In 2002, Michael Wolfe co-founded Vontu, an enterprise security company. As you’ll hear, he made big sales in some of the toughest economic times. Then he sold his company to Symantec.
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Let’s get started. Hey everyone! I’m Andrew Warner, founder of Mixergy.com, home of the ambitious upstart and where 600-plus entrepreneurs have come to tell their story. The question for this interview is how do you turn an idea into a $350 million company? In 2002 Michael Wolfe co-founded Vontu, an enterprise security company. As you’ll hear, he made some big sales in some of the toughest economic times. Then he sold his company to Symantec. I invited him here to talk about how he did it and about his latest company, Pipewise, which provides user relationship management solutions to businesses who acquire customers via web and mobile channels. Michael, welcome.
Michael: Thanks, Andrew.
Andrew: So, do you remember what it was like after you sold Vontu to Symantec?
Michael: Yeah. You know, it was, for starters, it’s always a little bit difficult because you have this great startup, great culture, then you kind of have the big company acquire you. You think about how’s that going to change the culture and is that still going to be fun. I ended up staying at Symantec for about two years and most of my team stayed. We really worked hard to make the business successful inside of Symantec. And one of the things we did was…One of the reasons we got acquired was the opportunity to take the business international.
So, I remember there were a couple years, you know… I ended up on the executive team at Symantec, I ended up as the CEO of the enterprise group, so I was flying around the world flying business-class going to events, parties, and ended up kind of living this big-company lifestyle. You know, like when the executive flies into town, everybody takes him out to dinner and drinks. I remember this one time I was in Rome and I was on another one of these boondoggle business trips. And I remember we went to visit the Italian power company, like, the national power and light, because they had some kind of security things to look at. And I remember the customer took us out. The customer even gave me, like, a little trophy, like a sort of ‘Thank you for visiting our operation.’ And I remember thinking I could do this for twenty years. I could be the fat-cat corporate executive, not working very hard, two executive assistants. And I realized, like, that’s not fun. Like, that’s not fulfilling. You don’t build. It’s just not. And I knew I wanted to start building another company, so I left the company. I went to benchmark as entrepreneur-in-residence which is now something I’ve done twice since I went through my company. And now two years later I’m sitting here in a co-working space in San Francisco, five employees, no business-class tickets, no receptionist, a bunch of other startups in here. Everybody in here just has some project, some dream, they’re trying to launch and we’re right back doing in again, fourth time for me.
Andrew: So surprising. Because a lot of entrepreneurs or a lot of people who watch entrepreneurs, I guess, from the sidelines think that the goal of entrepreneurship is to eventually retire and have some space to yourself to do what you want, to travel, and you’re now the second entrepreneur I’ve interviewed today who said to me, ‘Andrew, I wanted to go right back and start another business.’ Was there any fun, any upside to selling the business? Was there any of that stuff that you were looking forward to?
Michael: Yeah. There are a lot of people who keep doing this. It’s really hard to find people who start a company and just disappear. I don’t think I know any. And even if they don’t start a company, they become investors, they become investors, they go to politics. I think there’s sort of, like I remember after Kana, my second company, we spent six months in Europe. My wife and I got married. It was right after we got married. It was right at 2001. I took my bike, I was in the best shape of my life because I was biking, I followed the Tour De France for a week, ate Italian food every day.
I remember there was a time there when I said, I hadn’t decided what I wanted to next, and this was when we were in Tuscany, everything was perfect and all I was doing was reading technical manuals, following the industry news, calling my friends and saying “What’s going on?” and that’s the point that I knew if I had a chance to go do anything. I would always end up right back at doing another startup. And it just gets additive. When it’s working, there’s nothing that’s more fun. When it’s not working you learn a lot about yourself, too.
Andrew: So I want to focus this interview on Vontu. How it went from an idea to, as I said earlier, a $350 company. I could spend a whole interview just asking you about Kana. I remember back in the day when we used to use them at Bradford and Reed. But since you happen to be at Pipewise, let’s just bring people up to speed by explain what pipe wise is. Why did you do this when you could have been sitting on the beach somewhere? When you could have been buying fancy cars, great houses.
Michael: First of all, it’s just companies are fun. When there really working, when you’re just building something new, when you’re trying to put the team together, raise money, trying to put all the ingredients. When you’re working there’s nothing that’s more fun and it’s really, it’s just a great way to contribute. And what happened, what’s going on with Pipewise is, we originally started off with a different idea from what we’re doing right now at Pipewise. And while we were building the other company, which it was a freemium DVD type of product, we ran into all these gaps in the market around how companies who sell directly to end users, meaning sell to somebody that offers a service app, and e-commerce site, all the issues around knowing who your users are, understanding their demographics, there social profiles, all the information you can get about them. Knowing who your most successful users are, knowing the difference between the ones that are successful and not knowing how you can bring them in. We realized that this is a problem that, you’re always looking for a new problem as an entrepreneur, typically a new approach to an old problem sometimes works but a new approach to a new problem is a great way to think about ideas….
Andrew: I’m sorry. I’m not following. So what’s a typical use case for this business, for Pipewise?
Michael: So a typical use case would be an e-commerce company. They have hundreds of thousands or even millions of users who are coming into their site, who are looking for something. They might make a transaction or if it’s a service they might try something. Typically somebody with that business model usually will either be just a set of clicks on the page or if the users are registered they’ll see a stream of emails. That’s all they know about their users. They don’t know why one user became a successful customer, why one didn’t. They don’t know potentially some demographics around, maybe users from one country are being more successful than another or maybe users who hit this feature early in their cycle, there’s some action they take or maybe they get invited by a friend who better predicts that becoming a high lifetime value user.
And what we found is successful companies were building this themselves they were putting in engineers on capturing, logging all these customer events, slicing and dicing the data, generating the email campaigns based on the date based criteria and segmentation. Anytime in software you find a bunch of companies who are all building the same thing because there’s a gap in the market and commercial solutions don’t solve the problem, that’s almost always where at least there B2B software ideas come from. And that’s genesis, is seeing a bunch of people having that problem who weren’t happy with anything on the market today.
Andrew: All right, that makes a lot of sense. I can understand having gone through my own numbers and seeing that sales are increasing one day and decreasing the next. I want to understand why there increasing, why there decreasing what aspect of my site is driving more customers and what aspect of the site is killing them and all that understanding is when you’re really in business becomes more and more important and you start to care more and more about it. So I’m glad we talked about it, especially for my audience of entrepreneurs. So we’ll come back to that in a bit. But let’s go to Vontu. What were you doing? In fact, where did the idea for Vontu come from?
Michael: So what happened with Vontu was that I knew I wanted to start another company. And Benchmark Capital, who had funded Kana brought me in as an entrepreneur in residence in 2001. That’s this great thing that some of the firms do, where they take entrepreneurs they know, typically someone they’ve funded before or they know by reputation. And you essentially work at the firm for six months or a year, but you don’t really have a job. Your job is to start a company, or maybe join one of their companies, or do something that hopefully the firm can invest in.
So, you end up in this unbelievable situation where you listen to pitches, you meet entrepreneurs, you research ideas. And the venture capital firm is basically paying you to do it. And if they like what you come up with they’ll likely fund it. I was doing that, then Joseph [SP Ansonelli], who was co-founder and CEO of Vontu, my company and his company merged at Kana. He started a marketing company called [Connectify SP]. So he ran marketing at Kana. I ran engineering. And we worked together really well. And any time you get that marketing engineering connection working, which is hard to get it right, usually that’s a good partnership and you should make that work. [Kevin ??] was our CTO and our co-founder. He came in to pitch a firm that Joseph was consulting for on what was kind of the earlier version of the same idea.
So, Kevin had a good security background. Joseph had a great sales and marketing background. I was more an operations engineering guy. All of us had lived through this customer data problem, and how customer data gets put at risk inside of companies; think about retailers, ecommerce companies, financial services especially on this issue with keeping data inside the company and not having it leak out over email or getting posted to websites. So, the three of us talked about it and decided to investigate it and did about six months of customer interviews, customer development. And that’s ultimately what led to the company getting started. This was in the summer of 2002.
Andrew: All right, so you decide that this is the business you want to get into, protecting data. What kind of data, by the way? When you say data leakage I don’t think of data as leaking. What kind of data leaks?
Michael: The biggest priority at the time was really consumer data. To financial services firms it was names, social security numbers, credit card numbers, anything where there’s a risk of identity theft.
Andrew: How do banks accidentally leak out my name and my number?
Michael: Well, I can’t use any names, to protect the innocent. It’s about good to think about the bigger technology shift that’s behind an idea, making an idea work. And this was in early 2000, and the Internet at the time was only five years old. [??] Well, take Bank of America, Citicorp, you know they are used to a world where you can lock the doors at night and the papers and the file cabinets, and unless somebody wants to fill a briefcase full of reports, the data leakage was not really a problem. We helped, the whole industry helped basically put everybody online. We gave everybody email. We gave people laptops. We gave them phones.
So, we gave them all this ability to either email data out of a company, post it to a website, send it to their hotmail account, that kind of stuff, or put it on a thumb drive, put it on a laptop that would get lost. So we created this situation where it was primarily accidental, inadvertent. You know, somebody puts the entire employee roster on a laptop and then loses the laptop at the airport. Now, the employee didn’t try to steal the data, but it’s gone. And that can cause eventual identity theft. It’s against a whole bunch of privacy regulations, which fortunately were put in place around the time we were started, which also helped us.
Andrew: When you and Joseph and Kevin got together the vision that you had was, we’re going to protect these things, these financial institutions, these big companies from one of their employees having data on a laptop, the laptop gets stolen and BOOM, all their customer data is now out somewhere–those kinds of problems.
Michael: It was keeping the data inside the company.
Michael: Think about the firewall. That keeps bad people from getting into a company. You can almost think of this as a reverse firewall in terms of keeping data inside the company.
Andrew: I see the vision here. I understand the need for it, especially back then, when companies were just starting to get online. What was the first thing that you did?
Michael: The first thing we did is, you know, common sense said this was a problem. It was one of those problems where if you pitched your friends on it they would say, ‘Yeah, but I assume that companies already have that solved. They must have that solved. There’s no way that somebody at a bank could email my credit card number out the door. It’s like, well, actually, yeah, I mean, they haven’t really figured this out. It actually is a problem. But we didn’t think that was enough. I think that, you know, what is now called customer development, which at the time was just called, you know, talking to customers and seeing what they want, we did that for about six months.
We really set up kind of a whole series of interviews with, you know, some of it was retailers, e-commerce companies, banks, brokerages. And just said, you know, ‘We’re not selling anything. This is not sales call, so, please.’ And that’s really important, because if it sounds like you’re selling something, nobody ever talks to you. So we kind of do the, ‘We’re not selling anything, we’d just like to have a meeting with you.’ And we just kept interviewing these folks. And we got some contradictory information, but the commonality was, it is a problem. The customer data is the priority, as opposed to, say, financials, or intellectual property documents, things that are a little harder to pin down. And they said that they could likely get budget, and they could likely, you know, they likely would solve this problem if somebody came to market with a solution.
And that’s what you always want to hear at a company, you always want to hear, ‘If somebody built it, we would buy it.’ If you’re twisting people’s arms at that customer development phase, it’s probably never going to work. I mean, you have to get that really strong kind of customer validation early on. And then we raised the Series A based on some of those data points, then we kind of got Austin going.
Andrew: How receptive were these financial institutions to entrepreneurs walking in and asking them questions?
Michael: I would say that if you, again, if you treat it like a sales call, it doesn’t work. If you ask people for advice, if you say, like, I remember there was a guy who was the chief security officer of Credential. You know, so one of the top ten financial services firms in New York. We didn’t know him, we didn’t get an introduction from a board member or anything, we just had to cold-call him and try to get a meeting. And I remember we called him and said, ‘We’re not selling you anything, but you’re really well known in the industry, you’re on advisory boards, you’re a great guy. We’d love to just run this by you,’ you know. We’ll give you, like, ‘Just a half hour of your time.’ And then, if he likes it, and he likes you, yeah, we went back, like, six months later and gave, like, you know, we showed some screen shots, we gave some more detail. ‘We’re not trying to sell you anything, we just want to catch up with you.’ I remember one time he was in New Jersey, we told him, ‘Well, we just happen to be in town, so we’d love to come by and have lunch. And we’re not selling you anything, we’re just going to show you the latest, the greatest . . . ‘
Andrew: And were you really in town at the time?
Michael: Nah, it turns out that we were just in town to meet him.
Andrew: [laughs] So basically you were saying, we’re in town, and if he says yes to the meeting then you’re going to get to town quickly to talk to him.
Michael: Yeah, and the reason why is, by the time, you know, this was, like, our third or fourth meeting with him, by the time we got there we knew that, if we could even get just one of these top ten banks as a referenceable customer, that could put the company on the map. And, based on how willing he was to work with us, how good his feedback was, and how his requirements seemed kind of right in the middle of what we did, it was worth it. And I remember he came to one of our customer events a couple years later.
And at that point, I think, he had joined our advisory board, he was a huge fan of the company, he spoke about us at conferences, he had gotten a lot of kudos inside of credential for confidentializing this new project there. And I remember he gave a talk to our customers that said, ‘Well, you know, it was, we’re not trying to sell you anything. The next time I met these guys, not trying to sell you anything, the next time. And all at once, you know, suddenly I bought something. I guess they were trying to sell me something.’ [laughs]
Andrew: And your idea was, at the time, considering the size of this business, was to get one customer to say, ‘Yes, we would buy it,’ and then get funding to build a product that this customer would buy.
Andrew: OK. And what did you learn? Beyond getting the idea validated, what did you learn that helped shape the first version that you eventually built?
Michael: I would say that at the time, there were two kind of sets of competitors to what we were doing.
Michael: None of which ended up mattering in the long run. One was competitors who were digital rights management companies. That’s when you’re supposed to, like, put your documents in containers, and control who gets access to them, and it’s basically a bunch of new complex infrastructure. What the customers told us is, we will never do that. You have to protect the data where it is and you have to protect the network as it is, meaning, if you go into a company and say, you can be more secure, as long as you change everything, and that doesn’t work, I think, in any market. You always have to go where the customer is, you can’t ask them to make a bunch of, you know, a bunch of infrastructure and behavior changes.
And the other thing we heard was that people mostly cared about customer data. They didn’t care as much about employee data, financials, intellectual property. They cared a little about those things, but it was mostly customer data. And they mostly cared about email, just data leaking over email. I mean, they cared about FTP and chat and web posts, they cared about lost laptops, but really, kind of like, half the risk they perceived was just people sending email attachments full of data.
So we sent our first customers only, or our first product is only going to solve email, it’s only going to solve customer data. And even though there are a million things we’re not going to do, some of the competitors were already trying to do those things. It was kind of like when Apple shipped the first iPhone without cut and paste. Somebody at Apple said, ‘This phone is so great that people can live without cut and paste for a year if we get everything else perfect.’ And that was our approach. Really scaled down but what it did, it did really well. And then you get a couple of customers, you then give them the stuff you want and then we built up from there. A few years later we did everything but that first product only did really two things well, but that was enough.
Andrew: Take me to the first version. What was in the first version? Because a lot of the lean-startup methodology is about doing customer interviews, which you’ve done, and then right afterwards, launching a minimum viable product. But in your business, if you don’t launch enough, then you’re giving people just a minimum amount of security, which just clearly isn’t enough. So how do you do that? What’s the first version?
Michael: And that’s a good question. I mean, a lot of people will ask if the lean-startup stuff actually works with B2B software, especially something you’re going to put in a network at a bank. I mean, that doesn’t sound like something you can be minimal. So what we did, our 1.0 product was basically PowerPoints and screenshots. I mean, our window product was just enough to sit down in front of a customer, get feedback, kind of illustrate what we’re doing, it wasn’t actually a product. It was just enough to kind of get their feedback. And we never had a 2.0 product. And the reason why is, everybody knows you should never ship a 1.0 product, no one’s every going to buy it but if you ship a 2.0 product, the users are smart enough to know that’s really just your 1.0.
So, our first product was our 2.1 product. Which, 2.1, that number kind of implies that you’re not the first customer, there must be something that’s happened before you. But it was, really, that was our first product. Only did email, only did customer data, and it only had a couple reports, so very, very simple. But everything that it did, though, it did really well. It did great user interface, super fast, high quality. And even though we weren’t protecting them against everything, we were giving them more than what they had today. They were going from nothing to something, and going from nothing to something is worth a lot because that something is something they didn’t have yesterday. And I think entrepreneurs, and I’m still doing it right now in my new company, you spend so much time thinking about the stuff you wish you could do for the customer, that long list of things that they want, that sometimes you discount that just the thing you are doing is more than they have today. And if they like you and believe you, you’ll stand on that. Especially if you don’t have, if you’re in a market is new and doesn’t have competitors, you can do it. And that’s what we did. Just get one thing right and that will give us the right to do more down the road.
Andrew: And when you’re just showing a version 1.0 that’s wire frames, you’re just walking in and saying, ‘This is how it would work; this is where the button would be; if you click this button, here let me bring you a new slide, this is what would happen,’ what do these big companies say? Do they think this is not a real company, this is a high school project, or are they understanding the process as we entrepreneurs understand it?
Michael: I think the . understand the process. The savvy one’s…there are a couple things about this. First of all, they’re just regular people. They get bored at work. If you take them out for a drink or for lunch, get to know them, even though they might have an impressive title from some big company, they’re just people who just, if anything, you might be the most fun thing they did that day, getting to talk to some young startup about some cool new product idea — it’s fun, it’s interesting. They’re thinking, ‘Well, maybe I could end up joining this company’s board of directors,’ which one of our customers ended up doing.
They’re thinking, ‘I can help shape a product; I can get a discount; I can go to my conference this year, I can get up and give a talk about this new thing that we did first and that makes me kind of a star in the industry; or I can get kudos from my CEO because I brought this new thing into the company.’ So, there is an upside to customers for doing something new.
And the customers are also smart enough to know that the new stuff comes from companies like yours. Cisco or Dell is not going to come in with something like this. They’re not going to come in with a fully realized, high-quality product in a brand new market. That’s just how it works. I think startups need to embrace that sometimes, and not kind of be scared that, ‘Well, this business isn’t going to want to talk to me.’ If you have big company competitors who are better funded and more professional than you, you might lose. Typically in a new market, you typically wouldn’t.
Andrew: This is really helpful to know. I remember when I first talked to Eric Ries years ago, one of the things that he said was, ‘People just don’t believe that these ideas work for them. They understand that they work, but they don’t believe that they work for them. They think they’re a special case.’ Hearing that you’ve gone through this with this enterprise sized business that wasn’t just a small few thousand dollar a month lifestyle business, but one of the big major companies in your space. That you went through this process is really encouraging for the rest of us too.
Michael: Well the thing is, the reason it worked, at least in this case, was first of all there did turn out to be a real market. So, you have to have that ultimately. It was focused. I think almost our first ten customers were big financial services firms. If we had gone after a small company, a large company, a bank, a retailer, insurance, we would have gotten all these contradictory data points. But if you’re willing to focus on a sector, then you get data points that are consistent that you can build on. Then you can get that right and then go into other sectors over time. They have similar attributes to the one where you are. It’s kind of the Geoffrey Moore bowling pin strategy. Get a market right, and then go into the adjacencies. If you’re willing to focus, you might feel like you’re limiting your opportunity, but ultimately the focus is what ends up giving you a kind of entry point that then lets you expand into the bigger opportunity.
Andrew: So, version 1.0 was the wire frame mock up that you showed clients to get their feedback. Version 2.0 didn’t exist. Version 2.1 was the actual first version of the product. You said in that you had email customer data and reports. How were you monitoring their email without giving them a whole new email interface, which you said they didn’t want?
But, then that ends up going to a different system. They don’t tell you, ‘We rebuild your site on our platform to get the benefit.’ In the corporation, in our case, it was really tapping into the network, putting network taps in. We read the traffic, put together the emails. Kind of like what they were doing for intrusion detection and firewalls and other technologies. It was always do the minimum possible, make it as easy as possible for the technical guys who might not even buy off on the project. Then give a big win to the business guy. You kind of had that, make it sell to the business guy, but keep the technical guy happy. Make it sound like it’s not going to make his life harder, which all these things have that attribute.
Andrew: I see. So, the end user, the employee of the bank, if he was using Outlook before you guys came in, he could continue using Outlook afterward. The only difference is, on the back end if he happened to accidentally send out customer data, you guys would stop it.
Michael: Yeah. We would either tell somebody about it or we would stop it. You can almost think of it as anti-spam for data, except instead of saying that email now have spam in it, we would say that the email had 100,000 credit card numbers.
Andrew: OK. So now you have a real product. It’s time to get customers. Where did you get your first customer?
Michael: What we did is we had a bunch of these, ‘We’re not selling you anything’ meetings. We probably spent a year with, we just want to get feedback, we just want a relationship. But our goal all along was that all of those feedback meetings would ultimately be the beginning of the sales funnel. Then the ones that were really well qualified is where we would do our beta projects. So, we would have the ‘We’re not selling you anything. We’re not selling you anything. Oh, but are you willing to try our beta? We’re not selling you anything. We just need some good beta feedback.’ That ended up being our pipeline. So, in 2003 we had five or ten companies that were out there in that beta, we’re going to play with it, give you feedback.
Then Bank of America, at the end of 2003 actually sent out an RSP[SP] for, I think they called it customer data monitoring. B of A had a great security team. Their Chief Security Officer, a woman named Rhonda MacLean, was really one of the top chief security officers in the industry, ended up joining our board a couple years later because she liked what we were doing so much. She had this vision for what we’re doing is not enough, we need to focus on customer data, and we saw that, jumped on it, and we said we have to win this deal. This is the first deal in our market, in our industry, and it’s the biggest bank in the world, and the rest of the industry might all just buy when B of A buys, because you end up with a kind of ripple effect where if the leaders buy your stuff, the rest of them will.
So, I remember we put on suits and ties, put together this risk assessment methodology, like how you figure out if you have risk in your network and how you solve it. We flew to Dallas, we had a kickoff meeting, we really ran it almost like how [??] McKinzie would run a kind of engagement. I remember our top competitor at the time, they said one guy wearing a black concert t-shirt, who had shown up at the airport with a server pizza box under his arm, and he asked a customer to come pick him up at the airport. Like he had never seen a customer before, and he thought that’s how it worked. He basically plugged the box to network and left. Meanwhile, we’re sitting there consulting, advising, interpreting results, and later on they admitted, “Your product was better, but even if your product wasn’t better, you guys know how to sell [??] and make a deal”.
Andrew: What was the size of the first deal?
Michael: Our first deal was $500,000, and we grew the Bank of America account three or four million over a few years. And it might be even bigger than that at this point. Our average selling price for our initial deal was about $500,000, but we did a lot of deals that ran three, four, five, six million, because they were multi-year, and we kept adding products. What we would do is we would get in with this network product, but then we had a laptop product, we had a cell phone product, we had a data at rest product, which is when you scan the network looking for documents that are confidential.
Again, if you get in early, and build that relationship, and get the customer to love you, they will look at your other products. If you price them the right way, even add those products as new modules so they don’t get them for free. It was: get in at a few hundred thousand, but grow the big accounts into a couple million. We made $50 million in revenue the year we got acquired, and that was really on fewer than a hundred transactions that year.
Andrew: Fifty million dollars the year you guys got acquired?
Michael: Now, I think the business is a couple hundred million inside of Symantec. It survived the acquisition and is still growing, which anybody who has been through an acquisition and merger integration knows that is not that easy to do.
Andrew: So you spent all this time interviewing customers, you spent all this time developing the product, you go out there and sell, and finally get a sale. Do you remember the feeling and what happened when you made that sale?
Michael: Honestly, it was a little bit anticlimactic. The reason why is, Joseph, our CEO, who really, he was our head salesman. He really led all this, came up with methodology, and closed that first deal. We ended up bringing in the sales team later. He traveled like crazy, and was basically on the road for four days every single week. I probably traveled for three weeks out of the month. The company, we were never in the office, because when you have these big million dollar deals, you have to go and visit the customer.
I remember hearing about when we won the deal, we were all in the office and we all went out for drinks since we were on the board. I remember when we actually got the order, he was in the tow [sp] room, so we just had this virtual email that went out that said, “I’m in my hotel room all by myself jumping up and down because I’m holding the fax in my hand and we got our five hundred thousand dollar order. Now I’m going to go to bed and we have a 7:00 a.m. breakfast with another customer tomorrow. We have these very brief celebrations, then you say “oh shit, we have to implement this customer. Now, we have to ship the next product; now, we have to close the next deal.” So I think founders and entrepreneurs are generally bad at celebrating. There’s a brief kind of milestone, then you’re like, “Oh shit, now it’s just going to get harder. Now we have to do the next thing”.
Andrew: I know that it wasn’t all win, win, win, win, win, win, but let’s talk about some of the bigger sales. There was one just as a company, it was Wham-O [SP], just as they were going into bad financial times. Kind of teased it in the intro, but can you tell that story, how you got that sale, and what Wham-O was like at the time?
Michael: The thing we really focused as a company on having professional services, support, you have sales, you have marketing, you have engineering. We really focused on all those functions working together well. In other words, having a single face to the customer. So, Wham-O was a couple million dollar deal, but a new Chief Security Officer came in and inherited the deal. He didn’t like some of the things that the predecessor had done. He didn’t understand the project. He didn’t like it. The sales rep who lead the deal brought me up to Seattle. I sat down and basically I yelled at him for an hour. The customer said, ‘It doesn’t do what we want it to do. I don’t get this project.’ The company at the time was, in 2007, there were some signs of problems.
Things started to emerge at Wham-O. We decided, let’s not get defensive. He was even threatening to sue us to get the original license back. That would have meant we would have had to restate our previous quarter. It was on the verge of becoming a real blow up. It was the first real customer crisis we had had. Before that, we really had no customers who stopped using us or threatened us in any kind of way. I remember we went back to the office. The sales team and the engineering team and the marketing team, we all got together. We all rallied. We didn’t finger point. In a lot of these situations, you end up with sales said, ‘The product doesn’t work. The engineers screwed up. ‘The engineers might say, ‘The sales guys over sold it.’ We really honestly worked on this as a team.
We went back up to Wham-O, and we said, ‘Let’s not just try to save this deal and get them to fill the original contract. Let’s ask them for another two million dollars.’ Let’s say, ‘We’ll take what you paid so far. We’ll role it into, we’ll give you a bunch of our new products, a bigger license. We’ll extend the contract a year.’ So, we didn’t just go and say, ‘Please don’t sue us.’ We went and said, ‘Please give us two million more dollars.’ We were able to do that because all the different groups in the company worked together on the deal. That’s what ended up happening. They ended up renewing for the original license, a couple million more, and they ended up becoming a super successful customer up until they got fired by B of A.
Andrew: I’m sorry, but I don’t understand how you ended up turning it around. I see that they called you in. They wanted a refund. You kept your cool. You got the whole team together. You did something that ended up giving you an extra $2,000,000 in sales. What did you do?
Michael: What we did is we committed to make them successful on the initial deployment. Part of that was just listening and understanding what the problems were. Part of it was we had been a professional services team. So, part of it was some services to get them live and to make it work for them. Then it was we had these new products coming out. These new products will both make the original ones more powerful plus let you do some new things, which were a priority for him.
So, we gave them the new products at a pretty big discount, and gave him some professional services. Because they’re a big enough company, that still ended up adding up to a couple million dollars more. So, he felt like he got something, like he got a huge discount on a project that he would have done anyway and maybe, some help rescuing the old one. That’s because we framed it that way. We framed it as what do you need? I need this project to be successful, and I need the next project to be successful. We said, ‘We’ll help you with both.’ and we did do a big discount, but that’s still a big deal. They’re a big company.
Andrew: I’ve got to remember that next time a client wants to cancel or something looks like it’s the worst news I could possibly have. I need to just keep my cool and say, Well, Michael Wolfe actually walked into a worse situation and somehow ended up getting four times more money in addition to the money that he was almost going to lose. Then look for that opportunity in my deal, too.
Michael: It was really our sales rep, Steven, who kind of brought me in and coordinated all the different parts of the company. It’s hard to do that. With a lot of companies, if you’re the sales rep, you’re out in the field by yourself. It’s hard to get the support. We just kind of all rallied. It’s still my favorite story from that part of the company.
Andrew: I think now is actually a good time to talk about the vitamin versus the medicine, because I could understand in tough times, if you walk into a client’s office and say, ‘What we do is we make you more money. We’re the guys who come up with new revenue sources for you.’ They’re all ears at that point. But you’re walking in instead and saying, ‘You know, worst case scenario, we will be there and help you avoid it. If we’re doing our job right, you don’t have your face in the news.’ That’s a harder sell to make to a company in a down market .How do you do it?
Michael: That was really the risk with what we were doing. And a lot of companies that sell security solutions. A lot of them actually have this problem. Where you’re not going in and saying we’re going to make you more money, or we’re going to save you any. You’re either selling risk reduction. You’re lowering the probability that a bad thing might happen some day. And you can try to apply some our ROI on top of that. You can say the cost of a breech will be this much this much. [??] eliminate that possibility but it’s kind of tough math to convince a customer. So what happened for us was as 2003 this was still very much something companies should be doing, but only a few were kind of forward thinking companies like Bank of America were actually kind of being proactive about it.
We got lucky because in 2004 and 2005 there were a whole series of really high publicized data breaches in the news. Mostly credit card companies, [??] services firms. Where consumers had to be notified about the identity theft. Because the bank had a breach that required them to notify. And it’s because of at the time there were some state laws coming out that were pretty modest.
All they really said was if you have a breach that involved consumer data, you have to notify the consumer. Well what ended up happening is everyday you’d pick up a newspaper and this bank, this credit reporting agency, this e-commerce company had to notify two million customers that there accounts were at risk. And that gets a ton of press, that also gets CEO’s and boards of directors coming into the next board meeting like holding the Wall Street Journal. That says, our top competitor had a data breach. You tell me that this can’t happen to us.
And of course the CIO would say, well actually, it could happen to us because we’re really not that different than they are. And now you get what [??] got the analyst to start writing about us. So there was king of an external force that had to kind of meet good timing and good execution for this to become a big company. If it hadn’t I think we would’ve been a small company. But we were always betting on this rising in the priority lists. But that was the bet we were making. That was the risk of the company back on day one. Will this go from nice to have to must have?
Andrew: And what made it a must have is that companies were going under. Choice Point went under because of a data breach and all major banks immediately started paying attention. This constantly was in the news. It was a small change in the laws that basically had big impact which said, you have to report to your customers when you’ve lost their data, or done something bad with it. That’s what did it for you. That’s what makes a pain killer versus vitamin if I’m framing it right, but that’s what made you get more sales.
Michael: It was really the board of directors said we had to do this. The CEO said we had to do this. All of our competitors are doing this. If we have a data breach our stock could go down by 20%, or in the case of Choice Point literally the company went out of business. I mean it was an existential threat, like the company actually went away. Maybe that’s a painkiller, but that’s the ultimate painkiller because the downside of that is so huge even a low probability of it happening gets it [??] on the [??]. But it’s very few, especially with B2B software, there’s really not that many success stories. They don’t either solve a problem that’s that big, or really let a company radically cut cost or restructure. There’s really not much else from that.
Andrew: So we talked about the up and the up, and the up and all the big successes. You also had a big obstacle in 2004. Do you know the one I’m talking about?
Michael: Yes, what happened was, in 2003 we left on a high note, because we had this Bank of America deal, we got on the board with some revenue. We had a pretty good pipeline of stuff after it. We set a number for 2004. I think we were going to do 4 million in revenue for the year. We were going to do ten big deals. And what happened is we went into Q1 with some stuff in the pipeline but we didn’t book a single dollar [??] in Q1. We literally like a goose egg and a dollar sign zero on our financial reports.
And I remember, Joseph our CEO and I, we went into the board meeting and you have two options. One is you can say markets are not developing as fast as we thought, we’re going to maybe slowdown hiring, or even cut people. We’re going to kind of wait and hopefully there will be more B of As. Or you can say you know what, intuition says this is going to be a market, the data points from our first customers will be generally applicable, let’s double down. So, I remember we went to the board meeting, and we said: well, the bad news is there were two bad news. The first bad news is we didn’t book anything this quarter. The second bad news is we don’t want to slow spending or even keep it flat. We actually want to accelerate it. Joseph handled it really, really well.
I remember one our board members, Steve, was like, well, typically when a company does zero, they don’t accelerate their spending. This isn’t normal, and we just said part of it is intuition, part of it is data. It turned out we ended up booking $4 million for the year. We made up the difference in Q2, and then Q4 ended up being huge.
We also learned … We had a bad Q1 in 2005, 2006, 2007, 2008. I think even now Q1 is still the crappy quarter for that business. It has to do with budget cycles and the way that IT works. We realized, wow, it turns out that was just seasonality and our intuition was right, doubling down was the right thing to do. At the time we just kind of said: keep the faith. Make sure that the team still believed, and we just kept on.
Andrew: When you spend more money, where does it go? Is it more money on ads? Is it more money on sales people?
Michael: Yeah. For that business, it was really pretty well balanced. You had to have a really strong sales team to go sell direct to the customer, great support end services to keep the customer happy. The product was super important, and it had to scale, great user interface, high accuracy. So, we were almost like … A quarter of the company was engineering, and a quarter of the company was sales. We didn’t spend a lot on ads. We did a lot of analyst relationships, and in that market getting Gardner or Forrester to bless you is the important thing.
The company I’m doing now, Pipewise, it’s going to be way more about product design and marketing. Sales will be important, but these kind of products tend to be … Either the customer tends to discover you and even try you out and get pretty far with you on the web before they talk to a person, as opposed to more of the traditional IT model where the sales rep might even cold call a customer. And say, “Have you heard of us. Try us out.” That kind of model is rapidly going away, but for that product it made a lot of sense. But every other business is totally different.
Andrew: Was there also another issue where you guys split up the company equally? I don’t full understand what happened here.
Michael: Yeah. I’m kind of telling you a story of everything went right. We started the company. We validated the idea. We built a product. Other than the Q1 curse, everything went great. The reality is the big stuff always went pretty well, but day-to-day there were a lot of just politics and conflict and bad hires and even the way the company got started.
We had to have that founder negotiation between the three of us. How do we break it up? And we had that very typical: is execution more important or is the idea more important? So, Kevin, who really came in with the original insight, really felt like he should really have the out size stake in the company and a lot of power in the company because he came up with the idea originally. Where we were saying: let’s just split it equally, all the work is ahead of us. The idea might even change. In fact, it did change a lot after we got started. We ended up coming to terms, and everybody turned out happy.
But I remember for the first couple of years, I remember this one blow-up we had where there was an algorithm Kevin came up with. It turned out to be really important; it was a big part of the product. He was pushing to get it into the first version of the product, and I remember this argument where he said, “Joseph, that algorithm is the most important thing”. I remember Joseph looking at Kevin and saying, “No, Kevin. Actually, the people are the most important thing we have at this company because we’re going to make or break the company by how well we execute, how well we work together. It’s not going to be this one special piece of sauce, this one guy invented that is going to be the difference.”
I think at that moment that’s where he kind of got it. You get the right players on the field. If you get them to all work together well, good things will happen, but you have to be constantly on the lookout for these personal conflicts, politics. And also finding ways to bring good people into the company and finding ways to move people right back where it helps which is really difficult, but you have to be good at it, and it became one of our specialties.
Andrew: How valuable did you say that algorithm was? We actually lost the connection just as you were saying it.
Michael: It was really valuable. It was something that we ended up getting a patent on. It was a big part of one of our initial products. It was about identifying customer data over the network at really high speed. So it was super important, but the point of the debate was about that being the most valuable thing at the company, or is it really that collection of people who are going to take that, build on it, get it to market, support the customer, and build a great culture. And we ended up with about 200 people [??], and that was just one of the most cohesive and functional teams that most of those folks had ever worked on. A lot of us are still looking back at the good old days when we would have all these parties and off sites; it was such a great team. And now, after the acquisition it’s all kind of gotten disbanded, and everybody is off doing their next thing, like me.
Andrew Warner: I love those kinds of environments. I remember, actually, when I interviewed Scott McNealy of Sun, and he said that he had that great relationship with his people and I thought, how will I even verify this? And right after the interview was done I started getting emails from his people, people who worked directly with him who said, ‘Yeah, it’s absolutely true.’ There was some mailing list of ex-Sun employees who then posted a link to his interview and many of them ended up, and first of all, I saw the referral traffic from it, and many of them ended up saying positive things about their experience with him. It really is great when a company jells like that.
Michael: And if you look at the biggest success stories, they almost all had some kind of magic, not about the product as much, but about the culture, about the cast of characters that meshed together.
Andrew: And how do you do that? You mentioned, I think, it was Susan, earlier, who got you the Vontu deal. How do you get people who are that great, first how do you find them, and then how do you get them to work together?
Michael: Well, that’s really hard. A lot of it is just hard work. I mean, you have to be willing to interview 20 people to find the one great one, and say no to the other 19, which probably would be OK, but maybe wouldn’t have been. We had a really rigorous interview process; we all had a different role we would play in the interview. We all compared notes and kind of coordinated on the recruits. We had ritual, and I think every company needs a ritual like this, where everybody gave a presentation. Your last round of interviews was actually a presentation in a conference room, to anybody who wanted to show up and meet that candidate.
So it was get up, talk for 15 minutes about something you did, your career or something about you. And you really find out so much about that person in that presentation. And they would find out a lot about you, too. And I think that’s something that some companies should do a better job at. The best people always have multiple opportunities. A lot of times you’re really poaching them from other companies. So, you have to think as much about selling that candidate, and creating an environment that people want to join, as opposed to just making a decision about do I want to hire you or not. So you can almost think of it as [??] marketing. You create something that people are attracted to. They come in, they meet great people, they love the camaraderie, they love the market, and they want to join you, and you don’t have to go and twist their arm.
Andrew: You said that there are different roles in the hiring process. What were the roles?
Michael: Well, for example, a big problem with hiring is you show up for an interview, no one’s every prepared because everybody’s busy. And you get asked the same questions over and over again. [??] You put together a play book where we talked about really what are the cultural values of the company, communication and teamwork, entrepreneurial enthusiasm, customer focus, communication skills. We have about five of them. Those cultural imperatives drove our performance review process, our evaluations, and it drove our recruiting process. And we would break the interview up into themes, and we did a lot of two-on-one interviews, too. So in the first interview we might talk about teams, projects, issues where you had conflict with other people. We had like a playbook of questions for an interview like that.
Michael: We had another set of themes around creativity and entrepreneurial enthusiasm, and does this person think outside the box? ‘Tell me about something where you did something [??] in your company.’ [??] And another was really the obvious functional expertise, you know, if you’re a developer, are you good at writing code? If you’re a sales guy, give me a presentation; sell me something.’ And they are very different. When you wrap them all up against those cultural attributes you’re looking for, and then the presentation kind of wrapped it all up and kind of confirmed those things. So it was thoughtful, we designed it for a particular outcome. We never had somebody show up and just interview and chit chat. It was almost scripted, and it really, really works.
Andrew: Kind of like this interview. We don’t just chit chat. We make sure that we almost script it by pulling in all the key ideas, here. One big idea that you suggested we talk about in this interview is selling the company versus going public. Why didn’t you take the company public? Why did you sell?
Michael: That was a hard decision. And Joseph and I had both done IPO. Kana was an IPO. So Kana went public in 1999, and this was during the bubble. We had about a $10 [million ??] market cap, $400 million in revenue. He and I had both been officers at a public company. So it wasn’t like we hadn’t done it, or might never get a chance to do it, to sort of know what that was like. And then at Vontu, in 2007, about $50 million run rate, which is just below at the time what you needed to be public, [??] we were going to break even at the time and on the verge of profitability. And it was a tough choice, but it really was a ‘stay the course, invest more, hire CFO,’ go through that process to get to $100 million profitable, or sell out for $350 million cash offer to probably the perfect acquirer–the company that was best positioned to do something with the company where we had good relationships.
And in retrospect it was the right thing financially, just because the market crashed so much in 2008, 2009. We probably would have had to raise more money, and valuations went down. We definitely ended up way better off financially. In terms of was it the right thing to do, it’s like, we’ll never know. The business survived the acquisition and the team stayed and was happy through a couple years, and the business is a big business inside of Symantec. But we all miss the good old days. We all wish it could be the way it was. But if we were still an independent company it still wouldn’t be the way it was, because we would have 500 people now, and it would be political and bureaucratic. So, companies go through these moments in time and you can’t ever reproduce that moment. And you either get acquired or the moment goes away, or you get big and the moment goes away. Either way, you know, it’s a fork in the road.
Andrew: We talked about why acquisition over going public. Why did you choose an exit over continuing to run the company? And I understand that as you have investors and have an obligation to them when you take their money, but from a personal point of view, why?
Michael: First of all, I think that it had very little to do with investors. I think that sometimes there’s a perception that once you have investors that they kind of end up calling the shots with exits. And that certainly happens sometimes. But as long as the company is doing well, their time horizon is certainly long enough, that the longer you go the more valuable it will be. I think for us it was, we were about to get to the next level of complexity, meaning trying to take the business international, which means really expensive investments, equipment, offices in other places, bring in a CFO, hire a lot more people, raise more money. And we felt like we had the team to do that, and could have done it, but it would have brought all these additional risks and complexities.
It would have been less fun, and all of our competitors were getting acquired by McAfee and Computer Associates, and what had been all the competitors. So we said, right now it just feels like the moment’s right. Everything is going great, the numbers are great, it’s the perfect acquirer, who will go acquire somebody else if we don’t acquire us. And it all aligned; and you never know if it was the right decision. But I think also, we all love small companies, so the best outcome for small companies in terms of a big company, the problem with that is now you work at a big company. And sometimes what you really want is just to go back to a small company. And that’s what all the founders and early folks at Vontu ended up doing; we’re all back at companies like this one.
Andrew: At the end of Kana, just before you launched Vontu, you took a trip. Do you remember what that trip was? And then also, I’d love to find out what you did after you had this big exit with Vontu? But after Kana, what did you do?
Michael: After Kana, my wife and I got married in 2000, so we took that six month trip to Italy. And everybody kind of has that, if I could just do nothing or if I could just be in the perfect place, what would‚Ä¶ I think it’s hard to learn about yourself, the day-to-day work. You have to get away from stuff to really figure out what you’re passionate about, what you would get drawn back into.
That’s when I realized I really needed to start another company. I couldn’t wait to get back here. So, I remember we came back in September of 2001, and Benchmark brought me in as an entrepreneur-in-residence. I remember the very first day I got to Benchmark. I started there September 11, 2001. Literally, I came into the office and the TVs were on and the market had already kind of crashed, and nobody was investing. Most of the investors were kind of cleaning up their old investments and trying to rescue their funds.
I remember thinking like, 18 months ago I was going through an IPO, and I was going through the most [??] industry. Now, 18 months later I’m right back here. It’s just me. The market’s crashed. The U.S. is under attack. No one is getting funded. So, that’s a pretty big comeback. That’s from a pretty big drop. I guess I just feel like there’s always room for companies. What ended up happening is a lot of companies that were founded in 2001, 2002 really at the bottom of the market where there wasn’t a lot of investment available, the economy was crappy [?? 
Andrew: You were cycling before Vontu. Are you still a cyclist? Do you still ride?
Michael: Yeah. In fact, Vontu was named after Mont Vontu in France.
Andrew: After what?
Michael: There’s a mountain called Mont Vontu which is one of the best known stages of the Tour de France. Anybody who’s a serious cyclist recognizes Mont Vontu. So, every time we would pitch the company, people would say: well, where did the name, Vontu, come from? [??] So, we got to tell the story about cycling, the Tour de France. It’s not spelled V-O-N-T-U. It’s spelled the French way.
I’ve always been a [??] cyclist, a long distance runner. I just love that stuff, and that’s my hobby whenever I‚Äôm not here. I’m out with my friends doing long bike rides or the break between companies. I did the Tour de France trips. It’s just a great way to spend time. I think that’s really important. I’m a big believer that entrepreneurship is something that you should do as a career. You can do it more than once, and you can get good at it and keep doing it. If that’s your outlook you can’t neglect hobbies, you can’t neglect family, you can’t neglect health. You just have to come up with a system where you balance it all. It’s like today I rode my bike to work and then I got here early. I’ll probably ride my bike home and do some hill repeats on the way. You figure out a way to work it in, and I’ve always tried to do that. The best entrepreneurs I know have managed to be really intense about work but have it be 80% of their life, not 100% of their life.
Andrew: I ran into work today and I’ve been trying to do more and more long distance running on my own. I did my first 2.6 mile distance on my own. No marathon, no support. I carried my own water, my own food recently. What distances do you do for runs?
Michael: The longest race I’ve done is 100K. And it was a hard 100K because it’s up north of the city…
Andrew: We’re talking over 60 miles.
Michael: This is with 10,000 feet of climbing. You’re not just running 100K you’re doing 1,000 foot hill, down up down, you have stairs, you have to cross creeks, you have sand. The best part of why I love…that’s why I live and work in San Francisco is you have this amazing ability to be in this great work environment and 20 minutes later you’re across the bridge on some trail that goes all the way to Oregon and you’re totally outside of it.
That’s also where I do my best thinking. I’ll get a podcast or video like this, I’ll tee it up on my phone, go out there and listen to hours of Stanford seminars, Harvard Business Review stuff, stuff like Mixergy, just to hear those stories. You come back from that time away both well exercised but also full of these new ideas. You get all these breakthroughs where you were stuck on a problem, but then you got away from the office and suddenly the answer became obvious. You’ve got to have that balance.
Andrew: I used to listen to those old Stanford…I forget what podcast it was but they had an interview series for a while there. I listened to it as I did my long bike rides. It’s great for long distance running, for cycling to have those long form podcasts.
Michael: There’s so much great stuff out there. This is why I love doing stuff like this. I wish stuff like this existed 20 years ago. I could’ve heard videos like this back before there were no iPods.
Andrew: Back when you hiked all over Europe and when you followed the Tour de France in the Alps.
Michael: Yeah. I feel like I could’ve avoided so many painful lessons. I’m a huge believer in learning from mistakes, but I think it’s way better to learn from other people’s mistakes, not your own.
Andrew: Let me do a quick plug for Mixergy Premium. Then, I’m going to ask you a question based on something you happened to mention before the interview started. I don’t know if you remember, but I think it’s good for the audience to hear. The plug is for Mixergy Premium, where real entrepreneurs turn on their computer screens and teach you step by step how to do what they do really well. Everything from how to get customers, to how to get traffic, to how to get publicity, and so on. Well this couple, [??] the founders of fundson.com took the copywriting course, we gave them a checklist on that one.
They took that checklist to a live meeting. They said, it’s not copywriting, but if copywriting tactics that we learned on Mixergy will help us convince people online, then maybe they can help us close this deal. So they held on to it in their notes, and they said, oh. We need social proof here. They added social proof to their conversation. Then they said, oh. We need this other thing over here. So they added that. We need this other thing over here. They just kept going back to the checklist without anyone knowing that this is what they were doing to get the deal. So, that put a thought in my head.
I said, we should take all of the courses and create these action guides from them. I just hired a writer who is going to start doing that for all the courses, including the one on how to get traffic, how to get customers, and so on. Maybe, based on audience feedback, we’ll do that for every one of these interviews. So maybe Michael Wolfe’s interview, we’ll have the writer go through and pull out the actionable tactics from this interview, explain them, and give you a checklist. So that at the end of listening to this interview, you’ll have this guide that you can use to see results in your own business.
So what I’m doing here is first suggesting that first of all, you guys sign up to Mixergy Premium, mixergy.com/premium, and get all those courses including the checklist that [??] used. But, in addition, check out the new action guides we’re putting together. Give me feedback on it, we’ve just hired a few writers here to keep improving them. We’re going to keep improving them based on your frustration, based on your excitement, based on all your feedback. So come back and let me know what you think.
So Michael, here’s the thing that I was going to ask you. You said there’s so many things I wish I knew before I started. I wrote it down with quote marks around it. Let me ask you: what do you wish you knew before you started?
Michael: I think the number one thing I wish I knew was how important your network is. For me, for example, when I was at Stanford for four years. I would have become a professor if I hadn’t become an entrepreneur. I met a bunch of great people who then got me involved in my first company. All those investors and people ended up in the second company, the third company, then the fourth company. So there’s this constant thread of people and relationships. You can see it with PayPal, you can see it with Google. There’s these people who might spend the next 50 years leveraging that network, being part of that team. It’s the importance of relationships. It’s the importance of meeting people and getting to know them.
Even when things go badly in your company, almost all companies go south or you go through bad stretches, you can be upset about the company. But never let that impact your relationship with your co-workers, your investors, your board. Because even if you fail, you can still keep those relationships intact. I’ve been fortunate that I’ve always learned that lesson, at least, when I needed. I’ve had to work with some people who ended up dropping off the network completely because they had a blow-up or they ended up creating conflict. So it’s really that. If you get into the right team and the right set of people, even if you go to a job where maybe it’s a demotion or it’s not the right fit, if you really get tapped into the right network, that could be the set of folks you work with forever.
Andrew: So how do you do it? How do you build relationships outside of the people you happen to work with?
Michael: I think a lot of it happens when you choose what projects to get involved with. I’ll give you an example. I met a guy recently, he got an offer for a VP of engineering job at some hardware company in San Jose that nobody has heard of that is probably not going anywhere, but it was VP, higher title, etc. But he got a lower level offer at Square, so he could go join the team at Square. He didn’t know anybody at Square but just got recruited in by the team.
And I told him, “If you join Square, Square will be one of those companies like PayPal where ten years from now, even if you’re not at Square, you’ll probably be working with a bunch of Square offsets or offshoots of Square, so don’t worry about the salary, don’t worry about the title, worry about who are the ten people you’re sitting next to who will be [??] people in your company who will be with you. And then, of course, once you get there, you have to build relationships as well and do good work, don’t politic, be a good person. Also, remember that people respect smart people with integrity. Smart people without integrity, that doesn’t get you anywhere either. So being the smartest person at your company doesn’t really help you unless you are also somebody people just want to work with.”
Andrew: I know you’re making some angel investments. How do people connect with you, how do they find out about the investments you’re making, how do they get to know you better before they get to meet you in person?
Michael: I think, again, it’s usually network. Almost always something was introduced through a friend or something where there’s at least some commonality, a person you know in common, a company you know in common. That tends to work the best. I also think that being specific helps. For example, I don’t do a lot of angel investing right now, I mostly invest in other people’s [??] which is even better. You kind of get to participate second-hand. I would want to invest in something that I know something about. It would probably be [??] some kind of software company.
If somebody approached me and said, “Mike, I notice you know that market and you’re interested in it and that seems like a good fit.” If they’ve done their homework, I would respond positively. If you feel like someone just picked your name of Angel List and just spammed you that’s sort of like, “Tell me why. Don’t just tell me you need money. Tell me why me. What’s special about me? Flatter me. Or say that I’m a good fit because you’ve done you homework in terms of what you need in value that I have. Everybody has an ego, you just have to figure out what it is that they value.
Andrew: Right. So, we’ve talked about Vontu, and I also hope that people check out Pipewise as I said at the beginning this provides relationship management solutions to businesses that acquire customers via web and mobile channels. This is if they really want to understand who their customers are when they’re buying from them online, when they’re interacting with their site. Pipewise will plug into their current sites and give them all that extra insight into their users.
Andrew: And that’s Pipewise.com
Michael: Thank you.
Andrew: Michael Wolfe, thank you for doing this interview.
Michael: Thank you [??]
Andrew: All; right. Thank you all for watching.