The Exchanges

Q mean, so much to unpack there. The first and the second one that you mentioned there was kind of the team assembly and it being all about the people. I often hear CEOs on the show say that the core role of the CEO is management ups Scaling. I'm intrigued. Would you agree with that as the core role, and how do you think about your role today as CEO?

A Yeah, I think there's three core characteristics, three core elements for the CEO. I certainly think one of them is about the people and making sure that you continue to scale the team around you. Absolutely. And by the way, that gets hard because you have to do it quite often. Number two, though, is making sure that you're focused on what the right strategy is for the company and being very clear about it. Because any ambiguity on company strategy causes misalignment farther you go down into the organization. And then the third big component, I think, for a CEO is communications. How you communicate that vision on where you're trying to go and aligning the right people up against that vision. It's a big, big part of the job as CEO.

AI assessment note: “Yeah, I think there's three core characteristics, three core elements for the CEO.”

Q I mean, that's a very compelling vision, but I do want to start on the building of the great company that Carbon Black is today, because we spoke before, and you said that there's seven themes to building a great company. Very kindly, you left me on that cliffhanger, so I'd love to start today with that, and what are those seven themes, Patrick?

A Well, when you look at building a company, my experience, I've spent the last 25 plus years helping to build and scale a variety of different startups and have been fortunate enough to be part of five teams that have brought companies public, including Carbon Black. And throughout all of those experiences, you see patterns, same way that VCs see patterns, we as operators see patterns on how do you build a company right and how can you get it wrong. And we obviously learn more when we see things not done well. And so when I talk to new employees in the company, I talk to them about seven core characteristics of building a great company. And they're quite simple. And many of these are the things that we learned growing up and the things that we learned and different experiences at different companies. And they go like this. Number one, you need to have a shared vision and mission on what you're trying to accomplish inside of a company so that all of your team members are aligned. And it's stunning to me how many companies don't have a shared alignment about what they're trying to achieve. Number two, it's all about the team. It's all about the people. You have to hire great people. We are very focused here at carbon black about referral rates because we want great people to refer other great people. So number two, it's all about the team. Number three, no assholes. And my view on…

AI assessment note: “I talk to them about seven core characteristics of building a great company”

Q No, it absolutely is. Stronger than marriage. But I do have to ask, and, and, you know, absolutely no names needed here, if not required. When thinking about this and kind of the importance of market Is there an anecdote or a memory that really comes to mind with the subsequent learning attached to it?

A Well, as I said earlier, I've been at Carbon Black for 10 years, and we were early in the market talking about how there had to be a fundamental change on the way that cybersecurity was approached, and when we were first out telling that message about the fact that antivirus doesn't work in its current approach, and that there needed to be a totally different approach to this challenge, there were a lot of Potential customers who didn't see that issue yet. So we were, we were out ahead of the market. And so, you know, up through from 2007 to 2010. So three years there, we were really out kind of evangelizing to the market. In 2010, there was a market change when Google announced that they had been hacked. But prior to that, it required a lot of communication and transparency with my investors on what we were seeing and why we were seeing what we were seeing. And the moment you aren't transparent with your investors about The why and the what of your seeing, that's where you start to lose that trust, and that's where I think things can fall apart pretty fast, because a lot of companies are out early in market, and that's the nature of tech.

AI assessment note: “prior to that, it required a lot of communication and transparency with my investors”

Q I mean, that's a very compelling vision, but I do want to start on the building of the great company that Carbon Black is today, because we spoke before, and you said that there's seven themes to building a great company. Very kindly, you left me on that cliffhanger, so I'd love to start today with that, and what are those seven themes, Patrick?

A Well, when you look at building a company, my experience, I've spent the last 25 plus years helping to build and scale a variety of different startups and have been fortunate enough to be part of five teams that have brought companies public, including Carbon Black. And throughout all of those experiences, you see patterns, same way that VCs see patterns, we as operators see patterns on how do you build a company right and how can you get it wrong. And we obviously learn more when we see things not done well. And so when I talk to new employees in the company, I talk to them about seven core characteristics of building a great company. And they're quite simple. And many of these are the things that we learned growing up and the things that we learned and different experiences at different companies. And they go like this. Number one, you need to have a shared vision and mission on what you're trying to accomplish inside of a company so that all of your team members are aligned. And it's stunning to me how many companies don't have a shared alignment about what they're trying to achieve. Number two, it's all about the team. It's all about the people. You have to hire great people. We are very focused here at carbon black about referral rates because we want great people to refer other great people. So number two, it's all about the team. Number three, no assholes. And my view on…

AI assessment note: “Number one, you need to have a shared vision and mission”

Q No, absolutely. I, I do agree with that. I do have to ask, you mentioned the element of transition. I'm interested, especially with the culture and how that changes with scale. How do you think about the professionalization and scaling of a firm, especially with culture and maintaining that nimble startup culture with scale?

A Well, I think it starts at the top. If you just take what you just asked and you pull it apart, there's two aspects to that. One is how do you do scale? How do you bring scale to an organization without making people feel like we're leaving some of the original team members behind? And again, I think the biggest part on that is how you as a CEO and how the company communicates. If you communicate openly and honestly about why you're making changes that you are, you treat people with respect throughout the process, driving change from a leadership standpoint, you can do very effectively, and you can really allow a team to continue to tick. And then on our ability to actually still stay nimble or agile, again, I think that's more of a cultural phenomenon, and I think a lot of that starts At the top with the executive team at the top, balancing, making quick decisions, but also understanding that the decisions that you make that are critical, you have to have some soak time and some analysis against those because you don't want to shoot first and aim after you. You really want to make sure you have an understanding of, of why you're doing what, and then you got to pull everyone along with that decision-making. Whether or not you're doing it fast, whether you're doing, you're doing deeper analysis, you got to pull all of your critical constituents along with that process. And that'…

AI assessment note: “And then on our ability to actually still stay nimble or agile”

Q Can I ask, are there any challenging elements that you maybe didn't perceive? Maybe the visibility, maybe the constant requirement for communication, be it the volatility of stock and the kind of influence that it has on team? Are there any challenges?

A I think one of the challenges, and many companies have spoken to this, one of the challenges of being a public company is the way that you communicate and the transparency that you exhibit inside the company from a comm standpoint has to change, and it's harder, perhaps, than you would anticipate, because especially you want to be able to talk to the team about results the moment a quarter has finished or the moment something's done, and now suddenly you have to get your communication changes a bit, and so I think that we knew coming in, and that's been the reality there. I think the other piece, too, is Going out and helping public equity buyers understand who we are as a company, and the amount of time that that requires for myself and others at the senior level in the company. Those are two big changes.

AI assessment note: “one of the challenges of being a public company is the way that you communicate”

Q No, it absolutely is. Stronger than marriage. But I do have to ask, and, and, you know, absolutely no names needed here, if not required. When thinking about this and kind of the importance of market Is there an anecdote or a memory that really comes to mind with the subsequent learning attached to it?

A Well, as I said earlier, I've been at Carbon Black for 10 years, and we were early in the market talking about how there had to be a fundamental change on the way that cybersecurity was approached, and when we were first out telling that message about the fact that antivirus doesn't work in its current approach, and that there needed to be a totally different approach to this challenge, there were a lot of Potential customers who didn't see that issue yet. So we were, we were out ahead of the market. And so, you know, up through from 2007 to 2010. So three years there, we were really out kind of evangelizing to the market. In 2010, there was a market change when Google announced that they had been hacked. But prior to that, it required a lot of communication and transparency with my investors on what we were seeing and why we were seeing what we were seeing. And the moment you aren't transparent with your investors about The why and the what of your seeing, that's where you start to lose that trust, and that's where I think things can fall apart pretty fast, because a lot of companies are out early in market, and that's the nature of tech.

AI assessment note: “the moment you aren't transparent with your investors about The why and the what”

Q mean, so much to unpack there. The first and the second one that you mentioned there was kind of the team assembly and it being all about the people. I often hear CEOs on the show say that the core role of the CEO is management ups Scaling. I'm intrigued. Would you agree with that as the core role, and how do you think about your role today as CEO?

A Yeah, I think there's three core characteristics, three core elements for the CEO. I certainly think one of them is about the people and making sure that you continue to scale the team around you. Absolutely. And by the way, that gets hard because you have to do it quite often. Number two, though, is making sure that you're focused on what the right strategy is for the company and being very clear about it. Because any ambiguity on company strategy causes misalignment farther you go down into the organization. And then the third big component, I think, for a CEO is communications. How you communicate that vision on where you're trying to go and aligning the right people up against that vision. It's a big, big part of the job as CEO.

AI assessment note: “I certainly think one of them is about the people and making sure that you continue to scale”

Q Can I ask, literally, how does that look? Is that like an all-hands meeting and continuous Slack messages outlining the message? What does kind of seamless communications across the entire team look like done well?

A Yeah, so it's, it's exactly what you've described. I think a great communication starts at the day people kind of enter the company, so we do new employee orientation for every single and I speak at every single new employee orientation. I shake every single new employee's hand and tell them why we're here and what we're all about and what we're trying to achieve. So right from day one, you're trying to give everyone an understanding of the vision and the mission of the company and what we're trying to achieve. And then as you drive through change, you've got to kind of realign again and again against what we're trying to do. And then you communicate why we're making the changes that we are, whether or not those are strategy changes, personnel changes, the way we're executing. You do it at all hands. You do it again and again. We also do it. I mean, we try and do it here prior to the all hands. We'll do it with a broader team of managers and directors. So you can kind of think about it as cascading communications. We'll talk about it as an exec team. Then the next level down gets communicated to, we talk about it openly, we get questions, and then we do it in all hands. And then you don't just do it on one all hands. You're going to do it again and again. And then I always follow up with written communication to the company on what we're doing and why.

AI assessment note: “So you can kind of think about it as cascading communications.”

Q Can I ask, are there any challenging elements that you maybe didn't perceive? Maybe the visibility, maybe the constant requirement for communication, be it the volatility of stock and the kind of influence that it has on team? Are there any challenges?

A I think one of the challenges, and many companies have spoken to this, one of the challenges of being a public company is the way that you communicate and the transparency that you exhibit inside the company from a comm standpoint has to change, and it's harder, perhaps, than you would anticipate, because especially you want to be able to talk to the team about results the moment a quarter has finished or the moment something's done, and now suddenly you have to get your communication changes a bit, and so I think that we knew coming in, and that's been the reality there. I think the other piece, too, is Going out and helping public equity buyers understand who we are as a company, and the amount of time that that requires for myself and others at the senior level in the company. Those are two big changes.

AI assessment note: “one of the challenges of being a public company is the way that you communicate”

Q No, absolutely. I, I do agree with that. I do have to ask, you mentioned the element of transition. I'm interested, especially with the culture and how that changes with scale. How do you think about the professionalization and scaling of a firm, especially with culture and maintaining that nimble startup culture with scale?

A Well, I think it starts at the top. If you just take what you just asked and you pull it apart, there's two aspects to that. One is how do you do scale? How do you bring scale to an organization without making people feel like we're leaving some of the original team members behind? And again, I think the biggest part on that is how you as a CEO and how the company communicates. If you communicate openly and honestly about why you're making changes that you are, you treat people with respect throughout the process, driving change from a leadership standpoint, you can do very effectively, and you can really allow a team to continue to tick. And then on our ability to actually still stay nimble or agile, again, I think that's more of a cultural phenomenon, and I think a lot of that starts At the top with the executive team at the top, balancing, making quick decisions, but also understanding that the decisions that you make that are critical, you have to have some soak time and some analysis against those because you don't want to shoot first and aim after you. You really want to make sure you have an understanding of, of why you're doing what, and then you got to pull everyone along with that decision-making. Whether or not you're doing it fast, whether you're doing, you're doing deeper analysis, you got to pull all of your critical constituents along with that process. And that'…

AI assessment note: “starts at the top... balancing, making quick decisions, but also understanding”

Q written communications. But in terms of kind of communication being that critical element, I do want to take another one that we've slightly touched on before in our chats, being market timing. We had Mike Dauber at Amplify on the show, and he said that timing kills more startups than dollars. Would you agree with this? And I'm intrigued to hear your thoughts on kind of market timing per se.

A Absolutely. I would agree a hundred percent with that statement. And I think a lot of it has to do with the maturity and I'll call it the patience of And the persistence of three core teams. You've got the CEO who comes in with an expectation. You have investors who have an expectation and you've got senior team members who have an expectation. And if at any point, you know, those get out of whack really causes a lot of churn. And so you end up in a situation where organizations will make investors or CEOs will say, Hey, look, this is just not happening in the speed. I, I wanted it to, and I'm, and I'm done. And then there's big ramifications of that. And obviously making those decisions Reinforces how important it is that the CEO and that the investors, especially your lead investors, are really, really aligned. Because you can change a lot of other things, but it's challenging to change out a CEO, and it, depending on what your investor profile looks like, it's, it's impossible to change out who your investors are, for the most part.

AI assessment note: “Absolutely. I would agree a hundred percent with that statement.”

Q That's a heavy undertaking for sure. I do want to touch so back on, on kind of Jeff and the investor base, because we've discussed before investor buying, something that you excel at. So what do you think is crucial to gaining investor buying, and what do you think that you do so well? Well,

A First off, I think every founder, every CEO should look at their board as an extension of their team. They shouldn't think of them as separate. And by an extension of the team, I mean the same characteristics that you're looking for with regards to who you would hire as executives around you and other team members around you are the same characteristics you're looking for in your board. And if your board doesn't exhibit those, then something's not right because they can have a material impact. On the life of a company. If you have a board member who you don't connect with, that perhaps doesn't have the same core values you do, or has a very different perspective on the company that you're building. And this is obviously one-on-one, but I find that many times CEOs or exec team members are willing to overlook the fact that a board member is not necessarily a hundred percent aligned with them, but over months and quarters and years, it can have a profound impact on a company. You've got to really view your board as an extension of the team and make sure you're aligned. And the way I do that is the same way I do with my exec team, which is being super transparent on what's working and what's not working, and doing it consistently again and again, and never, ever not telling them exactly what's happening.

AI assessment note: “being super transparent on what's working and what's not working, and doing it consistently”

Q Can I ask, literally, how does that look? Is that like an all-hands meeting and continuous Slack messages outlining the message? What does kind of seamless communications across the entire team look like done well?

A Yeah, so it's, it's exactly what you've described. I think a great communication starts at the day people kind of enter the company, so we do new employee orientation for every single and I speak at every single new employee orientation. I shake every single new employee's hand and tell them why we're here and what we're all about and what we're trying to achieve. So right from day one, you're trying to give everyone an understanding of the vision and the mission of the company and what we're trying to achieve. And then as you drive through change, you've got to kind of realign again and again against what we're trying to do. And then you communicate why we're making the changes that we are, whether or not those are strategy changes, personnel changes, the way we're executing. You do it at all hands. You do it again and again. We also do it. I mean, we try and do it here prior to the all hands. We'll do it with a broader team of managers and directors. So you can kind of think about it as cascading communications. We'll talk about it as an exec team. Then the next level down gets communicated to, we talk about it openly, we get questions, and then we do it in all hands. And then you don't just do it on one all hands. You're going to do it again and again. And then I always follow up with written communication to the company on what we're doing and why.

AI assessment note: “Yeah, so it's, it's exactly what you've described.”

Q Can I ask, what do you think is the right way to treat and handle failure? Often in the Valley, it's the kind of hailed, you know, a celebration of failure, almost to the extreme sometimes. How do you think about, kind of, Failure and the right subsequent action.

A I believe, and I think we believe, that understanding what led you to where you are is such a critical part of it, because if you don't really understand the decisions that you made along the way, and you don't recognize and kind of talk openly about it, then you never learn from the experience. And as I said at the beginning, I think you learn more from failure than you do from success, or you learn more from tough times than you do when everything's just going up into the right And the only way you learn is to actually kind of go back and truly be open and understanding about what's not working. And so, you know, we try and do that as a team, as a senior team, and all the way through the organization, we try and really, when something does not work, to truly understand what was it that was the key decision point, or the key, was it execution? Was it strategy? Was it people? What was the element that allowed us to fail?

AI assessment note: “truly understand what was it that was the key decision point”

Q No, absolutely. I couldn't agree with you more in terms of being early in market. You spoke about, kind of, your investors there. I spoke to Jeff at a conference before the episode, and he wanted to ask, what was the motivation for going public when you did, and kind of, what are the subsequent pros and cons in your mind?

A We have said from the beginning, since the day I came here, we're building a company for the long term, trying to build a large Standalone cybersecurity company, and over the years that we've been building the company , we've been fortunate enough to realize that, and I'm extremely proud of where we sit today. I've always said to everyone on my board and ultimately all my employees that an IPO is just a step along the way. We knew we would bring the company public someday. I think from a brand standpoint, it helps distinguish the company. Obviously, we get access to public markets if we wanted to do inorganic growth at some period of time, so there's benefits to it. We knew we were going to do it, and in the end, on the timing side, we felt like, given where our market's at, now is the right time. We're two quarters into it, and so far, we're still early, and we have a lot to prove in the years ahead, but so far, we like what we see.

AI assessment note: “from a brand standpoint, it helps distinguish the company. Obviously, we get access”

Q kind of, we mentioned there a combination of kind of the centrality of team and then elements not working. In some cases, People don't scale with the company, and it is a stretch. I'm really interested for you from kind of seeing the scaling and growth of five companies to public company status, what are the signs that maybe a team member or a candidate is a stretch too far?

A Well, here at Carbon Black, I've had the opportunity to work with great people at every stage of the company, and some people don't scale, and others choose not to. Some people like the intimacy of smaller organizations and choose to say, I really liked the company when it grew from zero to twenty million or from twenty million to fifty million, and so it's not just people don't scale, it's also their own personal desires for what makes them tick and makes them feel fulfilled. I think the biggest way I think about it is how that manager, how that leader is looking ahead, what his or her vision is for the roadmap ahead, and when you have people, team members who are reacting as opposed to being proactive about what's coming, It becomes very obvious that you're going to have to make a decision to bring someone else in. And by the way, that's a delicate balance because if you're running a great team, then you're all kind of a foxhole together. You're working together day in and day out. And these are really tough decisions as you continue to scale a team here at carbon black. If you look over the years, I've effectively had three senior teams around me that I've had the opportunity to work with. And again, appreciate all the work that they've all done, but people are best at certain scales of the organization.

AI assessment note: “team members who are reacting as opposed to being proactive about what's coming”

Q Can I ask, what do you think is the right way to treat and handle failure? Often in the Valley, it's the kind of hailed, you know, a celebration of failure, almost to the extreme sometimes. How do you think about, kind of, Failure and the right subsequent action.

A I believe, and I think we believe, that understanding what led you to where you are is such a critical part of it, because if you don't really understand the decisions that you made along the way, and you don't recognize and kind of talk openly about it, then you never learn from the experience. And as I said at the beginning, I think you learn more from failure than you do from success, or you learn more from tough times than you do when everything's just going up into the right And the only way you learn is to actually kind of go back and truly be open and understanding about what's not working. And so, you know, we try and do that as a team, as a senior team, and all the way through the organization, we try and really, when something does not work, to truly understand what was it that was the key decision point, or the key, was it execution? Was it strategy? Was it people? What was the element that allowed us to fail?

AI assessment note: “understanding what led you to where you are is such a critical part of it”

Q kind of, we mentioned there a combination of kind of the centrality of team and then elements not working. In some cases, People don't scale with the company, and it is a stretch. I'm really interested for you from kind of seeing the scaling and growth of five companies to public company status, what are the signs that maybe a team member or a candidate is a stretch too far?

A Well, here at Carbon Black, I've had the opportunity to work with great people at every stage of the company, and some people don't scale, and others choose not to. Some people like the intimacy of smaller organizations and choose to say, I really liked the company when it grew from zero to twenty million or from twenty million to fifty million, and so it's not just people don't scale, it's also their own personal desires for what makes them tick and makes them feel fulfilled. I think the biggest way I think about it is how that manager, how that leader is looking ahead, what his or her vision is for the roadmap ahead, and when you have people, team members who are reacting as opposed to being proactive about what's coming, It becomes very obvious that you're going to have to make a decision to bring someone else in. And by the way, that's a delicate balance because if you're running a great team, then you're all kind of a foxhole together. You're working together day in and day out. And these are really tough decisions as you continue to scale a team here at carbon black. If you look over the years, I've effectively had three senior teams around me that I've had the opportunity to work with. And again, appreciate all the work that they've all done, but people are best at certain scales of the organization.

AI assessment note: “team members who are reacting as opposed to being proactive about what's coming”

Q No, absolutely. I couldn't agree with you more in terms of being early in market. You spoke about, kind of, your investors there. I spoke to Jeff at a conference before the episode, and he wanted to ask, what was the motivation for going public when you did, and kind of, what are the subsequent pros and cons in your mind?

A We have said from the beginning, since the day I came here, we're building a company for the long term, trying to build a large Standalone cybersecurity company, and over the years that we've been building the company , we've been fortunate enough to realize that, and I'm extremely proud of where we sit today. I've always said to everyone on my board and ultimately all my employees that an IPO is just a step along the way. We knew we would bring the company public someday. I think from a brand standpoint, it helps distinguish the company. Obviously, we get access to public markets if we wanted to do inorganic growth at some period of time, so there's benefits to it. We knew we were going to do it, and in the end, on the timing side, we felt like, given where our market's at, now is the right time. We're two quarters into it, and so far, we're still early, and we have a lot to prove in the years ahead, but so far, we like what we see.

AI assessment note: “I think from a brand standpoint, it helps distinguish the company.”

Q written communications. But in terms of kind of communication being that critical element, I do want to take another one that we've slightly touched on before in our chats, being market timing. We had Mike Dauber at Amplify on the show, and he said that timing kills more startups than dollars. Would you agree with this? And I'm intrigued to hear your thoughts on kind of market timing per se.

A Absolutely. I would agree a hundred percent with that statement. And I think a lot of it has to do with the maturity and I'll call it the patience of And the persistence of three core teams. You've got the CEO who comes in with an expectation. You have investors who have an expectation and you've got senior team members who have an expectation. And if at any point, you know, those get out of whack really causes a lot of churn. And so you end up in a situation where organizations will make investors or CEOs will say, Hey, look, this is just not happening in the speed. I, I wanted it to, and I'm, and I'm done. And then there's big ramifications of that. And obviously making those decisions Reinforces how important it is that the CEO and that the investors, especially your lead investors, are really, really aligned. Because you can change a lot of other things, but it's challenging to change out a CEO, and it, depending on what your investor profile looks like, it's, it's impossible to change out who your investors are, for the most part.

AI assessment note: “Absolutely. I would agree a hundred percent with that statement.”

Q That's a heavy undertaking for sure. I do want to touch so back on, on kind of Jeff and the investor base, because we've discussed before investor buying, something that you excel at. So what do you think is crucial to gaining investor buying, and what do you think that you do so well? Well,

A First off, I think every founder, every CEO should look at their board as an extension of their team. They shouldn't think of them as separate. And by an extension of the team, I mean the same characteristics that you're looking for with regards to who you would hire as executives around you and other team members around you are the same characteristics you're looking for in your board. And if your board doesn't exhibit those, then something's not right because they can have a material impact. On the life of a company. If you have a board member who you don't connect with, that perhaps doesn't have the same core values you do, or has a very different perspective on the company that you're building. And this is obviously one-on-one, but I find that many times CEOs or exec team members are willing to overlook the fact that a board member is not necessarily a hundred percent aligned with them, but over months and quarters and years, it can have a profound impact on a company. You've got to really view your board as an extension of the team and make sure you're aligned. And the way I do that is the same way I do with my exec team, which is being super transparent on what's working and what's not working, and doing it consistently again and again, and never, ever not telling them exactly what's happening.

AI assessment note: “being super transparent on what's working and what's not working, and doing it consistently”