Steve Blank

Starting up requires both passion and a willingness to learn from mistakes, and gender balanced teams outperform imbalanced teams. Those were the messages from the two latest guests on Entrepreneurs are Everywhere, my radio show on Sirius XM Channel 111.

Anand Sanwal, co-founder and CEO of CB Insights; and Chris Shipley, executive producer of MIT’s Solve initiative, joined me in the studio to discuss the day-to-day chaos of building a company.

Listen to the full interviews by downloading them from SoundCloud here and here. (And download any of the past shows here.)

Clips from their interviews are below, but first a word about the show:

Entrepreneurs are Everywhere airs Thursdays at 1 pm Pacific, 4 pm Eastern on Sirius XM Channel 111. It follows the entrepreneurial journeys of founders sharing their experiences of what it takes to build a startup – from restaurants to rocket scientists, to online gifts to online groceries to entrepreneurial education and more.

The program examines the DNA of entrepreneurs: what makes them tick, how they came up with their ideas; and explore the habits that make them successful, and the highs, lows and pivots that pushed them forward.

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Women in startups: ‘It’s just business’
Chris Shipley is executive producer of MIT’s Solve initiative, through which business, technology, policy and philanthropic leaders work together to identify and solve to some of the world’s biggest challenges. A former tech journalist, Chris has built a career identifying innovative startups that create markets and drive positive and disruptive change. As the executive producer of the DEMO conference from 1996 to 2009, she helped more than 1,500 companies make their market debut.

Her 30-year career gives her keen insights to the startup world, how it works and what has changed.

Among the topics she addressed was gender bias in startups:
All the data point to the fact that gender balanced teams outperform imbalanced teams, whether they’re all men, or all women. …You have to be an idiot as an investor not to demand that the team be balanced because that will put your company in a better place.

I think it’s easy to say, “These are my friends from college, and we’re going to start a company.  … These are the women I was in a sorority with … We’ll start a company.” Neither of those teams is going to be optimized for success. When you bring different perspectives to bear, I think you start to have a better company, and a better culture.

… It’s (not just about gender but about perspective generally. I know that there are a lot of … “fill in the blank” and technology, or “fill in the blank” and startups. It’s women and technology, and women and venture, women and entrepreneurship. I think it’s just entrepreneurs. It’s just startups. It’s just business.

I have not made my way through 30 plus years in this industry by being a woman and an entrepreneur. I’ve done it by being an entrepreneur, by being a journalist, by trying to be a thought leader. I think that you just have to do it. I think that you have to demand, the respect, and part of that is by earning it, and working hard.

If you can’t hear the clip, click here.

Chris also discussed how the startup world has changed

Chris: There are cycles. We know about investment cycles. We know about waves of innovation around new markets. …. I think about the early ‘80s, and … all the entrepreneurs who now we think of as sort of tech legends, who were just making stuff. They were just taking advantage of an opportunity and trying to create a market. … (They were operating like) there’s an opportunity and there’s a market need. (So) let’s bring this thing to market, and we hope that we can build great companies and be successful at it. I think we went through a period, and maybe we’re emerging from it, thankfully, where entrepreneurship became a thing to do.

… there was a time over the last 10 years where I started to refer to the startup community as the startup industrial complex. They had created this whole infrastructure for the purpose of starting companies and supporting entrepreneurs and flipping businesses and creating wealth creation, really — a mechanism for wealth creation. … It felt like we were just creating companies for the purpose of flipping them and selling them and going off and doing it again, not for the purpose necessarily of really fulfilling a market need or a larger ambition.

Steve:    You know, I call this the Hollywood-ization of Silicon Valley. Hollywood in the beginning was a bunch of artists who wanted to make entertainment, and then the whole infrastructure of PR and hangers on and the New York money came in.

Chris:    It’s exactly like that. When we get a television show that parodies the Silicon Valley community, and we don’t even notice that that’s what’s happening often, then you kind of know you’re in trouble. …it has to be the easiest script to write you just sit in a café in Palo Alto and write down what you overhear.

If you can’t hear the clip, click here.

Eye on the Prize
Anand Sanwal is the co-founder and CEO of CB Insights, a National Science Foundation-backed data as a service company that provides data and insights to high-growth companies and investors. He got his start at Kozmo, a now-defunct startup that offered free one-hour delivery of DVDs, food and other goods, then went on to manage American Express’ $50 million Innovation Fund.

When Anand left American Express, he knew he wanted to start CB Insights and kept that goal top of mind.

I left Amex Jan. 1, 2008. … (and) the economy tanked right as soon as I started. In the beginning, it was really just do anything to make some money. We were doing advisory work for hedge funds … doing a survey of people in the credit card industry and we would sell this sentiment survey back to hedge funds (and) executives in credit card companies. We’d ask them, “What do you think about delinquencies? What’s going to happen to them?” or the key metrics in the credit card business.

… A lot of this, as I look back, was luck. The mortgage crisis had just happened. Mortgages were understood and credit cards became the next thing everybody was worried about.

There’s some serendipity in this (too). We met a few folks who were distributors of research to hedge funds. They said, “Hey, there’s this gap in the marketplace. Can you guys put something together?” …  We knew we had relationships in the credit card industry just given our background. A lot of ex-Amex people … (and people) at Citi … Barclays … Chase. We could call them up. The quid pro quo … was they got this data back.

… Everybody wanted to know, “Hey, what’s the general pulse of the industry? Where do people think certain key metrics are going?” We knew as we were building that business that it had a very short shelf life. It was basically crisis driven. … 

If they feel that we’ll give them any incremental advantage, they are willing to pay for it. We had credibility. We were the only folks with a product on the credit card space. The three of us who were doing it, we’re all ex-Amex and knew what we’re talking about. … It was like an advisory consulting business (but running such a business wasn’t the goal). … It just paid for a couple years. … That funded us.

 CB Insights was always the goal. … We said we think we can build the Bloomberg of the private company data space. … (So) from when I left Amex, that was the goal. It was just I had a desire to not fund the company by raising capital.

If you can’t hear the clip, click here.

Anand shared mistakes he made early on and what he learned from them. Among these was the realization that a formal onboarding process for new hires is critical.

Anand: Onboarding is when a new employee joins the team. It’s giving them their footing… Making sure they understand everything from where the snacks are, to how to order lunch, to who is on the team, and what’s the product, and all of that good stuff.

Steve:    There used to be this culture, it still is in a number of startups, is you throw them in the deep end of the pool, you assume you hired smart people and they’ll figure it out, right? So what was wrong with that?

Anand: …We hire really high achieving people, and they felt that they weren’t achieving anything. They were just sort of floundering around trying to figure out even the most basic things. The other thing is they didn’t feel like they were connected to anybody in the organization, and that’s hard to do on your own. Some people have that innate ability to go out and just meet people, but we needed to help foster that. The other thing was people didn’t even know our vision as a company, they didn’t know the product.

Steve:    But you’re sitting right next to them. Shouldn’t they have known that?

Anand: Yeah, I mean this was one of my naïve assumptions. I think what we saw was it just doesn’t happen. It actually leads to a sub-par sort of experience.  We spend a lot of time wooing people when we’re recruiting them right, and so we paint this great picture of what CB Insights would be like. Then when you actually showed up, to be very frank back in the day it was pretty bad the first day.  What we want, when you go home that first day to your significant other, your parents, or whoever, is to say, “Hey, I had a really good first day of work and I think I made the right decision.” I don’t think we were living up to that obligation initially. 

If you can’t hear the clip, click here.

Looking forward, looking back

Anand also explained how he learned that company culture doesn’t scale:

Anand: I think the biggest thing that I’ve learned over time is the importance of culture. I think I completely … I underestimated this. I thought culture, to be very frank, was just sort of corporate brainwashing. It was bullet points on the wall. … I thought it just kind of happened organically. You hire really smart people-

Steve:    And they sit next to each other. The osmosis would happen, right? …

Anand: Yeah. … culture does happen up to 10 maybe 15 people (but) it doesn’t scale. (While you’re) building the operating system … you will have a culture, it just won’t be the culture you want.

If you can’t hear the clip, click here.

And he discussed how he draws on the experience of working for American Express to foster innovation within CB Insights today.

Anand: The first thing we did was we codified what do we want the culture of CB Insights to be, what are the characteristics we want. But … just putting it to paper doesn’t really get you there. The next step is what are the actual actions and strategies and rituals and tactics that we’re going to have and how we’re going to reinforce those things.

We do something called “pitching demo day” every three months. Basically we take a few days off. Anybody in the team — it’s not just the developers but from the business, to marketing, to content — can propose an idea. Essentially, they have to kind of rally support from within the team and get other people to want to work on that project. For three days, we just take off and we work on these projects. The goal is that they’re experimental. They don’t have to go get folded into the product. They could just totally sort of die. But experimentation is a big part of sort of what we’re going after. …There’s a lot of good ideas that people on the team have. They get lost when we don’t give everybody a channel to surface them …

If you can’t hear the clip, click here.

Listen to Anand’s full interview here

If you can’t hear the clip, click here.

Chris spoke about watching startup history being made when she was a tech journalist:

Steve:    This was at the beginning of Microsoft’s ascent, right?

Chris:    This is 1984.

Steve:    1984, and so this was when the Apple Mac first came out, Microsoft starts dominating with Windows, and Steve Jobs hires John Sculley, and all these exciting things that we now look back as, I hate to admit, many decades. It was the beginning of the computer industry we kind of take for granted. You were right in the middle of it. Did you have a sense of history at the time?

Chris:    I knew that something was happening, just because there was so much activity and so many people coming into this thing and doing things for the first time. There were a lot of the first spreadsheets, and the first different software applications. It was clearly a sense of maybe an era beginning. I don’t think we ever talked about it in that way, but clearly a lot of pioneering activity was occurring. We were really fortunate to be there at that time.

Steve:    When you started writing about these technology companies, did the pattern kind of emerge about, “Oh, here’s another founder with a standard pitch telling you it’s the best whatever’? Did you kind of go, “Oh, that’s number 903,” after they left?

Chris: Early in my career my job as an editorial assistant was to do the charts in the buyer’s guides. Of course, then we had these long dot matrix printers with the green bar paper, and it would just spew out row after row. I think there were 68 companies at one point in the database buyer’s guide. You knew that all 68 of those were not going to make it, especially when all the features across the columns were very similar. You knew that there was a lot of attempt to be the one, and a lot of repetition there.

If you can’t hear the clip, click here.

And what the startup landscape was like back in those entrepreneurial salad days when she was with DEMO:

Chris:    DEMO is all about pattern matching. I’ve talked to about 1800 to 2000 companies a year… I always think the shorthand for Demo is, “I’ll look at all those start-ups so you don’t have to.” We would talk to all of these companies, these startups mostly, listen to their pitches, look at the products, and try to identify the outliers, the companies, the people that were doing something really different that I thought had the potential to have real impact, that would kind of push markets in new directions. … and use that pattern matching to kind of point the direction to where I thought markets might go. …

… There were companies and things that we would not know today — that are not even footnotes in the industry– that had a lot of influence, a lot of impact early on that didn’t quite get the credit in their moment. I think back to … ’97, and there was this company called Hot Office. …. One of the best companies you’ve never heard of. … Web platforms were very, very new at that time. The browsers were relatively primitive. Here’s a company that said, “A browser would be a great way to access a word processor or a spreadsheet. We’ll do office in a browser.”

We had people coming up and going, “Have you lost your mind? There’s no way we’ll ever use a web browser for software. It’s not intended for that.” All I could say was, “I think there’s something there.” It turns out there was. Hot Office wasn’t the company to make that big. The next year Salesforce comes along and then an army of them afterward, but a lot of really early pioneering things that I was fortunate enough to get to see and put on stage.

If you can’t hear the clip, click here.

Listen to Chris’ full interview here

If you can’t hear the clip, click here.

Listen to Anand’s and Chris’ full interviews by downloading them from SoundCloud here and here. (And download any of the past shows here.)

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Next week on Entrepreneurs are Everywhere: Frank Rimalovski, executive director of the NYU Entrepreneurial Institute and Frank Sculli, co-founder of BioDigital Inc.

Tune in next Thursday at 1 pm PT, 4 pm ET on Sirius XM Channel 111

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