what we call it in sales, where you get into a conversation with a customer, and you start asking questions. And that question then leads to another statement, which then you can probe around, and it's a natural conversation, like this interview is, between two new friends, and we have that discourse. So as I talk to them, I'll be like, okay, well, what do you think about this? Why is this important? How would you sell it internally? What would you be taking out to be able to afford it? Things like that become really interesting to me as I'm doing diligence. So, yeah, I think it helps, but I think it's that art of the question, and not being satisfied with just the first answer, but digging deeper, because the truth is usually the second or third question you ask will, will get you closer to the truth.

AI assessment note: “So, yeah, I think it helps, but I think it's that art of the question”

Q What happens to the generation of companies that have raised at very high prices, largely from twenty-twenty, twenty-twenty-one, and they kind of plateaued, and they're not moving into those valuations. What happens to them? Is it a roll-up play? Where do they go?

A I think we're in the process of figuring that out. I think some of them are re-accelerating the growth right now. So that's one category. Those should be fine. I really believe some of those are going to come out really, really good, and they'll be better for this journey. There's a few others where, yeah, I'm not so sure. I mean, I, I would honestly say they're probably worth more, uh, as cash than they are as independent companies, and some of them have made the choice to refund the cash back to the investors, sell off the assets. You just, there's a couple out there that that's happened to recently. And then there's a few others that maybe they'll use the cash to come up with the second or third act, right? They've got enough if that founder has the fortitude and wants to continue on that journey. A lot of the founders are like, boy, this is hard. I'm not so sure.

AI assessment note: “some of them have made the choice to refund the cash back to the investors”

Q When you look at that journey, that was a phenomenally successful journey. What were your biggest takeaways when you look back now with the benefit of hindsight?

A Well, I think the first part of that journey that was so important is the first year we didn't have the right product. We had an initial product that I almost would refer to as a paid for beta. We knew it had some of the features and elements of what the customers needed, and we were talking about the product in a way as a backup appliance. And very quickly after talking to customers, they're like, it's not about the backup guys. It's about the recovery. It's about how fast can I recover this data so I can do my job and not get in trouble if something is corrupt. And so we got really good at finding the first use cases where we could be effective every time. And so the other thing we did is it was simple to integrate into existing technologies. We didn't force customers to change their environment. We just plugged right into their existing backup software world. So, you know, simple does win in technology a lot of times, and people need to keep that in mind.

AI assessment note: “simple does win in technology a lot of times, and people need to keep”

Q Do you know what I always get when I'm on boards? Yeah, you know what, we had this, but it got pushed the next quarter. It got pushed to next quarter. How do you think about instilling that urgency in any of those three? Because urgency, I guess, is important in all of them.

A Yeah, that, that common thing, the common refrain, ah, we, we had the sponsor, it just got pushed. That's really a discussion around, was the value of my solution that I proposed worthwhile for them to make the choice for us? Or was some other solution that was being proposed, not even if it was competitive to us, but another thing in the company? That was being worked on. There's only so many projects somebody can run at once, and so many dollars to go solve the problem. So basically the seller's job is to make sure that the value that you're providing is well understood, and we, we adopted a sales methodology at ServiceNow that featured this, where we had joint value discussions, and we called it a value prompter, that we did with our customers, so that when it was time to go up to the CIO or CEO for five, 10, twenty million dollars worth of funding, That they knew what the business case was, and it, it held true. Because deals that slip at the end of the quarter are the nightmares, the bane of your existence, if you're the management team or board, and after a while you lose faith in your sales leadership about their ability to guide the business. And so my job always was, be able to call the number, 90 to 180 days in advance, plus or minus three percent. So if you can do that reliably, you can keep your job as a CRO, but more importantly, you know how to guide the business,…

AI assessment note: “we adopted a sales methodology at ServiceNow that featured this, where we had joint value”

Q We have had many people from Founders Fund on in the past, including your Brian Singamans of the world, who very clearly has the belief that the best founders do not need help. How do you respond and think about that?

A You know, my first response is, is probably because he doesn't know how to help him. Um, maybe that's the reason. Um, I think everybody in life could always use a friend to talk to, could use, um, an honest conversation. And there is a difference, by the way, between founder friendly and founder helpful. Um, and I think I have to walk the line between what I call founder friendly. Uh, I'm in your camp, but I'm gonna also tell you the truth. And I'm gonna get you ready for what's coming. And sometimes that truth is hard to hear, but I gotta be doing that. And you have to know as a person like me that your job is not to do it for somebody. Your job is to coach, guide, consult, be a mentor. Almost like being a grandparent versus a parent.

AI assessment note: “my first response is, is probably because he doesn't know how to help him.”

Q Do you know what I always get when I'm on boards? Yeah, you know what, we had this, but it got pushed the next quarter. It got pushed to next quarter. How do you think about instilling that urgency in any of those three? Because urgency, I guess, is important in all of them.

A Yeah, that, that common thing, the common refrain, ah, we, we had the sponsor, it just got pushed. That's really a discussion around, was the value of my solution that I proposed worthwhile for them to make the choice for us? Or was some other solution that was being proposed, not even if it was competitive to us, but another thing in the company? That was being worked on. There's only so many projects somebody can run at once, and so many dollars to go solve the problem. So basically the seller's job is to make sure that the value that you're providing is well understood, and we, we adopted a sales methodology at ServiceNow that featured this, where we had joint value discussions, and we called it a value prompter, that we did with our customers, so that when it was time to go up to the CIO or CEO for five, 10, twenty million dollars worth of funding, That they knew what the business case was, and it, it held true. Because deals that slip at the end of the quarter are the nightmares, the bane of your existence, if you're the management team or board, and after a while you lose faith in your sales leadership about their ability to guide the business. And so my job always was, be able to call the number, 90 to 180 days in advance, plus or minus three percent. So if you can do that reliably, you can keep your job as a CRO, but more importantly, you know how to guide the business,…

AI assessment note: “we had joint value discussions, and we called it a value prompter”

Q Listen, you, you gave me such a great teaser there. Hostile acquisition, how can I, like, let that go under the rug? What was that process, and what did you learn from it?

A Oh my god, so, um, in fact, here we are in London, and this is a fun story, is, Um, we knew that our business was very valuable, even though in 2009 the stock price went down because the market went down. And at the time, in 2009, there was another company called Network Appliance that had approached Frank Slootman about a potential acquisition. And we were close to them. We knew who they were. We're neighbors. They, they're down the street. A lot of our early engineering team had worked there before, and we did not know EMC, and in fact, Joe Tucci, when we reached out to him to get to know him, he was always hidden from us, um, because of various reasons. So in, in oh nine, we sound, signed a definitive agreement to be acquired by Network Appliance, and it was a, it was a good offer, and we had all these integration meetings, and I was actually here in London having dinner on Brick Lane, I know, judgment, ok, with my sales team, And my phone rings, and it was, um, basically the news that EMC was launching a hostile acquisition for our company and outbidding, uh, network appliance. Now, we were not allowed to talk to the other company, because in a definitive agreement, all we could do is stay quiet, but we had lots of, uh, interesting emails and texts that came in over the line, and it was apparent to us that they weren't gonna go away, but then NetApp responded, Uh, EMC takes…

AI assessment note: “EMC was launching a hostile acquisition for our company and outbidding, uh, network appliance.”

Q How do you empower them? Bring them to the meetings? Allow for idea generation in a new way? What is the right way to empower them? It's difficult.

A I could think of a couple specific situations where we were dealing with a customer opportunity that's at ServiceNow, and one of my sales engineers said, I'm working on something where it is ticketing, very similar to what we did for IT service management, but they want to use us for HR, and we don't really have that product. Now, there's a couple stories about when we had the product or didn't have the product. I said, well, let's, let's work with them, because this may be a really interesting use case, And so we basically put this SE in charge of listening to the customer and demoing back what he'd heard, not through engineering yet. This was just a proof of value kind of experience. And, um, this gentleman, Eric Hemmer, still remember his name, um, was so important in the, in the gestation and building of the understanding of what the idea was. We then took that to like three or four other customers and we showed it to our engineering team. All those customers got really excited about it. We brought it back to engineering and said, we'd like us to build something on the platform, which already does, 99% of this. We just need to relabel some things. That's probably a billion dollar product now, inside of ServiceNow, because we just listen to customers. And that was Eric, who was close to that problem, who listened and said, I've got an idea. Can I go forward? And we were just…

AI assessment note: “we basically put this SE in charge of listening to the customer”

Q Listen, you, you gave me such a great teaser there. Hostile acquisition, how can I, like, let that go under the rug? What was that process, and what did you learn from it?

A Oh my god, so, um, in fact, here we are in London, and this is a fun story, is, Um, we knew that our business was very valuable, even though in 2009 the stock price went down because the market went down. And at the time, in 2009, there was another company called Network Appliance that had approached Frank Slootman about a potential acquisition. And we were close to them. We knew who they were. We're neighbors. They, they're down the street. A lot of our early engineering team had worked there before, and we did not know EMC, and in fact, Joe Tucci, when we reached out to him to get to know him, he was always hidden from us, um, because of various reasons. So in, in oh nine, we sound, signed a definitive agreement to be acquired by Network Appliance, and it was a, it was a good offer, and we had all these integration meetings, and I was actually here in London having dinner on Brick Lane, I know, judgment, ok, with my sales team, And my phone rings, and it was, um, basically the news that EMC was launching a hostile acquisition for our company and outbidding, uh, network appliance. Now, we were not allowed to talk to the other company, because in a definitive agreement, all we could do is stay quiet, but we had lots of, uh, interesting emails and texts that came in over the line, and it was apparent to us that they weren't gonna go away, but then NetApp responded, Uh, EMC takes…

AI assessment note: “EMC was launching a hostile acquisition for our company and outbidding, uh, network appliance.”

Q The joys of Siri. Always helping in a situation. Can I ask, Bill McDermott, one of the most hailed CEOs of our time, biggest takeaway from working with him?

A So I worked with Bill at the end of my ServiceNow career. He joined in a, in a kind of weird situation. We had John Donahoe, who's a great, a great human being, great CEO as well. He's now the CEO of Nike. John was on the board at Nike, got the offer of the lifetime to go be the CEO of Nike. It was something he'd always been interested in doing. And so he took it. Bill gets parachuted in on our third CEO transition in the 10 years that I was there. And what really is apparent to me is Bill understands enterprise SaaS. He understands sales as well as anybody. I'm really good at selling. Bill may be even better, which is, which is hard for me to admit.

AI assessment note: “Bill understands enterprise SaaS. He understands sales as well as anybody.”

Q Do you think with the companies you work with today, do you think they should have CS teams?

A No. I think that many of them are coming to the same realization. I was talking to one CEO of a fairly, largely scaled SaaS company, and he told me, We are gonna be revisiting these decisions. And it's fun because, you know, I can't say to people, I told you so, but I start planting the seed. What are they doing? What's your metric? How many do you need? By what, what's your factor? Most customer success organizations come at it with, hey, I need this many people for this many accounts, or for this much revenue. In every organization, I think, how do I become more efficient over time? And so every structure, I've got to drive efficiency. How many dollars per sales headcount am I driving? How many dollars of, you know, of revenue am I driving for every engineering resource, revenue and finance? So if I can't get efficiency, I'm not doing my job as a leader in a business.

AI assessment note: “No. I think that many of them are coming to the same realization.”

Q Is it a game of the highest bidder wins?

A It was. In fact, Fourth of July happened, NetApp people went on vacation and EMC didn't, and they knew exactly how much cash NetApp had and what they could do to, uh, Win the deal. And they made the winning bid over the Fourth of July weekend, and we had to respond. The classic point of that was we announced that, yes, we were going to have to accept their offer, that a couple days later I was going to have my sales club trip in Mexico with my team, and, uh, Joe Tucci's like, great, I'll be there. We said, no, you won't. This is our last moment, our last opportunity, and it was one hell of a party.

AI assessment note: “It was. In fact, Fourth of July happened, NetApp people went on vacation”

Q And how did you ramp them so effectively and so quickly?

A I'm really good at my job. No, so, um, I am really good at my job, but what, what happened was there was market pull for the technology. There was definitely a receptiveness to it. We had probably underserved the profile of potential customers. We, we probably didn't have enough people on the street, so there was some pent up demand for us. One of the things we did is we changed our pricing as well, so I got rid of some of the discounting modes that we were dealing with. We basically doubled street price in that first quarter, um, which helped us double the revenue for that first quarter. And because I had gone to that user conference, I was watching the feedback from these customers, giving massive standing ovations to the founder, telling me this was the best technology they've ever purchased. I had a lot of confidence in the value of the product against the problems we were solving.

AI assessment note: “One of the things we did is we changed our pricing as well”

Q and what you need it to be to be attractive enough, is it a, is it a, I'm sorry for asking, because in really early stage problems, we talk about ownerships as kind of the core focus, and so for you, I totally get it in terms of kind of dollars invested as the core focus, but what is that upside requirement then? Is it a five X, 10 X?

A Yeah, we're usually in growth trying to underwrite Can it be, you know, five to 10 X, uh, kind of outcome? Um, we're, we have a kind of a, a view of what we call super stamps. The companies that we really want to be in that are the future IPO companies. And those may not have the same, um, direct return. The risk is much less, right? Hopefully the risk is, is de-risked a little bit. And then there's the, what we think are the future franchise earlier stage bets, uh, That we're gonna go in and kind of layer in over time and look for even more upside. So we kind of bifurcated our growth view a little bit, trying to do right by our investors and right by our portfolio.

AI assessment note: “we're usually in growth trying to underwrite Can it be, you know, five to 10 X”

Q Do you think with the companies you work with today, do you think they should have CS teams?

A No. I think that many of them are coming to the same realization. I was talking to one CEO of a fairly, largely scaled SaaS company, and he told me, We are gonna be revisiting these decisions. And it's fun because, you know, I can't say to people, I told you so, but I start planting the seed. What are they doing? What's your metric? How many do you need? By what, what's your factor? Most customer success organizations come at it with, hey, I need this many people for this many accounts, or for this much revenue. In every organization, I think, how do I become more efficient over time? And so every structure, I've got to drive efficiency. How many dollars per sales headcount am I driving? How many dollars of, you know, of revenue am I driving for every engineering resource, revenue and finance? So if I can't get efficiency, I'm not doing my job as a leader in a business.

AI assessment note: “No. I think that many of them are coming to the same realization.”

Q And how did you ramp them so effectively and so quickly?

A I'm really good at my job. No, so, um, I am really good at my job, but what, what happened was there was market pull for the technology. There was definitely a receptiveness to it. We had probably underserved the profile of potential customers. We, we probably didn't have enough people on the street, so there was some pent up demand for us. One of the things we did is we changed our pricing as well, so I got rid of some of the discounting modes that we were dealing with. We basically doubled street price in that first quarter, um, which helped us double the revenue for that first quarter. And because I had gone to that user conference, I was watching the feedback from these customers, giving massive standing ovations to the founder, telling me this was the best technology they've ever purchased. I had a lot of confidence in the value of the product against the problems we were solving.

AI assessment note: “what happened was there was market pull for the technology... we changed our pricing”

Q Do you share Vinor Kosa's view that 90% of VCs detract value?

A My terminology from experience is there are VCs that are seagulls, And here's my definition. They fly into a room, or fly into a meeting, fly into a location, they basically take a shit, and they fly away. They talk a lot, they give work to do for other people to do on the management team that distracts the management team from doing anything that's important, and you've got to control for the seagull. And this goes into the quality of the board that you're bringing on, and the kind of people, and also goes into As a management team, you need to set the tone and set the agenda for what's important to you. So for example, when I led the review of any portion of ServiceNow or Data Domain, I started with the three things that were working, that were really green, and the three things that were red. If somebody wanted to help me on something in the red, be my guest. But if you wanted to bring another thing on my list, it wasn't welcome, because I already know my business. And so having the confidence as an operator to say to the board, this is what's going on in my business. Here's what I'm working on. That keeps the seagulls away. Um, and it keeps them, keeps them different.

AI assessment note: “My terminology from experience is there are VCs that are seagulls”