Venture-Backed CEO: Lessons Learned Inside and Outside of Silicon Valley

I'm Promise Phelan. Good to see everyone here today. I'm a first here at Saster. I think I'm the first person to ever wear a dress at this conference because they just duct taped the mic to me. So that means if there's a wardrobe malfunction, I'm going to dive off the stage in that direction. So be prepared. It's great to be here. I'm really excited to be here today. So I. So my goal is to talk about what it's like to be a Valley CEO and to run a company outside the Valley. So I'll give you my perspective and then some insights. So who am I? I've run a couple high tech growth companies, mostly in the Valley and Serial Entrepreneur, mostly focusing on SaaS and tech companies in the HR SaaS marketing spaces. Love tough challenges of which running a company outside the Valley is one. And yeah, really excited to talk about what we do at Tap Influence as well. So where did I start? The Valley's a special place. I actually moved here, you know, just after business school. And I was part of an amazing company called BEA Systems, which I joined when it was about 100 people. And so incredible ride from 100 people to a multi billion dollar company, an IPO within a matter of years and then a sale to Oracle for about $8 billion. So that kicked off for me a career in tech and in leadership. So ever since 2002, I've been a CEO of different companies. Mine that I've started, but also ones that I've taken around as CEO. I've been a tech CEO since 2005, had three exits and one lesson which I'll talk about as well as we go through this. So I heard a Data point in 2015, that data point was that it was by Allen and company. They essentially said that because of the cost of living, because of what it takes to fuel the Valley, that more and more companies that get to scale are going to have more of their talent outside of the Valley. So imagine that half of the people in this room, maybe even two thirds over the next five years, you will have a third to more of your teams located outside of the city in which you live, outside the Silicon Valley. Minneapolis, Austin, Boulder, Dallas, Denver. And so I made a decision in 2015 after coming off of a great ride at a SaaS company here to go and become CEO of a company and based in Boulder, Colorado. Okay, they're over here. I'm a dive in your direction. If I have an email. Okay, that's a Friendly crowd. So I go from the Valley to Boulder and I was telling a friend of mine who was thinking about moving to Boulder, I said, literally, I was the only brown person in Boulder. I was talking to Brad Feld and I said, brad, I think there are three people in Boulder who are brown. He says, no, there's just two, but they're on shifts. And I was like, okay, that makes sense. So I leave the Valley to go figure out how to run a company outside. And I thought it was actually going to be easier in the Valley. We have this intense drive to build companies and run fast and billion dollars and all these things. As my head of marketing likes to say. I was like, hey Jesus, take the will, I'm going to chill here. That did not happen. And so I want to talk about my assumptions going into running a company outside the Valley, but also what that forced me to do as a CEO, but also as a leader. So in 2015, in April, I moved to Boulder to run this incredible company called Tap Influence. At the time it was a founder led company, small, slower growth, venture backed, but really needed to evolve from being a services company to being a software as a service company. Which as you know, is a massive undertaking, not only in building new technology and rebuilding old technology, but also bringing in a competency and a capability that didn't exist. And we had to do it in three quarters because there was a looming fundraise. So I went for this brilliant concept. Tap Influence is building the world's largest marketplace for brands to connect with influencers. And so if you don't know what an influencer is, an influencer is an empowered social consumer who can speak on behalf of brands. So we've got great customers and we went from a million dollar services company to a company that boasts today over eight figures in SaaS revenue and marketplace revenue. So we've hit a massive clip since then. But the idea was amazing. All my investors are non valley investors and at the time all of my employees were based in the Denver Boulder area. But I went for this brilliant billion dollar concept and I got a lot of lessons out of it. So you guys have probably seen on Instagram and YouTube and Facebook that influencers are changing the world. They are. So I had the opportunity at Tap to work in this incredible new space that's lit up, that's got influencers creating content for all different brands at the same time, figuring out how to take this idea, scale it and scale it under a very different business model. So we did that. So we go from a Smaller organization, expand, move out of Boulder to Denver. And then the lessons begin. So what I thought was going to happen was you come in, you talk about the billion dollar vision, you talk about the value of equity, everyone understands that. You bring in some blitzscaling, you bring in Scrum, and everyone kind of gets it. That wasn't what happened. The motivations of teams outside of the Valley, they're different, right? I mean, I don't know how many people are in the Midwest. Maybe I can see some hands. Anyone got company in the Midwest? Okay, right, right. It's different. People are motivated by family and by connection and by intimacy. Anyone? New York in the house? Right. They think the Valley's weak, they're over there, they'll get them. But people are motivated by different things. And so my blind focus on results and growth and this is all about your personal development. And we're going to be a billion dollar business that didn't work in Boulder. Didn't work. And so two years or a year and a half at least, figuring out how to go from not only a services business that was founder led, but go to one that has out of, out of Boulder, Denver investors who are expecting a high degree of return, change the business model, raised 14 million in the up round, like all of that, while also dealing with the fact that there was a culture clash between being a Valley CEO and now being a Boulder Denver CEO. So I won't say that I've nailed it if you came to see that there was drinks outside. But what I will tell you is that it forced me as a leader to really turn inward and think about what are the things that if I'm going to run a company, and we all will, that has employees outside of the Silicon Valley, outside of New York, outside of Boston, what do we have to know about ourselves, about the teams we're building and about the culture we're creating that will allow us to be effective outside of an area where everyone kind of thinks and feels and has similar experiences. Most of the CEOs I know and am close to have had an IPO or have had an exit, or have had this. But imagine going to a place where that isn't common and isn't as regular. So what I want to outline for you guys is what I did. So that's me. I look exhausted because that was right after I fundraised, so I probably was asleep during that 101. But I'm smiling and I think my hair is combed in that picture. But one of the things I said Is one of my lessons is who I hire as my leadership organization is critical to me regardless of where I am. And so the most important aspect of the people who lead with me is that they have one critical aspect, extreme ownership. Because regardless of where you are, people are motivated by owning and having an impact. So maybe it wasn't the Silicon Valley nature of having a leader, but it was having people who led with me who had that extreme ownership. I own it, I've got it, I'm making an impact. And that was their default. I think we've all been confused. Second lesson learned is that we've all been confused and conflated with the idea of what is actually culture. Well, if you're running a venture backed company and you just did a $50 million round, you can afford to have free lunches every day and to have all the accoutrements that come with the wealth of a bubble, right? But if you're working and you're running a company that is pushing to get to cash flow break even, or pushing to get to be cash flow positive, free lunch can't equal culture. So perks has to be different. So we built a framework on what culture means to us. And we start at the bottom, which is always having the resources to fund the business and the ideas, having transparency, focusing on decoding what works, building that into the business. So this is our structure for how we build culture at TAP versus that. It's all about the free perks, because that really isn't culture. So my head of marketing put the photo of the puppy. I think he was trying to tell me something about myself. It's cute and looks very sweet. So this is the intense part. So I'm running this company. We're growing and evolving, we're changing the business pretty significantly and also trying to build a culture that combines the intensity of the Valley, but with the intimacy of the flatirons. And so one of the things that was really important for me in this process was also managing myself. My network wasn't there in Boulder. I had to build a new one. And it was also a space where I was living about a mile from where I worked and focusing on not only building a business, being a CEO, but also changing the culture. And so for managing myself, it became about staying curious. I got into trail running. Boulder's amazing. You can ski there too. So skiing, but also staying uncomfortable. So I did personally a lot of work on, okay, what are the things that I personally want to develop and how do I develop my people and doing it In a way that I can't do here or that's not traditional to Silicon Valley, managing your board. So one of the things that I found interesting about my time in Silicon Valley, raising money and working with venture investors. I would say the average venture investor in the Valley is on probably eight to 10 boards, is probably meeting with several hundred companies per year that are prospective investments. Outside the Valley, it's very different. There's a lot less ego. Not that that's what the Valley is known for, but people are much more relationship based. And your average investor has about six to seven boards that he's on. So it's a different relationship where it's no ego, much more about relationship building. And there's a much bigger partnership between you and that investor. They've got more time. And so what I appreciate with a Valley investor or outside the Valley is the importance of having no egos in the boardroom, but also people who have the time and the focus and the ability to understand your business and to be helpful and additive, especially when you're going through tough spots, which I'm sure no one here has ever missed their number or ever had to go through a tough period. But that made a huge difference in our business, having that board that brought those lessons and brought the time and lack of ego. So this is one that I'm going to borrow from Tim Ferriss. So one of the things that I find with, with being a CEO and I heard backstage it's a lonely job, I think that's definitely something that we all can relate to for the CEOs in the room. And one of the things that you do when you go through a tough time as a CEO is you attempt to motivate yourself. How do I get my energy high? How do I stay excited? Does that relate to anyone? You guys are looking like I'm crazy. Ok, one person, thank you sir, for showing up today. Everyone else, but when you're a CEO, you've got to raise money, you've got internal issues, there's legal stuff going on. I'm not sure why it must be created by lawyers, but there's always something that's happening in this business that requires you to be at the top of your game. And so the mistake we make sometimes as CEOs, I believe, is to try to self motivate, pump ourselves up, get excited. I'm going to go and say and make this happen. I don't think that's sustainable. I don't think that's sustainable. I believe what you have to do as a CEO to stay motivated in tough situations is the exact opposite of that. I think it's not to be motivated. I think it's to be the opposite. So this is a quote from Zig Ziglar. It was character that got us out of bed, commitment that moved us to action and discipline that enabled us to follow through. And so I believe one of the things that we don't talk about is CEO as a profession and CEO as a set of disciplines that help us get better, but also helped us stay focused in light of challenges, issues, whatnot. So have you guys noticed I am not a white 27 year old male from Harvard? Okay, thank you. Thank you. Don't make me take this jacket off, because I'll do it. But one of the things that, just to get real here for a moment, I find being a female, being a woman, and being black, deliciously brown, as my husband likes to say, is that one of the challenges is no one who has gotten funded by this person has ever looked like you. Does that make sense? You're walking into a room to pitch someone, you're leading a company where no one who came before you in any way resembles you. And so I'm not the only one. If you're Asian, if you're older, if you come from a different background, if you're not a tech founder but you have an English major and you went to a state college, most of us don't fit the mold. And so what's interesting about that is that becomes a demotivator is you don't look like anyone that fits a pattern. And so when you meet with someone or you're pitching or you're building your business, you are fully aware that the person in front of you has never seen it and has to talk themselves into removing their own personal bias about what you look like or what you bring to the table. Now, I'm going a little off script here, so you need to prepare yourselves. But that's going to be true for most of the people that are going to be raising money over the next 20 years are running companies. Most of us will not look like Mark Zuckerberg. Most of us will not fit any pattern that people are used to. And so thank you. It's true. And you know, to go really off script here, that's a good thing, right? Because the people who are buying our products, the people who are using our stuff, they're women, they're in India, they're in China, they're in Europe, they're in all these different Places that are outside of this bubble that we've come to know and love. And I believe that it's incumbent upon all of us, even the people who are subject to bias, to first, get over it because it's happening and you can't change it. But secondly, understand that you can't motivate yourself out of it, but that you actually have to just have discipline in how you approach everything. And so my quote for myself coming out of two years of running a non value based company is, when the struggle is most real, the answer is not about motivation, but about discipline. So here's mine. I read a book a week, which I know sounds crazy, but a quest for self learning and self development is so essential. I heard a quote once that struggle comes from a focus on oneself, right? So don't struggle. So I read a book a week and I think I spent about $4,000 with Audible last year. So I continue to make Jeff Bezos money, but that allows me to do something number one, to codify every lesson rather than feeling like, oh, I'll give you guys a really interesting stat. Last year when I raised money in 2016, in April in Colorado, our fundraise, it was an up round. We quadrupled the valuation. It was 2/3 of all money raised in the Flatiron district. So that's basically Boulder and Denver. It was 2/3 of all venture capital raised. It's the largest African American female round. We had grown 300% and I had 40 negative Glassdoor reviews. So my valuation's doing this and my personal valuation's doing that. And so There are other CEOs that this has happened to. You don't have to raise your hand. I know who you are. But when that happens, you start to question yourself and you start to say, well, what have I done wrong? And then no one else in the room does this but me. But you beat yourself up about, okay, could I have been better? Are there things I could have done differently? Am I at the right CEO? Do they need to hire someone else to do this job? The answer is no. The answer is, you know, we are who we are. But part of the problem with being a CEO is you don't have time to self reflect. And I think that's one of the problems that keeps CEOs stuck and also makes the job suck is that you don't have time to think about the lesson. So I force myself to think about the lesson, so I codify. So one of the things I do every night is this is part of my Discipline is I do a one minute recording on my phone every night and reflect on what happened that day, who did I talk to, what did I learn, what were some interesting takeaways. So I force myself and then on every Sunday I go back and I listen to all six or all five and so it provides context. End of the year in December, I listen to them as a podcast series. So that's one. I don't make pros and cons lists anymore. Part of my discipline. If it requires a pro and con list, the answer is definitely fucking no, don't do it. Whatever it is, like, just the answer is absolutely no. I do morning pages. I'm not sure if anyone knows what that is, but basically every morning you get out of bed before you do anything, before you look at your phone, you just basically spend two minutes and you write notes. And that's where the best stuff comes from. Best ideas, best concepts, best thinking happens at that time. I also try to connect to other stories, like who, who has experienced this, what I'm going through, who's raising money, who's doing X, Y or Z, and connect to their story and understand that there are lessons in that. So my discipline is basically, you don't see anything in here which is sort of focusing on myself or ruminating or therapy because I can't afford it, but basically really thinking about that. Every experience that you have as a CEO is a career fulcrum and it's important not to ruminate or self flagellate, but really to learn from those experiences. And, and so whether you're outside the valley or inside the Valley, I think it's important to have that discipline. But it's also important to know that great CEOs need to be mobile. I want to someday be able to run a company in Paris. I speak no French, but I like the men. So it'll all work out. I want to be able to run a company in New York, I want to run a company in dc, go anywhere. And so that requires that we can't all expect that everyone shows up, acts like valley people or New York or wherever you're from, or even bolder. But the expectations, the culture, the requirements are going to all be different. And so I know that if you're running a startup or if you're a founder today, you're beating yourself about something that's not going right, you're running out of cash, you missed your quarter, you're going to miss next quarter. There's learnings, there's learnings in that and so rather than trying to motivate yourself or make yourself feel better, focus on discipline, focus on learning, codify lessons. So thank you.