Why This VC Showered With Construction Workers And Why You Must Also Be Willing To! – With Mark Suster
on Nov 11, 2009 - 9:34 AM PSTIf you’ve been to Mixergy before and I’ve earned your trust, then don’t waste your time reading anything I wrote on this post. Just listen to my interview with Mark Suster and get fired up by his stories and his lessons for entrepreneurs. Then go out for a good run so you can burn off some of the excess energy you’ll get from listening to this interview.
For everyone else, I excerpted the story about the time Mark had to shower with construction workers to save a few bucks so he could turn around a struggling company he founded. It’ll give you a taste of the pragmatic discussion we had and why I think this interview is so important to anyone who considers business a calling.
Today, Mark is a venture capitalist who works with passionate entrepreneurs who will probably see a bit of their own determination as they listen to some of the stories Mark told.
The FULL program
About Mark Suster
Mark Suster is an entrepreneur who turned venture capitalist. He’s currently a Partner with GRP Partners. Before that he founded Koral, which was sold to Salesforce.com, where he stayed on as Vice President, Product Management following the sale. Prior to Koral, he founded BuildOnline, the largest independent global content collaboration company focused on the engineering and construction sectors, which was acquired by SWORD Group.
You should read and comment on his blog and say hi to him on Twitter.
Text excerpt: showering with construction workers
In this section, Mark talks about BuildOnline, the company he founded in 1999.
We were a really big deal until we weren’t, you know? Goldman Sachs was an investor. We were going to IPO within 12 months for north of a billion dollars.
I know it sounds crazy, but a comparable company out there had an eight billion dollar market cap on less than two million dollars of revenue, so anything seemed achievable.
I had a company approach me about acquiring our company for a hundred and fifty million dollars a year into our company, and I thought, “A hundred and fifty million between friends is chump change.” I know it sounds dumb, but this was 2000.
And then in 2001, I had very humbling experiences. I had 122 staff. Thirty of them were contractors, 92 were full-time employees. I had recruited people out of Goldman Sachs, GE Equity, Anderson Consulting (Accenture, now), Morgan Stanley, you name it, and a lot of them were Harvard MBA’s, Stanford MBA’s.
I had to go from 122 total staff, 92 employees, down to 38 in one day, and then within a month, I took it down to 33 — one of the most humbling experiences of my life. And I laid off nearly all of my friends. It was awful. And I’d say in 2001, we really had to build a real company, and that’s when I realized that I maybe hadn’t done the right thing, but having taken that kind of money from investors, I felt a huge sense of responsibility.
And just one quick aside…I remember traveling through Germany, and I didn’t want to spend money on hotels, because we had pledged to build a capital-efficient company, so I used to sleep in Neu-Isenburg, which is south of Frankfurt, in a pizzeria. They had three rooms above the pizzeria, and they used to rent me rooms for thirty euros a night, and that’s what my life became in 2001.
They actually then decided not to offer those as rooms anymore. So, we’d gotten a taste of cheap rooms, so I went down the street in Neu-Isenburg and just stayed at the cheapest place I could find. It was 35 euros a night, so I was wasting five euros.
But then I found out they didn’t have bathrooms in the room, and I had to take a shower down the hall, no joke, walking down the hall to take a shower in the morning next to Turkish construction workers wearing leopard-print underwear. That was about the low point, and that’s a true story.
And, you know, had I built my company from a foundation of that in the first place, I think I would have set off in a much better trajectory. And it’s in those down years – 2001, 2002, 2003 – when no one would return my phone calls, that I built a real company, and everything I ever learned bout being an entrepreneur was in those three years.
Full program includes
- How the real world requires entrepreneurs to do things that wouldn’t look good on the cover of the Wall Street Journal, including a revelation from Mark.
- How Mark turned a troubled company around. You’ll even hear a detailed example of what you should be willing to say to your customers if you want to turn around your business. (And if you think it’s beneath you to have this conversation, this interview will show you why you might not be ready for entrepreneurship.)
- Why your elementary school teacher was wrong and how having a chip on your shoulder might make you a better entrepreneur.
Suggested comments
- I was clearly enthusiastic about what we talked about. Did the value of the content live up to the passion?
- What did you think of the example I gave about Bloomberg? Do you think entrepreneurs need to take risks like that in the early days?
- I need to interview more entrepreneurs & investors like Mark. If you know anyone, tell me.
Big thanks to my sponsor
Check out Haystack.com right now if you want to find a designer for your next project or you just want to be inspired by the work on the site.
View Comments to “Why This VC Showered With Construction Workers And Why You Must Also Be Willing To! – With Mark Suster”
Leave a Reply
You must be logged in to post a comment.
November 11th, 2009 at 11:36 am
This might be the best headline ever.
November 11th, 2009 at 12:09 pm
I agree, solid headline on this one! Solid interview too.
November 11th, 2009 at 12:15 pm
I second that. I actually had to read it twice to make sure I wasn't having some strange Freudian moment.
November 11th, 2009 at 12:27 pm
What makes Mark so rare is that he stepped from that world (entrepreneur) into his new one (VC) but his content, tone, and focus makes it very apparent that he's not too far removed from that world (entrepreneur).
Starting my seed round, I read a disgusting amount of VC blogs, but for most of them they've already completely shed their entrepreneurial skin. It's gone. Long gone. They've donned the VC hat and they've completely forgotten what color their old one was and how uncomfortable it was to wear.
I stumbled into Mark's blog about a month ago, and consider it my most precious resource. If you have no intention of every raising money, then enjoy this interview but don't bother reading the blog, it will be a waste of your time, just hang out at inc.com instead.
But if raising cash is part of your future, have a tab open to bothsidesofthetable every morning.
Good luck with the new investments, Mark, and thanks for always showing your true colors. Fascinating interview.
November 11th, 2009 at 1:18 pm
Thanks. I have the toughest time coming up with headlines and figuring out what quotes to highlight.
Before I came up with this headline, I was going to say, “Lessons and stories from an entrepreneur who became a VC.” Boring.
November 11th, 2009 at 1:20 pm
Fred Wilson complimented it in his blog once or twice too.
November 11th, 2009 at 2:01 pm
This is, by far, THE BEST interview!
Thanks Andrew.
November 11th, 2009 at 4:00 pm
So cool!
You both make great points about the new way of networking. Post a comment, tweet… something to get yourself out there.
Confidence is key.
Thanks for the awesome interview Mark and Andrew!
November 11th, 2009 at 4:35 pm
Thanks.
As I did it I could feel it was one of my best. So much fun to do interviews like this.
November 11th, 2009 at 4:37 pm
Right on. I've used twitter and blog comments to get interviews here.
November 11th, 2009 at 5:03 pm
Andrew: Probably your best interview yet (and that's saying a LOT). Mark is such an intelligent, dynamic, engaging guy. These were some of the best insights I've ever heard for Entrepreneurs!
November 11th, 2009 at 6:00 pm
One of the best I've seen, Andrew! And at the right time!
Love it! Entrepreneurs Hall of Fame – http://www.theehalloffame.com/
I have to say that Mark's perspective of an entrepreneur with a “chip on his shoulder” is exactly what drives a majority of successful business owners who have learned to fail forward. This has resonated with my understanding, in my experience, that discovery of innovation is rarely determined by the abundance of knowledge but more so by the art of exploration.
I am rapidly and easily consuming Mark's BothSidesoftheTable.com posts and recommend it to every entrepreneur with that “Ambitious Upstart”. ;-)
At 21, I owned a 2 month old company that had monthly revenues of $25k+. I'll spare the lovely conclusion, but that success was not due to operating off of my belief and knowledge system but off of intuition which was developed from dogged perseverence through road blocks in which to survive I had to continuously “pivot”!
May I suggest blog analytics and performance companies also Mark? Maybe too early on the radar. But in due time… in due time. ;-)
Thanks Andrew!
November 11th, 2009 at 11:06 pm
Excellent interview as always. Suster makes great points about “pivoting”.
BTW I am the person who wrote up this Case Study for the Google Group Lean Startup Circle.
http://www.startuplessonslearned.com/2009/10/ca...
Wanted to let you and your readers know I am looking for a lead developer who is oriented towards “Customer Development” ala Steve Blank. Perhaps some of you reading this are interested or know of someone who may be.
If so, please see my post here:
http://eventsession.com/customer-development-or...
Thanks.
–
BTW I changed/edited “SAS” to “SaaS”.
November 12th, 2009 at 7:01 am
Fabulous interview Andrew. I had the pleasure of listening in for awhile during the live presentation and it's great you got it posted so quickly so we can all listen in more detail. I must admit that I almost turned it off too quickly when I saw that Mark was a VC but his entrepreneurial history is what made the interview so compelling.
Congrats on getting this set up so quickly in Buenos Aires, the technical quality of the live interviews has been great, maybe even better than before the move.
November 12th, 2009 at 4:06 pm
Excellent interview Andrew, what great information from Mark. I also liked your enthusiasm and passion.
I like the getting to know investors before taking their money concept. As Seth Godin says, people tend to do business with others who know, like, and trust them.
One of the best interviews on Mixergy for sure. Looking forward to listening to Leah's next, and learning about why she decided to “Pownce” from her company.
November 12th, 2009 at 4:06 pm
Excellent interview Andrew, what great information from Mark. I also liked your enthusiasm and passion.
I like the getting to know investors before taking their money concept. As Seth Godin says, people tend to do business with others who know, like, and trust them.
One of the best interviews on Mixergy for sure. Looking forward to listening to Leah's next, and learning about why she decided to “Pownce” from her company.
November 14th, 2009 at 3:50 pm
Sleeping in cheap hotels is what you Andrew described as “Ramen lifestyle” – a true entrepreneur makes no fuss when it comes to his own comforts. Truly one of the best interviews!
I'm glad I discovered Mixergy.com.
Cheers!
Constantin Gabor
November 15th, 2009 at 10:29 pm
It seems that this is so far the best interview.Thanks Andrew.
Thanks,
Portable Storage,
http://www.moveablecubicle.com
November 16th, 2009 at 4:26 pm
Great interview. Probably the best ever. It's a pity it only got two votes on Hacker news. I'd have expected more like 200+ !.
Constructive feedback: Andrew, you need to stop talking about yourself during the interviews. I can prolly understand why some people on hacker news think you are “smug”. Watch Larry King. He doesn't try to relate anything the interviewees say to his own experience and doesn't try to put words in their mouth then get them to agree. He makes the time with them, theirs and is in the moment at all times, leading the conversation where it naturally wants to go but erecting guard rails now and then. You seem a little too eager to ask your next question and interrupt a lot. For example, Mark wasn't finished talking about money raising tips and so he politely warded off your next question and finished saying what he had to say!
Otherwise great work and keep it up.
November 16th, 2009 at 10:03 pm
Thanks, Casey. Actually, I have a whole series dedicated to “startup lessons” and I'm about to start a series on “sales methodologies” so hopefully some stuff there for people that don't even need money. I appreciate your kind words.
November 16th, 2009 at 10:04 pm
p.s. I have a VC friend in town who always calls me the “VC apologist,” which I take as a compliment ;-)
November 16th, 2009 at 10:05 pm
Yes, it's funny but people actually read blogs and it's easier to get to initially “know” people this way than rushing up after we speak at conferences. thanks for the feedback.
November 16th, 2009 at 10:07 pm
thank you, Stephen. I appreciate it. And the Turkish construction working story has the benefit of being true!
November 16th, 2009 at 10:09 pm
Thanks, Todd. Appreciate the feedback. Re: blog analytics / performance companies – is that what your company does? I've already invested in and like the space.
November 16th, 2009 at 10:13 pm
Jeremy, I agree with your comments about getting to know investors. I wrote specifically about that topic because it's so important. Link is here –> http://grp.vc/AGc
November 17th, 2009 at 1:00 am
You're welcome.
Re: is that what your company does? -
No, but I developed a business model for a blog marketplace. And although blog initiatives do not have the same kind of budget as website marketing programs do, I cannot ignore the excitement of an emerging market where conversion transforms into conversation and a world where we now desire Google Analytics, Omniture, and Feedburner all in one place. ;-)
So as I see the world of blog analytics evolving I see the need for a blog marketplace. But it's tricky, as metrics are still being weighed. So I put a cool twist on it so it stands in the theory and emotion of blogosphere performance and accents the science of the performance once fully developed.
Thanks again Mark! :-)
November 17th, 2009 at 8:44 am
I'd say more of a VC pathologist.
November 18th, 2009 at 1:13 pm
What a great interview. I attendee a lot of entrepreneur networking events here in Toronto – and they often don't understand what they're really missing – salesmanship!
Also his point on ensuring deals are mutually beneficial – this is critical. It requires an understanding of what a profitable deal is, however..:) You can't be afraid of having those conversations. For instance, how many entrepreneurs are told “it's not in my budget”, and just believe it?
November 25th, 2009 at 12:10 am
Andrew and Mark, thank you both very much for this interview! It is not only informative, it is also very motivating. I am especially grateful to Mark for describing years 2000-2003 of his career and sharing how you built your company. And it was great to hear that you advise people to minimise the investment intake. I think too many people are using vc funding as an easy way out and that impacts the potential of those companies and creativity of the entrepreneurs. This also makes it harder to find mutually beneficial deals for the others.
Mark, I am glad that you have addressed the subject of sales! It seems now days that the revenues are taking the 3rd place in comparison to the website traffic stats and community/user numbers. I see so many people from both corporate and entrepreneurial worlds who close their eyes on sales, almost expecting that the product or existing relationships will take care of the company revenues on their own. It is rather sad… There are a lot of cowboy sales people out there. It is very difficult to find great sales people, especially ones who will understand the start ups. However that should not give entrepreneurs and their boards an excuse to ignore the necessity!
November 25th, 2009 at 7:10 am
Andrew and Mark, thank you both very much for this interview! It is not only informative, it is also very motivating. I am especially grateful to Mark for describing years 2000-2003 of his career and sharing how you built your company. And it was great to hear that you advise people to minimise the investment intake. I think too many people are using vc funding as an easy way out and that impacts the potential of those companies and creativity of the entrepreneurs. This also makes it harder to find mutually beneficial deals for the others.
Mark, I am glad that you have addressed the subject of sales! It seems now days that the revenues are taking the 3rd place in comparison to the website traffic stats and community/user numbers. I see so many people from both corporate and entrepreneurial worlds who close their eyes on sales, almost expecting that the product or existing relationships will take care of the company revenues on their own. It is rather sad… There are a lot of cowboy sales people out there. It is very difficult to find great sales people, especially ones who will understand the start ups. However that should not give entrepreneurs and their boards an excuse to ignore the necessity!
January 17th, 2010 at 11:14 pm
[...] raising startup capital, marketing, right down to the definition of "Entrepreneurial DNA". His fantastic interview on Mixergy was quite probably the most inspiring thing I listened to last [...]