20VC: Behind The Scenes of a $Bn IPO Process, What Startups Can Learn From Teddy Roosevelt's "Five Minute Meetings" and What John Lennon Teaches Founders About Storytelling with Howard Lerman, Founder & CEO @ Yext

Howard Lerman is the Founder & CEO @ Yext, the company that allows you to control your brand experience across the digital universe. Due in part to Howard's incredible leadership of the firm, Yext went public in April 2017 with an opening price of $11 a share, today the stock price sits at $26.85 and a market cap of $2.65Bn. Prior to the IPO, Yext raised over $117m in VC funding from Insight Venture Partners, IVP, SV Angel and CrunchFund to name a few. As for Howard, Yext is his 4th company and he is also Co-Founder and Chairman of Confide, a leading off-the-record messaging service. In Today’s Episode You Will Learn: 1.) How Howard made his way into the world of startups and came to Partner with is co-founders to start the now public company that is Yext? 2.) Why must every founder know about Teddy Roosevelt and his "Five Minute Meetings"? Literally, what is the right way to structure these meetings? What one question is the right question to ask? How can a leader look to retain that startup culture and ethos with scale? Why does Howard believe running a global company is like running a country? 3.) What have Howard's biggest takeaways been from studying "John Lennon's Storytelling Trick"? How can founders use this trick both to inspire their team more effectively internally and then to present a better vision for the company, externally? 4.) Howard has said before "fundraising is not an end in itself". Does Howard believe that company financing should be celebrated? How was the IPO process for Howard? From a literal standpoint, how does the process run? How did Howard choose which banks to work with? How did the 10-day roadshow shape up? How did the pricing decision-making process look the night before IPO? 5.) Why does Howard believe it is fundamentally better being a public company? What does "public" status allow you? How does being public introduce a challenge never before seen to founders? Why must founders always examine the motives of the VC behind whether they are pushing them to remain private or go public? Items Mentioned In Today’s Show: Howard’s Fave Book: Five Stars: The Communication Secrets to Get From Good to Great As always you can follow Harry, The Twenty Minute VC and Howard on Twitter here! Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Harry Stebbings?

  You are listening to the 20 minute VC with me, Harry Stebbings. It would be fantastic to see you on Instagram at H Stebbings 1996 with two Bs. There you can suggest both questions and guests for future episodes. But speaking of episodes, I've really wanted to do today's interview for a long, long time. A phenomenal guest. I think he's one of the most thoughtful strategists and business builders that I've had on the show. And so with that, I'm so excited to welcome Howard Lerman, founder and CEO at Yext. The company that allows you to control your brand experience across the digital universe. Due in part to Howard's incredible leadership of the firm, Yext went public in April 2018 with an opening price of $11 a share. Today, the stock price sits at about $26.85 and a market cap of 2.65 billion. So a pretty successful IPO there, Howard.

• 0:45Harry Stebbings?

  And prior to the IPO, Yext raised over $117 million in VC funding from Insight Venture Partners, IVP, SV Angel and Crunch Fund, just to name a few. As for Howard, Yext is his fourth company and he's also co-founder and chairman of Confide, a leading off the record messaging service. I do also have to say a huge thank you to the wonderful Mr. Jonah Goodhart at Mote for the intro to Howard today. I really do so appreciate that. But before we dive into our episode with Howard today, thanks to my friends at WePay, let me introduce you to a very cool player in the space we love. Freshbooks, the leading cloud accounting software for small businesses and self-employed people. It provides invoicing, time tracking, project management, payments and much, much more. The platform aims to allow people to focus on their business, not on accounting or getting paid.

• 1:30Harry Stebbings?

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• 2:14Harry Stebbings?

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• 2:59Harry Stebbings?

  Launch 360 reviews, share ongoing feedback, facilitate one on ones, set up goal tracking and even run employee engagement surveys. And Lattice is the only solution that combines performance management and employee engagement so operators can make sure top performers are happy. Lattice is giving away three months of Lattice free to 20VC listeners. Just go to lattice.com/20vc to receive that offer. That's lattice, L A T T I C E dot com forward slash two zero VC. But you've now heard enough from me, so I'm thrilled to hand over to Howard Lerman, founder and CEO at Yext.

• 3:37Speaker 01

  You have now arrived at your destination.

• 3:40Harry Stebbings?

  Howard, I'm so excited to have you on the show today. I've heard so many great things, both from Jules at IVP and Jonah at Moat. So thank you so much for joining me today.

• 3:48Speaker 02

  It's a great honour to be here.

• 3:49Harry Stebbings?

  Not at all, but I'd love to kick off today with a little bit about you. So tell me, how did you get started in the world of startups and come to found one of New York's breakout success stories in the form of Yext?

• 4:00Speaker 02

  There is no single pivotal moment when you start a company. A company is really a group of people when you found it. And the most important thing you can do is pick great co-founders, which I happen to do, and Brent Metz and Brian Distelberger. We wanted to start a company and build a company. What you find is that the original idea you have is almost never unless you're extraordinarily lucky, the idea that you end up winning with. So through a process of iteration over a long period of time, we stumbled upon a gigantic idea, a huge idea, one that we think is going to change the world.

• 4:33Harry Stebbings?

  Can I ask, I had Mark at Thumbtack on the show recently, and he said that actually, you can take a very consultative approach to starting a company, come up with graphs, market maps, and really kind of isolate potential markets into exciting opportunities. Do you agree with that kind of strategic analytical approach to finding a market? Or do you think it does have to follow the passions of the founding team?

• 4:53Speaker 02

  I think it is possible to do either. I think it's completely possible for you to assess potential markets from the top down or from the bottom up. I will say that I think if you historically look back at the greatest companies in history, they typically have come from more of a grassroots, organic type of feel, like Microsoft, or Apple, or even IBM, or going back to the Ford Motor Company, going back eons ago. It's entrepreneurs that have an idea and they make a thing from the bottom up. I'm not sure how often Mark Zuckerberg, or Larry Page, or Steve Jobs, or Bill Gates were conducting market analysis of potential businesses to start and then jumping into it. I think they had an idea and they executed

• 5:38Speaker 02

  on that idea. They dominated a niche, and it turned out that that niche, which appeared to be small, was huge.

• 5:45Harry Stebbings?

  Now, I have to admit, Howard, I've done 2,000 episodes of the show, and this episode is pretty much unlike any other, because when we discuss what you'd like to chat about, you suggested some cliffhangers, but none of which I know anything about. So this should be fun, and then we'll end with some questions from Jonah and Jules. Does that sound good?

• 6:01Speaker 02

  Let's have fun.

• 6:02Harry Stebbings?

  So let's kick off today with Teddy Roosevelt and the Five Minute Meeting. Unpack this for me, Howard.

• 6:07Speaker 02

  When you're building a company, we've now got more than 1,000 people. Around the world in offices from Shanghai to Berlin. It's pretty tough to keep on top of that. What you want to do as this founder or CEO is stay attached to the office. As you grow, want to make sure that your company culture is there, that you have a good pulse, a read on what's going on. And the question is, how can you do that? How can you, sitting in an office in New York, know what's up in Shanghai when you're not even on the same time zone? How do you know what's up in London? How do you know what's up in Beijing? How do you know what's up around the world? It's pretty tough to keep a pulse on everything going on. And so I learned a technique from Teddy Roosevelt that turned out to be a really effective way to keep a pulse on what's going on.

• 6:52Speaker 02

  Teddy Roosevelt, as we know, was a remarkable, productive individual. And running a global company is not so dissimilar from running a country where you've got factions around the world. You know, right now I'm reading a book on Hadrian, the ancient Roman emperor. How do you keep on tab of Portugal and Persia? You know, in the land of chariots and couriers. It's a tough thing to do when communications are not instant. And so Teddy Roosevelt, in his presidency, developed a technique that we can all learn from. This guy, his productivity was amazing. He was once shot during a speech, blood dripping down. He insisted on finishing the speech because he wanted to complete the job. But one of the techniques that, and by the way, he died when he was 53,

• 7:35Speaker 02

  so maybe he sort of squeezed in about 80 years and 50 years. But one of the techniques he did was during, in the White House, he would hold five-minute meetings. He'd have an assistant keep kind of a close time on the meeting. And he'd line people up outside of his office, set the timer, and they would come in and deliver their five minutes. And in five minutes, he'd make a decision. The decision would be recorded, there'd be follow-up items, and boom, the next meeting would start. And I read this and I was like, wow, what an amazing, you can meet 12 people in an hour. And then I started thinking, well, heck, you know, we've got 100 people in my office in, say, Berlin. Why not meet all 100 over eight hours and give them each five minutes? So that's what I started to do. And now when I visit a

• 8:20Speaker 02

  Just last week, for example, I was in Tyson's Corner, Virginia. We've got seventy-five people there. Yeah, it took three hundred and seventy-five minutes to get through the entire office. But at the end of the day, the data you have, what you've collected, is quite extraordinary. And here's how you do it. You tell everyone they're gonna get five minutes. And one of the other tricks is to not just have them get five minutes with you. But I also brought our, my chief of staff, I brought our CTO. So everyone gets a five-minute meeting with the CTO, with me and my chief of staff. And it takes the full day. You have an assistant run the clock, shuffle people in, shuffle people around. You have to stay on time, you never, ever go over. And you'd be stunned how much you can accomplish in five minutes, how much you can learn from someone in five minutes. People get right to the point.

• 9:05Speaker 02

  There's no bullshit, there's no small talk, it's just, here's what's on my mind. It's an exercise in communication, it's an exercise in clarity. At the end of the day, and one other technique is, when you ask them, when they sit down, I just ask an open-ended question. I say something like, "Tell me what's on your mind, and tell me what you're working on." And they will come with a few of the critical, key things that they're thinking about, that's on their mind, and take notes. And I sort of take notes as the person's talking, I listen more than talk. In fact, I listen pretty much the whole time, and then thank them for their thoughts and move on. And the output of the day is two things. One is that you now have seventy-five data points times three from the other two people,

• 9:47Speaker 02

  around what are the critical themes going on in that office. And when you hear the same themes start to emerge five, ten, twenty times, there's probably something to it. That's the first thing. Secondly, boy, do people appreciate getting five minutes with the CEO. And even though it doesn't seem like a lot, they can say whatever is on their mind, and they have my undivided attention, that, you know, it's my attention, the attention of the CTO. So you inspire the whole office. When you sit down with every person, from the executive to the janitor, because you care what they have to say, you care what they have to think. Now, you obviously can't do this, you know, when the company gets to a hundred thousand people. But for running a one thousand to three thousand person company, to get an idea of what's going on-

• 10:30Speaker 02

  There is no better technique than the Teddy Roosevelt five minute meeting.

• 10:34Harry Stebbings?

  I love that, but moving from one legend to another legend, I am gonna try and string all these together with some terrible linkages, by the way. So apologies in advance for that, but John Lennon storytelling trick and and how have you interpreted and used it?

• 10:48Speaker 02

  You know, it's funny, John Lennon was one of the greatest storytellers, greatest musicians of all time. And he realized, he once said that when he would write a new song, he would intentionally not write it down. A lot of us, when we write something, we have to write it down immediately or we'll forget it. But he wanted to, when he composed a new song, a new line, he purposefully didn't write it down. And would come back the next day and see if he could remember it. Because he realized that if he couldn't remember it, it probably wasn't very good. Because if the author, if John Lennon, the master genius Beatle can't remember it, how is a fourteen year old on the radio gonna remember it?

• 11:28Speaker 02

  And so in this, when I read this quote from John Lennon, I realized that he had figured out a hack, a defect of the human brain. Let's take a step back ten thousand years. The oral tradition was the only way to pass things down. This is before we could write things down on paper. It was certainly before we could digitally record any bit of information. Now today, we can write everything down, we can record everything, probably Alexa is listening to everything as we say it. But ten thousand years ago, the only things that survived, the only works that survived were those that could be remembered from the oral tradition. And so the human brain, I believe, has evolved in a way to understand certain rhythms and to remember certain rhythms.

• 12:09Speaker 02

  And if you look at the greatest texts that survive over time, it's because they were passed down orally, the greatest religious texts. And then as writing became a thing, then you see the Shakespearean types of things. But here's the defect in the human brain that you can exploit to your advantage. When you're giving a speech, which is the human brain is really good at remembering lines that have terrific rhythm, that have terrific poetry, that really sing to your heart. The human brain can remember that kind of thing. But the human brain does not remember bad rhymes, bad rhythm, bad poetry, or a bad song. You can't remember a bad song. By definition, a good song is one that sticks in your head that you can hear later on after

• 12:54Speaker 02

  it's over. And by definition, a bad song is one that, ugh, you can't even listen to it because you'll never forget it and it'll be gone forever. And it turns out that the greatest speechwriters, the greatest composers, the greatest politicians, and even for us, the greatest entrepreneurs and business people that have to communicate every day what they do can exploit this trick to their advantage, which is to memorize your lines. When you memorize a line, you craft it as you write it. If it's a line you say out loud, it will be better than a line that you've written down. If it's a line that you say out loud, if you want to remember it, each time you try to memorize it, you're going to make it shorter, crisper, better, it's going to feel more natural. When you memorize your lines, you create something that's memorable. And that's what John Lennon figured out, that

• 13:39Speaker 02

  when you're telling a story, whether it's a hit song from the Beatles or a speech that you want to give in an AI conference in Shanghai, if you memorize your lines, you will deliver a better speech, your audience will remember it, because I can guarantee you, if you can't remember it, your audience won't.

• 13:56Harry Stebbings?

  Kind of both core tenets to being a great leader there in terms of inspiring the team and then that majestic storytelling ability. But you've said before that there's two other bodies of great leadership. I'm really intrigued, how, what are those two other bodies?

• 14:09Speaker 02

  As you grow your company from a hundred people to two hundred to five hundred to a thousand beyond, you have to apply, adopt different techniques in order to win. And one of the techniques I figured out early on was two bodies of leadership. That is, I carefully work with my direct reports, and I've got, yes, now I think twelve. And that's about the maximum number that I think a leader can really have. But I also carefully work with and cultivate And frequently communicate with all my direct direct reports of which there are fifty five. So I don't manage them directly, but I'm constantly in communication contact. And so I have two bodies of leadership at Yext. I have the executive group, that's thirteen of us, myself included, plus the twelve.

• 14:53Speaker 02

  And then I also have the extended group, the second body, the leadership team. That team is not a decision making body, but it's instead a a group of leaders that helps set that culture from around the world. And the office leaders from Berlin to London to Paris to Tokyo are in that, our head of product is in that. And that's a group that I get together. I actually focus more on cultivating that group a bit more than the executive team because the execs are pros. And the leaders need to be the ones that are carrying out the vision, the mission, the strategy, the culture in the field.

• 15:26Harry Stebbings?

  Can I ask, what do you find the most challenging element of CEO ship? And how have you seen the role change over time?

• 15:32Speaker 02

  I always look at other leaders and I study them closely. One of the leaders I study is Coach K from Duke, and that's because I'm a Dukie. He's a college basketball coach. I'm not sure if you knew him since you're in in the UK.

• 15:45Harry Stebbings?

  Thank you for responding on that one.

• 15:46Speaker 02

  Yeah, I just want to make sure you knew. And when I was starting the company, I was like trying to look at a lot of the leadership techniques that he employed. And I was thinking to myself that he has an advantage in leadership because he's playing a game that is known. Basketball is a game by which there is a set of established rules, by which there's a set of established scoring. The game is set and at the end of that sixty minutes or whatever it is, there is a winner and there's a loser. And there's a set of games throughout the season and there's a tournament at the end. And then there is a conclusion at the end of the season. Playing an established game, playing a set of rules that already exist, that is not what entrepreneurship is at all.

• 16:25Speaker 02

  In fact, the gamemanship of entrepreneurship, I would argue, that is raising a seed round, raising an A round. A lot of entrepreneurs buck up and think that raising a round is the end of itself. And it's the human desire for that conclusion, for that feeling of, okay, I'm playing a set game and I need that next step along the way. And raising That next round is that next step, I think is a big mistake because funding is not an end in itself. It's a means to get to a bigger end of building a company. Now, the problem is in building a company, being an entrepreneur, there is no established game. There's no clock, there's no championship at the end, there's no tournament. You have to be able to deal with ambiguity. Now, I would argue that you asked me about what it's like to be a CEO.

• 17:10Speaker 02

  It's a bit different to be an entrepreneur than to be a CEO, even though I am both. Over the last decade, I have had to change what I do dramatically every day from playing an undefined game in outer space with no gravity to more managing a larger operation. So I think I'm being more of a CEO now than an entrepreneur. That said, you still do entrepreneurial things and I'm still the founder of the company. But I can understand the difference in why respected CEOs that run big companies like PepsiCo or Caterpillar want to hear from Coach K about how to lead things in an existing game. Because the bigger we get, the more of an existing game this becomes.

• 17:52Speaker 02

  But for a startup, for that entrepreneur, that's their first company or their first idea, there's no clock, there's no scorecard, there's no tournament.

• 18:01Harry Stebbings?

  Kamal, with there's no tournament, there's no clock, there's no scorecard, there's no finality or definitive milestone, a lot would argue or have in their head that an IPO is that milestone. How did the IPO feel for you? And was it kind of quite a strange moment when you have an IPO and then it's back to work, building the sustainable profitable company that you know you can?

• 18:20Speaker 02

  The IPO is a step along the way. It is certainly an achievement. It's an achievement that no one can ever take away. And I'll tell you the story. When you go on an IPO, you pick a couple of banks. And we chose Morgan Stanley and JP Morgan and then some other banks to round out our syndicate. And they were all terrific. And you spend a couple of weeks going on this crazy roadshow where you meet with. At least eight meetings per day to investors that for the first time in your life aren't just thinking about betting for you, but could also bet against you. That's a new thing that an entrepreneur doesn't have to deal with because when you have your VCs and your cap table and your early investors, they're all rooting for you. And if they choose not to invest in you, that's fine too.

• 19:03Speaker 02

  But now there's a class of people that are extremely smart. They are quantitatively superior to you by an order of magnitude and they see things in your numbers that you didn't even know existed. And if they don't like you, not only do they bet for you, they could short you. So you have a whole new set of people that you have to think about that you have to deal with. And so the roadshow, it's one of the cool things is you get, the banks get you a plane. You're in a different city every night. You have a breakfast meeting where you pitch investors, four meetings that are about one hour each as you zoom around whatever city you're in from Boston to Kansas City. A lunch meeting where you pitch more investors, four more meetings, a dinner meeting potentially, and then you're on the plane to the next city. You repeat that, call it for 12 days.

• 19:47Speaker 02

  One of the coolest things is that you get pretty fast feedback. So we had this little app that Morgan Stanley gave us that you could see as investors, after you met with an investor, they pretty much placed the order or not, which gave you an indication of how well you were doing. And you want to be very oversubscribed. I think we sold 10 or 12 million shares in our IPO, depending on how you count the green shoe, and presumably there was quite a bit more orders than for just that, the amount that we ended up selling. And so at the end of the roadshow, the night before your IPO, you price it. You sit down with the bank in their headquarters and you get a sense of, based off their trading desk, how much you can push up the initial offering price or what you want to do with that. And so you do that and you get to pick who your shareholders are, at least initially.

• 20:32Speaker 02

  Do you want to choose long-term? Long only is that you felt really understood your story and will stay in your stock and really got it. And then you wake up the next morning and at least for us, we chose the New York Stock Exchange. It's an emotional moment when you see Yext hanging from the banner of the New York Stock Exchange. And 250 people that helped you get there are standing in front of it. That's the moment you know when you did something and you did something permanent. You did something that's going to change the world forever. And also that it's still just day one in the big journey. And so it's an amazing day. You ring the bell, walk the floor, at least in our case, as we were in the New York Stock Exchange. And everyone's all amped up and then you go out and party and the next day it's kind of business as usual.

• 21:16Speaker 02

  But for us, the usual is never the usual. So the journey is still just beginning and Yext is a special company. We're not just a feature of some other SaaS platform that ought to be part of this bigger SaaS. A lot of the SaaS companies out there should just be features of Salesforce. In fact, it's annoying that they're not features of Salesforce. Things like billing, things like order management, things like contract management. But Yext is a platform in itself. We're building the brain to power every company's information in the AI-powered future. That's really exciting. We're in the super early innings of a more than $10 billion market of which we are less than 2% penetrated today.

• 21:58Speaker 02

  So it comes with the territory of being a new category because there's no analysts that are out there saying, "Hey, Yext is the leader in this new market just because that market doesn't exist." But that's okay. That's the ill-defined outer space part with no gravity. But that also makes it fun because we are building something gigantic.

• 22:17Harry Stebbings?

  No, I couldn't agree more. You mentioned building the brain there and we chatted before. And you said about the web to the brain. I have to ask, what is the web to the brain, Howard?

• 22:26Speaker 02

  Well, information today is moving From the web to the brain. If you think about what a website is, it's nothing more than a document that contains text and links and pictures. And in ninety seven, Larry Page had that brilliant dream in the middle of the night. He woke up and realized he could download the entire web into his computer and build a search around backlinks. You type in a search, you get the most relevant part. And his big insight was that the web was not a bunch of individual documents, but instead one gigantic document. And Google can take you to the part of the document, let's say you want to find where how many calories are in a Big Mac. You type in Big Mac calories and the original Google search would find the best part of the document that had that.

• 23:07Speaker 02

  But then it's up to you as the end user to look at the part of that document, probably on McDonald's dot com slash menu and look at the line on the table there and read Big Mac calories and interpret the number five fifty as corresponding to what you wanted and you have to do the thinking. So while documents are a really powerful way to present information, they're also, they're kind of dumb. A user has to do the thinking, a user has to think about the results and the user can't ask complicated questions. You can't say, hey, document, give me all the hamburgers that have less than six hundred calories out there. Document's not very good at answering that question, but a database is good at answering that question. And the intelligent services of today, Siri, Google Assistant, Alexa,

• 23:50Speaker 02

  now instead of sending you to a part of a document when you search for something, they just tell you the answer directly. They look it up. So if you ask, hey Siri, how many calories are in a Big Mac? She just says the answer is five hundred and fifty. And if you type that into Google today or Google Assistant, instead of sending you to the spotlight part of the document that contains your query, they now just look it up in their own database and tell you. And so that's the way the world is moving. The information is moving from web-based documents to what we call database-based brains. And so for a company like a McDonald's, like a Burger King or a hospital, instead of presenting your information on the web in unstructured way of text, we see a future where every company that has a website has a database-like brain.

• 24:32Speaker 02

  And that database-like brain is a set of structured information that's capable of putting information everywhere and answering more complicated queries and all.

• 24:42Speaker 02

  Also powering the brains of intelligent agents like Alexa and Siri and Google Assistant, so that you can get more precise computed answers. And you, as the end user, don't have to do the thinking. The service does the thinking for you.

• 24:54Harry Stebbings?

  Can I ask, I had an interesting conversation with another VC on the show the other day, and they said that the power of brand will completely diminish in the rising world of voice, because you will ask for more toothpaste, more neural, more commoditized, whatever you want to do. But you lose the power of brand. How do you think about that? I'm intrigued with the kind of data space nonsense you just gave.

• 25:14Speaker 02

  I think voice search is half the puzzle, to be frank. It's the most natural way to engage with a computer. But I also think that you're going to see augmented reality become a huge part of it. I think voice search is only half of the natural computing input puzzle. When you combine being able to speak with being able to see, who wants to be hunched over their phones, typing, looking at stuff all day? You want to see the windows in your screen. You want to be able to talk to them. My view strongly is that voice is in its early days. And a lot of the reason that voice has become big in the last couple of years is because of the fact that we've gotten really good at transcription. We're now at, you know, ninety-six, ninety-seven percent accuracy, which is about as good as the human ear at transcribing things.

• 25:54Speaker 02

  NLP is that next step, being able to take what you say and understand the intent of it, so that we can essentially build a database query to give you that answer. I don't believe that brand is over, because I think that voice search is only half the puzzle. While exciting, augmented reality is going to be the other part of that puzzle that completes the evolution away from the smartphone into a next-generation user interface.

• 26:18Harry Stebbings?

  I do want now to move into the quickfire round. So it's my favorite of any interview. Essentially, I say a short statement, and then you give me your immediate thoughts. In about sixty seconds per one, are you strapped in?

• 26:29Speaker 02

  Are we in outer space again? Let's do it.

• 26:31Harry Stebbings?

  So your favorite book and why? What must I read on my next flight to New York?

• 26:35Speaker 02

  I have a number of favorite books, but one I'd recommend reading right now is Five Stars by Carmine Gallo. It's all about storytelling, the oral tradition. He's one of the people that inspired me to come up with a unique story, storytelling format to tell the X story.

• 26:49Harry Stebbings?

  Tell me, Howard, what's Benioff's introductory question?

• 26:52Speaker 02

  Benioff does a great job putting on dinners. Part of enterprise software is entertaining customers that spend a lot of money. And one of the things that he does better than anybody in the world is put together executive dinners with interesting people from around the world, including customers, but mixing in celebrities, too. If you go to one of the dinners... He hosts, he'll have customers, he'll have Chris Rock, he'll have comedians, he'll have entertainers. And what he does is he gets everyone involved. And similar to the five minute meeting, what are you working on, where I ask a question to my team. Svennyov brings fifty people in a room together, they're all sitting around. And he has everyone go around the table and answer the question of what's on their mind.

• 27:32Speaker 02

  It's a brilliant way to get everyone to say what's on their mind and facilitate a great conversation from Chris Rock to Sir Richard Branson.

• 27:39Harry Stebbings?

  Love that. Tell me, public versus private, pros and cons.

• 27:43Speaker 02

  Well, private, nobody bets against you. Public, people can bet against you. First off, being public is way better than being private. For those people that say that you shouldn't be public, that's just a timing thing. And honestly, sometimes it's a VC that has a self-interest that wants to do a late-stage round before you go public. Being public, from a competitive perspective, you're bigger, you're better, you have more cash. Cash is king. You can pay people more because you have RSUs. You attract better, more executive senior talent. Your brand is more famous. You get the ability to sell to big banks that want to look into your financial statements and know you're real before they install or use your software. Being public is the only way to be big. If you actually want to be a gigantic, huge company that changes the world, being private is just, it's like a step along the way.

• 28:26Speaker 02

  It's like asking a butterfly if it's better to be a butterfly or a caterpillar.

• 28:31Harry Stebbings?

  Obviously, now your VCs were phenomenal. You spoke to many of them. What do you make of the VC class in general today?

• 28:37Speaker 02

  Gosh, it's been a long time since I raised VC. So I'm probably not the best person to answer that question. We were lucky. We had great VCs, from Andy Sheehan, from Sutter Hill, to Jules Maltz at IBP, to Mike Walrath, to Marker, to Devin at Insight. I never had any problems with VCs. We did pretty well. So I will say that you can tell who your friends are when things aren't going well and who sticks by you. But I don't have any generalized thoughts on the VC community in whole, except to say that my experience with the five VCs we raised money from was phenomenal.

• 29:10Harry Stebbings?

  You mentioned the roadshow. It's an incredibly stressful time, but every day as a CEO is. How do you deal with extreme stress?

• 29:17Speaker 02

  I take Chinese lessons.

• 29:18Harry Stebbings?

  And that calms you down?

• 29:19Speaker 02

  It requires you totally to focus. If you ever want to feel like a two-year-old child and be Be dumb. It's almost like when you go into the ocean, it's meditative because you have to totally concentrate when you're in there. Similarly, if you don't have complete and utter concentration on speaking Chinese, you won't succeed as a Westerner. So it's a great way to take your mind off stuff. I love learning. I read a lot of books. Like I told you, I'm reading a book on Hadrian right now. I study leaders of the past and I try to learn new things. And those new areas spawn a renaissance of new ideas within the X. And so we try to have a growth mindset culture where people are learning all the time.

• 29:58Harry Stebbings?

  No wonder Jonah asked this question. Jonah asked, how do you think about the rise of China and China's kind of prominence over the coming years?

• 30:05Speaker 02

  I'll tell you a story. I was riding a train, the Gautye, is what it's called. It's a high-speed train from Beijing to Shanghai. And I was about to give a speech about AI and I had memorized a speech in Mandarin. And I wanted to practice it one last time. We were in the front car of the train. There were eight seats in the front car, seven of which were occupied by Yext and the last seat was occupied not by a Yexter but by a Chinese national. Um, we had no idea who this person was. And so the seven of us got in the car and then the guy sits down. And I figured, well, you know, we have enough of the train for me to stand up and practice and hopefully the guy won't care. So I practiced my speech one last time in Chinese and at the end of it, he stands up and starts clapping.

• 30:46Speaker 02

  And he's clapping and I'm like, wow, I must have really gotten through to him. That was pretty cool. So I wanted to pay him a compliment too. And I said to him, Zhongguo de Gautye bi meiguo de Gautye quai hao. Which means the Chinese train is essentially faster, better than the American train. And he looked at me and he looked at me intensely and I was like, uh oh, what did I do? And his eyes kind of like lowered and he stared at me and he said in perfect English. Yes, I know. I am an engineer for the Chinese military. It is the mission of my generation to study America and to crush you. And then he sat back down.

• 31:25Harry Stebbings?

  That's a mic drop moment and a half. Oh my god. Wow.

• 31:29Speaker 02

  See, that's what I think of China.

• 31:30Harry Stebbings?

  Tell me, penultimate question. Challenge, and again, this is Jonah, I have to give him credit. Challenge that you were most surprised by in the journey?

• 31:38Speaker 02

  I think it's like a marathon where when you're tired halfway or even a half an hour into it, if you just keep going, somehow you find more energy without slowing down.

• 31:48Harry Stebbings?

  Love it. And then I want to finish today, Howard. On the next five years for you and for Yext, what's the exciting roadmap ahead?

• 31:54Speaker 02

  Well, it's the whole concept of the web to the brain. Every business in the world that today has a website will very soon have a brain. And that brain is a structured database of their public facts. If you're a restaurant, it's your stores, your menus, your events. If you're a hospital, it's your physicians, your facilities, your hospital areas. This is the data behind the AI-powered future. And it starts with structured information. Without structured information, a brand can't think for itself. That's what we're going to provide, is the platform for every business to think for itself.

• 32:27Harry Stebbings?

  Howard, as I said, I heard so many great things from all your investors, from Jonah. It really has been such a pleasure. So thank you so much for joining me today.

• 32:34Speaker 02

  Harry, thanks for having me. I really enjoyed our conversation.

• 32:39Harry Stebbings?

  And I do want to reiterate, I think that was probably one of the most entertaining Founder episodes I've ever done. Such a diverse array of topics there, and I can't thank Howard enough for that. If you'd like to see more from Howard, you can find him on Twitter at Howard. Likewise, we'd love to welcome you behind the scenes here. You can do that on Instagram at HStubbings1996 with two Bs. But before we leave you today, thanks to my friends at WePay. Let me introduce you to a very cool player in the space we love, Freshbooks. The leading cloud accounting software for small businesses and self-employed people. It provides invoicing, time tracking, project management, payments, and much, much more. The platform aims to allow people to focus on their business, not on accounting or getting paid. Learn more at freshbooks.com. And to learn how you can grow your revenue with integrated payments, just like Freshbooks did, visit wepay.com/harry.

• 33:25Harry Stebbings?

  This fantastic case study on how another platform, TeamSnap, is working with WePay to make payments its number one revenue stream, more than its subscription business. Again, that's wepay.com/harry. And speaking of great products, do you ever look at promo pictures for the show and say, wow, Harry looks so young? Well, that's the help of Casper, the company that delivers a great night's sleep at incredible value. The team of engineers at Casper work non-stop, prototyping, collecting data and engineering what is certainly the most comfortable mattress. The Casper mattress has a unique combination of foams that provide the right pressure relief and alignment. So you feel perfectly balanced and comfortable and you can try Casper yourself for a hundred nights in your home, risk-free. If you don't love it, they come and pick it up and refund you everything, no questions asked.

• 34:08Harry Stebbings?

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• 34:53Harry Stebbings?

  And Lattice is the only solution that combines performance management and employee engagement. So operators can make sure top performers are happy. Lattice is giving away three months of Lattice free to 20VC listeners. Just go to lattice.com/20vc to receive that offer. That's lattice, L-A-T-T-I-C-E dot com forward slash two zero VC. As always, I so appreciate all your support and I cannot wait to bring you a very special set of episodes next week.