CHM Live | Pioneers of the Possible: Women Entrepreneurs on Innovation and Impact

The history of computing and the history of entrepreneurship, especially in Silicon Valley, are so connected in so many ways that it's often hard to tell them apart. We're living through a transformational time, some have said the most transformational time in history. And that transformation in turn is being led by remarkable people. Tonight we begin to highlight the work that our new Exponential center is starting to do in the transformational area of innovation and entrepreneurship. The name Exponential evokes the change that is at the heart of the story and that our new center is undertaking to document and explain. And it's a great pleasure for me to introduce some of that work to you tonight and the people who are doing it. We have two great guests to kick off the series in Heidi Roizen and Michelle Zatlen. And taking us through their introductions and through the conversations tonight is the Executive Director of the Exponential Center, Marguerite Gong Hancock. Marguerite has been working in the field of entrepreneurship and innovation for more than two decades, first at the Stanford Graduate School of Business and now, luckily for us, here at the Computer History Museum. And I'm delighted to introduce you to her right now. Please join me in welcoming Marguerite Hancock.

Thank you, John.

You're welcome.

Thank you. And good evening. Welcome tonight to the inaugural event kicking off our Exponential series featuring founders, change makers and visionaries. Silicon Valley is home to pioneers of the possible. From Bill Hewlett and David Packard to Mark Zuckerberg. History, media and pop culture frequently showcase transformational stories of Silicon Valley. But what about women? While tech companies and venture capital firms today are starting to actively support rising female stars, women entrepreneurs often go unheralded. Female founders raising series A Capital jumped from 10 to 15% in 2015. But still, they are too rare. Fortunate for us, we have two remarkable women entrepreneurs here with us tonight. What can we learn from them who forge their own paths to innovation and impact? Make no mistake, these entrepreneurs are noteworthy for their innovation and impact. By any measure, they also both happen to be women. To introduce tonight's speakers, let me share five numbers with you. She's a venture capitalist, Stanford lecturer in entrepreneurship and self proclaimed Recovering Entrepreneur. In 1983, she co founded software company Tea Maker. 14 years as co founder and CEO. She served as VP of Worldwide Developer relations at Apple, then became a venture capitalist, now at DFJ.820 million, the number of dollars for investment in DFJ's fund where she now serves as operating partner. She's also sought after as an advisor to entrepreneurs and companies, 37 private companies that she served as board members including five currently everything from DMGT to Zoox. Six public companies. So she's been named to numerous top lists, including Top 50 Women in Tech by Corporate Board member magazine. She's also active in education of the next generation entrepreneurs. 450 students taught at Stanford where she received both her undergraduate and MBA degrees. And on a personal note, there are two other significant numbers that she shared with me. Two plus two. That's the number of kids and rescue dogs in her life. Join me in welcoming to the stage the remarkable Heidi Roizen. So glad you're here, Heidi. And for our next featured speaker, she's a serial entrepreneur, World Economic Forum young global leader and co founder of a leading web performance and security company. Educated in chemistry at McGill University and graduate of Harvard Business School. In 2007, she worked with Google and Toshiba. Three entrepreneurial ventures founded, including Cloudflare, where she is co founder and head of user experience. Today, 5 million Internet properties use Cloudflare, with 12,000 being added daily. 8 to 10% of all Internet traffic uses Cloudflare, which was selected by Wall Street Journal for two years in a row as the most innovative technology company. Others include her company and the Elite club of unicorns. $1 billion plus the dollar private valuation of Cloudflare, which she co founded. Recipient of many awards. 2012 is the year she was selected as one of the top 15 women to watch in Tech by Inc. Magazine. We're also very pleased that she's an alum of our own Next Gen board here at the Computer History Museum. And on a personal note, she mentioned to me that 36 and 5 are the number of months old of her two children. Join me in welcoming to the stage the amazing Michelle Zatlin.

Thank you. So nice.

Thank you. Well, Heidi and Michelle, I'm so excited to have you here to kick off this series. You're remarkable in so many ways. And what I wanted to do is to start with kind of the beginning of your entrepreneurial journey and ask, was there a moment, a person or an experience that kind of catalyzed you wanting to be an entrepreneur?

Heidi, I'll start with you.

I was really lucky in that my father was an entrepreneur. He wasn't a particularly successful one actually, but he was a really happy one. And he was the kind of person who I remember when I first said to him, I think I should go get a job doing something, he said, oh my God, why would you do that? Why don't you do something or make something or figure out something people want and make that happen. And so to him, the idea was always if you could create your own opportunities, you could control your life and you could contribute in ways that were meaningful to you, in ways that you couldn't do when you were part of a company. Since then, I've been with a lot of companies, but I was very fortunate to have someone who believed in that and also believed in me. Even though I was his female child, he actually used to say to my brothers, much to their dismay, she's going to be the one like me. She's going to be the one like me. So it turned out I was.

That's great. I love this story beginning with your father. And how about for you, Michelle?

So I grew up in the middle of Canada in a province called Saskatchewan, which is just north of North Dakota. There's some people nodding their heads who know where Saskatchewan is, which is quite amazing. Good job. A plus on your geography. I grew up in a city of about 32,000 people. I think it's since grown to 35,000. So it's a city. And I was definitely a child who participated in a lot of programs. I was on a lot of sports teams. I did piano. My parents were very big believers and getting involved. And I remember when I went into high school, my mom actually told me about this program called JA Junior Achievement. And nobody else in my school was doing it, but I went and I actually ended up falling in love with it. And it was this exposure to entrepreneurship. And so it was this group of kids from my city that I didn't know because we were all from different schools and a leader and we had to come up with a business idea and execute cute on it. And we ended up choosing Making Horse race Games. Now, what I mean by making, I mean we literally sawed the wooden pieces and assembled these horse race games and then we sold them around the city. We actually ended up winning the provincial JA entrepreneurship award for this. And it was amazing. I loved it. I loved being part of a team. I loved coming up with different ideas, how we were going to execute on it. I love the idea of making something and then selling it to people who wanted it. And so it was really, really fun. And that was my first exposure to, I mean, both business and entrepreneurship. And I just loved it. Horse racing, horse race games. And again, Saskatchewan. That's why Saskatchewan was really important. We played a lot of cards and we played a lot of board games because it's very cold in the winter.

Very cold.

Well, as you know, such an important part of the museum is Educating and inspiring the next generation. And you, too, have both had special education experiences. Can you tell a little bit about how the schooling, your school has impacted your career in your life? Start with you, Michelle.

So my dad is here tonight, actually. He's visiting from Canada, and so I invited him to come.

So.

Hi, dad. And my parents were very strict on. They really believed in education, and they were like, you can do anything in your life, but you have to do what well at school. And so they were very strict on that. And so I did well at school, so I could do anything I wanted, which was great. And I remember that, again, where I grew up, a lot of people stayed within the province. It was very common to go to the University of Saskatchewan for second education, and I got scholarships to go there. And I remember my parents saying, you can do anything, you can go anywhere, but you cannot stay here. Because they worked really hard to say, the world is much bigger than where we were from. And I'm really lucky that I had parents who pushed all of us. I have two sisters, and we've all moved outside of Saskatchewan, which means my parents travel on airplanes a lot. But I was really lucky that I had parents who pushed me to do that, because I remember. So I got into McGill, which is a great school in Canada, and a lot of people said, oh, it's the Harvard of the north. And who knows whether it is or not, but it is a very, very good school. And I remember telling all my. Because again, I was part of all these sports teams. I would tell everyone's like, where are you going to university next year? Oh, I'm going to McGill in Montreal. And what are you going to study? I'm going to study science. And they said to me, doesn't U. Of S. University of Saskatchewan have a science program? And that was the most common reaction I got because it was just so strange that people would leave the province. And so, you know, this for the budding aspiring entrepreneurs in the room, this idea of, like, going against the grain, in a way. I've always had to go against the grain because I've always had to do things that were different than a lot of people around me and do it kind of in a way, without being ridiculed for it. So I ended up going to McGill. I studied science, I ended up working for many years. And I originally thought I was going to go to med school. And for a bunch of reasons, I realized I didn't want to. And I fell in love with business. And I had a science degree, but I was finding myself working in business. And so I was very good at it. But I lacked a lot of the foundations of like how to read a P and L or some of the common terms. And so I really wanted to go to business school. I mean I set my eyes on that. I was like, I want to go to business school and I want to go to the best business school I can get into. And I ended up getting into Harvard, which is a great business school. And that's what brought me to the US nine years ago.

Great, great path from McGill to Harvard. And how about you, Heine?

You know, it's interesting, I think both of us share that our parents were very focused on education. My parents, you know, very different story. My parents were immigrants. I'm the first US born citizen in my family and my father didn't graduate from college. My mother only had an eighth grade education. And they both felt that education was critically, critically important. But I had kind of a funny unlike your situation. And actually my parents moved here from Montreal. Before that they were from Russia and Germany, but they had met in Montreal and then they moved here. And my dad got a job at Ampex back in the 50s and he used to say to me, well, honey, I've been all over the world and I've already picked the best place to live. And so you don't have to do that because we're already here. And you know, when you really think about it, you think about Ampex in the 50s and you know, in the 50s, I mean that was a really innovative company in its day. And I get a kick out of driving down 101 and seeing the Neon sign is still there. It's a national landmark now. And so I just get such a kick out of that. That was a very entrepreneurial venture backed company in its day, in the 50s. And so I was super lucky. I was pretty driven and in some ways, I will admit, driven by the fact that I didn't want to. My mother was working in a minimum wage job in a high school cafeteria when I was in high school. And I didn't want that for my life and neither did they. So I got into Stanford and I went there and had to pay my own way and all of that. And so that had to work while I was in school. And then I got my first job. Of course I was here at the birth of the computer revolution. Really. I mean, I got my first job in 1979, December 79. I get out of school now. My major is creative writing. Okay. I have A creative writing degree. Let me explain something. The idea of what you do after school was not really big in my mind. It was sort of, oh, I love to write. I think I'm a good writer. I think I'll be a creative writing person. And then I had to find a job. And it turned out in the want ads, the highly sought creative writing major was like, said, no one ever, right? So anyway, interestingly, I got this job as the editor of the company newspaper for Tandem Computers before it went public. And so I ended up going to Tandem and my job was to write about all the people at Tandem who were doing interesting things. And after about a year of that, I said, I don't want to write about other people doing interesting things. I want to do the interesting things. Right? This is not going to motivate me. I know how to do this. I don't want to do this. And I looked around Tandem and I said, you know, everybody getting ahead was either an MBA or an engineer. And I felt like it was too late for me to be an engineer, but I thought, well, there's that business school down the street. So I applied to Stanford Business School. I joke that I was a diversity candidate, which I truly was. There weren't a lot of me at the business school, but it turned out that was a good thing. So I went to Stanford Business School. And then I just also had the amazing good fortune to have a computer science. Well, they didn't call him that back then. A programmer who was my older sibling. And he and I started a company together, second year in business school. So I was very fortunate. In fact, he said, I want to start this company with you in spite of the fact that you're getting an mba. So much for that degree.

Apologies to those associated with business school at Stanford or Harvard.

Yeah, no, it's great. I'm really glad I did it. My brother didn't value it, but that's ok.

Okay, well, let's kind of fast forward to Silicon Valley. There are many opportunities that both of you had and you could have stayed on the east coast or returned. Why come here to start your company?

So I was at business school and we started to work on what is now Cloudflare as a school project. And I graduated in 09 and it was a school project. I was actually supposed to go work at LinkedIn, which in June of 2009 would have been a great job. It was 300 people. And if you fast forward today, it's grown tremendously, it's gone public. I would have Worked for a great boss. He's still there. It would have been a perfectly wonderful outcome. But we had this business idea that kept gaining a lot of steam, and it was just an idea, and we had a lot of conviction around it. And when we decided that we were going to keep working on it, a lot of people in Boston said, you should stay here or go to Atlanta because there's a huge, huge security community in Atlanta. And we said, no, we have to be in the Bay Area. And when people said why, I mean, it was really two main things. First, we knew our business was one that required a lot of venture capital. And if you have a business that requires a lot of venture capital, this is the place to be, because this is where all the venture capitalists are. And so we knew we had to be here, and we needed a lot of capital to start our company. And since then, we've raised $182 million, so. So that original assumption proved out to be true. The second reason why we really want to be here is that what Cloudflare does is we run a large, globally distributed network, and we help make the Internet faster and safer for 8 to 10% of the Internet traffic today and growing very quickly. And when you work at that scale, you need people who have seen Internet scale, and everyone who's seen Internet scale works here. And so we knew that the talent either already lived here or were very motivated to come to the Bay Area because it was known as the Mecca for people who wanted to work on really big things. And so that's why we ended up coming here. Even though people tried to convince us to go otherwise, we were like, no, we have to be here. And so that's why we started our company here. And if I look back, it was absolutely the right choice. Now, the question is, going forward, is this the place you have to start a company? And I think that's a different question. But back then, it was. Back then, in 2009, this was absolutely the choice for us. And wonderful. Way back then, way back then, when I walked uphill to school both ways.

In the snow Backwards in the snow. Yeah. 2009. Oh, my God. I don't even want to say the year that I started. No, it's very funny. I mean, to your point on, is this the right place to start a company today? I know I'm preaching to the choir here, but an interesting thing, if you look at the statistics of the National Venture Capital association that collects information like this, last year, there was $54 billion of venture capital invested in the United States, 27 billion of that went into the Bay Area. So are you in the right place? Yeah, you're in the right place. So for me, in 1980.

You know.

The funny thing is I was here, but my brother was not here. So my brother was working for the World bank, and he was a programmer at the World bank. And he found that my brother's this really brilliant guy, and people would come to him all the time with data they wanted to crunch, and he would sit there and write programs to crunch the data. And he realized, and I'm sure this is. I mean, some of you are going to say, really, it used to not work this way, but he had this very brilliant idea to abstract the calculations from the data. And so that once he wrote the calculations, because he tended he was working for the World bank. And if you were doing something for Zimbabwe and you need to do it for some other country, it was probably going to be some of the same formulas. So he said, well, I'm going to abstract these. And then he thought, well, I can maybe do this on a personal computer. And so he wrote this thing called tmaker, which is short for tablemaker, which was an early spreadsheet program back in. He actually wrote the program in 1979. So he wanted to be the CEO, and he wanted me to be the VP of everything else.

Right?

And so he wanted to program, and then he wanted me to do everything else. So I actually had a really interesting experience because for the first couple years, we started the company out here, and I ran it out here, but he was sitting in Washington, D.C. doing the programming. And we had a very interesting thing which I'm going to talk about, because, again, I think, for women, I hope this is an empowering story. I told somebody that I was working with a Tandem, that I was going to leave Tandem, and I was going to start this company with my brother. And she was the head of PR at Tandem, this woman named Pat Becker. And she said to me, well, what's your title going to be? I said, I'm going to be the VP of whatever. And she said, you should be the CEO. And I thought, well, my brother wrote the program. My brother came up with the idea, why could I get to be the CEO? And she said, well, look, first of all, your brother wants to code, and you are going to be the person who's out there selling. You're going to be meeting with people. You're trying to get contracts and distribution and selling, and people always want to talk to the highest level person when they're buying. And so if you carry the title of CEO, that's going to be way more powerful. And she said, second of all, in Silicon Valley, let's count the number of female CEOs there are. And I think we stopped at Sandy Kurtzig.

Right?

I think at that point there was like one or maybe two. And she said, you have no money for marketing, but if you're a woman CEO, that will get attention. And so I thought, well, those are interesting ideas. I'm going to run this by my brother. What the hell, right? And I sat my brother down and I said, I need to be the CEO, and here are the reasons. And my brother, being a computer science person who's super logical, said, those are great reasons.

Okay.

And that's how I became the CEO of the company. And so it was really kind of this amazing thing. And it turned out that those were very valid reasons. And so I remained the CEO, CEO through 14 years. But it was interesting that he agreed with me. So thanks to my brother Peter for agreeing with me.

Great advice from Pat, and also kudos for your brother.

Yeah.

Well, thank you for telling the stories of the founding of Cloudflare and tmaker. There are always highs and lows in those early years. Could you pick out just one high and one low from the. The earliest sort of first year after founding? There's the euphoria and the roller coaster that goes down.

That'S like hour by hour. If you're an entrepreneur in the room who just started or you're thinking about starting. I mean, just those first couple years, the highs and lows are so compressed in such a short period of time, it's just like physically demanding. You just come home at the end of the day, at the end of the week, you're just exhausted because they're just. This amazing thing happens, and then followed by a terrible thing, and then about five more times during the day. Six years later, we're about to turn six next, next week at Cloudflare, there's still a lot of highs and lows. They just get much more stretched out. Much more stretched out. And, you know, if I think about some examples early on, you know when you're really small and no one knows who you are, and again, no one knew who we were when we moved out here. We really had no. Nobody knew who we were. And I think that's actually the beauty of the Valley. You can come here and start a business and not know anybody. And it is. There's lots of things wrong with the Valley, but that's not one of them. It is definitely the best place to do that. And so we're here working on our idea and it's like you have to hire people, but no one knew who we were. And I remember that we reached out to some people on LinkedIn and we found somebody who had like a systems engineer background. He was like a C level programmer, but was employed as a web developer at a big company here. And we reached, we messaged him on LinkedIn back in late 09 and we said, hey, we have this startup idea. We met with him and the reason why he had been employed as a web developer even though he was a C level programmer, was basically for visa reasons, he was a French developer and he ended up joining first employee at Kleffler. And that was just such a high because somebody we did not know decided that they wanted to come work on this because they believed in this vision, we're going to help make the Internet a better place. And I mean that is just such. He believed you, he believed in it and he was so excited. And he stayed for four years and we're still very good friends and he was the founding team member. And the fact that again, someone we didn't know all of a sudden wanted to come join us again as an entrepreneur when you're in the trenches was such a validating sort of thing that we, I'm sure gave each other high fives for the founders who were just like, awesome, we're not crazy. Or we found another crazy person to join us. And so that was definitely a very high point. I've had many low points. I'll share one mainly again so you can learn again if you're an entrepreneur in the room. And so no one really starts a business thinking they're going to be huge, right? You're out there solving a problem or something you really care about. And turns out that there's some smart things you should do up front because if you are, huge things can happen. And so early on we registered everything to my business partner's Matthew's house. We just used his home address. And that was a really big mistake because ultimately we use that to do do all our filings because we didn't want to pay for a P.O. box, which really isn't very expensive. It's like $400 a year. But when you're startup with no money, $400 a year, it's like $400 a year. And that ended up haunting us because some hackers basically used his address and bought his Social Security number online in Russia. And I promise you, all of your Social Security numbers can be bought in Russia as well. And he, he actually ended up getting seriously hacked. The company ended up getting seriously hacked. And that was really a very bad day. And now there was a security flaw in both AT&T's system and Google's email system, which then. And we were the unfortunate. We discovered these bugs and had to deal with it. And they've since patched them and we've since moved on. But it was very structural that basically someone hacked into our corporate email because we originally used his home address. And that was just a very low point. I never bought michelle'satlin.com thinking because I was. Why would I. And now somebody. If you go to michelle'satlin.com, there is the Michelle Zatlin fan club, which I have no affiliation with. And it's really hard for me to buy back that domain. And so things like this that again. And thankfully they haven't done anything crazy with it, but they could and that would really be very sad and it causes me great stress. And so if you're an entrepreneur in the room thinking about starting something like buy your personal domain name. It's $10 a year. Just do it. And don't use your home personal address for anything.

Good advice.

Oh, I love it.

Thank you.

I do own heidiwarazing.com smart.

You're much, very smart.

How about some highs?

Wow, highs and lows. I was sitting here before 14 years of being a CEO and the same thing like so many, like every day is drama and trauma and what's going on. But if I were to characterize them, I would say for me, weirdly, the highs were product related. It's shipping a product, it's seeing it. I remember walking down a street in Paris. This was back in the days when you put software in boxes and shipped it around the world. Crazy thing that we used to do and being in Hong Kong and seeing our packaging in Windows at computer retailers. And that to me was like super exciting. We won some awards. We'd see our user numbers go up, we'd get thankful, grateful customers would send us things.

I mean it was.

The personal computer back in the 80s was a very personal, like people would name them and love them. And if your product, there weren't that many products and if your product ended up doing something, something great for them, they would ship you things like this avocado Farmer sent us a box full of avocados one time as a thank you for doing something. And so to me, a lot of the highs were just feeling like we had made people's lives better with the thing we invented. And I would say the lows were always. There were two forms of low. One was running out of money, right? That sucks. And running out of money and doing anything to keep that company alive. That company is more important than anything. And you would be willing to cut your credit cards and borrow money from everyone and sleep on couches and go without pay. My co founder and I went without pay for six months one time. Not like we could afford it, Right? I mean, it was just that we had to. And that pressure to get to the next level and be able to fund ourselves. And we always survived those things, thankfully. But those were one of the lows. And the other lows, I would say, had to do with people. It really has to do with when things aren't working and when people can't get along with each other. And I will say also, though, some of the greatest things were people. Two years ago, two years ago, we had the 20th anniversary of the sale of our company. And at the time we sold the company, we had, I think, 100 employees. And I had a barbecue at my house and 32 people came who had been employees. And so many people pouring out. And all of us, and many of us still keep in very constant touch. And the idea that we forge these incredibly close relationships, we're like family. To me, that really is one of the highs, right, Is the people. It's the relationships about the people that you work with. And I think because you go through those incredibly tough times, right? Going through incredibly tough times is the strongest way to forge a relationship with somebody. And those, to this day, remain some of my closest friends.

Thank you. What I'd like to talk now is about technology and innovation. Both involved with software, Web security and innovation is really the lifeblood of technology companies. And I'd love to hear a story, sort of a story that gives a window into how you're able to not only have the first sort of innovative idea or process business model, but the next one. What's been behind being able to have sustained innovation.

So when I. So I've been doing Cloudflare for seven and a half years. We're about to turn six years old, but the group of us worked on it for a year and a half before, before we started it. So I've been. I'm seven and a half years in, so this was not an overnight success by any means. And during seven and a half years. I've seen so many people start companies, sell their companies, leave their companies. I've just. Lots of people have changed jobs in seven and a half years. Just think about yourself. And, and I often get asked like, you know, how do you do it? What do you know? And. And so this is just my personal perspective. And Heidi, you know, who looks at a lot more entrepreneurs, probably have his different one. There are a lot of people who want to start companies just because they want to be a founder. And I think that's like the worst reason to start a company. You should go. Being employee number 500 at Facebook would have been a wonderful choice because look at where Facebook has gone. And they need really smart entrepreneurial people to make that happen. And same at Cloudflare, we're 300 people. We, we've done a great job, but we've just scratched the surface of what's possible. And we need great people to come and execute. And again, everyone on our team is entrepreneurial and, like, plays a huge role in making it happen. And so there's some people who just want to start a company because they feel like they want to be like the founder. And I'm just like, being a founder of a company that does nothing or doesn't have any impact really sucks. And no one talks about that. And again, I've been doing this seven and a half years, so I've seen people who've said it really sucks to build a company that no one uses, and you kind of get stuck in what they call the rut. But again, no one talks about it. And so the things that do work from a techno, like, the questions that I do think that you should ask yourself when we ask ourselves all the time are, first of all, are you solving a meaningful problem? Okay. And can you assemble the right group of people to really execute on that idea? And that's where it starts. Because a lot of people are solving problems that aren't meaningful or they're not doing the right things to attract the great people. You need to execute. And you need both the big idea and you need the right people who can execute. And you either hear people who have big egos who can't execute, or you have people who are working on things that actually don't matter. And so if you're. What we think about all the time is, are we solving a real problem? Is this really going to. I mean, to use Steve Jobs quote, and again, this is what he was getting at. It's like, what are you going to do? To make a dent in the universe. And so when we started Cloudflare, it's like we're trying to rebuild the way the Internet works. We're helping rebuild the way the Internet works. People laughed at us, but like, we're doing that and we're on our way. And it's kind of these big, audacious, almost crazy ideas, but it was a really big idea that if we were right, that it would really impact a lot. And so that's what we think about a lot. And again, I think if you're an entrepreneur, really easy questions to ask yourself and to be very honest with yourself. Vasculan. If the answer to either is no, it's like, no, I can't attract the right people, or no, my idea is really not that big. It's like kind of a small idea and I can get my hands around it. You should go do something else or go work at one of these companies that have big ideas because you'll learn a lot and meet a lot of amazing people and there'll be another opportunity.

Great advice. Looking for that double? Yes.

Well, that's just one perspective.

No, I mean, I think it's an excellent perspective and I absolutely resonate with, with the idea of solve a problem. Right. Most of the great entrepreneurs that I've ever had the pleasure to work with have been people who recognize a problem and go out to solve it. Right. And I would say that one of the reasons why our company survived for 14 years, because obviously we started as a CPM spreadsheet company, so we wouldn't have survived for 14 years if that's all we ever did. But we went from CPM spreadsheet. I saw an early pre release version of the Mac and I said, this is the future. We ended up being the fifth product to ship for the Macintosh. Then when the Mac wasn't so much the future anymore, we sort of said, hey, this Internet thing, we think it's going to be big. And we started working on ideas for what we could do with the Internet. And we came up with this idea for remote ordering and printing and did that and ultimately sold the company. So we went through many iterations, but I would say two things. One is we were looking for problems to solve. We had some ideas.

We.

We started with a problem that obviously my brother was solving over and over and over again for customers, but we also had the advantage of being here. And who is it who says the future is here? It's just unevenly distributed. One of the advantages being in the Valley is We get to see the uneven distribution of the future and we get to see things like pre release versions of things and we get to understand things like Moore's Law and live in the world where people are walking around with ever more powerful devices and Internet connectivity. Except if you live in Woodside, which actually the Internet and self coverage sucks there always confuses me. But for the most part we get to really understand what's coming down the line. And I think the creativity is what problems can we solve knowing where this technology is going to be in a year or two and being able to to time it against that. So the one difference that I'll beg to differ with on this perfect.

That's what we disagree. It makes for a much more interesting.

Company, which is I actually work for a firm whose motto is Think big, right? And we say we're looking for big ideas. And one of the things about venture capital is venture capital is sort of a funding mechanism to fund really big things, right? And I won't go into it. If you want to learn all about that. There's a book by Brad Feld and Jason Matt Mendelssohn called Venture Deals Everything youg Want to Know or whatever it is. It's a great book and for anyone who wants to raise venture, go buy that book and read it and then you'll know everything. That would take me a few hours to tell you and I probably wouldn't cover it all. So go read that book. But anyway, venture is not for everyone. The vast majority of companies should not be venture backed companies because they're not intending to have multi hundred million dollar outcomes and be IPO'd and that sort of thing. That said, there are tremendously fantastic numbers of companies that are solving what some people might say is a small problem, right? I can't tell you how many people go out and say I have a problem. I'm going to create an app for my problem. Oh my God. Other people may have this problem and may use this app too. It might be a really niche problem, but if you're the person with that problem, it's a really awesome thing. And the thing I described to entrepreneurs is if you're an entrepreneur and you go out and you do that and you write an app and you can sell 250,000 a year of those apps and you charge a dollar for it, you are going to have an amazing life. If you raised a million dollars to do that, your life's going to suck. So I don't think that just because your idea isn't the biggest dent in the universe that it makes it a bad idea. I think number one is are you passionate about it? Is it worthy of your time? Is it another entrepreneur that I just adore? An entrepreneur now termed venture capitalist Mike Maples says, is it an important enough thing that it's worthy of all your time to do it? If it's not worthy of all your time to do it, well, then don't do it. But it might be worthy of all your time. Even if it isn't going to make venture capitalists a big bunch of money, it might solve a really important problem for a really important set of people that you care about, including maybe your own problems. And that I think is worthy. But just understand what it is, why you're doing it, and therefore how big is the market opportunity? How much money can you afford to put into it? Are you going to be suitable for venture investing? Don't have unrealistic expectations about what you're out to do if, if it isn't going to be sort of a venture backable ipoable company which is sort of, I feel like in Silicon Valley, it's almost like a disease. It's like the first thing you do is, well, the first thing you do is print the T shirt, right? You get the logo, print the T shirt and then you go to Sandhill. Because God forbid you can start a company without venture capital. And my brother and I bootstrapped our company for six years before we ever took in venture and we were profitable and at a $3 million run rate when we took in our first dime event venture capital. So now, yes, it took us six.

Years to get there.

Ancient times. But sometimes I will say to an entrepreneur, let's imagine venture didn't exist. How would you get this company going? Because that's how most of the world starts companies. It is not. I sound like the anti venture capitalist, but it really is. My favorite kind of funding is customer funding because here's why. It's non dilutive. You can sell stuff to customers and still own 100% of your company. That's super awesome. It is also validating, right? Product market fit. We all talk about trying to find product market fit. Well, the best way to find product market fit is make a product and then convince someone to pay you for it. That proves pretty much you've got product market fit, right? And so to me, this whole idea of going out and finding customers who are willing to work with you and pay for the work product you create is the purest form of Venture financing. And I strongly encourage everyone to think about that as your first way to make money, not your last way to make money.

Thought provoking. Good. So innovation, entrepreneurship clearly is not for the faint of heart. And we often celebrate success, but maybe don't often enough talk about failures. You've both told a little bit about lows, but could you give us an example of a time when things definitely did not go as planned and where if we had stopped at that moment, it would have been failure? What was it? What did you learn? How did you recover and go forward? Heidi, let's start with you. It could be either with Teammaker or what you've seen through through being an advisor for other companies.

Well, in venture, not all companies succeed, right? Surprise. Actually the statistics used to be that more than half of venture investments never return the capital invested. Right. And it's the outliers that make up and more for the difference, which is why people keep investing in venture. But unfortunately that means that on average, half of the entrepreneurs who see who get venture capital will not have a successful outcome. And so I think that for me, a lot of it is understanding the risks of the game you're going into, knowing that you're going to have to work your ass off, that this is not easy and that you will live and die and breathe it and be 24, 7 on it. And it is hard to find work life balance. As much as I have respect for people who start companies and have families and have spouses and all that sort of stuff, I didn't have any of those until way late in my entrepreneurial career. So I just, I don't know how people do that. It's hard, honestly, it's just hard to do. Doesn't mean you can't do it, but it's hard to do. I think that you, you have to have tenacity, right? You have to. And since we have a lot of women in the audience, I would generally say that there is subtle gender bias. You will have more doors slammed in your face, right? It's just the honest truth. You will. And my answer is, well, you're not going to change who you are. And I really believe that actually being a woman can be an advantage in many situations. But if somebody slams the door in your face, you have to be willing to sort of wipe the blood off your nose and go knock on the next door. And people who don't have that sort of drive to not fail and not take it perfect personally will just be beaten into submission. And so for me, that Tenacity, which is my word, as you know, I love the word tenacity because I really believe that those days are really dark and you have to get up the next day and say, I'm going to go make it through. Now. That was my life as an entrepreneur. Interestingly, my life as a venture capitalist is when things don't always work out. The thing that I think is really important to do is recognize reality and redefine what success is in that reality. And so, for example, there are a lot of companies in Silicon Valley that, well, here's my joke. I'll meet an entrepreneur and I'll say, hey, the great news is you've built a nice little $10 million company. The bad news is you blew through 50 million doing it. And there are those. Trust me, there are those. They're out there. And the reality is the CEOs, the VCs, are unhappy because they are not going to make money on that deal. The CE is coming, CEOs coming into work every day, and he or she knows they have this overhang that they're not going to be able to overcome, and they don't know what to do. But there's still money in the bank and customers are buying the product. So let's just pretend like that's not a problem until the money runs out. Or if you're, you know, the good news is if you're profitable, you can live forever. The bad news is if you're not profitable, the money will run out eventually and it will be bad. And so one of the things I try to do when I get involved in situations like this is go to all the stakeholders and say, let's redefine what success looks like. Right? Okay, maybe we don't get all our money back, but maybe eventually we get half our money back. And let's think about employees and let's think about customers, and let's think about the other stakeholders, and let's try to figure out if there is a win here that we can affect, even if it isn't the win we had all hoped it would be. And sometimes people, people are relieved to hear somebody talking like that. Sometimes people are insulted, Sometimes there isn't a win, sometimes it can't happen. For whatever reason, the structure's in place, that it just gets. It crushes under the weight of its own structure. Every situation is different. But the fundamental thing I would say and advise all of you is at the end of the day, structures and money and all that aside, we're all people and we're all. I know that sounds like super Hallmark Cardi, but we're all people and we all come into work every day with our goals and our aspirations, and our investors feel that way and our employees feel that way, and our customers feel that way. And if you can just sort of peel the onion in a problem situation and get to the root of it, I find very often you can find a solution, but it isn't. You know, you have to give up your fantasy that you're going to be that person, you know, on the, on the Forbes list or something. And unfortunately, that that's hard fantasy for people to give up.

Thank you, story the thing that everyone loves to talk about. So, so, so Cloudflare runs this large globally distributed network, and our job is to make the Internet faster and safer around the around the world. And we have a lot of customers, a lot of Internet properties that use Cloudflare for that. And back in 2012, one of our customers had a large attack and our network engineer went to fix the attack, pushed a rule to one of the routers at one of our points of presence, and there was a bug in our vendor software that not only took that point of presence offline, it took our whole network offline, which meant for 45 minutes at 2 in the morning on a Saturday night from 2:15 to 3:00am all of our customers, which was about 2 million websites at the time, or like 1.5, were offline, which is the exact opposite of making it faster and safer. Like they were not accessible. That was a really not fun time and very stressful. So what happened? The network engineer that pushed the rule immediately realized something was wrong and called for help through our escalation service. And the team jumped on. And while the technical people solved the problem, the support team all of a sudden got a flood of inquiries being like, my site's offline, my site's online. Twitter blew up. Because again, a million websites, a lot of site people noticed and everyone got on. Some people who live close to the office went into the office saying, well, people called in, I'm gonna answer the phones. I was on a ski trip to Snowbird with my husband. I was online doing support from literally 2 in the morning till 6am that morning. We all jumped in and rallied. By 45 minutes later, all of our network had been reset and all the sites were back online. We had replied to all of the customer service tickets and we had a post norm up by 6 in the morning. So four hours later, about exactly what happened and what we were doing so it wouldn't happen again. And it was really a very stressful situation and nothing to be proud of. I mean, we were just so embarrassed and whatnot now. And the question in these sorts of situation is, how much do you share? And we were very transparent. We told them exactly what went wrong. We showed them the exact rule that we had pushed to the router. It was a Juniper piece of software that had a bug in it, but it doesn't matter. It was still our problem. And what we were doing to put safeguards in so this wouldn't happen again. And we refunded a lot of our paying customers and we really did the right thing. And yes, we definitely lost customers during the. During the situation. I think we gained more customers because of the way we handled it. And so this is one of those things where. And that's just like one of many examples where when you're a leader and you're making these decisions, kind of coming back to, like, at the end of the day, your customers are people, your employees are people. And the person who pushed that rule still works at Cloudflare today. But we didn't throw them under the bus. It was, you know, they were trying to do the right thing and they asked for help right away and. And whatnot. It was a whole team effort. And so that's just one of many stories I have of where we failed. But I think just in life, it's like, what can you learn from this and make sure you don't happen, it doesn't happen again? And if you're always getting better, then you're in a good spot. And that's kind of how we think about it at Cloudflare.

Great story. Thank you. I'd like to read a quote from President Obama, who recently spoke at the Global Entrepreneurship Summit here at Stanford in June. He said, starting your business is not easy. You have to have access to capital. You have to meet the right people. You have to have mentors. And that can be especially difficult for women and young people and minorities and others who haven't always had access to the same networks and opportunities. You deserve the same chance to succeed as everybody else. We've got to make sure that everybody has a fair shot to reach their potential. We can't leave more than half the team on the bench. Reaction or comment.

Gee, that's a pretty true statement. Warren Buffet always says it's silly to ignore women because you give up half of the brain trust. And then he says, well, actually, it's more than half of the brain trust. One of the things I love about Warren Buffett, but no, I do think that, I think things are changing and I think that rooms like this are helping that happen and evidence that it is happening. I think we're seeing more and more female entrepreneurs. We have more women on the venture side. And so I think we are evening that it isn't just women, it's women, people of color, it's diversity at every level. I fundamentally believe in diversity. I think it creates stronger in biology. It's true too. Diversity creates stronger systems. So I'm a big believer in it. That said, Silicon Valley has been a machine that kicks out certain kinds of companies and certain kinds of entrepreneurs and they tend to come from, as I call it, from central casting. Right. I have my undergrad double E from MIT and then I work at Google as an engineer and then I got my MBA from pick one, Stanford, Harvard, Wharton. You know, there's five or so that you go get your MBA and then you come back and then you go to, you know, you become a product manager at, I don't know, pick your tech company and then you start your company and you know, we need to break that mold. And part of that is, and I think it's one of the things that's been very powerful about the Valley is a lot of the entrepreneurship was building the infrastructure, it was building the guts on which all of these great, for example, consumer facing apps get to live. Right. Most people who get on a website every day don't know that you exist.

No, they don't.

And nor do you want them to. Right. They only know when the wrong code gets pushed and then they can't get on their gaming site or their shopping or whatever, their news site or whatever it is. Right. And so I think one of the amazing things about. So I think that there is a reason why technology entrepreneurship was sort of dominated by a particular class of sort of a certain kind of education and a certain kind of job trajectory. But if you look at today, I think that because of actually things like what you've built, there are many entrepreneurs who don't have to know how the technology works in order to start. Really interesting companies that do really interesting things because they can rely on sort of AWS and mechanical Turks and whatever it is, they can go rely on various levels of abstraction that take the technology farther and farther away from the application usage that you have people who have brilliant ideas. And I used to say this even back in the day, I say, hey, I don't have to know how to build A car to get use of a car.

Right.

I can drive one, I can sit in one. A car can be really useful to me, even if I don't even have a driver's license. Right. So I think about entrepreneurship today, and I think more and more we're seeing people look at the technology and say, I can use this technology to solve a problem, but I don't have to be the technologist. And I think that's why we're seeing more and more diversity in the entrepreneurial pool, because nobody's got a lock on great problems to solve. Right. That is not the domain of purely engineers. I think we all can think of great problems that we need to solve. And more and more now, people are going out and feeling empowered to tackle those problems. And so I do see the tide shifting. It's going to take a while, and I think we all have to support each other in so doing, but I definitely see a shift.

Well, thank you for being a part of that tonight here at the museum. We're very committed to it. Michelle.

If I can do it, so can you. For a long time, I really did not want to participate in the Women in technology conversation because I was kind of a little bit. I didn't want to get put into a box of, oh, you're a woman founder. So I worked really hard and I really wouldn't even, like, acknowledge it. I wouldn't be part of the conversation. I wouldn't do any interviews about it. This was a big topic back in 2012 too. And I just, I just. Or 2011, 2012. And I just really didn't want to be part of the conversation. My personal opinion has changed a little bit more about having. Playing, like, having a voice and actually having an opinion, because I do think, like, the next generation of women coming up. I want them to have lots of. I want them to see lots of different paths for craft careers. And I really do think technology is a great industry. If you're at all interested to pursue, you get paid very well, you get to work with very smart people, and you really get to work on problems that impact people around the world. And that's pretty awesome. And so I want the next generation of boys and girls to be like, this is great. I want to be part of this because it's growing. This industry is not going away, and we just need of lots, lots of smart, ambitious people to be part of it. And again, diversity is critically important to making it work. But it's not just technology. Finance needs more diversity. There's lots of different industries that also need it. And so if you're a woman, you should absolutely stay in the workforce and pick the path you want to do. And if you're a man, you should actually make sure that you're like, is your team diverse? Are you encouraging women around you to take chances? Because part of the reason why I get to be where I am is because I have to. I have a business partner who thinks of me as Michelle and thinks that I can. It couldn't be happier. But who he picked as a business partner and the fact that he believes in me so much means that I can get up and do a good job at work. And I think really, really lucky about that. And same with my investors. Like, we've raised a lot of venture capitalists, and our investors, like, think that I'm a huge asset to the company. And now, because we've done so well, they're like, wait, I need to find more. Michelle's in some of my other companies. And again, I'm just one data point. And so where I think I need to do is win. So it's just another proof point of, like, this. You can also do this. But again, it's. It's lots of different sorts of things. So. But I absolutely think that diversity is the key to being strong founding teams. Strong teams, you get much different, better outcome as long as you share a same, a lot of trust and a shared vision, and then diversity is very powerful.

Thank you for. My time has gone quickly, but I want to close with asking you for advice. We have in the audience a lot of people who are mentors to entrepreneurs or aspiring entrepreneurs. And I asked each of you to choose a word or a couple of words for advice. And let's see what you had. I think, Heidi, you've already.

I hinted at this word.

Tell us your word in just a short explanation.

Why tenacity. I actually wrote this. We wrote these at an event here many months ago. But I really do believe when people say to me, if there is a word that you can apply to entrepreneurs, what is that word? And the thing I love about this word, anybody can develop this. I don't think you're actually necessarily born with tenacity. I do believe that anybody can actually teach themselves to have tenacity. And so for me, what it really means is what I said earlier, that idea that somebody tells you you're a dumbass or doesn't want to fund you or doesn't. I can't tell you. I had so many meetings with venture capitalists. Trying to raise money. Part of the reason we went six years without venture capital is because we tried to raise it and nobody gave it to us, which was actually a blessing in disguise, because if they had given us the money, they probably would have fired me in the first year or something for being an inexperienced CEO. But because we bootstrapped the company, I got to learn for six years, and then they actually liked me. But I really believe that you have to learn to just keep getting back up again and getting back up again and getting back up again. And if you do that, one of those times, somebody actually won't keep pushing you down. And so that's my word.

It's a good word.

Good word. All right.

Yes.

Are you ready for the reveal?

The big reveal. Mine. Sweat the details. So what do I mean by that? So often when you're building a company, you do things that aren't scalable up front so that they can be scalable tomorrow. And so I remember when we were first trying to get to our first company customers, it was so hard and that those we. I had a board, a cardboard. It looked like this, and I would color it in every day, like to try until. And when we got to 100 people, we were going to take everyone to Vegas. Our team, which there was five of us. And I remember, you know, those first hundred people, I did Skype calls every time somebody signed up. What did they learn? How do they. Why did they sign up? What did they like about it? And again, obviously, you know, today we're not doing Skype calls with every time a customer signs up, but early on, we did it for a long time because you learn and a survey is not the same as physically talking to somebody. Today, you know, our marketing team was trying to something of your own. I was like, well, have you looked at the list of customers who have signed up the last week and just gone through? They're like, well, there's, you know, 12,000 that signed up yesterday. I was like, 12,000 is not that many. You can go line by line and spot the patterns and they're like, that's not scalable. I was like, like, to get to scalable things, you have to sweat the details and do unscalable things at first. And it's these things where you do things that are unprofitable to make them profitable. And again, you can't write programs or abstract unless you get into the details. And so for the long time, I did customer support for Cloudflare. I don't anymore, but I still chime into a support channel once in a while, just because. Because it's like you want to be there in the details. And again, I think that's actually what I love most about my job. So sweat the details. It matters.

Great. Thank you. Well, let's get the audience into the conversation. There's a terrific group of questions here, and lots of people ask this. It's returning to the question about being a female entrepreneur, if you don't mind. In what specific areas do you think being a female entrepreneur has been an advantage or disadvantage? And how do women overcome those disadvantages together? Shel, let's start with you.

Advantage. So I definitely look different than other people on our team, on our management team, we have a couple women. And again, I think we bring a different point of view. We approach problems differently, we're more collaborative, all these different sorts of things, some of these generalizations. And again, I think when there are meetings, they always end up better when I'm around than when I'm not, because maybe the way you facilitate or whatnot. And so I play up those strengths, and I love doing those sorts of things. You know, early on, people said silly things to me, like, women don't believe in infrastructure. Like, that didn't feel so good. It makes you want to hide behind a rock, then it makes you want to throw a rock at them. And, you know, I. Jay, Shari Olal, who's the CEO of Arista, has this great quote last week. She said, you know, I don't walk around all day thinking I'm a woman because otherwise, like, I wouldn't ever get my job done. And I was like, yeah, that's exactly right. Like, I just, you know, I'm running a business. I'm an operator. And so I think it's good to make sure you're surrounded by good people. And I've done that. And when people don't treat me well, if I'm in a position to kind of, like, stand up for myself, I do. And sometimes I'm just like, okay, I just gotta spend less time with that person. But, like, focus on winning and the thing. People that I do want to spend time with, because it's just. It's much healthier and way more fun than just talking about all the things that I wish were different. And so. And so that's kind of how I think about it. There are great people out there. Find them.

Yes.

Yeah.

Yes.

Yeah. And I would definitely. I would lean on that and underscore it. I found in my life the easiest thing to do was be myself. Because it's easier to remember, right? If you're going in, trying to be someone else all day long, the amount of cycles you're spending doing that is really hard. And so if you're yourself, it's just a lot easier. But what I came to learn, and I think this is a female thing, women in particular want to be liked. And the problem is, if you spend all day trying to make everyone like you, you're not going to be very effective. And also in leadership roles, getting people to like you is I would like people to like me. But more than that, I would like people to respect me for being thoughtful and honest and making good decisions and being decisive and moving on with those decisions. And so that doesn't always make you popular, but I believe at the end it does make you respected. So I think that for me, especially in the early days, I would literally go to a meeting like this, There would be a hundred people in the room. I'd be the only woman. And you know, the interesting thing about that is I got really used to it because I was the only woman lots of times. And so I didn't think of myself as being different, Right. I was looking at a sea of men. So, you know that joke about, you know, if you look at a sea of people and you're the only one that's different, you just think you're the same because. Which is why my dog thinks she's a human, by the way she looks around like everyone else is human around here. I could sit on the sofa, too. So, you know, I really. I do believe that for me, on the one hand, I didn't think of myself as being any different. On the other hand, I think it gave me two advantages. One is I was different. So at the end of, you know, I went to Stanford Business School. It was in the early computer revolution days. People like Steve Jobs and Bill Gates and whatever would come and speak at our class. At the end, there would be 20 students gathered around to ask a question. I was the only woman. I always got to ask my question. So that was good, right? I also think in the early days of teammaker hiring, because I was gender blind, because I was one of those women things. I hired a lot of women. We were 60% female. At one point in our company's career, I think we were probably the only tech company that was 60% female. In fact, there was actually. I'll just tell you a story because it's such a funny story. We were at Macworld and we were doing our demos, right? And at some point, two guys were standing there and one of them said, well, I'm just here because this is the booth with all the babes, or this is the booth with all the women. And we immediately bristled, like those of us in the booth. And then we looked around and there were nine of us in the booth, nine employees. And we were all women. And so we were like, oh, my God, you know, we didn't even realize that we were an entirely female at that moment. All women in the booth, they thought we'd done it as a ploy. Not that we actually were just the women who worked for the company. So, you know, I do think that you can use it to your advantage, but I would say trust your gut. And if you're in an environment where you think you're not being supported, you're probably not being supported, because if you feel that way, it's probably true. So you need to go find the environment where you are supported. And luckily, there are lots of those environments today. And so don't I do. You know, sadly, I would say cultures are really hard to change. And there are certain cultures that are not evolved in this way. And if I were a woman today and I went to work for one of those cultures and I felt it, I would probably go find another culture because I think there are other cultures that realize it that empower women. And those companies are actually just going to do better, right. If you're already that company that understands that you're actually going to do better anyway. So you, if you're voting with your precious time to go work somewhere, go work somewhere that's already figured that out because I bet they're going to be more successful.

Great. Next question. What is the most exciting thing that you are working on right now?

Heidi? Well, gosh, you know, when you work with about a dozen companies, you can't pick any one to be your favorite, right? That's like naming your favorite child. So.

And your daughter's here.

And my daughter's here.

Yeah.

Yeah. We have a long, long running joke. I have two children. We have a long running joke about that. But I won't go into that here. But anyway, you know, I'm not going to answer in. I'm not going to answer with a specific company. I'm going to answer with what I love, what I'm most excited about about my work. The cool thing about being a venture capital is you don't actually have to have any good ideas. You just have to know it when you see it. And you have to get people with really good ideas to want to come talk to you about them. And the interesting both the beauty of. You saw that big number, right? DFJ currently has two funds we're investing out of. If we have $800 million, is not that a phenomenal thing? Well, guess what? On Sandhill Road, that's like table stakes, right? So the problem is lots of people have that kind of money in Silicon Valley, and money's the commodity. What we have to do is get entrepreneurs to want to come to us because of our reputation as being thoughtful people and entrepreneurially friendly and company builders and people are really willing to be helpful. And so what I love is that's stuff I really love to do. And I have a partnership where we all love to do that. So for me, the most exciting thing is every day I get to meet with people who are genuinely trying to change the world. And sometimes I even get to work with some of those awesome people, some of whom are in the room tonight. And that just makes you want to get up early every day.

Early every day.

Tgim.

Thank goodness. It's Monday, Monday, Monday, Monday.

Early Monday morning.

I see.

Although I'm saying that to a person who probably works all weekend, so.

But I love what I do. So, yeah.

Flex time. The 80 hours a week of your choice.

Michelle, how about for you, most exciting thing you're working on right now?

So we run this large, globally distributed network, and earlier Marguerite said, oh, H10 of the Internet traffic uses Cloudflare. And so the reason why that's important is one of the things what we get to do is we get to patch the Internet in real time. Okay. And so things that used to be hard, we make easy. And one of these whole threads are. So I can give you lots of examples. Let's say there's a new exploit that comes out. I don't know if you guys remember back when Heartbleed came out, we can basically patch that in real time for all of our customers, and then they can go and update their servers, but we basically are acting like a shield in the interim. And so we do this all the time. And so some of the things that we've been working on and we just announced this week are traffic that goes over HTTPs. So encryption traffic. This is a huge trend. And back in 2014, only half a percent of all Internet traffic went over HTTPs. Half a percent, that's nothing. And we've really helped to make that easier and a lot less expensive to employ it used to be very hard and expensive when we make it simple and cheaper. And today, and we're not the only reason, but we definitely play a big role in it. Today, 10% of the Internet goes over encrypted traffic. And so if you remember back to the Apple, FBI, whole iPhone case, it was all about encryption. Like encryption is a very hot topic and more and more of the Internet traffic is gonna go over encryption. In the behind the scenes there's a lot of very smart people, the people who are part of the crypto community, the cryptography where there's a lot of the underlying math and science that's making sure that all of the standards behind making sure encryption work are up to snuff. And so there's a whole new standard that's coming out called TLS 1.3 and it doesn't matter if you know what that is or not, but it's like the next standard. And so we made that available to all of our customers and we're the first on the market to do that. So now every single Cloudflare customer, if you're coming from certain browsers that support it, are now over the most secure crypto elliptic curves to ensure that you can be very high confidence around this encryption. And it's pretty amazing that we are first to market. We're a six year old company, we are a startup in San Francisco that most people have never heard of and that we're able to come to market and make the success. And again, we're patching the Internet in real time. And so that's just one example where. And so that's that. And we have a lot of other things coming out over the next couple weeks where it's just these examples of we're pushing these new standards, IPv6, TLS 1.3. Things that used to be so hard we make so simple and we're patching the training in real time. So those are the things that I'm most excited about.

Very exciting. Congratulations.

Thank you.

Next question. This is really about talent. I'll start with you, Michelle. What question qualities do you look for when you hire and then turn to you Heidi and say qualities that you look for when you invest. Maybe just choose two.

Two, sure. So definitely people who are curious. There's no way you can understand every single thing Cloudflare does today. Or I don't expect you to, but we're changing all the time. So I just want people who are curious, who want to learn and that will read the blog post and talk to Their colleagues tell me what you're working on. I love that. And I get to work, work with a lot of people who are very curious and I think that's why we all love working at Cloudflare. And the second is I always say like start, middle end, people who can get things done, there's Getting something to 80%, 90%, 98% done is like useless in a high growth company. You have to get over the finish line. And that is such a skill. Not everyone can do it. And so it's like, tell me example, where you had to to start a project and end a project and how long did that took you? And some people love that environment and some people don't. And again, so it's just start, middle end, just momentum. And so those are the two qualities that we really look for.

Fantastic.

I wish there was a perfect answer to the qualities and you could just have people fill out a form and just know who you were going to back. It doesn't work that way and everyone is different. But I would say that the things that typify, I think the entrepreneurs that we gravitate towards and the ones who've been successful, one is this voracious willingness to learn, right? A voracious curiosity, a willingness to learn. They listen to your comments, they come back the next day with more questions. They will challenge you if they don't agree, but they'll be thoughtful about it. So people who are constantly learning mode because one thing about entrepreneurship is very often you're making something out of nothing and you're making something new, which means there isn't a playbook for what you're doing. Therefore you have to be a voracious learner. And you know, the other thing is, in some cases it's really awesome to have subject matter experts, right? In some fields you need to. Most things are built on the shoulders of the things that came before them. And so the kind of entrepreneur who both has this curiosity and, and is willing to go try to start a company, but also has deep domain expertise in the field that they're trying to disrupt, it's really powerful. Right. And what's interesting about that is it isn't always that way. Like I say this and right away I think of 100 examples where that's not true, but I really believe that. And that's why entrepreneurship is a team sport. That's the other thing is there is no, with rare exception, there is no single entrepreneur you invest in. You're always looking at at least two, usually three people and Team dynamic is one of the most important things and team risk is one of the most important problems. So for us it is also not just looking at the individual, but when you're two entrepreneurs and you're in a meeting and you're pitching us, you know, we're watching the dynamic, right? We're watching if you're finishing each other's sentences or talking over each other, you're. And we're watching how the interplay goes and how the dynamic goes. One of the reasons why venture capitalists meet with teams over a period of time. I know when I was an entrepreneur, I'd walk in, I'd be just like, here's my plan, give me the check, right? Like, you view venture capitalists as like they're the ogre at the bridge and the pile of money is on the other side of the bridge. And if you say the secret word, the ogre stands away and you go get the pile of money. But from us, from the venture capitalist perspective, we're in a room with you and we're thinking, can I spend the next seven to 10 years of my life with you? Right? And oh, by the way, I'm not driving the bus. You're driving the bus. I'm sitting in the back of the bus you're gonna be driving. And I have to trust you because I'm a minority owner. You're the founder, you're the CEO. That's what we're thinking. And so a lot of times the reason we wanna have multiple meetings is we're trying to figure out, you know, can I work with you for many, many years? And I find that entrepreneurs that come in as very self serving, but entrepreneurs that come into the VC meeting also understanding that it's going to be a pressure filled, multi year relationship. That's what it's about. It's not just about saying the secret word to get the money.

Next question. Can you each talk a bit about how you built your networks and met allies to aid you in your journey? What about advice for new entrepreneurs who haven't yet established networks? How do you start?

So I came here with no network, so it's possible. And there's a couple things. So early on, there's so much, it's so much easier to get information today than it used to be. Like following people on Twitter, all these different folks are blogging about their experience. Quora. I mean, you can feel like you know people without ever meeting them. And in a way it's like I consume all of that and I still do Today, a big part of my job. Every night before I go to bed, I'm reading tech news, tech blogs, tech everything. Because, again, that's part of my job. And there's a lot of people who've gone out and built, made mistakes, who are blogging about it, writing about it, even if I don't know them. It's my job to be. To be consuming this. So the first is you can basically build a network without ever meeting anybody. That's that. And then as you start to make progress again, I think people are very open, willing to introduce you to people in the Valley, just even showing up. Even if you don't live here and you just come out for a week and you have one meeting, that person will introduce you to other folks. You'll meet people at the coffee shop, you'll run into somebody at the caltrain. Like, just even being physically here, as long as you can communicate, you will start to meet people, and it's up to you to nurture that. And whether you follow up with those people or add them on LinkedIn and just say, hey, I was thinking about you. Do you want to do this or that? And. And again, these things start to build on each other. And then once you start to gain traction with your business, if you can find a way for people to come to you, it's really, really powerful. And so everyone does that in different ways, whether you're part of something like a yc, yc. Again, you don't really have to be. You don't have to have a network to get into yc, and then once you're in, they bring a huge network to you. I wasn't part of a yc, but that's a great way to do it. Today or a lot of these other incubators. We launched at a competition called TechCrunch Disrupt, and a lot of people say, oh, my God, you guys did that? And I say, absolutely. And it was amazing because we launched this tech conference and no one knew who we were. We were so under the radar. And all of a sudden, everyone wanted to know who we were, because they're like, what? You've built this private beta. You actually have results, you have customers. I've never heard of you. And the job of every venture capital capitalist is to find out what's going on. And so all these associates were like, I don't know you, and I need to find, you know you. And so they were all of a sudden rushing to meet us and partners and people, users and people who wanted to work At Cloudflare, which was great. And so there's a couple different avenues, and it kind of depends on what your end result is. But. But the biggest thing is, like, following up with people is, is. It shocks me how many people just don't do that. And when you see someone, oh, Heidi, so great to see you. We met a year ago at the Computer History Museum on stage. Because Heidi meets a lot of people. She may not remember me. So every time I'm telling people, I just make it easy for them. And then eventually they're like, oh, yeah, now I know who you are. And so those are some of the things that I've done that have been really, really powerful. Great, simple, but easy.

Great tips.

I love your comment. I love the idea about at the end of every time you have a meeting, say, what's the one person you think I should meet? Yes, who's that one person? Would you be willing to make an intro? I do think this is such a cultural melting pot and such a place. How many of you were born here in the Valley? Yeah, I mean, not a whole lot. Right. And so most of the people here had to come here and build their networks from nothing. So I think we are a very open and generally helpful society. I also think we are that way because entrepreneurship is not a zero sum game. I think there are a lot of industries where it's I win, you lose. But I think we are the living example that if two people work together, both of them can succeed. You make the pie bigger. And so I do believe we're very, very open to that. I think that if, for me, the recommendation I would make to people is, if you're going to ask somebody for a favor, make it as explicit and easy to do as possible. I find a lot of times what people do is they ask me for a favor and they made it. They do it in a way that was easy for them to ask, instead of doing it in a way that makes it easy for me to do it. And so I mean, to give you a simple example, somebody will send me an email and they'll say, hi, I'm a student. I read your blog post, or I read something about you. Could I buy you a coffee and pick your brain about my career? I mean, literally, I've had people, students will say this to me. And by the way, I don't have a car, so would you mind driving over to Stanford to meet me for this coffee where I can ask you about my career? Right. And it's like, I can't do that. I don't have enough hours in the day but if someone were to send me an email and say like you, I studied English, I'm at Stanford Business school, I'm a second year, I'm doing this and that. And right now I can either go to work at Google or I can join my friend super startup. I would love to pick your brain for five minutes. Could I talk to you for five minutes? I mean that's a compelling. I'm going to want to talk to that person just to know how that story ends up.

Right?

Because it's a five minute investment, it's not a one hour plus drive time investment. So to me I think be really explicit in your requests. And the other thing I tell people, particularly those people starting out is put a LinkedIn profile in your signature or put something, something there that in one click I can find out a little bit about you. Don't send me five pages about you starting with where you were born and stuff like that. I mean that's the other thing I think is really interesting. People ask me for something and they'll send me a three page email and usually when I get a three page email the first thing I do is I look at the very last sentence because that's where the ask is right. But don't make me read three pages to get to the ask. I find that there are some ways that we can, like you said, there's so many ways to go find out about people and there's so many ways to present yourself in a really nice shorthand way that we're all used to looking at LinkedIn profiles. So that to me for example is kind of a no brainer is if you don't have a URL with a website where you're, you know, where it's your website or you're one of very few people on it, put your LinkedIn profile on there. It makes it easier for other people to get you.

What a fantastic way to end. Michelle and Heidi, on behalf of the exponential you thank center here at the Computer History Museum we will always remember this night. Sweat the details, tenacity and many other things along the way in the conversation. Thank you very much.

Thank you so much. Thank you, thank you.