Reflections on 20 years of building

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Growing up in Palo Alto, CA, with supportive, entrepreneurial parents, I knew I wanted to build. I remember completing my Computer Science degree, thinking I finally had a skill that would at least keep me employed, and I was privileged enough to know that if I ever truly became destitute, my parents would bridge me. (In reality, they went above and beyond to give me everything I ever needed and wanted, which is a privilege I don’t take lightly.)

I wanted to create organizations that made meaningful impacts, and so far that has happened. More importantly, the people I have worked with have greatly enriched my life, and for that I am thankful.

I wanted to reflect on these experiences for personal growth, and hopefully, some of the learnings are interesting. Thanks in advance for reading, and love any feedback and discussion.

TL;DR

A few learnings from creating companies over the last 20 years:

  • The biggest hurdles for most entrepreneurs are mental
  • Get over your fears, and just help somehow
  • Recognize when you are bringing a knife to a gunfight. It doesn’t need to stop you, but just know the score
  • 10 years later, you remember the people, not the product
  • The No Sleep test
  • The world needs worthwhile missions and virtuous organizations — they are more scarce than capital
  • A leader should accept the spotlight, but not seek it
  • Positively impacting the lives of people is what you remember from a start-up journey
  • The co-founder relationship is critical
  • The Brick Wall Paradox
  • Priority #1 for a Company Board: Do no harm
  • You can’t fix market
  • The people and the journey are what matter
  • If you are intellectually honest about the potential goals, you can often create a better chance of success.

StrongBox

My building career started as a junior at Stanford, partnering with Tyron Stading to create StrongBox. We were (and are) best friends and crafted a business idea while we had free time during study abroad. He was in Chile and I was in Florence. Senior year, the idea matured enough to enter the BASES business plan competition.

The major takeaways from working on StrongBox were:

  • The biggest hurdles for most entrepreneurs are mental.
  • Get over your fears, and just help somehow.
  • Recognize when you are bringing a knife to a gunfight. It doesn’t need to stop you but just know the score.
  • 10 years later, you remember the people, not the product.

The biggest hurdles for most entrepreneurs are mental.

Ty and I were both Computer Science majors, so initially, we split the development work. Without getting too much into the details, the product was an open-source Internet router with Enterprise security IP.

What became obvious is Ty was a better software developer than I was, especially at the networking layer. This gave me a ton of consternation for not pulling my weight, and I constantly worried that Ty would not only stop working with me but stop being my friend. While the second worry seems a little crazy, at the time, it felt very real.

Eventually, I told Ty that I am going slower than he is and it is probably better if I focus on ‘everything else’ in building the company. As I look back, that was the hardest obstacle for me to overcome in contributing to StrongBox — it had nothing to do with the product or market work.

Get over your fears, and just help somehow.

With the mental hurdle overcome, it turns out there is a lot to help with regarding ‘everything else.’ To paraphrase a Larry Ellison quote: “If you are not selling or building, what are you doing here?”

As I worked on the business plan, go to market model and initial sales, no task was too small. If I could save Ty an hour so he could code more, that was worthwhile. While I didn’t brush his teeth or pick up his dry cleaning (Granted he didn’t have any since he only wore 3–6 different Polo shirts. He hadn’t met Laurie yet.), I recognized a core goal was to give Ty more time.

The outcome was a successful project and an even better friendship.

Recognize when you are bringing a knife to a gunfight. It doesn’t need to stop you but just know the score.

Many times, the start-up journey is encapsulated in a set of days/moments of note. Ty and I experienced one of these moments in StrongBox when we were presenting the company to a group of Venture Capitalists, as part of the BASES E-Challenge business plan competition.

One of the VCs was Sameer Gandhi, who was at Sequoia Capital then (now at Accel). He asked a few ‘drop the mic’ questions. Ty and I both were impressed by his depth of knowledge and cognizant that he brought up business challenges that could be tough for us to overcome.

Well, it turns out he had just invested in NetScreen, a company and product in the same space as StrongBox, but started by a team with 15+ years of industry experience. Ty and I were college Seniors, hence there’s a chance we still had a few things to uncover (insert heavy sarcasm).

Ty and I recognized there were competitors in the market who were better prepared to build a big company, but so what — it didn’t mean we couldn’t have a successful experience. We turned our focus towards finding a market-leading partner to work with. The best fit for us was IBM. While IBM did not acquire us for a billion dollars, it is no surprise IBM hired Ty out of Stanford.

10 years later, you remember the people, not the product.

This is not entirely true, as I still have a love for the FREESCO open source project,

However, the biggest win from StrongBox is Ty and I became even better friends through the experience. The unique experiences that entrepreneurship brings are hard to replicate, and the bonds that can form are extremely fulfilling.

Glow Foundation

My next major building experience was creating the Glow Foundation, an idea that came from my work volunteering at BUILD. Glow was a non-profit that provided financial literacy and aid to first-generation students entering college. We partnered with students starting in the Sophomore year of High School and stayed with them through college graduation.

Over the course of 10 years, Glow served over 300,000 students across California. I feel very fortunate to have had a great co-founder in Anne Diaz, great Executive Directors in Joohee Shin Rand and Peter Kim, and dedicated staff members in Alana Okomoto and many others.

The major learnings from building the Glow Foundation were:

  • The No Sleep test
  • The world needs worthwhile missions and virtuous organizations — they are more scarce than capital
  • A leader should accept the spotlight, but not seek it.
  • Positively impacting the lives of people is what you remember from a start-up journey.

The No Sleep test

Glow was started because of an acute need. Through BUILD, I mentored a truly special group of high-school students in Edgar, Raniel, and Kimberley and got to know the equally impressive Javita. All were the first in their family to apply to college, all got accepted to four-year institutions, and all were at risk of not matriculating due to financial concerns.

When I saw this issue, it was entirely unacceptable. These students were great investments, and the fact that our education system does not prepare students to understand finance is a travesty.

In addition, the financing process for college is extremely convoluted, and motivated students deserve a river guide.

All of this culminated to a crossroads where I had the idea for Glow, and I simply couldn’t sleep until I manifested it.

During year five of Glow, when I was trying to fundraise at night while working at Bain Capital in Boston, and I had to dedicate hours twelve through fifteen of the day to Glow, my conviction was put to the test.

Validating your commitment-level on the way in is very important, hence the No Sleep test — are you unable to sleep until you give your idea a shot?

The world needs worthwhile missions and virtuous organizations — they are more scarce than capital

When I started Glow, I had zero non-profit experience. At the time I was working at Menlo Ventures, and I appreciated the juxtapose between investing in companies during the day and raising money from people for Glow at night, promising no financing return.

I was pleasantly surprised to find people receptive to funding Glow. Mark Siegel was an initial advocate, and Tom Cole and Shawn Carolan went above and beyond.

All told, we raised over a million dollars for Glow, and as importantly 100s of people each gave 100s of hours to the cause.

Throughout the Glow journey, I saw how people and institutions of means have a shortage of companies to believe in, and if you earn the trust of people, capital will follow.

A leader should accept the spotlight, but not seek it.

This learning happened very much on the job, and for this I give a ton of credit to Anne Diaz for letting me build the plane while flying it.

As Glow started executing, opportunities arose to pitch Glow in front of audiences of potential donors. As the chief fundraiser, this was a critical part of my job. As the snowball of Glow started growing, we built out annual fundraising events that had front-and-center needs. While it is critical to execute on these opportunities, there is a fine line between doing right by the organization and making sure credit and speaking opportunities are distributed.

I probably went right up to the line in terms of being front and center, and at times was too front and center. I feel good about rectifying it in the later years of Glow, but it is a very important learning.

I now try to remember that whenever you are talking about your company or journey, you are taking time away from building and making it better. In addition, if someone is dedicating time and effort to your cause, he/she deserves to be recognized early and often.

Positively impacting the lives of people is what you remember from a start-up journey.

In reflecting on 10 years of Glow, of course, there were many ups and downs. Rather than reflect on every detail, I have found the farther out I am from the experience, the simpler the lens is for assessing success.

I think about the people I interacted with, and whether the experience for them was meaningful and positive. If I ran into them at Starbucks, would they be excited to see me?

I am happy to say Glow was a success by this metric. Most poignantly, I met Raniel when he was 14 years old, sagged his jeans down to his knees, and didn’t think school was worthwhile. He is still the same person, just with a few different perspectives. Here he is now:

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Kahuna

2012 was the first time I bet my career on building something, with Kahuna. I finally felt ready to ‘burn the boats’ and go for it, thanks to the support of many people and Josh Stein at Threshold introducing me to my cofounder.

Over the next six years, Kahuna scaled to $10M ARR, then stumbled and ultimately did not succeed. That said, lots of small wins along the way, a ton of great experiences, and hundreds of wonderful people who contributed to and benefited from the product and company.

The major learnings from building Kahuna were:

  • The co-founder relationship is critical
  • The Brick Wall Paradox
  • Priority #1 for a Company Board: Do no harm

The co-founder relationship is critical

I was paired with a truly gifted technical cofounder, and for that I am fortunate. However, from the get-go certain aspects of the relationship were risky. These issues were minimized instead of fully addressed. I believe I cared more about capability vs. perfect culture mesh, and there is no right answer. However, a co-founder breakup is painful and I don’t wish it on anyone.

If you don’t have a completely open relationship with your co-founder, red flag. If you can’t relax and be 100% yourself with your co-founder, red flag. In the end, no matter who’s fault it is that the partnership doesn’t work out, it is detrimental and a strain on both of you, and the company.

The Brick Wall Paradox

Another hard-won lesson with no easy situational answer. Many times in building a company, you are presented with hurdles / ‘brick-walls.’ Examples include closing customers, raising money, key hires, etc.

In these situations, the right answer to achieve results is persistence — keep finding ways to push against the brick wall until it finally gives.

However, sometimes you face existential brick walls, and running through the brick wall is the wrong answer. Instead, the wall could prompt reflection and a 90-degree turn. Or even tougher to decipher, perhaps you should take a few steps back, make major changes, and eventually figure out how to pole vault over it.

I would say back then I was pretty good at running through brick walls, but at one juncture I realized one month too late that Kahuna should take a different path. Since Kahuna, I have worked hard to decipher when pushing ahead on the same path is the wrong answer.

Priority #1 for a Company Board: Do no harm

A board member would do well to remember this since this rule is so often broken. Unfortunately, we failed at this as well. The simplest indicator of this is that at the time of being asked to step down as CEO, we had $30M of cash in the bank. It stands to reason that Kahuna’s enterprise value was at least $30M at that point in time, and board decisions moving forward destroyed value, not to mention potential.

I continued to be a member of the board, and I take 20% responsibility for this. To all Kahuna alumni employees (including myself), I am sorry I couldn’t generate a better financial outcome for y’all.

Alpine.AI

With Alpine, one of my key criteria was to start a company with someone I knew I’d mesh with. After Kahuna, I did a lot of reflection on what went wrong with the co-founder relationship, and how I could be better.

Alex recently left Yahoo and was a customer of mine at Kahuna. He has a ‘high-motor’ and a proactive attitude, and we decided to build a company together. We were intrigued by the new Voice Assistants, Amazon Alexa and Google Assistant, and saw emerging platforms developing.

From our experience in mobile, an early company we admired was Flurry. Flurry created the ubiquitous mobile analytics product and used that #1 position to roll-out monetization products. In addition, Flurry was great at organic acquisition and this is a skill I wanted to flex.

In the end, we created the #1 voice analytics platform, with over 4,000 accounts on a total of $100 paid marketing.

The major takeaways from building Alpine.AI were:

  • You can’t fix market
  • The people and the journey are what matter.
  • If you are intellectually honest about the potential goals, you can often create a better chance of success.

You can’t fix market

This was one of the first lessons I learned in Venture, thanks to a great mentor in Sonja Perkins. You can’t out-execute a bad market.

However, some of the biggest wins in the past twenty years were ideas where the market came to them. Twitter is a top example, where the initial market size for short-form expression was $0, and Twitter created a market and category on the way to becoming a big company.

With Alpine, we were ‘pulling a Flurry’ on the Amazon Alexa and Google Assistant platforms. We hoped that these two platforms would develop similarly to iOS and Android, although we knew this thesis had risk.

Specifically, these markets were 100% controlled by Amazon and Google. Thirteen months in, Amazon decided to not allow a robust and healthy third-party ecosystem to form on top of Alexa, which was unfortunate but the company’s right.

Given the above, it was clear the market sucked. Nothing we could do would change that, hence we needed to find a different path.

The people and the journey are what matter

Now, this is not a cop-out to say success doesn’t matter. When we knew we had to pivot, it led to many sleepless nights and consternation.

However, when you build a company and hire people, you take responsibility for their careers. Hopefully, you provide a platform to learn, grow, and enjoy along the way. I take fulfillment and pride that Alex and I were able to do that with Alpine.

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The Alpine.AI core team, with the CTO of Headspace

If you are intellectually honest about the potential goals, you can often create a better chance of success.

This learning builds on the above learnings, where I realized we encountered a brick wall that we shouldn’t try to run through. With 75% of capital raised still in the bank, we decided to sell the company.

Now people who have never done it before or have lived a charmed existence will say ‘companies are bought not sold,’ but that just isn’t true. Granted, if an acquirer doesn’t see value in your company, no amount of selling will help. However, there is a strategy and process you can execute to give your company a 10X better chance of acquisition.

I know this because I didn’t do this well at Kahuna, but feel good about my work on this at Alpine. Eight years in VC taught me 10% of what I know about M&A… but I digress.

We reframed the problem from building a big company to driving toward a successful outcome for investors and employees.

Nine months later, Alpine was acquired by Headspace, fulfilling our goals.

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