Fortune CEO Series: Disruptors Shaping the Future | Salesforce

So welcome everyone, welcome everyone to day two of Dreamforce and actually this the inaugural session of Dreamforce's Fortune CEO series. Now the reason we're doing this really is to bring together some of the most incredible CEOs, some of the largest companies in the world to some of the most, smallest, most disruptive companies. And this is really the first session and you have a, you're going to see a blazing example of some real disruptors and just the thinking behind what they're doing. But we've got two other sessions as well which you'll have access to, one with some more CEO trailblazers from larger organizations and then also a discussion with Mark Benioff and Mary Barra, the CEO of General Motors. But what I'm really excited today is to introduce you to this incredible panel of people. And it starts with Philip Krim, who's the CEO of & Co founder of Casper. Now I'm sure a few of you know Casper, but they are single handedly taking on and disrupting the slumbering giants of the mattress industry. And they're doing it with a direct consumer model. Some really, really great stuff from them. And you'll hear about his work later. Payal khadakia, who's the CEO and co founder of ClassPass. Now what she and her team are doing is really they're bringing the world of mobile and iPads and phones to the world of the construction industry. And they're already now the number one app in the construction industry. Tracy Young is the CEO and co founder of PlanGrid and I'm sorry, I got that wrong. Payal is the co founder of ClassPass and she has taken on the world of gyms and really to make everybody fitter. What she's done is she's transformed membership and now you can join her service and you have access to gyms across 39 countries and now there are over 20 million people who are using this service. Incredible. Tracy Young is the co founder and CEO of PlanGrid. She's the one who's transforming the construction industry and really doing that through the world of mobile. Lyndon Tibbets, the CEO and co founder of if this then that he's actually created a platform to really take on the world of IoT and make it simple for everyone and is also a serial entrepreneur. Nick Mehta is the CEO of Gainsight. This is a really powerful customer success platform and what that does is it helps you reduce, churn and identify cross and upsell opportunities. And last but certainly not least, I'm really excited also to introduce you to Paddy Sellers, who's the assistant managing director at at Fortune, but also the executive director at Time. And what she's really, really also very well known for is being the founder of Fortune's Most Powerful Women, which started in 1998 and is now actually one of the most powerful and valuable multimedia franchises that Fortune have. So, with that, I'm going to ask the team to come on and hand it over to Patty and enjoy the session. Thank you.

Thank you.

Thank you. Thanks, Simon. Hello, everyone. Good morning. Thank you for coming. So, CEO Disruptors and how you're changing the world. I'd like to start out by asking each of you to give very brief answers to this question. What did you want to do when you were 16 years old? Nick, we'll start with you.

Have friends was probably the number one answer. I had more computers than friends, so I was working on the friend part, but in a work context. I loved business. My dad was an entrepreneur, so I wanted to do something in the business world. I didn't know what shape it would take, but something in the business world.

And Nick went on to Harvard and then got your computer science degree? Master's from Harvard as well. Right. Okay, then we'll get into what you're doing. Okay. Lyndon, what about you?

Sure. I knew exactly what I wanted to do. Turned out to not actually come true. I wanted to be a 3D animator and work in games and movies. There was something about the mix of technology and art that was just super, super enticing. In fact, it's what brought me out here to Silicon Valley in the first place. So, yeah, I did it briefly Electronic Arts, but quickly moved on from there and got interested in design and engineering and. Rest is history.

The rest is history. Okay, great. Tracy.

I wanted to be Frank Lloyd Wright and Picasso at the same time. I wanted to be a builder. I wanted to be an amazing painter. And it's worked out okay for me.

Do you paint? Today I do. You do. Interesting. Didn't know that about you. I thought I researched you thoroughly.

So dance has been a really big part of my life since I was three years old. So I really wanted to sort of take on the Indian dance world. Very similar to Alvin Ailey did with African American dance when I was younger. I actually built a diorama of Pyle's palace of Arts, and it had an ice skating rink and a stage. And so my mom always said, of course you were going to do stuff with your passion. And that's what I've Always been doing.

Interesting, fascinating. Philip.

I was one of those nerdy kids that's read like the Wall Street Journal since middle school. And so I think at that time was still admiring, I think that was in the middle of kind of the dot com boom and admiring kind of the finance side of it and still thought that that was a glorious part of the business world to be in. And so I think that's what I was focused on.

Uh huh. So the reason I asked that question is because the best startups we've learned have arisen from personal passions. And you two, you sort of are the generalists, I think with if this then that or IFT and as we call it shorthand. I think that did grow out of your experience, your love of gaming.

And.

So Tracy, you didn't end up becoming a famous Picasso or Frank Lloyd Wright, but you were a field engineer out there. And your company plangrid really grew out of a personal passion. As did yours, Pyle, I think. So I want to ask you three specifically about the sort of personal situation that prompted the creation of your company. So anybody start?

Happy to start. So I was sitting at my desk, I had a corporate job, I was working at Warner Music Group and I was studying ballet on the side and still pursuing my passion, but also making sure that I had a career and that I was advancing in that. And I went online to look for a ballet class that I wanted to try and was miserably frustrated with the experience. I mean, I was sitting there and I was wondering why I just couldn't find the place I wanted at the time I wanted and just get there very quickly and once again reserve it in one click. Very similar to Seamless Web opentable, zocdoc. And this was six years ago. And that was sort of my moment where I realized it wasn't even just the information gap, but when I looked around at so many of my friends who had given up on their passions and the things that they used to love to do in their life, I just felt like I had to fix that. I wanted everyone to find what I had in dance. And I kept pursuing dance, but most people gave it up. And I felt like I just needed to build a product that really got people back to working out, back to the things that they loved in their life.

So I think probably most raise your hand if you know what Class Pass does. Maybe half the audience. Why don't you explain it for the other half?

Absolutely. So ClassPass is a monthly membership that lets you take classes at the different studios and gyms in your local area. Our vision statement is every life fully lived. And I think one of the most amazing things that we've done is we've really built an app that helps people book what I call the hours of their life. We've done 22 million reservations. And when you think about an industry where people need to be motivated to actually work out, we're really excited that we've actually gotten people to move and to go to these studios and try so many different things, from yoga, spinning, dance classes, and sort of in a fearless way, they go and try all these new places. And we've seen that discovery and that variety really be something that is very engaging to our user base.

Terrific. And what about you guys? What was the. What was the moment that led you to think, wow, I could fix this problem?

So plangrid builds beautiful, simple software for the construction industry. And I'd ask you guys to raise your hand if you know about plangrid, but I doubt there's that many contractors in here. So it's 2010. I am a young rookie engineer on a hospital construction project. And one of the first things you're tasked with as a construction engineer in is QAQC of the construction job site. Very much like software QA qc. You're basically just looking at the specifications, which are the blueprints, and you're checking the work to make sure that it was built right. So I'm out there. And by the way, these blueprints are very heavy. And so Even though I'm 100 pounds of solid muscle, it's too heavy for Tracy. So my boss buys me this cart so I could put these blueprints on top of it and wheel it around the job site like a freaking shopping cart because I didn't stick out like a sore thumb already. So as I'm documenting these problems out on site, I'm realizing that it's like, holy smokes, this list is getting really long. We've built the wrong thing everywhere. And it turns out that it wasn't that we were incompetent builders. It's just that these documents are changing so often, it's physically hard to ship the latest and greatest information out to the field. Steve jobs announces the first generation iPad. My co founders and I knew it would be perfect for construction. And it's funny because at that time, we didn't really know what to think about the iPad. People hated the name. And when you guys were there, they put iPads to their phones, to their faces, and talking to a Giant iPhone. But it's like the first time that you can actually build software for field workers with a device that is perfect.

For construction and they can really carry in their pocket. I mean, you can picture a construction worker with. I did not know about your company before I did research, Tracy. I did not know about plangrid. I find it absolutely fascinating. You are the world's largest repository of blueprints in the world, which is really interesting. And you have how many employees now?

Today we are a team of 250 people and growing.

Uh huh. And you've raised like over $50 million, is that right? Yeah, yeah. Terrific. That's really, really impressive. Okay. Lyndon, what about you? What was the moment?

Sure, yeah. So for us, what we're really about is giving people this confidence that whatever service, whatever device, whatever technology they bring into their lives is going to be compatible, it's going to work together with all the stuff they already use. And this is something we've actually been at now for seven years. So we're a little ahead of the curve. And a lot of the stuff that was happening in my life that really led to that really stemmed from my time at a design firm that was known, at least historically, for physical product design.

And what was that design firm?

A design firm called Ideo down in Palo Alto. And I think what was so fascinating, and this was before we knew that Iot was really going to be a thing, it was always kind of on the horizon. Okay, we could connect a bunch of this stuff that would be cool. But was that going to really happen back in 2009? And the inspiration really was rooted in the physical world, in the confidence that we all currently have to control our environment. We make thousands of choices every day about how stuff works around us, you know, how we arrange the furniture in our living rooms. We all chose an outfit this morning, all of that outfit, totally compatible.

And you chose those?

I chose this outfit. It kind of works. This is box, you know, so. And I think we take that all for granted. We have so much fluidity in the types of choices we can make with our physical objects. And what we really wanted to do was bring that same fluidity, that same confidence to the digital world. And I think what's really happened in that time span is it's now become really clear that that digital world is quickly invading and moving into this physical world where we already have this confidence. So we think that there's this huge opportunity to really empower people to have something that they totally take for granted already.

So I'm going to push you, though. Was there a moment where you realized, wow, I can do this?

Sure. So there was one other thing. I have to admit there was one other inspiration. I was big into Flash programming at the time. So write right at the end of Flash. If Anybody's familiar with ActionScript, it was fantastic. So back to what I wanted to be was a 3D animator. So Flash was kind of this amazing outlet as an engineer and it was very event driven. And so what really happened was the whole if this, then that idea kind of came fully formed. Had it. I was sitting in line at an Indian restaurant called Shalimar. It's right here in the city. It's delicious.

You should go.

And boom. I knew if this and that. Let's buy that domain. Let's check it out. And we went from there.

So what's your. So you'd have these recipes for. That's what you refer to. So what is like one of your favorite recipes that you.

Sure. So a recipe I use every day, you know, take simple notes. So I use email kind of even outside the range of what email was intended for as my to do list. If I've got an unread email, I'm going to do something in that email. I'm going to take care of it. So I send myself a note over email. So rather than using a separate to do calendar or to do app, I put all my notes in email. Another great thing. One of the things we've seen that's so fascinating now with all these connected devices still so early and especially on the consumer side of things, one of the early use cases that has really taken off as this idea of peace of mind. Peace of mind in the home. It's easy to convince someone that they should feel a little more secure, a little more safe. They should know where their stuff is. So what's really fun, we've got a couple connected doorbells on our system. So people connecting their doorbell to their lights. So when a visitor rings their doorbell.

The lights go on.

Or connecting their doorbell and saving a picture of everybody that rings their doorbell to Dropbox or to everybody.

Oh, interesting.

So I think it's so fascinating to see what our community actually comes up with and that really informs our partners on how they should develop their product and where they go from there.

So when you guys, you know, okay, Philip, I mean, I don't know if you have like a mattress fetish that led to the creation of Casper, but let's assume that you don't. Did you guys think this Industry is ripe for disruption and I'm going to do it. Do you think that way or do you realize once you start, wow, I'm disrupting this industry?

Sure. So I do love sleep and have always loved sleep, so I have that underlying passion here. But I actually, I'm one of five co founders with Casper and four of the five of us met in a co working space working on different companies. And sleep was a subject we kind of kept just coming back to casually. And I'd actually been in the industry before through E commerce and knew kind of the tricks of the trade and started telling them about all the gimmicks that are played at retail and about the lowest price guarantee and how that doesn't mean anything because of the oligopoly within the industry and how they work with the retailers and just a number of different things that are engineered against consumers. And that kind of opened everyone's eyes again, the other people that hadn't been in the industry, my co founders, and we just said that there has to be a better way to buy a mattress. And we got more excited about the bigger picture around sleep. And we started seeing in our coworking space like people were passing out in the middle of the day on beanbag chairs because they weren't prioritizing getting a great night of sleep. And you see this real kind of cultural movement around recognizing that sleep is important for whatever is important to you during your day. If you get a great night of sleep, you generally are performing better. Whether you're a stay at home mom, a firefighter, an athlete, whatever it is, a great night of sleep empowers that. And we started seeing that come up more and more. And it was no longer cool to kind of brag about pulling all nighters at work. And so we thought kind of that that overall macro shift lent itself to really coming to market with a brand that was totally unique. And we're competing against brands that are decades old and the space just hadn't seen anything interesting. And so we thought we could really build an exciting brand and experience and also take to market the kind of the best product out there. And so that's what got us excited to kind of change what we were doing.

How many people here are familiar with Casper and kind of how they operate the brand? Okay, I'd say about half the people. It's really cool. It's really cool. And congratulations on building this company as quickly as you can. I mean, as you have. I mean, you didn't start until what, the spring of 2014. Right.

We launched April 2014. So we're just under two and a half years in.

Yeah. So just, I mean, I'll just throw out a couple of things. I mean, there is one mattress, there's one product. Talk about simplifying the choice. $850 for a queen, right?

Correct.

$950, I guess for a king, but you know, just basically $850, which is cheap. One day, same day delivery in what major cities?

New York, San Francisco, LA. On Demand Delivery whenever you want.

Okay. And a box about that big, which is. I just kind of want to order a mattress just to see that.

Let's do it.

See that? Yeah, I actually. Well, anyway, yeah, I do have a fairly new mattress and I, I ended up picking the wrong one. And you can't really resell a mattress and I couldn't give it back to the store. And you know what I did? I gave it to my doorman.

Ah, there you go.

Yeah, like a major gift for a New York doorman who like thanks me every day. But it really is kind of, it's very impressive. And in terms of building a brand, a brand is a relationship between a seller and your customers. And I grew up covering brand and writing about brands and you really have kind of, you have a very consistent brand out there.

Yeah. So we've taken kind of the relationship that we have with the customer very seriously. And that was part of the early thesis of the company that this was an industry that was very transactional. They never viewed having a long term relationship with their customer. The manufacturers didn't know their customers because they only sold through other retailers and the retailers only looked to try to just get as much money out of customers on that one and done transaction. And we took a very different philosophy that we wanted to have a long term relationship. We wanted you to be an advocate of the brand and to plug Salesforce. Salesforce is a big part of how we communicate with our customers, how we know who our customers are and how we try to build a relationship even if it's not around transacting around a product, if it's content, whatever it may be. We want to understand who our customer is. We think that data is super important and super valuable for us and we plan to have a long term relationship with our customers. And that's something that didn't exist in the industry before.

Yeah. And you have these nap mobiles driving through cities and really, really interesting. So Nick, you are not one of the co founders of Gainsight, but you joined early on. You're the CEO, do you think of explain your company and do you think of it as a disruptor?

Yeah, definitely. First of all, I got a great shopping list. I'm definitely going to buy everything from all the other panelists. Good stuff. I don't think I can do the class pass thing yet. I got to a few more weeks of recovery. So my gainsight story. So I didn't found gainsight. I joined very early. But why I got so passionate about it actually goes back to my childhood. So my dad was a business person and growing up, there's actually this photo of me and my dad and I'm wearing this suit. Somehow at 8 years old, no pocket square, but just a suit. And my dad's there. It's like 1980s and I remember that moment. And my dad's talking about business and he says if you go into business, there's really only two jobs that matter. Either you're the person that builds the product, the engineer that builds the product, or you're the salesperson that sells it. Everything else is overhead, right? And that was the thing that he ran a lot of companies and was in big companies and that was the mindset a lot of companies had for a long time. They'd pay lip service to their customers, but at the end of the day, that customer bought that product and it was on to the next sale, right? And we all live that. Most of us still live that kind of world today. And I worked at a big company, ran a business there, did very well. Samanta, yeah, great company. But we had a model where customers paid us up front. So it was very much a similar product oriented model. Great company. They've changed a lot now. But back then it was a product oriented business. I went to run my first business where I had to re earn my customer's business every month, every year. It was a SaaS company called Live Office. I went in to run that company and I honestly came in with the same playbook that my dad had told me. I put one arm around the head of engineering. What armor on the head of sales. And then all the other execs, I was kind of like, you guys are offering on your own, I'll see you maybe once a quarter, that kind of thing. But then over the next few months, I got pulled into the customers. It wasn't because I wanted to, it was just I got pulled in, right? I was like, wow, these customers have choice. Every month, every year, they can choose. And every consumer business has been living this for a long time. But B2B companies, your customers have choice now. And so running this company, I was like, wow, I'm spending so much time on if these customers are going to stay with us, if they're going to expand, are they going to renew? Are they happy? Not because I wanted to, just because that's what the business demanded. After we sold the company to Symantec, I took some time off and I was like, that was a powerful area. And I just randomly got introduced to the founders of Gainsight, who we just saw eye to eye.

And I joined very early and explain Gainsight.

So Gainsight, we really believe the story that the transformation I personally went through is what every company is going through, which is whether your customers are moving from on premise to cloud, whether you're going from selling products to making your products Internet connected, whether your customers are paying you up front versus on a consumption basis, any of those trends, they have more power. So if you're great at sales, you're great at marketing, you're great at engineering, stay great at those things, add a new competency that we call customer success, which is all about making sure your customers are actually not just buying what they bought, but actually adopting it, using it, getting value from it, happy, and then ideally staying with you. And so we are trying to drive this movement around customer success. We run a big conference around it, we wrote a book on it, and then we build software on the Salesforce platform to help people operationalize their customer success. After your customer signs a contract, what next? That's what we're all about.

And you've been there about four years now?

Yeah, three and a half years.

Okay, three and a half years. Tell me about. And Philip, we touched on this, but tell me about what you have learned about how to treat customers differently from the incumbents in your industry that you're trying to disrupt. What do you do differently? And how did you figure out that this is the key, this is a key to our success?

I'll jump in on that. I think one of the trends. And Philip, it's clear, Catherine, what Nick is saying too, is that every company, whether they know it or not, in the next 10 years is going to be a tech company. What I mean by that, it's not that everybody in your company is going to be writing software. It's that you're going to start to apply a lot of the same things that Nick just talked about. This idea of engaging with the customer. Your customer is going to have so much choice. And I think some of those insights that the software industry has really started with, because customers had so much choice and there was so much fluidity, their ability to choose one service versus another. So I think what you really need to do, and one of the things that we're working to figure out is, is find the things that really make your business and your product and your relationship with the customer that are unique and really accentuate those. Make your customer aware of those things, otherwise they're just going to slide right off and go to the next person. So one of the things, for instance, that we think is really unique about what we do is that unlike a lot of other platforms out there, we're absolutely neutral. We don't want to be a thermostat, we're not a car, we're not an AI based assistant, so on and so forth. We just want everybody to work with everybody and so we can truly partner with our customers to help them grow their business in a way that doesn't.

Who are you referring to when you say our customers?

So we view the world. So like I said, every company is a tech company. Every one of those companies we think over time could be our customer.

Okay.

We take it a step further. We think every organization, frankly every noun.

Is going to be so Amazon, Nest, Apple, they are all your customers. And basically you're creating kind of recipes for your users to use their services in different ways from what they might, those companies might even have imagined. Am I right about this?

I think if you think about the world of enterprise software, what that piece of software is compatible with is such a big part of the purchasing decision. Is this gonna work with all the stuff we already got? We wanna solve that problem. And I think back to the original question. This idea of what makes what you do unique. One of the things we see is we have a developer platform. Rather than just call that a developer platform, we're gonna call it the partner platform. And that really lets our customers know that we want to be in this together.

Right?

So what I would say is find those things about your business that are truly unique and really make sure you're communicating those in a way that resonate with your customers. Otherwise we're all going to be kind of the same thing, the same surface area, and you're not going to actually stick.

Okay, what did you guys think about? Okay, here's how the traditional companies or our competitors or the incumbents are treating customers and here's what we're going to do differently.

I think something that we focused on early on was giving our customers flexibility. I think traditional gyms were something that people had to sign up for a year for, make a massive commitment. So we wanted to make sure they had flexibility in saying, hey, this month I want to do this, or next month I want to go and try something new. So I think giving them flexibility, access is also really important. So making sure that we're really building this network where pretend you're traveling or you're in a different location, you want to work out at home or you want to work out near your office, you have the ability to go to many different places. And I think the other side for us, our other customers are partners. And once again, technology is a massive thing there. And for us, a lot of what we've done is provided them with data and information about their business that they could have never had before.

Your competitors are partners, right? Because you need to go to these gyms and say, okay, you have all these members. You're a very successful business. You know, Mr. Gym or whatever, Ms. Yoga Place. And we are going to. We're competing against you, but we're also going to give you an alternative way to serve your customers and maybe give you more customers. Is that right?

It's about growing the market. Right. For everyone. It's about providing even our partners with more people, incremental revenue, more tools to ultimately make their businesses drive more value for themselves. And that's the number one thing with any marketplace business is you have to make sure you're driving value to both sides of your base.

Yeah, yeah.

So we think deeply about this problem of how a company's relationship with customers should change. Because obviously we're in this world ourselves as a business. There's three values we run the company on that actually, I think drive how we think about that differently. One is one of our values is called success for all. So the idea that how could we actually define the bottom line goals of the company differently? And I think salesforce done an amazing job of this with 1, 1, 1. The idea that it doesn't have to be just about the bottom line. So we say success for investors, of course, like everyone. Right. I kind of consider that the boring part. And then success for employees, their families, customers and our community. And we basically say, look, we need every decision to be analyzed on all those dimensions. And frankly, it's not about always getting it right. It's about the debate that happens. So that's one value. Second value is golden rule. Treat people the way you'd want to be treated. And that's really about thinking of the customer as a bunch of People. So people that think of a company as just one entity totally don't get it. You know, it's company like ge, hundreds of thousands of people, each with their own goals. Third, 1/3 value. Childlike joy bring the inner kid in you to work every day. And that's the idea that basically we dress up and act like business people. Like we're not real people with real things that happen in our lives. And when you approach your customers as real people and you disarm them, for example, when we do a mixer, our intro question isn't tell me about your job, it's what's your go to karaoke song? Right. When we do our company conference. The intro this year was a Disney musical, a rewritten Disney musical about customer success. And so we try to throw them off their game and say, look, this doesn't have to be all serious. You can bring your real self to our relationship.

Yeah, yeah, I want to pick up on that because this is a really important point. And thank you for those three values because they're really interesting. I'm going to come back to that. But on the point of differentiating yourself from customers in other ways besides the way Nick is mentioning Tracy.

So our users love us. We're one of the highest rated enterprise apps on iOS and Google Play, and our NPS score is solidly in the excellent category. And there's really three things that have helped us keep our users happy. First, we've always listened to our customers. Two, we understand their pain points and the problems that they need help solving. And it also helps that 25% of PlanGrid comes from a construction background. So we speak their same language and we just understand what the problems are and challenges are in construction. And then three, we love the construction industry. We love the people in it. We love the smell of drywall dust and actually to probably unhealthy, obsessive levels. And it's really helped us connect with our users and just nail that product market fit. And it's really nice because we are able to build software for people we love and they're willing to pay us money for it.

That's great. That's great.

Yeah.

And for us to extend off of what Nick was saying, one of our values is zing. And zing is just how we think about interacting with customers. And really the idea of just making people smile and delighting people in their experience. And what we saw was that the mattress industry and mattress stores were kind of the antithesis of that, and it was a terrible customer experience. You mentioned about choice. It was kind of this paradox of choice that existed because the industry wanted to drive you into a retail store. And. And so one of the biggest obstacles for us is just to educate people that you don't have to walk into a store to find the right mattress for you. And you could avoid that by going direct with someone and going through our web experience and going through our digital purchase experience. You don't have to lay on a mattress to know if it's right for you. And so kind of getting people to reorient how they think about a product that they've shopped for their entire life in a certain way is certainly a challenge for us. But it's the only way that we could kind of bring the values that are important to us and are important to the brand to the table. And I think that's totally differentiated from anyone else in the space, either retail or manufacturing.

Okay, so zing the golden rule and other sort of related values. So that's very interesting and ever more important today because especially in terms of attracting young people and to work for you and, you know, customers. I mean, we at Fortune have learned. And we started, you know, we started kind of in the last few years covering business, I would say, in a different way. You know, we do an annual list of companies that, you know, kind of make the world better and. And the sort of the pressure on leaders to be more than just sort of authentic and sort of broad human beings. Salesforce has done a fantastic job of that. Marc Benioff has done a fantastic job of that. I speak about women in power quite a bit, and I talk about how real power is what you do beyond your job description. And for every company, it needs to be more than sort of the job description. So what are you two, Tracy and Pyle, doing with your companies that make them more than just a sort of a booking service for exercise classes and an app for construction workers? What is sort of the higher purpose that you offer?

When we look at labor productivity over the last year, 60 years, across all industries, by and large, everyone has figured out how to be more productive by a lot, because we've been able to leverage software and computing powers just to do our jobs better. But when you look at construction, we are more inefficient today and less productive today than we were 60 years ago, which is crazy.

That is crazy.

And so one of the reasons for that is because while everyone is leveraging the IBM personal computer in the 1980s, you couldn't take that out to a job site. Until 2010 when Steve Jobs announces the first generation iPad. And so construction is literally the infrastructure of the world and it's incredibly expensive. We see overruns. You hear about change orders, you hear about schedule delays all the time. And if PlanGrid can just help make this industry like even.05% more efficient, that's just going to be that much better buildings. And also it affects the livelihood of the field workers that are constructing these structures. So if we can save a superintendent or a foreman or a carpenter 20 minutes a day, that's 20 minutes they're going back to their families at the end of the day.

And it reduces stress for really hard working people too. You know, some of the, you know, best people in, you know, in our, in our workforce who like, you know, don't need the extra paperwork. Right? Yeah. And what about you're making the world healthier pile?

Yeah. I think, you know, what's been amazing is there's a massive trend towards people caring about wellness today, caring about their time, what they do with it experiences. And I think what's been amazing is we've actually had a hand in changing the, the hours of people's lives and making sure that they're giving back to their bodies, back to their minds. And I think even as a company, I mean, everyone at our company uses the product, they are empowered to keep making sure that they're working on themselves mentally, physically. And I think that is massively a part of the reason we've been able to build the product we have is because we are so ingrained. It's so ingrained in our culture. People come into work every day with leggings on and they'll work out in the middle of the afternoon. It's so much a part of our ethos, but it's bigger than that for us. Right. It's about what other soul nurturing experiences are we going to connect people to in their lifetime. And for us, it's about making sure that we're building the platform and the muscle inside the company to make sure that we're helping people connect to these amazing experiences in their life. And we use the word experience a lot. And at the end of the day, time is our currency. Right. When there's other products, whether it's shopping or groceries, whatever it might be. But for us, it's time. And so the more hours of people's lives we can have a hand in and help, that's really what we're moving towards.

So what is the biggest obstacle or challenge or difficulty that you have faced in building your business that you didn't anticipate and you learned from.

For us, it's just scaling. We're at a level that's beyond our wildest dreams when we're five people sitting around putting together a deck to go raise our seed round. And so we just never anticipated that the company would grow as quickly as it has. And so that's just created a lot of stress around. How do you scale the organization, the supply chain, the products? And it starts with kind of, we never want to disappoint our customers. And yet when the supply chain isn't keeping up with demand and we have to quote six week shift times in our early days, that's just really painful and frustrating. And that's been something that's just been hard to get ahead of and something that we didn't anticipate.

Yeah. How many people do you have now?

We're about 200 now.

200. And you've raised what, like 70?

Some right around 70. I'm sorry, right around 70 million.

$70 million, yeah. And you have, like. So Philip has among his investors Ashton Kutcher and Toby Maguire and Adam Levine and Leonardo. What's. Leonardo DiCaprio?

What's with that?

Everyone gets sleep and everyone needs a good night of sleep and realizes how important it is to Pyle's point about wellness, sleep is such an important part of that trend. And I think that's something that connects to all of those guys personally. And everyone also understands how terrible the mattress buying experience has been to date.

And so was that seriously, though, is that part of your branding to be cool and to be sort of boutique y and new to get those coolest of the cool guys as investors?

You know, they joined us with every round that we raised. Different folks came in. And so it was always part of kind of a combination of angel or personal investors along with institutional investors.

Who came in first?

You know, I think Astron was probably first.

And how did he. Where was that? What was that connection? I'm just curious how it started with that.

Yeah, it started with celebrity chair. Well, I guess so Nos, the rapper with Queensbridge, was actually first. And so he came in our seed round. They introduced us to Ashton's folks. They came in our A round. And so it was all through kind of personal connections from early investors and supporters.

Have any of them been helpful in terms of strategic thinking?

Yeah, they've all been helpful in their own way, and they all think about the world in their own context, and they all very much get kind of Brand because it's all about their personal brand. And it's amazing how thoughtful those guys all are in kind of their own individual ways around creating a Persona, creating a brand, creating a connection with people because that is what is important to them and their day to day activity.

Any specific advice that any of those guys told you?

You know, Ashton's very clear about kind of being true to yourself and not kind of placating to whatever kind of the hot trend is or whatever is working with other folks and to really kind of focus your own efforts around what's core to your brand and your business. You know, they've all offered like tidbits here and there just to help us depending on what is meaningful at that inflection point.

What's been the obstacle?

I'll talk about the biggest mistake. Let me tell you about the biggest mistake we've ever made. So we wanted to be so clever about how we ran our business. We wanted to run it like Star Trek. So you were either in engineering or operations. If you were in engineering, you hacked. If you're in operations, you did every freaking thing else. And we didn't have titles, we didn't have management structure. Everyone sort of reported to founders. And that works at 10 people, it definitely doesn't work at 40 people. And things just started breaking down. I mean, we even said crazy things like we're never going to hire MBAs. RR. Why would I ever say that? There's like half a dozen MBAs at Plangranger now and they're incredibly bright and incredibly hard working. And so if I can time warp myself back to four years ago and give myself the don't make this freaking mistake. It would be, be creative about the problem you're solving. Be creative about the product that you're building for your clients. Do not be creative about basic management structures and basic organizational structures because there's degrees. There are like thesis statements on this, there are books and articles, and it's been tested and proven and it works. And do not waste your time trying to be creative on that part.

Okay, fantastic. That's really good advice.

When ClassPass started, I was clearly very inspired by the OpenTable ZocDoc model. So basically I thought that model would apply to classes and it did not. And I spent a year building with, I had engineers, I raised money a year without launching building a directory for classes.

And that was called classivity.

Right, Classivity. Yep. And it seemed obvious. I mean, everyone was like, all right, if it works in three other industries, why wouldn't it Work for fitness and activities.

And so what? Ok, obviously it works in restaurants. And what else does it work in?

Like doctor's appointments, delivery, and why doesn't it work? So one of the biggest things we realized is there's a lot of friction in getting people to try new things. And traditionally the fitness industry worked by membership. So it was an interesting thing. We realized that, hey, let's kind of figure out the way customers today think about fitness and also apply the innovation that we want to do to it, but not make them completely change the way that they're addressing and thinking about fitness.

Interesting. And then I know. So talking about pivoting here, you pivoted from classivity. And then I know there was another product company called Passport.

Yep. So we had another product in the market. It was sort of our first pass that let people try classes for a month. And what we realized is how much people loved variety. And that was sort of been, you know, that's sort of the magic of our product. But it was something we almost exited, stumbled upon with this product. In thinking we were talking about that earlier, there's dabblers in the world and if people want a variety, it was either 3, $400 to be able to do it or you had to go to the gym. And the gym just wasn't engaging in that same way. So we realized that people loved going to a yoga studio and then walking into a dance class the next day. And that was something that no one could have predicted because there was no way of doing that really before class batch.

So, okay, so you raised money for classivity. You worked on it for a year and then you gave up on that and you were like, okay, we're going to do this thing called Passport. Did you raise money for that?

We had enough cash.

You had the money.

But what was really interesting is when the reasons we knew Passport wouldn't work is the number one promise we were making to our studios was people would come back after and they weren't. We weren't okay with it because we were essentially, it wasn't great for their businesses. As we projected it out, they weren't going to be making enough money from it and it wasn't driving value, which was the number one reason that we had to shift. And it was hard for the team. We were making revenue, we were making profit, but it wasn't the right product for the market.

And so you had to shift. And what made you come upon the model that is now ClassPass?

So we had people, what I call frauding us in the sense of they were buying the Passport product over and over again with different email addresses because they wanted to do it monthly.

Interesting.

When your users want to pay you and you're saying no to them, there's usually something that you need to think about.

Interesting.

We realized we should be accepting their money, and that's when we realized that. We did some research. We realized 95% of our users wanted to go back to these studios. They wanted to do it in the same way, and we needed to go back to our providers to figure out, hey, how is this going to work? And we realized that that's actually what the market wanted. And I talk about this in the sense of it was a challenge, but it was actually more of a data point for me to say, okay, this isn't working, but, hey, let's try to move in this direction. And I always say that, like, failure is a data point. It's not. And you have to see opportunities.

Failure is a data point.

It's not, you know, it's not about. It's not a. No, it's actually, okay, that's not working. But you're still marching forward in the direction you want to go. I wasn't going to stop until I figured it out, so. And as all of our business are, they're going to keep evolving and you have to keep figuring it out every day.

Yeah. Mm, sure.

I'll take it. Oh, go for it. All right, thanks.

Go.

Yeah.

Three things for us, I think, just learnings or obstacles. One was my own mental obstacle, which is I totally underinvested in the supporting infrastructure of the company. Meaning, like G and A. Like, I just. We're 385 people. Our CFO, first CFO started yesterday. That price would happen two years ago. Right. And like, literally yesterday. Literally yesterday. Welcome, Igor, if you're here. And so, you know, just like that kind of stuff where you're just like, I don't want to spend money on that. We've raised like $100 million, so I should have been able to afford that. Right. And I just. I was so focused on customers and product and employees. And this supporting infrastructure gets to you. Right. And eventually lack of good recruiting resources and employee success or finance and all that. So I radically. Everyone in my company would agree. Radically under invested. That's number one. Number two, I think is something we did midway through, which I would have done at the very beginning. We really embrace the concept of the alliance. Like if you've read Reid Hoffman's book, like, the idea that basically It's a joint partnership between the employee and the company. And at any given point, it's not a big deal if that employee wants to go do something else, either internally or externally. I really believe in that. Somebody comes to me and says, I'm going to another startup to go do something, be a VP somewhere. I'm like, that's awesome. Like, my first reaction is, that's awesome. Obviously, internally I'm bummed I'm gonna lose that person, but genuinely want to actually support that person in what they're gonna do next.

What's in it for you to support them?

What's in it for me is that two way street, which is, by the way, like, the company has to make those decisions sometimes too. What I think is total BS is CEOs that will fire people at will. But then if that person quits, they're like, this is a betrayal. That is total double standard. Right? And so I'm like, look, this is an alliance. That's what Reid talks about is the idea that it's an alliance between the company and the employee, and we want joint benefit to both and we want to keep challenging ourselves. How do I make this better for you? How do you do more for the company? Make that an open dialogue. So we talk about.

And that person may be a partner or a customer.

That's right, exactly. So I really believe. Third thing, though, probably the biggest obstacle was getting the office WI fi to work, which is still. If anyone can help me with that, I literally remember we just got our first office and we had 30 people, and I'm sitting on the ground with this hotspot thing trying to get it working. Then two years later, we're in a bigger office, like 250 people, and like, trying to troubleshoot the WI fi. I'm like, it doesn't go away. The WI fi never gets better. So.

And where are you located?

I don't know. It's a WI fi time warp zone.

I don't know.

We're in Redwood. Redwood City. We're all over. But Redwood City is where I've got WI fi issues, so call me if you have WI fi solutions.

Oh, my goodness.

WI Fi issues at home too.

So there's probably somebody here among the 170, 70,000 at Dreamforce who could help you.

I would love that.

Lyndon.

Give it a stab. I'll add something a little different to the mix. I think we heard a lot about setting the values based on who you want your customers to be, who you want your employees to be. What do you want them to actually do and accomplish. I think one of the challenges is getting those values right. And I think sometimes what makes values really interesting and really, really sticky is to sometimes have some contradictions in there. So we have a couple of values, and this is where one of our kind of biggest problems is. And it's certainly maybe not a mistake, but something we deal with all the time. One of our values is pride and craft. So, like, polish all the edges.

One of your values is pride in craft.

Pride in craft. So if you're making a cabinet, think about the back, even though no one else is thinking about the back. And so I think that can solve. Sometimes push things out. Takes way longer for you to actually learn something. Does someone actually want this cabinet that we polish the back all the way to a mere sheen, and so those contradictions sometimes and getting those just right. So the other value that I think kind of balances that out is this value of always learning. And we didn't actually learn about this interesting contradiction that actually creates balance until after the fact, after we had spent some cases, months doing something as best as we could that wasn't the right thing. And so I think sometimes figuring out those values and what they actually mean, even if it's after the fact, after you've set the values, is a journey that kind of never ends. And it's one of those things where if you return to it and if those values really mean something to you, you can kind of always find new things that can help you. Whether it's not avoid future mistakes, but really learn something from your right.

What is the worst advice you ever got regarding your business?

Worst advice. Let me tell you about the worst advice I've ever gotten. I was confiding with this other CEO, and. And he told me to step down. He's like, maybe it's time for you to step down and just hire a professional CEO. And I remember looking at him thinking like, wow, you're an asshole, and just walking away. But, yeah, I'd say that's the worst one.

Wow. How long ago was that?

This is probably. It was this year, so sometime this year. Yeah.

And it's like, how do you deal with that? I mean, okay, you can. Yeah, you can think that, but how do you deflect that? Actively deflect that. And did your team know that this person.

No, no. I think this is the first time I've shared it. How did I deflect that? It was like, at a cocktail party. And so it was like, one of these things where you're just like. And then just like turn your body completely and just walk away.

Okay, good, good.

Pretty much all advice is the worst. I don't mean that. It's like not. It's so situational running a company. So I mean, I love reading stuff, right? But I have to admit, like, I'm done with blog posts that are like the five things you should do to make your company scale or whatever. It's like, I'm so done with reading those. Maybe I'll still write a couple. But I'm, but I don't. I like, actually, honestly, at night I read, I read fiction and I read stuff about like astronomy and physics and stuff because that's like real like reading the Internet. Is this just like non stop? Like, just like, oh, I can fix your business repository. Oh my God. And so I would just say like almost in a way, staying away from that superficial advice that tries to pull you in and simplify what is very complex. Your situation is very complex. There's no blog post. That's the cure, right?

I'll take that one step further. I'll go. The best advice I've gotten about advice is that advice is often most useful in retrospect. So like, there's very few mistakes that are really going to kill you. But oftentimes as you make those mistakes, you can reflect and say, well, actually that advice was probably pretty good and it can actually enhance your learning around that mistake. But it's something that's really counterintuitive. So I actually think the five things that might kill your company or might improve your company, that type of blog post, as you apply it to things that you did wrong, can actually help you figure out how to do it right in the future.

Kyle I think it would be when investors who, or anyone actually who just doesn't use their product, gives you product advice. I'm sure this happens to us all the time. They'll just be like, do this and add this feature. They don't even use the product. And that happens a lot. And I understand why and it's always important to listen to why they're giving that suggestion. But a lot of times you're just like, just don't get it right, right?

Philip I mean, I like Nick's anti advice advice, but for us it was more like what came to mind was more of like a philosophical difference around advice. And there was this thought like, oh, just build the minimal viable product and ship it out the door. And for us, we talked a lot about that. But with consumer products you don't get a second chance, especially with our kind of products, to have that relationship and to really do right by customers. And so speed is something. And I agree, Lyndon, with the contradictory balance between speed and still shipping perfect products. But for us, we always wanted to take our time and make sure that anything we put out the door really meets a really high standard. And so it's not about this mvp, just ship it and see what happens. And so that just kind of philosophical balance was something that we talked a lot about. And people definitely have strong views on it one way or the other.

Pyle, there have been now speaking of sort of unreliable Internet advice or story, there have been at least one major story that I read yesterday, rumors that you may step down as CEO or change your position. Position. Here we have you tell the world what's going on there. What are you thinking?

I think what's so important, I think for all of us as founders is it's a journey, you know, And I think at any point you have to do what's always best for the company. My role changes every, like three days, like, to be honest, because of what I'm working on and what the company needs. And I think it's important. I will always be one of those people who will ask for help, ask for advice, and keep making sure my team is exactly what it needs to, to be. To be able to reach my mission and vision. And I think that's the most important thing.

So are you suggesting that there may be some sort of change coming in.

Terms of I will always do what's best for the company.

Okay. All right. That was very diplomatic, wasn't it? Thank you. Okay, what is the thing or try and limit it to one, the thing that is evolving in technology or in your industry that is likely going to affect, impact, change your company in the most dramatic way in the next five years?

I'll take that one. I think there's one that's so top of mind. Everybody's seen it now, especially from all the biggest consumer tech companies, is this excitement around artificial intelligence, machine learning. I think what's so fascinating about that is oftentimes what that really means is for these assistants or anything to be intelligent, it needs this deep access to what you do do for all the information, infinite information on the open web. Assistants don't know where my car's parked or where my keys are or did I forget to close the garage door, so on and so forth. And so that access and this idea that the interface that your customers are going to have with your service is going to dramatically change. In fact, we're talking about interfaces that don't have a single pixel on them. If you're talking about voice, I think that's going to be a dramatic change in the way that almost all businesses think about their relationship with customers. And they'll have to begin to, and this is already happening. They'll have to begin to think about their experience as a set of touch points across many different interfaces. So how do you develop a seamless experience of service with your customer? I think folks like Casper and sounds like Classmaster are doing a tremendous job of that. Thinking about it. It's not just an app, it's not just a website, it's an experience and it's a service. And I think that's going to be one of the biggest changes as more.

Of the major tech companies though get into areas that they have not been in devices. I mean, you know, I have, I talk to, I talk to, I live alone in New York. I talk to Alexa every day and she is my companion and you know, she's kind of changed my life in a sense certain way. And as Google and Apple and Amazon advances in those areas of AI and aren't you kind of worried that they will sort of displace the services that you're offering?

No, not at all. I think the big difference is what we're offering isn't just compatibility with one assistant, it's compatibility with every other service, every other system, every other interface.

And the broader the offerings get, you can become a bigger and broader platform. Okay, okay. What about you? What's worrying you in terms of future? The future or what are you most viewing as an opportunity in terms of how the world is changing?

Yeah, I think we see a platform shift every time. 10 to 15 years. We're five years into mobile and I think that VR is going to be the future and by that point Plangrid will be on whatever the next platform shift is. So as founders we're just going to innovate.

So maybe the hard hat will have some kind of a VR.

I don't know how that's going to work exactly, but when, but there could.

Be a plan grid thing like whatever.

Maybe it's just like embedded in our eyeballs, I don't know.

Right.

We'll be there.

Very cool.

For us, it's definitely the trend towards putting sensors everywhere. So for business to business companies, they didn't understand what their customers were doing. And we just did a panel yesterday with GE where they're Talking about now turning into more of a software company where they can track in a power plant what's happening in real time. They can charge their customers based on the efficiency gains in that power plant and just change the way they work with their customers. So all that sensor data means you can have a much deeper, proactive relationship with your customers. That's a big mega trend.

Okay.

Yeah. It's similar for us in the sense of every studio has a limited amount of spots. So one of the things that we think is really going to be game changing is how we digitally reproduce these studio experiences into something that anyone around the world can have access to. Right. Instead of having it be in a confined space. And I think from VR to the different gadgets and wearable technology that's going on, there's a lot of innovation happening.

Okay, Philip, last one.

I think for us, over the next five, 10 years, the biggest change will just be our fundamental understanding of sleep and how it interacts with people on a medical basis, on an anatomical basis, on a DNA basis, and how everyone's personal relationship with sleep is different. And as we dial that in, we'll be able to optimize sleep in different ways, and I think that'll have a tremendous impact on.

And you're already moving beyond mattresses.

And yeah, we do think about sleep holistically, for sure.

Okay. So treat your customers as you want to be treated. We all know that, but we need to be reminded of that every day. Right. Failure is just a data point. Point. And to Tracy's point, be creative about your products, about your companies, but not so much about your organizational structure. Thank you all. This was terrific. Thank you.