20VC: 3 Biggest Mistakes Founders Make When Scaling, Management 101 on Trust Building, Morale Maintenance and Hiring & What We Can Learn About Parenting From Nature Programs with Scott Dietzen

Scott Dietzen is Vice Chairman of the Board of Pure Storage and served as the Company’s CEO from 2010 to 2017. Under his leadership, Pure grew to thousands of employees and completed an IPO in 2015. Dietzen is a four-time successful entrepreneur with WebLogic, Zimbra, and Transarc. Before Pure, he was President and CTO of Zimbra (now part of VMware), but originally acquired by Yahoo!, where Dietzen served as interim SVP of Communications and Communities. Prior to Zimbra, Dietzen was CTO of BEA Systems, where he helped craft the technology and business strategy for WebLogic that drove BEA from $61m in annual revenues prior to the WebLogic acquisition to over $1B. In Today’s Episode with Scott Dietzen You Will Learn: 1.) The Journey to Pure Storage CEO: How did Scott make his way into the world of tech and startups? What was the hardest element of making the transition from CTO to CEO? What advice would Scott give to more technical leaders looking to make the move to CEO? Where do so many make mistakes? 2.) How To Build Trust in a Team: What are the most important ways that leaders can build trust with their teams? How can leaders be honest and share the hard truths without damaging role? What is the right tone to communicate both the big wins and big losses? Why does Scott always believe the losses teach more? How does Scott approach post-mortems? 3.) The Biggest Mistakes Founders Make: What are the single biggest hiring mistakes that founders make? What are the single biggest firing mistakes executives make? Why should founders sometimes say no to customers? How should founders approach investor selection and valuation for rounds? 4.) How to Optimise a Board: What specifically can founders do to optimise their board? What are the biggest errors founders make when communicating with their board? What is the value per word framework? How does it tell which board member is the best? Item’s Mentioned In Today’s Episode with Scott Dietzen Scott’s Favourite Book: The 22 Immutable Laws Of Marketing

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

• 0:00Harry Stebbings?

  Welcome back to 20 VC with me, Harry Stebbings. And wow, what an episode we have in store for you today. A stalwart, four-time successful entrepreneur, one of the great operators in the valley over the last 20 years. I'm so thrilled to welcome Scott Dietz, Vice Chairman of the Board of Pure Storage, and served as the company's CEO from 2010 to 2017. And it was under his leadership that Pure grew to thousands of employees and completed an IPO in 2015. Before Pure, he was President and CTO of Zimbra, originally acquired by Yahoo. And before Zimbra, Scott was CTO of BEA Systems, where he helped craft the technology and business strategy for WebLogic that drove BEA from 61 million annual revenues prior to the WebLogic acquisition to over a billion. I'd also have to say a huge thank you to Mike Spicer at Sutter Hill for the intro,

• 0:45Harry Stebbings?

  and Somesh Dash at IVP, and Satish at Redpoint for some fantastic question suggestions today. But before we move into the episode today, our first sponsor for this episode is CoreSignal. CoreSignal is a data vendor providing fresh, raw data collected from public web sources. CoreSignal works with leading Silicon Valley VC firms, helping them enhance their discovery and analysis. CoreSignal collects and regularly updates records of millions of professionals and companies from all over the world, allowing VCs focusing on all stages of funding to do one of three things incredibly well: Discover promising companies at the founding moment, capture and quantify startup traction, augment their DD process. Head over to coresignal.com/20vc and download a free ebook that explains the various benefits alternative data offers for VCs.

• 1:30Harry Stebbings?

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• 2:10Harry Stebbings?

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• 3:06Harry Stebbings?

  But that's enough from me so now I'm so excited to hand over to the one and only Scott Deetson.

• 3:16Speaker 01

  You have now arrived at your destination.

• 3:19Harry Stebbings?

  Scott, this is such a joy to hear. I've heard so many great things. I actually had chats before both with Mike and with Sir T shirt at Redpoint. So thank you so much for joining me today.

• 3:28Speaker 02

  Oh, my sincere pleasure. Those are two fabulous characters that have meant great deal to both my personal life and my career. Honored to follow in their footsteps.

• 3:35Harry Stebbings?

  They're very special, but I do want to start with a little bit on you. So obviously kind of the most recent incredible success story was the seven years that you spent as CEO at Pure. Tell me, how did you come to the CEO role at Pure and how did that come into play?

• 3:48Speaker 02

  So let me go back a little further. I ended up earning a PhD in computer science back in the day because I used to think I wanted to be a professor, but I got a little disillusioned with two things. One, professors had to work really, really hard. And second, probably the bigger issue is they were really crazy smart. I was smart, but I wasn't professor smart. And my dad was an entrepreneur. So, you know, somewhere through the PhD program, I hatched this scheme that I should try to be an entrepreneur. I had the good fortune to get a really great mentor in my first job and I moved into a CTO-like position and I'd been A CTO and a president before I'd never done the CEO job. But I was really excited about what Pure was up to. I had come to the conclusion that Flash was going to replace all the mechanical storage in the data center.

• 4:30Speaker 02

  I got connected through Mike Spizer and through Neil Boostery with the early Pure storage team and I fell in love and the job opening they had was CEO. I hadn't been a CEO before, but I'd done the go to market side and I understood product development, so they elected to take a chance on me. And obviously, I'm extremely grateful they did.

• 4:48Harry Stebbings?

  And what a chance that it was and an incredible journey that you have since. I'm too interested, I didn't know that actually about your father being an entrepreneur. I always think our parents shape us in ways that we don't really expect. What was a big take question from seeing your father's entrepreneurial spirit?

• 5:01Speaker 02

  I think early on, it was not a draw. My dad worked extremely hard, you know, it's where I got my own work ethic because it kind of just wears off on you, I think, when you're growing up. But I used to not see him for days because he would be gone to work before I would get up in the morning and I had a job after school, so he might be asleep before I got home. He worked really hard, but he wasn't in technology. So, you know, the upsides of that hard work was he built a successful business, but I would say the return on his time invested was not ultimately what I was hoping for. And so I just got really lucky getting pulled into technology at where I went to school, Carnegie Mellon. Computer science faculty were just insanely gifted and talented and it was so incredibly exciting and I just got sucked in.

• 5:44Harry Stebbings?

  I do want to ask also, you mentioned there about the taking the chance on you as CEO. Were you nervous? This was not a role that you'd had before and there are very different roles between CTO and CEO. Were you nervous and what elements were you more affronted by?

• 5:57Speaker 02

  I wasn't nervous in the beginning because I knew right where Pure was. I mean, Pure was my fourth startup. I mean, I joined when it was about 12 people. And so I'd been down this road multiple times before and, you know, I had a vision for how we should attack the market. You know, there were people that felt that the company should pick a particular niche and try to go dominate that. And I was much more excited about David poking Goliath right in the eye and just like making this fight, a big fight from the outset, that the technology is wholly got to change. You know, the solutions that were being used in the market. Were 25, 30 years old, based on mechanical disc. I would say, hey, these are competitors richly deserving of competition. Let's change the architecture and bring it to them and take that big fight right out of the gate.

• 6:41Speaker 02

  So I had a plan and the board liked it. And I mean, that was ultimately the reason they took the chance. I had incredible, you know, support and advice. Aneel Bhushri told me, you know, the hardest fit about the CEO job is you've got to build both below you and above you. Right. You've got to build a leadership team, but you've also got to build a board, you know, to help ensure your success. And so having people like Aneel Bhushri and Frank Slutman and Mike Volpe and of course, Mike Spicer and Satish Dharmaraj, a whole collection of your former interviewees on my board was incredibly helpful in de-risking Pure.

• 7:13Harry Stebbings?

  I love that in terms of build above and below. I do want to ask you because you mentioned there about the element of competition. I had Frank Slutman on the show very recently, who obviously was on your board. And he said, you know, business is warfare and competition are your enemy. And that kind of flies in the face of a lot of the softly, softly be friends with your competitors. How do you advise founders and CEOs today on the right way to approach competition? And how did you do it?

• 7:38Speaker 02

  First of all, encourage everyone to welcome competition. I mean, you actually need competition to build markets. If you're the only company in a space, it's, it can be a lot harder. And competition certainly makes you better, right? It forces you to innovate faster and improve your product and see what they're up to. So I relish competition, but you know, I would say I try to stay away from warfare analogies. Because at the end of the day, this is more like sports, right? We're playing to win. We're not going to win everything, but the downside is dramatically less than if you're actually in a sort of military engagement. And so, yeah, I want people to play hard to win, but not be afraid to lose too. And the critical thing is when you do lose, you look at the tape, the Monday morning tape and say, what is it that we could have done better?

• 8:22Speaker 02

  You know, what about our sales process? What about our product? You know, where was it that we lost this engagement? Cause you're going to lose some. And so the critical thing is can you learn as quickly? I mean, you can learn a lot more from losses than you can from victories. And so the critical thing is digging in on losses and sharing them openly.

• 8:40Harry Stebbings?

  Believe that. Sorry, I didn't mean to go off. I'm just interested. I always think that actually I'm not sure about that. We just never analyze our wins. We celebrate them and move on and we set like analyze our losses. Do you think that you do learn more from losses than wins?

• 8:53Speaker 02

  I do. The wins are great. You need wins to encourage and provide enthusiasm and people want to be part of the winner. So you should celebrate those victories. And I'm not saying there aren't lessons to learn in wins too, but in losses, there's almost always a lesson to learn unless your competitor buys the business, right? Competitors that are larger or have ancillary product lines that they can, you know, move money between. You're going to lose in those situations and maybe that's a case where there isn't actually something to learn. But in general, there's almost in every loss, there's something you can identify or multiple things you can identify about your product, about your engagement, your partnering strategy. And you should mine those insights and you should openly share them too. I think one of the problems entrepreneurs have is they're great at sharing the good news, the atta boy, atta gal, we won.

• 9:38Speaker 02

  But they're less inclined to want to open up and dig in on the losses. And it makes everybody feel fragile and dishonest if you're not really mining the insight from those losses. You're going to lose sometimes. And if you talk about the losses, then you can bring this entire smarts of the company to bear on making things better. So you don't lose again for the same reason. That's the key. Don't repeat your mistakes.

• 10:00Harry Stebbings?

  How do you do that without reducing morale? I think a lot of founders that I speak to want to do what you just said there, but they're going, you know, the talent market is so tough right now. If we have any negativity in the company, people go to the recruiting 10 messages they have and join someone else. We have to keep pumping, which is obviously not very healthy. But how do you do that critical analysis on losses and understanding what went wrong without reducing morale?

• 10:26Speaker 02

  Well, so I think the morale, if you're not being realistic, the morale is thick, right? And so you're inflating things in a way that's not sustainable. The critical thing is to keep your eye on the long term goals and make sure you're sharing what success looks like for the company in five plus years, right? You paint that picture of what the future can look like, but then at the same time, you have to be grounded in the reality of exactly where you are right. Now, today and what needs to happen and why, you know, your product isn't ready in a particular market. And I think it's completely comfortable to share that as long as the the company stays focused on that long term upside. Then you've got the wherewithal to, you know, to go through the valleys and fix the issues in front of you that are slowing you down right now.

• 11:07Harry Stebbings?

  Align to the morale maintenance is the element of trust with teams for me. I'm fascinated. It's something actually that Mike told me about you. He said that you're incredible at building internal trust with your teams. How do you think about that internal trust building exercise and creating that environment of safety? But also not a soft playground, mate, that we're here to work as well.

• 11:28Speaker 02

  I do think trust is absolutely critical currency to foster and build the team. One of the simple things, first of all, is to never talk about yourself. You know, you don't use I me when you're talking about something that the company is going to do. I see CEOs and other functional leaders in business make this mistake all the time. Where they say I me when they're talking about their team's execution and it's always got to be we us, right? Because you're building, you know, team success. As soon as one person starts talking about their individual accomplishments, it causes other people to go political too. The time for I me is when there's a screw up and as CEO, it's always your fault. You know, taking responsibility for a problem, but then passing credit when anything goes well is is a really simple recipe for building trust.

• 12:13Speaker 02

  Here's a more aggressive one that I've had great success with. When recruiting people, you know, when they're they'll start to try to negotiate, I will shut them off and say, look, this isn't necessarily a fair ask of you to negotiate. I mean, we've got all the compensia data about what everyone is making. We know what all your peers are making and I can tell you, offering is very fair for your experience and, you know, the talent. We we believe you're deeply talented among the best, you know, in the world at what you do. We want you on the team. This is a fair offer. And if you exceed our expectations, we will be the first to seek you out and give you additional responsibility and additional reward. And if you don't believe that, if you're not prepared to trust us, don't join the company. I've had the luxury of never having had to ask for a raise in my life.

• 12:57Speaker 02

  I had management chains that didn't. The right thing. I think that's a sacred responsibility for the management chain is to dole out the rewards appropriately. So it's never squeaky wheel. It's always about who deserves it the most. And if you set that tone early, you get people to trust their management chain. It's a critical way to keep everybody playing for the gold ring and not worried about carving up the pie for themselves.

• 13:20Harry Stebbings?

  What was the variation of responses you got to that? When you cut people off and say, hey, we have the bench, what's happening? Help me understand what's good and what's bad for founders that listen. We have hundreds of thousands of founders that listen who will now do this. What is a good response and what's not a good response?

• 13:34Speaker 02

  I would say my favorite response overall, though, was one really talented employee was having trouble, trouble with this and trusting the management chain. And I said, why? You've met these people, you like them, you say you're inclined to trust them. And he goes, you know, Dietz, it's, it's because I come from the equivalent of a broken home. I've never had a management chain in my career that I could trust, you know, that was out for my best interest. And I said, well, let's fix that. Come join Pure.

• 13:59Harry Stebbings?

  Guys, when you lose that element of trust, you know, someone doesn't do what they said they were gonna do. Someone lets you down. And this is quite deep, but once lost in some way, can trust be regained, do you think? And also, when you have someone, you start with full trust and it's theirs to be lost, or no trust and you build it over time?

• 14:18Speaker 02

  So through the interview process, I think is when you have to be building trust. Trust that this employee is among the best in the world at what they do. And of course, what they do is really important to the company. And so there's part of the interview process is all about forming those trust bonds bidirectional, employee to the leadership team and leadership team back to the employee. I want trust to be there as, as you start. And obviously, you want it to grow over time. And trust does get lost. I mean, you're inevitably going to make hiring mistakes. Any business that's scaling fast is going to make hiring mistakes. And, you know, the number one advice from every CEO I've ever talked to is I was too late in, you know, fixing that. Not everyone makes an elite team. And, you know, I think

• 14:58Speaker 02

  too many people fall into the innocent until proven guilty model of employees. And I'm sorry, that's not the way it works. It's when you're a leader, if your bit flips on somebody, if you lose confidence. Then you need to make the change and I don't like PIPs. You know, I think I'm much more in the Frank Slutman school on this one. You make changes quickly in order to to keep the team on track. If somebody can make a mistake, you don't want to lose trust just because of a mistake, but you need to go to them and and talk about what happened and why and coach them up. So the same mistake isn't going to be made again. If you see mistakes repeated, that's when you start to lose trust. And as soon as you've lost trust, I encourage managers to make the change.

• 15:37Harry Stebbings?

  When making a change, Scott, I suck at firing people. I mean, honestly, it's it's comical. As a Brit, we're not not good at all at this, but I'm especially bad. What's the right way to do it?

• 15:48Speaker 02

  It is a very hard thing to do. And unfortunately, it's something you get practiced at over time. I strive to give some concrete constructive input why this isn't working out. But I also try to leave, you know, the employee, plenty of room to save face and turn their own story, you know, into what happened and why. You've got to be really careful you don't damage someone's career. And I've had the good fortune to be at really, really elite startups with amazing teams. You know, it's like, OK, if you didn't make the top 1% or one half of 1% for a particular reason, maybe other things are going on in your life, that's OK. I mean, you've got so many opportunities in front of you. And I'm even willing, in many cases, to to go to bat for somebody and say, you know, I think in this other job, they can be really successful at your firm.

• 16:33Speaker 02

  And so try to give them a soft landing. But, you know, give them concrete feedback, too, on what they could have done better with the opportunity.

• 16:40Harry Stebbings?

  Do you think so? That's an interesting question for me because I've done that before and I find that I just get, well, Scott, you didn't see that we have this in Q1 and you didn't see in Q2 we have this. And then you get this barrage back of all the excuses. And so I find it simpler to be like, you know what, Scott? Thank you for your efforts.

• 16:59Speaker 02

  So I agree with that, but I think the reason you should get there is every manager should be having substantive one on ones with their employees pretty regularly. I mean, it doesn't have to be weekly, even bi weekly, but probably once a month is minimum. I try to foster bidirectional feedback, not just manager coaching employee, but employee coaching manager, right? Because employees know what they want and need from great managers. Managers, especially high quality employees. So if that feedback is working and flowing, then there are surprises. You know, the employee's been told over and over again that, hey, this isn't working out. We need X from you. Like, sometimes I'm asked to come in and deliver the bad news to an employee. And if they're surprised, that's information for me that the manager hasn't been doing their job.

• 17:40Harry Stebbings?

  You know, when I spoke to Satish before the show, he said, one of your world-class superpowers was your ability to be most incredible salesman to both customers and employees. And to combine that with this incredible technical acumen. I wanted to ask, when thinking about that kind of salesmanship aspect to customers and team members, respectfully, and I'm asking you so it's not egotistical, what makes you so good at sales and inspiring both customers and employees, do you think?

• 18:07Speaker 02

  I think it's a pretty simple recipe. Every sales meeting we had with customers, I would always insist on the customer talking first. And every presenter from the company needed to be there to hear the customer's side and then ask questions and dig in and understand the customer's pain points and aspirations. If you truly understand where the customer is and what the customer is dealing with, then you have the ability to connect the dots with what your product and solution are and why they're a fit. One of the most empowering things you can do is say no to a customer. Especially early on, unhappy customers are supremely painful. 10x more downside for an unhappy customer than upside for a happy customer. Salespeople don't like this, but I would say, no, we're not ready for you yet.

• 18:52Speaker 02

  You know, the sweet spot for what you need is probably still two years off for us. So let's stay in touch. We'll let you know when we're ready. You would not believe how credible that is with customers. You've just won over somebody's, you know, long-term interest. And they'll often turn around and try to convince you that they are a right fit for you. But you need to put yourself in the customer's shoes and say, can we make this customer successful? Are we convinced that we're ready to make them successful? And if the answer is yes, by all means, go for it. But if the answer is no, say no.

• 19:22Harry Stebbings?

  On the team build side, I do have to ask, because I had this chat with the founder the other day. And, you know, I said, you can't settle for good. Great has to be it. Respectfully, that's a luxury. You know, we need to fill seats. That is core. Yeah, we can't wait months. Do you agree that a good hire today is better than the perfect hire tomorrow? And how do you think about that, accepting good now because you need it now?

• 19:44Speaker 02

  Yeah, I mean, it's definitely hard. I think it varies considerably at stage and function, right? There are certain functions that you need to be the best in the world at, and there are other functions that you need to be good at. Engineering hires in particular, especially early on, are something I would sweat really, really deeply because, you know, the difference between a top 1% and a top 10% engineer is pretty dramatic. You know, it's like tenfold productivity. And so it's really, really crucial, you know, to get that. But then there are other functions inside the business that, you know, you don't necessarily need to be the best in the world at finance and accounting, right? You want to be good and you better be squeaky clean, but you don't have to hire the top one-tenth of 1%, like you need to do inside of engineering.

• 20:28Speaker 02

  And so I think you need to focus on the role. I think you want to be really aggressive in the interview process. We put people through the wringer. I mean, we've had multiple engineers that interviewed at places like Google and Facebook and say, wow, I never felt like I got interviewed until I got interviewed at Pure, because we would really challenge them. And periodically, we'd have, you know, folks that would say, oh, I'm too senior. You know, I don't want to go through that process and be like, okay, then you're not a fit for our culture. Because if you're not curious enough and confident enough to want to try this process out, then, you know, we're happy to take the pass on you.

• 20:59Harry Stebbings?

  And do you want to, you know, go back to a statement that you said from Anil, which was, you know, managing above and below? We've spoken a lot about managing, but, you know, below in terms of the team. In terms of the board, you know, we connected first through Mike, and it was over something that you said about board members. And so I'd love for you to share that with me.

• 21:17Speaker 02

  So Mike Pfizer, who was the original CEO at Pure before he and Anil really brought me into the job. This was after we'd had the good fortune to add people like Frank Slutman and Satish Darmeraj. Anil was already on the board and Mike Volpe, too. I had informally stacked ranked the board members based on value per word. Jokingly told, you know, Mike, you're not at the top of the list. In any way to discourage his contributions were phenomenal. I don't even remember why I was delivering that. It was done in a humorous way and he omitted this from his tweet, but I said, by the way, I'm at the bottom of that list, right? I talk a lot in board meetings. My value per word is the lowest. But it was in a way to express the supreme good fortune I had as CEO to have multiple CEOs on the board.

• 22:01Speaker 02

  And Aneel, and Frank, Mike Volpe had been a CEO, Spicer had been a CEO, Satish had been a CEO. So to have five CEOs on the board was really dramatic for me in terms of lots of advice on how to better do my job. And I think that's what you want to look for in a board is you don't want really close friends that aren't going to be tough on you and press hard. I'm not looking for someone to micromanage on the board, but I am looking for someone, you know, to push back. And it's great if you can have people with good sales experience, marketing experience. It's almost like everyone on your leadership team has a shadow on the board. They mentor them and give them advice on how to approach their job. I really like to foster a lot of communication between the leadership team and the board as opposed to being like a funnel myself.

• 22:45Speaker 02

  Because then everybody benefits from the experience of the board.

• 22:49Harry Stebbings?

  Talk to me about that. How do you foster that relationship with the leadership team and the board? What does one actively do to create that where it's not actually normal? I'm on many boards and I have to seek that out.

• 22:59Speaker 02

  Well, so one thing in as the CEO, make sure you give lots of airtime in board meetings to your leadership team and have them there for the open session. I would bring the whole of my leadership team in most board meetings and certainly everyone would present in their functional areas, right? When we're discussing sales, it's the salesperson talking. We're discussing engineering, it's the CTO and the VP of engineering talking. You know, I'm there to provide overall high level goals, like I would start every board meeting with here's the good news and here's the stuff we got to work on. You know, that just simple one slide, what we're happy with, what, you know, we're most sweating right now. But then let each of the functional areas drive that. I think you want to go further and actually specifically identify board members to mentor the key functions, right?

• 23:42Speaker 02

  So, you know, especially for sales and marketing, it's really good to have a board member that can provide insight and even bring people with that expertise on. The board, you know, as you're ramping toward public, being public, you bring in an audit chair. Somebody can coach up your CFO and even help hire the best CFO. So it's almost like you can build board first and then use the board to help build your leadership team. If you have the right sales, marketing and financial expertise on your board.

• 24:06Harry Stebbings?

  Where do you think many founders go wrong in terms of managing their board?

• 24:10Speaker 02

  I've seen lots of mistakes. One of the classics is just posing a problem to the board and then, you know, saying, what do I do? That's not the board's job. If you're a founder CEO, your job is to propose a path and then rely on the board to help you course correct. So the one side of the error is not coming in with a plan. Got a problem, if you're going to propose it to the board, you know, you're going to get a plan out of it. You're better off going in with a plan and letting the board course correct. I would say the other thing, though, that I see founders do is not share bad news with their boards. And then they really limit the amount of help they can get from their board. So they're so interested in trying to sell, sell their board on only the good news, that they don't actually present challenges and what they're worried about.

• 24:53Speaker 02

  And then, you know, the board's got to try to dig in and ferret that stuff out. You know, the latter problem is almost always tied to insecurity. I would say, you know, going back to why I wasn't nervous at Pure in the early days. Everything was about the orange flag of Pure, right? My job as a servant leader is to try to raise that flag as high as possible. And so I'm going to do the best I can, but I'm, I'm not going to be worried about my own success. I'm worried about Pure's success. And that frees you up to really take ego out of the equation.

• 25:20Harry Stebbings?

  This is what worries me, though, about multi-stage funds with board seats. Because if you have a multi-stage fund leader A and you're the CEO and I'm on your board, are you really going to tell me that that last quarter was terrible? By the way, we're raising a series B and I'd kind of love you to lead it internally. And so it kind of creates this distorted truth mechanism I find within the board, because you can't bring them everything, because you want them to give you a markup for the next round.

• 25:44Speaker 02

  Well, I mean, ideally, you just don't raise after a bad quarter. I always encourage people to be looking nine months out, right? You don't want to be at the 11th hour trying to make a raise, because then, you know, you're desperate. And so insulate yourself from that by, you know, raising early. I would also encourage, we never took the highest valuation that was offered to us. We chose a fair and good evaluation in order to get the best possible board participation for the company. I would optimize that on upside after the raise. Like, don't view the raise as the end game. The raise is just one step along the way. And so look past the raise to what's going to happen afterwards and don't overpromise. Another classic founder-CEO mistake is offering, you know, a dramatic upside.

• 26:27Speaker 02

  Paint a great long-term vision, but be really pragmatic about what you can achieve in the coming quarters. So you underpromise and overdeliver consistently.

• 26:35Harry Stebbings?

  I totally agree with you in terms of that overpromise. I do have to ask, you know, in terms of, you know, the boards that we mentioned, you've also sat on boards on the other side of the table. How did sitting both as a board member and then also managing a board as a CEO, how did that impact how you approached board management as a CEO, having the other had as a board member?

• 26:54Speaker 02

  You know, I had the privilege of being on boards before I became CEO. I think it's really helpful to see how the mechanics work, to see what's, you know, you like about how boards are being managed and what you want to change. It really caused me to be very, very careful about who's on the board. What are the dynamics of the board meeting like? I really like a very collegial, open board meeting. But then you've got to also be careful that where you don't have like one person drowning out other board members. And so I think in managing the board, I would try to be careful to make sure that we were getting the input from the board members with the greatest expertise on a specific issue. And so I wouldn't leave a topic until I got particular board members, if they were being quiet, to speak up and share what I was looking for from their perspective.

• 27:37Speaker 02

  And so CEO's job is really to manage those board dynamics, you know, to build the board, to preserve that kind of great collegial collaborative trust, but open environment where you can say anything.

• 27:47Harry Stebbings?

  Scott, can I ask, you know, when I listen to you speak, you speak with such calmness, but also authority. And, you know, I would listen to podcasts before, I would hear leaders like you and I'd go, oh, that's Scott. And it would never be me. And I guess I kind of would love to understand, you know, every leader has insecurities. When you look back to your leadership as a CEO, were there some core insecurities that you faced as a leader? And I'm intrigued, how did you overcome them?

• 28:11Speaker 02

  I certainly had insecurities in grad school. There's something called imposter syndrome. I was really successful as an undergrad in a strong program and I thought, oh my gosh, I'm great. And I got into grad school and I'm like, wow, these people are crazy smart and the professors are even smarter. Do I even belong here? What am I doing? And you know, I think I had some of that in my first job too, where I wasn't, I thought I was bright. I've never been the best technologist or the best business person at any of the companies I've been at, but I can straddle them effectively, right? I have a combination of business acumen and technical expertise that allows me to be a bridge. And I think that's part of what's allowed me to be successful. And I would say the other thing is over time, your instincts, you watch your instincts play out.

• 28:52Speaker 02

  Some of my early work, I second guess myself about things because there are people here that know more than me. But when I turned out to be right, you get ever more conviction to follow your gut. But then the most important thing I said earlier, which is it's all about the company, it's not about you, right? You're a tool, just like everyone else on the team for the company's success. And so if you check your ego at the door and focus on what can I do to help make this team capable of achieving its goals, you're liberated from worrying about that. You can just do the best you can and hire people that complement your skills. Another classic mistake is hiring people that look like you and think like you, whereas you really want people that have complementary skill sets and experiences so that you can de-risk together.

• 29:35Harry Stebbings?

  Final one before a quick fire, but on the leadership style that you have, how did having children change your leadership style? Did it change how you operate, how you engage, how you communicate?

• 29:47Speaker 02

  That's very interesting. You have this vision of children that, you know, they're gonna want your leadership. And my own experience at least is the opposite, that, you know, my children were fiercely independent from birth, right? Like, you know, they're gonna own what's going on around them and they wanna take charge. You know, and I would say that's certainly the leadership style that I tried to approach with. If you're micromanaging somebody, there's a mistake, right? Either you've hired the wrong person or you're in the wrong job if you're trying to manage somebody else. And so when things go wrong and they're inevitably gonna go wrong, then you wanna try to. Give people the help they need to be successful, but you shouldn't have to micromanage anyone. And I try not to micromanage my kids. Piece of parenting advice I got from a friend. He said, you know, I got my best parenting advice from watching nature programs.

• 30:31Speaker 02

  A lioness will engage aggressively if she fears for the safety of her cubs. But otherwise, she models the behavior that she wants. And that is a really powerful tool as a parent and I think as a leader. You ultimately need to model the behavior that you want. I would work, right? I made sure that I was doing, I was an individual contributor even as CEO, because I wanted every manager to be contributing and doing things, particular in the early days. And so I think a lot of the culture came out of the leadership team, modeling the behavior that we wanted to foster across the whole team.

• 31:04Harry Stebbings?

  Tell me, I want to move into a quick fire, Anne, which is my favorite. So I say a short statement and then you give me your immediate thoughts. Does that sound okay?

• 31:10Speaker 02

  Let's try and find out.

• 31:12Harry Stebbings?

  What are the favorite books? A lot of people have like reading lists for the year. What's your favorite book that you go back to?

• 31:18Speaker 02

  So I've gone back several times to the, I think it's the 20 immutable laws of marketing. That's one. First chapter of Innovator's Dilemma is, you know, every time I read that, I get something new out of it. This is not necessarily relevant to entrepreneurship, but Israeli historian that did a book called Sapiens. And then 21 Lessons for the 21st Century. This is Yval Harari. And I'm currently reading his second book. They're all fantastic. He makes complex things simple, but I would really encourage people want to get a broad perspective on the history and future of humanity. I think it's worthwhile reading.

• 31:51Harry Stebbings?

  What are your OKRs and targets for 2022?

• 31:54Speaker 02

  So, you know, I'm currently not in a job. So I'm doing a lot more in board work and investing and mentoring. I'm trying to secure, help secure funding for one of my companies, helping coach CEOs on a couple of others. But it's much more about like, how can I contribute to making sure those companies continue on their track? And it's, it's really exciting. And I get to do a bunch of work with Mr. Spizer and the Sutter Hill team. They are on fire right now. I mean, they've got so many good things going. It's really fun and dramatic to see. I've got some, some other companies outside that are working in range of different things. One is trying to Change the technology for how video is delivered from the GPU to the screen because we're running out of gas. So there's an opportunity to change that architecture.

• 32:39Speaker 02

  I tend to play in the B two B space. I think those markets are a lot easier to predict and they're less oversubscribed than the consumer markets where I have far less expertise. My, my goal is to have fun and work with people that I like and be a great dad. That would be how I'm spending my time.

• 32:52Harry Stebbings?

  I love that and I'm totally with you on the fun. Tell me what piece of advice you often give, but find hard to follow yourself.

• 32:59Speaker 02

  I would say when I was in the seat, I would say it's a marathon, not a sprint. I would struggle to follow that. I am an obsessive competitor, like I see things that I think need to be done and I'm willing to take them on myself. So I would not necessarily do a great job of leading a balanced life, even though I strongly encourage the team to do it, right? Don't work anaerobically to where you're building a deficit. You know, you've got to find ways to be productive, improve your productivity to make it sustainable.

• 33:24Harry Stebbings?

  Final one, what do you know now that you wish you'd known at the start?

• 33:28Speaker 02

  It's interesting to think about the trajectory that, you know, I might have taken. You know, when you look at life, it's like you're climbing a tree and you make these choices and you're getting out on ever smaller branches. I turned down some pretty amazing job opportunities. I had the chance to be early on at Microsoft, early on at Amazon, earlier on at Google. I have no idea where I would have landed if I had chosen one of those companies as opposed to just four very early stage startups. I've had the luxury of having two of those startups really be grand slams in web logic and pure storage and gotten to work with the most amazing teams. So, you know, while I'm curious, I'm so gratified with, you know, the career trajectory that I've had

• 34:11Speaker 02

  and the many great people I've gotten to work with and the great markets I've gotten to play with, play in.

• 34:15Harry Stebbings?

  Scott, this has been so much fun. As I said, I heard so many great things from the many mutual friends we have. So thank you so much for joining me today and I've loved doing this.

• 34:23Speaker 02

  My sincere pleasure, Harry. It was really good fun. I don't know, maybe we'll get to do it again down the road.

• 34:30Harry Stebbings?

  What a wonderful person. I mean, I just love that in terms of learning parenting from nature programs and imbuing the behaviors you want your children to see and always acting them out. If you'd like to see more from us, of course, you can on the 20minutevc.com. But before we leave you today. Our first sponsor for this episode is CoreSignal. CoreSignal is a data vendor providing fresh, raw data collected from public web sources. CoreSignal works with leading Silicon Valley VC firms, helping them enhance their discovery and analysis. CoreSignal collects and regularly updates records of millions of professionals and companies from all over the world, allowing VCs focusing on all stages of funding to do one of three things incredibly well: discover promising companies at the founding moment, capture and quantify startup

• 35:11Harry Stebbings?

  traction, augment their DD process. Head over to coresignal.com/20vc and download a free ebook that explains the various benefits alternative data offers for VCs. Once again, that's coresignal.com/20vc. And to be even credible tools like CoreSignal there, from websites and online stores to marketing tools and analytics, Squarespace is the all-in-one platform to build a beautiful online presence and run your business. There are three things for me that really stood out about Squarespace. First, mobile optimized websites. All websites are optimized for mobile in a way that content automatically just adjusts so beautifully so your site looks great on any device. Pretty awesome. Second is the email campaigns. Squarespace makes it super easy to grow and engage your audience with Squarespace email

• 35:55Harry Stebbings?

  campaigns. And finally, SEO tools. Squarespace takes the guesswork out of SEO, so you'll get found in search by more people more often. And if that wasn't good enough, go to squarespace.com/20vc for a free trial. And when you're ready to launch, use the offer code 20vc and you'll save 10% off your first purchase of a website or a domain name. And last but by no means least, the incredible team at Angel List. They've been a key partner for me in managing my investments. I love using the Angel List platform because it abstracts away all the complexity and operational burden of fund management. So whether you're running SPVs, a traditional venture fund like me, or even a rolling fund, Angel List has you covered. I'm also, though, super excited about their new product, Angel List Stack, which is purpose-built for founders. With Angel List Stack, you can create a fundraising-ready startup in just

• 36:40Harry Stebbings?

  a few clicks. Angel List handles your company's incorporation, banking, cap table, and fundraising process all in one single place. This allows founders to focus on building. If you're a founder, you can launch your company at stack.angelist.com/20vc. Whether you're a founder or thunder, you're in great hands with Angel List. Stay tuned. This week we have two more very special episodes to come. We have a The Memo on Tiger Global. And then we also have a very special announcement on Friday with a new fund announcement.