20VC: Why Raising A Mega-Round Makes Your Life Harder Not Easier, Why Your Board Is Not Your Boss and Lessons on Successful Board Management & The Biggest Breakpoints in Company Scaling with Emmanuel Schalit, Founder & CEO @ Dashlane

Emmanuel Schalit is the Founder & CEO @ Dashlane, the company that provides your all-in-one internet shortcut for passwords, payments and personal info. To date, Emmanuel has raised over $192m in funding for Dashlane from some of the best in the business including Jim Goetz @ Sequoia Capital, Rick @ Firstmark, Alex @ Bessemer and Habib @ Rho, just to name a few. As for Emmanuel, prior to founding Dashlane, he was the CEO @ CBS Outdoor in France and before that COO @ La Martiniere Group. In Today’s Episode You Will Learn: 1.) How Emmanuel made his way from CEO of 5,000+ people companies to founding Dashlane and changing the world of passwords and identification? How does Emmanuel asses his own risk profile moving from CEO of a large company to starting Dashlane? 2.) Is Emmanuel concerned by the excess capital available today? Why does Emmanuel believe that raising a mega-round makes your life as a founder harder, not easier? What specifically becomes harder? How does Emmanuel advise founders when it comes to burn and capital efficiency? How does Emmanuel think about when is the right time to pour fuel on the fire? 3.) Where does Emmanuel think that VCs do tangibly add real value? Where does Emmanuel believe that despite what some think, VCs do not add value in certain areas? What have been Emmanuel's biggest lessons of operating and managing a VC board? What does he advise founders starting out on this learning curve? 4.) What does Emmanuel believe are the core challenges of scale? What breaks at what specific points? How has Emmanuel seen himself scale in his role as CEO? What have been the most challenging element to scale into? How did Emmanuel get through them and what does he do to mitigate them now? Items Mentioned In Today’s Show: Emmanuel’s Fave Book: Sapiens: A Brief History of Humankind As always you can follow Harry, The Twenty Minute VC and Emmanuel on Twitter here!

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 Founders Friday on the 20 Minute VC with me, Harry Stebbings, and I'd love to hear your thoughts on the show. For all feedback, both positive and negative, hit me up on Instagram at H Stebbings 1996 with two Bs. It would be great to see you there. But to the show's day, I'm following our episode with Dave Tish at Box Group on Monday. We remain in New York, but change sides of the table from VC to founder. And so with that, I'm thrilled to welcome Emmanuel Chalit, founder and CEO at Dashlane, the company that provides your all-in-one internet shortcut for passwords, payments, and personal information. To date, Emmanuel's raised over $192 million in funding for Dashlane from some of the best in the business, including Jim Getz at Sequoia, Rick at Firstmark, Alex at Bessemer, and Habib at Row, just to name a few. As for Emmanuel, prior to founding Dashlane, he was the CEO

• 0:45Harry Stebbings?

  at CBS Outdoor in France, and before that, COO at La Martinier Group. I'd also want to say a huge thank you to Rick at Firstmark and Alex at Bessemer for providing some fantastic questions and suggestions for today. Mojitos on me for that, chaps. So every time you listen to a podcast or go online, you get another ad for a mattress, thousands of them, but only one uses technology and temperature to give you the deepest, sweetest sleep, the Pod by Eight Sleep, the first bed to combine dynamic temperature regulation and sleep tracking to ensure you're getting the best sleep possible. Research shows the deep link between sleep performance and temperature, so the Pod reacts in real time to your body's unique needs, adjusting the temperature to keep you comfortable and sleeping deeply all night long. The stats say it all. Customers who sleep on the Pod fall asleep

• 1:28Harry Stebbings?

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• 2:10Harry Stebbings?

  Interest rate of 1.4% APY and no hidden fees. Point is currently invite only. Unfortunately for listeners of 20 minute VC, they have created a special invite code for you, 20 VC, and you get 500 points for signing up. So go to point.app to learn more. And remember to use the special invite code 20 VC to get early access and start racking up points with some of your favourite brands. And speaking of brands we love there, so you know when you go to a website and you just want one thing? It should be simple. It should be quick, friendly even. Well, that's Intercom's motto. So Intercom make that little chat bubble in the corner of a website, opening your business up to customers in quick and friendly ways. But it doesn't stop there. Intercom extends your team with conversational bots and guided tours inside your product. Take Intercom's success story, Unity.

• 2:55Harry Stebbings?

  Before using Intercom, visitors kept abandoning their site. The Intercom Messenger helped Unity get proactive with their visitors. In just 12 months with Intercom, Unity got 45% more customers. So give your customers the one thing they're looking for and get your best revenue channel yet. Go to intercom.com/podcast, then see everything else Intercom can do for you. That is quite enough of me druing on though. So now I'm very excited to hand over to Emmanuel Shalit, founder and CEO at Dashlane.

• 3:27Speaker 01

  You have now arrived at your destination.

• 3:30Harry Stebbings?

  Emmanuel, my word, it is such a pleasure to have you on the show. As I said, I've heard so many great things, both from Rick at First Mark and from Alex at Bestmas. So thank you so much for joining me today.

• 3:38Speaker 02

  Thank you. It's a pleasure to be here with you.

• 3:40Harry Stebbings?

  I would though love to kick off today with a little bit on you. So, so tell me, you went from being CEO at CBS, a very large company, to founding Dashlane. So what was the entry into startups for you? And what was that aha moment for you with Dashlane?

• 3:53Speaker 02

  So I was the CEO of a unit of CBS called CBS Outdoor, their billboard business in France. It was a mid-sized company of about 1,200 people, a few hundred million in revenue. And when I left it after working for a number of years on essentially what was a turnaround plan, I decided to go back in tech because that's my passion originally. I'm a software engineer. I looked for what at the time I called small tech companies of a few thousand people. A few hundred million revenue and I met with the people that had started down the path of what we've become Dashlane. And I was fascinated by the idea of solving what was one of the biggest unsolved problems of the internet. How we navigate and we authenticate from services to services.

• 4:37Speaker 02

  I was fascinated by that, but obviously from a carrier standpoint, it didn't make a lot of sense for me to join what was almost not a company at the time. And I had actually decided to turn down the very generous offer that Bernard Yoto, who was part of that funding team, made to me to join as CEO. And I was actually on a train from Paris to London on the Eurostar to go meet with a number of folks, you know, private equity investors to talk about real CEO jobs in real companies. And I was also supposed to meet with Bernard Yoto to give him my answer on whether I joined Dashlane or not. And I ended up on that train, sitting across from a very successful headhunter I had worked with in the past. She had helped me hire senior executives. And she asked me what I was going to do in London.

• 5:19Speaker 02

  I told her about my various meetings and I said, of course, you're advising me against joining this very, very early team that is starting this because it's a very risky carrier move. And essentially on the train from Paris to New York, she made me change my mind. And I went into the meeting where I planned to say no and I ended up saying yes. That was nine years ago, almost to the day. And that's the best decision I ever made, even though it was a risky one.

• 5:43Harry Stebbings?

  Can I ask, and do say if it's too personal, what did she say that made you change your mind?

• 5:48Speaker 02

  Yes, you can absolutely ask. So she asked me if I had put together a list of criteria for what my ideal next job would be like. And I gave her that list of criteria. I said, look, it has to be a company that's in technology because I've spent many years trying to help traditional companies migrate towards technology or towards a world that software is transforming. And it's very hard to get traditional businesses to do that. They just don't have the mindset. So number one, it needs to be fundamentally about technology. Number two, it needs to be a high growth business because again, I have spent the last eight years turning around traditional businesses where a good year was plus two percent and a bad year was minus two percent. In order to be in a world where a good year was plus two hundred percent. So the second characteristic

• 6:30Speaker 02

  Was high gross and the third one was I wanted to be global because my life has been about building global businesses. And she said, well, that thing you're talking about, which was not even called Dashlane at the time. It's certainly about technology. I had to say yes. It's certainly going to be high gross because when you start from zero, you are going to grow fast. And by definition, the problem you're going after is a global problem. So she ended up telling me, look, it may, it may not work out. But you should give it a try. Give it a few months, give it six months, give it nine months and see where it takes you. And that's what I ended up doing. When I met with Bernard Uto, I told him, look, I'm going to join for nine months. And I'm going to try to build a team, build a product and raise the first round of capital.

• 7:09Speaker 02

  If it doesn't work, no harm done because anyway, you know, you can't really pay me for my market value other than with equity. And if it works, we'll see where we take it and the rest is history. And again, it's the best decision I ever made to follow Bernard's instinct that this would be a big market. And it's the best job I've ever had by far, even though Dashlane in spite of all of its growth is still the smallest company I've ever run.

• 7:31Harry Stebbings?

  I mean, I, I find that very interesting, being the smallest company you've ever run. I do have to answer. You mentioned that like if it doesn't work out and that mindset in the beginning of trying for like nine months with that almost trial phase. It makes me ask, like, how would you assess your own appetite for risk?

• 7:44Speaker 02

  So I think appetite for risk is something that changes over time. And I think naturally I tend to like risk. If I look at, you know, some of the sports or activities I've done outside of work, many of them. Now that I think about it retrospectively, I've included a fair amount of risk. But I think in this case, it also came at a time where I had not necessarily taken a massive amount of risk in the previous years in my career. And I felt I needed to start something from a size where it was small enough, which certainly Dashlane was. So that, you know, I could really look at this and say, build something from scratch.

• 8:21Harry Stebbings?

  Yeah, no, I totally get that feeling of kind of building something of your own. I do want to dive into the meat of the show today though, Manuel. And I want to start on the element of mega rounds. It was just yesterday, there were six a hundred million dollar rounds alone. So first, I guess, starting from a more macro, you've seen many different business cycles. Are you concerned by the excess capital? Available today.

• 8:41Speaker 02

  So the first thing I would say is the excess of capital available today is a fact. Like, there is so much cash that is looking for places where it can be invested. That whether you or I are concerned about it or not, that capital is still there. And he's still looking for ways to get better return than what treasury bonds or or money markets are giving today. And it's not easy in a world where you have negative rates to find what places to put your money. So the thing that is fueling that excess of capital is not about to go away anytime soon, whether we find it good or bad. I think the question of whether raising a large round for a company, the question of whether that's a good or a bad idea.

• 9:19Speaker 02

  I don't think that there's a general answer. I think it depends much more on very specific circumstances about a given business at a given point in its life cycle.

• 9:28Harry Stebbings?

  When we spoke before, there, you said raising a lot of money does not make your life easier, it makes it harder. I think that goes against conventional wisdom for founders that it does make it easier. So why do you believe this and what becomes harder?

• 9:40Speaker 02

  So, I mean, the funny story is that before we raised the very large round we raised from Sequoia, which was one hundred and ten million in May. We had raised meaningful sums of money, but in smaller rounds, and when you raise smaller rounds, you have to be relatively frugal about, oh, you invest the capital, you have to be thinking about the next round. And money is at all times a very important consideration for a founder and a CEO. And you have this fantasy that, you know, oh, maybe one day I'll raise a mega round and then I'll be able to focus on on other things than money. And my life is just going to become easier from one day to the next. It's actually quite the contrary, because, and I I'm speaking from experience, because six months ago we raised the mega round.

• 10:25Speaker 02

  Because of a couple of things. The first one is that, obviously, when you raise a mega round, you do that at a high valuation, otherwise it's massively dilutive. And as a result, you completely change the parameters of your potential exit. You have to exit at a much higher valuation. So suddenly you've raised the bar for you and your team by a massive amount, and it's a one-way decision. You can't go back. As a consequence, you also. Whether you like it or not, the the level of pressure on the organization is increasing very, very quickly because suddenly the target has changed and it's a much, much bigger target for us. You know, we need to build a multi-billion dollar company for this to make any sense. And when you look at the history of companies, not many people succeed doing that. So that's the first part.

• 11:10Speaker 02

  But the second thing is that once you start deploying that capital, and in particular, once you start growing the size of your team much faster, that's when lots of things break in your company. From things around the fact that you may not have built at a smaller scale, the right level of middle management. You didn't have the money to do that, you didn't have the need for it. Now, suddenly, you're talking about a company that's going to go from, a year ago, we were eighty people, to today, we are two hundred and fifty. In a year, we'll be four hundred and fifty. When you grow at that pace, you don't have the management, you don't have the bench, you don't have the management layers to manage the company at that scale. And building it very quickly is a big challenge. Your culture is also put under a massive amount of pressure because suddenly, if I look at our company today, half of the people that are at Dashlane were not there a year ago.

• 11:55Speaker 02

  Actually, I think half of the people that are at Dashlane were not there nine months ago. So what does it do to the culture of your company when there are so many newcomers that were not there for the previous episodes in that season and don't have that culture, you know, deeply ingrained in? The culture is very organic. And then you have other very trivial things that break, but that have a huge impact on how your team functions. Things like your offices are not adequate anymore, they're too small, you have to spread your people over multiple locations, your IT is not able to cope with, you know, the the number of people, the number of meeting rooms you don't like. And all of these things are being revealed suddenly under the very crude light of, you know, hypergrowth. And so, yes, life doesn't become easier once you raise a much bigger and becomes much harder.

• 12:38Harry Stebbings?

  I mean, my word, what a salesman for a mega round. But I I do have to ask one, well, a couple of things, really. The first was, you said about the pressure there. It's an interesting one. Do you want the team to feel the pressure? And do you yourself want to feel the pressure? Because in a good way, it's a it's a forcing mechanism to make you think bigger, stretch dreams, ambitions, hours longer. But then it's also challenging because, you know, the pressure can also be too much. So do you? Do you want to feel the pressure and do you want your team to feel the pressure or do you not want that?

• 13:04Speaker 02

  So I think the answer is different when I think about me and maybe the people I worked with the most directly, the executives that are part of my immediate team were all very, very senior and seasoned. I think at our level, it is important that we share the same understanding of what the outcome needs to look like. I think again, that's senior executives like me and the immediate member of my team. We are very generously compensated for the job we do. We should look at the company as a shareholder and as such, yes, we need to understand what these hurdles mean and what a good outcome is versus a bad outcome. I think at that level, it is critical. I think for the team, in a broader sense, it's different because for me, it's more about,

• 13:48Speaker 02

  I want them to be motivated by the one thing we all share, which is the opportunity to build a formidable business that before us did not exist. And to have accomplished something like, if we do succeed, if we do reach our goals for all the people on the team, this is going to be something they remember all their life. This is going to be something they're going to be proud of all their life. This is going to be something that's going to be incredibly meaningful for their future careers because they're going to be able to say, oh, right, you were part of the team that built Ashland. Well, you know, immediately you are you are taken seriously because you built that incredible company. So, you know, from that perspective, I think it's about extracting what's positive about the outsized outcome we are going after, but not so much the pressure.

• 14:31Speaker 02

  And by the way, you know, don't get me wrong, the pressure is not coming from the board and the investors. If you are a self motivated executive, that pressure comes from inside. It's you've just made the decision to take that round. And so as such, you have you have created that pressure for yourself. Nobody has forced it upon you. And my board didn't tell me we should do that round. I came to them and said to them, I think, given the opportunity we have, it does make sense to do it. And I accept the implications of doing it.

• 14:59Harry Stebbings?

  Well, that's super interesting because I do want to kind of hit on that inflection point. So why did you at that point feel that then was the right time to raise the mega round and go big? And how do you think about when's the right? Time to flip the switch, so to speak, from the frugal mind that you mentioned to actually we need to raise big. How do you determine the switch?

• 15:16Speaker 02

  So the first driver is clearly related to market conditions, especially in a case like ours. Because what we're effectively doing is we are creating a mainstream consumer category. And even in the enterprise world, that doesn't really fully exist today. Or didn't really fully exist until I would say we raised this first mega round, which I think was the validation that the category was meaningful. So first it's about is there a market opportunity that is big enough to reasonably think that we can create a large multi-billion dollar public company at some point. And there are a number of things that happen in the market in terms of its maturity, but also in terms of the mobile ecosystems opening up to what we do on Android and iOS

• 16:00Speaker 02

  that suddenly let us see and quite frankly, let Sequoia Capital and our existing investors see that the opportunity was actually going to be much bigger. The other thing that was a beginning etir of that is that we now live in a world where clearly these issues of privacy, of breaches of credentials and password are absolutely top of mind for everyone. You can't escape from them. They are constantly present in the new cycle, in the political cycle, in the business cycle. So all of these factors are about the market. The second thing is about do we think we have a business model and a set of capabilities that will allow us to deploy that capital in a way that we create value? Because you can always spend money, but the question is can you spend it in a way

• 16:44Speaker 02

  that once you have spent it, you have created sufficient gross that it was actually worth spending that very expensive capital? And so we took a hard look at our business model that has some pretty fascinating characteristics in terms of the retention of users, the monetization of customers and also the very high gross margin of any pure SaaS business, which I think is the big differentiator today. When you think about some of the very large public or non-public companies like ridesharing and office space sharing, these are tech-enabled companies for which technology is somewhat Important, but that structurally have very low gross margins because they live in the physical world. Companies like us and many others like, you know, the Zooms and the Slacks of the world.

• 17:29Speaker 02

  We are pure play software players, which means we have super high gross margins, which means being profitable is not the fundamental challenge. If we can grow fast, we can get to profitability quickly. And so that provides a good foundation to deploy a large amount of capital.

• 17:44Harry Stebbings?

  In terms of like the deployment of large amounts of capital, when you think about advising other founders who I'm sure come to you and ask for advice today. What do you advise them when it comes to capital efficiency and burn? Are there commonalities in what you find yourself saying?

• 17:56Speaker 02

  So the first advice I give to people that ask me advice is to always take my advice or anyone's advice with a grain of salt. Why? Because every company and every set of circumstances is fundamentally different. And you can only benefit from advice if you understand what it applies to you, or that's number one. Number two, again, I think for me it has to do with can you build a credible case? Can you convince yourself as a CEO, as a founder, that you are going to deploy that amount of money quickly enough to produce enough acceleration in our growth that the risk of increasing the exit bar is worth the reward. It's really based on, do you have the leadership team?

• 18:41Speaker 02

  Do you have the business model and the gross margin? Do you have ways? Do you know where you are going to deploy that capital? Do you have investors that are going to be willing to take the level of risk that comes with deploying large amounts of capital? Because if you are very frugal, you may be able to raise lots of capital, but you are sure are not going to be able to spend it. If you are very frugal, deploying a lot of capital means stop being frugal. So you need to have the culture that is able to make that shift. And for us, it's a challenging shift because we've been frugal over the years. And now we have to relearn how we do things. We have to learn how to take a level of risk we are not used to taking. All the ingredients are there, the market, the leadership team, the margin structure, the board that supports a new level of risk. Yes, it's worth it.

• 19:25Harry Stebbings?

  Can I ask, how do you feel about the many companies today that are essentially going, like you said at the beginning, market conditions are super important. Many founders have massive excess of capital available and they go, you know what? We might as well take it because a storm could be coming and we could warehouse it and it gives us five years of runway. One of my angel investments has got 12 years of runway. How do you feel about the warehousing of cash?

• 19:47Speaker 02

  Certainly, that's one of the benefits of raising a large amount of money. But it depends on where you are in your growth curve. If you're already growing very fast and you have access to more capital and with that create a bunker balance sheet that protects you against anything, by all means. But if you're not, in other words, if you know the value of your company is going to grow massively over time, even without that capital, yes, you can raise it and put it aside as a safety mechanism. But if you're not growing at an incredible rate, if you are not guaranteed to be worth way more money without using that capital, then you must deploy it. Because otherwise, you will have raised your exit bar, you will have a lot of money in the bank, but you will not have grown the value of your company sufficiently.

• 20:30Speaker 02

  And the only thing you've done is you've put your equity underwater potentially, because you'll never justify the valuation of that round.

• 20:36Harry Stebbings?

  Yeah, no, I do agree in terms of the inability to justify the valuation there. We mentioned the money a lot, but what about the people behind the money? And as I said, I spoke to Rick and Alex before the show, and both of them asked some questions. And Rick in particular asked this one, which I really liked. And he said, where do you think VCs can meaningfully help? And where do you think many think they can, but actually rarely do?

• 20:57Speaker 02

  So VCs are, if you know how to work with them, they are incredibly helpful. And by the way, not all for the same things. Some are going to be incredibly helpful because they have such a vast network and they are fantastic connectors that if you want to meet somebody to recruit or just for advice, they will know that person, they will give you access to anyone. Some are incredibly helpful because they have seen so many things that you encounter a situation and they are the pattern recognition engine that will give you the... These are the three things companies do when they encounter that. Some are going to be incredibly helpful because they are firm and First Mark is certainly top of mind when it comes to this, do so much in terms of their community of entrepreneurs, particularly in New York,

• 21:40Speaker 02

  to create a community of CEOs, create a community of CMOs, of CPOs, to share best practices. And just the other thing that VCs can do a lot is provide you with an opportunity to meet with other CEOs or other executives without them being... In the room because there's nothing more precious than talking to another CEO and realizing that the challenges you're going through, they're also going through them and maybe they have solved them in a different way. So VCs way beyond the money they bring can be incredibly helpful. And that is why actually that was one of the key decisions or decision factors when we took that very large round from Sequoia. We had no intention of raising a round at that time. We had just raised a significant round of debt and we were not looking for new capital. The thing

• 22:25Speaker 02

  that decided me was the combination of two things. One was clearly with that amount of capital, we could think about our business plan differently, which is what we're doing today. But B, the opportunity to have Jim Gertz from Sequoia joining our board, given his vast experience and given what the Sequoia brand brings in terms of recruiting and partnering, was also going to be a key factor when it joined with the forces of First Mark and Bessemer and Rogue who are already there with us. So I think all these things are part of the consideration, but you need to learn how to work with your VCs and with each and every one of them individually because they all bring different things. And a lot of that work happens outside of the boardroom, actually.

• 23:03Harry Stebbings?

  No, I totally agree. And I absolutely do not blame you on the Jim Goetz and Sequoia. It's a very unique situation and person. In terms of the flip side, where do you think many people think that they really help, but actually rarely do? Again, this was Rick.

• 23:16Speaker 02

  So I think it also has to do with, I'm going to tell you something that may surprise you, but I think the thing I wish I knew if I was starting again is I wish I knew how to work with a board in a VC-backed company. It took me a while to learn how to do that because when you've run companies in a more corporate environment or large divisions and the largest division I had run at 10,000 people and close to $2 billion in revenue. So it's not like I've never run large organizations, but the dynamics are completely different with VCs because your board is not your boss. You are running the company and you're running the board and you have to really understand that because you become effective at working with your board and your VCs. The moment you understand that the board is there to advise and the board is there to

• 24:01Speaker 02

  consent on certain important corporate decisions, but the board is not there to run the company. And so where VCs and CEO founders build a negative dynamic is when they break that model of advice and consent and when because the CEO allows it or because the VCs want to jump in more, they start running the company and that's a recipe for disaster regardless of well intention, how well intentioned the VCs are because they don't have the context. They are too far from the company, they are on 10, 15 different boards, they spend a few hours a month on the company and most of the decisions they are going to make are the wrong decision. And so as a CEO, you can't let your board run your company for their

• 24:42Speaker 02

  sake, actually. But I'm very fortunate that in our case, I have investors who understand that dynamic really, dynamic really well. They give me very valuable advice. Sometimes I agree, I always listen to it, oftentimes I do not, and I explain to them why I do not and, you know, we move along to the next topic.

• 25:00Harry Stebbings?

  Can I ask, there's a lot of first time founders that listen to the show and, you know, effective board management is a really difficult thing to get to grips with essentially. What would you say they can do and how would you advise them in terms of maintaining that dynamic of almost a degree of distance in terms of advice and control? What can one do to maintain that dynamic as a founder?

• 25:18Speaker 02

  So I think there are several elements to that which I learnt over the years, thanks to some of the people like Rick and Alex and Habib from Ro and now Jim from Sequoia, that I learnt from them over the years. The first lesson is that a lot of that relationship is the one that happens outside the board. The board is a very formatted exercise where we go through things we need to go through as a company for good governance. We formally present a number of things and we need to do it and it's an important collective discussion. But oftentimes, the most valuable discussions I've had with my board members are happening outside of the boardroom. So investing time with your board members outside of the boardroom is the number one advice. I'd say the, the, the second advice is to prepare the board

• 26:03Speaker 02

  materials a long time in advance, send to, send them to your board members a long time in advance. We do that 10 days before our boards and have individual discussions with each of them in advance of the meeting, prepare the meeting so that you can Take off the table all the tactical stuff, all the stuff about understanding the metrics and the details of the reporting. With the objective that the discussion at the board is purely focused on one, two, maybe three at most really strategic topics. Where you have the time to present the strategic question, get into a real discussion with the board. So they can really advise you. And so keep for the board really strategic topics for the company.

• 26:44Speaker 02

  And move the tactical stuff outside of it by having the deck sent a long time in advance. And potentially discussing all the key metrics outside of the board, because the board should be a strategic discussion.

• 26:55Harry Stebbings?

  Can I ask you a question and a final question on the boards? And I've joined my first institutional board about a year ago now. What can I do from your perspective to be the best board member that I can be? If you were to advise me entering kind of the career of a board member, what would you advise me in terms of being the best?

• 27:11Speaker 02

  I'd say the first thing is constantly think about this notion of advice and consent. And understand when you're stepping beyond this notion of advising. And help the founders you're working with understand that when you tell them something, you're advising them, but you're not asking them to do it. To see founders that take your advice as I instruct you to do this, immediately tell them that that's not what you're asking them to. So I would start there. Then I think it's also about understanding you're not going to be able to help on every front. There are things you're better at. Is it your network? Is it specific areas of the business? Like typically, I'm very privileged that Seth Fodman, who was the former Chief Marketing Officer of Spotify and before that of The Gap,

• 27:53Speaker 02

  joined our board. Obviously, having a marketer of his caliber on our board means that when we have complex, far ranging strategic marketing questions, he can be a fantastic sounding board, but I'm not asking him to give me his advice on our engineering stack. And so knowing where you can help is also really key, I would say.

• 28:12Harry Stebbings?

  No, totally. I agree, especially in terms of finding that zone of specialization. I do want to move into my favorite element, Emmanuel, which is the quickfire round. So I say a short statement and then you give me your immediate thoughts. Are you ready to dive in?

• 28:24Speaker 02

  I am.

• 28:25Harry Stebbings?

  Okay, so I need to. Read more. What book should I be reading and why? What's your favorite?

• 28:30Speaker 02

  You should read Sapiens, which I'm sure you've heard about.

• 28:33Harry Stebbings?

  I have. Why is it your favorite?

• 28:35Speaker 02

  Well, it's my current favorite because I think there is so much learning about so many things that is packed into the way he looks at history in that book. And there are even lessons you can apply to your business, like the challenges of what happens in a culture when you go above a hundred and fifty people, which is why Homo sapiens prevailed over Neanderthals and other human species because of their ability to form large groups of humans because they were able to have a shared vision. So like there are so many things in this book about economics, about civilization that that can be applied to life and to business that I found it fascinating.

• 29:09Harry Stebbings?

  What are the breakpoints in company scaling? Often people say it's Dunbar's theory of a hundred and fifty people. To you, when have you been like, ah, it's broken here? What period is that of growth?

• 29:19Speaker 02

  So you you you have breakpoints earlier than that. If you go through the whole range, you you have a first breaking point at at between ten and twenty, when it's not, you know, the few people that were there in the beginning and, you know, that have cleaned the toilets and built the network. So you have a first breaking point there. I think you have a second one between fifty and a hundred, where you start having a clearer hierarchy structure and you start having more people, more management, more managers at that level. Obviously, you have that Dunbar or that one hundred and fifty limit, which is really, really very palpable because it essentially means when you when you are in an organization where you can't know everyone enough to trust them implicitly.

• 30:03Speaker 02

  And this is where vision and culture becomes so critical because you need something that binds people together even when they don't know each other. You need something that makes people trust each other when they don't know each other. But by the way, that's also the kind of threshold where you need a very strong people function, which is something you may not have at fifty or sixty or and that's something we waited for too long to build. Now we have an extremely strong one. But the thing is, when you start having a strong people function, which other people go HR, which is a very terrible name for it, then your organization reacts by saying, oh, wait a minute, now we have an HR function. Does it mean we are a big company? And yes, it means that. And it's not necessarily a bad thing. You have to embrace your own growth. So one fifty is a very clear threshold.

• 30:46Speaker 02

  And then there's another threshold, which is probably when you get to three hundred, when as CEO you cannot know everyone. Like you can't really remember easily the first and last name and what's the job of each and every person you have in your company. And there is an element of it being heartbreaking. And then you have other thresholds. When I was running an organization of ten thousand people and I knew fifty or sixty of them well, I knew, you know, zero point five percent of my company. And that's a very, very, very different world.

• 31:14Harry Stebbings?

  Basically, it's always hard. That's my takeaway from those companies.

• 31:18Speaker 02

  Yeah, I mean, but of course it is. The rewards are incredible. The pride you take in your job, the human stories you build, the relationships you build. But most of the time, you're dealing with problems. That's just what we're paid for.

• 31:31Harry Stebbings?

  What would you most like to change about the tech ecosystem today?

• 31:34Speaker 02

  Diversity, more women, more people of color. There is a cancer running through the tech ecosystem today, and it's one that's really hard to cure.

• 31:42Harry Stebbings?

  What's the single best investor meeting you've ever had and why?

• 31:46Speaker 02

  I'll name two, the first one and the last one. The first one was with, when we were raising our Series A and I was meeting with Habib Kharoush from Ro Ventures here in New York. And I was halfway through my pitch and he banged his head on the table and right in the middle of it, I was not even finished. And he said, I love it, how much is it I want to do it? And it was a great meeting because from that day until today, and it's been eight years, Habib has been an incredible supporter of the long-term vision of the company. So that was the best first meeting. And there have been lots of great meetings. And then the best one I had also was the one last February with Jim Goetz, when he came to see me in New York, as he had done several times over the last few years. We'd always had great conversations and I, you know,

• 32:30Speaker 02

  we had just raised a thirty million round of debt with no plan on taking equity. And in the meeting, Jim made me see the opportunity I was potentially missing by not considering an investment from Sequoia. And he convinced me in that meeting to rethink because I had essentially decided we would not. Ever raise equity again because we had a very powerful access to debt and we didn't want any more dilution, but Jim forced me to rethink that by focusing me on the bigger picture and it's a meeting I'll remember.

• 32:59Harry Stebbings?

  I love that as a remembering meeting. Speaking of investors there, Rick Heitzman asks, how do you feel about the New York ecosystem as it relates to the European market?

• 33:09Speaker 02

  The very early days of our company were actually in Paris, France. But very quickly, one of my decisions was to say we're going to launch this product in the US and we're going to raise capital in the US. And so when you do that, and for us this was in 2011, we had two choices essentially, which were San Francisco and New York. And I've lived and worked in both cities. I love the West Coast, but there are two things about New York at the time that made me decide for New York. The first one was the proximity to Europe, both in terms of time zone and travel time. I have run companies between West Coast and Europe and it's extremely hard to build a cohesive culture, to be present on both sides as a founder frequently. The time overlap is not sufficient and so I knew

• 33:51Speaker 02

  it would make our life much harder. So New York was better. But also, there is something about New York that the Valley doesn't have, which is there is a form of diversity because New York is not just the city of tech, which it has become. New York is also the city of finance, of retail, of advertising, of e-commerce. And so as such, I find it a very enriching environment that meets people that are not just startup founders and VC. And I think it's culturally something that I found very powerful about New York. But today, the New York ecosystem, thanks to some of the investors we're fortunate to have, has become, for me, the best destination for European entrepreneurs that want to expand or start in the US for the reasons I just mentioned.

• 34:35Harry Stebbings?

  I totally agree with you in terms of the cultural diversity. It's one of the reasons I love London so much. But I do want to finish though on probably the most exciting of all, Emmanuel, which is what are the next five years hold for you and for Dashlane? Can you paint that picture for us?

• 34:47Speaker 02

  So what we want to accomplish in the next five years for us as a company is actually quite clear. Our mission is to fix the UX of the internet. The way we transact, the way we authenticate is as broken today as it was twenty five or thirty years ago when the internet started. And so in the next five years, we want to build a mainstream consumer brand and a mainstream consumer product that will have made a significant dent in how the UX of the internet is experienced every day by millions and millions of people. If we succeed, we will have created a new category that today doesn't exist. And if we succeed, we will have built a pretty formidable company.

• 35:30Speaker 02

  So I'm very excited for the journey ahead in the next five years and beyond.

• 35:34Harry Stebbings?

  Emmanuel, as I said, I had so many good things, both from Alex and Rick. This has been so much fun and thank you so much for joining me today.

• 35:40Speaker 02

  It was a pleasure. Happy to have joined you today.

• 35:45Harry Stebbings?

  And I do also want to give a huge hand to Emmanuel because we did have a fully fleshed out schedule, but I practically asked no questions of it. The conversation took such great flow. So a huge thanks to him for that. And if you'd like to see more from us, you can follow us on Instagram at H Stubbings nineteen ninety six with two Bs. However, before we leave you today. So every time you listen to a podcast or go online, you get another ad for a mattress, thousands of them. But only one uses technology and temperature to give you the deepest, sweetest sleep. The Pod by Eight Sleep, the first bed to combine dynamic temperature regulation and sleep tracking to ensure you're getting the best sleep possible. Research shows the deep link between sleep performance and temperature. So the Pod reacts in real time to your body's unique needs, adjusting the temperature to keep you comfortable and sleeping deeply all night long. The stats say it all.

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• 37:51Harry Stebbings?

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