From Idea to Billion Dollar Business: the RingCentral Journey

Please welcome RingCentral founder, chairman, and CEO Vlad Shmunis, and Jonathan Vanyan, Fortune writer.

Hi everyone.

All right, well, I finally get to live my dream of having an own show with a little table here.

Nice. So, Vlad. Oh wow.

So this is great. I've been looking forward to this. We've had some really cool talks, interesting talks about the gestation process, I would sort of say, from your embryonic state of a product idea to, you know, multi-billion-dollar company. So I want to start right now by just giving a little background about RingCentral. What is it? What do you do? And let's just take it from there.

Right. Okay, so firstly, a disclaimer, this is not my real voice. This is just my show voice, but I also have a cold, so.

This is my real voice and I have a cold.

Yeah.

So sorry.

So what is RingCentral? RingCentral is in the Unified Communications as a Service space, UCaaS. So what does this mean is we replace traditional communications infrastructure that includes voice, video, contact centers, collaboration tools. We replace on-prem software and hardware with a pure cloud solution. It's a very large market. It's been historically dominated by people like Cisco and Avaya, the big guys, and we are hoping to become the next big guys there by displacing and dislodging those people.

So that's what you describe yourself now. How did you describe yourself when you first started? I always think that's sort of interesting, 'cause the trajectory of a startup from where it goes from beginnings to even now?

[Speaker:ILYA GRIGORIK] Yeah, no, we were very clear from very early on about the kill Cisco idea. [Speaker:JASON M. LEMKIN] Seems to be a very popular idea. [Speaker:ILYA GRIGORIK] Was prevalent. And not kill Cisco as a whole company, weren't that ambitious. But I personally never understood why you need to have a hardware box, or on-prem software anyway, when you can do all of this through the cloud much more efficiently. Make people more productive, much more open environment, you know, saves the money and improves the productivity.

And you describe yourself as a technologist first or a business person?

Definitely technologist.

Technologist, okay. Does that set the trajectory of a company a little bit differently when the founder is a technologist versus a business leader?

Yeah, I have not been accused of being a business person.

You have not been accused of that, okay. Well, that's a pejorative term for that. Well, walk me through the relationship of that, because I've covered a lot of startups, and it's fascinating talking with technologists who are designing the product. And I think the problems start arising when they're trying to create the business around it. I mean, you know, this has got to be a little bit more complicated nowadays, I would imagine, than maybe— and let's shed some light, and let's— maybe there's some similarities of when you started.

Right. Well, I don't know if it's more complicated or less. And look, I can just talk about our journey, right? So we were a true startup, true bootstrap. There were basically two guys, me being one of them. It was 20 years ago. We had a fairly clear idea of what we wanted to do, which was, again, to kill Cisco. And that's kind of all we had. Did you make t-shirts? No, we never made t-shirts. We never did that. What we did do from very early on is we were working with the product. I mean, with us, and I know there are different schools of thought and different people get here in different ways. In our case, it was always about the product. And the product started with understanding the business case, the use case, understanding the customer. In our particular line of work, in our particular industry, it was easy for me, for example, to relate firsthand to customer needs because the product was kind of being designed for me to use and the other few people we had. But it started with that. And then it was just a matter of, hey, make sure that it works. Make sure that it scales. Very, very important not to forget, make sure that people buy it, that they know how to find you.

I mean, it's interesting when you— there's a lot of, especially networking companies that I've noticed where you have the sort of the big company out there, Cisco, so that you sort of identify yourself in relationship to that company. How important is it then for startups to have that identifier to be like, well, this is the one company that, you know, we are setting our sights on? You get that a lot, or you get companies like, oh, we don't have any competitors, but that seems a little wishy-washy.

No, that's great. I mean, so my quick retort to we don't have any competitors is you probably also don't have a market or customers, because if there are— yeah, usually, you know, if there is an opportunity, multiple people will see it and will go for it. I do think it's important to understand who you are competing against and ultimately trying to displace. Granted, there are some amazing successes out there that it's maybe a little bit hard to see, okay, like who did LinkedIn, this place, or even Facebook, you know? But in the end, even for them, they were replacing offline media, right, offline lists. But even, I mean, it's clear that, for example, You know, Airbnb, you know, they're in the— well, Airbnb more in the hotel business, I would say, hoteling business, right? Or, you know, Uber, right, in the, you know, car rental business, right?

You're always going to be in a category.

You have to be. I believe you have to be in the category, and it's a lot more fun if the category is meaningful, right? You have to be solving a real problem.

What's funny is, like, when I talk a lot of companies, I feel sometimes they get really pigeonholed when they say we're part of a category. And then I get a lot of the conversations where they're like, well, this doesn't adequately describe what we do. But there's a reason for the category to exist. So how do you define what it is that distinguishes you when you do have to sort of be placed into a box? Not saying a gardener box.

I personally tend to err on the side of being more specific rather than less specific. Again, me personally, and there are all kinds of different schools of thought, and again, different strokes for different folks. But to say that we're so unique and you can't even begin to describe us, okay, fine, great. But I don't think that's something that many investors would go for, or many customers. Because when you come in, you have to say, look, I'm solving this problem. Right. But by the way, this was for me personally, it was really hard. Hardest thing to go through initially is— What was hard? What was hard is defining, answering your very question. What is it exactly that you guys are doing and why? Okay, kill Cisco, okay, good, great, got it. Now how are you going to do that? It's a giant company. So to answer your question, we— and it took some iterations, you know, we're saying, look, we're going to start with the phone system. Maybe it's not the sexiest thing in the world to do, But it's an OK target, because most people hate their phone systems. And you have to get that emotional sort of—

Modify. Kill Cisco's phone systems.

Yeah, exactly. So you go, OK, now how are we going to do it? Well, again, in our case, but I think it resonates maybe in other industries too, is, OK, so speak to the emotion of it. We're going to make it more user-friendly. I always would ask a question, whomever it is, investor, whatever, do you guys use phones? Yeah. Well, what do you think of them? We hate them. Good, we're speaking the same language now. So what if you had a phone solution that you did not hate? Right. Okay, that's the beginning of the pitch.

So did— and when you were articulating this message, like, tell me, at what point did you feel comfortable presenting this to investors?

Look, I, me personally, I was really conservative, and I don't necessarily recommend this for other people, and this was, we were, you know, multiple millions of dollars in revenue until I took the first call, you know.

Oh, wow.

So, yeah, from investors, and we actually—

Why did you want to do that?

As opposed to?

As opposed to you have X number of customers, you have bookings that indicate future growth?

You know, several reasons. One is, I mean, to me it was sort of a personal thing, but maybe some people here it will resonate with and others it will not. But when you get investors in, you are giving up control to a certain degree. And it's a marriage. And it's actually a marriage that you can never dissolve. Not until— like, you could get a divorce. You can never get divorced from your investors. Like, whomever is thinking of doing funding, understand that they will never leave your life, OK? Until either you're out of business or get acquired, or at the very least, your IPO. In which case, it's still their choice whether they're holding onto the stock or not. But most of them will eventually distribute and sell. So you want to be really, really deliberate in who do you enter into this insoluble contract with.

And so the people you were looking for, you wanted them to resonate with the idea that you already have this amount of money in revenue, as opposed to looking for other metrics that they might be interested in for a startup?

No, no, no. Well, first, look, it's not like I wanted. Lots of people who eventually we talked to told us no, to be blunt. And no, look, what I was looking for was people who were well established. Yes, we took our time, but we did end up with Sequoia as a lead investor and managing director of Sequoia on our board. That moved the needle for us. Another investor was Series A was Vinod Khosla, who is legendary VC in his own right. So again, in our case, it kind of worked out to not rush into things, but go for the topmost quality of investors.

And so once you get that idea, once you decide to make that pack with them, what is the next sort of step? Is that the point when you start saying, scaling, and what does that even mean?

Yeah, yeah, excellent question. So look, again, we were, you know, the product was out there, we were, you know, at revenue, right, in our case. So yeah, when people give you money, the last thing they want to do is for you to not spend that money, because sometimes I also hear people kind of making that mistake. They're really giving you money to scale the business. Now scaling the business means different things depending kind of where you are, what you have, but certainly in our case, and I think in majority of cases, it means scaling the team, and that means lots and lots of hiring, and I don't want to say firing, and we didn't fire anyone, but people get reshuffled, you know, because a person that gets you, you know, from zero to, you know, a million dollars is not necessarily the one who is going to get you from $10 million to $100 million.

[Speaker] I get that idea, but that's gotta be rough to do in person, too.

[Speaker] Extremely painful.

[Speaker] Right.

[Speaker] Extremely painful, because these are friendships, and these are people who stood by you, and you don't feel good about yourself.

[Speaker] Man, how much is that coming from pressure from the board to sort of do those sort of changes for the company, or is that for, in your case, personal decisions, and like you have to do it for what you feel necessary for the company to go?

Yeah, look, I mean, certainly the board, you know, they're trying to add value, right? I mean, so they're basically saying, because they have a playbook, and they will go, yeah, hey, you know, do you have this position filled, do you have this, you know. In many cases, the positions were not filled, so that was, no, let's go do this, you know. And thank you for the playbook, because, you know, I didn't know we needed that position, basically. Basically. In some other cases, no, we did have— I wouldn't say run-ins to where we would go, like, this person you have here is great, and he got you to where you are. Well, actually, it wouldn't go like, good person, but is he going to scale, or is she going to scale? And my retort was, for the first year, basically, well, that's the team that got me here, so I'm going to stick with it, which I did for a year. Then I kind of started turning around a little bit and saying, look, yeah, but are we growing as fast as we could be, given the new reality on the ground? So what's the new reality? So before, we were optimizing for dollars. We had a very fixed amount of dollars available to us, and how do you make the dollar stretch? As it changes with funding, and we raised, I don't know, $10+ million first round, used to be real money in those days, you know. And it was like, okay, rather than stretching your dollars, how do you compress your time?

Right.

So do spend the money. And it turned out the people that we had in our case were all very much used and conditioned to stretching the dollar. So we needed to kind of get a new mindset going, stop stretching the dollar, start compressing the time.

Now do you think this is a different— because this is a different point of time and then this idea of stretching the dollar, do you think that's applicable now, or do you find if you're even talking or mentoring to companies that they're sort of going through these sort of ideas?

No, I think time is— yeah, like I said, I'm not a huge believer that things change that much in, you know, 20 years, whatever, you know. And no, I mean, I think it's just a different stage in company's life, right? You know, it's resources you have and the goals you set and so forth.

So what is the most challenging thing that comes across when you're scale? I mean, I think it's common. I think people would have an idea, oh, you just replicate what's successful. But that doesn't necessarily work, right? It's not an exponential sort of curve. I mean, what are things you've had to overcome?

As you scale? Well, it depends on what stage. Yeah? So if you're talking about specifically when first money comes in, that stage in scaling, again, it's managing the team. To me, it's always It starts and ends with the people in the end. It's how do you transition the team? How do you not lose each and every friendship that you've ever had? In my particular case, it was a close-knit group. And the company employed both my wife and my mother.

Oh, wow.

And actually had to fire them both.

You fired your wife and your mother?

Well, the wife left by herself. But my mom, I had to fire. Yeah, it was very— actually, it was bad. She's still—

Can you explain that? That's impossible to explain.

Don't— yeah. No, look, she wasn't scared. What can I say?

What did your mom do?

She was the bookkeeper for the company.

She was the bookkeeper. So you needed like a—

And I needed a CFO.

You needed a CFO. OK, gotcha. Wow, did she ever meet like your board members too? They know Vlad's mom has to go. I mean, that's—

No, believe me, that was discussed.

Right.

Yeah, that got a lot of airplay.

Okay, wow. Okay, so you literally went from like a family-run business in some ways to something a little bit different. Okay, so what were the stages of investment rounds that you took? You know, what do you think was the most challenging round for you as a company? Most crucial to get to the next level, to get to IPO?

Well, look, we had, you know, A, B, C, D, and E, so 5 rounds, right? Certainly the first one was sort of, in a way, you know, I was new to this, number one.

Yeah.

And, you know, you don't have, you know, because all VCs, they all talk to each other, right? So, and once we had our Sequoia and Khosla in, we had these sort of references, so people could call them, so that was fine. But the first one was, yeah, I mean, that's like, who are you and why should we invest in you?

It's symbolic putting you on the map in some ways.

Yeah, that's a really good way to put it, really good way. But look, I tell you, everyone, but then it gets into valuation, and look, we went through I mean, there was this infamous meeting that Sequoia had in 2008 where they got all of their portfolio CEOs in one room, so myself included, and said, OK guys, whatever money you have, you have. And you will never get another dollar because the world is done, and the economy is over, and you better make that money last.

And that was true for one year, right?

And that was true for a number of years. I mean, now it seems like ancient history, but that is what happened. Again, in that particular case, I know many people just downsized a lot. We did not. We just stayed the course. But we did and do have a recurring revenue model. We had predictable revenues. We weren't maybe hiring as fast as we would have otherwise, but we never had to lay off.

Did you ever get advice during the downturn to, hey, raise money now so you have stuff in the bank? OK.

Yeah, I mean, sure, sure. During the downturn, and especially as you were coming out, I was always of the opinion, you don't want to run out of gas, but you don't want to fuel the plane up too heavy too. Because remember, the more money you take— The less equity you have in the company, right? The less control. The less of a company you're going to end up with, and also the expectations are higher.

—Is there like a safe number of investors you should take, or a good rule of thumb that maybe people can learn from? Just for how much you're willing to give and take.

We did 5 rounds, $12 million each.

5 rounds, $12 million each.

So I don't know. How much to give up, that's really case-specific. I don't know. I surely would, now sitting here now, would have liked to give up less than we did. But I know many people do a lot more, and it's fine too. I think in the end, it's about the result. Did you get, again, my example, enough gas in the tank to get you from point A to point B? Do remember about point B. In the end, you need to get to point B.

So when you're leading up to doing an IPO, I mean, when do you start projecting for that? When is the time that you start crunching the numbers to say, OK, we've got to start really taking serious thought of this now?

Look, we were always about crunching the numbers. The company is analytical in nature. And again, it's recurring revenue, so there is a small set of fairly well-understood metrics. Your bookings, recurring revenue, retention, gross retention, net retention, things like that, that kind of people have been looking at for a long time. But it's a completely different standard and level of scrutiny as a public company. [Speaker] Yeah. [Speaker] And this is one of the advices we got from investors, which was spot on. Was, why don't you guys run like a public company before you're public? And like, I was—

and what did they mean by running?

Exactly, that's what I said. That sounds really good. Like, what do you mean, you know? So run like a public company means have full predictability, you know, certainly through the year, but have a multi-year plan and see how you're tracking against that. Because what's happening is I don't know how many people here are public or close to public, being public, whatever. What I can tell you is that public markets, unlike your investors— like I made this corny analogies like marriage, whatever— but they're kind of like family. In the end, they are in your court. And in the end, founders are hard to come by. And they'll support you. Public markets are very, very different. With public markets, it's— They're completely unforgiving. You cannot miss a quarter, knock on wood, or this is not wood, whatever. Yeah, thanks, Yuri. But we've been public for 21 quarters now, 5+ years. We haven't missed one, so hopefully.

Did you have to do any sort of big steps hiring-wise? I mean, usually, I've noticed, when a startup hires a new CFO, you can sort of guess. OK, and within a year, that's what they're thinking about doing. It's like you bring in this person, start streamlining the business. Did you do any concrete steps like that?

Well, we did have to hire a new CFO. Replace your mother, right? Well, that was years later. Look, it's a very close community, right? All of the investors talk to each other. All of the banks talk to each other. Right. We've never— there's no way you can keep a secret, right? So people know that the company is talking to the banks. Yeah, that stuff comes out. And they expect something will happen. And I personally know a couple of cases like that. If for whatever reason it doesn't happen, the company is broken. So if you engage in that path, towards the IPO, you better be damn sure that you— that you're ready to roll, that you get there.

Yeah. So one of the things we were talking about a little bit prior to this too was also the idea of like who you're taking on your board seat. And you didn't, you didn't have anyone from like a public company or something on your board seat, right? It was all VCs.

Yeah, well, we had, we did have one person who was But that was later, certainly, in life. It wasn't— it was, yeah, and he wasn't an investor. He was just— we specifically wanted to bring in somebody with public company experience, and this particular person was a very high-level manager at AT&T for a while. At AT&T, which makes sense.

You're— yeah, the sort of expertise you want. How important is that then, of bringing someone with that sort of— that public company experience into navigating the company? In navigating the startup?

[Speaker:JASON M. LEMKIN] Look, I'm of the school that you can never have enough friends. You can never have enough advice, good advice. So yeah, I say it's important. I mean, how do I know? I wasn't born running a public company. None of my friends ever did. Traditional VCs don't necessarily have that experience. So you very much do want to have somebody who's been there before. That's been our thing to do almost from day one, is always get people who've seen the road at least a few steps ahead of you.

Right. Do you still have connect like that? I mean, now that you are a public company, who would be examples of people that would steer your company now? Because I would assume you're not done scaling. I would assume scaling doesn't really end.

Well, we have president of Google on our board, so. So, yes, there are larger companies out there and there are people we still can learn from, lots of people like that. So, yeah, look, again, it's exactly what you say is we are certainly, you know, the board and all, we're trying to get people with differentiated experiences, number one, and also people, you know, ideally who come from larger companies, you know, so our board, you know, we're a public company, you know, —so public information, you know, we have, you know, ex-CFO of Intuit. You know, it's a $50 billion, maybe $60 billion as of now, market cap company, you know, ex-CFO of Yahoo, right, in their heyday. So we are trying to go for the very, very top talent from, you know, major brands.

What's one thing you learned running a public company that you wish you would have known when you were a startup?

One of the things running a public company that I wish I would have known, it's a platter. I don't even know where to begin. Look, it's a journey. I think be prepared and embrace change, I would say. Understand that whatever it is, don't think that as a startup that just because you have this neat idea and maybe your friends think that it's the coolest dating app ever that you're doing, which is nothing wrong with this market segment, but understand that there are many steps along this way, and that getting again from point A, which is you've started, to point B, maybe it's IPO, maybe you sell the company, there will be many steps along the way. And be prepared to change the company and change yourself as you go.

[Speaker:JASON M. LEMKIN] In which way did the company change for you? Just an example of one change. Big change?

Like, I used to know everybody by name, and I don't remember every location that we have. No, it's just the scale of it. Right. Look, sure, but maybe a more serious answer is everybody has to be a generalist in a small company, and in a larger company, most people are specialists. And it's a different thing. And generalists don't necessarily make best specialist and vice versa. That's interesting.

So that's sort of— that changes even that dictates like who you're hiring too.

Absolutely, absolutely. Yeah, now we're looking for people with very deep expertise in a fairly narrow area, okay? As before, we were looking for people with, you know, jacks of all trades.

How has You start off with Kill Cisco with the idea that— is that still the same, or is there now multiple Kill Cisco, et cetera? So many companies.

No, it's a gift that keeps on giving. Kill Cisco is still out there.

It's still strong.

It's still big. It's good, yeah. It's a good target. But we've made a dent. They're certainly more aware of us now. Obviously, GeoXicide is nothing against Cisco, right? It's just that there is a very large market going through a seismic transformation, and we're riding that wave.

So what's the challenge then of informing your product as the technology landscape consistently changes? Absolutely. Keeping relevant, keeping relevant.

Yeah, that's the challenge, is how do you keep relevant, yeah? So we always had this playbook, seems to be working to this day, and the playbook was, yeah, we are supposedly industry experts, Smart, sure. I mean, you have a bunch of people kind of doing the same thing for a number of years, you know, eventually you kind of get better than average at it, probably. But no way, no how, certainly I'm not smart enough, is to predict how the market will really evolve without talking to customers, okay? So our, our playbook always started and ended with listening to the customer. And it doesn't mean that you do everything they tell you to do. And by the way, we went through that stage, and many startups do. Like literally, our CTO, he'd read all of the feedback from every customer. And in our business, we had tens of thousands of customers almost immediately. He would actually read all of the stuff that they write. And then he would go and implement it. And the product got to be pretty powerful, but pretty complicated, to the point that, for example, I couldn't use it anymore. And I said, OK, well, that's not maybe that great. So you do have to filter. But having said that, always, in our case anyway, keep your ear to the ground, listen to customers, try to sort and search and prioritize things. But they know, they know what needs to be done. Well, here's one.

How do you let an early-stage startup, when they're developing products, they typically have a few standout customers that are generally doing POCs with them, proofs of concepts. And how do you make sure that they don't define the future of the company too?

Yeah, no, it's not, right, it's not a one-legged stool. You can't just do what customers tell you, or else you just become a contractor basically. Nothing wrong with that, but it's not what we wanted to do. You do have to add value, but again, that comes from taking inputs from customers, because they know what they want and need, and then combining with our ideas as far as where we see the future going, given our alleged industry expertise, and putting it all together.

Was there ever an example where you had to start informing features of the product that were going a little contrary to what one customer may be trying?

All the time. All the time. Lots of them.

What are some examples? Oh, early, you know, like, 'cause I mean, that's gotta be, I can only imagine what the conversation's like when you're talking to a customer, like, "We really wanna do this," and you're like, "It's gonna benefit us in the long term if we do something else." Yeah, no, I mean, we have a number of product features where the customer reaction initially was, like, why are you doing this?

And it's not something that we want. And in our particular case, for example, when we started expanding from voice into digital channels, into texting and messaging and stuff like that, video. And why are you guys doing that? We already have solutions for it. So our retort was, well, that's great. But how many apps do you want to have in your iPhone? Because our differentiated approach is that yes, we'll integrate with best in class, as we do, but pieces that we can roll in, we will roll in. And you know what? Feel free to use or not use, but we think that there is value added in having a closely integrated solution which does more than one thing. And in the end, people like Gartner kind of got around to that idea too, and now Again, I don't know how many people follow Gartner or what have you, but in our business, they're kind of the oracle, right?

I mean, they're the people—

Yeah, I know, it's a really important report. —responsible for formulating the vision of the future. And now they're saying, yeah, it's all about unification. We think we have something to do with that.

Gotcha. If you could start over again, what would you do a little bit differently now? Let's say RingCentral was starting now.

Yeah, gosh, I take money earlier. You would take money earlier? I would take money earlier.

I thought you prided yourself a little bit on that bootstrap. Yeah. So what would cause you to take money earlier?

Well, you're asking me sitting here now. You know, yeah, no, you know, it would be probably out faster. We I mean, who knows? You don't know. I mean, again, it sort of worked out, but I can see us being in public markets a few years earlier, potentially. Again, it's how do you define success? I mean, we had fun all along the way, so from that perspective, it's all fine. But certainly people do get— we'll be $1 billion in revenue next year. It's a nice position to be in, but there are people who got there a lot faster than we got to our billion. That's interesting.

So what is success to you then? How do you even define that?

Keeping your sanity and at least some of the family relations. Keeping it right, right. Yeah. No, success is, look, success is not losing other people's money. Success is solving customer issues. Success is making people money again, like public markets, investors, anybody, whoever. Yeah, you got your own responsibilities. Whoever touched RingCentral pretty much made money on it. So I personally feel very good about it. Displacing Cisco continues to be a good driver, even personal.

[Speaker] What are the benefits of going public? 'Cause some companies just like staying private a bit, 'cause then they don't have to deal with a lot of the pesky dealing with analysts every quarter and such. But why is that still the ultimate goal?

Again, different strokes for different folks. Yeah, you don't have to deal with public investors, but by and large, the vast majority have to deal with your private investors. People who invest in you eventually want to see their money out. I mean, that is their business model. Yeah, that's the business, right? That is their business model. Now, they don't want to see it out next year necessarily, but eventually you have to show them a path. Look, for us, being public worked out. I personally, I think the team we have, myself included, we're comfortable in that space. Because it's, I like level playing fields. So everybody gets the same information. Everything is sort of regulated enough to where If somebody asks you a question that is maybe a little bit too involved or what have you, you have a perfectly valid issue saying, look, I can't just tell you, not tell everyone else. And this is just not how we run the company. But on the other hand, you provide a lot of information that everybody has. And talking to analysts is fine. And by the way, to your prior point, yes. So talk to customers, but talking to analysts now, that's a whole new constituency. And they're like really, really smart people. They all make a lot of money too, but maybe there is a reason for that. So we learn from that a lot.

Their objectives are a little bit different, but in some ways— I get that feeling from a lot sometimes talking with people in Silicon Valley. It's just like, oh, Wall Street doesn't understand a lot of what it takes to innovate.

I beg to differ. Yeah. I think that Wall Street understands a lot, many, many things. Now, obviously, they don't know your business as well as you do. Right. But they do an amazing amount of backdoor checking, just understand that. They know things about our business that I have no idea how they find out. They do talk to customers.

No, in a good way. Yeah, they do. In a good way, yeah. But they're scrutinizing it.

They're scrutinizing. The people do research. And to say that— I know that there are people there, prominent people, very smart people saying, well, yeah, I wish— I really don't want this level of scrutiny, et cetera. I think a lot of it maybe comes from potentially missed expectations. So in our case, it was, guys, this is what— and gals, sorry— but we're here now, point A. Okay, this is what we're going to do, so here's point B, here's point C, and we're just going to get there. And you have to have a little bit of thick skin, because people will look at you and everybody's very polite, whatever, and they would totally fully discount everything you tell them. So nobody would believe a single word you say until you prove them wrong and wrong and wrong again. And eventually they'll come around and go, okay, well, if RingCentral says they'll do this, maybe they will do this.

Leading up to the IPO too, did you notice a change in the way that you were interacting with your board? I'm just curious of like, can you read the signals that they're saying without necessarily telling you up front that you guys, let's start pushing you for this. I think that would be sort of beneficial for anyone here.

Well, first time we brought up the IPO thing, I don't know about reading signals, but one of the board members said, "Hell no, over my dead body." So that was a signal. No, because we weren't ready. In his opinion, we weren't ready, and he was right. We weren't ready. Now again, we took it in a positive way. We said, okay, well, we can discuss that budget. I mean, that can be arranged too, but you know, what, what, tell me more, you know. Well, you guys don't have this, you don't have that, you don't have that. Okay, fine, so let's go. So what does it mean? Okay, let's be getting more talented, let's be getting controllers, let's be getting CFOs, let's be, in our case, we were pivoting or expanding from an SMB-oriented business towards the enterprise. Let's show some traction in that direction before we really commit to it. Because again, a lot of it is just setting expectations and not letting people down. So having said all of this, the board has turned, with one exception. Everyone on our board joined when we were already a public company. Early investors, again, with one exception, rolled off.

And they rolled— right, gotcha. And how has the relationship changed with them over the years now?

With which? All?

Yeah, with the people who remain in contact with, or who are part, who are still somewhat conjoined.

Well, we made people a lot of money, so in general, they're OK.

So generally, everyone's going to be happy when that happens.

And those are generally happy conversations. They do complain about selling out too early, which is what I told them, don't.

[Speaker:JASON M. LEMKIN] What advice do you have to people here, as far as, let's say, at a stage of you're getting the company off the ground, what do you got to do right now to— I mean, I'm just looking at the people that you've sort of known. It seems like you've networked a lot. What advice do you have for people getting out here at getting themselves known in a very tight-knit community?

So how to get them known?

Yeah, just how to get in front of us. Because it does seem like, from what we talked earlier, Series A is a very symbolic gesture. How do you get in front of people?

Well, look, so understand that whatever you do and say will be recorded and amplified. And if you say something, like there are no secrets in this valley. Everybody knows everybody. And the one thing, and I don't want to sound like a Sunday school teacher here, but the one thing that you have one of, and if it's broken, it's not repairable, is your reputation in the end. So if you come across as, yeah, if you come across as somebody that people can trust over time, then good things will happen. And at least in my case, before I could even suggest to people or ask for their trust, I wanted to see many proof points, which again kind of led to maybe our first round being a little bit later than it could have been. But yeah, that's the advice. And the other thing is, there is something to be said about, you know, people coming to you as opposed to you going out with a handout stretched, you know? Get enough of a following with your customers or whatever the constituency is to where you're a little bit well known to where people will be calling you. Right. Saying, hey, you know, have you considered an investment?

So that's like the stage, that's a good metric for any company is when you start seeing people are coming to you towards that.

Yeah, I think so.

That's fascinating, man. Is there any, what's been some of the most important advice you've learned from your board members during your journey as a company?

What have they given to you? Well, we touched on some of this already, so don't be fully married to your team. I mean, that's a really hard one. That's a really, really hard one, and the same goes for—

Yeah, that's rough. How do you even build a culture like that? I mean, knowing people might be ephemeral.

Well, it's hard. Yeah, I don't think— look, I think that what you need to do is be honest with yourself, be honest with the people, be clear about why you're doing something. And it's still very hard. But I think that is one. And the other one is— Understand that the reason that people get involved with you, at least this day and age, Silicon Valley, expectations are sky high. Companies, they're talking about unicorns, but unicorn is a billion-dollar market cap, which is not that big anymore. There are many people with $10+ billion market caps as a private company. It's not just Uber. By Airbnb.

No, the list goes on.

OK, so understand that people at this point have very, very high expectations. And hopefully, you're there to deliver on those. OK, well, very good.

We are out of time. Thank you, everyone. Thank you, Vlad.

Thank you.