Secrets from Silicon Valley

Lesson 5/14 - Glenn Kelman - How to Sell Your Company w/o Selling Your Soul

 

Secrets from Silicon Valley

 

Lesson Info

Glenn Kelman - How to Sell Your Company w/o Selling Your Soul

You talk about how to sell your company without selling your soul is a guy that we personally admire here. Creative, live. This is glenn kellman this's the clicker. All right, well, thanks for having me here. I wanted to talk to you today about how to sell your company without selling your soul, because I don't think it's a skill that comes naturally to many entrepreneurs. Most of us became entrepreneurs because we loved our product or we loved our service, and often we hailed from different nerdy backgrounds where we weren't always comfortable putting ourselves out there and talking to the world about what makes our product so great. And for me, it was actually an awkward, painful journey from being a bit more of a goof ball, that being somebody who has to give talks like this all the time. So what I wanted to do was to try to find a way we could strike a balance where you could still be a genuine person, a person who loves your product but is able to express that. And so this may hel...

p you talk to your customers. It may help you talk to your employees, and they help you talk to the press, but whether you like it or not, one of the key challenges you'll have is an entrepreneur is getting the word out. Making sure that everyone knows how great your company is and that can be a real slog if you don't believe in your company. But usually if you founded the company, if you run the company, here's, someone who just has to let the love show s so what I wanted to do today is just take you through the process that I went through to really become more comfortable as the chief spokesperson for the company. Because if you're going to start to run a company, you need to be able to do that. So the first thing we should really discusses what matters the most, and what matters most is just your customers and your products. I still remember when I was in a board meeting for plumtree software was a software company that I co founded. It ultimately went public. Oh, you want me to back up? Sorry. How is this? Okay, um so I started a software company with a few friends that ultimately went public we had on our board the legendary pierre lamont who founded national semiconductor. He invented the cray supercomputer. He was a frenchman who was known for being very direct. I think he wants told us that it was good that he left the uzi in the trunk of his car because they would have lined us all up and had a shot, but once a marketing person in the meeting said that we had to position ourselves in the market one way or another and he immediately corrected that person, he said something that I'll never forget, which is that you don't position yourself in the market, the market really positions you, so the first thing you have to get right is you have to build a product that customers really love, even though we're going to talk about how you promote that product in the world if you don't have a product that customers love, you shouldn't talk about it. I think the first mistake that many entrepreneurs make we want attention for our companies because we think it's our job to get that attention, but we do so before we've really made the product right now, sometimes it's unavoidable the truth is that even in telling this story, you'll sometimes hear that there's something wrong with it that as you describe that there's always a part that you like to skip over that you don't really want to talk about and that's usually a signal you just need to make the company better, but we won't talk a cz much about the product as I would in other talks just because everybody's got a different product, we're gonna talk about how once you have it right, you really tell the world about it so I did want to be direct about where I'm coming from as you may have surmised like many people in silicon valley I come from a fairly nerdy background I was the captain of my high school chess team I feel a little silly saying this now because I'm actually wearing foundation I can't wait to get a picture of myself with my kids just because I look better than I normally do but I think most of us really aren't natural salespeople and so what's going to be hard for you as an entrepreneur is to find a way to really the genuine I spent most of my life before becoming an entrepreneur slightly embarrassed of myself I always had hair growing out of my years I always felt like I wasn't wearing the right shirt I worried even once it started a company that my company was in this cool is other companies there's just this general feeling that you are a fraud and that's because you want people to believe in your company even though you go to bed and at night you secretly have your own doubts about whether it's a great company and the way that I ultimately solve that problem was by realizing that everybody's got these anxieties and as long as you tell the truth you are going to stand out in this baloney gorged world every journalist every customer has heard the same sales pitch over and over and over again. And I think, it's just better to say, well, I know there's all sorts of reasons this business might fail, but this is why I really believe in it. So if you can express your passion while still acknowledging all the frailties and risk that your company faces, I think it will actually be more genuine, and you'll stand out in a way that other people may not. So the first thing that I recommend is just finding a way to really be genuine, to still be yourself. And part of that I think will develop in you this toughness, this ability to be embarrassed without really being embarrassed. I mean, after all, we all have experiences that where we really put ourselves out there and just basically determine that it's impossible to die of shame. I grew up the son of aa a feminist who thought that I need to get in touch with with my feminine side. She sent me and my twin brother to an all girls camp. The white of you sent us home after about two days because we just couldn't cut it and knitting class or something like that, and my mother was furious at us. She sent us to an evangelical christian camp, even though we're jewish, we refused to go. Water skiing, because we first had to acknowledge jesus christ is our personal savior, she had to pick us up again, and basically, what we developed from those experiences was this absolute conviction that it is impossible for a human being to die of shame. And so now when you put yourself out there and you start a company, you have to remind yourself that listen, it may fail, you may put yourself out there, and it might not work out, but at the end of the day, if you are always honest about the risks, if you are always genuine about why you love the company, you really don't have anything to fear just because you have always told the truth. So the key thing, I think, is to make sure that the story you're telling is one that comes from yourself. So the first challenge that I had to address as the ceo of redfin was how we were going to make money. We had invented this website that put listings on a map. We were the first ones the highlight location, location, location for real estate consumers, but we didn't know how we're going to make money. One business model was to sell ads to traditional real estate agents, and the other business model was to be the real estate agent one was cool. One was not being a media company has very high profit margins silicon valley investors love it and allowed me to focus on what I really knew which was software but somehow I just couldn't really get excited about telling the world that I was going to be running an advertising site for traditional real estate agents because I'd actually bought a house and I thought there were so many ways that it could really be better and so I went and talked to this friend of mine matt bell and he was the head of sales for a big chunk of plumtree software so I thought he would tell me to do the thing that would make the most money I said listen, we could become a media company would be able to sell the company to another business it would be an easy way to make a few million dollars but I just have this feeling like we could actually be better real estate agents than traditional real estate agents and he had this answer that always stayed with me he was an ex football player he played football in college his hand was about the size of my head he put it on this little bony shoulder and he said glenn you were put on this earth to fucks with the order of things you should change the game you should change the whole game and become a real estate agent this made me so proud of redfin, and the first exercise that you need to go through is you need to have a product that you're really proud off so that you're selling something you really believe in. People have often asked me to introduce them to a journalist or give a pitch to a customer on their behalf, and what's hard for me is that I'm not a hired gun, and if you're a true entrepreneur, you won't be either. You can't just give a pitch just because someone's asked you to do it. You can't just give a pitch because someone's paying you a salary, you have to find a product you believe in, and part of finding a product you believe in is making that product. I don't think that you can really be an effective marketer if you're not also the one making the products, so when I meet folks who are publicists or salesman who can't really change the product, I know that they don't have a deep personal sense of conviction, which is what I think everyone is listening for. Often, you'll be told, when you're running your own business, that before you talk to a customer, you need to make sure that you've got a salesman there, or before you talk to that journalist, you need to make sure you have someone from pr there and those people will coach you in print and prod you in different ways, but I think what you really want to do is highlight the passion. You have the product and explain why you believe in it. By the way, I should pause. Do you have any questions? I know that this should be an interactive format, but I've never done it before, so I want to make sure that I get it right. I have a little question here. Uh, the guy on your slide here was I'm curious about the image. Oh, well, this is matt. This is the person whose hand is the size of my head, who put his hand on my shoulder and told me to change the game and really it's just a prompt for me to tell the story that I wanted to tell which is just about how I came to find a model for our business that I really believed in, um and actually usually the way I tell the story of the business is by telling this story of our conversation because most people are not going to remember a logical argument when you try to explain that perhaps becoming the real estate agent instead of being a media site for real estate agents has a larger total addressable. Market and that has a more defensible business position people just aren't going to remember but if you try to convince them that it's in your nature to be disruptive or that you just wanted to do the right thing or that this is what you always wanted to do and someone you least expected to gave you permission to do it that's a story that I think people remember and so in general I sometimes hear entrepreneurs make the case for their business using abstractions or using numbers, and I think you do have to be able to quantify how much money you're going to make and things like that but it also seems important to be able to tell the personal story about why you care about the business because if you don't care about it, no one else will there was a time actually I was really nervous I was going to go on the today show um and for whatever reason, I just was petrified I was told that julia roberts was going to be on right before me on dh I do have a thing for julia roberts second only to my wife. My wife actually flew out because she heard that julia roberts is going to go out before me not to meet julia roberts but to make sure that I didn't meet julia roberts but before one of our board members found this consultant to talk to me on the board member said I'm worried about you you should be worried about yourself I want you to talk to this consultant I was coming back from new haven and I called him on a cell phone and I told him listen I'm just petrified there was this terrible ice storm so my hand was like freezing off while I was talking to this guy and he just went off and the one thing that he really convinced me up is that people are going to be walking by the tv screen and they're going to try to figure out if you're really interested in what you're saying and if you don't look interested you can't expect them to look interested so actually I talked about the most deadly dull topic of the world about housing prices in america when they were absolutely false but the whole time I looked like I had a cattle prod put like I just looked absolutely exhilarated mostly because I knew that julia roberts was somewhere in my vicinity but I think that you want to try telling a story and you want to have some passion that story and the only place that can come from is the original reason you started the business of the original reason you wanted to run the business and the only way you can do that is if you make the product your own that's a great sort of follow on to some of stuff that cresskill bo was talking about earlier today about leading a passion filled life and trying to construct meeting in everything that you do every day and you spend more of your waking hours at work than anything else, and if you're not working on something that you're passionate about, that you can stand up an advocate with a a full throated endorsement, you know, there's some questions there about you know, is that is that really what you want to be doing? Yeah, well, I think the emotional challenge of being I don't know if I should look at you, are them what's away? It's a weird thing, I think we'll go everywhere, it feels natural. The challenge that I have is that aa lot of entrepreneurs are genuinely emotional people if you're a passion driven person, that sounds like a good thing until someone's on the wrong side of the wrong passion. And the lesson that I learned from all of this came when someone called and gave me some bad news about something completely unrelated. I think my bicycle hadn't been repaired correctly, and I was walking into an all hands meeting and I had my cell phone too, my face, and then I hung up the phone, I sort of scout, and then I started the meeting and I thought it was fine meeting, but all everyone wanted to know was, who was in trouble? What was wrong? Is everything going to be all right? And this is at a time usually in redfin's history when everything wasn't all right. Where? There's something wrong? So if anyone ever saw me where I looked a little concerned, I felt like it really created a ripple in the business. So the most important quality you have is an entrepreneur, it's, just the quality of your energy. I think if you really believe in your company, there's always this temptation that you can work not just until midnight, but until what am and then until two a m used to be a scientific experiment for me to see how little sleep I could get. And then I think I read an article about jeff bezos that he had this contract I don't even know if it's true, but supposedly has in his contract that he has to get eight hours of sleep. I never quite managed that, but I do feel that when I bring the right energy into the office that's the most important thing that I can do because if I'm not excited about it, theo employees are going to be excited about it. And then we're not gonna have a business that's going to be able to do great things I have so many follow up questions for that I think the audience does to question is at the leader of an organization this is what I'm facing right now is that what you're saying? I'm keenly aware when my energy is so often it could be toxic to my team that yet I can't really it's like a parent that doesn't want to put their emotions on their child. How do you find other people to boost your energy when it's low so that your only communicating positive energy to your team and but then still be vulnerable with your team? I let them know what you're going through at the leader wow that's an impossible question answer, I think that's a world war that's a great question, there's, a world war two general who told his lieutenants, my job is not to motivate you are leaders if you have a motivation problem, you shouldn't be in command, and so I would never tell someone that I don't believe in redfin because if I stopped believing in redfin, I would just quit on def you do have that level of anxiety, I just don't think you can share it with the team, what I do think you can do is say here the problems that we need to solve now when I get into an emotional tizzy, which everybody does, I don't pretend to be better than anyone in fact, I think I'm worse I just try to be a spectator to my own thoughts sometimes I call my wife and she will literally say get out of the building and I say but I have three meetings I you know, I'm this big shot you don't realize how important I am and she'll say I know exactly how important you are and which isn't that important you need to get out of the building when you think that you are still just being quiet or listening, but you don't seem enthusiastic and engaged if you're not sort of conveying some form of love, people will feel that they are more sensitive to how you feel then to what you think they remember mohr how you make them feel then what you tell them and so my number one challenge is to make sure that I'm always conveying that emotion to people that I make them want to work harder because I believe in them and they believe in me so often that's just a editorial process of figuring out when I can be the ceo I need to be and taking myself out of the situation when I can't and I think I've learned a lot I have a two year old in a four year old and they get absolutely despondent about the silliest things and I just say, oh my gosh, you're just tired, you're just hungry there are times when I need to put a pacifier in my own mouth and just say you're not really upset about missing this number this month you're upset because you're exhausted and so I just try to be much more deliberate about having a really good energy level. The back side of that is I think many people feel like it's the ceo's job to deliver only good news, which I totally disagree about I mean, take the extreme example saddam hussein ran iraq all of his generals thought they didn't really have to fight because he had nuclear weapons he lied so effectively about it that no one could really address the real problem, which is they were about to get their butt kicked and in the same way you just have to say, listen here's, the problem it's a big problem and the on ly thing you need to say at the end of it is but I know we can solve it I don't know how yet, but I know we can solve it it's a bit of a nuts and bolts question I'm just curious as to how you handle the licensing part of being a real estate agent and wretched and how does that work? We hire licence real estate agents um so we just had to change your identity we used to be just a software company and now mostly employees are actually real estate agent so I wanted to tell you another story about how to be genuine so when we had the launch redfin we actually somehow got a meeting with the new york times this is damon darlin who edits the new york times technology section actually he just moved on and the way I got his email address was I just read his stories and at the bottom of them they're often email addresses and I sent him a note we got this media couldn't believe it I was incredibly excited about it so I flew down that morning to see him and of course I had a six am flight and I woke up late um uh oh I don't know if I'm gonna make my flight I started to worry about it and then a moment later oh my god I'm going to miss it so I jump in my car I fire it up I come flying onto this freeway exit I can't hold the curve this guy who has stolen about fifty bicycles in a van with no windows slams into the back of my car and smashes it to smithereens and I'm still trying to drive it but I could like see the pavement the car and he's like looking at me like oh my god oh my god oh my god so we pull over and I like whip out my wallet and I have all this money in it on by say dude, I will give you as much money as you want here if we don't call the cops and then I see that he's got all these bikes in the back and he's like I am totally cool with that sweet it so then I like drive off like fred flintstone in this car where I can see the road which is freaking me out and I get to the airport and I think I could still make my flight but somehow I've left my I d in my computer bag and not in my wallet I don't know what it was doing in there but the whole trunk was smashed and I couldn't get to my computer bag and I couldn't get my idea which man I couldn't get on the flight and then I borrowed a crowbar from a taxicab driver and he and all of his friends sipped coffee and watch me beat this car to smithereens and then I wept and drove my flintstone car home and then I laid down face down on my bed I told my wife oh my god we could have gotten in the new york times but I blew it I totaled a car and I paid off a bike thief on then I borrowed a crowbar and I don't know what to do with myself we could have been famous and her advice to me was you need to call this guy you can't lie and say that your car got a flat and that you're not going to be able to meet make the meeting you need to tell him everything because that's the on ly way he will believe you and so we agreed on that and then she said leave out the part about how you started beating your car with the crowbar because it makes you sound too crazy but leave the rest because I don't want him to be scared to beat you and so I met damon my call damon and I said listen I'm the dude you're supposed to me I know that you probably regret even agreeing to the meeting but I totaled the car trying to make a flight because I woke up too late about a crowbar paid off this guy and he started laughing and he said just just catch the next flight and he said are you at the airport now and I said no I'm I'm at my house and he said why and I said well because I had the life face down for a while just to get over the fact that I had made my flight and then to get the guts to call you and then he's like all right, we'll do the meeting this afternoon take a bus catch a flight on come meet me and so I went to meet him and he talked to me about whether we could really reinvent real estate that's the premise of redfin we wanted to change the way people buy and sell homes and he asked me what I knew about being a real estate agent if I was a licensed real estate agent and I said no and then he talked about whether silicon valley investors would ever get behind a company that wasn't purely virtual and I said I don't know but I think they should and as we were getting into the elevator as I was getting into the elevator, he said, well, do you think you're going to succeed? And then how about I put my hand in the elevator and I said, well, it's sort of like that penguin the first one who jumps into the water sometimes he gets all the fish and sometimes he gets eaten by a shark and then he laughed and that was sort of the lead into a story you can still look it up, but I think what he appreciated is that almost everybody he talks to says there's absolutely no chance of failure but the hardest thing in the world to do is to say, well, of course there's a chance of failure this is a really impossible thing to do but it's worth doing and I believe we can do it if you say that you believe you can acknowledge all sorts of anxieties about it as long as you close with that and if your genuine when everyone else isn't, I think it really helps you stand out, so I'm gonna come back to that theme over and over again today because let's face it, you probably are running some fly by night start up where you try to be cooler and look more professional that you are. I mean, I'm wearing my best shirt right now. You should see the way I normally look, and I think if you're just a little more direct about that, actually people love to hear that story. The fundamental story of american business is of nothing ventured, nothing gained, and when you take all the risk and all the drama and all the emotion out of that story, you don't have a story anymore. One so that's, my challenge to you is to think about the stories that you can tell instead of just the arguments that you can make and that's why I wanted to highlight steve jobs, he actually was the one who gave me permission to do this. I just saw this commencement speech on the web where he started with three stories, I just have three stories, and I'll be damned if I was gonna stop that youtube video before I heard the third story everybody wants to hear about what happens next and I used to when I worked at plumtree this enterprise software company I used to go over the features and speeds and feeds of the product and then I came back to the original reason that I started the company why I believed in the company and whenever I did that if I were talking to a customer if are talking tio an employee that was the on ly thing they ever remembered and what's amazing to me is that when I ask people to give me the pitch for their company it's often just dreadful and then I say all right dude now what's the real reason you did this now I got sort of a funny story and then I always say the same thing why don't you just tell that when I asked for the pitch just tell the story that you want to tell because that's what people want to hear about especially if they're talking to the founder or the ceo of the company they want to hear about why you believe even if you bought the company you could be like that guy who said I believed in this hair replacement product so much I bought the company or is it a shaver I can't remember anyway you can always sort of make the case why you believed in it ok the other thing that I think you want to do when you tell stories is tell of values driven story. Um, this is sort of hard to explain, but most people tell a story of their company like this. It is the narrative of a hockey stick. It is the biography of a steam engine. It is a company that has never had a moment of doubt. We always been successful. How are things going great, by the way, if you run a company, don't you hate it when people ask you at a party? So how are things at redfin? Because you always feel totally fake, would you say firm tastic? And then when you say, well, actually, you know, there are some things that I wish could be better and then you know, why didn't be more positive, but most people don't have that anxiety. They just say everything is going great, and if you tell the employees that story that the reason you should work here is because we are going to kill it. I think you set yourself up to really have loyalty problems later on to really have credibility problems later on, because every business has ups and downs, and the fundamental story you want to say is, listen redfin is going to have some ups and downs, the real estate market is going to have some ups and downs were going to make some mistakes, they're going to be setbacks, but fundamentally, this is a worthwhile thing to do because we are doing the right thing for our customer. So the person pictured here is adam winer he's, one of the executives at redfin, and I wanted to tell you a story about one of the downs because it became a defining story for the company. So in two thousand eight, we had just gotten started, and there was this huge real estate crash. We told everyone they were the greatest idea in the history of capitalism and also that we were going to treat our employees like family, which was right before we laid off twenty percent of the employees. It was terrible if you are a passion driven business and you suddenly have to treat people like economic assets, you feel like a hypocrite and people will treat you like a hypocrite, and you just have to own up to the fact that you made a mistake so after that, we really needed to rally the troops together, and we told everyone that if we can hit this revenue target, we're going to pay a bonus, but if we don't, we're not. We missed it the first quarter, the next quarter, we were very close to hitting it. We actually made it by something like one hundred bucks, no lie um and we were so relieved, but then it turned out that another real estate agent had overpaid us. It was legal, she wrote into the contract the wrong amount that we were due and she'd overpaid us and she overpaid us by several hundred dollars. And so we all got in this tiny little room, and it was sweaty and gross, and we argued about it for about an hour, and I was just pulling on my chin the whole time because I was wondering, who am I to deny the employees their bonus? Because I want to get on my high horse and call a real estate agent back and give her three hundred bucks, and then someone else was, say, it's legal, she screwed up. We're not breaking the law take the money and run when adam hadn't said anything the entire time yet at the end, he said, one of our values is that we always do the right thing and you know what the right thing to do is we've all known it for forty five minutes call her back and then walk out and tell the company that we lived by our values and I felt all this way released from because people want to do the right thing, but in business, you're supposed to maximize profit at all times you don't feel permitted to do the right thing, but suddenly I felt liberated to do what I've always wanted to do, and it was because of him. And so we told the company that now actually it's a long story, the real estate, and I think it moved back to the philippines or something we tried to call her brokerage and say that we're giving you money. Why won't you take it? At some point, I felt like a nigerian, our fake nigerian spammer were like emailing them say, I want to give you one hundred dollars, please their light stop bothers, and we've paid the bonus, but it's a story that we tell the company over and over again because everybody knew that at one point we'd said, no, we're not going to pay the bonus, and everybody knew that what really defined the company wasn't commercial success but was actually the's values. And once you are values driven business instead of a commercially driven business, you actually make more money. But you also have people who stick with you through the highs and the lows people always ask me, aren't you worried now that real estate is back that all your agents will quit? Absolutely not because they joined for the right reason they stay for the right reason one of the things that's really surprised me about the business is how much our stories define us. I used to think that a story that I told about redfin expressed who we were um but actually the strange thing is is it goes the other way to I'm now talked about it parties is oh this is glenn he's the real estate guy so whatever story you tell about yourself kind of takes on a life of its own and I know this sounds silly but I wish that I had been more careful with that at the beginning I thought that I could tell a powerful story and then take it back and say oh well now I want to tell you a different story about myself but people really remember the stories that you tell and they come to define you um the example that comes to mind is I was actually on sixty minutes I was on sixty minutes for about ten minutes maybe five years ago and the entire real estate industry will never let me forget that I was in this tiny little room with leslie stahl and her producer and about fifteen camera people I was told that I was going to be the good guy because they were wiping my brow between takes and they said the bad guy we just let him sweat but they had me do one take after another, where they asked me if I thought what I thought of the real estate industry, and I just got frustrated and realized that it was, like just shooting an episode of friends where they just have you say the same thing over and over again, to see which time you say it best. And so I looked at the producer, and I said, this keeps asking me the same question, and leslie sort of just said to rich, don't coach of on the answer no, tell me, what's wrong with the real estate in the streets, like it's, the most screwed up industry in america, everything's wrong with it on, you know, when I'm buried their most real estate agents will remember that quote more than anything else. So I think you just want to make sure that that you have a story, you're really going to be proud of. The other thing that's important is that when you tell stories, some of the stories, we're naturally going to be personal, because you're the entrepreneur, you're the sea, you know, you're the founder, whatever you may be, but ultimately you want a story that's, not just about yourself, so this is a picture of mohammed ali, who composed perhaps the shortest poem in the history of the english language I don't know how it could be shorter but when he was in the depths of his parking sony in catatonia I think he spoke at emory or some university like that and his entire commencement speech consisted of him sort of putting his hands on his chest and saying mitt and then he sort of put his hands out and he said we and that is the essential story that you're telling everyone s o if every story is about yourself and it's not about adam winer steve jobs or mohammed ali I think that that can really be counterproductive and if your company's succeeds there's a natural star making apparatus the media wants to believe that everything that's great about redfin comes for me probably everything bad about redfin comes for me but the truth is that we're a collection of people and so when you have a chance to be photographed you could be photographed alone or with your team when you have a chance to talk to the employees you could give the entire talk or you could do it with your team and the more people who are telling your story the more invested they become in that story and the more folks will believe in it so no one is ever going to tell the story better than the founder of the company or better than the ceo of the company you will tend to believe that particularly if you are one of those people but actually I think having a story that comes from different people and involves other people is a better way to tell your story you'll find that it just has more residue it's for people when it's about we instead of me do you have any questions before I talk about the next line? I just want to chime in and say that the internet is loving your style, your speaking and what you're talking about we have feedback that seventeen brainy brainiac says stories are useful for just about every social situation maxi from texas is that you're a funny story teller and they appreciate that on dh then greg de human beings can't resist stories once they start we get drawn into the narrative so people are agreeing for sure oh that's resonated school I don't want to wipe my brow in reality because it'll take the foundation ofthe you have family photos to take later um so I wanted to tell you what was most useful to me when I had to learn about public speaking it was actually in preparation for plum trees road show eso when a company goes public there's this road show where you have thirty minute meetings with a bunch of different investors I actually wasn't the one giving the road show that I participated in the preparation there's this legendary aipo coach on older guy, I think his name is jerry weissman and this is actually a picture of him leading a class I usually it's smaller it's just with the executives of the company and what's strange about it is he does talk about sort of problematic figures in history, I think talked about how hitler always showed up late for a talk and that actually made him a better public speaker, but he challenged me in really interesting ways. I would always talk about the technology of the company and he would sort of sit back there and say, I don't care, and then I would say, oh, well, let me tell you a little bit more about the technology and then he'd say, oh, I really don't care. And now, whenever I'm giving a talk, I always have jerry sort of sitting in the back of my mind screaming, I don't care, and so you have to identify what he called the withy what's in it for you why someone should care about your story, maybe I can give you an example. So when I worked at plumtree, I actually, uh, lived with a bunch of other founders um in an apartment, we'd all started different companies, some of them were doing well, some of them weren't doing so well, and we ended up talking to a journalist about mtv real world for startups what happens when you put a bunch of narcissistic entrepreneurs one room it turned out by the way to be absolutely disastrous that of media coverage for me but way ended up drinking with the journalist we we did a lot of unwise things I think we got in a push up contest while she was they're um but the key to that story being interesting is we just said, well, there's something happening in america right now? This is in the nineties at the beginning of the dot com boom, lots of companies were being funded and it's bringing all these young people into san francisco and they're having interact with each other for the first time one of our one of our roommates actually showed up with a bag that was about this big, and that was all he had for his entire time there, and when his company went out of business the day it went out, he left again. But in between it was this giant social experiment about what happens when all these smart people or supposedly smart people in my case show up and sort of convene in one place, and I think one of the challenges that you have when you talk about your business is you have to explain why it matters or why the story you're telling has a moral or a point so another friend of mine was trying to explain why people should care about his business he created a business that tracked whether stock pickers were really effective at picking the stocks he would follow up and see if abi rating actually resulted in the stock going up to evaluate the stock picker and he said who cares about a business like that and all he really had to do was challenged himself to take another turn of the screw it happens that at the same time there was this huge question around whether stock pickers were truthful henry blodget had gone down over a conflict of interest whether it was true or not the stock markets have lost billions of dollars in value because wall street suddenly wasn't trusted by main street and so when he talked about rating stock pickers I just wanted to tell him you just need to explain why this broader story matter it's you need to imagine jerry sitting in the back of any meeting you have saying I don't care I really don't care and I think if you just go through that mental exercise of saying who cares well I care and these other people care well why do they care um you know I usually start every talk about redfin's saying that thirteen percent of the american economy is in real estate and it's this industry that everyone really cares about because everyone has a home and so there's a reason that it matters that we have to get it right. So whether you're doing wedding photography or starting a business to build websites, you have to explain why your company matters. Why your company matters to american business why your company matters too society, you have to create some kind of stake, and usually I describe that process is just turning the screw, and it was just a process that I went through with jerry, we just kept saying, I still don't care, I still don't care. I still don't care until I identified, you know, what was really at stake, and then he would say, ok, I care. And actually the advice he gave that was really practical for me was really simply said, sometimes you're gonna have to give a presentation that was supposed to be thirty minutes or twenty minutes, you're going to have to give it in three minutes because somebody showed up late and the sandwiches didn't arrive on time or whatever might have happened. And if you have one line on why each of your slide should matter to the audience, you don't have to go into all the details. You just do what he called the with he's what's in it for you. Boom, boom, boom and I thought I was too cool to write that stuff out, but he made me do it and when I actually wrote one sentence on why you should care about each of the points I was making, it did help me just have a safe place that I could go back to if I got lost in the middle of a presentation, I could just come back to that point saying, well, wait a minute, this is why we all care about this, right? So, um, that would be the main thing that I got of sort of this harrowing two day boot camp of having this guy scream at me. I don't care, I don't care I don't care there's just one or two other things that I wanted to talk to you about, um and then I'll be done, um, I want to tell you one more story. Um, so when I became the ceo of redfin, the last thing that I wanted anyone to know what's that I agreed to become the ceo when I'd actually decided to I go to medical school, I told the board that hired me I thought I was going to medical school, it was a long story, but basically I had an older brother who could stop drinking, and I brought him into the emergency room over and over again and I met these doctors who kept treating him when there was no percentage on it they weren't like business people business people would calculated the odds and said this guy is a waste of time but they never did that and I thought I've got some talents I should use them to really help people the problem was that it wasn't creative the first thing I like about creative live is the first part in the name I really like doing creative work I like building products I like making new things and so being a doctor which is entirely and literally prescriptive was sort of a hard gig for me and I just couldn't decide what to do the right thing and the thing that I really enjoyed doing um so I went back and forth my wife got extremely impatient with me because it hadn't been days or weeks or months that almost been a year that I was trying to decide um and finally she told me I couldn't sleep until I decided and then she told me that I couldn't sit down when she discovered that I could go for days without sleep just said I you can't sit down until you decide and actually I love sitting down if I could have done this talk sitting down I would have done it um and so we ended up walking to this park in seattle this is carrie park um and ah you know, I told her, like, I just can't do it, I know that being a doctor is the right thing to do, but I know you're a doctor, but I just can't what I really love is starting businesses building software, I love redfin. Um and so she told me, all right, then you can go do that, but you're going to hate yourself for the rest of your life if this business doesn't make the world a better place. So you have to figure out how it's going to make the world a better place and you have to tell yourself that story every day you have to tell everyone else that story every day, because if it's just about making money, you are going to collapse. And so I think, fundamentally, the story you have to tell about your business is not about how it will succeed commercially, but how it will make the world a better place, and it doesn't matter what you're doing, um, it has to make the world a better place in some way, and if it isn't, since you're in charge, just change it. You can do whatever you want, you're the ceo, I hope that's the end of everything that I prepared, if there any more questions, I'll answer them, otherwise I will get off the stage, let's start off with a big round of applause way kind of sit down here if that's a more comfortable position and kind of make it a little more informal come up here is we do questions live and from the internet as well all right names david lafontaine first thing the earlier one of the earlier presenters pan has this great story about a car service but I think like maybe in the future if you make it get here just on that but circling back a little bit toe one of the things you let off with you said that one of the problems is that people start talking about their start up a little bit too early that we have this need to talk about how do you know when it's the right time to start talking about what it is that you're doing? Because if you're really passionate about it, shouldn't you want to talk about it? It may depend on your temperament I mean, I think first of all you have to have a product people are ready to buy. So I know a lot of companies talk about themselves before they've actually ship the product uh color is the most notorious example here in silicon valley it raised a ton of money and then launched a product that people didn't love the story was about how much money they raised instead of their product but the other test is just whether you feel proud about the product and that's sort of a problematic one if you were to ask me if I'm proud of red than I am, but sometimes I think oh, but next year it's going to be so much better than this year I mean like what we have now is ok, but my god next year it's going to be really good so it's just a hard challenge, but usually your customers make that decision for you when you have happy customers um you can go to town and if you don't have happy customers, I think it's really hard to convince the employees that you've got a good story and it's hard to convince other sales prospects that you have a good story uhm and it's definitely hard to talk to the press or anyone like that um color from dog b f f s and kind of trying to figure out the story with my company now I've actually like today probably tried out eight stories. Well, come on, you're gonna trout number his story is right I'm serious. All right, hold on, ask your question and then you're going to get us the question is how do you know when you've told the right story it's pretty subjective because I mean even the coach I was the one giving you feedback for whether it's the wright story or not, how do you know what you're talking about? That story eso basically dog be a fast we, uh, tennis, we're seeing that a lot of people are kind of going towards the digital direction with their with how they socialize with people. Sorry, facebook for dogs, no son way we're using online to get the offline experience better so identifying the awful experience getting people together the first day that because, you know, getting people around dogs um secondly, you wear the lookie there don't look at me, I don't know about you, but that's, what we're doing, we're basically trying to get people we put about together based on based on people who are interested in dogs and it's, a huge industry that people, you know, a pretty passionate about um all we're doing this, just getting people together and using algorithms to figure out what people have in common dog people haven't dog people haven't well, first of all, I think that's a really there's a lot there, right? Because like, people are crazy about dogs and people are crazy about the internet, and if you bring this these things together, they should go nuts, but my first challenge to you and I should have mentioned this earlier in the talk, I think a lot of people describe a product in a way where I still can't picture it and so I try to be as concrete and visual as I can and I try to use words that a fourth grader would understand like when I had to explain red fan I would say all right so there's this web site and has a picture of your city and superimposed on that picture tiny little houses and when you click on one of those little houses it's got a real estate agent who will help you buy it and that's our business he helps you buy and then the other thing that I had to do so first always just literally paint a visual picture because as you were talking all I was trying to do is paint a visual picture the other thing that I really think helps is just the old tried and true trick of saying it's x for why so you know alien the movie alien ridley scott pitched it by saying its jaws in space on bread fan was pitched as its e trade for real estate actually was an imprecise metaphor because it's much more service driven business than e trade but right away you heard me say oh isn't facebook for dogs and so one question I would have for you is is there an analogy you could make tio an existing company have you heard of still in dot I have so selling dot for dogs so basically have we let people throw their own parties and they could have fun to make money on the side and so we'll see that was really fast so wild about it a couple of times you have I do have a dog. Why did you start this business? Um so I got a dog with my now ex girlfriend and we, uh this is our cameras are skyrocketing, right? Yeah, probably way went to paris and decided just head it was a good idea to get a french bulldog there long story short went to hungry and got him and brought him back he got sick a week later and when I got the dog and hungary yeah, why not get the dog here? We wanted to wait excuse to go hungry way we're at the point relationship right? They had toe proposal get a dog way too much information for the camera but, um long story short we welcome back you got to take a week later and starts throwing up or go online to figure out what's wrong with him and it's all kinds of awful information out there everything from me he's either having a bad day or he's getting probably is going to die in like an hour or so undecided caution went on yelp look for look for a vet and everyone's got five stars in san francisco this is a it doesn't really help so and I'm going to close this place in the one hundred fifty dollars in twenty minutes later that says you should probably change its food so I figured this would be an easier way to do all this and what and uh figured out was that I could trust people understand who have the same breed of dog more so when it more dog owners they have a lot more advice to give me and we kind of bonded over that developed friendships over that let me just try to turn that screw yeah, I can't um I think the heart of the story is the broken heart like the reason it resonated with me is that my mother died last year my father is alone in florida, he has a dog, his onley connection with the outside world is this dog actually think a lot of lonely people really bond with their pets and through their pets they bond with other people so I would just try to tell a story about how for a lot of folks their social network doesn't happen in a college dorm it happens at the dog park and those connections air really important I don't know I feel like part of your story is that you came home and suddenly you were alone with a sick dog um and I was always alone oh wait this is good thank you so much for getting up here and be a great big hand I think that that's the fun of it live tv we get to try something like that in real time and like, you know, brave member of the audience gets to get up and learn from an expert like yourself does anyone else want to get up and try and give their their short business pitch? I thought that was pretty fun anyone else? I really this is an incredible opportunity to be here with the ceo of redfin and another come on back and then we do have some questions from the folks online that we can go through after that a big round of applause just for the courage and support friendly environment we're here to help so this is a great opportunity, tio give it a shot and get constructive feedback. Yeah, I have my name's bob my name is bob. Um I have a company called to do media. Uh, essentially when I first started the company uh I was taking a look at what was going on with facebook and twitter and all of the privacy issues and how everybody was getting all pissed off I'm just saying, you know, this is this is ridiculous that people are using all of our all the statistics about us, so I created a system where people can remain anonymous and essentially favorite all of the businesses that they like so in other words, we create connections between local businesses and consumers, but that connection is done essentially where people are able to remain anonymous. So in other words, you can favor it every brand that you know you can have your favorite watching your favorite pants and your favorite car all of these things, and as soon as you favorite them, the businesses khun talk to you, but you can un favorite them in the blink of an eye and they don't even know that you exist. So in other words, you can you can create a list of everything you like and it instantly connect you business, but you can back out of it at a moments notice. So wow, that's a good idea. So why, if I were saying, I don't care, even though I do, um, why is that an important story? Um, I was just really frustrated that I didn't think that the online online communities replicate what we really do in real life, but in real life you can walk into a business and talk with people and not have to give up all of your private information, and so in other words, you can you can go around your community and meet all of the brands and businesses you like, and you never have to you know make that last step that's to tell everything about yourself and that that only happens when you buy and when you look at online they're the business models of online they don't follow that paradigm and I figured that you could really open up a lot of aa lot more relationships with businesses if you could do the same paradigm is offline so I just have I I would start with that I just think when you walk into a business and you say do you have this code in yellow they don't say well first of all tim about your name, your marital status and everything else but I also think when you're trying to tell the story of why this business matters just think about what's on the front page of the new york times the wall street journal every single day right now it's all about privacy and the fact that these websites we trusted twitter and facebook and others have been subpoenaed for all this information that we freely shared and the fact that companies are now starting they create a safe place regardless of whether those companies they're successful or not is a really interesting trend so I would just try to connect what you're doing to this larger question that everyone has am I being watched because right now that's the topic that's on everyone's mind so you've got a really meaningful idea geo help is the name of the product good luck thanks very cool. Um you're you're a really masterful storyteller how did you personally develop these skills? Were you a you know, liberal arts guy growing up a writer because this is really amazing that you're able to take a story, crystallize it and then feedback a really succinct story like that quickly. Ah well as far as my own stories I think everybody just has stories that you tell it dinner parties and you just never feel like you can really tell that story to the world and I would be careful about that I wouldn't necessarily talk about my ex girlfriend unless you have no hope of getting back together really he looked really good to me yeah whereas there are a lot of women who seemed interested but maybe he'll still be available for a few hours so I think part of it is that people naturally tell stories and they just don't feel like they can do that um when they talk about their company but that's what's essential and you just have to figure out a way to tell your story where you're still comfortable with your privacy I never tell stories I guess I told a story about my four year old crying when he doesn't get lunch but otherwise like I just never tell a story about that so I think that's part of it and then the other part of it is um I've just had jerry yelling at me in my head for a long time well, who cares who cares who cares and I just immediately start thinking about well how can I connect this to something broader that's happening in society um and and that's usually pretty easy to do I think I don't I don't know um yeah that's an unsatisfying answer I'm sorry that's okay that's okay that's the beauty of live tv sometimes it works out great and sometimes you know we can't quite you know put our finger on exactly what it is should we go to the internet for a few questions and then I think toward the end I'm gonna ask you to tell one more story that I have I heard you tell in a different situation all right, well, the internet always has questions and that is why this is a social x spearing and right here I'm right all right, so some people have the same question about had become a good storyteller thiss one is from mindy rose who says the word passion is often overused to the point of becoming a sad arise cliche being used to tell stories have any other do you have any other ideas to convey the same concept for how to convey the same concept? Well, I don't think you actually talk about passion very much you just exhibited um you know, I was recently being interviewed by a journalist who said, what is your advice for young people of america as if I should know and I don't even remember what I said that he was so relieved that I didn't say your passion because that has become so cliche and I think what's hard at least for me if you'd asked me before I became the ceo are you passionate about real estate? Actually I don't know that I wass um I I had an experience buying a home that really drove me nuts on then I met a group of people that I really cared about and then I found the problem just intellectually exhilarating and then I found sort of a moral purpose inside of all of it and I became passionate about it but I don't think you can really be an effective leader if you're asking yourself how could I manufacture that? Um I think it's natural to have ups and downs and as I said, the key is just to try to figure out how you can deal with the downs and and edit those from from your public persona. Um but otherwise I just think you just naturally have toe have a love for what you're doing and if you don't you're doing the wrong thing um so I don't know that it could be an intellectual exercise I just think it's something you fall into the way you're falling in love um so I don't know if that's answering the question um it's beautiful beautiful state uh followed your heart not your head or merge them together yes, I would love to see if there are more studio audience questions and we have one so there's a micro here laurie if you could pass that over and then we'll go back my biggest question is which happen to state the obvious which is there's so much wisdom and what you're saying and I want to know did all the wisdom that you have is it but based on experience or do you have a person that you read or certain philosophy that you integrated yeah I don't read any business books at all sort of view them as being similar to self help books there's you know, if somebody could write that I think there's just nine yards of self help books in the bookstore and if one of them worked all the rest of them wouldn't be there um so I think that what's lucky about being a ceo especially of a venture backed company is that I used to think, oh, these folks really care about me they're investing so much in my education but really what happens is they put a lot of money in your company and now they need you to really be an effective ceo so I have been able to be around other ceos who are really good and watch them operate um, and that's really helped. I've worked for really good people if I had to choose between working for a company that was good in a lot of different ways, but just where I had a bad mentor good meant or even a pretty bad company, I would choose the good mentor, but I guess what I'm trying to say is that I've just been really deliberate about trying to surround myself with really smart, good people, because I feel like the direct observation has helped me more than anything else, and I would add to that that I really think it helps if you're just starting a business on your own. Um, it's not backed by investors, for example, I found that when I try to talk to friends about what's going on with my business, it can be a little bit hard because they just don't know enough about it. And what I really like about having investors as board members is they have a really vested interest in the business. They are paying attention when you call him and say I have a problem and I don't know how to handle it, that is something they're going to pay attention to. The other thing that I think you really have to work on, like every single one of you in this audience knows what your fatal flies right? You know like you're going to get an annual review if you work at a larger company and they're going to tell you need toe delegate more you need tio be more assertive you need to control your temper whatever it is you've been hearing it for twenty years and at some point you just have to say you know what? I'm going to attack that problem like people going to say whatever they want about me but they are never ever going to say I'm not assertive again you know, I went through an experience where I was nearly fired for not delegating enough and I just decided all right you want to see me delegate I'm going to the beach and everybody else is going to do a bunch of which was harder for me than I thought but basically what I'm trying to say is that, um it helps to identify that as the enemy to attack the enemy um and to say you can change most people I manage sooner or later have a popeye statement which is I am what I am and I'm like, oh my god whether you're fifty or thirty or twenty you're going to treat yourself as done like you're a work in progress you're an unfinished symphony and you just have to keep writing so I think a lot of it is just being really conscious of whatever is wrong with you and trying to fix it and that's hard because usually you're in love with yourself even the parts that aren't that good when you mentioned fatal flaw, I thought you meant like my allergy to bee stings but yours is much more for wisdom basically um actually I was one of the few so the story was hoping you could tell as maybe a closer I read your recent linked in post about that experience of being fired I think it's an incredibly powerful story I found personally a lot of value in it and I was going if you wouldn't mind telling that in a live format sure well I I was a co founder of plumtree um iran product and marketing at times iran engineering there to, um and we brought in a ceo over me uh I spent a little bit of time trying to sabotage john because I wanted to prove that nobody else could run the company except for me and he put up with it and it became this great mentor and friend to me, but that didn't stop him from deciding at some point that I wasn't cutting it. And so I think he called me on a sunday night and told me that the company was growing and that I wasn't growing with it and that the board had lost confidence in me um and what was hard about that first of all, if you're fired the number one thing that will surprise you is how fast it happens like you think we're going to talk about this for forty five minutes but there's nothing to say it happens in about two or three minutes, but then after I hung up the phone, we agreed that I'd meet the chairman of the board and I told you about earlier I just thought about all the things, all the dumb things that I've done, and I thought about how they were going to bring in a guy to replace me there was goingto have nothing invested in my mistakes and just immediately fix them and everybody would hail him as a hero as a genius for just fixing the dumbest, most obvious mistakes in the world. And the only reason that I persisted in the mistakes was that I first had to just admit that there were mistakes, and so now I often think, as the ceo of redfin, well what's the next ceo going to d'oh one day of my numbers up what's my success, they're going to do one of the obvious dumb things that I'm just so committed to doing. You know, if I had to guess by the way I would tell you the number one thing that guy's going to do is raise prices or that gal our prices we use prices a competitive weapon, the service's way better but they'll come in and raise prices ok well why don't you do that if everybody's going to hail him as a genius because you're committed to price so I thought about what my successor would do and then I met pierre and sort of big for my job and the thing the only thing that worked was I said I can change do you? You know I said I might be the worst executive you have in your entire portfolio of companies but I am more determined and any of those mo fo's to get better you should give me a chance and the thing that he did for me that you kind of owe to your employees if you're a leader and I think I said this in the linked in post is he just described what was wrong with me as if I were a dent in a car like just in the most prosaic matter of fact way he said very directly you don't do this you need to do this I don't know if anybody's told you but it's it's freaking terrible and I was like good to know good to know and a lot of times when I hear that someone's going to get fired red pen or somewhere else they say well is it going to be a surprise and you're like no no no no no no no no no no I've told him a million times and then forty five minutes later that person's been fired, the shooting my officer like I'm shocked no one ever told me this, and a lot of that is because we just don't listen, but some of that is because people also don't like to tell you what they really need to tell you. And so one of the things that I've gotten good at is saying I'm your best friend in this situation because I'm the on ly one has the guts to tell you that you are in a world of hurt and that this has change right now. Um, so anyway, I had the benefit of someone who was that direct with me and who gave me a second chance, but I tried to marry that with an absolute commitment to changing, and I still backslide like it's not like I don't have a fatal flaw anymore. I have a new one and I still have the old one, but I'm just really aware of it and I kind of came back to the company and I had to decide I was going to tell people if my ass was grass and I decided that I would. I don't know if I said I nearly got fired today, but I said I'm in a lot of trouble because I have been delegating enough and so I decide I'm gonna change and I need your help when I start taking on something that I shouldn't, I want you to tell me now. Sometimes I'm still going to do it by at least need to know. And so, you know, if you're drinking too much, the first thing you should do is tell all your friends, listen, I'm trying to stop, and I need your help. If you yell too much, you need to say, listen, I know this is my problem, and I need your help to help me stop. And that makes it a group project to help you get better. Um, and it makes it ok for other people to say how they need to get better.

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