 All right. Hi everyone. So nice to be back here. My first slush was actually in 2014 and it's it's awesome to see the energy is just as strong as it was back then. So my name is Paul Murphy I'm a partner at Lightspeed. I Am based in London and I lead our European efforts to expand the franchise into Europe We have an amazing session here today with John W. Thompson who is a venture partner at Lightspeed I want to dive into that but before I do so I just want to tell you a little bit about Lightspeed in case you're not familiar with us We are a global fund. We have 12 offices around the world in six countries We have about 18 billion dollars of assets under management and this summer we launched our latest fund family Which is just over seven billion dollars To invest in everything from seed all the way up to pre IPO rounds We've invested in some iconic u.s. Companies that you might be familiar with like snap and a firm But we actually have all host of companies in Europe as well about 30 at last count companies like personio vented Lightyear many others in fact nearly half of our companies are outside of the u.s. So With that I want to jump in talk a little bit about John's amazing career. I'm lucky enough to call him a colleague At Lightspeed which is an incredible Thing for me to be able to do he has 40 years of technology industry experience and before we jump into specific questions I just want to ask John if you could tell us a bit about yourself. How did you end up here? What do you want to be when you grew up? Yeah, those sorts of things well I grew up in West Palm Beach, Florida and it is about the biggest contrast to where we are today Than anywhere else in the world because the temperature there never gets below 72 degrees but nonetheless, I grew up in a family where my father was a Military guy became a postal worker and my mother was a local school teacher who ultimately as her career progressed She became a principal and administration Administrator if you will in the county school system the one thing though that I will never forget about my Life experience with my mother and father My mother had a point of view about life which is life is about lifelong learning And so you should plan to learn your entire life and I translated that into I will never retire Because if you're going to learn your entire life, you can't stop working And so while you said I've been in the industry for more than 50 years the actual number is almost 40 years the actual number is almost 53 and I'll cross that 53 mark in June of this year Never in my wildest dreams never ever Did I imagine being in tech? It's a matter of fact. I wanted to be a lawyer because the most prominent people in the African-American community in the 1960s were teachers preachers doctors and lawyers and I knew I couldn't be either of the first three And so I opted to go to law school. Well, lo and behold Six months before going to law school. I sat down with my father-in-law who was a very prominent attorney in West Palm Beach and said Here's what I'm thinking. I'd like to go back to law school and he looks at me and says okay Let's talk about that. How much money do you make now and I told him was about a little over $10,000 a year And so he says so where do you think you'll be a year from now? I said well, I'm about to go on quota So I'll have my first full IBM territory to sell into and generally your salary goes up by 75 to 100% in that first year He said really I went. Yeah, really. He says well, where do you think you'll be three years from now? and I said well, I suspect I'll be three X more than I make now and Really and he says why would you ever leave that job to go to law school? Where you will make essentially the same amount of money in your first year that you make now and It was that conversation with my father-in-law who's long since passed away That got me to say I'm gonna stay and I'm gonna try to concentrate on Technology in a way that I can be effective and quite frankly I can develop some Experiences that are valuable to others in the industry So 53 years in this industry has been an incredible journey for me And I expect to go another 50 years We have the same expectations. So I think you know, there's a few chapters of your Career that I want to dive into and we can all learn from sure start with IBM. So you spent 28 years there You've seen you saw presumably a lot of change. What were the kind of highlights key learnings from your time there? well IBM is an amazing company or at least it was during a period of time that I was working there and one of the things I came to recognize is that It's a structured environment and you had to learn how to Deal in that structure and back in those days. It was always about blue suits and white shirts Well, I was from a community that didn't wear blue suits and white shirts I wore what I call two sister suits Polly and Esther and they were any color but blue And sure enough as time progressed I came to realize While you may be smart enough to advance your career You're not aligned enough to advance your career at IBM and I ended up moving to from Tampa, Florida my first job at IBM to Atlanta and while there I said I need to buy a wool suit It's navy blue and I need to buy a white shirt and a striped tie And that was the aha moment for me that it was more about cultural acceptance not trying to fight who you were and what you wanted to be and Candidly the stay in Atlanta was a great inflection point and about five years later I get a call that says we'd like for you to come to Boston to be the director or I'm sorry The regional sales manager here, and I thought what a great place to go well back then Boston did not have the reputation as being an embracing community and I was going through a divorce and I didn't want to go because of the nature of the community and My two young kids, but I finally made a decision that I'll go because I can always go back to Atlanta Which is the African-American Mecca of the United States? And so I went to Boston and the leader of that region decided I like you and oh by the way I want to prove that Boston nor me are ethnically biased and so within six months I was his chief of staff within a year I was running a branch within two years my branch was the top branch in the nation and then six months later I get a chair call from the chairman of the board saying tag We want you to go to MIT Sloan School will pay your tuition and will continue to pay your salary And so my IBM journey was one that I never imagined But that decision to move to Boston was the most important inflection point in my career never again Did anything that spectacular happen? I mean, it's pretty amazing. So what brought you from Boston to? Then Silicon Valley to go runs tonight. Well, I had been at IBM for 27 years nine months and 13 days And I knew I was never gonna get to run the company And I had joined my first corporate board when I was running our Midwest operation And I would sit in the boardroom and people had these fancy epilepsy said CEO chairman President and I said head of sales for the Midwest and it was so narrow and I went wait a minute They don't know that much more than I do and if they can have those fancy titles Why can't I and sure enough I called John T. Thompson at Hydric and Struggles and said Don't come to see me anymore about a sales job or a marketing job or a product management job If it's not a CEO role, I'm not interested well sure enough 90 days or so later. I get an email note that says in the subject line perfect match And I click on the note and it has no content So I immediately call John and say what is this about and he says well I have a little company that I've been working with for years called Symantec. I went yeah I think I know them He says they're looking for a new CEO. Are you interested? I said well, I don't know. It's a consumer product company I'm an enterprise guy. He says they need somebody who's a tech leader. Do you want to join the company? I said well, I'd like to meet some people first. So I flew to California I met with the team and I concluded why not I'm about to turn 50 and if I ever want to run a company I better do it now. Otherwise, I just won't get there and I joined Symantec then and we took it from 600 million in revenue to 6 billion over a 10-year period And I had a wonderful journey and I concluded I'll never retire I'll never retire because if you can do that you can do it again because you've learned something from that experience and While I may not have an interest in being an operator anymore I do want to be an advisor and consultant an advocate if you will for the teams and that was in part Why I joined Lightspeed. I mean it's it's amazing I think just you know getting the sense of scale 600 million to 6 billion dollars in revenue Is is a massive feat but actually not the biggest one in your career So we'll come to some of that in a bit But I just want to understand some of the nuances of how you took a company from 600 to 6 billion in revenue That's I just can't even think about how you would achieve that Well, as I said, it was a consumer packaged software company when I got there So they had a very strong gaming business a very strong connectivity business a little security company called Norton Antivirus and a few other things and it generated 600 million in revenue But I was from a company that had a diverse portfolio, but it had concentrations within categories And I couldn't understand how this company with all of these diverse categories as small as it was Could really leverage to scale and I learned something from my IBM experience Which was I would spend the first hundred days listening. That's why you have two ears in one mouth You should listen and so I listened and concluded we need to get out of all of these related businesses That are not security related because in 1999 the security problem was escalating exponentially So we did that and we bought a little company in North Carolina Somewhere and started the journey to become a true security company and sold off many of the assets that weren't security or enterprise related and the end result was It kind of progressed quite well for the first 18 months to two years and then two years in I Pre-announced an earnings miss and the stock price dropped 35% in one day And I was like devastated and I came to the conclusion. Wait a minute. We're doing what's right So you should not be devastated by this. Just stay focused. Well, lo and behold two weeks three weeks later The first self-propagating thing Self-propagating virus called nimda hit the marketplace and we were in market with a new product and McAfee our top competitor was not and the company took off and the rest is history I mean, it's a very different company today than when I left it, but nonetheless 600 million to 6 billion you don't do that without effort without building a great team And quite frankly being comfortable with the team you built great Okay, so I want to shift topics a little bit and talk about Boards so, you know the founders in the room you presumably have formed a board if you've raised capital This is a topic that I talked to the founders I work with in Europe quite a lot because I think that There's a lot we can still learn as to how to have effective boards And John you sat on the board or sit on the board of Microsoft Which is you know one of the largest companies in the world you joined in 2012 I believe before we talk about your Microsoft journey specifically Maybe you could just give all of us sort of your view as to what a board and an independent director should do for a company Well, I've been Very clear from the very beginning that just because you have a seat at the board table doesn't mean you run the company the CEO runs the company and I think it's damn important for the board to all come to that and Recognize that they're there to provide insight and counsel not to run the company and I Was quite clear about that at Microsoft And in my early days there it was clear that in my opinion it was time for a change That Steve had been there for 12 years had done a good job of making sure that the revenue continued to move but had not done as good a job in improving the stock performance and They then asked me to Not just be a board member but be the lead independent director and before too long I lead the search and I want an outsider and sure enough I couldn't find one because nobody wanted any part of Microsoft at that point in time And so we turn to two relevant insiders And I remember one of the important statements that bill made to me early in the search process Which is the company is in technology trouble now and we need a leader at the top who is in fact a technologist and That was a very very important statement that resonated with me as I was looking at the two final candidates And we selected Satya who had a very very strong technology background having worked at Sun For a few years and then joining Microsoft That journey to my surprise led to An appreciation and the stock price that I never would have expected yet I mean when I so I actually spent eight years in Microsoft I Unfortunately left the year before John joined and sold all my stock when I left because I thought it's been flat for Eight nine years. It's never gonna change And of course John and sort of new leadership come in and I I was trying to do rough math that it was About one and a half trillion dollars of value creation happened in the last decade one and a half trillion dollars I mean, that's just you know incomprehensible. So What do you think I mean earnings were growing the whole time I was there revenue was growing employees are growing But what changed under Satya's leadership? Well, I think what? people perceived was that Steve did not have as strong a technology Insight as Bill did or candidly paging forward as Satya did and one of the Things that Satya made very clear from the very beginning as his in his role as CEO is that we're going to have a Top position in the cloud. We're not going to be number three four or five We want to be number one or number two and he and Scott Guthrie who runs the cloud business for Microsoft have doubled down And they have created a very very important business for Microsoft more importantly However, is if you look underneath many of the technology things that they have done quietly are Incredible and I can't wait for them to announce a few of those products in that market place. That's exciting or we'll be anticipating that So okay, so if we move on from your your role, you know on the Microsoft board You also sit on I think it's five other Or you sit on five four in total or others One one public and three private okay, and a few of those are light speed companies Which is which is amazing as a as a board member and you talked a bit about the board doesn't run the company the CEO and the management team Run the company But what do you view the the key job of the CEO to be now with all the experience that you've kind of accumulated a witness over the years Well, it's important for the CEO to have a strong and deep perspective on the market place That he or she is trying to penetrate and it's equally strong for them to use their ears and mouth proportionately and all too often Leaders feel that they have to tell the world what they're thinking before they think through what they should be thinking and I learned from my early days on the Microsoft board how important it was to listen not to talk Yeah, because many of the people in the room who will go nameless Wanted to talk rather than listen, and I think that's an important issue for every leader at any level of an organization listen Comprehend and then act and that's what I did for ten years at Samantha. I think we're seeing right now You know the role of a company culture a corporate culture playing, you know Increasingly being part of why some companies grow and survive challenges and others maybe sort of die off When I think about going into an environment like Microsoft or other companies you've been involved in Sometimes the CEO needs to reset the culture and get you know hundreds or thousands or hundreds of thousands of people behind them What do you think the most effective way to do that? We're witnessing some of this play out in the public space right now with with new CEOs making dramatic changes I mean juries out as to how that's gonna work. Do you have any views as to how you shift culture? Well, I think People will follow a leader who they respect and admire and I think as such a came in to an organization That candidly was very much technology centered or long-term technology centered Many on the team truly respected his background and experience and had confidence that he could lead the company To a place where the top-line performance of the company would in fact expand and I as I alluded to earlier He's one of the people that while he may be one of the smartest people in the room He's not the loudest person in the room. He's not the one who has the most to say in the room He uses his ears and mouth Proportionately and that's developed an enormous amount of respect from not just the Microsoft team But from our partners and our customers around the world amazing Okay, so, you know, I want to talk a little bit about now your role as an investor Because sort of you mentioned one email that you got and you know, I know my conversations with you You've actually had many emails and phone calls like that from kind of all walks of life the most senior levels in politics and technology I'm very happy with light speed, but why did you join light speed? Why are you why are you an investor now? Yeah, well, I am as I was winding down my chapter 3 Which was running a little startup that I was gonna run for 90 days I ended up running it for six years as I was winding that down. It was like, okay. I'm never gonna retire So what's the next journey on this chapter or next chapter in this journey? and I joined a firm that That one of the founding partners was a very very good friend and co-investor with me and that was Riverwood Capital and Riverwood does terrific Job at supporting later stage companies and I didn't realize how late stage it was compared to some of what I wanted to do But more importantly They had a business process that was not as engaging as I expected it to be And so I would show up in the office at 8 39 o'clock in the morning and leave at 2 30 at 3 o'clock in the afternoon And I'd do nothing not a damn thing all day long because they had a more controlled approach to how they manage The assessment and ultimate decision to invest in a deal and because I was a new guy on the team They were like we don't want you and so I'm like I got to get out of here and to my surprise Arif Jammu Hamid from lightspeed kept sending me notes saying you should join our team You should join our team and I was candidly pretty adamant that I would not join the lightspeed team because My startup that I had been running for six years went under in large part because the major partner at lightspeed went thumbs down When I asked for more capital and I'm like holy smokes. Why would I ever go to work for that firm? Well, I went there and went to the Monday meeting the partner meeting and I was incredibly impressed and Then following that were two early stage companies that had come in for reviews with the team And I was overwhelmed by then and I turned to Arif and I said can I start tomorrow? Because that was what I wanted to do when I was leaving semantic I had invested in about six or eight little companies over my last two years at semantic because my intent was to become an early stage Investor after I finished my role at semantic Well, I got distracted for six years running virtual instruments And now I'm able to do because of my journey with lightspeed what I had intended to do some eight or nine years ago I've invested directly and probably 20 or more companies since I joined lightspeed I obviously invest in all of their funds and what have you but I'm far more interested in the engagement with the founders and their Teams to see if I can help in some way. Yeah to make them help them scale So what are some of this? You know the founders that you've gravitated towards are there any qualities or characteristics that well They get excited about one of the ones that is destined to go public soon is rubric and The founder of rubric co-founder of rubric I should say was a partner at lightspeed and he came to see me when he had this idea about marrying backup and recovery and security and Low and behold when I spent I don't know 11 billion dollars for veritas That's what we were trying to do But the market was not mature enough at that point to see those things come together So it became an absolute disaster Well rubric is now the fastest growing company in the history of Silicon Valley or at least that's what some say and They have the potential to do an IPO when the market is stable We've done all of the prep for the filing and what have you but I get to spend time with Bipple Daily as a matter of fact at 3 a.m. This morning he called And I had to make sure I turned my damn phone off I wouldn't get any more calls But it's that part of the journey that's so exciting to me that you can find brilliant young founders who Don't start with the obnoxiousness of I'm brilliant and you should acknowledge that they start more but I don't know what you know, let's share insights together and That experience with Bipple and the rubric team has been amazing. It's been good at Illumina And it's been equally good at all of the companies that I've been involved in. Yeah I think that the curiosity certainly for me as well. It's it's high talent high curiosity and decent amount of humility nice combo Okay, so when it again shift gears one more time in the time that we have left it You know since the time that you agreed to come out To tell thank you which thank you very much for doing that my pleasure. This has been an amazing event I've never been here before and If I get invited back I will definitely yeah, it's it's awesome to have have you here But you know in that time the world has has continued to change and it's been very challenging for a lot of people I'm sure many of you in the room You know, you might have had you know, your personal companies get devalued might have struggled to raise financing or had even personal wealth Wiped out with what's happened. It's trying times for sure. And you know, you've been through more than a few cycles Any advice words of wisdom things that have gotten you through those tough times that you could share with the founders in the room well, I think in a Challenging economic environment like the one that we're going through now Every company big or small has to start with do I have the right team and Then do I have enough capital to make it through particularly for startups to make it through at least two years? Because you'd never know how long the recovery period is going to take and I that's one of the issues I learned shortly after I joined lightspeed was how much capital do these teams really need to have on their balance sheet particularly as you enter challenging times more importantly, however, I think the founding team has to come together in a way that unifies them particularly when they're operating in a challenging market and It's incredible to me to look at some of the early-stage companies that I'm involved in and how they're going through a chain cycle now Because the company has matured, but it's time quite frankly to make some Changes in the leadership team because of the scale that they've reached and what they need to do the next cycle around And that's where I get to be very very involved quite frankly. Yeah, that's great So we are out of time. I do have one last question, which is um, are you writing a book and I'll know? Some of us I've been asked to write a book. Oh my gosh for years Yeah, and I just don't believe in that my view is the world will come to interpret who I am and what I've done Based upon what they learn. I don't need to tell the world who I am and what I've done Well, thank you I've enjoyed learning about your career in preparing for this session and thank you for sharing this your lessons with the team So thank you all very much