From College to Silicon Valley: A Tech Journey | 6min snip from The Twenty Minute VC (20VC): Venture Capital | Startup Funding

Speaker 2
You know I've referenced the shit out of you with like, you know, 20 people. But it was incredible to hear the depth of your relationship. So thank you first so much for joining me today.
Speaker 1
Great to see you. I've been a fan of your podcast for a long time. And I was wondering when my invite was going to come. But here we are in 2022 and it's come. So I'm here.
Speaker 2
And we actually have to thank Rafa GoPuff for this one, but I'm so excited to make it happen. I want to start with a little bit of context. So we see kind of the OG of negotiations and deal making today in Emil, but just walk me through, like, how did you make your way first into tech and then into investing? What were those two entry points? So
Speaker 1
I went to college and graduated in 1994, which if you remember the time there, that was the very beginning of the Internet businesses starting to come out. In my same class at Harvard, Hati Partovi, Ali Partovi, David Wyden from Coastal Ventures, Alfred Land, Tony Hsieh, all graduated the same year. All of us sort of decided, hey, well, this thing is happening in the economy. We go do an investment banking job, a consulting job, or figure out what this tech thing was all about. So I moved to California. I went to, unfortunately, Stanford Law School, but at least I was in the middle of what was happening in the Silicon Valley. And then Hadi Partovi, if you know who runs code.org now, was co-founding a company called Tell Me Networks. And Oli Partovi was founding Internet Link Exchange with Alfred Lin and Tony Hsieh. And so I was working at both. And so it was at the very beginnings of the new internet entrepreneurs who were feeling around for something important in the internet in 1994 through 1998. I
Speaker 2
have to start with actually one from Dave Clark. but Dave Clark highlighted the breadth of your experiences pre really diving into being the OG that you are today. We have Harvard, Stanford, Goldman, lawyer, Department of Defense. And he asked, which of these best contributed to your success today, do you think, on reflection? I
Speaker 1
mean, sort of none of them. The best one was the Bill Campbell thing. When I got to the Valley, Bill Campbell was associated with Kleiner Perkins. And Kleiner Perkins back in that day was the VC. They did Amazon, Google. Don Doerr was the man. There was no one. When he touched, turned to gold. And he was buddies with Bill Campbell. And he invested in Tell Me, that first company I was telling you about. And Bill took a liking to me when I was 25. And he became my mentor. And he's the one who sort of propelled the future startups. He's the one who propelled working at the White House for Secretary Robert Gates. Their education stuff didn't propel me for much of it, except meeting the guys, Hadi, Ali, David, Alfred. So those are the two sort of influence, I'd say, that got me there.
Speaker 2
You mentioned Tell Me a couple of times. I want to dig in on that because Jared Hex, actually, one of your friends, said it was such a transformational time for you, obviously very early in your career as well. He asked, what were some of the biggest lessons or takeaways for you from that experience with Tell Me? That's,
Speaker 1
I feel like, where I got my first grit. We had to have a lot of grit for Uber later on, but we started Tell Me in 1999. So if you think about the timing of that, we were, unbeknownst to us, 18 months from the world coming to an end from a technology investing standpoint. So we had done the things, four rounds in 12 months, raised $150 million, which was a lot of money in the late 90s, a lot. I think more than Bezos had raised in his first couple rounds. And then the business model didn't work. And the internet economy blew up. And we had scaled to 300 people. So we went down from 300 back down to 100, tried to refigure the business model, we had to reconfigure from what was a consumer model to an enterprise model. So you know, those phone trees you call now that say, Hi, speak your name at American Express? Well, that's still tell me, we built those enterprise systems at Fidelity, American Express, American Airlines, and so on. So it's you I
Speaker 2
have to blame.
Speaker 1
When you're yelling and it doesn't understand you, yeah, it's me. And so imagine twisting that business around and then spending seven years building it customer by customer, enterprise by enterprise, trying to get them on the platform. And then we got to $100 million in revenue in 2007. That was a lot more than it seems like today. And I was able to help get it sold to Microsoft to be the base of their speech recognition technology today. We're
Speaker 2
going to talk about the acquisition. It was actually Hady that said, there was a competing offer on the table at a fire sale price. Drop the mic and ask him what happened then. I think words he was like he didn't give me any more so i don't know so we
Speaker 1
had gotten this acquisition for call it 300 million dollars would have been a fine outcome but you know right this was my last shot and one of the things bill told me is like when you're selling the company it's sort of all bets are off this is your last chance to create value for shareholders employees and so on so begged Hottie for one hour with Steve Ballmer at Microsoft. One hour. Everyone thought it was crazy. You'll never get a deal done. They don't know us. So I flew up to Seattle to see Steve Ballmer. And Hottie went jogging with him once a month or something. So I begged him for this meeting. And I said, every minute you talk to Steve is going to get me $100 million more for the company. He's like, ha, ha, ha. So he made him text to Steve, got the meeting, flew up there. I rolled into a meeting with the BlackBerry. Steve Ballmer purposely pours his water on my BlackBerry because it wasn't a Windows OS phone, kind of as a joke, but my phone was ruined. We do this negotiation. He likes us and he says, you know what? You guys stay the weekend. We're going to do this deal over the weekend. By the end of the weekend, three days later, had a term sheet for $760 million plus the cash and balance. So just about $800 million. That was it. It was sort of like having the gumption to go there and not relent until we got that deal.
Speaker 2
What did you do that made you so successful in that and get another $500 million in enterprise value? What specifically do you think it was?
Speaker 1
was just about showing sheer determination that come hell or high water we were going to win inside of microsoft inside of another company that had made that offer alone no matter what we were going to win and he asked us are you guys going to stay around and without blinking we said hell yes because we believe in this vision so we're going to stay around wherever as long as it takes to make this work and when you say that as an entrepreneur a guy like Steve Balmer and he believes you he's like okay well if you're gonna stay and we're gonna do this together let's do this there's other mechanics in between getting the number to that number but that was the sentiment that got us there can
Speaker 2
I be so bold Noss was that the first real money that you made I think when you first have your big hit it does change a lot mindset-wise.

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