Box CEO Aaron Levie | Breakthrough Innovation: Evolving into a Digital-First Business

Hi, everyone. I'm Sarah Guoa, general partner at Greylock. You're listening to Gray Matter, where we share stories from company builders and business leaders. Today's episode kicks off our Work From Anywhere series exploring how the world has been turned upside down over the past five months. Since the pandemic began, this black swan event has thrown every business into crisis mode, with industries from education to retail being upended. Now, as the world navigates reopening, we look toward the digital by default future. Is office centricity over. How will the global talent market change? How can we best lead in this time of uncertainty? And in what ways will we connect with our teams and our customers differently? Which of these changes are temporary and which will sustain it feels to us like we've been delivered a dump truck of problem statements. And at Greylock, we're excited to invest in entrepreneurs that are tackling them. In this series, we'll talk to an amazing set of founders and CEOs of companies that are working through these issues in real time, and especially those leaders building technology tools for the digital first economy. Our first guest is Aaron Levy, the co founder and CEO of Box. Aaron, you started Box in 2005, right? So tell us a little bit about how it happened and just introduce the company.

We started Box our sophomore year of college, and my co founders and I, we had done a bunch of projects in kind of high school and in college, just various business ideas, a lot of things that just were spectacular failures. And in 2004, if you kind of transport yourself to 04, and I'm sure some people listening to this were like 3 years old or something, so it might not be relevant, but in 2004, when you were accessing and sharing data from different devices, you had to have FTP sites, you had to have USB thumb drives, you would have to email yourself files, and it was just way too complicated. And so this was right on the cusp of Firefox launching mobile devices, getting a lot better. So people were starting to use BlackBerry's more. More people were using cable Internet as opposed to dial up Internet. And so you had this confluence of technology trends of mobile devices, faster Internet, cheaper storage, better browsers, and it all came together at once. And we basically said, what if there was a way where you could just access your data from the web and be able to work from anywhere? And the idea had been tried a few times in the late 90s, but just it never took off. It was too expensive, the Internet was too slow, the user experience didn't really work. So at the beginning of 2005, we launched this idea called Box.net and it was just this sort of storage box in the cloud that made it really easy to get to your data from anywhere. It was for the low price of $2.99, you would get a gigabyte of free storage. So our business model was, you know, you pay for a gigabyte online and then you can access that data from anywhere. And we got lucky. It started to get some early traction. People found out about it on various blogs that we were pitching. And then we eventually raised a little bit of seed capital and dropped out of college.

I am, despite the joshing, old enough to remember working with thumb drives and FPP and blackberries as a professional, so.

So you have some street cred.

Yes, definitely. Well, like fast forward a little bit. You guys started as a more consumer oriented business and then I think it was maybe 07, like right before the financial crisis, you were moving into the B2B business, is that right?

That's right.

Can you talk a little bit about that, like what Box looks like then and what it felt like as a leader?

Yeah, you know, it's interesting. When we started the company, we didn't make a distinction between consumer and enterprise. We were just focused on individuals. And so even in the initial business plan, we talked professionals and small businesses and teams would use our product. And we never really felt like you had to make this distinction between the personal use case and the enterprise use case. Eventually we made the decision that you did have to make that distinction. But when we started the company, it was really to solve individuals problems with being able to access their data. And what happened was one of our early investors, Josh Stein, basically said, hey, you have this business model where you're doing all of this work to get $2.99 from a consumer and they're just churning away and they're going to get free offerings from Google and Microsoft and Apple and Facebook and Yahoo and all these other companies. Alternatively, if you went after the enterprise, you might get 1,000 or 5,000 or 10,000 or $100,000 from enterprises. And those companies are trying to move off of legacy software that was not working for them. That was way too complicated where there wasn't as much competition. And so we basically studied both markets and we looked at, okay, what was the onslaught of competition that we had in the consumer space. And it was massive. And basically the big tech giants would be able to give away free unlimited storage for everybody. And because you could sell advertising or you could sell devices or subscription to other services. And then you looked at the enterprise market and you had companies that had been around for a decade or two decades that were just basically totally extracting profit out of their customer base. They weren't innovating. It was really hard to install. It was very cumbersome. People hated using the technology. And these were these sort of legacy software products that were just really complicated. And so we said, okay, we think we could actually take that initial strategy of being very end user focused, very individual focused, and apply it to the enterprise. So could you bring almost a consumer instinct to enterprise software, where you built software that was simple, that was easy to use, that was virally adopted, but your business model was to go and sell to the corporate CIO or the IT organization and try and get, you know, money for every single, you know, per user inside of the organization. And that was the pivot we made in kind of 0708. Unfortunately, that came right at the same time as the recession hit, which surprisingly was less dramatic than it could have been because we had very low revenue. And so there was still a tremendous amount of upside down the business. Then it was probably like a few million dollars in revenue, 5 million in revenue a year, 10 million in revenue a year, somewhere in that kind of ballpark. And so we unfortunately did have to make some cuts early on, very swiftly during the financial crisis. But within about a quarter or two, we actually started to see growth continue to maintain. And ultimately, looking back, we kind of know why that happened, which was people were still investing in infrastructure, they were still needing to move their businesses forward. They wanted to be able to bring modern technology to their enterprise. And then the thing that we got really, really lucky with was, and this is something that when people look back on 08 and 09, we sometimes conflate multiple events. Yes, there was an economic recession, but it also was at the same time when mobile took off massively. And so you had this economic recession combined with the growth of the iPhone and the iPad and Android and the early stages of cloud computing. So basically what happened was for all of the economic headwinds facing businesses paying for software, you had this massive tailwind of a completely new way to work that was starting to emerge that basically made it impossible for legacy software to be able to serve customers. And the, the corollary to today's environment is, you know, obviously unbelievably high in terms of how similar this environment is.

Okay, so let's go there. Fast forward to, well, maybe not to right now, but how about to February of this year. So what does box look like? What does the workforce look like?

Well, in February of this year, we had nearly 2,000 employees. We're now a little over kind of 700 million in revenue. In terms of our last quarter's results, we are in about 70% of the Fortune 500, 100,000 customers globally. So, you know, super excited about the scale that we've been able to drive. And it's just been methodically building out the platform, building more security, building more workflow solutions, building a simpler product for users inside the enterprise. And that was the state of the world. In February, our strategy was we wanted to continue to drive this sort of digital transformation in enterprises, help companies move off of legacy infrastructure, help them go and modernize their IT tool set. And that's been the journey that we've been on over the past decade as a company.

In terms of those almost 2,000 people, where was everybody before the pandemic hit?

We were very much in offices. So if you wanted to find us between Monday and Friday, we would be in an office in Redwood City, California, New York, Austin, Chicago, Tokyo, Sydney, London. So we have about 2,000 employees, where about 85% of the workforce works out of one of our big office hubs, and about 15% were working remotely at the time.

So March happens. What's your reaction as a CEO? What were the sort of first orders of business in terms of addressing your company internally? And Box went public five years ago. How do you talk to the public markets about what's happening?

Fortunately, we were very lucky where we benefited from years of IT decisions that were made over the past decade that set us up well for this environment. So we were on Slack, we were on Zoom, we were on Salesforce, we're on Workday, we're on G Suite, we're obviously all of our data is in Box. So it was super easy for us to be able to shift to this remote way of working. And we were relatively early. I remember, you know, by the day, you know, sort of we were debating, okay, should we make the announcement, you know, later in the week or wait a couple more days to see what the work from home strategy needs to look like. And then all of a sudden, it just complete avalanche of companies like Twitter and Google and Facebook all sort of making their announcements. And we were, we were kind of right in that mix where we realized that there was just no sustainable way to have people come into the office every single day and sort of figure out, you know, who's got Covid and who are they talking with? And there are these moments where, you know, somebody would. We got an email that said, okay, somebody in our New York office was at a party with somebody who eventually had Covid. And so we shut down the New York office and did a deep clean. And we're like, okay, this is completely unsustainable. So everybody go home, work from home, while we kind of figure out the situation of what this health crisis looks like. And we're really lucky. I mean, we've got a culture that was able to move very quickly on that. It's a fairly agile organization and they sort of move rapidly to this remote work environment. One of the first things we did once we felt like employees were in a safe and healthy spot was go and focus on our customers. And so we made some announcements right away within the customer base that said, any customer that wants to deploy box to more people right now, you can do it free of charge. For this temporary window because we thought there was going to be. Be this sort of rapid, immediate, temporary burst. It was, I look back and it was so innocent because we said sort of there's a 30 day window where people might need to have burst remote work. And then. And then they'd be back at the office. And so.

Oh, the optimism.

Yeah, what a wonderful time that that was. If I could put myself back in, you know, that early March mindset of it was just, I mean, to me it was, it was unprecedented to think about a week of remote work where the whole world would operate that way, let alone four months at this point, so. Or five months at this point in some places. So we send everybody home. We decided, like, we're going to focus entirely on the, on the customer base. And that was the middle and end of March. And then what we did was we kind of pivoted our whole product strategy for the full year in those subsequent few weeks where once it became obvious that the, you know, the viral nature of, by definition this virus was going to be unstoppable and that we would be practicing some form of social distancing in a sustained way, which would then mean that companies need to have more digital investments. They need to work remotely, collaborate remotely, serve their customers digitally, which meant we had to go and, you know, impact our product strategy to solve some of those problems.

Okay, so I want to come back to how you changed the box product strategy in reaction to this and also how quickly you did it. But when you think about that period in March and probably going into April where you changed how box was Working operationally, Were there crucible moments, like points of pushback? Did you go call your CEO friends? Like, this was at least in our portfolio and amongst the CEOs I work with, this was a highly debated topic for a couple of weeks it was.

And we kind of organically started to figure out what the best practices were. Certainly with some peer companies, there was a group of sort of SaaS CEOs that were getting together virtually and kind of sharing best practices and what we were all running into. And I remember two weeks in, we thought like, okay, how is this possibly going to last for another month or so based on what we were running into. And some of the main questions were things like, okay, how do you make decisions in this environment? Do you make decisions that are sort of these one way door decisions? Like you shut down an office entirely and you send people to remote work for a really long time. Do you just focus on the near term, kind of more triaging the current environment, so setting up a more agile way of working, making decisions more quickly, how to do virtual all hands. And within a few weeks we sort of figured out what are these sort of in the Jeff Bezos kind of language, like what's a two way door where we can make a temporary decision right now and be able to come back from versus things that we're never going to be able to reverse if we get it wrong. And so one thing that we did was we announced in, I think early May that employees would be able to work from home or work from anywhere until early January, no matter what. So even when we do eventually open up offices, no matter where you are in the world, you'll be able to work remotely. And for people that want to continue to work remotely, we'll have a lot more flexibility after that point as well. So not necessarily as far as a remote workforce culture that maybe Twitter or Shopify and others are setting up, but certainly a digital first way of working which just provides way more flexibility for people that want to be able to come into the office certain days of the week or be able to have a little bit more flexibility in their commute. So we did sort of make sure that we codified that way of working going forward, even when things get back to whatever normal looks like.

That was a big decision. What data or what were you hearing or thinking about that made you prepared to go communicate that some of this.

Was just done for you? Because we're not going to go back anytime soon. And what we realized was given that we're not going to go back anytime soon. Unfortunately, this is where I went from sort of optimistic to cynical. And by cynical, just in terms of if you just look at the patterns of how different states are reopening, very, very uncoordinated efforts going on across the country, it became clear that at least in the US we would be in this type of environment for probably longer than anybody really wanted. Because you could even see like when, when some companies were talking about they'll reopen their offices, it wasn't really making a lot of sense because you can't really just reopen your office in one state if you have the practices of that state not really facilitate social distancing or, or the right kind of health standards. So it doesn't really matter what any individual company does if the collective is not really solving this problem in a.

Strategic way, because your employees are going to face that risk level regardless.

Exactly. Like we can set up the perfect office environment that doesn't spread Covid but if the moment that they leave the office and they're going into the community and the community hasn't set up any shared best practices of how we're going to function as a society, then it doesn't matter what we do, which is unfortunately and really sad. But like, this is what we're running into right now, which is you could do every single CDC standard in your office environment, but if people are going to go to a bar and not adhere to any of the best practices from a social distancing standpoint or whatnot, then, then it doesn't really matter what you did. So once we kind of came to that conclusion, we basically said, okay, we're going to be working this way, at least in the US for quite some time. So it's probably going to be more the case that it'll be harder to go back to the office in terms of the new work patterns than harder to allow for people to stay remote. So it actually is a very easy decision because we started to see that this was going to become a way that we will work even when you reopen the office, because if schools are shut down or if some people have moved away and they have to stay remote for some time because they're caring for family members, our culture will have to adapt to this forever. And so this digital first way of working will mean that even when we go back to the office, you're going to be working with colleagues that are remote and distributed and working on different time zones or different hours of the day. And so we have to be able to adapt to that way of working. So it became very easy to basically say, okay, anybody can work remotely, and if you want to stay that way, just talk to your manager and we'll have a process to make that easy to do. And that's effectively how we've been executing in the past couple of months.

You talked about how you have built over the last 15 years, like digital first infrastructure and tooling, born in the cloud, yet a culture that supported changing to a more distributed way of working. But as soon as you made that announcement in May, like you and your exec team thinking about that going forward, like, what other work do you have to do? What other changes do you need to put in place?

You know, each business probably looks very different. So for us, we had to think about, okay, how are we selling our software, how are we serving our customers, how are we doing consulting implementations, how are we innovating? You know, there's this big question of can you only get sustainable innovation in this environment or can you get breakthrough innovation in this environment? Can we come up with the next great idea in a fully remote and distributed way? So we've, we've basically been evolving each part of how we work. We actually literally have a T chart that we've been running of sort of the then now for almost every business process to just figure out how well do we think we're doing in this new way of working, Even things like career development and talent enablement and talent development, that had to all change, that had to move to virtual. We have to make sure that we're doing all of our employee enablement and manager enablement work again in a very virtual way. And so, so a lot of the things that we took as sort of for granted about how we would communicate and how we would move projects forward had to evolve in this environment. But we had to go kind of, you know, line item by line item through the business and try and get each of those ways that we worked into a, in a modern digital first way.

Okay, so let's go to two of the things you just mentioned, like how you interact with customers and then product innovation. So what has changed about the way you work with the most important box customers?

I think on the customer side, this is something I'm super excited by. There's this idea that being customer centric means that you have to go spend time physically with your customers. And I remember right at the sort of start of COVID everybody was like, okay, we're not going to be able to go and serve customers or sell to new customers. Or do client engagement in the same way.

Because Box does have a sort of field salesforce that does spend time in person with people traditionally massive field salesforce.

It'S half our business in terms of this sort of sales team. That team primarily would go on site to the offices of our customers and have meetings in their office and try and, you know, work with them on their, their IT projects and transformation. And they certainly took meetings over zoom with clients when they couldn't make it that day or if they had a customer that was. Was a little far away. But. But it was very much an in person experience. And so we thought, well, what's going to happen to the efficacy of that customer relationship or that sales motion when it's now completely virtual and. And the reality has been kind of almost the exact opposite of what we thought about. A few things fundamentally got way better. The first is as a sales rep or a sales manager, you can reach more customers in a day, sometimes like a factor of five more customer conversations in a single day. Where now you can instead of spending all of your time, you know, on airplanes and commuting around the country and all of the, you know, just all of the process and the, just the work that it takes to be able to do each client meeting that is inevitably going to be two months out from today because of when people's calendars can align. You can basically pack your schedule with being able to reach customers in different time zones, in different regions all throughout the same day. So we've been able to reach more customers than we ever could have imagined. We can spend more of our time on the parts of the customer engagement that matter. Like what can we do to help their business? Or being able to demonstrate the product much more easily versus people that are on different conference rooms. And the technology never works and you just never are able to just show off. We're a software company, that's what we do. So we should spend most of our time showing and helping the customer with our software and very little else frankly, other than making sure that they're successful. So we basically were able to reach more customers, spend more times on the engagements that matter. And customers are making decisions faster now. Part of that is Covid and so they don't have the time or budget or energy to spend time on things that they're not going to do. But also something about being a remote just nobody wants to just join a video call for the hell of it. Like I'm going to just take that meeting because I really want to be on another Video meeting. And so you almost have this automatic filtering that's now happening. Like if you're talking to a customer, they probably have a little bit more interest than they did in a prior environment because it was a novelty, okay, I'll take a client meeting or I'll get on video with somebody. You don't want to do any video that you, that you don't have to be on right now. And so I think you're seeing like sales cycles will accelerate, you're able to reach more customers, you're able to be in more regions at once. You can be even more customer centric because we can spend our time on really finding the value for that customer as opposed to our time going into airplanes and hotels and commuting, which is where so much of the mental energy went when you were serving a client. Previously we had a customer, it was really interesting. It's the stuff you never think about. We had a customer who's a large consulting firm and what they found was it used to be the case that their partners can only engage with a few customers at a time or a few clients at a time. So you never really got the partners engagement because unless you were one of their top three or top five clients, you would never get the expertise or the best practices from that senior partner. Well now over zoom, they can be on five client engagements in a day and just making sure that you're getting the right kind of support and the right ideas and the right feedback, you know, in that, in that customer engagement. And and so it's really interesting to think like you can actually be more customer centric by going virtual than you could have previously. Because if I have a consulting firm working with me, the likelihood that I am the one company that that person is going to visit that one day is very low. But now it's so much easier for them to be able to go and engage with us. And so just you multiply that out over everything that we're doing now in business and I think it's a completely new way to serve customers that ultimately is much more customer centric.

That's a super encouraging view, at least for software centric companies, that this is actually learning to work more digitally, even if forcibly is a productivity multiplier.

I think it's a huge boon to productivity. There's been multiple days where I've been on video calls with counterparts and partners and customers in five different time zones. In a day you might be on a call with somebody in Japan. Later in the day you're on with somebody in London and then, you know, a couple different time zones in the US and it's just, it's trivially easy minus your own burnout, which, you know.

Right. I was going to say except for not sleeping during, except for that, you.

Know, that part aside, but you know, just trying to survive right now.

So one of the reasons I wanted to talk to you was that box more so than many companies really went, it seemed from the outside went on the product offensive in reaction to what's happened this year. So can you talk a little bit about your UI rethink or what else you changed about your product strategy specific to the pandemic?

Yeah, well, we went into this year with a few key principles of our strategy. One was doubling down in security and compliance. The second in just better ways of doing workflows inbox and easier ways to collaborate and then finally deeper integrations with third party partners that we've always had but we wanted to invest even more in. And so as soon as the pandemic kind of became very clear, we just decided to basically take that strategy but tilt all of the specifics of that strategy toward things that would help customers in this remote work environment. So we launched a series of updates in a couple of months after that March timeframe around new collaboration features, around being able to annotate on your files better workflow capabilities so you can streamline business processes and digitize more of your business process new integrations with products like Zoom and WebEx and Slack with many more to come. And so we kind of just did all hands on deck go and pivot the strategy, focus entirely on the things that will matter to customers right now. And it was, it was your sort of standard kind of fire drill of what is the most important thing right now that customers will care about and make sure that each team is incredibly clear on that. And that doesn't, and so it didn't matter that you spent a thousand time thinking about the amazing breakthrough innovation in February because March is entirely different. So you've got to throw away, you know, any of that, that former strategy and, and we did that in every area of the product across, you know, the few hundred engineers that we have in box and, and that's the, the strategy that we're executing on right now.

So two more thoughts for you on, on leading during this time. You're a public company CEO got a lot of investors looking at the box stock all the time the last three months in the markets of course, value predictability and nobody knows what to predict right now, how do you think about how to plan and how to communicate?

Well, one of the things that has been super tough for the market is the things that once would have been staples and predictable businesses have sort of flipped over to being the least predictable businesses. So it's been this incredibly challenging time, I think, for public market investors. Because when would you have ever thought that airlines or hotel franchises would be the less predictable category or cohort of companies? And the reason now that the less predictable is because we don't know actually how our country is going to respond to this pandemic. And thus it's not really clear what shape of recovery are we going to experience. And you've heard every letter, you know, V and U and W and L bracket and hockey stick. And there's too many different, you know, letters that we're thinking about as the recovery. And so nobody really knows. So in an environment where nobody knows what the economic recovery looks like in terms of social distancing, then actually the most predictable things are things that are going to be digital first and they aren't dependent on how the health crisis evolves and how people come back to kind of in person settings. So it's interesting that software has actually held up, you know, strongest as a category because we're in a moment where software is probably the one thing that you can bet on from a predictability standpoint. And this sort of social distancing. The direct corollary to social distancing is being digital first because you have to fundamentally still communicate, still transaction, still drive retail and health care and education, but you're now going to be doing that in a very digital first way. So we've tried to make sure that investors know the latest on our strategy and it's been a roller coaster. We've seen some extreme lows, we've seen pretty good results otherwise. And we're just, our job is just to make sure that we keep focused on our long term vision and make sure that investors are pretty clear on where we're going.

How do you communicate with your executive team differently or choose to spend your time differently?

Now, I think this environment forces you to be hyper focused. And again, part of it is this remote work element which is just we don't want to be doing unnecessary video meetings. Like it just gets too draining. And the other part of it is the sheer, again, kind of crisis environment that we're in. So you don't have time to be pontificating about long strategies. I mean, I'm going to be pontificating obviously, in this call. So I apologize to anybody who had to listen to me talk about the future of sales way longer than they ever had anticipated. But, but like in a meeting, it's just, you just don't have the time for this. Like you just gotta make a decision and move on. We don't have a lot of time, we're in a crisis mode. So I think this environment forces you to simplify, forces you to focus, do fewer things. So I see it as my job of making sure that we take as much off the plates of our employees and of our, of our leadership team as possible and we stay highly, highly focused on just the two or three most important things. What are the view features that matter the most? What's the go to market model that matters the most? How do we help support our employees and enable them to be successful in this environment? And that's it. So focus is everything. And just reducing the noise and the thrash and the distractions that the company might, you know, normally be creating just to simplify everybody's daily work.

Did you have to do work as a leader to convince people to focus that way? Because I think, you know, everybody has incomplete data about how large these impacts are, how much to focus on the current environment versus, you know, the well laid multi year plans that I'm sure you guys and everybody else had.

I would say the first is I had to do work on myself on that front. I am naturally a sort of go wide and add more to our plate and that we need to do than normal because that's maybe it's my sort of undiagnosed add or whatever, but just like I want to do more things, I want to go in more places, I want to grow faster. So I think in this I benefited by executives telling me that we had to focus. And then once you flip to that mindset, then it was just really simple because as long as you know how to prioritize, then you can just make the decisions of, okay, below this line, whether that's three things or five things or 10 things, whatever the right number is for your scale of company, if you can at least know the order in which things matter the most, then it becomes really easy and you just say we're only going to do these things. And so if I'm in a meeting, we're now talking about yet another thing, hopefully either it's on me or somebody else. It behooves somebody else to just say no, that's not one of the priorities. We're not going to add more to the plate. And I kind of give myself like a C minus at doing this personally. But in terms of maintaining the system, doing it, I can do it a little bit better because we've just got great people on the team that help make sure that we stay super targeted on what we're working on. But simplicity and focus is everything in an environment like this.

Well, if you've built that system, hopefully the system can even keep you.

Well, that's what I tell, I say, I tell the system, don't let me override the system. And when you have a really good chief of staff, that's, that's what you can do.

Let's talk about futures. Can you predict like what does the box workforce look like when the world is able to go back into the office?

And can you give me a time frame on when you're imagining that to be?

I'm asking you to tell me whatever you can predict for your employees.

The problem with that question is it's like CDC plus our culture plus the political environment.

Let's simplify it. Two plus years from now, two plus years, let us hope that we have a vaccine effective treatment, better coordinated policy responses and we are able to safely work in offices. How do you think box works then?

I think you'll have a meaningful increase in the number of remote only employees. So today that's 15% before the crisis, maybe it gets to 25, 30, 35, you know, somewhere in that ballpark at a minimum a of where we're at today. But I still think that, that we will have office hubs where if you're in New York or if you're in Chicago or you're in Silicon Valley and maybe you're new in your career or maybe you're in a function that just happens to be, you know, served by sort of real time best practice sharing like inside sales as an example. I think that, that we'll still have office hubs where a large portion of the workforce will go but with two unique characteristics versus before. First is really a digital first way of working in everything that we do. So I'm guessing that as many meetings will go away that used to go into a conference room as ones that kind of get created where you're doing, you know, video from your desk or you're just doing that work asynchronously in a Slack channel. I think that's certainly going to be something that will be with us for quite some time. I also think that we're going to do just vastly less travel as an organization. It used to be that somebody had the idea of doing an internal event and we would fly 30 people somewhere to go and do that internal event or internal meeting. And just you just look at the drain that that has on productivity, on people's family lives and personal lives. It's just unnecessary at the level that I think a lot of companies end up, end up doing that. And then I think just maybe the third thing actually then to have a third category is I think that we'll have more flexibility. So let's say you want to come to the office three days a week. Let's say you want to come to the office at noon, leave at 7, or leave at 4, 5. Like just more flexibility because you know that when you go home, you're going to be able to be connected up into this broader system that is digital first. You know, it's interesting, like people always wondered, well, do companies not like people to be remote because they don't think that those individuals will be productive? That's never really the issue. It's, is the system able to be productive when you have that sort of fragmented way that people are working? Because you might have a meeting in the office where nine people are in the office and one person is remote. You know, that remote person traditionally is at a disadvantage from what the sort of pulses of that conversation or that meeting. And so you have to find ways of replicating the digital first way that we're working now when everybody's remote. But when you go back to the office and I think there's going to be great new startup ideas, and I assume that you'll make a few billion dollars on investing in the right ones, but you're going to see how do we carry forward this digital first remote way of working. Even when offices reopen where you can get the speed and agility and dynamism of this environment, even when people go back into a physical setting and your.

View is like you and everybody at the box team, not just perhaps the incremental 10, maybe 20% that is going to be remote mainly is ready to make the investment to be working digitally first in order for that to be true. Because in the scenario you talk about, the nine people that are in the office, they have to do something different to enable person 10.

They do. And I think the difference is now the nine people going back into the office are going to be asking, how do we replicate the level of experience that we had when we were remote? The big difference this time around versus any other time in history is we've now run the experiment where the typical network effect that would have taken 10 years to play out, played out in three months or two months, where we all had to adapt to each other's way of working virtually. And there are some things that suck about this, like it gets to be again, annoying when you're just on one screen the entire time and you can't move around and you're dealing with all these other things. But the part that I think most people agree is positive is like you don't have to get on an airplane like just to do that one meeting. You can hop on a video call with 10 minutes of notice and get that the team that's working on a project together to go in and kind of figure out the next step so you can make decisions faster. Meetings tend to be a little bit more productive. You don't have to travel when you need to go and just have that one customer meeting. So I think what we're going to try and figure out what to do as a culture is can you replicate some of those ways of working even as you go back into the office and Even if there's nine people in the office on the 10 person team, they're still going to want to have that type of way of working in that environment.

Right. Because they can see the benefits of flexibility and the communication patterns they've built during this time.

They should, or I'm entirely wrong and everything goes back to normal as it was before February.

I like to think of the opportunity here as like every executive around the world can now reason about working remotely and working legally. Right. Because they've been forced to. And so they're all video fluent and SaaS tools fluent and they understand what collaboration in software means. And I think that's, I think challenging time, but it's really exciting, it's super important.

And I do hope that we don't just go back and forget about some of these benefits because we'll have these ad hoc meetings that might have 20 or 30 people on a video call and you would never have been able to do that in an in person environment in a productive way. And you'll do this video call and you'll get, you'll generate ideas from participants that would not have been invited to the meeting previously because they're just literally wouldn't have been in physical space or you'll have a slack channel with 100 people in it working on a project that typically only 10 people would have been a part of. Where you're getting ideas coming from across the organization that go and contribute to whatever that business problem is. There are real tremendous benefits to this way of working that are about innovation and are about creativity and are about better alignment of your company. But at the same time, people want to get out of the corner of their apartment or wherever they're kind of stuck. And so I think we're going to have to create a world where both of those things can be true.

Are there big unanswered questions you have for your own workforce that you're thinking about, or new tools or problems you're still trying to solve?

There's an interesting category of sort of, what about our productivity software? As you go remote or go distributed, more needs to find a way of approximating some of the ways that we used to work in person but now virtually. And, you know, some of the things are going to be like, really bad ideas. Like, you know, if somebody's working on like Second Life right now for remote work, that's probably, like, bizarre.

I assure you they are.

I would love to hear those pitches. And you know what, maybe that is the thing that explodes and I'm totally wrong. But so the question is not, you know, do you carry forward the perfect sort of office version of how you worked and digitize it, but like, how do you take the unique nuances of, you know, bumping into somebody in a hallway or, you know, being able to collaborate in real time and how do we bring that to more of, of the way that we work? And I think you're going to see, you know, amazing new software that gets created around all that. The thing I'm probably most excited about, honestly, I. I think we're all pretty clear on the future of work part of the software stack. The thing that I think is equally exciting or more exciting is what happens to all of the industry innovation, where an entire industry could be run differently because of the social behavior changes that are now happening. So the yoga studio that can go virtual, the conference business that goes virtual, the telemedicine healthcare experience that's now fully digitized by Google. You know, the thing that we, we can't lose sight of is the social norms in this environment are so now codified that we've been living with that. There's going to be all of these new digital first businesses and experiences that would never have been possible to create. A year ago if you had said, hey, you know, do you want to do a virtual yoga session? You might do it as like a novelty or. But like, Even then, probably 1% of the population would do that and now like that's literally the only way that you're going to, you know, do you know, a gym class or whatever. And so think about how many billions of dollars are going to get created in all of these new ways that we're going to have these consumer experiences. So that's where I think actually the bulk of the innovation is, is industry specific disruption. And I'm super excited about kind of watching what happens next in that space.

The entire journey up from the college kids dropping out to start a company until public company CEO. What advice would you have for earlier mid stage entrepreneurs navigating this period?

The advice I would give no matter what the environment is, which is first and foremost work on ideas, you know, from an entrepreneurship lens at least work on ideas that you're incredibly passionate about that no matter what type of economic collapse or business challenge or crisis you might be dealing with, you would still be passionately trying to go and pursue irrespective of what the environment is, because you're going to be dealt so many different challenges and blows that it's, it's just really important to make sure that you're doing something that you're unbelievably passionate about. The second thing is I would focus on ideas that because of some major change in the world in this environment, there's an incredible number of new changes in the world. But because of either economic factors or technological factors or social behavior changes, something new changed that then has created an opening for a new type of solution to an existing problem or a new problem that's opening up. And sometimes I think that founders miss either identify or don't fully think through like how do they have enough of the change of the market happening to sort of cause a new idea to emerge. And most consumers or businesses don't really want to change what they're doing. Like most people are very change averse by nature. And so you need the new thing to, and this is, you know, years and years of wisdom that's been passed down over the years to all of us, but you need the new thing to be 10 times better than the old thing. And the only way you're going to have something that's new that's 10 times better than the old is if something happened that makes the old not work anymore. And so in this environment right now, there's unlimited opportunity of creating new things that are 10 times better than the old thing because you have so many archaic incumbent solutions that will not be able to adapt to this new way of working or this new set of social behaviors. But if you're not really clear on what fundamentally has changed about your market right now that you're building a better solution for, probably not a good time to start a company. So you really want to be crisp on what's new and different and why does it matter right now? It's a market where if you're primed for what domains are going to experience growth and you're ready for that, then this is how you're going to be able to easily select the winners in this environment.

So, Aaron, what you said earlier about pivoting your product strategy from these existing couple pillars to something where each of those pillars was now just focused around the environment that your customers are dealing with, that really resonated with me because I have sort of three zones at Greylock that I am actively trying to make investments in. And as March and April unfolded like, two of those zones are digital transformation and applications that support enterprises making that transformation and the future work. And so both those areas, they've really been upended by the last few months. And so I'm also reorienting, you know, 80% of my investing to think about that speed of change.

That's super exciting. I am very excited to watch your next set of investments in that space.

And hopefully be a part of it with Box as partners and otherwise. Okay, so last section, Quick takes. So the three are content. So between, you know, your video calls with Japan and London and the loads of sleep you get and the new baby, like, is there a book, movie, tweet, podcast, whatever you think is worth recommending?

Well, I forewarned you that I hate quick Takes, so I'll do an oldie but a goodie. I would recommend any entrepreneur right now to reread Innovator's Dilemma. You know, anybody who even thinks they understand Innovator's Dilemma probably doesn't even fully understand Innovator's Dilemma. And so right now, in this particular moment in time, when you have so much disruption and so much change, it's a time of really making sure that you hone the craft of thinking through, you know, what's the sustainable versus disruptive innovation, and in this market, what's going to create disruptive innovation. So I'm a big, big fan of innovators alumni. I try and reread it every couple of years. Right now, I actually happen to be rereading a book called Dealing with Darwin by Geoffrey Moore. It's about product strategy and product reinvention, also equally highly applicable. And two More books would be Dealing with Darwin and Inside the Tornado by Geoffrey Moore.

A classic. Well, I've got my weekend light reading set up for me.

Okay, good.

Okay, so shout out one way someone on your team has stepped up over the last few months.

We have a team that is basically working day and night to make our service way faster. Previously, you know, if a company wanted to have a performance team, you'd have five or 10 people be dedicated to that problem of let's make the service faster. Well, instead of hypertent people, we actually opened up a slack channel to 100 people for anybody to contribute ideas across engineering. And we've seen ideas all over the map from the team. But huge shout out to Vova and Tamar, who have been driving that effort across the business. And we've already been able to shave off about half the time of the normal application experience. So we're super excited about what's going on there. Vova and Tamar performance and Huff as well, in case he's listening.

Discovery the weirdest thing you've learned about you or your family or your team during this time.

I sort of understood all of my problems before, so I felt like I was pretty clear on my issues. The weirdest thing, I have a back problem now that I'm starting to run into, so it's not even that weird. It's just sad. So I've never been at a desk for as many contiguous hours as I am now, so I'm definitely physically falling apart at the stage. So that's one unfortunate reality that I'm now running into at this stage.

Okay, Aaron, I'm going to send you one of those, like, peloton or treadmill desk setups.

Now, if I can just sit on it, that's great, but I'm not going to. I'm not going to be able to be mobile on one of those things.

Okay, thanks so much. It was awesome to have you on the podcast and great to hear about everything that's happening at Box and get your advice for entrepreneurs.

Awesome. Great. Take care.

Okay, everyone, that concludes this episode of Gray Matter. Next up, I'm incredibly excited to talk with Dylan Field, co founder and CEO of figma. Find our episodes wherever you get your podcasts or get episodes and blogs on our website greylock.com and on Twitter reylockbc. I'm Sarah Goa and thanks for listening.