Chapter 14 - Seven Lessons Learned on the Journey from Founder to CEO
To watch:
Understanding corporations: The Corporation, a must-watch documentary, compares the way corporations are compelled to behave with symptoms of human psychopathy.
Audacious goals: Venture capitalist and author John Doerr describes in this TED talk how entrepreneurs succeed using the goal setting system “Objectives and Key Results.”
Point of View: Fully articulating your Point of View, or “POV,” is critical to developing market leadership in your business category, explains marketing coach Roy Furr.
Chapter 14
Seven Lessons Learned on the Journey from Founder to CEO
“Character cannot be developed in ease and quiet. Only through experience of trial and suffering can the soul be strengthened, ambition inspired and success achieved.”
— Helen Keller
No one is born knowing how to found a company or be a CEO. And no one is born knowing how emotional the trek can be. This is a hard-earned, ever-evolving, and constantly demanding role that I hope is clear from the chapters so far. As my friend and CEO coach Kirk Dando has counseled me on more than one occasion, “The path to heaven goes through the road to hell.” It certainly does, and the journey is often one of euphoric highs and gut-wrenching lows. But it’s also a journey that is profound, and one I’ve cherished as I believe you will too.
So let’s pause for a bit of reflection here, as it’s worth summarizing the seven primary lessons I’ve learned from more than two decades as a CEO. It’s been a journey through six companies, working with literally thousands of great team members, both inside the companies I’ve helped found and led, and as well with the CEOs in whom we’ve invested through our family office.
Below are my seven lessons on this transformational journey:
Lesson #1: The CEO must be the Chief Culture Officer.
No one else has the power to be the “CCO” but the CEO. This is because the CEO is the synthesis point for all departments and the most senior executive at the company — with the ultimate say on what a company decides to focus on, culture included. A founder-CEO especially cares about the culture because they have breathed the soul into a new being: the company. And like a parent, the CEO cares uniquely about how this new being evolves from childhood into adulthood. A company is like a person and is even legally treated as such in most countries. In their personhood, some companies have a great brain. Fewer have a great heart. And even fewer have a great soul. The CEO should care about nourishing the soul. You can tell when a company has a great soul just by walking the halls and feeling the energy. Does the company give you energy or does it siphon your energy away?
Nothing says more about your culture than who you hire, who you fire, and who you promote. The CEO has the most power to make these decisions. If the CEO promotes a brilliant jerk — one who performs very well individually but who no one wants to work with because of their attitude — then that speaks volumes about that company’s culture. The CEO also has the ability to shape how the company serves its communities. I chose to establish the Bazaarvoice Foundation in our first year of our life, which ultimately decided to focus on accelerating STEM and entrepreneurial education in high schools. I was influenced by watching the documentary, The Corporation, and I encourage you to watch it if you haven’t already. I’ve included a link to do so on the Digital Companion. Today, the Bazaarvoice Foundation has taken on a strong life of its own and was initially led by Executive Director Kelly Ballard with the help of a steering committee. The Foundation was led top-down only in our first year of history because I wanted to set the tone. From that year on, it was led by a steering committee of volunteers who have solicited constant feedback from the people of Bazaarvoice. After Bazaarvoice went public, Debra and I gifted a significant portion of our stock to help give the Bazaarvoice Foundation a boost. This is how much I embraced trust in our people.
At data.world, I still very much view one of my top priorities as CEO in this way. We constantly debate culture and how to make data.world a better place to work, and I often ask our people, especially our newest team members, how to improve it. And we’ve won Best Places to Work in Austin for six years in a row now, just like we did at Bazaarvoice before.
Lesson #2: The CEO must constantly work on self-improvement and regularly take the time to reflect.
After graduating from Wharton, I and many of my fellow graduates felt that we had received the best business education in the world. It was, of course, quite good. But I also felt that my business education was just beginning. I had founded Coremetrics during my last semester and was now in the real, raw world of being an entrepreneur where I discovered that perhaps the most important thing I learned at Wharton was learning how to learn. I was determined to read hundreds of leadership and management books in my first two years after Wharton to help me in my journey and apply what I read every day. Books are read by leaders, and magazines and newspapers are read by followers. This doesn’t mean I never read a magazine or newspaper, I do so voraciously. But keeping up with the 24/7 news cycle doesn’t improve yourself as does a book. A book causes you to think more deeply because decades or centuries of knowledge are nicely summarized in one concise, reflective format. I discussed this mindset and practice in detail in Chapter 4, The Importance of an Always Be Learning Life.
Constant self-improvement means the CEO should also constantly seek out mentors. I am the product of many mentors, and I have found that if you reach out to people fearlessly they will often respond to aid you. I believe this notion to be deep in our DNA as a nation. It’s worth pondering the fact that since 1776 our country has come to hold a quarter of the world’s GDP and almost all of that wealth has been self-created. Yes, much of this wealth has been created amid historical injustice, a topic we’ll discuss later. But that does not obviate the virtues of collaboration and mutual reliance. When you reach out to successful people in the U.S., they may see some of their previous struggles and ambition in you and remember that they too were helped by mentors to become successful. I believe the U.S. is unusual if not unique in this way. When Debra and I went to Israel for the first time, we found it to be very similar, in no small part because of the similar circumstances of how the modern-day country came into being after World War II. Like the new Americans, the new Israelis had virtually no equipment to fight for their independence, especially right after the Holocaust. As I write this in mid-2022, Israel, despite a population roughly equivalent to that of New Jersey, ranks third globally in the number of startups outside of the U.S., right behind the United Kingdom and ahead of Canada and Germany.
The CEO should also leverage a CEO coach. I have long leveraged Kirk Dando as mine, and he is now a very close friend. A podcast we did together is linked on the Digital Companion. Not long ago, my views on this point were reinforced by Scott Cook, the Founder of Intuit when he said one of his biggest mistakes was not using a CEO coach for the first 23 years of his career. To prepare for our IPO at Bazaarvoice, I leveraged three additional coaches — one to help with earnings calls, one to help with investor Q&A, and one to teach me how to present to investors on the roadshow. I still work hard to build out a world-class mentor network, as evidenced by our diverse and incredible investor base and our large Advisory Board at data.world, about which I wrote in Chapter 13, How to Leverage Advisors and Investors.
All that said, I also believe that just as you should seek out mentors, you should also be one. I’ve long believed in the counsel of the French essayist Joseph Joubert, “to teach is to learn twice.” This is a mantra I live by in my practice of reflection. I’ve served multiple times as an Entrepreneur-in-Residence, both at Wharton and at the University of Texas at Austin’s McCombs School of Business. I’ve spoken at many events to help teach entrepreneurs, including the Capital Factory and TechStars, two of our largest startups incubators and accelerators located here in Austin. And the initial version of this book, located on Medium.com, was turned into the foundational material for the entrepreneurial leadership course at Technion, Israel’s oldest university.
Taking the time to reflect on what you have learned is paramount. As author and entrepreneur, Arianna Huffington states in a podcast episode with LinkedIn Co-founder Reid Hoffman: “Knowing when to turn the lights out may be the only way to keep the lights on.” At Bazaarvoice, I took five to six weeks of vacation every year and I believe this made it a better company. At data.world, I still take the same amount of vacation time with my family, to both recharge and reflect. Sometimes these vacations give me the clarity of mind to let go of an executive that I have been holding on to for too long. Sometimes these vacations have made me sharper on strategy. Sometimes these vacations helped me focus on our company more. It is easy to get defocused as a young company. So, recharge, and reflect.
Lesson #3: The CEO should own the long-term vision of the company.
This is the torch that the CEO must carry to light the fires with everyone — investors, employees, clients, and partners. This creates tremendous energy, both for the CEO and everyone else. The CEO also decides when to sell the company or keep growing. This is aligned with the long-term vision. How bright is the future? Is it real or is it a mirage? What kind of impact do you want to make? We could have sold Bazaarvoice for $25 million after our first year in business. Instead, we chose to go long because our long-term vision was greater. Ultimately, we built the company to a valuation of more than $1 billion (our IPO was named by the Wall Street Journal as one of the top five of 2012), creating a much bigger impact, as a result, enriching many more people, and the community beyond ourselves as founders. For example, I’m very proud of the fact that more than 60 startups have been created by former Bazaarvoice team members following our IPO.
A very concrete way to think about the CEO’s role in carrying the torch of vision is in the articulation of the firm’s Point of View, or POV. More than a mission statement, the POV is the expression of the company’s outlook, values, goals, and strategy. A brilliant book I highly recommend, Play Bigger: How Pirates, Dreamers, and Innovators Create and Dominate Markets, explores this concept. Three years ago, I took our entire data.world team through the book and I wrote our collective POV over many weekends and with much input from the executive team. It is the most important strategic document I’ve personally written in the history of our company. It continues to grow and evolve as our strategy does, and I make sure to take all new team members through it during their onboarding.
Lesson #4: The CEO should always treat recruiting as a top-three priority.
Among the many jobs of the CEO is the responsibility to serve as the Chief Resource Officer. The “CRO,” if you will, is responsible for attracting the best clients, partners, investors, advisors, and, of course, employees. Beyond the critical job of creating your initial, founding team, the CEO must also be focused on constantly upgrading your team. For example, I hired three CFOs in six years at Bazaarvoice. This isn’t easy, and again reflecting on vacation helped with this. As CEO, you will be defined by those that you choose to report to you. If there is dysfunction at the top, there will be a huge ripple effect throughout the company, causing dysfunction throughout, including at the bottom. At Bazaarvoice, we relied on a rigorous recruiting process that mostly served us well, if not always perfectly. I wrote about this in some detail in Chapter 11, The Most Proven Way to Hire Well, and we follow the same process at data.world. People are the raw material of your culture and ultimately of your performance as a company. Rapid growth brings out the best — or worst — in people. It causes everyone to stretch and the pace is hard to keep up with. I have found those with the wisdom that I mentioned in Lesson #2 above scale with a company’s growth for the longest period of time. Recruiting your Board of Directors should especially be a focus. It is much harder to fire a Board member than any other person on your team if you have made a mistake. Don’t get starstruck by pedigree. Spend the time to really get to know them and check their references. I discussed in detail how to reference Board members and executives in Chapter 12, The Importance of Reference Checking.
Lesson #5: The CEO should celebrate regularly at All-Hands meetings where vision, alignment, and transparency prevail.
At Bazaarvoice, and now at data.world, we hold our quarterly All-Hands meetings at the Alamo Drafthouse, a famous homegrown venue in Austin that is a combined cinema and pub. I’ve found this venue tremendous because it is counterculture. In short, the Alamo is a place with a sense of humor, mock movie posters, and an atmosphere that demands that you relax. Drinks — including beer and cocktails — and food are available throughout the day when we have our meeting. With it being a fun movie theater, most of our presenters try to one-up each other with the funniest — but most informative — presentation. At times, we’ve voted on who did the best, who stoked the competition and quality even more. As we grew at Bazaarvoice, we combined the meeting with a film festival, where team members produced some of the most hilarious videos I’ve ever seen. We even had a company band play live. And here, all metrics are revealed. I further evolved at data.world to also use these meetings to share our quarterly presentation decks given to the Board of Directors, a practice I didn’t dream up during the Bazaarvoice days. Everyone knows how we are trying to be aligned and what our goals and progress are. These events have been, and continue to be, magical. Early investors who have witnessed them have been wowed. These gatherings are my favorite days as CEO — second only to our Client Summits. We now do the data.world summit, a kind of cross between the Academy Awards and a TED conference devoted to data, each spring, and fall, and thousands attend virtually. Only the CEO can choose the means to bring the entire company to spend this time together. There are many competing priorities. I discuss the mistake I made at data.world by not having these until a few years ago in Chapter 17, Action-Oriented Communication.
Lesson #6: The CEO should evolve systems to keep everyone aligned.
In developing my own strategy to keep teams aligned, I have been very influenced by Salesforce.com Founder and CEO Marc Benioff’s book, Behind the Cloud, where he discusses what he calls his V2MOM model, for Vision, Values, Methods, Obstacles, and Measures. I include a link to an essay Benioff wrote on this on the Digital Companion and you’ll find it enlightening. But I chose to make it simpler for my purposes. I called it the “declarative b,” in homage to the “b:” logo that was part of Bazaarvoice’s brand since a year before our IPO. The colon stages something profound that follows, and you can use it in many ways such as b: bold, b: changing the world, b: transparent, etc. The beauty of the V2MOM model as I’ve modified it is that everyone participates and forms their own goals to be aligned with the corporate goals. It creates an interlocking chain of goals for each unit of the company within the larger set of corporate targets and aspirations that go from the top to the bottom to keep everyone aligned — and happier. If you know how you are performing, and that you are indeed aligned with the overall strategy of the company, then your work will be more fulfilling as a result. And this allows the company to constantly measure and constantly improve. I only wish that I had discovered this model earlier. Benioff says it is the key to Salesforce.com’s perpetual success, and I believe it.
At data.world, I’ve had the benefit of three co-founders along for the journey since the beginning. One of them is Matt Laessig, one of my best friends ever since we went to the Wharton School together as young MBA students. He serves as our COO and CFO. Matt has made practicing this lesson easier as he’s established good systems from our beginning. Other members of the team have made profound contributions. Rafa Pereira, our first Director of Software Engineering, really pushed us to embrace “OKRs,” for Objectives and Key Results. And I should add that Rafa went on to co-found Onebrief, which is a mission planning tool that reflects his passion for OKRs.
We are much better for using this practice to build and reinforce collective commitment. John Doerr, the famous venture capitalist once described as a “fizzing coil of energy,” talked about the importance of OKRs at a TED conference that I link on the Digital Companion. I urge your attention to his talk, and also his book on the subject, Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs. Doerr credits the late CEO of Intel, the legendary Andy Grove, with creating OKRs as a tool to “establish the right goals for the right reasons.” I’ll have a lot more to say on this in Chapter 19, The Five Critical Ingredients to Build a Big Company. This is a very important practice indeed. Doerr cites it as the main practice that has made Google so successful since almost the beginning, as well as many of his other Kleiner Perkins portfolio companies. Our top corporate goals and the OKRs that align with them have been a very important practice over the past several years at data.world, and help keep our now 100-team-member-plus size company aligned.
Lesson #7: The CEO should embrace vulnerability.
As the most senior executive, you are on the ultimate stage. Everyone's watching to see how you will behave — and, to a large extent, they will mimic your behavior. The CEO should have a growth mindset versus a fixed one. No book explains this better than Egonomics, which explores ways to achieve the right balance between ego and humility. If the CEO has closed his or her mind to learning due to their “success” (I put this in quotes because there is always someone that is more “successful” than you), then many others in the company will also choose to stop learning. Taking the time to reflect is incredibly important for learning — and a CEO is very hard to mentor if they don’t practice reflection. A CEO is impossible to mentor if they cannot be vulnerable. At Bazaarvoice, we practiced vulnerability by reading books like Fierce Conversations, which focuses on truly meaningful communication and having training programs around them. I discuss this more in Chapter 17, Action-Oriented Communication.
We enable employees to regularly rate managers on whether or not we were living the core values. After all, are they just values on a piece of paper, or are we — as managers — going to truly live those values? If we don’t, then the paper is not worth as much as the cost of the ink to print it. We have regularly run what we call “Climate Surveys” for everyone in the company to evaluate our overall culture and we have found ways to benchmark ourselves against other companies to see how we rank. At both Bazaarvoice and data.world we’ve participated in “Best Places to Work” surveys, where we were ranked against other companies in Austin. All of these are difficult practices. They require you to be open, reflective, and introspective, and sometimes what you learn is painful and the insight unveils practices that can be hard to change. Note that those with a fixed mindset will sometimes hold vulnerability against you. But choosing not to undertake these steps — and not make them a priority as CEO — is to turn your back on the voice of your people, which ultimately will affect not just your culture but your performance. The best speeches I have given have been where I have been vulnerable. Like the time I hired an executive at Bazaarvoice who didn’t reflect our values and had to explain in front of the entire company how I had made a mistake. Or the time at Bazaarvoice that we faced the Great Recession and stopped hiring to protect our people. We all had to work double-time and in hindsight, we beat our goals and I wouldn’t have stopped hiring had I known. But in hindsight everything is clear, and in going through the Great Recession everyone was very concerned about what the fallout might be. And it made us a much stronger company at the time to pull together like that. And I’m both very transparent with our investors and our team members about those challenging times to help set the tone for our other leaders to do the same.
A few years ago at data.world, we implemented the use of software from the team-building company RallyBright to measure individual team resiliency, which has been helpful. RallyBright’s Founder and CEO, John Estafanous, has become a friend. And, around that same time, our data.world Culture Club (a volunteer, diverse group of people at our company that is very passionate about culture) designed and executed an engagement survey, which was very telling and actionable. That engagement survey has become an annual event at data.world, and we are all the better for it.
To be clear, yes, I still make mistakes — lots of them. But I’m a believer in karma and you should rise above it. Your people need you to be human.
Those are the key lessons I’ve learned in the journey from founder to CEO, and in short, it’s all about self-awareness. These are certainly not a set of magic potions, and you will undoubtedly learn your lessons on your journey. The important thing is to heed the insights that reveal themselves along the way. I hope my own will serve to help get you started and become a better, more reflective, and ultimately more successful leader.
“Experience is the only thing that brings knowledge, and the longer you are on Earth the more experience you are sure to get.”
― L. Frank Baum, author of The Wonderful Wizard of Oz