Season 2 - Episode 1

Zoom and MikMak

Hosted by Okta's Frederic Kerrest and Epic Magazine's Joshua Davis

Featured on iTunes' Business New and Noteworthy

When you're the first to do something as an entrepreneur, and you do it very well, other companies start to pay attention—fast. But what happens when you're suddenly up against businesses a hundred times your size, offering up your product? In this preview of Zero to IPO season two, Zoom's CEO and founder Eric Yuan shares advice on how to stand out with Rachel Tipograph, CEO and founder of MikMak, a marketing ecommerce platform that allows brands to better understand their consumers.

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Guest List

Eric Yuan

Founder and CEO of Zoom

Rachel Tipograph

Founder and CEO of MikMak

Transcript

00:06
Joshua Davis
Hi everyone. It's Joshua Davis.
00:07
Frederic Kerrest
And I am Frederic Kerrest.
00:10
Joshua Davis
First of all, we want to say that we hope everyone is staying safe and healthy right now.
00:15
Frederic Kerrest
These are certainly challenging and dynamic times. More than ever I think human communication is important and just connecting with each other and we're excited to be back here with you all.
00:25
Joshua Davis
I'm actually speaking to you from the backseat of my car, which is my temporary recording studio in isolation.
00:34
Frederic Kerrest
And I'm in my home office. So what are we doing here? Well, we aren't back with season two of Zero to IPO just yet. But we have decided to drop our first episode early because it features a very special guest who's played a pretty big role in our day to day lives.
00:46
Joshua Davis
Enterprise software isn't something that normally makes national news, but Eric Yuan and the company he founded, Zoom, have found themselves front and center this month as millions of people are trying to figure out how to work and live and keep in touch with people.
01:01
Frederic Kerrest
Yeah. And over the past few weeks, as companies around the world have shut down their offices as a result of COVID-19, many have turned to teleconferencing to help keep operations going while maintaining employee safety and it seems like pretty much everyone I know, certainly everyone that I talked to is using zoom because I get zoom invitations all day long.
01:19
Joshua Davis
As a refresher, we're mixing up the format this time and this episode with Eric is a great example of what's to come. Conversations in which successful founders and CEOs give great advice to new entrepreneurs who are starting companies and have found themselves at a strategic crossroad. So we wanted to share this episode early in the hopes that it offers a little hope and inspiration to our listeners or at the very least a good distraction. So we hope you enjoy this conversation with Eric Yuan of Zoom and Rachel Tipograph of MikMak.
01:59
Joshua Davis
Welcome back to season two of Zero to IPO. Today we have a very exciting couple of entrepreneurs on the show. Rachel Tipograph, the founder of MikMak.
02:08
Frederic Kerrest
CEO. Founder and CEO.
02:09
Joshua Davis
CEO. Who was called by entrepreneur magazine, one of the 50 most daring entrepreneurs. And we also have Eric Yuan, the founder and CEO of Zoom, which as we all know, has grown into a behemoth of video conferencing.
02:23
Frederic Kerrest
Yeah and I think what's very interesting here is both enterprise software entrepreneurs, one who is earlier in her journey, another one who is later on in his journey. He's gone public, taking it public, but still has a lot of memory about what it was like to be at her stage. So I think this is going to be very, very interesting.
02:40
Joshua Davis
Let's introduce our guests today.
02:43
Frederic Kerrest
Great.
02:43
Joshua Davis
Eric Yuan is the CEO and founder of Zoom and has grown Zoom into a little bit of a big company, I think.
02:53
Eric S. Yuan
We're still very small.
02:54
Frederic Kerrest
Very small compared to what you're going to become. That's how he thinks about it.
02:58
Eric S. Yuan
Right on.
02:59
Joshua Davis
Eric started the company in 2011 and IPO last year, and at the IPO, the company had a market cap of a little over 9 billion. Now, less than a year later, it's at 21 billion on the public markets.
03:15
Frederic Kerrest
So, that's more.
03:16
Joshua Davis
That's more.
03:16
Frederic Kerrest
So its grown. That's great
03:18
Joshua Davis
A little bit more. That's growth. Up into the right.
03:20
Eric S. Yuan
I don't know it. I never look at a market cap.
03:22
Joshua Davis
You never... That's right.
03:23
Eric S. Yuan
Not sustainable.
03:24
Frederic Kerrest
Market cap is not sustainable. Revenue. Would you talk about the revenue growth?
03:28
Eric S. Yuan
Yeah.
03:28
Frederic Kerrest
Revenue growth is very impressive, it's about on the order of about 100% year over year. Up on a 600 plus million dollar revenue year, consensus estimates. We're not saying anything out of the ordinary here. That is very impressive and when you can see that growth at that scale, that's something that's very exciting.
03:44
Joshua Davis
Well, before we go any further, I want to introduce Rachel Tipograph, the CEO and founder of MikMak, which is a fast growing startup and there's a lot of things I want to ask you about and talk to you about. Part of the purpose of this show is to hear from you about how you're growing the company, what your hopes and aspirations for it are, and any obstacles that you see ahead that perhaps not me, but the other two leaders of public companies might be able to chime in with some experience. Let me ask you to describe MikMak for our listeners and talk a little bit about what the company does.
04:23
Rachel Tipograph
Sure. So MikMak, we're a marketing eCommerce platform. Fortune 500 brands license our software to better understand their consumers by connecting digital investments to online retail insights. So essentially when I put a dollar into Facebook, what does that mean for my performance at Walmart, for example. So my clients span Campbell's, Hasbro, Lego, L'Oreal, Nestle. Essentially if you sell at Amazon, Target, Walmart, you will become my client because you live in darkness with retail data.
04:55
Joshua Davis
Let me brag a little bit about you if I may. At age 24 you became the global director of digital and social media at Gap, which seems pretty young to have that role. I wasn't doing much of anything at 24.
05:10
Frederic Kerrest
I think I was taking out the mail for whoever was running that role at Gap at the time.
05:15
Joshua Davis
But then you walked away from that to start this company out of your apartment, I believe in Brooklyn. That must've been a difficult decision? Similarly, Eric, you had a big role at WebEx. You were leading the engineering team. You had hundreds of engineers. You said to your wife, "Hey, I think I need to go start this company and she didn't like the idea?".
05:39
Eric S. Yuan
Yeah, she did not like that idea. By the way, I almost failed to graduate when I was 24 years old.
05:47
Frederic Kerrest
So the three of us-
05:48
Rachel Tipograph
Degenerates.
05:48
Joshua Davis
The degenerates while Rachel was kill it. By the way, the other thing that I love about what I've heard about your career is Gary Vaynerchuk, who was an investor in my company and I believe invested in yours, describes you as a "Fucking gangster", quote unquote.
06:08
Rachel Tipograph
I'm lucky to have his support.
06:11
Joshua Davis
Let's talk about MikMak and the growth of online video and the commercialization of online video. Obviously Eric has a massive video business. What you're trying to do with MikMak, some people describe it as infomercials for the web. I've heard the term mini-mercial. Did you come up with that?
06:31
Frederic Kerrest
Mini-mercial?
06:31
Rachel Tipograph
I did. I coined it.
06:32
Joshua Davis
Yeah and the idea is that it was very hard before MikMak to see a video and buy something. You had to jump through a number of hoops and the bounce rate was above 90% when you click through. And now with MikMak, the bounce rate comes down to?
06:47
Rachel Tipograph
Often just 10%.
06:48
Joshua Davis
Right.
06:49
Rachel Tipograph
And the thesis of MikMak was... I was at Gap. I was seeing the growth of video, I was seeing the change in the customer journey. So, gap.com, the homepage was the most traffic web page when I started. When I left the product detail pages, we're seeing five X the amount of traffic. So all of a sudden all of these landing pages were actually becoming the heartbeat of conversion, but no senior leader is paying attention to them. And then finally the rise of Amazon. So the early signs that the major retailers were about to become new walled gardens. And if you talk to major CPG brands, they would be investing hundreds of millions of dollars, whether it was in digital video, social paid search, programmatic, and having no idea what the outcome was on the other side.
07:35
Joshua Davis
So in your case, you have this insight and you know it's a good insight and you're like, "I'm going to start a company". But you leave a massive company and now you're this tiny little entity all by yourself and you have... Your powers that you have, the insight-
07:52
Frederic Kerrest
Why you got to be like that man? Why you got to be like that?
07:55
Joshua Davis
Well, I'm telling the truth.
07:57
Frederic Kerrest
The the bravest lady in the room and you're like, "Oh, you're the little, little". What do you want?
08:01
Joshua Davis
That's just the honest truth. We said we'd tell the truth and we said we'd tell the truth and you have these massive companies that could easily swoop in and take your idea at like ... Talk to us about how do you navigate that and I want to hear also from Eric because he was in the same boat as you leaving WebEx.
08:18
Rachel Tipograph
Yeah. It starts with an insight, but that's not the hard part. The hard part is executing and initially my competitive advantage, right, is speed of market. I'm nimble, I can move faster. Fast forward, all of a sudden I start proving myself and then other companies begin to pay attention because obviously if I'm successful must mean that there's a larger opportunity out there.
08:42
Joshua Davis
And how did that make you feel? What was your reaction to the encroachment, the potential encroachment?
08:48
Rachel Tipograph
My first reaction was this is a good thing because you don't want to be a lone ranger in business. It means you're not doing something that's worthwhile-
08:54
Frederic Kerrest
Is it a market? If you're the only one, is it really a market?
08:56
Rachel Tipograph
Right. Yeah. Yeah. So I was excited. I'm like, "Yeah, competition. Bring it on." But then when you look at the size of those companies ... so I have currently 30 employees. My competitors have upwards of 5,000 employees. Then you start to get a little bit scared because they could put 50 salespeople against the Southwest territory and then no one at Keurig Dr pepper was ever going to talk to me. And those are the dynamics that began to change for me last year, which was, "Uh-oh. I got a suit up because there's people who can be louder in market right now." I still have the utmost confidence in my product. I have the utmost confidence in my ability to lead, but the reality is that they're bigger than me.
09:38
Frederic Kerrest
Eric, can you talk to us?
09:40
Eric S. Yuan
But I'm pretty sure, Rachel, you will catch up because speed is everything for a startup. Today you have 30, you may not know, in five years you probably'll have 5,000 or 6,000. More than your competitors has.
09:51
Joshua Davis
Eric, how did you deal with it at Zoom? You had left a WebEx, WebEx being part of Cisco, massive company. You had that initial speed, but then people could see what you were doing right and could, and in fact have I believe, copied you.
10:07
Eric S. Yuan
Nobody wanted the see. We always focused on speed. Speed is everything. For me to leave WebEx, that's one of the best decision I made, because before I left I was not a happy there, not like today. I was so excited, I wanted to come to office. But back then, everyday I'd like stay at home. I do not want to go to office because every day when I talk with a customer, I did not see a single happy customer. Customers they were not happy. Why should I go to office?
10:32
Eric S. Yuan
So I struggled for almost one year. Finally I decided if I do not leave, our employee will suffer. My family will suffer. So I got to leave. I think that's the best decision I made.
10:42
Joshua Davis
And now at Zoom you talk about speed and as it might relate to Rachel's conundrum, she has potentially large competition, large competitors who could dominate a certain region, could dominate the entire country if they wanted to. Is it just about speed? Does she just try to raise as much money as possible and hire as many people as possible? Like what did you do in this situation?
11:09
Eric S. Yuan
Well, we started just myself for the first months and I started at end of June of 2011. By early August I have around 20 engineers join me. And look at our competitors, extremely crowded market. It's all the big legacy players. They have also thousand of employees, but we knew that if we focus on the customer experience, quickly innovate and extend a customer pinpoint, and also we want to be the first one to really care about our customer to come up with the solutions.
11:39
Eric S. Yuan
We can grow quickly. The year over year almost doubled the size, now almost we have more than 25 hundreds employee now, right? If we can double maybe in next two years I think it will be okay, right? I think speed is everything. Don't worry about a very big legacy players because they are very, very slow because everyday you have new problems, right? And a customer, they cannot lead with that. You have to be a first one to find a solution. Who can figure out the first solution to serve customers well? It's not about those big legacy companies, it's about the startup company.
12:12
Rachel Tipograph
What about, and I'm a Zoom customer-
12:16
Eric S. Yuan
Thank you.
12:16
Rachel Tipograph
... so I'll disclose that. And when we were going through conference software, it was just an obvious choice. We didn't even look around and, but in terms of pricing, Zoom compared to legacy companies, where do you fall within pricing? Are you cheaper? Are you more expensive?
12:33
Eric S. Yuan
Much cheaper.
12:34
Rachel Tipograph
You're much cheaper.
12:34
Eric S. Yuan
Because our philosophy is always we want to offer the best service, also the lowest price with the best culture as well. Those three things are very important. The product, price and your company culture. If you focus on those three things, I think you will be okay. Yeah. Even our product is today is better than any of our competitors. Our price also is much better. Lowest price.
12:59
Rachel Tipograph
So I am the most expensive within my competitive set because the positioning that I've taken in the market is, listen, e-commerce is always on. You need someone hands on keyboard, so one of the core differentiators for us is my customer success team. Everyone has my background, meaning they're paid marketing e-comm specialists, or I've trained them to essentially execute my playbook. My competitors came to market, like a [C companies 00:00:13:28] and they're a widget and they're going into these Fortune 500 companies. Sometimes they win the contract because they grossly under price me, but a year later the client calls me up and says, "We can't even get in contact with them. We want to work with you." So I've sort of held my ground with my premium pricing, but it's challenging from a sales standpoint.
13:48
Eric S. Yuan
Yeah, but I think your strategy also works, more like iPhone strategy, compared to other smartphones. Our strategy more like a restaurant business. So I'm a huge fan of restaurant business, right? I want to offer the best food, very delicious food, better than any other restaurant. When you try to pay the bill, you will say, "Wow, it's so good price, "right?
14:06
Rachel Tipograph
Mm-hmm (affirmative).
14:06
Eric S. Yuan
I think that's our philosophy. I think that to be a profitable or not profitable, I do not think that's the case. The case, so everybody is different because sometimes you really want to focus on growth because market share is very important. Sometimes you see, you do not want to focus on the growth, bigger profitability, sustainability is more important. I think there's no success formula for every company.
14:28
Frederic Kerrest
Yeah, and ultimately I think the question would come back to you, Rachel, from my perspective is I'm curious, like what's your goal, right? Because as the entrepreneur you get to pick those goals. You can say, "Hey, I want to build a very large independent public software company. I want to build a high growth company for a certain amount of time and then sell it to one of those people." In which case you'll fundraise differently. Or even, "I want to build a lifestyle business that's just going to cashflow and it's how I'm going to run it for the next 20 years." Those are all okay. There's no wrong answer. I think it's like what you want to do as an entrepreneur and then if that's your strategy, then what are the tactics, and financing is one of those around that, right?
15:00
Rachel Tipograph
Yeah, no totally.
15:13
Rachel Tipograph
I know that we have a competency that a lot of people care about, so in the history of building MikMak, I've had corp dev teams sniff around us like quarterly and at this point I ignore pretty much everyone. I'm like, "Send me a term sheet," just to call their bluff.
15:28
Frederic Kerrest
And for our listeners a corp dev means one of the larger competitors, they have these corporate development M&A groups, mergers and acquisitions, who are interested in potentially buying MikMak because they're like, "Wow, this is a jewel. We can't reproduce this jewel. Can I buy this and bring this into my company?"
15:42
Joshua Davis
Which for most people is a pretty nice thing to have happen. It means somebody-
15:48
Frederic Kerrest
For most people that's going to be the ideal outcome. I mean that's in a perfect world.
15:49
Joshua Davis
Yeah, you get acquired. Yeah, you make a lot of money and you're done.
15:52
Rachel Tipograph
Yeah, I mean that's one reason why they would reach out. The other reason is that they're just fishing, right?
15:56
Frederic Kerrest
Sure, yeah. Competitive intel and so forth. Yeah.
15:59
Joshua Davis
They want you to disclose ... they-
16:00
Rachel Tipograph
Exactly.
16:00
Joshua Davis
... want to do some due diligence and they learn all about your business and then they pull out-
16:03
Frederic Kerrest
They want to do some-
16:03
Rachel Tipograph
Exactly.
16:03
Frederic Kerrest
... due diligence and they learn all about your business, and then they pull out at the last minute.
16:04
Rachel Tipograph
And so, maybe it's the New Yorker in me and I'm a little bit cynical in that way, but I always constantly feel like most people are just fishing, so that's why my reply is now, "Just send me a term sheet."
16:12
Frederic Kerrest
Mm-hmm (affirmative).
16:13
Rachel Tipograph
Because I can't go through that rodeo again. That being said, and I'm transparent with my team and my investors, I believe that MikMak will become acquired. And that is my goal, when it's the right time, at the right price.
16:28
Frederic Kerrest
Mm-hmm (affirmative).
16:30
Joshua Davis
And why do you say that, as opposed to going to be a standalone company?
16:34
Rachel Tipograph
I think because the big guys are so big. If you look at the Adobes, the Oracles, the Salesforces of the world, for me, there's the traditional marketing cloud guys. Then there's people who are more directly in my space, like Rakuten, Quotient, so more in that shopper marketing space.
16:51
Joshua Davis
They're independent?
16:53
Rachel Tipograph
Yeah. But they're so big that-
16:55
Frederic Kerrest
They have a lot of capital-
16:56
Rachel Tipograph
... their behavior, yeah, is to deploy that capital and swoop up and buy companies like mine.
17:01
Frederic Kerrest
And in theory, they also have distribution already to your customers. So they have contracts. Whether or not those customers love the product that is being offered as an alternative to yours by those big companies, that's a separate question. But at least they have those business relationships with all those big companies, so in theory, you could provide a lot of value by having MikMak be part of those just using them as a distribution channel. In theory.
17:24
Rachel Tipograph
100%.
17:24
Frederic Kerrest
Yeah.
17:26
Rachel Tipograph
So I say those things, and the fault of my own is I only know how to be one way, which is me. So the way I'm talking to you guys is the way that I talk to anyone. And if you say that to an investor, they go, "Why are you even thinking about your exit?" And I'm like, "Wait a second, you're thinking about my exit. That's the math that you're also doing."
17:47
Rachel Tipograph
And so, I've tried to put all that BS aside, and I wanted to hear from you, Eric. You took the IPO route; you've obviously also been a part of acquisitions. What's your advice to someone like me that believes in the next five-year time horizon that an exit opportunity should happen? What are the things that I need to do today to get myself there in five years?
18:07
Eric S. Yuan
I think it back to the Freddy's point, I totally agree. I think when it comes to studying a business, you got to be very honest to you and also to your employees, to your company. What's your goal? You want to sell the company? Ideally, you want to be cashflow-positive, profitable very soon. Because otherwise, you may not find a buyer in next several years. What can you do to survive, right? That's to be profitable earlier. It makes sense.
18:33
Eric S. Yuan
If you want build a long-term, sustainable company, actually you probably need more help from the institutional VCs. They are going to help you, because it's because you want to be a long-term, sustainable company. You really do not want to focus on cashflow or profitability. You want to focus on the market share and the vision, and also the disrupt on other bigger players, right? You probably need more capital, right?
18:55
Eric S. Yuan
That's why probably longer. When we started a business, I was already 41 years old, right? I was very old, based on the Silicon Valley standard. I told myself, "In the next 10 or 20 years, which company do I want to work for? I do not want to see sell the company and it join other bigger company, and then start another company." I think if I want to work for Zoom for another 20 years, I better the independent path.
19:19
Joshua Davis
So it was a very personal decision?
19:26
Eric S. Yuan
Yeah. Personal decision.
19:26
Joshua Davis
It wasn't a business decision, it was-
19:27
Eric S. Yuan
Why start a company just for myself? For sure that's a personal decision. I do not have any employee. I want to work for a company every morning when I wake up, I will feel very happy. I'll make sure employee feel happy as well. However, if someday, most employee told me that he do not want to work for Zoom anymore, he do not feel happy, okay, let's sell the company. I go back to retire.
19:50
Eric S. Yuan
But for now, we enjoy that. That's why I say our goal and advice is to build a long-term, sustainable company. So that's why, over the past several years, whoever wants to buy us, it's not about price, it's not about evaluation. No, we do not want to sell.
20:05
Joshua Davis
Even now, it's still this personal decision. You just can't see yourself, when you look out at the world, you don't see another company-
20:12
Eric S. Yuan
No, no. For now, it's not a personal decision anymore. We already became a public company. These are shareholders' decision, our employee decision. For now, I got to change a little bit because otherwise, it's just looking at my personal interests. I do not think that makes sense anymore.
20:26
Rachel Tipograph
Mm-hmm (affirmative).
20:26
Frederic Kerrest
Well, that might not be totally true. My guess is that, since you are still a major shareholder of your own company, you might have a say in how these things happen.
20:36
Eric S. Yuan
Right now. I can influence others.
1238
Frederic Kerrest
You can influence.
20:39
Eric S. Yuan
If a board or other shareholders, they want to sell the company, I would say, "No, I don't want to." But however, we got to communicate it well because I want to proactively share with them what's our company goal today. Back to your point about a goal, it's very important. At any given moment, you got to be honest to yourself, also to your employee. What's our company goal? That's very important. If you change your goal, you better to communicate with them.
21:04
Rachel Tipograph
Mm-hmm (affirmative). No, I agree with that. In terms of employee transparency.
21:08
Eric S. Yuan
Yeah, exactly.
21:09
Rachel Tipograph
You keep mentioning employee happiness. I'm curious how you measure that internally.
21:14
Eric S. Yuan
To measure employee happiness?
21:16
Rachel Tipograph
Mm-hmm (affirmative).
21:16
Eric S. Yuan
I still do not figure out a way yet, meaning systematically, how to measure employee happiness is very hard. But one thing we are doing here is, at least we tell employee, right? "When you wake up in the morning, do you feel happy or not? If you feel happy, please come to office. If you do not feel happy, you can stay at home." Right? Figure out the root cause. And it's every day we talk about that a lot. So Freddy, you're right. If you do not smile every day like this, you feel like, "Oh, something wrong," right? I think that the goal is make sure employee happy, but how to measure that is really hard. We do not know.
21:52
Joshua Davis
Do you have any ideas, Rachel?
21:53
Rachel Tipograph
Well, I have a company offsite next week, and so every quarter I send out an employee engagement survey. And so now, I have eight quarters of the same level of data. It's hard for me to look at it because, as the size of the employee pool increases, your data tends to go down.
22:14
Joshua Davis
You mean the happiness goes... when you mean data, the trend is down?
22:17
Frederic Kerrest
The results, yeah.
22:18
Eric S. Yuan
Yeah.
22:18
Rachel Tipograph
What my results indicate to me right now, I was looking at them last night, my employees are really proud to work at MikMak. And they're so behind the vision, but they don't seem to be able to say that they can see themselves working there in two years time. They also can't say they don't know what their career growth opportunities are at MikMak. So for me, that indicates I need to sit down and communicate org plans and growth charts.
22:43
Joshua Davis
Do you think there's any relationship between that sentiment and your stated goal of selling the company, that people think, "Oh, this is going to end at any moment, so how could I expect to be here forever?"
22:54
Rachel Tipograph
That could be maybe another dynamic. But it's not something that I talk about. And even when corp dev teams are inquiring, and we have weekly all-hands, I often let them know, "X company inquired and nothing happened." I don't want people to think that I'm having secret meetings behind the door. They also know that, in the second half of this year, I might go out and raise money, just because I think I have really strong underlying metrics and I also want to be on the offense. So I'm sharing all of this with them. But when it comes to employee happiness, and I studied this at Gap, because I was also helping Gap's Foundation with marketing, it really comes down to the individual. And it's hard as you grow, and I'm curious to hear from you how you can give the level of care to each individual employee so they feel security in their own role.
23:48
Eric S. Yuan
Yeah. So back to the happiness actually, again, we do not know how to measure employee happiness, but we do know how to help employee. What's the formula to keep the employees happy, because our formula is let employee think about from others-
24:03
Eric S. Yuan
Because our formula is let employee think about from others' perspective, really care about others. If you think about making others happy, we think you'll be happy.
24:11
Joshua Davis
I want to ask a granular question to you, Rachel, which is, you were saying that you sent out an employee survey. Did you just send out an email? Do you use a particular service? Like how do people do this?
24:21
Rachel Tipograph
Oh man, performance management, hot topic right now. So I'm hiring for a head of people for anyone who's out there; but meanwhile, we currently use Lattice. Listen, like any software company, there are things that you're good at. There are things that you're not good at. I think we have challenges with it as we scale. I actually send out a survey via Google Forms that I've made on my own and-
24:47
Joshua Davis
What kinds of questions are you asking?
24:49
Rachel Tipograph
Do you see yourself working at MikMak in two year's time? There's essentially a score, zero to five. Five is like "Hell yeah, absolutely." Zero is like, "I'm out the door already."
24:59
Joshua Davis
And it's anonymous.
25:00
Rachel Tipograph
It's totally anonymous. Another question is, do you feel like there's open and honest two-way communication at MikMak between employees and management? Another question is, do you think MikMak is in a position to succeed over the next three years against the competition? Stuff like that. Then there's also a freeform box.
25:21
Joshua Davis
At what size did you start doing that? At what number of employees?
25:25
Rachel Tipograph
Literally like six employees.
25:27
Joshua Davis
Right, because it wouldn't make sense if it was just you and one other person. Then you would know-
25:32
Frederic Kerrest
Anonymous survey…sent to one person.
25:34
Rachel Tipograph
But I'm a really believer in just giving people the opportunity for anonymous feedback. Two weeks ago, we had what I called a customer org kickoff. So I made my most senior hire to date. I call him a real fucking grownup who's done really big things in the world.
25:51
Joshua Davis
Congratulations.
25:51
Rachel Tipograph
Thank you. He's now my chief customer officer. We kind of reorged that department. Immediately after, I was like, " We got to send out just an anonymous survey and let people give their feedback." It was really helpful right after the meeting to just gather people's thoughts in a way that they felt was open.
26:12
Joshua Davis
Freddy, how do you do it at Okta? Like for you and for Rachel and for Eric as the head of a company, how do you know how your employees are feeling?
26:20
Frederic Kerrest
We do these surveys, too.
26:21
Joshua Davis
As early days as Rachel? We use six people?
26:24
Frederic Kerrest
No, we should have. I'm sure there was negative impacts to the fact that we didn't do that that. We should have. Everyone listening, if you have six people, start doing it right away.
26:34
Joshua Davis
How big were you or small were you when you did start doing anonymous ...
26:38
Frederic Kerrest
Well, today we have about 2200 people, so probably like 2150.
26:44
Joshua Davis
What about you, Eric? Do you do this, what Rachel's talking about, the anonymous feedback?
26:48
Eric S. Yuan
We do. We are similar to what Okta does. We do have once every two weeks, we have a all-hands meeting. Also, we do a lot of employee, to submit questions anonymously. Also, the one week before the all-hands meeting, our executive staff, we gather together, look at all the questions. Some question we will answer live, some question we just write down. I think we have that. I think we feel that's a pretty open, transparent feedback for any employee, for anything. Sometimes the questions are very tough.
27:19
Joshua Davis
I think for many of our listeners and even the people in this room, the idea of being the head of a company that's only six people and deploying anonymous feedback is a powerful idea. I don't know that you, either Eric or Freddy did it. It sounds like if you had to do it over again,-
27:39
Frederic Kerrest
Yeah, absolutely.
27:39
Joshua Davis
... at least Freddy-
27:39
Frederic Kerrest
Look, I think there's a lot going on when you're a startup founder, at least there was for me. There's a lot of moving parts. There's a lot of things you're learning on the fly. I think it's very hard to figure out. Here are all the different things I got to do, and I have six people, and I need to be focusing on culture when you're like, "Who's paying the bills? Where's the payroll? Hey, have we changed bank accounts? Oh, we need to get the health insurance thing going. Oh, I got to talk to some customers. Who's building the product?" There's all these other things going, and you're like-
28:07
Rachel Tipograph
That was literally my morning.
28:08
Frederic Kerrest
Right? And then you're like, "Hang on. The most important thing I should do right now is write a survey to send my six employees who are all sitting here within like 20 feet of me and ask them anonymously how they're doing." No, that did not occur. It should have.
28:23
Joshua Davis
But that's the point…that you say now in retrospect that that was a mistake of yours.
28:27
Frederic Kerrest
Absolutely, but it's totally understandable how it's not the most obvious thing you should do. I give Rachel full props for doing that.
28:34
Joshua Davis
Well, hey listen. Thanks to both of you for being here with us today. I certainly learned a lot, and it was very informative and insightful from both of you.
28:44
Eric S. Yuan
Thank you, Josh. Great. Thank you.
28:46
Rachel Tipograph
Yeah, it was great. Thank you.
28:48
Frederic Kerrest
Thank you, Eric, very much-
28:49
Eric S. Yuan
Thank you, Freddie.
28:49
Frederic Kerrest
... for taking time, and thank you very much Rachel. We greatly appreciate it. Anything we can do to help, please don't hesitate to let us know.
29:04
Joshua Davis
So we just listened to a lot of good information, a lot of good advice, a lot of good ideas. But are there particular takeaways that you have, Freddy?
29:13
Frederic Kerrest
Yeah, Josh. I think there are three really big takeaways out of today's session, and certainly for myself. The first one is, as an entrepreneur you need to figure out who your target market is, how you want to think about your product, how you want to price it, how you want to position it, and how you want to package it when you're going up against very large competitors, number one.
29:31
Frederic Kerrest
Number two, as an entrepreneur, you need to think about what you're trying to do, what your goals are when you are building a company, when you're raising capital, when you're going to hire employees, and you have to communicate, whether you're trying to build a longterm independent public company, whether you're trying to build a company for a few years that you'll sell to a larger acquire, or if you're just trying to build a lifestyle business.
29:50
Frederic Kerrest
Then the third one really is about anonymous feedback. The takeaway there was certainly do a better job than I did. Start anonymous feedback early, and do it often in the life of your company.
30:05
Joshua Davis
We hope you enjoyed our sneak peek at the new season of Zero to IPO which will be coming out later this spring. I want to give a special thanks to Zoom's Eric Yuan and MikMak's Rachel Tipograph for coming on the show. In the meantime, keep an eye out for the rest of season two, and if you need a little extra immediate insight, you might want to check out Oktane 2020, which goes live online next week from April 1st to 2nd.
30:29
Frederic Kerrest
Yeah, you can register for free at oktane20.com for Oktane20 Live, and we're very excited to be able to bring the entire production to the masses. We have over 10,000 folks registered. Todd and I recorded our keynotes from our home, talk about a bizarre experience. General Colin Powell, Amy Poehler, and other speakers all did their keynotes online, too. Should be very interesting. Obviously, none of this would be possible without technology from entrepreneurs like Eric and his company Zoom.
30:59
Frederic Kerrest
This is Zero to IPO. I'm Frederick Kerrest.
31:02
Joshua Davis
And I'm Joshua Davis, and thanks again for joining us. Come back and listen to Zero to IPO next time.
Speed is everything. Don't worry about very big, legacy players—because they're very, very slow. Every day, [customers] have new problems... You have to be the first one to find a solution.
Eric Yuan