Stanford Seminar: Solve the Problem You Have

0:11 all right you guys so Tracy let me start with you what's PL grid plangrid builds beautiful simple effective software for the construction industry we emerged from YC combinators Winter 2012 batch and we partnered with Sequoia and Doug joined our board in May of 2014 and today over 500,000 construction projects have been built with PL grid from the smallest kitchen remodels to the largest projects in the world and we're the number one mobile construction

0:41 software on on app store on Google Play on Microsoft Windows and Apple actually named us one of the top 10 Enterprise apps of 2016 I don't know if you know that which still blows my mind so I can feel your passion and you seem to love what you do yeah yeah on most days of LEL I do I do all right so in the past you've advised entrepreneurs to fix your own problem and that's an interesting statement what do you mean

1:10 by that fix your own problems I think the first step is to make sure we've prioritized the right problems something that has worked for us is we sort of because as as a startup there's just this barrage of problems are coming your way and we only have so much resources and time and so our big task here is to make sure we're working on the right problems I like to sort of think out a little further and our

1:35 team does too like if we don't solve this problem how bad is it going to be 6 months from now is it going to become 10 times worse and it's going to completely come back and bite Us in the butt if so we should probably solve it right now fantastic Doug have you seen this type of mindset from other Founders what's what's the common element that you see here what did you find so unique and compelling about Tracy and pl grd

2:00 well I think the very first thing I'd like to say is a bad 1988 sound that in intruction we have to kind of strike that in the future so what we found is a few things first and foremost what we saw is a company with 2025 people with no salese with revenues coming in all the employees with salespeople and they were answering the phone and that is so unusual because when you

2:30 start a company the toughest thing to do is product Market fit if you can do product Market fit we can help you do everything else imagine a world we where you don't have product Market fit what can we do as investors as partners so we had that and then we just saw something else and that is we had a Founder who solved a problem she had in the business and let me give you a whole bunch of

2:57 other cases it's a lesson to you if you're going to going to start a company solve your own problem I'll give you just four or five example the founders of arbnb Brian chesy and Joe and Nathan needed money they rented a room in their house and that's how they found that market they they solved the problem they have called Cash Flow the founders of zpos couldn't find a pair of shoes the founders of medalia which is an

3:24 Enterprise company probably one of the best private companies in the market they understood the mismatch between customers and vendors by being very unhappy customers at a hotel in London and yet the hotel kept on using them as references closer to Stanford the founders of Yahoo Jerry Yang there's a a building named after him couldn't find anything on the Yellow Pages they solved the problem for themselves they just happen to be a proxy for the next million people or the founders of Cisco

3:53 system here at Stanford again trying to network discus the campus networks and so key number one a little message if you're going to solve a pro if you want to start a company don't intellectualize some crazy stuff you know nothing about solve a problem you have and there's a chance that if you're upand coming and you're in the right circles you go to the right schools that that problem is just that you're the beta site for the

4:20 next 5 million people Tracy was that beta site the other thing that we saw though is a very passionate founder domain knowled solve their own problem committed authentic those are the ingredients that we look for when choosing a company with whom to partner now Doug how did you first meet and tell me about what that process was from that first meeting to an initial investment so we had we hired a young associate that not only had he started a

4:54 company right away out of college out of MIT that he sold to Twitter so by the age of 25 26 I started a company sold it understood a few things but the thing that caught our eye he had won $600,000 playing online poker at MIT and he parlay that into seed Investments and suddenly he was an investor of four or five companies before joining seoa that we were all interested in and so plangrid was one of those companies he

5:24 had a great nose for investing and so he made the introduction of course we were in the only company that Tracy was talking the only firm I had to drive to San Francisco twice you know she did a whole bunch of references on me in fact from my Christmas present she gave me a little card that's on my desk of all the feedback she heard in the market on Doug Leon and sequ capital just to keep me honest Doug has a resume believe

5:51 it or not his resume if you're Doug Leone is a sheet with CEO and Founders names and their phone number numbers so it's call anybody basically and I'll tell you the last two or three times we've lost money because the the real measure of a partner is not when things are going great the real measure of a partner is what happens when things aren't going so great and so I just put them all just call anybody go for it and

6:16 she did her homework and we were fortunate enough to be chosen that's fantastic now one of the things I'm sure you've seen is this Relentless resolve ability to Pro solve problems but that Focus I think you came into some very early adversity I believe you had three of your four Founders parents were diagnosed with cancer and one of your Founders unfortunately passed away how did you get through all of that I think the problems of genetics

6:43 and biology and disease accidents the challenges of Aging affects all of us it's just unfortunate that this incredibly tragic thing happened early on in in plant's life life doesn't stop just because we're trying to do the hardest thing we've ever done before it's not going to stop for any of us and antoon was diagnosed with cancer at 27 and it's totally unfair

7:18 it's complete chaos right and when he passed a month before his 30th birthday wow it was it was really hard on us us how could it not be we were trying to get our product out to Market we were busy hacking talking to users and I remember I turned the corner in our Hacker House in Sunnyville and I'd find I'd find one of my co-founders just sobbing quietly in the corner and this would go on for

7:46 months and as humans you know we always find a way way to cope we cry we mourn we build these shields around our hearts to protect ourselves from any more pain and hurt and then eventually we find beauty in the world again and we find beautiful distractions and delicious Comforts and we are able to ease some of that pain and be able to open up our hearts again and so for the founders of planger at that point we we

8:16 sort of asked ourselves like we have this one precious short life to live and we thought that if we could build a tool that makes construction just a little more more efficient we could probably make a good dent in the world in a really impactful and good way and we're also incredibly egotistical we wanted to build a company that we wanted to build a good company we wanted to show the world that this is how you

8:44 build a company responsibly that takes care of our employees and builds undeniable value for our users and is a good business within a community and so we took all of that hurt and we took all of that pain and we just fed the company with it because it was our privilege to do so wow that's amazing did you have outside help is it something that you and the team just sort of came together to work through the bereavement period and how

9:10 to keep things focused through this just massive chaos and unplanned unplanned series of events yeah so it's already hard enough to like live in a house together with your co-founders and working around the clock and so part of this process with the dying co-founder is there's hospice at our house and Antoine was coding to the last days this code is still live in planger today it's actually quite incredible I mean you

9:41 know we were we' never we'd never seen someone get eaten up by by cancer in front of us before and and it's like so frustrating because you're feeling all this like pain and horror and there's nothing we can do about it and so so you know our families were over a lot onn's family was over we had we had care so yeah that's amazing a Doug I'm sure you meet with lots of entrepreneurs probably look at

10:10 lots of business plans get lots of emails I'm sure you see this common thread of this incredible focus and this resolve how do you vet that out in found that's obviously a common element I'm sure you find that with everyone how how do you find that out how how does that character attribute surface and what's that process like the process has many flavors imagine someone coming to you with an idea and no code there you look

10:38 for clarity of vision Clarity of thought we had the luxury with Tracy and plri the fact there were there were sales incoming and that's a heck of a data point but then you know Tracy had to show us anyway that she could go from a terrific founder that she had the ingredients to become a terrific executive and CEO and leader of the company because our best partner companies are the ones where the founder takes them all the way and you know when

11:10 you lose a Founder you lose the soul of a company and so you want to make sure the at least one of the founders can take it and and I always remember the meeting at Sequoya capital and look we are a friendly place but we also know reality and we know when people come to Sequoia they take that quite seriously and so go out of our way to make people feel comfortable nobody has their iPhone you know up nobody checks email we're as

11:35 welcoming as can be but it's a pretty important day and I I remember the presentation and Tracy up there and look I knew she was nervous but I also knew she held it in you know they say hold your water kind of thing she held the water and she delivered like a champ I remember that and and we all came out of that meeting and say this this founder has it and so she answered for us the

12:04 fact how far can this founder go it was pretty clear to us she had the courage to go all the way because starting a company is really the tough thing everything else is kind of mechanical and road I mean you know you know building a company it's not easy don't get me wrong but does that doesn't require genius level starting compan is with a genius level running a company requires courage dealing with personality lots of IQ I meet you can

12:29 you recruit and those kinds of things but it was clear to us right after that meeting and it was a long conversation I'll admit it to it to you now I don't think I ever told you that it was a 15-minute conversation it was you know clearly when we all say yes to an investment we check ourselves whoa whoa whoo there's too many yeses too quickly it was one of those things everybody wanted to be an investor everybody want

12:49 to be a partner and so it was plus she came with a co-founder that had complimentary kind of skills that she knew construction new Co founder was from Pixar if I remember correctly who had the coding experience three you know the the the graphics and we thought that was a matching Heaven it was more in the heaven than we ever thought because that was our husband so it was really in heaven and and so and the next

13:14 thing became how can we convince them to choose us and so that was kind of the tough part for us we had is it true that the only heart you've ever put on a term sheet was our term sheet I put a heart yeah really I don't know what to say because I don't putting a heart if I put a heart I don't remember putting a heart to really isn't that nice you actually told me you're like

13:43 I've never put a heart on a term before this is how I feel about you guys it worked no the the reason I'm I'm because I have a reputation of being a little tough but I'm tough when things go well and you'll know when things things have not always gone swimmingly but you never felt an Iota pressure in your at that time is how can we help or can we solve the problem you know it is

14:08 not adding stress it is incredibly difficult and stressful to run a company the last thing you need is a partner to adds any stress so we like to remove stress and help but you know if I put a heart that's going to ruin my reputation a little bit so we don't want that's awesome all right Tracy so I'm kind of astounded that you have this ability to attract incredible Talent talents everything right at the end of's

14:34 a massive Talent War here in Silicon Valley even at a global level you've got these super sexy companies of the airbnbs of the world etc etc and slack how how do you recruit for a construction company obviously been really successful in doing that what's the magic something like 20% of plan grid comes from an architectural engineering and construction background so by the time we meet them they sort of understand the problem that we're trying to solving and what we're trying to do

14:59 and so that means the other 80% does not come from a construction background so there's a lot of selling to do I think we've gotten better at it over the years you know we've had six years of practice now of selling our company and the company's evolved and it's it's much more compelling to sell but I think there's three things that we we try to do when talking to people that we want to recruit number one is explaining

15:22 in incredibly clear way the problem that we're trying to solve and why it's so bad of a problem number two why our product and why our company is going to be the leader in the space what we're doing today that makes it the best product and what we're doing tomorrow that's going to keep us ahead of everyone yeah and three helping them understand the market size and how big the opportunity is for their careers because that's all we care about them

15:49 the day it's yeah what's in it for me and so if we can nail those three things in a conversation it's yeah it's a good thing fantastic now lots of buding entrepreneurs out here recruiting is the toughest thing so how do you how have you been able to assess Talent I'm sure there's many more people that want to work there that actually end up getting to work there what are some sort of things to look for what are some

16:15 pointers that you could give some folks out here thinking about starting a company or maybe joining a young startup of how to assess Talent yeah I would say that past experience and what they've built in the past is a good indicator of what they can do at at your company especially looking for leaders we like to early on when we were you know whatever less than 100 people we were sort of looking for people who had built

16:39 something before and had who had taken projects to the Finish Line over and over again whatever it might have been and now we need people who are experts in their domain and so we definitely look for that experience yeah yeah very good so Doug tell me a little bit of to do a commercial for Sequoia so lots we actually had a discussion in our class on Monday do you take VC money do you not so overall

17:06 like what are the advantages of when you have an opportunity to get an Institutional Investor like the likes of a seoa to make an investment what could an entrepreneur expect from the type of interaction what what what does a board member do and talk a little bit about that those that experience look I think the role of a board member changes as the company evolves let me take you to the end game game and let's go back

17:30 in the end game when you've got a successful company the board member does not help you in anything operationally they help you strategic issues and so on that's when you've made and you're a large company and now why don't we take it back to one person starting a company the very first thing we will do is we'll help you to recruit a few worldclass Engineers because we know unless you start with world class you're only going

17:53 to come down if you miss on your first two Engineers it's very tough to recover up so we'll help you do that we will help you through the reputation we have recruit people that may not necessarily join you in your dream because even though you're the best salesperson you're a great founder you really don't have very much and so they find some comfort in the fact folks like us are as are around it doesn't mean we didn't do

18:22 any of the important work they do the important work the last thing I'd say is break away from conventional thinking there's a lot of people here there's a lot of tourists in our business that have come and gone they made a few dollars they have a million dollar to invest here and so on maybe they can help you with a Rolodex but we have 45 years of institutional knowledge and I will tell you that most great companies

18:45 don't need Venture Capital to or most great Founders don't need us but if we can help you get away from making one mistake recruit the right person a year earlier give you another 10% of of growth through some of the decision maybe not break a leg in a pothole if we can help you do one of two of those three things that could make the difference between being a great company and a spectacular company the other

19:13 thing is we know that every great company has always had the crazy looking acquisition offer and knowing recognizing that when the business starts working we've seen it now over 250 times s they surprise you on the upside in many cases we help stiffen the backbone of the founder saying it looks like a great offer but is it going to look like a great offer two years from now so those conversation playing a bit of the of the deville's advocate and not

19:45 adding as I said earlier an aota or stress are very important the other thing you mentioned how can you recruit I'll say two other things it helps to recruit when you've got terrific numbers somebody else can sell you a dream yes we're going to be the Snapchat of of the Next Generation but we have something else we have rapidly growing revenues that you can point to Great gross margins that you can point to so those really help to recruit and then the

20:12 education of breaking down a market to explain hey it is not a$1 billion Market we're chasing it is a $15 billion Market therefore the opportunity to bring to to to build a large company getting that thought process in recruiting system is what makes the difference and then the last part is the skill set of the CEO so we hired a Vice President of Sales way you know we dated way above our grade we

20:43 got something we had no right to go get is employee number 40 an employee number 40 the first board member I put in front of Tracy was the president was the former president of Salesforce I will tell you when I made the intro I would not have forecasted the Trac in a one-on-one meeting would have been able to land him as a board member I I got a call from George Who right after the meeting super pumped up I want to join

21:07 this company I I almost looked at the phone oh terrific then the former president of AAS Carol Barts she's a hitter guess who recruited Carol Barts I may have said Carol Barts but it was Tracy and the team so it's that ability to tell the story to recruit to share the dream to use the we pronoun that great Founders do fantastic all right Tracy you I think spent five years in the construction business before that you were in school and you went to a CEO

21:39 how did you do that what is what skills did you acquire along the way like what gave you first of all the the the resolve to actually make that huge leap forward and take that massive risk and tell me about being a CEO so I'm trained as an engineer and I think as a Founder there's just so many problems to solve actually our skill sets translated nicely into being the founder of plard five co-founders were were all

22:05 Engineers two construction engineers and two three software developers and so we sort of look at problems and our challenges and we just slice them up into smaller things that we can tackle and there's this funny side effect that happens if you have any success at all as a startup especially as a first-time CEO it's that I am constantly in the biggest job I've ever done before and so surrounding myself with people who can Shore up in every

22:35 way I'm weak on was key to my ability to being able to do the job having four other co-founders to help take the load now we have I mean our executive team is quite awesome they're I'd go to war with them any day and a lot of the ways running a company feels like we are going to war and so making sure I'm surrounding myself with people that I can learn from people that can lead and

23:02 they're sort of my medium to to lead the company through yeah I think we are the average of everyone we surround ourselves with and then there's also this this need to understand that if I don't grow I I won't be plan GD CEO a year from now and so I have to believe in myself and I have to make the effort however painful it is to grow as an executive to grow as a CEO to grow

23:32 professionally personally to dive into areas that I don't understand at all and try to become an expert at it and so there's this this need for Change and growth and it starts with acknowledgement I mean I think I would have been a an okay or decent CEO for six to eight months ago and so just constantly working at that and I think it's the will and whatever it is we're trying to grow on it's like a

24:00 muscle I mean it's like it's like running you run enough you can run 10 miles you do enough push-ups and however shaky and painful it is you're going to be able to do that 15 push-ups a few months from now yeah what does a typical day look like for you where you spend your time what do you think about I think about PL grid constantly so I like getting up early CU our clients are up early so I'm up by 6:00 I like to

24:24 look at my emails drink coffee at 7:00 7 to 8 to 9 it's it's nice to crush those emails just because I can actually think and then it's it's a series of meetings I spend a lot of time with the executive team I spent a lot of time with the projects that are you know our priorities for the month for the quarter and then I probably spend about 20% of my time right now which I'm trying to

24:49 cut down on just visiting our remote team and being with them meeting with clients meeting with customers understanding the market and then just support in supporting our remote team yeah how do you manage work life balance I know it's always a a brutal thing for a young company and CEO and I suck at it yeah I meditate a lot now and that helps yeah okay tell me about the culture was it a lot of thought went

25:19 in there did it sort of just naturally and organically materialized talk about your culture and how that would how that developed I would love to hear your opinion on our culture so I think out of all things we've built at plangrid over the last five six years I am most I'm actually most proud of the culture that we've built we're sort of this team of incredibly hardworking people we like to nerd out on whatever we like to nerd out with and it

25:44 might all be different but we like building things and we especially like building tools for some of the hardest working builders in the world we care deeply about fairness in the world respect is our number one core value and we actually live it it's a good culture it's it's a good happy place I would say but I would like to hear your perspective because you see companies yeah I'd say look it's a healthy culture just for the for

26:16 completeness sake when we came across plangrid it was a happy culture it was a it was I'd say it was a happening more than a company 40 people all report according to the CEO you know to the founders of to the founders and which is cool up to a point but if you're going to grow the company and I don't want to get into conventional thinking but you need a little bit of structure you have too

26:41 much structure you suffocate these incredible fragile environments early on and so shift one we needed to while not breaking the goodness of the company Tracy not we we didn't do anything Tracy had to inject some level of accountability and some people just don't like that and most of the people can make an adjustment some people like it when it's you know hey I'll do whatever I want and so on so that was shift one shift two we we missed in

27:15 marketing on VP marketing twice but we didn't miss in any of the other Executives our MVP of engineering is out of Google to talk about recruiting but he came in it took us a year and a half to find the vpm engineering and he came into an engineering organization that was loose and they were starving for leadership so but they had to change in order to be more productive but they knew it and they were welcoming it it was one of these

27:45 things oh no the Google person's coming if they're going to change so I think the culture has shifted I like respect I think that should be way up there my number one thing is performance because if you don't have that you don't have a company and then everything underneath goes away but I like respect right up there but you always want to take the goodness and you always want to change and evolve I think that the the building of a company is the

28:11 constant evolution of that company and the and the constant growth of people and most people will continue to grow once in a while you lose some because they don't want to they're incapable in and then you hire some more people that can do that so it's a dynamic entity that changes through time and it must change through time because every day is different yeah I will add that on a very practical and tactical level having recruiters that just filter

28:38 out like the people who wouldn't have been a cultural fit has been key for us in our ability to maintain our culture and you're right as more people come in the culture's dynamic but I would say that whatever was important to us 5 years ago is still important us to to us today and our recruiters have done an amazing job at making sure that by the time our managers meets these candidates they're just of they're just a cultural

29:04 fit yeah awesome write your values in pen and your strategies and your tactics in pencil all right so write your values in pen and your strategy and tactics in pencil values don't change I get a yeah so we'd all like to thank were perfect some hires maybe aren't the right fit but so first first question is talk a little about when maybe an

29:35 executive you have to have a difficult conversation with them maybe the performance isn't there or there's something else that's always really hard one of the hardest skills as a leader how do you go about doing that yeah I mean we're always told to you know fire Fast Fire the wrong people fast but we never want to be in a position where someone's surprised that they're getting fired and so setting the right expectations is key I've certainly made this mistake many

30:02 many times before I learned it just having a clear understanding and agreement on what we're trying to accomplish together and actually it's so funny because it's the same thing in construction I worked for a general contractor and so you sort of always want to make sure that your subcontractors are agreeing to what you want them to do and you you have that commitment and you know hopefully you've got a good record of where all this stuff is because our memories are

30:23 incredibly selective and fragile and just checking in and asking a lot of questions yeah and Doug same question you maybe a little bit broader level but you're dealing with folks that are a CEO for the first time and not a lot of real world experience and there's egos at play there's a lot of psychology at play where's that balance when the the company's not performing the delicate conversation how do you sort of guide that and have those types of

30:55 conversations that don't derail or demoralize or end up having a negative impact how do you do that well there is there are many reasons why a company may not work take take the notion of you threw a party and nobody showed up meaning you built a product and there are no customers and my always take on that who's going to get us out of that pickle am I going to get you out of that pickle if I were that smart or

31:23 that capable I would have been a founder and so to me that's when you double down on Founders they're the one they're the only hope you have there are their execution challenges there's always lack of experience with Founders but that's where we come in to help recruit Executives to to help surround founders with operating people that have built businesses so you can go have dinner you can go have lunch I I I can tell you I'm

31:49 probably not the first call you make on an operating issue even though I've known as a as having operating noow you probably call George or someone like that which is by me it just call somebody and then you have the extreme case the extreme case where it gets really tough is where five vice presidents come to our office and say can't work for this person it's either he goes or she goes or we all go those

32:12 are the tricky situations and you hope that those are the rare cases look it's happened to me I've been in business for 1988 you know it's only happened twice in that case it's a very unpleasant choice because you know the founder is the soul you know you're not going to recover from that you basically are not and so you do everything you can to take this most talented people in a building and make sure you put them in a

32:38 position to succeed and that's the best way and that is try to nip these things in the butt pay attention don't be an absentee board member you know don't be a pontificating let let let me give you the look of a pontificating board member they have this look have you thought of you know they don't know anything about anything and so it is just get involved that's the questions and help to recruit the right people and right now if you look at a

33:03 management team the VP of engineering from Google terrific the VP marketing wonderful the CFO has taking a company public the VP sales wonderful Tracy has an easy job just kidding look at the look I got shows how tough she is she give me the look the cold look now follow up to that so now an average exit is 9 to 11 years that's a decade how much weight do you put on the

33:34 idea versus the founders knowing you're going to spend a decade with these people and and what attributes do you look at and sort of what advice would you give this group in terms of the the personal side of things look I I remember back 5 10 years ago before many of you were here there was debate is it better to have a great Market or a great founder well let me tell you great Founders find their way to Great markets

33:59 the two are interrelated they're absolutely interrelated if you have a great Market you don't have a great founder you don't have anything and so to us it's a package deal it's a package deal with a real understanding of what the market potential and the and the willingness to dare to dream with the founder to say how how big can this thing really get I can tell you I mean take many cases take Airbnb imagine they come to you the

34:27 first time now it sounds commonplace will you rent a room in your house you would not think two-sided Global Monopoly you would those words wouldn't come from rent to room in your house to two-sided Global Monopoly but that's where you know you have a little bit of vision a little gets done the vision gets brought and it's the same thing with PL with plangrid we have product one that got us tow in the market we have a long way to go there but now we

34:52 see a Clear Vision how this can be a beach head for product two and three for you know if you will world domination so you have a terrific big company it's the same yeah all right Tracy we all know this no plan ever works the way you draw it up welcome to the wonderful world of startups and Entrepreneurship so tell me tell us a little bit about some of the things you either miscalculated or had wrong and what you

35:17 what you learned through that a two-day conference so the the biggest mistake oh my gosh we tried to be so clever you sort of hit on it early when everyone sort of reported to Founders so we grew ourselves from five co-founders to something like 30 people and we had this flat management structure this was by by Design because we wanted to be so clever and we said crazy things like we're never going to hire NBAs R why would we ever no sales

35:46 people they're bad for the business we're never going to hire sales bades bad vibes sales like we're not going to be the Red Bull drinking gong hitting you know kind of culture oh and by the way we're never going to work with VC we and I think this is just from a lot of us I mean most of us grew up in the Bay area and we were like in high school or in college through Y2K so we

36:08 had this like distorted view of Silicon Valley and Venture capitalis which was we thought all of them were evil we've since found that they're not all evil and we've partnered with actually a great one but we just wanted to be so clever about the organizational structur we had this flat management structure and we would boast that we're running PL grd like Star Trek you're either in operations or you're in engineering if you're in engineering you code it all

36:34 day if you're in operations you did everything else which meant sales support qaqc facilities just everything that wasn't coding and that sort of works at 10 people because you have to make yourselves into like five people a piece to make make the startup work and then things just start breaking down fast when you get to 20 people cuz communication starts getting a lot more challenging suddenly you're in a bigger office and you're not just yelling at

37:01 each other and suddenly you know people don't really know what what they're doing and I remember one of our employees I think she was like employee number 20s something and she's actually our director of Prof Professional Services now she said to me what is my career path here and I remember thinking it's like we have so much work to do here like why do you care about your career path but this is what people care about and this is your responsibility as

37:24 a business as a company to take care of your team members and so we obviously that was when you got the call from us because we clearly needed help on building a company we were managing our business off of this massive Google doc spreadsheet where we managed all our finances and this is like a three-year-old spreadsheet where we were managing multi-million dollars and we'd sort of like look at the final number and then look at what

37:49 we had in the bank account and was like yeah it's close enough I think the math is right and we needed to go on to netsuite at some point but we didn't really even know what that meant and so the Lessons Learned here is be creative about the problem that you're solving be creative about how you're solving the problems for your users don't be creative about the business stuff there's there is degrees at Stanford for this kind of stuff there's a reason

38:18 there's a finance team there's a reason why you need a sales operations team and you guys really helped us build all of that structure over the last few years and it was painful but I want to add something to that and that is while you don't want to bug conventional wisdom 100% I I will tell you that we learned a ton from Founders on how to do things better we learned a lot about recruiting from Google and so

38:43 you can always evolve and improve these processes the point is I'll make two points one don't just don't just let them all go but feel free to improve on them with with your experience with your insights because you may find that you may do something better than the rest of the world does point one and second point I'd say choose your first partner extremely carefully and it's not the first person that approaches you with a check choose that partner because

39:12 that can make the difference between you know raise as much Capital as you can and after the series a you find out you only own as a Founder you and the employees only own 32% Because by the time you do all these seeds and they have Pro right to invest in their next round it seems like free money at first so you got to be very very clever very very selfish with the equity invest in Engineers invest in people that can

39:38 really help you but choose your partners early on extremely carefully did you know I was terrified of you which is why I called everyone Under the Sun just like which is really strange like reference checking someone like Doug Leone and what did you hear surprisingly only good things thank you no let me tell you because you have to be authentic there's a whole bunch of investors here will say I'm founder friendly and that's how if you will they

40:09 bait and I'm very conscious of the word bait a young founder who looking for Comfort I'm founder friendly I'll do whatever you want to do well let me tell you I don't think you want someone who's founder friendly I think you want someone who's founder focused who's super focused and helping you to succeed later through life you'll become friends and you can can go and have beers together but early on you use the word War it's you against the world you want

40:33 to find someone who who's on your side who has your back and was going to help you in that's what you really want skip all this founder friendly stuff that's in the market it's baloney and will and it will not help you good point all right I don't know if you have a specific example or maybe more philosophical so one of the most important things that all startups go through both decision making and pivots so when do you know when it's time for a

41:00 pivot versus like you're almost there some of the key decisions that you've made and I'm GNA say the same question for you Doug too at a broader L but U and that's a tough thing right am I I'm not succeeding but if I keep stay down this path and keep going am I am eventually going to get there I just have to keep working at it or man I'm like I I'm probably on the wrong path

41:22 there's time for me to change my decision or or make some type of either large scale or small scale pi I've had the opportunity to meet a lot of entrepreneurs over the years through Sequoia through the YC Network they're just random people in our space but I'd say that most most people don't try hard enough or spend enough time on their problem like they give up too fast so and they're good problems they've identified and solved I'll I'll talk

41:49 about there's this moment in planger in early early actually like late 2011 when we're about to launch the product iPads were sort of this new thing in the market Steve Jobs announced like summer of 2010 and certainly in the Enterprise and in the construction industry you know wasn't something that had been adopted yet and at the time people were making fun of even the word iPad I mean there's like photos on the internet with people talking to the iPad like a giant

42:15 iPhone totally making fun of it and so we would we would show potential clients PL grid and everyone would look at it and say oh that's really great I would love that but we can't really invest in you know these mobile devices it just we're not going to cuz no one else is and so there was this moment where it was like well is is the construction industry going to ever use tablets and so we sort of knew that they

42:38 were the perfect devices it's computing power that we can take out to the field for the first time ever and the co-founders looked at each other and we looked at our clients and said well if you had the device would you use PL grid and our clients were like yeah we would and so we we actually went out and Max our credit credit cards bought a ton of iPads and at the time Apple had limits on how many devices you

43:02 can buy cuz they were only manufacturing so much so we went in we'd buy like two or three at a time and then we' go from store to store and swipe our credit cards until we had something like 20 yeah and I remember that night when we went back to our our Hacker House in Sunnyvale it was everything we had and they were so valuable to us and we were going to go deliver it to the job

43:25 sites the next day and I had convinced to my co-founders that we were totally going to get robbed that night and so then we started shoving them into the kitchen cabinets and I remember Ryan had put one like above the refrigerator and I was like what if what if it's a tall Thief that comes in they're going to be totally able to see it and so we didn't get robbed that night after all but you know that would have been a

43:46 moment where it would have been easy for us to just say well this is not going to work and sort of give up yeah and we kept going and it it worked out for us awesome Doug same question you too right that's always a difficult question Airbnb had a couple spectacular pivots but when do you know when to Pivot and when do you know like you're almost there you need just more Resolve well one of them is when the

44:07 customer is spoken nobody's interested that's a clear signal that you're going down the wrong path and for those of you wanting to start companies I will give you a hint there's unlimited type of demand for a product you have not built so the simple question if I build it will you buy it that is the wrong question cuz people always buy a product that doesn't exist you have to understand their second order issues in their business why they might why they

44:34 may not so just take that as a lesson but first of all is when the customer speaks and second when you are trading the short term for the long term that is time for you to reconsider your strategy now clearly you've got to survive you have to work for tomorrow think of these think when she needed iPad she she need to it through the next day the next month assuming you have some resources you can last the only true north in

45:00 running a business is what's the best thing for the business over the longterm and so if you find yourself making suboptimal short-term decisions that you are going to pay for the longterm it's time for you to Pivot a little bit maybe not 180 maybe not 90 or 180 but at least 1015 but everything else you want to continue to pound and press and press because very few companies have I can't think of any that have had clear sailing

45:27 my partner Mike Moritz two or three years into the Google investment came to Sequoia and said we've never paid so much for so little it shows you how fortunes of a company can change and so it is the founder it is you that are going to zigzag based on new data point marketing condition your learnings but when the customer speaks and there's nothing there then then you want to Pivot it fast yeah

45:57 so Tracy talk a little bit about just at a from a methodology standpoint how you approach product requirement side of the business which is absolutely critical and the importance of uxui and how that's managed my guess is you were pretty actively involved in that part of the business early on probably still are yeah we have a design and product team now they're sort of the CEOs of all the products we build but you can imagine something like UI is incredibly

46:24 important for our industry our Builders are the most impatient people in the world if they have to wait for anything on plard to load or if they have to press a couple times and not figure it out that's a last time they're using our software so we I mean early days I think is probably more applicable we used to do something called the mom tests we would develop new features and we'd shove it in front of our mom and

46:45 dad's faces and just like can you use this and if they hit the buttons a couple times it's just like I don't get it it's like okay this is not going to work yeah but obviously we have a team that does that now they take it out to our beta users and they test it out before we launch it out publicly so it's just just getting feedback the faster we can get product out to market the faster we can get it in hands

47:07 of the users see real usage and what's happening or what's not being used and then we iterate from there y Steve Jobs talked about this quite a bit in his authorized autobiography and one of the things that I really resonated with me but a lot of the times the bigger decision is what not to do so especially in a product management side I'm sure there's like massive features we need this we need all these right now

47:30 how do you sort of reconcile that and how do you sort of approach how to prioritize an unending array of features and we need this and we need that especially at at a company of your side that's a really critical thing to focus on what not to do it's complicated yeah it's it's really hard and this is why there's a team around this we sort of like to think that if we built out this feature how much time would we

47:53 save a superintendent how much time really would we save a for in and would the whole industry would our most of our user base benefit from it or is it just a specific profile the project managers would benefit from it and so it's all about I mean what we're trying to do is about increasing productivity in the field and so having a clear mission statement is is key here because it helps us make the right decisions if

48:15 we're all driving at the same thing then we might actually be able to move the needle there yep okay cool all right Doug look into your crystal ball lots of folks either in an in an entrepreneurial endeavor thinking about an entrepreneurial Endeavor where the good places to focus and what advice would you give an audience member what advice would I give don't listen to anybody who tells you no

48:47 stop talking and do something don't tell too many people what you're planning to do don't join the bar circuit and share your secrecy is an incredible thing in your early days because keep in mind your advantages stealth and speed you don't have any other re and your brain and so keep your mouth shut say less and just go for it those would

49:18 be my advice all right last question for both of you Tracy you first what would if you could go back in time what would you tell yourself at 19 years old what would you tell your 19-year old self so I wouldn't want to tell myself anything that would alter like my life today cuz I'm incredibly lucky to do what I get to do and it's actually a spectacular life so I wouldn't want to change that but I'm 32 now and when I

49:45 think back at my 20s I can actually remember it very clearly it feels like it just went by like this which is incredibly scary and so it went by so she looks at me I have to say I almost hesitated ask that question like I wonder if she's even 19 but you go back I I think that because it went by so quickly I wish that I was more present I

50:17 think the most meaningful moments in my 20s were probably the Deep connections that I built with my colleagues and my friends and my family and and just just being more more present in the moment because everything else I mean so much of what we do is just planning for the future and solving problems and so we live in our head so much but that just really added so little to the quality of my life in the end yeah very insightful

50:42 all right so you go back 10 years and talk to your 19-year-old self what would you say yeah at 19 I was thinking that's 1857 I'll just keep it brief I would tell him shut up that's what I would tell myself shut up up and think more think more if there's a wall don't assume the or the door don't assume the only way past the door is busting that door through it maybe there's a clever way you can go around it and I wasn't

51:10 that clever back then awesome that's fantastic Tracy thank you so much this was an incredibly insightful talk and Doug thank you so much likewise it was it was a lot of funes for Q&A I'll let you guys pick who who you like I want ask what are you reading right now wonderful are youning to write a book no I I I don't have the gift that Mike Morris does I'm reading a book called homod deos right now me too Doug oh see

51:42 great homod deas I don't ask me who the writers are I never remember yes you do so many things you you you Mentor you you you do so many things to save tax or you don't want others to work to save tax no you don't want others to work it's look it's a we we thought in 2005 we were going to head towards a globalized world and we

52:14 and we decided to go into those geographies and now we have 300 companies in China 150 India and I will tell you by 2010 my partners were look at me and say you're crazy and I and I told them you can take me out you can I'll remove myself it was a mistake and hang it around my neck and soqu I can go back to being a West Coast investor by 11 or 12 those questions were out and

52:38 right now every company we see has Global ambition very early on so that was a it was a courageous bet we made maybe a silly bet but we called it right somebody back there hi first of all I just want to say thank you it was a fantastic talk my question pertains the use of the first H how do you draw someone to a company for that very first engineer when all you have is your founding ability a little

53:08 bit of money behind you and not much culture CU there may be only three or four people at the company how do you convince them to come on board I would say probably the first first 10 employees were people we had worked with before and so just going back to the people who had worked incredibly hard with us being able recruit them to the team there's another way sell your ass off and I'm not kidding just show them

53:34 the vision and pound pound Pound sell them be relentless don't take no for an answer and that's true for employee number 300 as well just sell sell sell show them the vision bring them in a tent get them pumped up about changing the the world and a great line I have I tell people yes you can work at Google it's terrific to work at Google but there's nothing you can do that's going to change of price of that stock by

53:59 116th and if that's what you want that's great if you want to work with someone that has a chance of changing the world with what you do can actually make a change then come on board so it's it's it's that reality it's not a sales line by the way it's reality and some people will say no and they'll self- select and those are the ones you don't want I also think it's important to be generous with

54:22 Equity early on I mean just look at them it's like are they going to add 1% more to the company than they probably deserve that anyone else yes talked about in your journey as a Founder CEO that CL personal growth professional growth you share some unconscious confidence that you came across about your own capacity that you found were really good at to help you navigate through all these changes and as you as you GRE the

54:52 company and GRE yourself I think over the years my pain tolerance has just gotten higher and higher it I mean so much of of running a startup it's not due to me by the way to make sure sometimes so it sure feels like we're getting punched in the face over and over again and then at some point it just like you're just standing up and you're still taking these hits and so the ability to manage our

55:18 emotions I think that's probably the most challenging part is that there's bad stuff happening all the time on the personal side on the company side and our ability to just like take it and then wake up the next morning start a new day and just March forward without letting the past hinder us is really key to our ability to Staying Alive as a company yep we're an Austrian startup GRE construction so so maybe it could beit late and like talk would love to

55:48 talk to you yes I like knowing everyone in this space yep back here how does seoa think about defensibility in hardware and whether exists or doesn't or what way it does it's always tough when you've got atoms for defensibility as you know but what defensibility means it's not just IP it could be first to Market it could be a 90day Advantage it could be known it could be the fact that your company is known as the company

56:17 that does something it's quality of execution it's getting it's what I call pixel Beauty meaning you you know think of how beautiful the the Apple products are now they have software too but that's beautiful hardware and it's amazing no one has really replicated that so it's possible and let me tell you what it's not it's probably unless you're in healthc care and and you're in deep Tech it's not patents it's wonderful execution of a beautiful

56:49 product and getting there early and building and I don't want to use the word brand I'm trying to stay away from that word it's a dirty word in in my mind because it means spending a lot of marketing dollars is just getting it in in in in the knowledge base of your customers that if you're serious about buying a product this is the product you want to get so it's possible and Doug's absolutely right I'm I know elon's an enigma executive at

57:14 Tesla and living proof right there so yes have a question when did you realize you needed a VC and all the money you out so far was from both dropping or do you have any other kind of Investments yeah so we raised a small seed round I think May of 2012 after white combinator demo day we actually never spent that that was like we wanted that in the bank and then we it's nice when you create real value for your

57:43 customers because they're willing to pay you real money for it so we went that way for up until May of 2014 so quite a long time without talking to any investors again things were just clearly not working and it was clear that there was all these CopyCats in the market and we needed to grow a field team we needed to grow a sales team and we didn't know how to do that and so we went to the folks that knew how to and

58:08 convinced them that we were worthy of a company for their investment and keep in mind they do all the it's really amazing they do all the work all we do is plug in a little piece here and there but they're really the horses that run and just the ability just an introduction the the ability to recruit one executive really helped the company for the next two years and we didn't have to do very much after that but the right

58:32 executive not someone that a run of a$2 billion in sales that person is an administrator he's no longer sold to find the the right level of experience for this kind of company bucks conventional wisdom a little bit maybe he joins because of a little bit of Sequoia brand certainly because of Tracy just doing that and then you step back and wonderful things happen and we don't have to do very much they do all the work last question

59:00 yep so where have you seen this is questions for Doug where have you seen co-founders that come out of undergraduate succeed and where have you seen them not and what do you think are the underlying reasons why you see people that are friends that go to school school together not time I look I think Evan Spiegel came out of Stamford he was raw I think just thinking the Airbnb founder came from Ry from undergrad I don't strip stripe

59:33 Founders I don't think there is a I don't think there is a a certain path one way or the other it is the founders that that that are engaged in the world and just look the the there are some kids that are a terrific student just reading and studying the books and that's what they do and they want to get the PhD and maybe they'll solve the next great algorithms they can be great Founders but the founders that are

60:00 undergrad are founders who have managed to network yes they go to university but they also build a network of people they ask a lot of questions they know what's going on they they they know about business more than I've ever known about business when I wasn't on the grad they know what's going on in the world and so on that would be the issue more more than more a personality trait so what succeeds and what doesn't who are the

60:25 ones that are aware of the world around them and have built a passion in one little area let's give a big round of applause