A Tale Of Two Cities: San Francisco and Tel Aviv

It was the best of times, it was the worst of times, it was the age of bubble, it was the age of burst, it was the epoch of belief, it was the epoch of incredulity, it was the season of growth, it was the season of stagnation, it was the 1999 of hope, it was the 2001 of despair, we had high salaries before us, we had low salaries before us, we were all going direct to IPO, we were all going direct the other way – in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.

Charles Dickens wrote his known novel about London and Paris during the French revolution a whole 150 years ago. I remember reading the book as a kid, which was required for a book report. It was a work of art. One of the things I took away from it, was how London and Paris were intertwined during that time. How the French Revolution impacted London, and vice versa.

A few months ago, United Airlines announced a direct flight between SFO and TLV. That announcement is a powerful indicator of how the two cities are closely tied. Thanks to this direct flight, two tech hubs became increasingly closer. As someone who flies to Israel every 6 weeks on average, I can tell you this is a fantastic improvement over the connection-in-Europe flights I had taken previously .

Tel Aviv and the Bay Area/Silicon Valley, have long benefited from a symbiotic relationship. One gave us Intel’s MMX and Sandy Bridge. The other gave us Intel. One gave us Facebook. The other gave us Internet.org. One gave us Google Search. The other gave us the Wikipedia info that appears on the right next to the search results. Each location builds on the other’s innovation to create its own innovation, in an endless feedback loop.

There are many startups founded every year in Tel Aviv. There are many more founded in San Francisco. In each city, though, the rules of the game are different. The culture, the management style, the amounts of funding, the method for achieving goals and many other aspects. Startups that are founded in one of the two cities and keep a single office, though, can relatively easily operate within these aspects.

There is, however, a subset of these two groups of startups that have two offices: One in Tel Aviv and one in San Francisco. We, indeni, are such a startup. We’re not a rare breed, as I know dozens of other startups currently operating in this way, including Alooma, Big Panda, CB4,SentinelOne, and hundreds of startups before us. In all cases, an R&D center is set up in Tel Aviv (and usually the startup is founded there), and a sales, marketing, business development and support office is set up in San Francisco. Usually, you have one of the founders relocate from Tel Aviv to San Francisco. Many times it is the CEO. In our case, it was me.

When you do this for the first time, you actually don’t realize what your challenges are going to be until you run into them:

  • “Two offices” means maintaining two separate operations structures – from plumbing and electricity to food, offsites and general office vibe.
  • It means your R&D engineers don’t spend time with your sales reps every day.
  • It means you, the CEO, or founder, are never with your entire team in one place.
  • It means a small company is split into two cultures. US vs Israel. English vs Hebrew. Sales and Marketing vs R&D.

One of my top challenges today is to figure out how to reduce the possible negative impact of this setup, while enhancing the positive impact. Tel Aviv has some of the world’s best engineers – innovative, creative and capable of reaching goals quickly. San Francisco has some of the world’s best sales and marketing talent, especially in tech.

I find myself thinking about this daily. Here are solutions we’ve implemented so far, would love to hear others’ suggestions as well:

  • If the CEO relocates to San Francisco (as I have), make sure you have someone extremely competent running the Tel Aviv office. In indeni’s case, it is our VP of R&D, Yarin Benado. If the CEO stays in Tel Aviv, send your strongest manager to San Francisco.
  • Managers on both sides of the ocean should continually foster communications between individuals – via email as well as video conferences.
  • Once a month, have an all-hands cross-ocean company meeting. In our case, it is the first Tuesday of each month, at 8am Pacific / 6pm Israel.
  • Set up a company-wide email (in our case, all@indeni.com) and encourage people to send messages to that forum that would help rally the troops around one flag. We send a welcome email for every new employee, birthday wishes, big sales deals closed, weekly R&D/sales/support updates, exciting updates and more.
  • The person who relocates to San Francisco (me, in our case), must visit the Tel Aviv office regularly. Ideally, the reverse should be true as well.

So, how would/do you deal with a startup spread over two cities?

Yoni is the CEO & Founder of indeni. This post originally appeared on indeni’s blog. Users of Check Point firewalls, Cisco routers, switches and firewalls, F5 load balancers and Palo Alto Networks firewalls are welcome to read about indeni’s approach to IT operations.

 

Are You “Using It” Wisely?

“Use it or lose it” – that practice of budgets expiring at the end of the year. A few years ago, Jeffrey Liebman and Neale Mahoney, wrote a paper on expiring budgets. In it they analyze the US federal government’s spending on IT, specifically in the last week of the year, and the quality of that spending. They rely on data provided by the federal government, which does a fairly good job of sharing information pertaining to budgets, spending and large IT projects. This level of transparency is quite an achievement.

Their conclusion? “Use it or lose it” results in severe waste, possibly up to 9% of the entire year’s budget thrown away on useless projects. Somewhat depressing – especially for taxpayers.

From the point of view of a vendor, there is a lot of potential in the “use it or lose it” concept. The vendor’s sales people can behave like cowboys in the wild west and try to rob trains carrying gold across the plains (left over budgets). It is a means by which a sales rep can make, or exceed, their sales quota and take home a fat check. Or at least, that’s what I’ve been told when I just started indeni.

In reality, the situation is radically different. To begin with, if you analyze the financial data from our technological partners (those our product integrates with, and hence relies on), we’ve noticed that they don’t all have a massive jump in sales in December. Some of them do, but only the ones where December is indeed their fourth quarter (such as Check Point). Others, such as F5 (Q4 ends in September) and Palo Alto Networks (Q4 ends in July), don’t have a massive jump in December compared to the following quarter.

In addition, more and more vendors are moving to focus on recurring revenue. In indeni’s case, it is an annual subscription (so everything we make is recurring revenue). In the infrastructure providers’ case, it is the services they sell on top of the hardware. So there is a lot of focus around selling only to customers who really need the product and who we foresee will keep using the product in the future. For us, the pain of a customer churning (stopping to use our product) is greater than the joy of a customer joining (a bit like prospect theory).

To test this, I’ve taken a look at customers who joined our service in December (any December). Interestingly, over 80% of the customers who bought in December have expanded their use of indeni within a year of their first purchase. That is, they’ve decided to add more devices under coverage by indeni’s software (which to us means they found the product valuable). This is very much in line with customers buying in every other month of the year. The takeaway: we do not see a dip in “project quality”, as Liebman and Mahoney did, in purchases made at the end of the year.

So the question then, is, are their findings valid? If they are, how is it possible that products like indeni (and by no means, only indeni) stand out and challenge their conclusion?

My answer: yes, their findings are valid. My longer answer though, is that they are bundling together very successful projects with unsuccessful ones. It is possible to choose to invest in better projects and increase the quality of investments made at the end of the year. It requires deep thought and answers to difficult questions, such as:

  • What do we actually need?
  • What are we buying now that we plan on really implementing next year?
  • What is a nice to have and maybe not really needed?
  • Are we buying it as a trial or are we selling it internally as something we plan on using in full production? (it is OK to buy something as a trial, it will be assessed differently)
  • Can we invest the money more successfully elsewhere?

I can tell you, from a vendor’s point of view, that I’d much rather someone not purchased our software than purchased it and labeled it as a low quality project. However, if you do see the investment in indeni as something worth your while, we are looking forward to hearing from you!

A Hold Is A Buy

At one of the Blitzscalling classes I’m taking, Reid Hoffman (founder of LinkedIn) said the phrase “A Hold Is A Buy” in relation to re-evaluating one’s decisions on an on-going basis. Thinking about that phrase – it’s quite genius. It is a good rule by which to manage many things in our personal and work lives. Googling it, though, provides just one result. Apparently, Reid came up with something people don’t often use yet.

Imagine you own a stock and it’s going up. You haven’t decided whether to sell it or not and so are still holding onto it. The next day, the stock crashes and you lost all of your investment. The fact that you have not made a decision to sell it means, implicitly, you’ve decided to buy it. You are responsible for losing your investment. Daunting, right?

Instead, what you should have done, is sold the stock and then reconsidered whether to buy it or not (which would be the ideal way if we didn’t have a gap between buy and sell prices as well as the existence of fees).

Applying This To Our Day To Day

Whatever you are doing today you need to sometimes reconsider whether or not you should keep doing it. As we all know, it may be drastically easier to keep things the way they are than it is to change them. Reid used the example of employees (“would you hire this person knowing what you know today for the role they are doing today?”) but let’s think of something completely different: how we run our day to day.

indeni’s customers are normally engineering and operations teams within large enterprises. The engineers are responsible for setting up the infrastructure, purchasing new products, etc., while the operations team are responsible for running the infrastructure. If something breaks, the operations team needs to fix it. If they need to, they can escalate the issue to engineering, who are the ones who originally set the infrastructure up. To conduct these processes, a plethora of tools are used.

Once in awhile, a break can become very severe and cause a shakeup of this model. The break is so severe, it results in ripple effects throughout the organization and the higher execs are pressing on their people to find a solution to ensure it doesn’t happen again. Suddenly, the current processes and tools in use get reviewed to see if they can be adapted to fix the problem, or if new tools are needed.

The reason this review is only done when a severe issue occurs is that teams today are simply underwater with all the responsibilities that they have. It is difficult to make time to do something like this. If it ain’t broke, why fix it, right?

But take it from the approach of “A Hold Is A Buy” and it suddenly looks very different. If you do what you do today, it means you have made the choice to do it the way you’re doing it. In other words, you are responsible for the current method by which you go about things. Even if you think you didn’t take an active choice, you’ve made an implicit choice. You “held” onto current methods and so you essentially “bought” into them. The same scrutiny you apply to using a new tool (as our potential customers do to indeni, for example), is the level of scrutiny you should apply to your existing processes and tools.

So What’s The Solution?

You should wake up every morning, and during your commute (or shower, in my case), “sell” an item from your day to day. A process, a tool or a strategic plan. Once you’ve sold it, reconsider if you’d like to buy it. Consider the price, the value and whether or not it makes sense. I started doing this recently and noticed it changed my perspective on things. All of a sudden, things seem a lot clearer.

Listening, Watching, Reading

“Discipline.”

When asked by a student of the Stanford Graduate School of Business (“the GSB”) “what meant most and why”, that was Sir Alex Ferguson’s answer. It was at the end of an hour-long chat between Sir Michael Moritz, chairman of Sequoia Capital, and Sir Alex Ferguson, until recently the man behind Manchester United’s success over nearly three decades. To elaborate, Sir Alex, added that discipline is what his parents gave him in his education and it has been critical in his life and success. He’s given the same discipline to his children.

Alex and Michael recently released a book called Leading, discussing Alex’s take on leadership. It is a fantastic book with many examples from the English football scene to support Alex’s observations. As I grew up in Israel, I am more familiar with English football than American football, so it is easy for me to relate to. I’m not a huge sports person, so many of the names are not familiar to me, but the rules of the game and the forces behind it are clear to me. I will be spending a few blog posts sharing some tidbits from the book and my thoughts. Sir Alex has roughly 40 years more experience than me in leadership, so keep that in mind when reading these posts.

Listening, Watching, Reading

“Listening, which costs nothing, is the most valuable things you can do.” (Sir Alex, in the book). I’m 32 and have probably heard this several dozen times. So it still amazes me how often I neglect to do it.

In the startup world, lack of listening is sometimes celebrated. For example, a couple of years ago, I was meeting a known investor in Israel in a country club just outside Tel Aviv. I came seeking for advice, and his money. Instead, I got a 30 minutes lecture why my idea was the a complete waste of time and why no one will ever buy it.

Naturally, I’m happy I didn’t listen in that occasion. However, looking back at the last two years, I can also list a very long set of mistakes that, had I listened to others, I would have avoided.

Listening, watching and reading shouldn’t be constrained to just advice, though. There are a lot of things you can learn by doing these three things; things that will help you be more successful. Back in the IDF (Israeli Defence Forces) I served directly under a Major for a while. A short, chubby, amazingly pleasant guy. He would drink five or six cups of Turkish coffee a day (which contains the most caffeine per amount of liquid of all coffees) and in every meeting we had I would also have one. It kept me quite awake, something I’m notoriously bad at.

Watching this Major taught me a lot about how to communicate with people. Many of his demeanors were very different to mine. People loved him, even when he told them they’ll need to do everything all over again, or when he was pulling the plug on a project of theirs. He was capable of communicating negative messages in a way the recipient was capable of receiving it. At that time, I was completely incapable of doing that. If I thought someone did terrible work, I told them flat out. Naturally, my social scores (where others rate you socially) were very low.

So, after watching this Major and listening closely to how he communicated, I have altered my ways. I still deliver messages in tough ways at times, but I usually try not to. I spend the extra effort to make sure the other side receives the message well. The exception to this is when I think that harsh delivery of the message will be beneficial to both the recipient and myself.

 

Still, as I’m reading Sir Alex’s and Sir Michael’s book, I can’t help but think about all the situations where I should have done a better job listening and watching. It is good to be reminded of this while reading, as it is a first step in becoming a better leader.

The Seven Deadly Sins of a Startup

Back in 1996, I was a young boy growing up in Jerusalem. I knew very little of the world outside my school studies (this is before Google). I had a VCR though, and when my brother came in one day with the video cassette of Se7en I was in awe. The movie was incredible, and I watched it again and again. Morgan Freeman and Brad Pitt gave an amazing performance. The story was interesting and the horrible twist at the end broke my spirit every time I watched it. And I watched it repeatedly, as it was one of only three movies I had at the time. The movie introduced me to a concept that doesn’t exist in Judaism and was introduced by the Catholic faith – the seven deadly sins.

Once in awhile, ever since 1996, I find myself thinking about the seven deadly sins (I will be using Wikipedia’s definitions below). How can we make sure we don’t commit those sins? Even if one is not Catholic, or even a complete atheist, I am of the opinion that these sins should still be avoided. In the life of a startup, it is easy to commit these sins, as I have learned. So, once in awhile, a refresher on what not to do, and what to focus on, is useful. So here is my take on the seven deadly sins as they apply to a startup.

Lust

An uncontrolled desire for sex, money, food, fame or power. As you become more successful as a startup, you always want more. There is always this bar you try to surpass. Once you do, you set the bar higher again. It can be seen as aspirational, which is a good thing. However, where does moving the bar up lead you? Will it make you build a better company, or will it lead to wrong doings? Will it result in happier customers, or are you trying to reach the level of power where you can force the market to do what you want?

Gluttony

Overindulgence and overconsumption of anything to the point of waste. It is normally very hard to blame most startups of overconsumption. However, recently, more and more discussions around high cash burn rates, the rate at which a company loses money, have emerged. Startups have successfully raised sums of money the market hasn’t seen since 2001. Some are employing these large sums in a manner that doesn’t necessarily align with what the shareholders, investors or customers want. They are wasting somebody else’s hard earned cash, and that’s a sin.

Greed

A very excessive or rapacious desire and pursuit of material possessions. Sometimes companies realize they are onto something. They’ve convinced the world that their creation is beneficial, and customers are knocking down their doors. At that point, it is easy to consider raising the prices, trying to extract every last dollar from the customer. After all, they’d pay for it as long as you keep it in the right range. Don’t forget, however, that you haven’t created a company in order to squeeze every last dime out of a given market. You’ve created a company in order to change that market and make the people inside of it more successful. While a company must ensure it creates value for its shareholders, I argue the value must be created for the market. Greed stands in the way of that, as it perceives the interaction with the market as a zero-sum game.

Sloth

Laziness. You can’t be lazy at a startup. It is hard work. Very hard. Not only the hours, but the amount of different things you need to do on strapped resources. You want to do payroll? Do it yourself. You need to fly to a customer to improve the relationship with them? Take the red eye if that’s your only option. You need to spend your weekend figuring out how to correctly position something? Buy a six pack and sit at your laptop until it’s done perfectly. Startups are hard work. Achieving what you want in life is hard work, whatever it may be. That’s life, wouldn’t be as much fun if it was easy.

Wrath

Inordinate and uncontrolled feelings of hatred and anger. Emotions rarely have a place in a startup, but surely hatred and anger have no room. It will not help you to hate anyone, or be angry at anyone. Whatever someone has done, they have mostly probably done so because it is in their best interests (or at least so they think). You cannot be angry at them for doing so, even if it contradicts your own needs. They do what they need to in order to survive. In order to feed their families, progress in their career or achieve their goals. Instead of being angry with someone, understand what they have done and why. Malice is rarely a driver and so you should consider how that person benefited from what they’ve done and how, in the future, they can benefit from helping you.

Envy

An insatiable desire. We all know what envy is and how to recognize it. Rarely though, does envy actually get you anywhere. It is easy to be envious of another person’s success – a large funding round, hiring a top executive, closing a big customer or even an exit. However, such envy gets you nowhere really. Healthy competition can help you get further, but pure envy does nothing but result in hatred and anger, as well as some of the other sins. So, next time you feel envious – chillax. Get a drink. Think of what you need to do to be more successful, irrespective of other’s’ success. Then do it.

Pride

Believing that one is essentially better than others; the original and most serious of the seven deadly sins: the source of the others. When someone seems overly proud, or even arrogant, we immediately dislike them. What makes that person feel they are better than us? Or when a company acts in a proud way, we like it far less. We see ourselves as the customers of that company, the reason for its existence. Without us, it is nothing. So what warrants its pride? It is very easy to act in a proud way – after all, look at how far you’ve come. You’ve achieved things no one thought were possible. So you are proud of them. However, act in a humble way. Humility, is actually an extremely important virtue. If you make the mistake of acting in a proud way, take a step back, apologize, and avoid in the future.

 

To conclude my thoughts: it is always important to remember why we do what we do. A team creates a company in order to change something in the world around them and make it better. But even outside of a startup – a person usually finds their meaning in life and attempts to fulfill that meaning. Along the way, it is easy to lose sight of what’s important. You see what happens to other startups, or people, and it may cause you to make mistakes. I have made some that I hope I will never make again. Let’s all remember the seven sins and avoid them.

Monitoring Sucks: My Takeaways From Frank Slootman’s Tape Sucks

Turkish Airlines seriously messed up this time. On a flight from Tel Aviv to Istanbul (my stop-over on the way to the Bay Area, where I live) one of the cockpit’s windows broke and left the pilots breathing 30,000ft air. This forced us to land in Anatalia. This isn’t the screw up though — as these things can happen. The way they handled it, was pure atrocity. So it is with that backdrop that I read Frank Slootman’s Tape Sucks: Inside Data Domain, A Silicon Valley Growth Story. A short and enjoyable book, I managed to finish it before we took off from Anatalia.

Across one hundred pages, Frank dispenses immensely useful advice on the process of building a startup. One of the main points there, is how to treat your customers. I’ve written about this recently here — how we should embed ourselves with our customers, as well as make sure we make their lives better — and believe this is true in all my heart. Turkish Airlines have treated 260 of their customers disgracefully in this occasion and as a result I will never fly with them again.

The goal of this post, though, is not to rant about an airline (Twitter seems to be a great place for doing that). But rather, collect a few snippets out of this fantastic book and add my two cents, in the most humble way I can. After all, Frank was the CEO of the super successful Data Domain, and is now the CEO of the even-more-successful ServiceNow. All I have to my credit is being the CEO & Founder of a far smaller company.

“Data Domain had the good sense to attack a product category that was not much short of loathed”

At indeni, we’ve decided to attack the monitoring product category in full force. It is the result of on-going conversations with would-be customers long before we wrote the first line of code. When we would ask them for their impressions of their existing monitoring tools, they were always lukewarm. They said the tools were nice, but fall short of what they need. The product category is cluttered with dozens of different tools that are hard to differentiate from one another. The pitches for those tools were always the same — avoid the next downtime — and it was hard to know which was better. Once you made the choice with a certain tool, you came to realize it could only really do 5% of what you needed it to and there wasn’t anyone else out there that could help you.

“Many technologies are conceived without a clear, precise notion of the intended use… if you haven’t [figured out the intended use] you are relying on luck.”

For us, it was clear early on what the intended use for indeni is — find complicated problems before they happen and give people specific instructions for how to fix them. I often see companies in Silicon Valley with some amazing technology, but not a very clear understanding of what anyone would do with it. I find it to be a highly risky proposition, considering customers buy value, not just technology.

“We always reverted to our True North, the customer”

Making the customer happy is the #1 goal at indeni. Without our customers we have no existence. We will only be successful if our customer base grows, our existing customers renew their annual subscription with us and that from year to year each customer expands their use of our product. This drives our product decisions and our resource allocation. I often find myself spending a lot of my thinking time on specific customer issues.

“Resellers start getting interested when their bread-and-butter customers begin asking about your product…”

That’s just one of many points Frank makes very well about resellers. If you choose to take a channel-based distribution model (which should never be the default) you need to make sure you keep a direct sales force. I’m very much against competing with your channel (be “100% channel”) but at the same time suggest you don’t rely on them to do the work for you. Find the customers and build the deals yourself, showing potential resellers they would be missing out greatly by not promoting your product themselves. Protect your top resellers, by using mechanisms such as deal registration, and penalize those resellers that ignore you or waste your time by taking business to their competitors and downgrading their margins. Many of indeni’s resellers have seen us implement these exact tactics, sometimes they got pissed off by them. We didn’t invent these tactics, but we’ve seen them work well and so adopted them. As a reseller, you stand to gain a lot more by working with us, and that’s important for our survival.

“The turning point comes when your sales activity is solidly paying for itself”

We always ask ourselves — how fast should we grow? How many people should we add, in what departments and when? It is very challenging — if you grow too fast you’ll burn out and die. If you grow too slowly, you will miss the market. Frank’s point about looking at the sales team and only growing when they are paying for themselves, plus partially paying for the rest of the company, is a good one. Our total sales spending is well below the amount of sales we book every month and hence we pass this “check”. We will be growing our investment in sales and keeping a close eye to ensure we don’t overgrow it. A difficult thing to get right.

“Big company thinking: check it at the door”

I have a long list of mistakes that I’ve made since founding indeni. One of them was not shedding enough of the big company mentality I absorbed in my days at Check Point. There are certain things I’ve done, processes I’ve put in place and people I’ve hired, that were incorrect for the stage we were in. They were so off, they are even ill-fitting for the stage we’re in today! If you start a company, or join a startup, from a large corporate, don’t forget this.

“Once it’s apparent you’ve made a mistake, own up to it”

This sentence opens chapter 10. I see chapters 10, 12 and 13 as related — they are very much around how the CEO behaves and what the rest of the team gets from this behavior. I used to be more mechanical — I would show less emotion (yes, there is a “less” to the amount of emotion I show today), not let people see my true personality & quirks and act like I represent a foreign government. This is one lesson it took me a long time to realize — you must be yourself. You must show your team what kind of person you are. The underlying assumption is that your personality traits are probably mostly positive as far as the company is concerned, otherwise you wouldn’t be in the role you are in. So show your team who you are and admit your weaknesses and mistakes when they happen. Embed that as part of the company culture and that will help build a healthier one.

“Data Domain’s sales organization sometimes acted like a single organism”

That’s why our entire sales team is in one open space. They listen to each other, learn from each other and feel free to ask questions and point out mistakes. One of the biggest difficulties at our stage is to get a repeatable sales model that works well in a consistent fashion. Much like ants keep perfecting their path to food through on-going trial and error and sharing of information, so should the sales team.

There are a lot more great nuggets in Frank’s book and I urge you to hop over to Amazon and order the book. Two hours of your time and I’m sure you’ll learn, reflect, relate and enjoy yourself.

Thank you Frank Slootman for sharing this.

Sequoia Supper 2015

Every year Sequoia Capital arranges a large dinner for its founders, close relationships and the Sequoia Capital team itself. It is a fantastic event where you can find yourself sitting across from Don Valentine (founder of Sequoia Capital), Ron Conoway (who got the Don Valentine jacket this year) and Doug Leone (the current head of Sequoia), listening to stories about the early years of tech.

It is also where you can have open conversions with other founders who share a similar adventure and now run public companies making hundreds of millions, sometimes billions, in revenues every year.

I often get asked by other founders what is the value of taking an investment from Sequoia Capital and what does it mean for your day to day. To me, the two core elements of SC’s value is in how hard they drive you to achieve and the kind of people they bring on as partners.

You see, at Sequoia Capital, making money is a top concern; as a startup you are constantly pushed to make more money. To me, who was raised by socialist parents in a semi socialist country, this has a negative ring to it (“the capitalist pig trying to become richer”). But over time, you slowly learn it is actually a very positive thing:

1. If you want “your baby” to really make an impact on the world it needs to last.
2. If you want to build a company that will last, it needs to make money.
3. A lasting company will generate jobs for many people and make their lives better.
4. Sequoia’s investors are endowment funds, health institutions and similar good-doers (Sequoia’s ethos). When you make Sequoia money, you create more scholarships, give people more free health care and make the world a truly better place.

The other element I mentioned are the partners themselves. I’m fortunate to work with Haim Sadger (take a few seconds to read his page on the SC website). In my experience, everything that is written on that page is true. In Haim I found someone I can trust to work with, someone who has the success of the company and its shareholders at the top of his mind.

And so, even though we personally chose Sequoia, and Sequoia chose us, we should always keep in mind the fact that no partnership is to be taken for granted. It requires on-going investment and work. The event last night was a fantastic one, and I thank Sequoia Capital, and specifically Stacey Gerber who did an amazing job, for inviting me.

Blitzscaling: my first college course

Yesterday, at age 32, I was in a college classroom for the first time in my life. I was genuinely excited. There is something awe-inspiring about a place where people learn their future professions, especially if that place is called Stanford.

Blitzscaling is a term coined by Reid Hoffman (co-founder of LinkedIn), John Lilly (former Mozilla exec, now investor), Allen Blue (also LinkedIn) and Chris Yeh. If you Google it right now, all you’ll see are announcements of this Stanford course and nothing more. It will be interesting to see the Google Trend for this term in two or three years from now. Just like the Google Trend for “unicorn startup” shows that the term has basically appeared out of nowhere very recently, the Blitzscaling term may be picked up by the entire market.

The Blitzscaling team is saying that Silicon Valley’s advantage over the rest of the world isn’t just in the number of startups that are created; startups are created everywhere. The real difference, they say, is in the ability of these startups to scale. The first phase in a startup’s life is the “easy” one (relatively) where a bunch of people sit down, write code and ship an early product.

If people are actually interested in what they do, then things become more serious. How do you get your product to more people? How do you develop it? Who do you partner with? What people do you need? etc. etc These are all questions that morph and get more complicated as the startup grows.

Today, at indeni, we’re at the phase where we are making millions of dollars from paying customers all over the world using our product. We’re growing rapidly and keep asking ourselves how we want to look like over the next few years. There are tons of questions – who do we focus on as partners (the device manufacturers and channel partners), who do we hire, how do we scale customer support and satisfy our customers, how do we scale our technology to support more device manufacturers, etc.

My hope is that in this course I will learn from those who have built the company we all use to communicate through. I will learn from them what challenges lay ahead, how to think about them and tips on how to tackle them. Remember, each startup has a different course, but there’s a lot of common knowledge that can be shared between companies to help them succeed. That’s what makes Silicon Valley so successful.

Embedding Yourself With Your Customer

Shardul Shah, a respected investor at Index Ventures, posted Learning to Say No and Four Other Secrets of a Successful Customer-Centric Startup just yesterday. If you haven’t read it yet, feel free to pause now and read it before you continue reading this post. It makes several points anyone building a product or a company should keep in mind.

I recently asked people if they would work for their customer. The feedback I got was interesting – a lot of people never thought about it. They set out to build a company because there is a problem they want to solve. They believe they have a better solution than others and will be successful at building it and selling it.

Often, though, they don’t really think about the customer. So, it was refreshing to see Adallom’s approach, as detailed in Shardul’s post.

You see, when I wake up, I am immediately reminded of our customers. My Internet provider (home and office!) is our customer; the chocolate I buy is made by our customer; I sleep at hotels run by our customer and I use the credit cards issued by our customers. The shoes that I wear are made by a customer and one of the main news sites I consume is run by a customer. And so, on a daily basis, I am reminded dozens of times of how our customers impact my own personal life.

So it begs you to think – if your customers impact your life so much, what is your impact on your customers’ lives? Have you ever given it much thought? Should you have more impact?

To Shardul’s points:

  • If you f*ck up, grow a pair and apologize. If you need to fly physically to the customer, do it. Not just to save the account from churning, but to really take responsibility for your actions and recognize their impact on others.
  • Focus is vital. You can’t service everybody and cover everything. Yes, your technology is amazing and can do a billion different things. But what are the top customer challenges you can solve with it and are they enough to get going?
  • The customer isn’t always right. You always need to put the customer first, but it is quite possible they are asking you to do something that will send you down a rabbit hole and kill your company. At that point, of course, everyone will lose. We learned this the hard way, and luckily stopped it before it became devastating.
  • Lighthouse customers will improve your game. Our Fortune 100 customers have caused us to improve our support services, build a more solid technology, generate technical documents up the wazoo and a lot of sleepless nights. However, we’re a better company for it and I thank them for doing this.

To summarize: put your customer first in a smart way and everyone will benefit. Remember, just like they are your customer, you are theirs.

Lesson from the Gold Rush

I spent last Saturday touring San Francisco in an open-top tourist bus. It was quite a bit of fun I must say. How often do you get to be a tourist close to home?

I learnt quite a bit about the history of San Francisco and the California Gold Rush. Apparently, less than 2% of the people who came looking for gold actually found any.

Interestingly, though, there were a few people that made quite a bit of money during the gold rush and they weren’t looking for gold! Levi Strauss and Sam Brannan, are two great examples. Both made a lot of money off providing supplies to the those looking to strike rich.

It’s a useful lesson in life. If you want to succeed, you may want to look for a very strong trend or market behavior and figure out how to attach yourself to it. You don’t need to be part of that market, even supporting or supplying that market can help you. This is true if you are thinking of your own career, or a company you want to start.

For example, consider the Internet of Things (IoT). So many different things are happening there, it’s crazy. It is very clear that IoT will be big, but it’s not clear which of the “things” will be big. Or which of the companies building the “things” will be big (other than Google-owned Nest, maybe).

However, it’s clear that IoT will present new challenges in big data, security and communication infrastructures. Therefore, if you want to benefit off IoT, you can focus on these three challenges and still be successful thanks to the aggressive growth of IoT. This way, you don’t need to bet on a specific “thing”, or product, but rather on a major trend that is clearly important and massive in size. Cisco is doing this.

So, take a few minutes to stop and think – are you currently doing something that is part of a major trend? One that can propel you to success? If not, are you sure you are doing the right thing?