Entrepreneurs Must Know When to End It | Adam O’Donnell

Foreign. Welcome everybody to another episode of Bits and Bytes. This is Sam, not Gene here. Gene had to step away for a minute, so I'm playing a release picture today. But the show must go on and we have a pretty special guest. We say all our guests are special and then we say you're extra special, Adam, just to buff every speaker up. Right. But yeah, it's already working. We're joined by Adam o' Donnell of Zendesk. Do you want to just explain a little bit about your role at Zendesk? And you have, your tagline is long, so I want to read it properly. But let's start with Zendesk.

Yeah, absolutely. I mean it's. I'm Adam o', Donnell, I work for Zendesk running North American startup partnerships. So I. The sub organization under Zendesk is Zendesk for Startups. It's our startup initiatives, working with some, trying to help some of the best companies in the world, the best founders in the world. But I'm based here in San Francisco for sure.

And that's why we're talking is not because I had a huge complaint through Zendesk and, and that's how we met.

That's so good. But I'd take that. I would take that.

Yeah. But Adam, on top of that, you're also the main host at a podcast called the Top vc. What's that about?

That's right, yeah, absolutely. So, I mean, honestly, I've been an entrepreneur before. Two time founder, one failed and one had a soft landing. It was a meaningful enough exit for me and then joined a venture capital fund and my biggest misconceptions around funding were just like tremendous. And so for me, I started that podcast to break down and bridge the gap between what it really means to close around what VCs are actually looking for. And I do that by interviewing some of the top VCs in Silicon Valley and throughout the world, as well as some of the top founders who've raised a lot. I was speaking to the CEO of Dooley who's I think based in your area, but he's raised 105 million. I did an episode with him last week. So we had people on both sides talking about, you know, unconventional strategies and tactics like to get that round over subscribed by the best VCs possible.

That was Chris, right?

Yes.

Yeah, yeah, Chris. Chris was recently on our sister podcast, Founder Stories. So free plug for me if you. If you're listening to this and you want to learn about Founder Stories, go check out Founder Stories, our Podcast, you can find all that on LaunchAcademy CA, but that's where we specifically want to talk to founders. And well, it's in the name. So I think you guys are getting really good with those podcast names. You learn their founder stories. Yeah, that's hosted by our CEO Ray Wallia, so make sure you're checking that out as well, as well as, of course, the top vc. But I'm really excited and you can kind of tell that I'm kind of raring to get going because I think I to make the most out of our time here, and there's so many stories that we can kind of go through. But I want to start here because I think you dipped into it and I think you thought I wouldn't catch it, but I definitely did. When you started talking about how you started in startups, you had two startups. One failed, right. And then one, obviously you exited as well. But you always. I've seen you introduce yourself a couple times that way. You always start with the one that failed. So can you maybe, maybe just as a background, describe, like, what were those two things you built? What was the one that successfully went through? What does success mean? And what about the one that failed? Why do you consider that a failure?

That's so good. I love your attention to detail there. So for me, it was an incredible learning opportunity for both companies. The one that failed was called Buzz Report. And so the learning, the thing that the. My. I mean, I want. I just want to be able to, like, understand. I think we can learn almost more from the failures than we can from the successes, because I got really arrogant, right, With. With the. The success that I had actually before that. And it was, you know, once again, it was not. I'm not saying it was like a massive exit in terms of. On the scale that you would see in Silicon Valley, but it was meaningful enough for me to be able to move out to San Francisco and. And start another company. So it was. It was a really cool event. That was the first company called Last that I sold. The company is called Tech Track, the first one that I had the successful exit with, and it was merged and the shares were sold to a company called Lasso IO, which is still around. So that was just a really cool experience. I was young and I was like, oh, my gosh, I figured that all out. Then I go and try it again and didn't have the same experience. Super hard for me, just like straight up. And I think just being able to talk about that is really powerful because the more people I meet in Silicon Valley, the more you realize that everyone's had some kind of failure. And failure. You know, I want to say it on both sides because people say, like, oh, fail fast, all those things. Fail, fail, fail. And we'd like to say that it's not that bad of a thing, and it's not necessarily a bad or good thing. It's more of a. Like, we're ultimately still trying to succeed. Like, we don't want to take money and waste money. We're still trying to be successful. So the idea of failing is more just like, hey, let's be testing often and learn from those tests all the time. So ultimately, though, the second company did not work. And I learned a lot, you know, along that way. And I learned a lot of things that didn't work, and I learned a lot of things that actually worked out well for me in the first that were. That were things outside my control. I mean, it was very humbling, which was a great experience. But my biggest takeaway is if you do, if you focus on the core things of the business, then you're not. You're not guaranteed to have a successful business every time, like, period. But you're. You'll increase the likelihood of succeeding. And that, for me, has always been understanding your customers at a level deeper than they understand themselves. And you do that through a lot of different methods, which we can talk about. But if you do that consistently enough, it's all. It's just basically about, can you stay in the game long enough financially? And you're. You're gonna. You'll be able to. To figure it out from there. And sometimes ending the game, which I chose to do with the second company at that time that we did, was the right decision to go and learn from other people. And that's when I joined a venture capital fund based here in Silicon Valley. The fund is called Mighty Capital. And they had invested in Airbnb and Amplitude and some other great companies and just was able to learn an incredible amount. And I, And I would argue that if I do want to ever go a startup again, that experience actually accelerated my learning than if I just kept pushing and pushing and pushing on that company. So there is a component of choosing to end a company is almost just as important as continuing to go. And the problem is podcasts like this, we all say, hey, keep going, keep going, keep going. Because that's, you know, right before the breakthrough. But there are times where it's like, hey, stop. This is not. Don't, don't. Keep wasting your money.

Yeah, yeah, for sure. And if you're good with it, I'm happy to kind of expand on that a little bit. So I want to kind of paint that picture for listeners time. So as you talk about Buzz Report, this is after you've sold your first company, you've moved up to the Valley, you've made it, you're in the mecca of startups or what? How long did you actually spend on buzzer? What? Okay, what was it? And. And how long did you spend on it?

Yeah, so it's. It's a funny question to really determine the exact. Cause there was so many different iterations that happened because we had something going and then we just kept iterating and iterating when it wasn't working. So it was like, I'm never going to end this thing. That was my mindset. So I like tried. We tried different markets, different, like different versions of the product, even like completely different businesses and iterated around that. Cause that's what all the knowledge is telling you in Silicon Valley. And I still think that there's some good to that. But here's the long and short of that experience. We, the. In the beginning, we hit. We were able to sign up a million ARR in six months, and we started the product only three months before that. We signed up a lot of those customers before we even had a product. This was like the big win of that experience. And I'll tell you why it ended up failing in the end. But I think that the process is still valid because the reason it didn't work was outside of our control. And I'll share that. And it's actually pretty legitimate. It's happened to a lot of companies, but we picked an industry vertical, we picked higher education. And so we were. This was not a sexy industry, which we picked, you know, intentionally. We had some proximity around that. So I understood those people were already in that network with a previous company. So I was like, okay, just pick this. Like all the people in the world are coming after this industry. So we picked it and we picked a Persona in the university. The Persona that we picked was the head of business services at any university. And these people can be in charge of 50 up to 50 to even $100 million budgets at a university. So they're frequently overlooked in terms of their buying power. So we figured out that they had a conference that they all went to. They're all really close friends. And so we said, let's get in that conference. Let's start at the Very top who's on the board of that conference, let's become friends with them, let's go to the conference, let's invest some money to go there. And then we built relationships with those people. And then over the next month we use those relationships to get introduced throughout the whole organization. And during our research we were able to ask consistent questions to them. So examples of the questions that we were asking were around. It was really like three components of the question. And it doesn't always work linearly like this, but this is like essentially what we were trying to figure out is what, what does success look like for you and your job? What's the hardest part about achieving that success? And then finally, how are you actively paying to solve that problem in your role? So by doing that we were able to understand since we're interviewing all the same types of people, we're able to understand, okay, cool. We, we can see patterns emerging pretty quickly. And when you're tracking all your interviews, we're doing Google sheets at the time but doing it in air table super clean. You can get incredible data on like wow, we have a similar type of people who are all, all struggling with this same kind of thing. And oh, here's some similarities in their organization. Maybe for universities they're, you know, over 10,000 students. So, so larger mid sized university business officer is struggling with this specific type of thing. And that was able, that, that was just like incredible. And then also not just struggling with it, but they're paying to solve it. And if you're not paying to solve, sometimes, you know, it can just be your time. But if they don't have that component, then ignore it. We would ignore it completely. They're like, hey, this is a huge problem for me. Like great. How are you actually paying to solve it? And they don't have an answer. Great. What's the next biggest thing that you're actively trying to solve? How are you spending money on it? And that is the key to that was the difference between a lot of failed things that didn't work for us and the ones that did. So we eventually created this. We learned that they had a problem understanding what students were saying on social media at the time and about their, their programs. And this would blow up. This would create a real emotional pain for them because like the president of the university would hear a blow up on social media and then they would email them and say, what is this? Or a parent outside the organization and say, how come my students not getting addressed because they mentioned this. Or maybe there Was like a comment about suicide and they missed it and one of their students said it. So it was very emotional to them because they're like, oh my gosh, like I could lose my job. This could be really bad. So they're, they're paying consultants to try to help scan social media. They're hiring people to just start looking at social media like they're doing all these things. And so we said, wait, what if we just aggregated it all in a really custom way? There's a lot of great companies that were doing something similar, but they hadn't focused on this use case like hootsuite, Sprout Social, all that was existent. But we figured out these people better than anyone else in the world and we're able to get started and we had them sign. We had big universities all around the country and even in Canada signing up for a year contract before we built the system. So it was, it was pretty cool. I'm just sharing the story because we just had incredible success in getting to the millionaire signed up and all that. The long and short though, we ended up, it ended up failing because our data source sources got closed off to us and we were scanning, you know, the popular ones, Instagram, Facebook, Yik Yak was around at the time. And those as those got closed off from us on a legal perspective, it completely changed our ability to deliver value to our customers. So the process wasn't flawed. But you know, you got to look at all the surrounding and you don't want to be building a business on something where a couple sources could change your whole business.

Yeah, And I do remember, like, this is, this is a very long time ago, but when Hootsuite just started and this was 2011, 2012, and there was this whole concept of like, okay, well, you're basing it all on Twitter. That's what it was originally on, by the way. And it was like, okay, well what if Twitter changes their API? What if Twitter pulls the rug from underneath you? Like, why would I invest in a company that's just built on another platform? Right. And so, I mean, obviously they did it and they've done well and you know, they're one of Vancouver's success stories in terms of startups. Right. But those are definitely things to keep in mind. Especially I think there's a lot of people building on TikTok right now. Right. Same idea. Got it. To make sure you do it right.

That's so good. And VCs have gotten burned on this, so they're definitely like, I know it Mighty Capital without saying any details on which company. There was a burn situation on that. So like VCs are aware of this and we all need to be aware of it. It's not something that you can just like the problem is those kind of categorical, outside your control things. Like you could never forecast all of those, but at least you can learn from the ones that you've already seen.

For sure. For sure. And so kind of. So how long did that take? In the first year you guys hustled real hard. You went through the whole 1,000,000 ARR thing. How long before you start to see cracks in the armor?

So the cracks were on the exterior side and we could see the writing on the wall. We could see that it was getting hard for us to source the data. We could see that, you know, just that they were potentially going to be closing things down. And so that was what really put it for us. So we were like, we gotta, we gotta figure out other things to be doing and we'll keep the customers that we already have and we'll do the best we can. But we just, we couldn't think of a good solution to stay like to iterate on that. I mean, we looked at, you know, building like a next level hootsuite as an example of like a tangential job. Like hey, we'll just try to be like a social media all encompassing thing, that kind of stuff. But the thing that got me was that.