My Story

Or why you might want to listen to me and why you might not

The Next Founder helps founders build great startups. We offer advice on managing your mental health and productivity, hiring and managing great people, building a strong culture, and keeping people aligned and working on the right things. See the series overview at Welcome to The Next Founder and find out more about me at My Story.

In this chapter, we’ll talk about my background, what led me to write The Next Founder, and what I hope to accomplish.

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“I have to study politics and war so that my children can study mathematics and commerce so that their children can study poetry, painting, and music.”
— John Quincy Adams

Where I’m coming from

The Next Founder is not a biography or a series of war stories from my career about when I did this thing and then that thing, and, oh my God, you won’t believe what happened next. That style can make some excellent reading¹, but I don’t find that it works well for me. My writing draws from my experience, but I also draw from stories by other founders as well as academic sources.

However, a recurring theme is that all advice is contextual and should be filtered and scrutinized. I want to share my story so you know where I’m coming from, including my blind spots, biases, and limited perspective.

I also want to share why I’m passionate about startups, want to see more of them, and want to see more of them succeed.

In the beginning

I grew up as a typical Army brat, moving every couple of years, mainly across the Midwest and East Coast of the U.S. By the time I arrived at college, I had attended ten different schools, which left me with some social scars and some glaring gaps in my knowledge, like never learning about colonialism (I was probably 25 before I could have told you why they speak Spanish in the Philippines).

I had little exposure to business and entrepreneurship since the adults in my life were military parents, but I was lucky to live in the same house as a great leader: my dad. He led a 30-year career as a decorated Army officer who commanded troops in combat in Vietnam and served as Post Commander or Chief of Staff at several bases, including Fort Knox, Kentucky, where I was born and graduated from high school.

Military leadership is one of the purest forms of leadership. No one joins the Army to get rich. The financial upside is limited, but the downside is enormous: death or injury is a real possibility. I admire how military leaders like my dad get peak performance from young people in strenuous conditions by getting them passionate about committing to the mission and supporting their teammates.

Startups are easy in comparison. Your worst case is that you fail, in which case you can get a job at a tech giant for a few years and then start another startup. You might be embarrassed to face your friends and family, but you probably won’t die in a training exercise.

Like most families of military officers, we were solidly middle class, but my parents did make one extravagant purchase when I was 13: spending more than $1000 in 1981 (close to $5000 in today’s dollars) on an Apple II Plus. I learned to program and discovered that I had a real interest in and aptitude for computers (as well as a passion for pirating video games on floppy disks). 

When I got to Stanford, I devoted myself to computer science, getting a BS and an MS and graduating in 1991. I discovered that I was a much better teacher than an academic. I largely paid my way through college by spending four years as a teaching assistant and lecturer in the Computer Science department, at one point running the legendary CS198 undergraduate teaching program, which was also my first management experience.² I still love getting in front of rooms full of students or founders and sharing what I know.

My career

I graduated in 1991 while the tech industry was in the depths of a recession. Many pundit were predicting that Silicon Valley was “over” (the industry has been “over” at least five times in my career). My first job was building equity derivative trading systems for Goldman Sachs on Wall Street. I wanted a job that would let me live in New York and London and get away from Silicon Valley for a while since I knew I was destined to return for good at some point. I loved Goldman Sachs and its focus on building a high-performance and people-centric culture. I draw on lessons learned at Goldman to this day.

By 1994, I knew it was time to return to Silicon Valley, where many of my college friends were getting involved in the first Internet startups. Friends introduced me to Ariel Poler, a recent Stanford GSB graduate, who was pursuing what was then a visionary idea: someday there will be advertising on the Internet, and advertisers and publishers will need tools to measure and audit it. The idea was controversial then (yes, I’m old). I joined his startup, I/PRO, as the first employee and ran part of the engineering team, building what might have been the first-ever software-as-a-service application. It was a fabulous experience. Our business spiked, we grew to about 150 employees, and a competitor acquired the company in 1999.³

After I left in 1997, Ariel introduced me to software startup Kana, where he had joined the board. Kana was founded by Mark Gainey and Michael Horvath (who also later started Strava) to help companies manage customer service over the web, which was a brand new problem since companies were only then putting up their first website. 

I joined as the first non-founder employee and ran the engineering team. I crammed a career’s worth of learning into four years at Kana. We raised millions in venture capital and grew the company from nothing to $150 million in revenue and 1200 employees in three years. We took the company public in 1999, and we peaked at a $10 billion market cap. We signed up almost every major B2C online business, and we acquired several companies, including the $4.2 billion acquisition of Silknet in 2000.⁴

After such an intense experience, I was ready for a break. My wife and I had just married, and we took a six-month sabbatical in Europe, most of it spent in Tuscany, where I mostly rode bikes and followed the Tour de France around. When we returned to San Francisco in the fall of 2001, the Internet economy had hit bottom, punctuated by the 9/11 attacks, which happened a few days after we landed back in San Francisco. 

Fortunately, I had time and space to think about what to do next, thanks to Dave Beirne, the partner from Benchmark Capital who led Kana’s Series A. He brought me into the firm as an Entrepreneur in Residence, where my only job was to start a company they could fund. It was a fantastic platform to meet great people, absorb great ideas, and brainstorm with the partners, who are some of the industry’s smartest folks to this day.

This led to my co-founding the security software company Vontu with Joseph Ansanelli, whom I have worked with off and on for 25 years, starting at Kana. Vontu was a fabulous company. We went through five years of rapid growth and sold the company to Symantec for $350 million in 2007. I joined the executive team at Symantec for a couple of years, which I enjoyed, although big company life would never be for me. 

I returned to Benchmark as an Entrepreneur-in-Residence a second time in 2009⁵, eager to start another company. From there, I launched Pipewise, which was a failure. We tried a couple of ideas but never got close to product/market fit. While struggling to find traction, I realized I was exhausted and should have taken a break between startups instead of diving right into the next thing. A successful startup requires at least a ten-year commitment, and I didn’t have that in me at the time. I needed a break.

And take a break, we did. My wife and I moved to Barcelona with our two young children, which was just as fabulous as it sounds. We spent the year traveling, mountain biking, and hosting visitors, but I also took the break as an opportunity to extend my knowledge, expand my network, and connect with the startup ecosystem in Europe. I invested in and advised a few great software companies, taught at the best business school in Spain, ESADE, and became a Portfolio Advisor to Point Nine Capital in Berlin, where I still work with their portfolio.

When I returned from Spain, I co-founded customer service software company Gladly with Joseph Ansanelli and Dirk Kessler, our most senior engineer from Vontu. Gladly has raised over $150 million, signed up hundreds of customers, and is on track to be one of the most successful enterprise software-as-a-service companies of the decade.

As I’ve gotten older, I’ve increasingly enjoyed helping other founders. I’ve invested in or advised about 50 startups, a few of which have become unicorns. I volunteer at the Stanford StartX incubator and for the Stanford Lean Launchpad course. I’ve guest lectured at ESADE many times, spoken at several conferences, and lectured at Harvard and Dartmouth business schools. My work with Point Nine has connected me with startups worldwide and allowed me to deliver keynotes at their fabulous annual Point Nine Founder Summit, the best founder event in the industry.

What I believe

Although my career has been somewhat of a random walk, I can extract some themes I’m confident will apply to almost anyone reading this. All of them involve people and getting the most from yourself, your co-founders, and your team. We’ll go deeper into some of these in future chapters.

The people are all there is

Technology always evolves, markets change, and every startup is different, but I can draw one solid line through my career: every opportunity I’ve had to start, join, invest in, or advise a startup came via people with whom I had strong professional and personal relationships. The same is true for every successful person I know.

Strong relationships are easy when a startup works and everyone walks away rich, but I’m especially proud of the relationships I built when we failed. If you can avoid lashing out or finger-pointing when times get tough, adversity can build stronger relationships than success.

Startup careers are never linear

I didn’t plan out my career, but when I was young, I had a vague sense that I wanted to do something in the startup world and jumped into it when I had the chance. I made the most of each opportunity, and the work I did and the people I met led me to the next one. In almost every case, I pursued something I never would have anticipated but that always seemed logical in retrospect.⁶

This doesn’t mean careers are random; you should always control what you can. Never stop honing your skills and mastering your craft. Invest in your network and keep your reputation stellar. Expose yourself to as many people, ideas, and places as possible to expand your options. But accept that you can’t predict today what the best opportunity will be tomorrow. Stay open to a wide set of possibilities, and jump at the ones that speak both to your intellect and to your emotions.

You are a product of your environment

I’m not particularly entrepreneurial. I wasn’t a kid who hustled lemonade stands while thumbing through the Forbes Billionaire list. I don’t walk around San Francisco in my company T-shirt, cornering people in coffee shops to pitch my company. I’ve never slept on the floor of a hacker house (although my 22-year-old self may have been into that…)

My success is an outgrowth of my environment. In Silicon Valley, especially at Stanford, you are surrounded by founders. My college contemporaries were people like Jerry Yang, Reid Hoffman, Peter Thiel, and Keith Rabois. At least half of the people I meet at my co-working space in San Francisco are founders. Friends in San Francisco often joke that they feel like the only person they know who doesn’t have a startup.

Access to this much expertise and brainpower has some obvious advantages (and less obvious disadvantages⁷), but it’s not why Silicon Valley has so many great startups. The secret of Silicon Valley isn’t just that it attracts extraordinary founders; it’s that it turns non-extraordinary people (like me) into founders.

When you see so many other people start companies, especially the ones who are no smarter than you, it’s easy to think, “I could do that, too.” When there is no social stigma against turning down a big company job to work at a tiny, no-name company that might fail, more people will do it. This leads to a virtuous cycle where startups beget more startups.

I always feel bad for the poor souls hanging out in the Google lobby, sent to Silicon Valley by their city’s Office of Economic Development to find out how to attract startups to their hometowns. They spend a week visiting companies and meeting with founders trying to crack the code, usually flying home having learned little more than, “The best way to attract startups is to have startups already.” Fortunately, startup hubs are developing worldwide in places like New York, Berlin, London, and Paris, so it’s easier than it’s ever been for would-be founders to rub shoulders with experienced ones.

Quitting is an art form

To find an amazing career, you don’t usually need to quit a crappy career. You need to quit a good one.

My family thought I was crazy when I quit Goldman Sachs as a 23-year-old living in South Kensington, London, on a corporate Amex. They thought I was crazy when I walked away from the cushy life of a public company executive at Symantec, where my job was to fly around the world in first class to launch the Vontu business in a dozen countries. I agonized over shutting down Pipewise since it meant booking the first big failure of my career. But in each case, I knew I couldn’t move on to the next thing until I walked away from the current thing.

This is also why so many startup founders don’t come from elite schools or top-tier companies. Those founders are less tempted to quit when things get tough since they don’t have a $750k/year job at Google to fall back on. When your opportunity cost is low, you focus on the opportunity, not the cost.

Sacrificing life for career success might get you neither

Most startup founders are high achievers who want to build great products, work with great people, make money, and make their “dent in the universe.”⁸ But why do they want to do those things? Presumably, for the same reason any of us do what we do: we expect it to lead to some level of personal happiness and fulfillment.

Startups require hard work and sacrifice, so many founders assume that the more pain they suffer, the more likely they’ll succeed. They lose touch with friends, starve their love lives, stop exercising and eating well, and turn into miserable bundles of stress and angst.

The downside of this strategy is obvious when founders fail: they can feel like they sacrificed years of their lives pursuing happiness and achieved neither success nor happiness, but successful founders can be even worse off. After the wire transfer hits the bank account, they find they are no happier than they were when they started, and they can go through an existential crisis, where they wonder, if success didn’t bring happiness, what will?

In either case, those founder’s decisions are based on a false dilemma, where they think they can have career success or personal success but not both. Startups require hard work and sacrifice, but the successful founders I know make a baseline level of investment in their health, their community, and their families. The ones who don’t end up too miserable to do creative work, too burned out to persist, and they struggle to attract good people, since people who have lives are suspicious of working for those who don’t.

I’m proud that over the last thirty years, in addition to working hard, I've built a fantastic family, made great friends, and maintained my health, logging thousands of miles of running, hiking, open-water swimming, mountain biking, and cross-country skiing in San Francisco and Lake Tahoe. I never saw those things in conflict.

You know both more and less than you think

In many ways, a startup is the same as any other career, where you build up your knowledge, skills, and connections and make it more likely you’ll succeed. You can always get better at designing, marketing, and selling products. You’ll never fully master managing people, raising money, and planning and operating a company. 

But no matter how skilled you are, startups have a way of humbling you. If you start to believe you have the game figured out, they’ll smack you down. You see companies fail that you thought would succeed. You see strategies that worked for one company fail at another. You see your favorite founders humbled by the next generation of founders who disrupt them.

After my first successful startup, I was a font of advice for young founders. If they asked me how to raise money, I’d show them our fundraising deck. If they asked if they should move to Silicon Valley, I’d say, sure, right down the street from me. Most of my advice amounted to, “Just do everything I did.”

I’m wiser now. I realize that I know very little about most markets, including B2C, gaming, biotech, cleantech, or anything other than my specialty, B2B software. I’ve failed several times because I didn’t follow the same advice I’m sharing here. I still make mistakes, like delaying letting a lousy hire go or not checking that one last reference for a critical hire. I’m still on a steep learning curve. I cringe at things I believed just a year ago, and a year from now, I’ll probably be scrambling to update some of my opinions here.

It’s humbling, but I’d rather be humble than bored.

It’s early

The startup economy is volatile and goes from boom to bust once or twice per decade. Each time the startup economy is "over,” it comes roaring back as the next wave of technology unleashes creative destruction on legacy companies, some of whom were startups only a decade earlier. “Everything that can be invented has been invented” is never a solid bet.⁹

It’s early for me, too. I’m energized by the founders I meet and their ideas. They are solving big problems in health care, clean tech, productivity, and economic development using technologies that didn’t exist just a few years ago. I’m amazed by how much more they know than I knew at their age. But I also see how people like me can help accelerate their journeys.

Now, I want to share some of what I’ve learned. Learn more about the series in Welcome to The Next Founder.

If you have feedback or suggestions for future posts, please comment or contact us at michael@nextfounder.co.

1. If you are reading this, then you should probably also be reading Ben Horowitz’s The Hard Things about Hard Things, which is a great glimpse into the day-to-day life of a growing startup. 

2. This New York Magazine article, CEO 101: The Stanford Class That Is Humanizing Silicon Valley, describes the program, although their assuming that computer scientists need to be “humanized” is amusing given that those folks increasingly run the world.

3. Enjoy this vintage Web 1.0 article announcing the I/PRO acquisition.

4. Although it might seem ordinary by today’s standards, back in 2000 our $4.2 billion Silknet acquisition was one of the largest software deals in history.

5. This WSJ article covers my “triumphant return” to Benchmark.

6. In his great 2005 Stanford commencement speech, Steve Jobs observed that great careers only make sense “connecting the dots” looking backwards.

7. In this amazing (bad-ass) recent interview Jensen Huang, founder of NVIDIA, describes how the “high expectations” of graduates of elite schools like Stanford lead to low resilience

8. “Dent in the universe” is also from the great Steve Jobs Stanford commencement speech. Yes, you really should watch it.

9. Charles Duell, the Commissioner of the U.S. Patent Office, supposedly said this while proposing shutting the agency down in 1899. This story has been debunked, but it’s still a helpful reminder. Regardless, I always remind myself that no one thought of putting wheels on luggage or a sail on a surfboard until just a few decades ago.