Preparing for Black Swan Events. There Will Be A Few.

So when you have like the events as industry was like down, right?

Yeah.

I mean, like no one could do anything. And that was going on for like the entire year. You had to postpone even by like 18 months after.

Yeah, we lost $10 million.

Right. So how, as a leader, what helped you to recover from a disaster like that? I'm just curious to know, like, what was your mindset and what steps did you take?

Well, it's funny, if you really want to talk about it, you know, did you hear the HubSpot one? Were you here for this? It's okay. No. Well, so Brian Halligan, the co founders here, I mean, HubSpot's worth almost 20 billion. Brian, right after Covid drove, had a horrible snowmobile accident. Broke every bone in his body, almost lost him. And. And it's crazy. And you can watch the session later. It's great. I mean, he barely recovered. He looked. He's great now, but it was. It was a long roll back from falling off a big cliff on the snowmobile in the dark and had to be airlifted out. And I think he broke 40 bones or something. Terrible. And I asked them the question after that, like, it's a black. But from a corporate perspective, it's a Black Swan event. Right. It sounds crazy. And my experience in my career, every five to seven years, I've had a Black Swan event. And I asked them if there were others at HubSpot and interesting they didn't have another one. Right. But I can think back every four or five years, I can think of one. And if I wasn't tired, I actually wrote a tweet and I listed all of the Black Swan events I've had in my career. And they happen somewhat. They're unpredictable, but regularly on the four to six year cadence. And so when Covid hit and the night came that Santa Clara was shutting everything down and we had to cancel it two days before, the team was beyond upset. Right. I mean, I mean, as a leader, right. I mean, just action. And I was driving and pushing and pushing and we went. We had to shrink from three days to two days as speakers, cancel. And we had to do all these things. And we were down to like an afternoon event by the end. We had a core group of folks that still wanted to do it and we still would have done it. Right. And then the night before, I realized we had to call foul. Like it was. There was just no more way when this tweet went out that Santa Clara county was prohibiting any gathering even though there was no Covid really in the US Yet. Then I realized. And then that minute, I'd had Black Swan events before, right? I want to give you another story at the end. And I went to, you know, Amelia, who you met, who she was tougher head of. I mean, the team was devastated. And I just, okay, we're done. We sat down, and for five hours, until three in the morning, we just planned out our best responses. And the team's better than me, and they're great. But I had been through the Black Swan event, so immediately I went into Black Swan mode, right? I just. Okay, it happened. I was not expecting it to happen, but, boom, I know what you do. And you got to flip the plan, and you got to immediately be a leader in change. And I think if you ask, like, Puia, who's our number one sales rep, he's close. 28 million. He was. He's here. He's so great. I don't know if he's here right now, but he was just devastated. But he'd worked so hard, right? And he's like, I thought I was a crappy leader, but he was like, you were such a great leader through that because you were just. I don't know how you were so calm. But that's what happens when you've been through a couple. A couple Black Swan events, right? But related to that, there's an email. If I did, I put it. So I look for them now. And as a leader, as crazy as it sounds, I think you have to look for Black Swan events. I think you have to look for them because you'll start to see them. And like, In January of 2020, the CDC put out an email that said, Covid might be an issue for travel. And I wish I had it. I put on screen. I immediately forward it to Amelia, and I said, my literally emails is, this is probably our Black Swan event this year. Because I knew the signs. I'd felt it before. And every year for Saster, there's. Except for this year, this is our best year in terms of execution. But every other year for eight years, there was a little Black Swan event for us, right? Something blew up. You know, one year, the person that ran it forgot to reserve the venue. That was pretty bad. Oh, my God. Okay. Even this year, one of the big vendors for us quit three weeks ago. They quit three weeks ago. A key vendor that we've relied on for years, they just quit. They didn't want to do the work. Okay? So those things used to destroy us. We built redundancy. We Built resiliency. So the minute that vendor quit after four years, Ashley from Montgomery Entertainment Officer, she's one of the best that produced this. She just stepped up and Amelia stepped up and we fixed it, right? It wasn't easy, but kudos to her. And she's not hearing this. Hopefully she sees our my appreciation in the video. But so now I plan, I plan for them, right? And so I'm not saying you literally have to plan for a snowmobile accident or a pandemic, but you want to think what, what could really, what, what kind of things could screw this company up? What if the, what if the round doesn't happen? What if, what if my co founder quits? Like, like, for example, like someone on your executive team is going to quit that you don't expect. And when I do, I don't ask these questions of the CEOs anymore. But I used to in the early days, you watch the videos, I'd always ask like, was there a great VP that quit on you? And everyone has this story. Aaron Levy at Box had this story in one of the interviews I did with him is how their first VP of Enght, they would never recover, right? They lost their VP of Engine. He thought the world had ended and it probably had. And now I always plan for a VP to leave and like, you know, the ones that won't leave. But even then something could happen, right? Something in their life. And so that's one that every founder should plan for, which is that one of your most trusted teammates for some reason leaves you lose them. Like it could be a snowmobile accident for HubSpot. It could be a personal issue, it could be a home issue. It could be, you don't realize how stressed they are and they just quit to go on a walkabout. But that's one. If you plan for nothing else, plan on someone, a key right hand person that you would never think leaving, leave. And so have a calm plan. What would you do if they quit? How would you handle it? Think about it on a walk, when you're calm. So then when something like that hits, like losing 10 million, like I knew, I didn't know exactly what to do, but I knew immediately what to do. We called the lawyers, we called the people, we called the vendors, like the folks that do this AV stuff. This is a million and a half bucks, these lights. So the trucks had already started rolling from Texas. We immediately called them and saved about $700,000 because the trucks turned around. I mean that's a specific example. Not to a SaaS company. But think about people. Black Swan events, Team Black Swan events. Don't spend all your time on them. But if you're going to go long, like you're going to have a snowmobile accident or a global pandemic or friggin Twin Towers being hit by an airplane. I mean I've been doing startups long enough to remember the day when the Twin Towers went down, right? And almost too morbid to talk about in the afternoon. I can keep thinking of the 28 in 2000. I mean most of you weren't founders in 2008, 2009. That, that is, it was so bad in 2008 or nine I can't remember what. I'm sitting at an early SaaS, like corporate banking event at like pebble beach on a beautiful day having wine with like investment bankers or VCs and I get a call on my phone from our bank, Citibank. Greg, my banker for years through 2000, he's like Greg, how you doing? I'm at this event, but I love you. He's like, you gotta pull your money out of Citibank. I'm like what do you mean? Citibank's the largest bank in the world. He's like I think tomorrow Citibank's gonna fail. And Citibank it turned out, almost did fail. Like Lehman failed, Citibank almost failed. And I'm like Greg, where do I put my money? Like do I put it in Silicon Valley bank? What if they fail? And he didn't know, he's like at least take half your money out. Because everyone in the office is talking about we're going to do a press release tomorrow that Citibank is going to fail. Now there was a bailout that night and Citibank did not fail in the morning. But I'm just rambling through. Like I never as a founder thought my bank, my bank guy would call me and tell me to pull my money out. I didn't know where to, I didn't know in one the the banks were closed at 3pm where am I going to wire out half of my 8 million of venture capital? I don't know. But so I could think of more of those. My co founder at EchoSign Ten months in, my muse walked out the door and never came back. Never came back. I never fully recovered from that. And so anyhow rambly. But think about those. If you're going short, don't worry about this stuff, don't plan around it. If you're going short, don't worry. But if you think in terms of a decade, like Renee from build.com, calmly think about what you're going to do when these things happen. And then when they. When it happens once every five years, you'll, like, spring, spring into action like I did, right?