Why CEO's Do It Anyway: Lessons I Learned Talking To 100 Founders - NAC - Episode #100

You're trying to be the GOAT, but most folks don't realize the sport is a broken glass eating competition.

I had to hospitalize myself.

Most companies don't die of starvation, it's indigestion.

The minute you lose hope, it's over.

2 years ago, I decided to start Not Another CEO podcast. At the time, everyone told me there were too many podcasts, that I'd quit after 10 episodes, I wouldn't be able to keep up a weekly cadence, and that the hour-long episodes were too long. But Those comments only motivated me. When my son would leave for school, I'd rearrange his bedroom and turn the corner into my makeshift podcast studio. I reached out to a bunch of CEOs who I'm friends with, and I begged them to be on the show. I honestly wasn't sure if he would listen. At the same time, I knew there was a massive gap between what people say about building a company and what it actually feels like to build one. I knew that a lot of the startup podcasts that are out there They want to talk about the sky-high valuations, the big exits, the things that'll get people's attention, but they don't really spend the time in the weeds on the tactics that it takes to build a company. I wanted to tell the real stories, the real challenges, the real lessons. Fast forward to today, this is the 100th episode. I've had amazing guests, first-time founders who are still figuring it out, multi-time entrepreneurs on their 5th or 6th companies. CEOs who are brought in to replace founders, founders who were replaced, people have IPO'd, people have sold their companies for billions of dollars, people have shut companies down, investors who have backed some of the most iconic companies of the last 20 years. If I add it all up across all the founders and CEOs who've sat across from me on the show, they have over 1,000 years of experience of being a CEO. They've employed tens of thousands of people. They've raised billions of dollars. They've built businesses worth tens of billions of dollars. And all of them have been so generous with their time and willingness to share their knowledge. And I wanna be honest about what this whole thing has meant for me. I have learned more in these 100 conversations than I have in any school, any book, any training program. And we're having the exact conversations that I dreamed of. We haven't just talked at the 30,000-foot level. We've gotten in the weeds. The actual interview questions that you want to ask candidates, the exact way to segment a market, how to fire someone with grace, how to structure a board, how to recover when a deal dies, the tactical stuff that nobody writes down because they assume you already know. And the reality is most of us don't. I'm grateful to every guest who said yes when I had no audience and no track record on this, to every guest who said yes since. The thing I've come to appreciate the most is how willing this generation of CEOs is to give back to the next generation. Every person on this show showed up to help, not to promote themselves, not to sell something, just to pay it forward. And I'm grateful to you, the listeners. The notes I get every week, the 'this episode helped me through a hard board meeting,' 'I sent this to my co-founder, they needed to see it,' 'I needed to hear this today specifically'— those notes are the reasons that I keep doing this. The guest recommendations that you send me, the LinkedIn comments, the DMs, every single one one of those things matter. Please, please keep them coming because here's what I've learned doing this. For those of you deep in it right now, dealing with a near-death experience, completely burnt out, no, not knowing how you'll make it through, every single entrepreneur has been through some version of the same thing. Just one generation of CEOs paying it forward to the next. Today on episode 100 of Not Another CEO podcast, I've picked some of my favorite moments. To kick us off, the best description I've ever heard of what it means to be an entrepreneur from Che Huang from Boxed.

So you're trying to be the greatest of all time, but most folks don't realize the sport in which they're trying to be the GOAT of is a broken glass eating competition. So that's, if you ask any entrepreneur, it's like, Noel Oberstein, amazing. Yeah, just fun, fun, fun every day. You know, it really is like one challenge after another. But yet next day you wake up, you're like, oh, more broken glass. Let's put it in my mouth. Let's chew it and let's put a smile on our face and like, let's keep marching. So that I can be the best at this. And so it really, like, unless you really enjoy it, it becomes a really difficult existence.

The best founders are just built different. They live for the challenges. They're resilient. They feed off of the game. At the same time, regardless of how strong you are, how resilient, there are moments in every journey that take you to the brink. I've had so many guests open up and show their vulnerability in ways that I never expected. But it's so powerful for founders who are struggling to hear these stories of other founders. Here is one from Alina from Chili Piper.

My mom made me believe that I can do anything. She, if the way she raised me is that if I want to be president, I'll be president. If I want to save world hunger, I can solve world hunger. So I have this delusion in my head that I can build a company that keeps everybody employed, everybody happy for the rest of their lives. And Everybody has a job that they thrive and that they love. And in my delusion, I can build a company that has 8 billion people in it. So when we had to do layoffs, for me it was unconceivable that that would happen because I just tried to find ways in which that I would, I don't know, sell my house and not have to fire anyone. I was crushed when we had to do layoffs. I was crushed and For like 2 months or so, I was in a state where I couldn't eat, I couldn't sleep. I had to hospitalize myself. Um, I just could not comprehend that what my mom said, that I'm capable of everything, was not true. I was not capable of keeping these people employed.

That one really hit hard for me. Almost every guest I've had on the show has had some kind of chip on their shoulder. Something deep down at their core that is driving them. Actually, I think you need that chip to keep you going a lot of the time. There have been so many stories, but there's one that I remember and reference all the time. It's from Flint Lane from Build Trust, a company that he ultimately sold for over $1.7 billion.

I was middle of 3 boys in a relatively under-resourced family growing up on Long Island, and I'm still trying to prove to those high school kids that I'm worthy. My parents got divorced when I was in first grade, and my dad did not support us financially. And my mom somehow figured out a way to find childcare for us so she could go back and get her master's degree in library science and get a higher paying job so she can raise us. And my mom used to drive us crazy and she had all these other problems, but like, you know, she raised 3 boys on her own. Like that, that story will never change. Like she went back and got an advanced degree while she was raising 3 young boys so that she could support us even more. Like that will never change. So I'm sure that rubbed off on him.

The best part of the story for Flint, and this is what I see with a bunch of exited founders, is he didn't just ride off into the sunset after selling his company. He actually decided to jump right back into it and start another company right away. The reality that we all have to deal with at some point is that there are things that are out of our control, and those things can bring with them massive challenges. I've asked every guest what the biggest challenge they've ever faced is, and I've heard some truly scary stories. Here is one from Ryan Simonetti from Conveen.

February of 2020, we had just finished our board meeting. We were up to 34 locations. We had a million square feet under development, including expanding into London. Financially, the business was performing incredibly well, over $200 million in revenue, profitable wind at our sails. We had kind of navigated the WeWork mess from a brand perspective where, you know, I think the market and our clients and landlord partners knew that we were a different business. We were a hospitality business, not a coworking business. And you know, we're in the middle of closing a large pre-IPO equity round, which would have one provided liquidity. Uh, to a lot of our existing investors, which, you know, people were very excited about. And it would have put a couple hundred million dollars of cash on our balance sheet and positioned us to be, you know, the clear winner in our category. And we walk out of that board meeting, high-fiving, second week of February. And in less than 3 weeks later, we had shut down every location. We went from 1,000 employees to less than 100 between layoff and furlough. We had stopped paying all of our landlords and our lender, and the pre-IPO deal was gone. And we had enough cash, but not enough cash to navigate through revenues going from $220 million to zero for 2 years. 90% of our revenue went to zero for 2 years. We went from $200+ million in revenue, about to be $300 million, to $20-something million in revenue for 2 full years. What business can survive a 90% revenue decline for 2 full years? So I would say, did I question? Were there moments where I'm like, there's just no way we're going to be able to figure our way out of this? And one of the things I learned was that the minute you lose hope, the minute you give up optimism, the minute you resign yourself to defeat, you know what happens? It's over.

Ryan kept Conveen alive through one of the most existential events any modern business has faced— revenue going to zero for 2 full years. And his lesson is the only one that mattered: keep hope, because the minute you don't, you're done. Conveen is now thriving. They're growing faster than ever. They're much bigger than ever, but they were very near death at that moment. One thing that is more relevant than ever is the concept of refounding a company. There are moments where just powering through with the product and approach you have isn't going to work. You have to take many steps back and rethink Everything. Here's one of those stories from Shensi at Merge, a company and founder I've been following from day one.

There was a month where we were in process with a really big account and we were unfortunately just because we were small, we were going to allocate all of our company resources for that account. The deal died for a month and it was devastating for our business. We had a bunch of people quit. It was really big hit more for morale. And in that time, Gil and I had to reflect like, how do we restart this company? Because we can't just pray that people are just going to come in and buy our product. So we spent those 4 weeks just really digging deep on how we innovate, how we like reorient our company and how we start it again. And the Handshake CEO and the Intercom CEO, they really inspired me because both of them had to do that. Like if you're a pre-AI company, like how you're doing things does not work now and you have to rapidly adapt to the industry. You have to relearn, you have to understand like how AI works and how your company can fit in that industry. And so that's what we did. And then the deal came back 4 weeks later, which was so annoying, but really great for our company, obviously. Um, and we were completely, we came out a completely different business.

I actually believe that almost every company that has been around for more than 5 or 6 years will have to go through some version of this if they wanna be successful in the AI era. Not pivot, actually refound from scratch with urgency while you still have the will to do it. Recently, I started interviewing investors for the show. These are successful VCs who've backed some of the most iconic companies of the last two decades. I've enjoyed getting their perspective because they've seen how the best of the best operate. This message from Amish from FirstMark, who has backed Shopify, Pendo, Frame, and many more, is one that is very important for every founder, CEO, and operator to hear.

They say most companies don't die of starvation, it's indigestion, too, too many different things, uh, at once. It's that focus really matters, but the sequencing of then what you do next and how you layer on those resources really matters. And that's, that's the strategy of when do I use my capital? How do I use my capital? When do I press my hand? You know, all of those things that, that's really interesting and what makes great companies great over the long term.

It's simple. Stay focused. When it comes to focus, this clip is probably the one that I share with founders and CEOs the most. This is from Tom Biocchi, a two-time CEO who had two very different outcomes. His first company grew, then shrank, and was sold for $1. The second, Service Channel, grew from $10 million to $100 million under his leadership and sold for $1.2 billion.

My pitch to folks these days that I'm trying to give advice is don't fish in an ocean, fish in a pond. And fish in a pond where you know the names of all the fish, right? So segment it down to a level of detail where you can literally name the fish in the pond. We had a mantra that our target market was retail. So in the pipeline process and in the lead generation process, we'd get Walmart, we'd get two bakeries on the Upper West Side, a guy that owns a bagel shop on 79th Street, a small restaurant in Belgium. And so we went out and tried to refine it. Food or apparel, those two things, right? It had to be 100 locations or more in North America only. It had to be geographically distributed. It had to be company-owned, it had to have centralized facilities management where consistency of brand mattered. We did an analysis and there were 682 companies in the United States that fit that description, and we knew the names of all 682.

The focus on ICP was one of the things that he credited his success to. I tell everyone, get down to a tight ICP. It'll impact every part of the business. I love getting perspective from my guests that you could only have if you've lived through and built companies through previous cycles, massive revolutions in technology. And I love this one from a true OG, Donna Dubinsky from Palm Pilot and Handspring.

I don't agree it's the biggest shift ever. I feel like it is a big shift for sure. Um, but boy, look at these shifts I've lived through. I mean, going from no computing to desktop computing, I lived through that one. I mean, that's pretty amazing. I know a lot of you younger people won't realize this or remember it, but there was a time when you didn't have access to computing at all. A pretty big shift going from desktop computing to handheld computing. Pretty big shift. The internet is easily one of the most major transitions in our lives in the whole world. You know, I don't see how you could take what's going on in AI and say it's vastly more than these massive changes that have happened in our industry. I think it is faster. I mean, these other changes took place over some periods of time. But, you know, a lot of this transition with AI, it seems fast now. Now, mind you, I've been working in AI for 20 years, so it doesn't seem so fast to me. You know, in terms of is there a bubble, isn't there a bubble, I'm not sure I know anything better than anybody else, but I've started to think about it myself in sort of two different layers. One layer of it is the LLM-based models and the battle going on between Perplexity and ChatGPT and Gemini and the data centers I feel like that is a bubble and that is partly because it's a race. We saw this with the internet. You know, we had Yahoo, we had AOL, we had Google. It ended up settling to a few. The second layer is the apps that are gonna build on top of those. They'll be a legal AI company, they'll be a nursing AI company, they'll be a whatever. There'll be a bunch of winners with a bunch of verticals along there. And so I've started to look at it as these two very distinct layers with very different dynamics.

Nobody that I've had on the show has been more uniquely qualified to talk about technology shifts than Donna. And what she's saying, that exhilaration of being on the frontier, of building something that changes how people live, that's part of our addiction. And then there are those that are wise beyond their years, the founders in their early 20s that are building their first companies in the age of AI. They're the ones that'll define the future. And I get a lot of energy from these conversations. Here's one with Max from Lagora.

There's a real value in actually being the second mover, and the value comes from two things, right? You, you get to see, um, what is the right path and what is the wrong path. I'll give you a very clear example. Turns out fine-tuning models and spending a lot of money on that was not the right move, right? Working directly with the latest OpenAI models, latest Anthropic models, latest Google models or Gemini models That was the right choice. That's what we did from day one. And so we didn't, you know, go down that route. Very expensive, time-consuming. You remember AltaVista, but most people just remember Google. MySpace was pretty big, but turns out that Facebook was a much bigger company. Now we're in this great place where I think the products become better as a consequence of competition in the market. There's no firm that doesn't consider us. It's no longer this, um, oh, I won't get fired for buying IBM.

I'm excited to continue to learn from this next generation of founders and CEOs. A lot of the rules of how and what you build are being rewritten. I still believe that there are core principles that are and will stay the same when it comes to building companies. But with AI, the speed you can build and the problems you can tackle are at a completely different level. When it comes down to it, if you're going to build a big company, a generational company, you need to have a big vision. You need to believe you're uniquely qualified to achieve that, and you need to be ready to go heads down for a long time to achieve it. I love this story from Jess Lin, co-founder of the venture fund Workbench, about meeting with and then investing in April Koh from Spring Health.

Great example of that is actually April Koh of Spring Health. Based here in New York City. I met her in 20— it must have been 2016 or 2017. They, at the seed round, and we happened to sit next to each other at a conference and then we ended up going to dinner. And at dinner she literally sat across from me and she goes, I'm going to change how mental health is done in this country.

Like, full stop.

She said it way better than that. But like, it was like how she said it was so powerful. And I remember being like, you're totally going to do that. I don't know how.

Right.

And there's going to be a lot of like stuff in between. But like, I genuinely believe that you believe this and you're going to do it and you're going to do it with or without us. That is the key part, I believe, which is like, I'm going to do this whether you want to get on this train or not. Like, that's your choice as an investor, but like, I'm going to build this one way or another.

Thank you for being here for 100 episodes. I've truly enjoyed every single one of these interviews. This has become a labor of love for me. I hope that those listening have learned from the guests and that the guests know how much they're helping others by sharing their stories, and that this is all impacting founders, CEOs, their teams, companies, customers, and investors in a truly meaningful way. We'll see you next Tuesday for episode 101.