What Now?

Before we get to today's show, we have some exciting news to share. The season one of Zero to IPO has been a great success. Thanks to you our listeners-

But ...

No but. There's no but.

Here comes season 2!

Here comes season 2!

Yeah.

We've gotten a lot of feedback from people who have specific problems that they're facing at each stage of their own journey. I prefer to call them opportunities [inaudible 00:00:26]. Well, opportunities, problems, challenges, whatever you want to call them. There are listeners out there who want help solving specific problems. And so, we have decided that season two is going to be about you, our listeners. How are you going to scale your company? The culture problems, you're having issues with your founders, go to market, building products, building engineering, raising capital. So, consider emailing us your concerns, your issues, your challenges. And in season two we will dive into those specific problems that you're having. Email us zerotoipo@okta.com. That's Z-E-R-O-T-O-I-P-O-@-O-K-T-A.com. And with that, here's the show.

The IPO was just a step along the way. I think we were slightly over 200 million in revenues and that we're supposed to do 2.7 billion in revenue. So, that was a long time ago.

Sometimes when I hear Sheryl Sandberg talk about leaning in, I said, "I've been laying on the table for 35 years." So ...

I mean, I know how much money I would have made if I'd kept going and I know what the multiple would be today if I still owned it and how much money I'd have and I got to make sure the scoreboard evens out.

Okay.

Welcome to Zero to IPO.

This is our last episode of season one.

Season one.

Season one.

I was just going to say, yeah.

And in this episode we're talking about what happens after the IPO.

Yeah, the IPO happened. Awesome. That was yesterday.

This is today now.

This is today now.

It's like it's-

It's the first day of the rest of your life.

Yeah, it turns out that the IPO is not the end.

No. Yeah. It's not even the beginning of the end.

It's the beginning of the-

It's the end of the beginning.

It's the end of the beginning [crosstalk 00:02:19] said exactly. Well, I'm Joshua Davis-

And I'm Frederic Kerrest.

I didn't finish saying [crosstalk 00:02:26] who I was. I am Joshua Davis-

They know at this point. They don't care. They are like, "Who your guests this week?"

Okay, well then let's just get right into it.

Fine.

In today's episode we're going to hear from Josh James, Maggie Wilderotter, Aaron Levie and first and foremost, Aneel Bhusri, co founder, CEO, chairman of Workday and formerly Greylock partner. On our last episode, and he'll give us a play by play on what it took to take Workday public and now he's back to shed some light on what happened next and why the IPO should never be the only thing you're working towards.

For many people, the IPO is the goal. And when they get to the other side of it, they're like, "Well, now what the fuck do I do?" Yeah. We wanted to build a special company where employees were happy and customers were happy and we had fun and we innovated. And the IPO was just a step along the way. I think we were slightly over 200 million in revenues and now we're supposed to do 2.7 billion in revenue. So, that was a long time ago. And it's a stepping stone. It's the rite of passage for a company. But it's not ... the means are not the ends. It's not the end. It's a place that I think actually helps you continue to accelerate the business.

For us we're following in Salesforce's footsteps. They're the dominant cloud provider that's an independent company. They've done amazing things. They've passed 10 billion in revenues. We run a similar trajectory just to a younger company. And I hope that I can just follow in the footsteps of Salesforce and good guys can win, good girls can win. And we take care of our customers, we take care of people and have a great partnership with Salesforce and that's motivating. Having a company like them leading the charge in the industry, it's very motivating because you can see the possible. We all see like, "Wow, I'd like to be like Salesforce." And it's possible you can do it with this new technology platform.

I think the great benefit of being in a startup is you do control your own destiny, right? But once you take that into your hands, you control your own destiny, well then you want it to go well.

That's [inaudible 00:04:41]. I mean, but it wasn't 95 plus percent of businesses fail?

Yeah. So, we were lucky from multiple dimensions. A huge part of it was the timing of when the cloud took off.

I mean, you could also argue that you weren't lucky in some respects to start a company right before the biggest recession of that modern era?

I see it exactly the opposite. I think that that prevented a whole bunch of other startup competitors from getting into this space. So, when you look at how our market evolves in the cloud, there was in terms of going after large enterprise for HR and finance to take on the likes of SAP and Oracle, there's only Workday. There were two very successful companies that did pieces of it and that suite for SMB financials and ultimate in HR, but when you take an $80 billion market and there's only a handful of vendors. Number one, it's a hard space but number two, I actually think that being born in difficult economic times is a huge advantage.

The recession had a chilling effect on other ...

Chilling effect. And so, if you stuck it out when the recession went away, you happen to be alone as this is new company. And that was a lot of the story [inaudible 00:05:55], there's not hundred companies going after space. It is something I worry about today. There's so much capital, everybody's so optimistic. You see an interesting space like AI and all of a sudden they're 50 startups in the space.

At least. [crosstalk 00:06:07] what about reduces the chances of success?

I'm not going to say recessions are good thing, they're not. But for companies you can learn a lot during that time period. It makes you focus on what really matters and every resource matters, every person matters, every dollar you spend matters. And I think it actually created a much more disciplined company than we were going into it.

Freddy, what's interesting to me about what Aneel says is that the IPO is not the end and we've talked a lot about that but he goes a little further and says that it's a stepping stone. It's like this transformative moment. What was it like for you?

My co-founder Todd and I frame this to the company as high school graduation. And what that means is it's great. Everyone's got to go to high school graduation then you want to make sure you graduate from high school. It's an important thing.

You could take your GED.

Whatever, in general we talk about high school graduation which is something that A, you want to get to. B, you want to go through but C, you don't want to peek at high school graduation. You want to go through it. It is right to [inaudible 00:07:12], it's a stepping stone, I think is how Aneel put it, which I think is very good. And look it's hard because you've been framing it for yourself, for your employees, for your investors, for your customers. It's going to be this magical event. It's going to be great for everyone. And now all of a sudden before you even get to it, you have to reframe it as now let's think beyond it. It's a pretty tricky thing.

You're moving the goalposts.

You are and you're moving the goalpost before even score a touchdown. It's like, "You're about to score this great touchdown, 10 more yards." Everyone's like, "What? Wait-

That's a whole 10 more yards. It's a whole new game.

A whole new hundred yards. And it wasn't like, well, what about spiking the thing? No, no, no. You know someone who has spiked it, that was the beginning of the end.

Well, our next guest is the expert at starting a new game. Josh James started Omniture and almost immediately after leaving Omniture-

We took it public.

Took it public. Was the youngest public company CEO for like three or four years and then like a day later after leaving Omniture decided that he needed to do it all over again.

I was like, "That was so much fun. I'm going to start over at zero."

Here's Josh.

I sold Omniture, my next day was the worst day of my life. The day after I quit Adobe, it was the worst day. I was so irrelevant.

So, you sold Omniture and you quit Adobe the next day?

No, I quit Adobe like seven, eight months later.

Why was it so horrible?

Because first of all, no one answers your phone call. I grew up, I started my company in school. So, I thought I was this person that wasn't this person. I was, I'm not Josh James with a big company behind me. I was just Josh James and I didn't know they were two different things. But no one answers your cell phone calls. They don't text you back right away. You're like, "What's going on? This isn't the way the world works. I'm so confused." So, I hated that. I hated "taking a break." What I love doing is when that's going well and you're growing fast and you're making money and [inaudible 00:09:10] kind of work slowly for a month and kind of take a couple of cool vacations. I love doing that. Because it's still cranking away back at the office. But when nothing's happening then it makes me crazy. I feel like I'm wasting space.

Did you have any inkling that that kind of thing was going to happen to you when you were in the process of selling Omniture or Adobe?

No.

No.

No I didn't. I was ... We'll see where Domo ends up but I mean, I know how much money I would have made if I'd kept going. And I know what the multiple would be today if I still owned it and how much money I'd have and I've got to make sure the scoreboard evens out. But at the time honestly was just ... I felt like we were shooting 99%. We had done everything right and we still had board members that weren't letting us do what we wanted. And instead of being mature, more mature about it and everybody was trying to hire all of our people, the Google overhang that was out there was definitely burdensome. And when my board didn't let me buy the companies that I wanted to buy [inaudible 00:10:15] handshake deals, I was like, "You know what, F it. I'm going to go do another one where I've got more control and I'll feel better about things." But I had no idea how much harder the second time that was going to beat them the first time around.

So, your board didn't force you to sell the company, it was your decision?

It was my decision for sure.

Your decision?

Yeah. And if they wanted me to, they wanted me to.

They were supportive.

They wanted me to more than supportive. They were like, "We should do this." But there was investors sitting around the table, they're like, "Hey, the stocks is 16 bucks." Is 16 bucks, I'm in the 95th percentile of all money, all VCs and I've got to raise the fund, so I don't want it to go below 14. So, I don't want you to do this acquisition. Like, what-

They wanted-

What are talking about?

So, they were pushing you to rather than for you to continue to grow for you to buy other companies they wanted you to just sell.

They wanted me to be conservative and not let the stock price go down or sell and make even more money [inaudible 00:11:07]. And-

Yeah. And so-

[crosstalk 00:11:09] shame on me for not plowing through it. When I first time I talked to Bezos, I asked him, I'm like, "How did you invest that aggressively in 2001, 2002 and all this distribution centers, your stock was nothing and you were flying in the face of what everyone was saying, articles being written about how stupid you guys were and you just plowed through. How did you do that?" It was the craziest answer. He said, "Basically I took them by the hand around the table and I said, will you go on this journey with me?" Took by the hand.

His management team?

No, it was board members.

The board members, they were all-

Will you go on this journey with me? It was figurative but [crosstalk 00:11:50] will you go on this journey with me? Like this is the vision we need to go on this journey together. I was like, that's crazy to me that that's the way that it works at that level,

Freddy, Josh talks about the idea that it's no longer just convincing one or two or three investors. After you've IPO-ed you've got to convince a lot of people. Tell me about that first earnings call that you did. What was that like? I mean, you had never done an earnings call before.

That's right.

So, what's it like on that first call? What do you remember?

I think that first earnings call it's kind of like a new thing. So, you're just trying to figure it out. You don't realize the important of it. And so, I think probably like the third or the fifth earnings call when now you're getting in a flow, when you have to describe things and there's people on the other end of the line, they're asking interesting questions and they're getting to know you and getting ... that's actually where you start to realize like, wow, we just did our eighth earnings call. We're actually trying to simplify the message compared to when we went public. Because when we went public, the people who bought the stock we just met them on the road show or we'd known him for a couple of years. Now there's a lot of people for the first time we're hearing this story, you actually need to bring it back down and say, "At a high level this is what we do," in a very simple English terms. And I suppose after that first earnings call you see the reaction and you see the stock move-

You do.

Yeah. That is a little bit surreal for sure. The next morning you wake up and in California it's 6:00 AM and you're like, "Stock market's going to open in three minutes. What's going to happen?"

We spend a lot of time Freddy as entrepreneurs focused on money on the bank account, on not running out of money but the money is a proxy for something else. It's a proxy for what you're trying to accomplish in the world. And I think it's important to take a step back and think about that. And think about the impact your business is having both internally and the culture you're creating at your own company, and the impact you're having externally on the world at large. Someone who's deeply invested in that idea is Maggie Wilderotter, the former CEO of Frontier Communications. What you're going to hear from Maggie is that at every stage of a company's growth, that diversity of thought and experience it's essential. Certainly you need all the other components to make your company go, but we're going to hear from someone who experienced a lot of first herself and how her perspectives made her company Frontier Communications that much stronger.

There was something that I read that your father had said to you early on, which was that the world at the time was not particularly open to women in business, but he wanted you to be prepared for when the world was more open-

Correct. Yes.

Has that happened? Where are we at?

I think we're making progress. I actually entered the business world as an early adopter and a trailblazer. Sometimes when I hear Sheryl Sandberg talk about leaning in, I said, "I've been laying on the table for 35 years." So, it's not just about leaning in. And I do think that I always looked at those opportunities of being the first woman in the board room, the first woman in a senior leadership job, the first woman as a CEO in a company, as an opportunity to show the men that worked with for me or I worked for them, that we're capable, we're competent, and we can deliver results just like anybody else. And that gives people a level of comfort which also allowed me to hire more women or to bring more women on the boards I was on. Or to actually move me into better positions of my career.

And the way I did that is I always made sure that I was being judged on quantitative results. It wasn't about qualitative and opinion. It was about what value was I creating for the business, for the board, for the environment that I was in. And I'm a servant leader. I would always go the extra mile, do more for others. I wanted bosses to look good. We've all had bosses in our lives that have been the best bosses. But for me, I always wanted the boss to be successful. It didn't matter if they were good or bad. I was going to make sure that their success was tied to my success. So, they would recognize my success just like I made sure they were successful.

So, I learned those things from my father to always have confidence, to open doors, to have people think something different, to see that women are capable of doing whatever we set our minds to. And I delivered that through a track record of years. And I continue to do that today. I sit on eight corporate boards. I've sat on 35 public company boards and 14 private company boards in my career. I always have my right hand pushing myself forward and my left hand yanking another woman behind me. I probably placed 20 to 30 women on boards a year because I get a lot of calls and I can't do them all, but I make sure I give them a slate of four or five great women who could do that job. And I think ... And I do that with senior executives too. And I think that's a gift that keeps on giving when you're successful. And I also think it's a responsibility and accountability for senior women to help other women.

When you came on at Frontier, what did the organization look like when you started as CEO, which I believe was '04?

'04 yeah.

And when you left in 2015, what did the organization look like?

So, when I started I came in as president and CEO and a member of the board. I was the only woman on the board. And in the top 500 of the 2,500 people in the company, there was one other woman who was a vice president in human resources.

One out of 500?

Right. And if you looked at our field organization which were telephone technicians, there were really no women out of the field, very few. They're mostly administrative assistance that's really what you had in an old line telephone company that was 75 years old. So, within an 18 month window I revamped my senior leadership and brought great people into the company. And within a couple of years, 50% of my regional leaders were women. Of the top seven people in the company, four of us were women. On our board, there were five women I had on the board, two African Americans.

And I went for diversity because I feel it's good business. And we did a lot of research in the telephone industry at the time. And this is when we were converting from dial up to Internet services. The telecom decisions in rural and suburban America are made by women. 65% of them are made by women, not by men. And so, I wanted the face of Frontier to be the face of the customer and to be the voice of the customer. And I felt it was good business for us to make sure we had great women, not just in leadership but in other roles in the company as well in technical roles, in customer service roles. And that transformation took us. And when I left the company the last year I was there, we had an 85% TSR. The highest in our industry, total shareholder return. So, it was good business. It wasn't just good to do, it delivered great value and great results for the company.

Did you end up with women technicians in the field?

Yes, we had women technicians in the field. We had women general managers.

[crosstalk 00:20:16] substantial percentage or was that always kind of slow to change.

That's slower to change, right? It's also union driven but our general managers, many of them were women. As I said, our regional operations leaders were women. Women in technology, in the IT side of the business, in customer service side, in marketing and in sales. Really throughout the company we had great women at all different levels.

Part of your vision as a leader, Freddy should be about creating a culture where you're being inclusive, where women are not just recruited but promoted. How have you done that at Okta?

I wouldn't say it's just women, I would just say it's underrepresented groups all across industries. So, it's about making sure that we have all sorts of different groups. Just making sure that you're getting that diversity of perspective, that diversity of experience, that it's not the same voice around the table giving you one view. It just makes your company stronger, it makes the people stronger. Frankly, it makes it much better environment to go to work every day.

As the leader of your company, you have a lot of power and control over the makeup of that company and so if you don't necessarily know how to implement it, it's important to learn.

Yeah, because by the way, no one is born knowing exactly how all these things work. You have to try different things up. Hopefully you have more success than you have failures. Not everything's going to be perfect, but you got to keep trying. You got to keep moving forward.

That's the purpose of this show to give you this variety of perspectives and ideas that you can then go and try and implement within your own company.

Our next guest, Aaron Levie, the CEO of Box and a co-founder of Box. And has been on the show a few times before, but this week he's back to talk about the changes that he needed to go through personally after the IPO.

You've talked about how you've had to change your parlance, how have you had to change your behavior? You've gone from 10, 100, thousands of people, public company ... are you still behaving the exact same way, do you dress the same way?

Yeah, my wardrobe is like slightly [inaudible 00:22:36]. Probably 10 years ago I would be wearing [crosstalk 00:22:38] short shorts.

Now you're wearing ... and just so our listeners can hear, you're wearing a black T-shirt and jeans [crosstalk 00:22:43] iron though.

But it's a Vince V-Neck [crosstalk 00:22:48].

It is V-Neck.

I would have been at old navy but this was my one upgrade. I love old navy to be very clear. But literally, like [inaudible 00:22:58] my clothes are from old navy and then the other two there was a gap but one big area I focus ... And certainly, learning is actually been focused. And I've seen the ... we have about 1900 employees at this stage which ironically you'd think with more people you can do way more things. But actually the more people in the organization, the higher premium there is on being insanely focused because you have so much risk of 1900 people going off in lots of different directions-

Distraction.

And on one hand it's like, this is so exciting. Like we can finally do all the million things that we always wanted to do. And on the other hand, like by definition, if you even attempted to do those million things you're trying to do with 1900 people, you will fail miserably.

And so, it's like the premium on focus is so much more than ever before. And ironically I could afford to be less focused at 10 employees because we were at a stage where we had to learn so many different things in the market and iterate so constantly. Like the rate of the speed at which we had to change was so important at that stage because we were just trying to figure out who we were and what we were doing. And then now 1900 people, you have to be insanely focused. And then you still want to iterate and at a local team level at that same rate that we were doing 10 years ago. But the overall kind of company and the overall kind of execution has to be very, very focused.

And the CEO in other words has to provide-

I have to then be very focused because otherwise the disproportionate impact of me being unfocused would ripple through.

And you have been pretty vocal on the current administration and talking about your feelings politically that's something that you could just not talk about. What was the decision making to talk about your own personal perspective?

Yeah, I mean I think this is definitely firmly in that category of things when you were starting a business you did not anticipate having to think about. I feel like when we were just like, wow, wouldn't it be cool to do online file storage? We're not thinking like, wow, wouldn't it be cool if we had to file an Amicus brief against the administration like that? Like not on the top list of 13,000 things I ever thought-

It wasn't in the original business plan.

It was not in the appendix. It was not like ... 14.3-1 [crosstalk 00:25:18] file.

We may at some point [crosstalk 00:25:22].

And so, you're on this evolution, which is like, okay, at some point you are a part of an organization that is either big enough because of the number of employees you have or customers you have or global presence that you have, where your values now extend to sort of like principles around the business and how you're going to operate in the world. And sometimes you need to make sure those principles are really clear because those are going to be important for customers, those are going to be important for employees, those are going to be important in trying to sway the actual dynamic that's actually happening to the extent that we have any value of our voice whatsoever.

And so, when we look at things happening in this administration or even in prior administrations on completely different issues, it's really important that we take a stance for the things that we care about and deeply believe in. And we deeply believe that we need to build a culture that has an insanely diverse perspectives and backgrounds and individuals that come from all walks of life and around the world. And that is the best way we're going to build a great company and a great culture. So, we have to make sure that we're standing up for those issues and what we believe in and our employees and our community and then our ultimate kind of business that we're building.

Freddy, Aaron talks about how as you get bigger, as you go public and you continue after the IPO, it's not that you certainly start doing a million more things. From his perspective, you need to get more focused. You need to get more laser like. Because the risk of diffusion of getting pulled in a million different directions is much greater. It's also much greater because there's a lot more people now who care and have an opinion about your company. I mean, every time you have an earnings call there's going to be 20 articles written. And they all think you should do this, you should do that, you should be going in this direction. And some are saying, "You're doing great," and others are like, "This is terrible." And it's whoever they're pitching to their customer base is what they're talking about. And so, as the leader of a public company, you have to be extremely clear.

Yeah, I mean I think in general when you're building a company, you want to take as much input as you can, but your job as a leader is to take all those inputs and then make a decision. And that just got harder when you went public because you have 10 times as many and you think that they're all very important because there's a real time analysis of how you're doing in your stock price. And you're like, "Wow, I really need to figure out what to do next."

Well, this entire show has been a journey of inputs. We've heard from over a dozen different leaders and everybody has weighed in with their perspective, with their experience. And the goal of the show has been to give you our listeners the opportunity to hear this kind of wealth of experience. And to realize that not everyone has it all figured out ahead of time. In fact, most people, I think of the 15 plus that we've spoken with on the show, you realize these are successful people and most of the time they're also figuring it out how [inaudible 00:28:34] go. So, it's not as though you're out there by yourself being like, "Oh man, I'm not sure how it happens next." Most people don't know what happens next. And they're kind of stumbling through it at times just as the rest of us are.

And I think another important point here is that it's an individual thing. You are the leader. You are building a company or you are part of the leadership team, or you have an idea about building a company. It's going to be about what you want to do and how you want to do it. And the culture you want to build and the kind of customers you want to have, and the kind of team you want to put together and the kind of vision that you're going to have. And we try to give you a whole bunch of different perspectives on the show of how other successful leaders in a broad array of different industries have thought about their goals and their visions and their growth. But at the end of the day, it's your call. That's the fun of it. That's the beauty of it. Well guess what Freddy, now it's time for our listeners to go out and do it.

Do it baby. Do it. Just do it.

Zero to IPO. It's all yours now.

This has been Zero to IPO podcasts about how successful entrepreneurs build successful companies from that genius kernel of an idea all the way to the thriving success story post IPO. Special thanks today to our guests Aneel Bhusri, Josh James, Maggie Wilderotter and Aaron Levie for taking time out of their busy schedules to speak with us. And to the Martin Trust Center, for MIT entrepreneurship for collaborating with Okta to bring this podcast to life. If you like what you've heard and want to know more, check out exclusive in depth stories from each episode on fastcompany.com and to hear the next step and taking a company from zero to IPO. Make sure to subscribe and give us a good rating on iTunes, Spotify, Stitcher or wherever you listen to your podcasts. I'm Joshua Davis-

and I'm Frederic Kerrest.

Thanks for listening.