The Exchanges

Q Absolutely. What were your biggest takeaways from your years at Google?

A Culture, actually. And, you know, I, I give Larry and Sergey tremendous credit for how early and how steadfastly they perceived culture to be a crucial aspect of Google's DNA. I was there for 10 years from when it was maybe 350 people until I guess they were probably 45,000 or so when I left. And the culture seemed effortless. And I did a startup right after coming out of Google, and we did that for two years. And I just assumed, you know, obviously it was my absolute intention to build a Google-like culture there. And I assumed, along with my, one of my co-founders, Peter, who was also a co-founder of Cockroach Labs, and, you know, both of us were at Google for 10 years, We assumed that it would just happen because we believed in it. That's not the case. We really fell down on culture on that first startup, and we've done things very differently at Cockroach Labs because what we realize is that culture is something that takes a very conscious effort, and it takes consistency, and you really have to apply yourself to achieve it.

AI assessment note: “Culture, actually. And, you know, I, I give Larry and Sergey tremendous credit”

Q Absolutely. What were your biggest takeaways from your years at Google?

A Culture, actually. And, you know, I, I give Larry and Sergey tremendous credit for how early and how steadfastly they perceived culture to be a crucial aspect of Google's DNA. I was there for 10 years from when it was maybe 350 people until I guess they were probably 45,000 or so when I left. And the culture seemed effortless. And I did a startup right after coming out of Google, and we did that for two years. And I just assumed, you know, obviously it was my absolute intention to build a Google-like culture there. And I assumed, along with my, one of my co-founders, Peter, who was also a co-founder of Cockroach Labs, and, you know, both of us were at Google for 10 years, We assumed that it would just happen because we believed in it. That's not the case. We really fell down on culture on that first startup, and we've done things very differently at Cockroach Labs because what we realize is that culture is something that takes a very conscious effort, and it takes consistency, and you really have to apply yourself to achieve it.

AI assessment note: “Culture, actually.”

Q investor appetite for potentially not enough, uh, money in the round. I'm intrigued to hear about getting into the very best deals. So on that note, And with you as a founder and ultimate decision maker of Cockroach, as we said, a highly heated startup in terms of investor appetite, what do you think VCs can do to maximize the chances of getting into the very best deals like Cockroach?

A Yeah, you know, I have a lot of opinions on this particular topic, and I'll sort of answer it in two parts. First part being, you know, how do you get into the initial deal? And then second part being, you know, when you've lost out on a deal, how do you then get in On follow-up rounds. And I would say that, uh, you know, for the initial deal, the best way to get in is to have the true decision maker be the main point of contact for the company. I've come across a number of venture capital firms that, you know, the first point of contact and what to me almost feels like the boots on the ground, tactical brain behind the operation is somebody that's not actually an investing partner. That's a major turnoff. And I would, I would, I know that, you know, it It saves people time, and they send out somebody that's sort of more of an associate level, and, you know, that person says to kind of bring the deals, and then the general partner, the investing partner, then takes the relationship over. I, on the other hand, think that that is, it's off-putting. And, you know, there's, there's no more opposite approach in the industry than the one that Benchmark takes, for example. And this is a very small VC fund, you know, not necessarily in dollars, although it's not, it's by far not the largest. But, you know, it's a small number of partners, and there's equal shares for all of them, and w…

AI assessment note: “the best way to get in is to have the true decision maker be the main point”

Q investor appetite for potentially not enough, uh, money in the round. I'm intrigued to hear about getting into the very best deals. So on that note, And with you as a founder and ultimate decision maker of Cockroach, as we said, a highly heated startup in terms of investor appetite, what do you think VCs can do to maximize the chances of getting into the very best deals like Cockroach?

A Yeah, you know, I have a lot of opinions on this particular topic, and I'll sort of answer it in two parts. First part being, you know, how do you get into the initial deal? And then second part being, you know, when you've lost out on a deal, how do you then get in On follow-up rounds. And I would say that, uh, you know, for the initial deal, the best way to get in is to have the true decision maker be the main point of contact for the company. I've come across a number of venture capital firms that, you know, the first point of contact and what to me almost feels like the boots on the ground, tactical brain behind the operation is somebody that's not actually an investing partner. That's a major turnoff. And I would, I would, I know that, you know, it It saves people time, and they send out somebody that's sort of more of an associate level, and, you know, that person says to kind of bring the deals, and then the general partner, the investing partner, then takes the relationship over. I, on the other hand, think that that is, it's off-putting. And, you know, there's, there's no more opposite approach in the industry than the one that Benchmark takes, for example. And this is a very small VC fund, you know, not necessarily in dollars, although it's not, it's by far not the largest. But, you know, it's a small number of partners, and there's equal shares for all of them, and w…

AI assessment note: “the best way to get in is to have the true decision maker be the main point”

Q being challenged there. I'm intrigued. Are there certain situations and preferences towards being challenged that you would Favor in terms of would it be a one-on-one coffee where they kind of gently say, actually, Spencer, I think we could be addressing it in a different way. Do you prefer the kind of head-on in the board meeting? How do you think the best VCs challenge kind of theses and ideologies?

A It's a little frustrating when people beat around the bush too much and try to be too nice. I like to think I don't have a very fragile ego. Obviously, you know, everyone does on one topic or another, and I've certainly found, though, that when I When my ego is most fragile and I'm most, at least likely to take constructive criticism is when I'm probably wrong. So, um, you know, I do think that a mature venture capitalist, a mature investor on the other side of the table will not beat around the bush, but will be, you know, constructive. And I certainly respond well to that. It might take me a day or two if I'm really sunk down into a sort of losing proposition and I've got some of my pride tied up in it. But, you know, the, the, the frontal approach that is constructive always, I think, yields the best results.

AI assessment note: “the frontal approach that is constructive always, I think, yields the best results.”

Q Are there any kind of real signs and indications of a bad interaction, potentially, not necessarily with your investors, but in the kind of pre-investor meetings that you've had, are there any real indications of, of, of bad, uh, communication channels and feedback?

A You know, I think there are bad approaches. You know, I certainly would not name any names, but I think that where, you know, when it comes to the, the negotiation of the pricing, You know, I've, I've certainly run up against approaches that, you know, I wouldn't take with someone that I was interested in investing with, um, but just too adversarial. And ultimately, you know, I think that, you know, many people view that with the expectation that the pricing and the negotiation is a sort of unpleasant baking phase. And then once you get past that, it's going to be all roses. But my feeling is that, you know, there's, there's a huge amount of trust that needs to be established and then carefully nurtured Over the course of what's going to be a many year relationship that people often joke in this industry, it's, it's more likely to last longer than your marriage. So, you know, like you establish that trust early and, and I'm sorry, but like the, a very chaotic and unpleasant negotiation phase is not a good way to, you know, have then, you know, have that person transition onto your board. I know I think that there's a much more constructive way and that actually involves being very Fair and open with your offers and not kind of lowball as a negotiation tactic. It feels like a used car salesman. That's not the kind of person I want on my board.

AI assessment note: “approaches that... I wouldn't take... just too adversarial... not kind of lowball”

Q Peter Fenton on the show the other day, actually. Uh, I think it's what you'd describe as a man crush. Uh, but then moving to the secondary phase of the kind of entering the best deals there, you broke it up into two, getting in first, and then what to do maybe when you haven't, and you want to get into the secondary round. So what's the perspective on that?

A It's funny because I've had so many meetings. I've probably talked to a 40 or 50 venture capitalists now, And many of them seem to be very interested in the next round if they can't make it into the one that we're just closing. And, you know, that's obviously the majority. Don't make it in. Not necessarily the majority are interested in investing in the next round, but we've had a very good hit rate with potential investors. You know, what they do is they see the round close. I give them what I think is probably going to be the optimistic and the conservative scenarios for when we'll do our next raise. And then we really just don't hear from them. And, you know, I get it that everyone's busy and so forth. But if you really want to get into the next round, this is like any other kind of a relationship. You're, you're much more likely to be considered, especially if you, you weren't necessarily at the top of the list for the sort of runners up. If over the course of the next year or however long it is, you're constantly involved. And a lot of people sort of promise to do that. And certainly I've noticed that venture capitalists as a group, I've noticed are very helpful. And if you request something from them, even if they're not currently an investor, They'll almost always go out of their way to provide a positive response of some sort. But I think that what separates the wheat f…

AI assessment note: “if you really want to get into the next round, this is like any other”

Q And then let's finish today on the next five years for you and for Cockroach. What do we have in store?

A Well, you know, I think this is a very interesting question. One of my central theses, which I touched on earlier, is just that databases actually suck for the most part. They never let you do what you really want to do for your business use cases, and that's, it's always been a game of sort of leapfrog. You get a new database technology that handles the big gaps in the business use cases in terms of technical capability, and then the business use case immediately moves forward and is trying to, you know, do, again, more than the database can provide. And, you know, I think we're, we're already pushing the envelope there. There's some additional stuff. So right now, our MVP, you know, our version one point O, which is imminent, It's very much concerned with feature parity with Spanner, Google's cloud Spanner product. Where we want to go, even in 2017, is to really push into, um, supporting businesses that are trying to build global services. So, you know, in other words, you're not just trying to stick a data center on the East Coast and, and serve, you know, European customers and Australian customers. People are doing that right now. But the reality is that the latencies are terrible for those customers that are further afield. And further, there's a growing concern about the liabilities around violating data sovereignty. Laws. And those laws are being put into place all over…

AI assessment note: “build databases that can span regions”

Q Peter Fenton on the show the other day, actually. Uh, I think it's what you'd describe as a man crush. Uh, but then moving to the secondary phase of the kind of entering the best deals there, you broke it up into two, getting in first, and then what to do maybe when you haven't, and you want to get into the secondary round. So what's the perspective on that?

A It's funny because I've had so many meetings. I've probably talked to a 40 or 50 venture capitalists now, And many of them seem to be very interested in the next round if they can't make it into the one that we're just closing. And, you know, that's obviously the majority. Don't make it in. Not necessarily the majority are interested in investing in the next round, but we've had a very good hit rate with potential investors. You know, what they do is they see the round close. I give them what I think is probably going to be the optimistic and the conservative scenarios for when we'll do our next raise. And then we really just don't hear from them. And, you know, I get it that everyone's busy and so forth. But if you really want to get into the next round, this is like any other kind of a relationship. You're, you're much more likely to be considered, especially if you, you weren't necessarily at the top of the list for the sort of runners up. If over the course of the next year or however long it is, you're constantly involved. And a lot of people sort of promise to do that. And certainly I've noticed that venture capitalists as a group, I've noticed are very helpful. And if you request something from them, even if they're not currently an investor, They'll almost always go out of their way to provide a positive response of some sort. But I think that what separates the wheat f…

AI assessment note: “if you really want to get into the next round... stay in touch, and they'll be proactive”

Q I do want to finish. So before we dive into a quick But I have to discuss the four-day workweek that I've heard so much about. So talk to me, how does this work for you at Cockroach with the four-day workweek? What does this look like internally?

A The four-day workweek is kind of, it's a provocative stance, and it is not necessarily all that we intend through this program. A better way to think of it is we call it free Fridays as opposed to a four-day workweek. So free Fridays mean you're self-directed. Like right now, I'm sitting in the office in the conference room and And the office is pretty empty. I mean, it is 10, 20 right now here, but you know, the office on a, any other weekday is busy. So people stay at home. Sometimes people want to have a three day weekend to go on vacation somewhere or Monday's free. It's a four day weekend. It's, it's kind of a nice bit of extra flexibility, but you know, what we really intend is something similar to Google's. 20% time is, you know, one day a week, the Friday is 20% time. What happened at Google was that nobody really took the 20% time. It was, it was a little bit of a failed policy. What would happen is that kind of store it up. Some people would insist on taking it. Most people wouldn't take it. And ultimately, it, I think, sort of died on the vine there. And our hope is that by allocating a specific day, and really where you have, you know, that full day, you really have that 20% time, then we can encourage people to, you know, actually work on things that are interesting outside of the priority road map. So what we'd really like to see is the birth of fantastic new idea…

AI assessment note: “A better way to think of it is we call it free Fridays”

Q Can I ask, would you suggest then to founders that maybe they shouldn't not waste their time, but shouldn't spend excessive amounts of time with non-investing partners like associates?

A That's a good question. Let me give you an example. There's somebody that I, that I met with in exactly this capacity at, uh, one of the really big funds, and she was working in Palo Alto for them, and she was the one that I was interacting with, and I actually really liked her. I thought she was incredibly intelligent, really sharp, out of MIT. She'd been on Wall Street, and she was doing this BC stuff, and ultimately, I recruited her. She joined Cockroach Labs as a product manager, which is that sort of the direction she wanted to go in, Um, so I would not say that, you know, like I said, it kind of goes, comes back to the question I answered just previously about the fact that I like talking to all these different people. Oftentimes that, uh, that associate or non-investing partner that you're talking to can be more down to earth, more in the weeds, and sometimes more helpful to you as a, you know, as someone to bounce your ideas off and, you know, to do that initial evaluation of your company. So I wouldn't necessarily say that those people should be shunned, you know, far from it. And I think they're quite useful. Um, On the other hand, you know, when you're really evaluating the quality of a new investor, I think you need to take into consideration the proclivity of that firm to allow the partner, the person that's going to be on your board, let's say, to pass off what co…

AI assessment note: “I wouldn't necessarily say that those people should be shunned, you know, far from it.”

Q being challenged there. I'm intrigued. Are there certain situations and preferences towards being challenged that you would Favor in terms of would it be a one-on-one coffee where they kind of gently say, actually, Spencer, I think we could be addressing it in a different way. Do you prefer the kind of head-on in the board meeting? How do you think the best VCs challenge kind of theses and ideologies?

A It's a little frustrating when people beat around the bush too much and try to be too nice. I like to think I don't have a very fragile ego. Obviously, you know, everyone does on one topic or another, and I've certainly found, though, that when I When my ego is most fragile and I'm most, at least likely to take constructive criticism is when I'm probably wrong. So, um, you know, I do think that a mature venture capitalist, a mature investor on the other side of the table will not beat around the bush, but will be, you know, constructive. And I certainly respond well to that. It might take me a day or two if I'm really sunk down into a sort of losing proposition and I've got some of my pride tied up in it. But, you know, the, the, the frontal approach that is constructive always, I think, yields the best results.

AI assessment note: “the frontal approach that is constructive always, I think, yields the best results.”

Q Are there any kind of real signs and indications of a bad interaction, potentially, not necessarily with your investors, but in the kind of pre-investor meetings that you've had, are there any real indications of, of, of bad, uh, communication channels and feedback?

A You know, I think there are bad approaches. You know, I certainly would not name any names, but I think that where, you know, when it comes to the, the negotiation of the pricing, You know, I've, I've certainly run up against approaches that, you know, I wouldn't take with someone that I was interested in investing with, um, but just too adversarial. And ultimately, you know, I think that, you know, many people view that with the expectation that the pricing and the negotiation is a sort of unpleasant baking phase. And then once you get past that, it's going to be all roses. But my feeling is that, you know, there's, there's a huge amount of trust that needs to be established and then carefully nurtured Over the course of what's going to be a many year relationship that people often joke in this industry, it's, it's more likely to last longer than your marriage. So, you know, like you establish that trust early and, and I'm sorry, but like the, a very chaotic and unpleasant negotiation phase is not a good way to, you know, have then, you know, have that person transition onto your board. I know I think that there's a much more constructive way and that actually involves being very Fair and open with your offers and not kind of lowball as a negotiation tactic. It feels like a used car salesman. That's not the kind of person I want on my board.

AI assessment note: “a very chaotic and unpleasant negotiation phase is not a good way”

Q Can I ask, would you suggest then to founders that maybe they shouldn't not waste their time, but shouldn't spend excessive amounts of time with non-investing partners like associates?

A That's a good question. Let me give you an example. There's somebody that I, that I met with in exactly this capacity at, uh, one of the really big funds, and she was working in Palo Alto for them, and she was the one that I was interacting with, and I actually really liked her. I thought she was incredibly intelligent, really sharp, out of MIT. She'd been on Wall Street, and she was doing this BC stuff, and ultimately, I recruited her. She joined Cockroach Labs as a product manager, which is that sort of the direction she wanted to go in, Um, so I would not say that, you know, like I said, it kind of goes, comes back to the question I answered just previously about the fact that I like talking to all these different people. Oftentimes that, uh, that associate or non-investing partner that you're talking to can be more down to earth, more in the weeds, and sometimes more helpful to you as a, you know, as someone to bounce your ideas off and, you know, to do that initial evaluation of your company. So I wouldn't necessarily say that those people should be shunned, you know, far from it. And I think they're quite useful. Um, On the other hand, you know, when you're really evaluating the quality of a new investor, I think you need to take into consideration the proclivity of that firm to allow the partner, the person that's going to be on your board, let's say, to pass off what co…

AI assessment note: “I wouldn't necessarily say that those people should be shunned, you know, far from it.”