Episode 9

Keeping it Fresh

Hosted by Okta's Frederic Kerrest and Epic Magazine's Joshua Davis
You’re starting to get comfortable — dare we say, content — with your company’s progress. Hate to break it to you: it won’t last. The moment you realize that you’re settled in and basking in your glory should be a clear signal that it’s time to start reinventing yourself. In this episode, we talk to entrepreneurs who have mastered the art of keeping it fresh. Sebastian Thrun, Parker Harris, Melanie Perkins, and Marc Andreessen all share how you can continuously evolve and challenge yourself, your companies and your industries.

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You have one chance to make your shot. Every eye in the room is on you, there’s no room for self-doubt, and failure is not an option. As your company grows, you’ll go up against the buzzer and face your competition time after time. In order to consistently nail the game-changing shots, you have to learn to enjoy them. In this episode, 2015 NBA Finals MVP and Golden State Warriors shooting guard Andre Iguodala — someone very familiar with hitting clutch shots — teaches a master class on performing under pressure. Medallia's Amy Pressman comes in with the assist, sharing how even the best players in the game can improve.

Guest List

Sebastian Thrun

CEO of the Kitty Hawk Corporation as well as chairman and cofounder of Udacity

Parker Harris

Cofounder and CTO of Salesforce

Melanie Perkins

CEO and cofounder of online design and publishing tool Canva

Marc Andreessen

Cofounder and general partner of the venture capital firm Andreessen Horowitz

Transcript

Sebastian T.
Then you climb the mountain. You don't do this in big moves. You do it step after step after step.
Parker Harris
We thought we were huge. We thought we had massive problems. That was small compared to now.
Melanie Perkins
Most companies have this fallacy that there's a fixed amount of pie, and that everyone's just got to fight for their own little segment of that pie. Whereas actually, the reality is that everyone's success comes from growing that pie and expanding that out.
Joshua Davis
Welcome to Zero to IPO, a podcast about growing a startup from a brilliant idea into a brilliant company and everything that happens next. I'm Joshua Davis, co-founder of Epic Magazine and a contributing editor at Wired.
Frederic K.
I'm Frederic Kerrest, co-founder of Okta.
Joshua Davis
What are we talking about today?
Frederic K.
Today we're talking about how to keep things fresh.
Joshua Davis
Okay? I didn't know they were stale.
Frederic K.
They're getting complacent and you don't know it.
Joshua Davis
How do you even know if you've gotten complacent? Because if you're complacent, you're kind of happy. You should assume-
Frederic K.
That's it.
Joshua Davis
If you're a feeling too happy, you have a problem, right?
Frederic K.
I think that's right.
Joshua Davis
Well, we've got an amazing collection of guests on the show today who are going to talk to us about how to figure out what to do when you feel too happy, which is kind of a strange problem, right? But that's the whole point of being an entrepreneur, is that when you're an entrepreneur, if you're starting to feel happy, that's a warning sign. What a weird business.
Frederic K.
I mean, the people that I know that are always super happy, I'm really worried for them. Bad things are right around the corner.
Joshua Davis
Right. They're just about to get blindsided.
Frederic K.
Yeah, exactly.
Joshua Davis
Today on the show, we've got you Udacity's Sebastian Thrun, salesforce.com's Parker Harris, Melanie Perkins of Canva, and Andreessen Horowitz's Marc Andreessen. Who's first, Freddy?
Frederic K.
First up, Sebastian.
Joshua Davis
I've actually known Sebastian for more than a decade now, and I've been amazed to see him go from being a Stanford professor, the head of the AI Department, to the first guy on the ground at GoogleX and building up GoogleX, to now running Udacity, a company devoted to helping people learn in all sorts of new ways.
Frederic K.
And Kitty Hawk.
Joshua Davis
And Kitty Hawk. Right.
Frederic K.
I forgot.
Joshua Davis
Flying cars.
Frederic K.
We got his last job, and then he started flying cars. Here's Sebastian.
Sebastian T.
I just ran into a guy who climbed Everest about two weeks ago. I ask him, "How much time did you spend preparing and climbing?" Was about six months. Then I ask him, "How much time did you spend on the summit?" It was less than five minutes. I think, honestly, it's so much more fun climbing than resting.
Joshua Davis
So at Stanford, how did you know you reached the point when you were no longer climbing? What does that feel like? What does that look like?
Sebastian T.
I try Stanford in my 30s, and became a professor there. At some point realized that a lot of my colleagues were not just successful academia, but also venturing out into Silicon Valley. I looked at this and felt it was a very different skillset than being a professor. I just felt I could do this forever or learn something new. I'm the kind of person, I just love learning new things. I'm at my best when I'm utterly incompetent and don't know what I'm doing because it's giving me the chance to learn something new.
Joshua Davis
Would you have done this if you didn't have GoogleX to go to? Do you think you would have just walked away into the unknown if there wasn't something more interesting?
Sebastian T.
Probably not. At the time, GoogleX was already founded. I was its founding vice president director. I was really excited to take interesting intellectual things like Google Glass or Project Loon or self driving cars a step further.
Frederic K.
Was it an easy or a hard decision?
Sebastian T.
It was an easy decision.
Frederic K.
You didn't think twice about it?
Sebastian T.
Not that I remember.
Joshua Davis
You did it again when you walked away from GoogleX for something more interesting. To many people, the job at GoogleX is a dream come true.
Sebastian T.
It is a dream come true, and I very much miss it. But in Google, I learned how to operate in a large corporation. At times I had over a thousand people in my organization, and we launched a whole bunch of stuff actually, including Street View. But what I've never done is a startup [inaudible 00:00:04:35]. I didn't even choose to take this job. The job chose me, in that in the midst of running GoogleX, I was still teaching occasionally at Stanford, and decided to take my Stanford artificial intelligence class online free of charge. When I stack ranked the online students with our Stanford students, the top 412 students were not at Stanford, and the single best Stanford student was ranked number 413.
Frederic K.
Was there a moment where you decided, you know what, I have to leave GoogleX? How did that happen?
Sebastian T.
Well, I ran straight to Larry and said, "Hey Larry, this has to be part of Google." But the mission of GoogleX at the time was not to worry about software, just hardware. [inaudible 00:05:22] at the time wasn't as popular as it is today. So I ended up starting a company and got permission from my manager [inaudible 00:05:29] to run the company four days a week and I remained one day a week at Google.
Frederic K.
The original idea, the original business model, was to give away these classes for free?
Sebastian T.
Yeah.
Frederic K.
How were you going to make money?
Sebastian T.
It's not good to have a business model where you give everything away for free, and that's it. Don't recommend it. Of course you can make-
Frederic K.
That a good idea.
Sebastian T.
But the truth is, this wasn't carefully planned. This happened because I put a class online and I had my calling, and-
Frederic K.
So in other words, it just kind of happened?
Sebastian T.
Yeah, it just-
Frederic K.
The idea bubbled up?
Sebastian T.
And that's a great way to start a company, because you have conviction.
Frederic K.
That's also why you left GoogleX? It was just so compelling to you personally.
Sebastian T.
It had to be done. Education has been the single most enabling thing in the entire history of this planet by a order of magnitude. So it can't be that we have the wrong mission. It's just the wrong solution.
Frederic K.
Did you think it was broken?
Sebastian T.
I want to come back to this analogy of climbing a mountain. When you climb a mountain like Everest, which I've never done, you don't do this in big moves. You do it step after step after step after step, and occasionally, when this mountain has never been claimed before, like building Udacity, you go back up the wrong tree and you have to go back. To me, this is actually a great moment. Even if I do something wrong, I can learn from it. As long as I don't make the same mistake twice, I'll be stronger at the other end.
Frederic K.
What happens when you get buried in an avalanche?
Sebastian T.
If you get buried in an avalanche, then you start the next company. But it never got that bad. My flaw was not that I didn't charge money. My flaw was that I've worked with the wrong entity in the end. That I didn't understand the dynamics of how the machine of universities keeps itself from rapid innovation.
Joshua Davis
The initial business model was that there was no business model? So you had to kind of press reset and think of it in a different way.
Sebastian T.
Yeah. It's so much fun in life to reset. It's so much fun to build these things up and see if they work.
Frederic K.
And sometimes, to use your mountain climbing analogy, you hit an icy patch and you slide down, you've got to start over.
Sebastian T.
Yeah. When you go into a false summit, climbing down is painful because you have to undo a lot of things. You lose a lot of staff in that process. People who trusted you lose trust in you. It's just the way it is. But the good thing is, you've now climbed a mountain you shouldn't have climbed, or a false summit, and you just never do it again.
Frederic K.
How does that relate to Kitty Hawk?
Sebastian T.
Well, in Kitty Hawk, it's actually an old idea. Had a good friend of mine, his name is Larry. We always thought about how to revolutionize transport. Larry and I had engaged in self driving cars at his company, Google. Had done this for a few years and it made solid progress. We decided let's give it a try.
Frederic K.
In this case, did you have to step back from Udacity? Was that part of the deal here? And why did you do that?
Sebastian T.
I didn't really step back. I found myself a incredibly trusted brother. His name is Vish, Vishal Makhijani, who served as my COO for quite a while. I decided it's time for him to become CEO, because every single decision he made was a great decision. He and I, to the present day, think on pretty much anything of relevance. That freed up some of my time and made me clone. I love cloning myself. I think any successful entrepreneur should work on cloning themselves. If you can't clone yourself, then you can't grow. Happened about two and a half years ago, and I switched over to run Kitty Hawk.
How do you keep yourself plugged into new ideas? How do you keep yourself in the mix of ideas, so that you feel like you're constantly involved in things that are calling into question your own assumptions?
Sebastian T.
Well, I'm surrounded by many, many, many very smart people. People who are really thinking so far ahead of our times that I'm often embarrassed by how pedestrian my own thinking is. They never go into my companies. I work with Alex Rhoda, Fred Veet. People who are insanely accomplished and smart, who come from a different angle and a lot of good ideas come from the inside. I would actually argue ideas is not the problem. It's all execution. I wrote an essay in Huffington Post, "Kill the Meeting Culture." Freshly inspired by this, I went the next day and sent email everybody, "No more meetings."
Frederic K.
At all? Like, gone?
Sebastian T.
No, no. I meant big meetings, scheduled meetings, meetings and meeting notes. The stuff that takes an hour. I said, "Instead, what's legal is, if you have a problem, grab the two or three people you have to talk to, have a coffee break with them, and if it takes eight minutes to resolve it, do not spend a ninth minute on this. Because it's going to be counterproductive." And a whole bunch of stuff happened. First of all, the meeting rooms are empty, which I loved. Banning all meetings was not quite the best idea. There's a small number of meetings that makes sense, so they kind of crept back then.
Frederic K.
How long before the meetings crept back in?
Sebastian T.
It was funny. Vish came to me and said, "Sebastian, the company is completely discoordinated. I need at least one weekly meeting with my direct staff." He created a meeting and excluded me.
Frederic K.
Basically no meetings for Sebastian.
Joshua Davis
Freddy, when was the last time you met somebody who climbed Everest? Is that what ... Like, do you hang out? Is that your circle?"
Frederic K.
That's not my circle.
Joshua Davis
Not your circle?
Frederic K.
No, that's not my circle.
Joshua Davis
But the point of this idea that you spend months and months and months training for something only to achieve it and then hang out for a few minutes and head back down. I don't know. I struggle with this, because on the one hand you kind of want to luxuriate in your successes. But I don't think that's the way the world really works.
Frederic K.
Not only that, I don't think that's the way real entrepreneurs are wired. I think they're wired for the next thing.
Joshua Davis
You're saying I'm not a real entrepreneur 'cause I want to luxuriate in my successes?
Frederic K.
I think they're focused on the next thing. I think it's about, okay, let's go plant the flag on that tall mountain 'cause no one's done it. We did that. Where's the next big mountain? What's the next big thing we're going to do?
Joshua Davis
The challenge is, you got to kind of be honest with yourself about, hey, have I gotten too comfortable? And if so, should I either figure out a way of reinventing the work or finding a new challenge on the job or with the company? Or should I go do something else? Go race the sailboat if that's what you want to do.
Frederic K.
Yeah, it doesn't make you a bad person.
Joshua Davis
Let's talk about our next guest, Freddy. Parker Harris from salesforce.com. One of the co-founders. When we talk about keeping it fresh, I think Parker Harris is a great example of how you can do that over 20 years at the same company you're building.
Frederic K.
This is a guy who could very easily go sail around the Caribbean if he wanted to, but he is showing up every day at Salesforce after however many years.
Joshua Davis
19, 20 years?
Frederic K.
19, 20 years. And has constantly evolved his role at the company, which is fascinating.
Joshua Davis
In fact, just last year in 2018, he joined the board of directors of Salesforce.
Frederic K.
Which was the first time?
Joshua Davis
Which is the first time. He hadn't been on the board for 19 years. In year 19, he was like, "Hey, now I want to do the next thing. Let's do some board work." 20 years on. I mean, how are you still staying personally motivated, engaged, excited? I get it. There's a quarterly cadence. There is a three releases a year. There is a monthly rhythm. But like how are you still staying so excited and motivated every single day? What's the-
Parker Harris
I think you have to reinvent yourself along the way. I'm a very different person and different role than when I started. I was a developer when we started. I ran development. Then I ran more than development. Now, really the last, I'd say, three years, I made another big shift where I've moved to ... I used to just have co-founder the title 'cause I was like, whatever. But then I thought maybe I should tell all these new people what I do in case they come in and think I'm doing nothing. Really pivoted to be CTO to focus on architecture, because we have a lot of people who have learned to run the machine, learned to be tactile, learned to be operational. As I said, we're trying to add strategy a little bit, a little bit longer term thinking. So I'm trying to do that for all the acquisitions we've acquired, all the data centers we have. That we keep making what we have better. I've got clearly the tenure and the title helps too, to then work across a large swath of groups. I can work on getting alignment across all these teams who are building common ... We're building workflow a million different times, different UI, different data centers. How do I bring all that together? It's this massive problem, multiyear problem, where I can have an impact in the company. So, I think you have to look to continue to reinvent yourself. At the end of the day, do you feel like you're having an impact? Because if you're having an impact, that's rewarding. And usually you're rewarded for impact, and I'm very well rewarded. I always have been and feel very lucky. But at the end of the day, you're working and you're in this office for a long time and with these people, and if you do the same thing forever and you hold onto that and you don't accept change, you're going to get to be very unhappy. Then you probably would leave and do something else, join boards or retire. I don't want to stop working. I think I have a pretty cool job.
Frederic K.
I have one last question. This switch from the waterfall development cycle to an agile cycle. That was a big decision. The development cycle had slowed down. You had to shut the team down. Was it hard to make that decision now?
Parker Harris
No, it was really easy. We were maybe 130 people, just teeny if you think about it in engineering.
Frederic K.
In product engineering, right?
Parker Harris
We were less than 200 people, but we thought we were huge. We thought we had massive problems. That was small compared to now. When I think back, it was kind of funny to think about. We were waterfalling, so everyone was blaming the last people in the line, which was quality assurance. That, oh, it's your fault we're having these problems. People were getting very angry with each other, and really there was some bad behavior that, it was just not good. There were people who were threatening to quit. I came here to the cloud to actually do something and get it out in the world. I'm just writing specs or I'm just writing software that's not getting released. We started by talking to our tech advisory boards, so Maynard Webb from Ebay, but now on our board, Len Reedy, also Ebay, Adam Bosworth. At Ebay, they have this idea, the train model. That, oh, we just ship everything every two weeks, massive branching, and have tons of automation, and it's just awesome. So I was like, sweet, that looks great. That's what I want to do. Train model, let's do it. [inaudible 00:17:26] when I called it that train model. Cooked it up, brought it back, and basically the team just crapped all over. Like, no way. Never going to do that. That's not going to work here. Our model is different or our domain of tech is different. It's more intertwined. It's a platform. I think a lot of that was true. We're not a website of separate little properties that is more separable, where you don't have code stepping on each other. Two engineers came to me and said, "We have this great idea. We're going to ... It's called agile." I'm like, okay, tell me about it. I was like, okay, that's great. They said, "We have to go carefully though, because we don't want to break anything. We're just gonna try it out in a few groups." And I said, "No, everything's totally messed up right now." So what we did was, I said, "I don't care if we ship nothing, but we will release on this date." Everyone was like, whoa, what?
Frederic K.
Release the agile model?
Parker Harris
No, we release the-
Frederic K.
The next rev of software.
Parker Harris
The next rev of software happened on this date. Timebox. But then the product manager was like, "Well, we don't have enough time to get our specs done." And the engineer's like, "Well then don't put that into the software we're going to release." So it was a very different way of thinking. That's the only thing I held constant. I said, "If nothing happens, it's fine, but that's when we'll push the button and code will go." It was a good thing because it forced what was then a big group of 120 people to really shift on a dime and work hard, and it rallied everyone. It was a simple and clear message to the whole team, and it was awesome.
Frederic K.
Were you nervous about it at the time, or were you just like, everything is so messed up that it can't be worse?
Parker Harris
Yeah, it's the latter. It's like, you know, what could happen? That we don't release some software. What's the big deal?
Joshua Davis
Nothing got released. Worst case, nothing happens.
Parker Harris
Right. That's taking a long view. I was like, okay, maybe we'll have some people upset in the near term, the customers. But I got a lot more issues if they start losing great people or if we can't actually get innovation out. Yeah, so that was good. That was a good moment.
Joshua Davis
I love this thing that Parker says about how you have to reinvent yourself along the way. But particularly ... I mean, you've heard that, but what I particularly like about it is that he says that he's a very different person now. It's the point of life, right? You don't want to just like suddenly reach maturity and that's it. Right?
Frederic K.
Really? What is the point of life?
Joshua Davis
I think we need a different podcast.
Frederic K.
We're going to get into that right now. That's what we're gonna talk about.
Joshua Davis
That's what the show is about. That's what this episode is about. It's about the point of life.
Frederic K.
Well, no, it's about keeping it fresh.
Joshua Davis
Well, but that's the point. [crosstalk 00:20:40] Is the point of life to keep it fresh?
Frederic K.
Yes.
Joshua Davis
You think so?
Frederic K.
Yes. Because-
Joshua Davis
It's not to find happiness? You believe this whole journey thing?
Frederic K.
Yes.
Joshua Davis
How do you find happiness? You find happiness by constantly challenging yourself and growing. It's about purpose.
Frederic K.
It is about purpose, right?
Joshua Davis
I agree.
Frederic K.
Sometimes that purpose drives you to suffer because you're trying to achieve something. As you get through those moments, as we've talked about on the show, you come out on the other side stronger, better, whatever the case is. When I think about it, we talk about it at Okta all the time. In a lot of situations people are interviewing for their job basically every year, because every year their job is so different and so new and pushes them to a level they've never been to before, that it might be the case that some year down the road, the board of directors turns to me and says, "Frederic, you've maxed out. You are no longer going to be the right COO for the next phase of the company."
Joshua Davis
I thought they already said that to you five years ago.
Frederic K.
They did. Multiple times. I'm just saying the next time they're going to say it.
Joshua Davis
Yeah, and then you're going to have to reinvent yourself.
Frederic K.
You got to reinvent yourself. I think that's been the case for Parker. You just heard that. Frankly, I face this at Okta. My job today at 1500 people is very different than my job was at two people. It's not better or worse, it's just different and it's new. So I have to grow, and I have to understand new things all the time. That's what keeps it fresh.
Joshua Davis
Freddy, our next guest has done something that seems to me pretty innovative. I don't know, maybe there are other companies.
Frederic K.
I've ever heard of it before.
Joshua Davis
We're talking about Melanie Perkins of the company Canva. She's broken her company into a collection of units or groups that all function semi-autonomously, I think.
Frederic K.
I've never heard of that.
Joshua Davis
Do you know what she calls them? Each of these units?
Frederic K.
Pods.
Joshua Davis
No.
Frederic K.
Startups.
Joshua Davis
She calls him startups. Here's Melanie.
Frederic K.
You said something earlier also about how you want to say no to red tape. This is something we've talked to a lot of people about, which is how can a company stay true to its values as it scales.
Joshua Davis
When you're adding 10, 20 people a week, just the growth constraints, how do you think about balancing that startup spirit with the need for more organization, for more communication that's planned, for more educational programs to keep your team's growing? How do you think about that?
Frederic K.
What else breaks?
Melanie Perkins
I think that as we have grown, there's been continuously decisions. Like, do the old bureaucratic way or do the way that we want. We are continuously making decisions and they're ... It's actually way easier just to go and do like what everyone else does. It's way harder to choose to do what feels authentic to our company. But what we're actually doing right now, is we're splitting up into 17 startups. We've got these groups of teams, and we're calling them startups, and we're actually about to have over the next month an offsite day for each of those groups where we're going to do all sorts of things from media training to creating a startup pitch deck to really talking about the vision and the future for each of those groups. I think that could be ... That's sort of the path of not really that normally trodden, versus let's put it in lots of red tape and bureaucracy and silly titles and things like that. So I think that along the path is just these continuous decisions that need to be made. One is one way, and one is the other. I think that this happened so many times over the last few years and I predict it will only happen more frequently as we go forth. It's easier to not do that. It's easier just to say, "Okay, well so and so has done it before. They're at X number of people. Let's just do that because that seems easier." But you can't just transplant somewhere else's culture and put it in your company and then get up and be able to say authentically that's why you did it. I think we've always tried to do and make decisions that are based on what we think is right for our culture and our values and our people. But we also have this other concept of minimal viable structure. The concept of minimal viable structure is you don't put in structure prematurely. We put in structure only when it's really needed to actually age something, to help achieve a goal. So I think that if we use that as our guiding principle forever, that will be really helpful for Canva going forward.
Joshua Davis
But aren't you creating a whole bunch of overhead for yourself by creating 17 new 25-person startups inside your company?
Melanie Perkins
Oh no, it's way better. The idea is that rather than me having to hold the entire vision and actually to the detail in my head, the idea is that the actual startup, that that group becomes the owner of that vision and that pitch deck going forward. So every time they have a new person start, then they get to show that pitch deck to their people that are joining their team. It really helps to ensure that rather than me having to be the person that's going and figuring out the chess piece and how to move everything forward, that group starts to own that. I think that if we want to build a company with thousands of people, which we certainly do, that it's really important that it's not just the typical hierarchy where only a few people know what's going on. It's why we do things like season opener as well, is to embed that strategy and that context as deeply as we can within the company. I think that's what's so important. Is if you have a traditional company where you've only got so many people that know what's going on, it kind of means that you can't really build strong foundations for that city. If we want to build a city, we've got to build the people that can actually support that.
Joshua Davis
How did you decide on 17? Is that a number? Is that split up by functional group? Frankly, it's something I've never heard of. I understand a little bit of the idea, that as you just explained it, it makes a ton of sense. But how do you come up with the details? What are the 17 groups? Who are the leaders? How do you assign that? Or is it just like [inaudible 00:26:35] from Zappos used to say there is no management at all. Where do you fit somewhere in there?
Melanie Perkins
I think somewhere in the middle. We have people who, for example, own a lot of code in a group and there'll be a tech leader. We have people who are really strong PMs, and they'll be helping to create that pitch deck. But we're sort of in this early stage of it at the moment. But really, having the whole team own the goal I think is what's so critical. With our season opener, getting the whole team to really buy into that goal. Then when we celebrate, we celebrate the whole team's success. I think that they're the really critical parts of social dynamics. That a lot of companies just get frankly quite wrong. Imagine a pie. Most companies have this fallacy that there's a fixed amount of pie and that everyone's just got to fight for their own little segment of that pie. Whereas actually the reality is at a startup that's growing rapidly, is everyone's success comes from growing that pie and expanding that out. So I think it's really important that we embed that mentality into the company. That it's not about trying to elbow someone or nudge someone to get a little bit more of their pie. It's about how we can grow that for the whole company. I think having the strong focus on goals and the strong focus on actually doing good for our customers, I think helps to alleviate that.
Frederic K.
Other things that were broken that you noticed as the company grew?
Melanie Perkins
I think literally every single thing has had to change. I remember when we were really small, we actually had our front-enders sitting on one side of the desk, we had our back-enders sitting on another side of the desk, and then we had everyone else sitting on another desk. Then we realize to actually achieve things, we needed to have front-enders and back-enders on a team. Then that sort of that continuous reorganization to make sure that everyone is assembled towards hitting goals has been just a constant priority. So it's just a continuous work in progress, and everyone needs to have that growth mindset or that desire to continuously grow and learn. I think that's something that we hire for and something that we just need to bake into our culture, is that nothing stays the same. Everything from the way we do our customer happiness to the way we do every team to the way we did goal setting. Even our season openers have been something that have continuously changed and transformed over the years. Because we used to do it on Fridays at lunchtime. It was just after lunch. We used to get everyone to stand up and show what they've been working on for the week. Then we had 40 people and that would take way too long. Then we had to move it into teams. Then each team would say what they've been working on. Then that was too long. Now we have this one day, once a quarter for our season opener, where everyone gets up and talks about their goals. That will just need to keep continuously morph as we go.
Frederic K.
Do you miss those old days? Do you miss those early days?
Melanie Perkins
I think that's literally why we're getting them back. 'Cause I was so excited to ... I love the idea that everyone has that context and that clarity about what's going on and is able to contribute more than just their particular skill set. They're able to really contribute towards that vision. So I think with this concept of doubling down on our group and startup structure, I really hope to be doubling down on that. Getting that back too. But I think that at every single stage of the journey, it's brought different challenges. I like challenges. I think that if they had stayed the same, I'd be kind of bored.
Frederic K.
Well, I think what's interesting here, Josh, is that Melanie's approach to growing her organization is actually taking it kind of in modular function is in saying the right size is this startup. No, I'm just going to do 17 of them.
Joshua Davis
It reminds me of Sebastian Younger's idea of the tribe and the fact that we don't work in 1000-person groups. We work in like 20-person groups. So, Melanie's approach here is to replicate this idea of small little groups throughout a company. And perhaps that's a way of allowing people to more nimbly adapt and change and tackle challenges. At the end of the day, keep it fresh.
Frederic K.
And reinvent yourself as you go, right? So how are you going to do that? You have some awesome little group. It's a great module. Then you actually want many of these modules. It's a way of reinventing yourself. Our next guest, Josh, is going to talk not only about reinventing your company as you grow, but actually reinventing an entire industry. Here's Marc Andreessen of Andreessen Horowitz, talking actually about his investment in Okta and how that got going. Here's Mark. It was one of your early investments when you started Andreessen Horowitz?
Mark Andreesen
Yup, that's right.
Frederic K.
One of the first ones. In fact, I think it was right around the corner that we had our first meeting. How did you make that call? You just started your venture fund. You had seen five or 10, this is now 10 years after the first. How did you make that call? Two guys came in, we couldn't even do a PowerPoint. Our Powerpoints were terrible. In fact, I think one of your recommendations was you guys should just tell a story, stop showing the PowerPoint because neither of you can draw. That's like literally what we heard in the first meeting. Which was great.
Mark Andreesen
Don't draw, yeah.
Frederic K.
[ "crosstalk 00:31:42" ]
Mark Andreesen
It's not one of your core competencies.
Frederic K.
What was the mix?
Mark Andreesen
I would say, so it was a couple of things. One was look, we had a very keen understanding of the nature of the problem with the market size. We knew that everybody would need something like this and market sizes is hugely important for venture capital. So that was one. That was maybe the obvious one. Then we were big believers. This was a fundamental architecture shift. Basically the world was actually going to go cloud and this was at a time when there was a lot of skepticism around that.
Frederic K.
Why did you think that?
Mark Andreesen
It just seemed so obvious. It was just like-
Frederic K.
You started the first cloud company, first of all, 20 years ago. So we should talk about that.
Mark Andreesen
We had some history. It was just like, we knew what it was actually like. The entire history of kind of business computing up to the cloud was basically companies trying to run stuff themselves and we just knew what a catastrophe that was. It's been a complete disaster, the whole history of the industry. The whole history of the industry is half of all systems implementations fail. There's no other industry that would ever get away with that, other than enterprise software kind of pre cloud. All the projects were over budget. They would all take too long. You get working. It would be obsolete, right? You're either then running an obsolete system or you'd have to start over from scratch. Users always hated the products. Nothing ever worked together. Things were crashing all the time. Then the security. Actually, the kicker to the whole thing was security. Which was like, everybody was getting penetrated by hackers all the time, because nobody knew how to run security for themselves. Then this is where we really kind of got on the cloud train, was it's like, well, the big argument against the cloud was security. Why would you put your data in the cloud where hackers can get it?
Frederic K.
Everybody can get it.
Mark Andreesen
Everybody can get it. We were like, no, no, no, no, no. It's the other way around.
Frederic K.
They're already getting it.
Mark Andreesen
They're already getting it, right. You're already hosed. We believed early that the market was going to flip and that people were going to basically gonna do a 180. They were basically going to realize that going to the cloud was the only way to get security for most organizations, which is I think what's happened. Then logically we know, okay, they're going to do that. Then there's your architecture change. Then we also knew, look, cloud applications are just easier to adopt, right? So we knew the customer sat was going to be far higher on these applications. Then we knew people would use a lot more of them. Then basically we projected forward from that, and basically said, people that are going to use, not only are they going to use more cloud apps then they were going to use old apps, they were gonna use like 10 times more or 100 times more or 1000 times more. So the vast majority of the apps they would run would be in the cloud, right? Which again, architecture change is what's gonna happen there. So like the whole world is basically going to just pivot.
Frederic K.
At that point, what year is this?
Mark Andreesen
2009, 2010.
Frederic K.
2009, 2010. had you been hearing ideas like this transition to the cloud? Were you hearing a bunch of them?
Mark Andreesen
There was a backstory. Honestly, there was a backstory, which is like we had pushed a lot of this ourselves in the 90s. There was a light on web applications, cloud applications. We push harder than ourselves. Then there was a whole wave of, the first wave of SAS, right, was actually in the late 90s, early 2000s.
Frederic K.
This goes back to what we were talking about earlier, where everything old is new again.
Mark Andreesen
Yeah, yeah. Well there was a whole breed of cloud application. It was called ASP.
Frederic K.
ASP.
Mark Andreesen
Application service providers, in the mid to late 90s. Look at salesforce.com. [crosstalk 00:34:44] Salesforce started in '99 and he was right. He got that right. You could see. You could just see that was working. And so if that was going to work, then a bunch of the others were going to work. Then we did [inaudible 00:34:55], our own cloud company at the time. So we had kind of a real lens on that. So we just kind of kept seeing the pattern. The bet was kind of ... So we thought the market bet was obvious. We thought the technology bet was obvious. There was always the timing question. But we basically ... When we think we see it, we just go in. We're wrong on timing a lot.
Frederic K.
Because it could be ... Maybe it's not going to hit in five years. Maybe it's gonna hit in 10 years.
Mark Andreesen
That's exactly right. Then that basically in our business is the same as being wrong. Because these companies can't go 10 years without success. Right? But we'll take that. That's a risk we're comfortable taking. That's almost the best way to fail in our business, which is-
Frederic K.
You were right. But-
Mark Andreesen
Fair enough. Because especially, we in our business, we get the chance to try again, right? We come back another company late ... Worst case, we come back another company later and maybe get it right the second time.
Frederic K.
Yeah. I think what Mark's talking about is when you are fortunate enough to have seen a whole generation of high technology in this case, and you also have the wherewithal to take a step back and understand what you're seeing and what's going to happen, you can really participate in these massive technology and industry changes and really revolutions. That's what he's talking about. We're not just talking about keeping it fresh on the personal level, or even the company level. We're talking here the industry level. We're talking about a massive transformation inside industries where they're keeping it fresh. If you can tap into that on both of these levels, the personal, the corporate level, and all of these levels, on the industry level, that's when you get something magical. This has been another fascinating episode of Zero to IPO, a podcast about how successful entrepreneurs build successful companies.
Joshua Davis
Special thanks today to our guests, Sebastian Thrun, Parker Harris, Ben Horowitz, Patty McCord, Melanie Perkins, and Marc Andreessen for taking time out of their busy schedules to speak with us, and to the Trust Center for MIT Entrepreneurship for collaborating with Okta to bring this podcast the line.
Frederic K.
If you like what you've heard and you want to know more, check out exclusive, in depth stories from each episode on fastcompany.com. To hear the next step in taking a company from Zero to IPO, make sure to subscribe and give us a good rating on Itunes, Spotify, Stitcher, or wherever you listen to your podcast.
Joshua Davis
I am Joshua Davis.
Frederic K.
I'm Frederic Kerrest, and we hope you'll tune in for our next episode, "Hitting the Clutch Shots," featuring Golden State Warriors all star Andre Iguodala.
Andre Iguodala
I feel like I shoot better when it really means something, because that's when you really lock in.
Most companies have this fallacy that there's a fixed amount of pie, and that everyone's just got to fight for their own little segment of that pie. Whereas actually, the reality is that everyone's success comes from growing that pie and expanding that out.
Melanie Perkins, Canva