 Good afternoon everyone. How are we? We're doing well. Still got energy. A little bit. Good, excellent. So I'm Ross Mason. I'm going to talk to you a bit about some of the lessons I learned building a company over the last 12 years. I actually exited a couple of years ago and since then I've been working on Venture but what I've learned by working with early stage founders is there's a lot of things that you learn on the journey that you forget and then you realize that's actually really important. So I tried to distill some of them in this talk this afternoon. All right, so a bit about me. First thing is I started life as an open-source developer and I built the first project, which is called Mule and for better for worse by the way when you name an open-source project it can stick with you for many many years. I thought Mule was kind of funny and then of course it became MuleSoft and I had to always justify why a serious company was named after a donkey. So that was always a bit tricky. But I started the open-source project and then 2006 it got lots of traction especially in banking and we raised some capital. Back then there was no seed rounds so you couldn't get there was no angels so you had to really go and raise money on some sort of market traction which today has become much easier I think to get started as a founder and then in 2008 a bit like what's happening right now we went through a financial crash and there was some really big learnings there just around how to communicate with your team how to deal with things like making redundancies for those who have staff that you have to reduce. I'll talk a bit about that and then in 2017 we went IPO of course that's one of the areas where many of you want to go right and it was a nice easy straight road to get to IPO no problems you know it gets hired we got customers all worked out flawlessly and then amazingly we got acquired by Salesforce in 2018 so we also experienced a very large acquisition, but I'm going to start you know the learnings I learned were really most relevant in the first two to four years of building your soft because that's kind of where most people tend to be if you want to know about later stuff I can you know grab me afterwards we can talk about it and since leaving Salesforce I actually set up a fund and I'll tell a bit of time on this because one of my big passions it turns out is I love building right I build all sorts of things from companies Just built a house recently in Switzerland. I build Lego in fact my house has a whole room Which looks like a Lego museum where we build stuff all the time with my kids I'm I just love building and actually I think about venture a bit in the same way rather than deploying capital I'm actually building a firm that really really helps founders in the earlier stages By providing a lot more support and guidance on a lot of the tactical stuff that founders struggle with when starting early stage companies So this is really if you like my next company versus me turning VC. Just thought I'd throw it out there. So I said it Okay, I Think the first thing and this is something that we tell all our founders at dig ventures we've invested in 28 companies 29 now actually to date and Founders often are looking for mentors. They want to talk to people like me who've been through it and Have some good guidance on hiring on Building culture expansion, that's all good, but you also want Coaches and peers because the problem with the things that you struggle with as a founder in the early two to four years is Often it's small and more tactical things right about hiring your first executive around how to run founder-led sales How to do PLG well and the best people to speak about on those types of topics are actually your peers in market or other Coaches who are also doing roughly the same thing, but maybe just a year or two ahead of you, right? So we always push our founders to make sure they don't just seek Exited founders as their as their cohort of people that advise them But really have people that are in the trenches with them struggling with the same types of problems So, you know good exercise after this session, don't do it now but just introduce yourself to the person next to you and Hopefully you'll find some mentors and peers that way. Sorry some peers and coaches that way and the reason why peers and coaches are better than mentors is The way they engage Right, so asking questions is far better than telling you what to do Right, so mentors tell you what they did They don't tell you what to do, but they tell you what they did But peers and coaches actually ask questions to help you figure out how to identify The problem in front of you and how to solve that problem and I love that method I do that method actually in investing as well one of the reasons Founders like us when we're talking to them early on before we've invested is I Ask completely different questions to every other venture firm and because I'm really trying to understand the person and the idea and the idea behind the idea and This is just a much more effective way to get founders or anyone really to think about how to Proceed with you know, whatever they want to do next. So I kind of love this this sort of quadrant Quality of questions. There's no magic answer to quality. You just have to get good at asking questions over time and then buys for action as founders typically they all have a bias for action and The people ask the best questions and have a bias for action Tend to do the best and I look for that and the founders I invest in it certainly describes The way the person I grew into in my journey as well now here's another one a Lot of our companies we back really early at precede and if any of you actually quick show of hands Who is starting a company right now and like you're in the first year of starting? Okay, like 20. What about how many founders in the room another quick show of hands? Okay, what are the rest of you doing here? I Hope you're enjoying this. I hope it's good So as early-stage founders for the the folks that put the hand up first quite often you end up doing some sort of pivot and A pivot is a bad word in venture Like you know investors get a bit nervous when you say I'm pivoting but actually what I found over the last four years of investing is Pivoting isn't all bad. It's just there's a lot of assumptions you make very early on around what you can achieve as a company And then either there was an wrong assumption or the market changes a bit like right now, right? Remote work was you know an assumption that might change a bit over the next two years And you've got to be ready for things like that Hiring assumptions around that might change in terms of who you can bring in and when And so My learning here is pivoting itself is not hard bad But you've got to bring your company along with you and you should also bring your investors along too And I guess the method the one learning I've learned is don't try and hide this stuff from people Especially in the organization even if it means you know You're going you have to go to double the direction the people that are working on the current direction start to free How right they're like what do you mean? We're not doing that anymore. That's what I do That's that that's why I'm here, right? So you have but you've got to address that immediately because if you don't address it What you end up doing is perpetuating this sort of nervous energy inside your organization where people don't quite know where they stand and so I bring this up because probably about half of our Pre-seed investments end up doing some sort of pivot and we're always telling them like make sure everyone knows Where you are even if you don't have the answer Let them know where you are let them know where you're heading bring them along on the journey and people are a lot Let less nervous it makes any major changes much easier This is sort of related, but it's actually even more important in this type of era where everything is slowing down as Transparency over authority people often first-time CEOs in particular suffer from this right first time CEOs often believe because they're the CEO two things They're not necessarily Allowed to ask too many questions because they're supposed to know that's not true Right, you should be asking questions all the time if you know you're worried about asking your investors That's why you want to have peers and coaches around you because you want to be asking questions all the time Right, so first-time CEO suffer from this We often suggest that CEOs get coaches to help them, you know figure figure this bit out But also because they lead the organization they believe they have to shield the organization from anything bad happening So the feel-good stuff comes in the first customers the the stories from users CEOs love talking about that, but when there's this real, you know Investors say hey, you need to get runway for the next, you know 24 36 months and you think well I can't run for 24 36 months on the current cash flow unless I make some cuts and Then the next thing that CEOs do is don't tell anyone about that except for a couple of people It starts the leak and then you get this this or even worse Companies in your cohort start announcing that they're releasing people and you're like are we next we don't know and everyone gets nervous Again, you want to manage that that nervousness around Sometimes you can say look we're assessing it's fine, but don't ignore it Right be transparent and then if there is a plan in place The other thing I'd say with just hiring this isn't really a tip in here, but if you are gonna Make layoffs it's much better do it in one go than in drips and feeds There's not in here, but I'm gonna just say it because people are going through that right now It's better that you you know Cuts once and then everyone can just get back to working Then you cut once and then twice that second cut hurts you so much because everyone's waiting for the third cut And again, organizations get nervous energy and you want to you want to calm that down make sure people understand where they are They don't don't have to worry about something unexpected coming down the pipe. So Transparency is key All right, so I lived through the last crash by the way actually when I created this presentation We weren't in a crash, but we thought we might going into one I did this at the Swiss Economic Forum and I talked a bit about how to manage manage through this and In a crash the first thing you want to do is not tell everyone everything's okay, right? Especially if you don't know everything's okay, like I hear this a lot like I asked founders is like so how you know How do you think you Q4 is going to go from a revenue standpoint like fine? I don't think we're impacted like I don't know that's true like I think you might be impacted and I like to have a deeper conversation and make sure people are being honest It's much better to be this defensive and say you know what we're gonna probably reduce our targets by 30% and then Only you know missed by 25% that's much better than not reducing and missing by 25% right so again It a lot of managing a company and a lot of like the lessons for first-time founders is getting good at being transparent But also getting good Communicating when you don't have all the information right? I think that was the biggest learning I learned through the crash some my story for the 2008 was we had about 4 million ARR. We're a SaaS business and Most of our customers were financial services two of which completely disappeared in 2008 I won't name names, but like just I didn't think banks could do that. I didn't think that was possibility that a bank could disappear But it obviously is and we've seen it again very recently with FTX even though it's not a bank and suddenly I had some hard choices to make and My investors were pushing me there. They said look most of your customers are banks A bunch of them have not gonna renew a bunch more might reduce their commitments. You're not making any new sales and They said what do you want to do and I said what do you mean what I want to do? It's like well Should we should we call it a day and and shut it down? And I basically told them I said look give me a weekend to go think about it. I Went away. I went a lot of long walks and I realized that I Truly believed in the mission that we were on to connect the world's applications data and devices That was the mission of mule soft and I believe we're a further ahead than anyone else in the market What I didn't believe was that we had a customer base that we could sell to at that time And I told them that I said look I believe in the first two things the third thing I can't tell you we're gonna drive revenue in this market because we've been focused in financial services and Because I did that they said great Well, we're gonna back you because that makes sense and we're gonna figure out how to reduce burn and we decided that you know what? We're gonna get rid of everyone in the organization that doesn't build software and we'll keep building software to build a product From a year from now that would be more suitable from people other than banks Not many people know this about mule soft, but it was it was like kind of a big pivot for us it was like we had to go and do something else and To the organization I explain it to them all the way through right I told them that the you know investors had asked me this I told them that this is how I was thinking about it and it was really interesting Rather than people getting freaked out people said I understand I get this why you would do this I don't feel like you pulled the rug from me because you have a real reason Why you would get rid of anything that's customer-facing and just focus on engineering because we just decided we're gonna do zero revenue in 2009 that was that was the the plan and it worked out really well, but The reason why this was a big learning for me is I Agonized for like four weeks during the the cycle of just trying to tell everyone everything was okay Even though there was you know stories of Bear Stearns going under and you know banks being bailed out And I tried to hide it and the more I hid it the more people got nervous and in the end I you know by trial by fire I just realized actually the best way was to be completely honest because I couldn't deal with the stress of trying to Hold it all on my own. So that was a good learning from and people might be going through this now Okay, interviewing How many people are interviewing right now? Maybe not so many. I was still quite a few of you. Okay, brilliant. Oh, actually interviewing to hire people Versus interviewing for a job. All right. It's still the same people. Okay One thing I didn't even even occurred to me because this Wasn't my story but what I've found in a lot of the companies that we've invested in is every now and again We we get a really really smart founder who says I Don't really hire people. That's not my thing I'm gonna hire a head of people to go do it and then that's how we're gonna hire the next 10 people and I and I've learned to ask in the Diligence process of the company formation is like how do you feel about hiring because it's a real miss like it's There's and there are venture firms out there that say things like hey, we'll help you with your hiring We'll take care of your hiring But for a founder starting a company the most important thing you do day to day is Bring in amazing people into the organization and really think about the composition of those people And if you've never done it before it's fine You've just got to go do it and again if you've got coaches and you've got peers talk to them about their practices about the way they do hiring but You'll find as you build a company probably your biggest value add You don't maybe realize this right now But the biggest one will be your ability to attract talent and bring them into the organization and establish a culture That is set up to build the things that you want to build right so that's quite important So you have to be really really involved with it and to give you some idea of how much effort this is At mule soft even at a thousand people there was only I was still one of the interview panel For almost every hire definitely every manager in the whole organization We also had a CEO at that time and he was also in the same boat And we did that to keep the bar super high on making sure that we brought in the right people But guess how much time that took us You're not going to guess but it was about thirty five percent of our time was spent on hiring But I think about that. We were you know a hundred going to 200 million in revenue We had customers all over the world. We had offices all over the place Yet the core exec team was still spending thirty five percent of their time hiring even though we had a large organization and I'm not saying that's necessarily the right way to go But it's actually a pretty good way to go if you want to build teams of people that execute on What you're trying to do and and so Certainly when you're young as as a first-time founder getting really good at hiring is super important I cannot stress this enough. I also recommend a book. This book is fantastic It's a little bit old actually, but I've read it again fairly recently and it still really holds true This book called hire with your head just helps people understand how to Decipher and ask the right questions to get the right information from people So the one thing I'd say is make it mandatory reading early on read it yourself a bunch of times And then every six months read chapter four Chapter four is great. If you've even got time to read the book. It's not the end of the world No one's got time to read books right now I know but Chapter four is amazing because it just reminds you how to conduct a really good interview and just Go in there without a bias mindset and just ask the right questions and keep digging and so typically an interview I don't try and cover everything. I go deep on one thing and I really understand Everything that that person did and who was around them and what they did To get a really good idea of how that person thinks how they function in an organization It allows you to understand what kind of person they are the way they reason and also Allows you to dig into a key achievement right these are all the things you're looking for an interview Anyway, this I can't stress is enough. This is probably one book you should read but definitely chapter four Okay, this is this is one. I think investors love do people know what the term be haggers big hairy audacious goal Right something that sounds so almost not necessarily insane because they sometimes they sound insane Okay, calm down, but like some really big goal that will end up defining what kind of company you end up building and There's there's only one type of be hagg that is great. It's one that ends up Defining the way the company goes to market and there's like there's some there's a couple of really good examples out there But I was one of the best ones I ever heard was actually from Atlassian People know Atlassian Yep, so you use them for Jira issue management and confidence I was employee number four at Atlassian and what when I walked into their office They had this big map on the wall with like two red dots on it and it said map of world domination and below at the bottom it's It said their target number of customers was 50,000 Right and their goal was to get 50,000 customers Well, it doesn't sound like a be hagg right that just sounds like oh, that's just I want 50,000 customers But if you peel it back that goal Caused them to make a lot of decisions that have shaped that company to the where it is today Right because they had one in 50,000 customers. They didn't want to have sales and Up until a few years ago. They had you know, they were very you know They got to over a billion in revenue without sales or they say that I'm not sure if that's true, but No sales it meant everything had to be self-service. This is before PLG They they decided that people should be able to just swipe a credit card get their software and get up and running without talking to anyone Right if you if your target is 1,000 customers is very hard You know you're not going to get there because you think well I can get a thousand customers by building a team of people and supporting them But they would know I want 50,000 which means everything has to be self-service You've got to be able to get success with my software and you got to renew my software without me getting involved too much Right, so it just changes the way you start building the software the way you build the support teams around it the way you go to market everything And I I love these missions mule soft one by the way Just so you know was to connect the world's applications data devices and that actually completely Framed the way we went to market it meant that we had to connect to absolutely everything The most legacy system that hasn't been touched in 50 years all the way through to the newest open source Projects and that was our guiding light and that's why customers loved us, right? And it really was born out of we're a connectivity platform We think our value proposition to the market is to be able to unlock data wherever it is and move it to where you Need in the organization and so connecting every application data and device made a ton of sense for us. Oh Tesla also has another one Do you know what theirs is? I can't see the notes. I can't quite remember it, but they it's about Damn, I can't see my notes. I can't tell you but go look it up It's really good because again the reason why you end up, you know building rockets that can land themselves again is because their mission was different to NASA if NASA's mission was the same as space X's mission. Sorry not Tesla then We might have you know reusable rockets 15 20 years ago Maybe not. I don't know what the engineering challenges are, but they might have been trying it But these their missions these be hags actually help your organization Center around some ideals or some goals that allow you to build product differently build teams differently And so even though it might sound a bit trite written on a slide somewhere If you live by it and you remind your organization of it and you start building Things that funnel into your mission the the company culture really starts to hold cohesion and work much better Okay, this is my final one and this is super important for everyone. I failed on this one by the way I this is a if I could do it differently again. This would be my advice which is You really want to invest more time in yourself and in particular in balance in yourself The one thing I found Through building mule soft was I became increasingly more unbalanced not in not like Psychologically, but like just in my life. I didn't go nuts in the office or anything But you know I first gave up hobbies and then I said I gave up Socialing certain social engagements Then I started stopped seeing my friends as much and then as I got more busy I didn't see my family as much and then I had kids and now you know I was traveling a lot and I wasn't always optimizing to see them as much as I would have liked and The reality is with mule soft. I also had an out, you know an unbalanced outcome, right? you know not everyone gets to see an exit not everyone gets seen exit like that and I'm still not sure whether You have to do all the other things I said that I did in mule soft in order to get the outcome But my hunch looking at the way the world is evolving and how how things are Evolving in in entrepreneurship that you don't need to be out of balance You just need to be doing more of the right things versus working harder and trying to figure out what the right things are This actually goes full circle back to having Coaches and peers like get having knowledge around you helps you do more smarter things do less of the wrong things make less mistakes and You know for me balance is self-care physically like the best thing I think I did during your software as I used to run a lot. I used to cycle a lot So even if I was traveling I'd always have running shoes with me and always go for a run And amazingly what I found out is I did my best thinking when I was running so You know actually works in your favor to invest here But I will say after mule soft it took me two years to get myself rebalanced again Like get re-connect with my family and friends the right way make myself feel like I was centered in the things I really cared about and now as I do I build dig ventures. I take that with me, right? I don't sacrifice everything for dig ventures at some point. I say no, I'm not doing that I'm gonna spend time my daughter right now and then I'm gonna go for a run and I don't care about that meaning right and and You've all got to find your own path there and I've also met people I've spoken about this and they've said look I do a balance and and it works out well some people just naturally do it But I do see even in my portfolio of founders that Sometimes people start to get off of track and I would just say look this You know it's 12 years for me at mule soft You can't go 12 years without seeing your friends or having hobbies or spending enough time with your family times too short for that So build but just build smart have people around that you can help you really think about the direct challenges in front of you and Allow you to do more the right things quicker and that's pretty much what I learned in 12 years So thank you