Capital-Efficient Growth (with Zoom CEO Eric Yuan & Veeva CEO Peter Gassner)

[0] Yes, it is very appropriate to be on here, on Zoom, with you recording these before going into the interview with Eric.

[1] If only we had our notes on Viva.

[2] Although I think it's a little bit out of our strike zone in terms of like perfect market.

[3] We would be the only podcasters in the world using Viva.

[4] Peter is very focused on clear and correct target markets.

[5] Yes.

[6] Who got the truth?

[7] Is it you?

[8] Is it you?

[9] Is it you?

[10] Who got the truth now?

[11] is it you?

[12] Is it you?

[13] Is it you?

[14] Sit me down.

[15] Say it straight.

[16] Another story.

[17] Welcome to this special episode of Acquired, the podcast about great technology companies and the stories and playbooks behind them.

[18] I'm Ben Gilbert and I'm the co -founder and managing director of Seattle -based Pioneer Square Labs and our venture fund, PSL Ventures.

[19] And I'm David Rosenthal and I am an angel investor based in San Francisco.

[20] And we are your hosts.

[21] Today we have something very unique to share with you all.

[22] It is common for top venture capital firms in Silicon Valley to get all their CEOs together once a year in one room for a CEO summit and speak frankly with them.

[23] It is uncommon, however, to allow anything discussed to be shared publicly.

[24] Well, today we are doing just that.

[25] The good people at Emergence Capital, in particular friend of the show, Jake Saper, invited David and I to interview to two very heavy hitters at their CEO summit last week, Eric Yuan, the founder and CEO of Zoom, and Peter Gassner, the founder and CEO of Viva Systems.

[26] I think this is the first time that any content from any venture firm CEO summit has been specifically created for podcast, public consumption.

[27] It's so cool.

[28] I think Peter has never done a podcast before.

[29] I think that's right.

[30] And he's built a $20 billion company?

[31] Yeah, the Viva system story is amazing, as you will.

[32] Here we talk about they raised $4 million.

[33] That's four, like one after three.

[34] And on just that $4 million that they didn't even consume all of that capital, they've now built a $2 billion revenue business with incredible margins.

[35] It's such a cool story.

[36] And Peter is on the board of Zoom.

[37] And so as you'll hear, he and Eric know each other very well.

[38] And it's a super different company that we normally talk about too, it's vertical specific.

[39] So it's just in the life sciences industry.

[40] They sell high dollar software to pharmaceutical companies.

[41] And I think biotech as well, right, David?

[42] Yep, yep.

[43] So the topic that we discussed with both of them is capital efficient growth.

[44] And that's something we felt would be super valuable for all the CEOs in the room.

[45] And obviously, that means that we think it's going to be really great for everyone to be thinking about right now.

[46] So rapid scaling on very little capital is something they obviously both know a lot about.

[47] David mentioned the $4 million total funding that Viva raised before going public.

[48] As you remember from our Zoom episode with board member Santi Subatovsky, also an emergence capital partner, Zoom raised $30 million from emergence and another $100 million from Sequoia afterwards, and they never touched the vast majority, if not all of those funds.

[49] I think they didn't touch any of that.

[50] hundred and thirty million dollars.

[51] Eric had raised, as you'll hear about, he'd raise some money from angels along the way and that funded product development, but none of the venture money was consumed.

[52] It's crazy.

[53] So if you're excited to learn about how these companies managed to pull off enormous impact with very little capital to do so, you are in the right place.

[54] And if you want to discuss these topics with us after you listen, you should come join the rest of the Acquired community.

[55] I think we're 12 ,000 strong now, David, at Acquired .fm slash Slack, you should join us.

[56] It is always a riot.

[57] This will be a great one to discuss in there with the community and other founders, and including Jake Saper himself from Emergence, who's active in the Slack.

[58] It's true.

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[100] David and I may hold positions in things we discuss on this show, and this is certainly not investment advice from anybody that we had on the show today.

[101] So now, on to our interview at the Emergent CEO Summit with Eric Yuan and Peter Gassner.

[102] So to set the stage, I thought maybe, um, Could each of you please give us a brief overview of your fundraising history up to and including Viva and Zoom's IPOs, which ordinarily that would take like an hour?

[103] This is going to be pretty short.

[104] This is going to be very short.

[105] Private financing history.

[106] Go ahead.

[107] Are the simple angel investors when we just started and then emergence about 15 months in, so angel investors, I think that was 3 million and emergence was 4 million.

[108] We never actually used the emergence 4 million, but I thought we might at the time.

[109] And we got to within about 100 ,000 of using it, and then we went public.

[110] The timeframe we started in 2007 in February, and we raised in about 2008, maybe March or so.

[111] So that was the environment at the time.

[112] Another very simple time to be fundraising and company building in.

[113] Yeah, it was hard to even open a bank account because it was the, the whole know -your -customer thing and financial crisis, so everything's hard.

[114] And I think probably most people here know this, but for folks listening on the podcast, today you're doing about $2 billion in revenue at Viva?

[115] Yeah, we're doing about $2 billion, about 30 % profit or so.

[116] Amazing.

[117] Eric, could you share your fundraising journey with us?

[118] Sure, sure.

[119] I started a company in 2011.

[120] First thing I did, I opened up a West Fargo bank account.

[121] I thought it's very easy for me. to raise capital.

[122] That's why I opened up bank account.

[123] And fortunately, it took me for several months.

[124] No VCs wanted to invest me. Unfortunately, I do not know my brother, sent you an emergency capital.

[125] Otherwise, life would be much easier.

[126] And finally, and talk with some friends.

[127] And it reached the 3 million city funding.

[128] That's how we started.

[129] And when it comes around, I try to talk VC again.

[130] And again, nobody wanted to invest us either.

[131] So, and, you know, we talked to friends and get another six meeting, and that's where we started.

[132] Yeah.

[133] It's very hard.

[134] And nobody wanted to talk to you at that point because most people assumed video conferencing was either a settled frontier or a race to the bottom.

[135] Am I thinking about that right?

[136] Absolutely right.

[137] That's a thing.

[138] Everyone mentioned, Eric, you are crazy.

[139] The world does not need to have another video conference solution.

[140] And another VC friend, you know, even is a great friend.

[141] But he told me that, Eric, I have a check for you as long as you do something else.

[142] Good news, I didn't know, listen.

[143] I was very stubborn.

[144] I should share your story.

[145] And once I was told by a big VC, I don't want to mention the name.

[146] For sure, you guys do not like them.

[147] And he told me that, Eric, I do not think your straight works.

[148] You know, look at the Skype, look at Google Home, look at the web, I said, don't.

[149] And I debated with him a little bit.

[150] I failed, and I cannot convince him.

[151] On the way back, I told myself, I'm going to change my Windows screen -sever.

[152] Back than I used a Windows machine.

[153] I changed Windows screen -sever.

[154] You are wrong.

[155] For several years.

[156] And just to make sure I have my facts straight, I believe you raised a $30 million round led by emergence, and then another $100 million round after that.

[157] And similar to Peter, you did not dip into any of that $130 million.

[158] Is that correct to build the business?

[159] For me, actually, after a certain million, you know, from an emerging capital, I think, yeah, we are on the right track.

[160] You know, to be honest, with you actually, we even do not need to read Series D, actually.

[161] Because at that time, you know, I think with that certain meeting, I think the company completely into a, I feel like a different game.

[162] Wow.

[163] That's one thing we wanted to ask a difference between your two companies.

[164] Peter, you obviously, once you got to cash flow profitability, which was immediately, basically, you never raised another round.

[165] Eric, you did make the decision to raise some more capital even after you were generating cash.

[166] And Peter, you were on Eric's board when that process happened.

[167] Why did you make that decision?

[168] Well, for Viva, I didn't raise more just because, because I thought I don't need it.

[169] You know, it's just that simple, right?

[170] So, and then as far as for Eric, right, when you're on the board, right, that's really Eric's decision.

[171] So, you know.

[172] So yeah, as I mentioned earlier, I offered to raise a certain meeting from emergency capital.

[173] At that time, seriously, we had a new plan or so ever to raise another round of capital.

[174] And the reason why we still move forward to have a serious deeks, because I thought the economy will win, we'll go down dramatically.

[175] This was 2017.

[176] 16 -17 high frame.

[177] I was completely wrong.

[178] But anyway.

[179] It had been the seven -year bull run.

[180] Of course, the end was near, right?

[181] Yeah.

[182] And long story, but anyway, so.

[183] Yeah, I think that raising that money at the time, I thought, yeah, maybe we don't need to do it, but also I thought it doesn't matter, right?

[184] What matters for Zoom is the great product and the customers.

[185] Whether you take some more money, you don't take some more money, right?

[186] It's all fine, it would all work out.

[187] That's right, yeah.

[188] So as we were preparing for this interview, our first thought was if we just had one of you up here and we were interviewing you about capital efficiency, it'd be easy to chalk it up to business model and cash flow cycle.

[189] You know, multi -million dollar contracts up front, on, you know, in the case of Viva, or in Zoom, customers flocking with their credit cards for a, you know, a self -serve experience.

[190] These are two completely different models.

[191] And so I think one of the things that it illustrated to David and I is capital efficiency is a mindset and culture thing more than a business model thing.

[192] And I'm curious to hear both of your reactions to that, but also what are the things that enabled you uniquely more so than 99 % of startups to be so capital efficient?

[193] I can take that one.

[194] I guess I've seen a little bit of Zoom and a little bit of Eva.

[195] I would say probably it starts with a mindset, you know, just run a profitable lemonade stand.

[196] For my point of view, for me, it was their safety in that.

[197] Cash generating business is always going to be valuable to somebody.

[198] At some point, a business is not cash generating is going to be valuable to nobody, right?

[199] You might be able to sell it before it becomes, you know, not valuable, but you can only, there's security in long term.

[200] So it starts with the mindset.

[201] I think Eric shared that.

[202] And then you have to have product excellence too, right?

[203] And that's something I think Eric and I share.

[204] We're both product people.

[205] I think also we both worked really hard.

[206] You know, we work really hard now.

[207] I think especially Eric probably in the first five years, I worked really hard.

[208] You didn't see me working really hard, but I saw you working really hard.

[209] So worked really hard, worked really focused.

[210] anything that wasn't related to the product or the customer was just BS, you know, and just don't do it.

[211] Like the first five years I was not at a conference like this, for example, right?

[212] I was just maniacally focused.

[213] And then the market really helps, too.

[214] And that's something you just have to get lucky on, right?

[215] You have to, it was the right timing for Viva.

[216] It was the right timing for Zoom.

[217] Maybe if you started Zoom five years earlier or five years later, it would have been hard, hard.

[218] So product excellence, real focus, mindset, and then you have to have some luck in your market.

[219] I'm sure there are some things that I could have tried to do or Eric could have tried to do.

[220] And it was, we might have picked a bad market and then it just wouldn't work.

[221] And that's, I think you have to, so we're an outlier, right?

[222] And so is Eric, you have to pick something that most people think is going to fail to be an outlier.

[223] Otherwise, by definition, you're picking something that most people think is going to work, and therefore a lot of people are picking it, therefore you're not an outlier.

[224] So just like Eric, you know, most VCs, all VCs, except for emergence, all VCs of any kind of note except for emergence turned us down, right?

[225] And ours was really simple.

[226] Vertical specific software, that's a small market and it doesn't work, right?

[227] That's what they would say.

[228] And I was encouraged by that because I thought, well, it has an opportunity to be really good because it's something non -obvious.

[229] Well, one thing that I want to double -click on that we were talking about beforehand.

[230] Yes, like, you need to be non -obvious to have a chance of a great outlier outcome, but you also need to be correct.

[231] But I think what you did, what you both did was not, hey, I'm going to pick some random idea that other people think is crazy.

[232] You know, I know Viva has, as one of your core values, clear and correct target markets that you have, like, written on the wall.

[233] What did each of you do, you know, ahead of time that led to you to, like, really genuinely believe, yes, the world thinks this is crazy, but I really think this is going to work.

[234] I'll go first.

[235] It's real easy.

[236] I talked to three or four potential customers for our first product, and they all said, we don't need that, you know?

[237] That's not interesting.

[238] It's not a good thing to do.

[239] But I wasn't listening for that.

[240] I was listening, are they emotionally attached to where they're getting their product now?

[241] Are they emotionally?

[242] attached to those people, do I feel like they're getting value out of that thing?

[243] And I could tell them their responses that they weren't attached and they weren't getting value.

[244] So, yeah, all four customers said it's a bad idea.

[245] All right.

[246] They're all customers now, though.

[247] Let me understand the Peter formula to build a business.

[248] Ask a customer if they want your product, they say no. You dig deeper and say, what are you using now?

[249] And they say, yeah, because I have a solution for this, but they just don't.

[250] love it, so you build for them anyway on the bet that you can be better than their current thing.

[251] Yeah, you have to listen to what they feel, not what they say.

[252] They would say, yes, we're very happy with their solution.

[253] But then you dig, oh, tell me more.

[254] Why is that?

[255] What is it that you get out of it?

[256] And it's like, oh, well, uh, and that's when you know.

[257] That, that sounds like the video conferencing market, circa about 2015, 2016.

[258] Yeah, so for me, it's very straightforward because I was a regional founding team member of WebEx.

[259] So the two years before I started a company, I know actually, you know, WebEx really sucks, right?

[260] Did you try and tell Cisco that?

[261] I tell my team.

[262] I do not dare to tell others.

[263] But anyway, so Skype also not reliable, right?

[264] Google and how not work.

[265] Every day I spend a lot of time talking to every customer.

[266] I know if I can build a better solution, I think at least I can survive.

[267] I never thought about everyone is going to standardize on Zoom platform.

[268] But at least I know for sure is if a customer they do not like something, if you can build something better, you have a chance.

[269] Eric, did you think from the outset that you were trying to build Zoom as a big company, or did you just think that you wanted to build a profitable company to survive and then you would sort of see where it went from there?

[270] I think two things.

[271] First of all, at every time, my passion was very straightforward because you know, WebEx more like my baby, right?

[272] I feel like I work so hard.

[273] for so many years, I let a customer down.

[274] I really wanted to fix that problem.

[275] But Cisco does not want me to start over.

[276] And I had no choice, you know, but to live to build a Zoom.

[277] That's the number one reason.

[278] And after I started a company, I realized, wow, it's so hard to raise capital, right?

[279] And by the money that you see they give it to you, don't think about that's money.

[280] You know, that's a trust.

[281] You know, every dollar matters, right?

[282] That's why every day I was thinking about how to survive, how to survive, how to survive.

[283] Even today, seriously, I still think about a walk over the night, you know, how to survive.

[284] You mentioned people in your team.

[285] When you started Zoom, you were a solo founder, but you brought a large number of people with you.

[286] You know, one of the kind of first sort of operational topics we wanted to dig into around this, this topic of capital -efficient growth is hiring and people.

[287] That feels like such an important part of the culture and DNA of having people who are going to get on board with, yeah, there's not going to be the spiritual equivalent of kind bars and exposed brick in our office here.

[288] How did you select for maybe both you, but Eric to start, because you brought so many people with you from WebEx, how did you select for the people that you brought?

[289] So all of them are very good engineers, right?

[290] except for me. So I didn't know write any code.

[291] And on Devon, we had around 25.

[292] Very soon, we get another 15 total of 40 people, and myself included.

[293] All the certain people, they all write all kinds of code.

[294] And this was all funded with Angel money.

[295] Yes, exactly.

[296] But I know actually, you know, we can, with run rate probably less than two years, right?

[297] That's why we had a series A. But we only have engineers, just get a product down.

[298] And I, and I, I'm a more like a product manager, a UI designer, and also the facility guy, everything else.

[299] You know, seriously, on D -1, I bought it, used the furniture, you know, sample everything by myself, and also write it on the company culture and value.

[300] That's pretty much what I did.

[301] So I would say is, and even for the several years, after product already, and some investor mentioned, hey, you already have money in the bank now, why not build a marketing team, look at your competitors, they spend a lot of money, or the build board in one -on -one.

[302] At that time, I think, no. For the first four years, we do not have any marketing team.

[303] Only until 2015, we started building up a marketing team.

[304] So we have to be very disciplined.

[305] To just highlight this, so, you know, you started the company with 25, quickly growing to 40 people, but those were 39 engineers and you.

[306] No product managers, no marketing, no sales.

[307] Yeah, yeah.

[308] That's the reason why I know how to use quickbooks.

[309] I never know how to use that.

[310] Seriously, I had to learn how to use that.

[311] So it sounds very easy to say don't buy billboards.

[312] You got to get your customers somehow.

[313] How did you get the snowball going?

[314] A little bit of lucky, because seriously, and luck doesn't pollute it all.

[315] Because, you know, several weeks before we launched the product, seriously, we had no idea how to get a first customer.

[316] Luckily, you know, the very famous, you know, the reporter, the Walter Mosberg, right, he evaluated our surveys.

[317] And we were so nervous, you know, he's very straightforward, right?

[318] And the good news, he did write down a very nice article published in Wall Street Journal.

[319] And also he personally recorded a video.

[320] And over the night, we got a 50 ,000.

[321] 50 ,000 users from that article.

[322] But most of them, they left, you know, after several weeks.

[323] But those who stayed, I imagine that was the kernel of the virality of telling their friends, who told their friends, who told their friends.

[324] I maintain a very good personal relationship with them, either VIP account or send them a small gift.

[325] And someone they canceled, back then only 9 -199.

[326] I personally sent them an email.

[327] Why you cancel our service?

[328] What other can do different?

[329] And, yeah, we still maintain a relationship even today.

[330] We had, so one of the CEOs wrote in and asked us about different metrics to track.

[331] Did you have a North Star?

[332] After you had those 50 ,000 people where you realized, okay, I'm holding something in my hand and the sand could slip through my fingers, but is there something I can measure to see if this 50 ,000 can turn into something?

[333] What were you paying attention to?

[334] To those of very early, very loyal, early adopters.

[335] You know, even 100 is good enough.

[336] They are the early, you know, I would say is the most loyal users double down to make sure they are happy.

[337] If they are very happy, guess what?

[338] You know, network effects.

[339] They are going to bring a lot of new users.

[340] So that's why even 49 ,000 users left, as long as 100 still stayed, we double down on that.

[341] So, yeah, that's a strategy back.

[342] For Peter, on the hiring and people and organizational front, you had a very, very different type of business.

[343] Your customers don't buy with credit cards.

[344] They buy multi -million dollar deals, cash up front in a year for a year deal.

[345] You need a sales force to sell that, which usually means you need a lot of cash comp to compensate that sales force.

[346] How do you think about the right people to hire as you were building and how to compensate them?

[347] Yeah.

[348] I think one thing Eric and I have in common art, you know, in the early days, there's no wasted people, like no optional people, no wasted people, because it just adds, A, it'll burn through your money, and it'll just make your decision making smaller.

[349] And sorry, more complicated.

[350] It's like sand and machines.

[351] So no wasted people.

[352] And for us, yeah, we needed, because a long sale cycle.

[353] So we needed sales right away, right?

[354] So, yeah, I was the first thing.

[355] person.

[356] I started selling before I signed the articles of incorporation, show up at the customer, hey, I think you should buy something for me, this thing that I'm going to make.

[357] Well, have you hired anybody?

[358] No. Well, okay, well, can you show us a demo what you're going to do?

[359] No. How about a PowerPoint?

[360] No. Okay, and then come back a month later.

[361] I got a PowerPoint now.

[362] Have you hired anybody?

[363] No, not yet.

[364] You know, and then just keep selling because it's a relationship -based business.

[365] Funny story, the first customer bought, small customer, actually somehow through a relationship with my co -founder, we got to this guy, he was a CEO.

[366] He wanted to buy some software for the small department just because he was really peeved with his IT team.

[367] So this guy had no idea what we're selling.

[368] He's like, I know that my IT team doesn't want you, so I'm going to make a point and show them that I'm actually in charge here.

[369] So that's how we got our first sale.

[370] You could barely log into the system at that time.

[371] Could you I didn't know that.

[372] But then you got to hustle, right?

[373] Then just like Eric, right?

[374] Then you got to hustle.

[375] Oh my God, this customer wants to buy something and then you're working super hard to make them successful.

[376] And Eric, I'm not sure I never asked you about this, but we never had customer satisfaction surveys for Viva in the beginning.

[377] I always thought if I talk to those early adopter people, I will know, I will get the feeling.

[378] And if I have some survey, maybe I won't get the feeling.

[379] Totally.

[380] You're right.

[381] I agree with you.

[382] You just, you can, can hide behind, when it's small, you can sort of hide behind metrics sometimes, and it doesn't work.

[383] But if you actually talk to the human and you figure it out, you'll know what's going on.

[384] Can you tell us also the story of landing your first big customer, which I believe is probably the deal that really made the business?

[385] Yeah, there was a set, right?

[386] There was the first, the guy who was just peeped at this IT team and then worked up to the next side.

[387] deal and the next size deal, and it was always a step function, right?

[388] And so the first multi -million dollar annual deals were a big customer, Pfizer, and it was just hand -to -hand combat.

[389] There was a partner at the time, actually, Salesforce .com actually at the time said, oh, you know, send a note that Viva will never win this deal.

[390] And I replied back, I said, we will win this deal.

[391] And they sent it to you during the bake -off.

[392] Yeah, because they didn't want to even come into the meeting with us, right?

[393] They were like, oh, we're going to go with this other system integrator or something like that.

[394] So I sent an email back and said, we will win this deal.

[395] Why?

[396] Because we have better people that'll work harder, and we're, Pfizer's only shot at greatness, and I think they want to shoot for greatness.

[397] And so, and I remember there was this big meeting with Pfizer.

[398] There was a guy in there in charge of it, and we had a certain amount of people in the meeting and the guy stood up, provides you said, we have more people in this meeting room than you have in your company.

[399] Why should we buy anything from you?

[400] And I just said the same thing.

[401] We're your only shot.

[402] We're going to make something great and we have the best people.

[403] So it seems simple to me. And then we got lucky.

[404] And we won it.

[405] And then I remember after winning it thinking, oh my God, now what?

[406] You know, now how are we going to make them successful?

[407] So we the whole company got a bonus when that customer was what we called Live and Happy, which didn't have a formulaic metric.

[408] It was based on interviews.

[409] So did you use the invoice from that customer to then go fund product development?

[410] Yeah.

[411] I thought, oh, we've just raised a $3 million round of capital here, and it didn't cost us any dilution, right?

[412] The check came in.

[413] So that's exactly what happened, yeah.

[414] Do you think that's still doable today?

[415] Like, I imagine there's lots of folks out there that are like, well, I would love to go invoice a customer and get cash in the bank.

[416] And, you know, what situations is it possible to fund your product with customer revenue versus not?

[417] I think it's, first of all, you can't be wasteful.

[418] Every person has to matter.

[419] I would almost think about, oh, we're hiring that person.

[420] Let's say we have to pay them $100 ,000 a year.

[421] I came from, my father was in the business of metalworking and machinery.

[422] And he, I remember him.

[423] He would like, oh, I got to buy that lathe.

[424] How much is that lathe going to cost?

[425] Is it worth it?

[426] So I would think of people like, I'm buying a million -dollar machine because I've got to pay them $100 ,000 a year.

[427] Is that million -dollar machine worth it or not?

[428] So frugal, and then make a really excellent product because that's the best way you can lower your cost of sales.

[429] So like Eric's product, you probably all notice it that it's easy to use, but he made it easy to consume the whole product.

[430] So he didn't have to convince a bunch of it.

[431] people so that's how to do it excellent product get a good price easy to consume you don't have to spend your money on salespeople because you have a differentiated product because salespeople that's where it's really really expensive right you you didn't have that right when i read the peter's uh the s1 document many years ago at that time i still remember wow my god this is being model so awesome so and but in our case our first paid customer largest paid customer, only 2 ,000 a year.

[432] So we cannot use that to fund a new product development.

[433] Because most of users pay us only for 99 months.

[434] So that's really hard.

[435] But I do think for all the founders, right, the business model very, very, very important.

[436] If you can figure out we do something similar as what Peter and the Viva does, that's the best.

[437] Do spend time on that.

[438] Not only for product, but also the business model, as Peter mentioned, product excellence, and how to sell the product and how to level the big enterprise customer as is very important build a long -term sustainable company in our case actually i can tell you today the biggest challenge is our online business right it's very profitable however it's very hard to predict right they come today next two months we might leave they cancel the service this is not the great business so but enterprise portion is very good you know that's why i learned a lot from peter you know how to manage a big enterprise customer we met a lot of an emergence event way back when that's how we first met Eric and I. It was smaller at that time.

[439] Hopefully there'll be some more connections like that today.

[440] One thing I want to highlight on this topic of contracts and funding development, because I think it's really counterintuitive.

[441] Again, the topic is capital -efficient growth.

[442] You would think that what you would want to do with that Pfizer deal, for example, or Eric, when you started selling enterprise contracts, is multi -year deals.

[443] let's get let's make this contract number as big as possible let's get as much cash up front let's lock people in for two three four years that's not what you did at all right yeah yeah we didn't do that uh because i i was always optimizing for the the long -term value which is the annual value per customer so if i had to give the customer terms that would lock them in i thought that's actually shrinking my market because they'll pay less if they're locked in that's one thing Then the other one, I didn't want us sort of getting lazy.

[444] I wanted us to earn the business every year.

[445] So it was just sort of like that.

[446] The driver was really optimizing to the long -term value.

[447] Yeah, which makes so much sense now thinking about it that you would have had to give in a, I don't know, 30 % annual discount or lock in the price, then raising prices is harder later.

[448] And that's unique to us.

[449] I think we're selling in a very confined vertical.

[450] So it's not really fair if there's two companies and one's paying 30%.

[451] percent less than the other and they end up knowing about it and feel that feeling bad about it so that's something specific to this confined market and to put some shape around it for folks that don't know vivas business as well you've a couple thousand customers of which there's a hundred or so that are you're like really big customers yeah and there's basically no one else out there who could be a customer without you expanding the market right we have a we sell into a defined set of customers, life sciences industry, there's kind of top 20, and then there's another thousand or so that are doing smaller things, and we've just expanded our product footprint.

[452] So when we sell to a customer, we might have 20 things that we can sell to them, they start in this area, they start in that area.

[453] So Gordon calls it layering the cake, right?

[454] We have a lot of different layers to the cake that are all into the same customer.

[455] We leverage relationships, and we spend, it's fine for us to spend $100 ,000.

[456] a year maintaining free relationships and just putting into developing relationship that's not wasteful so because we have a lot of showing up the door with $100 million worth a product so if you have a relationship it's worth it like a bank investment banking it's worth it to invest so it's a different type of business Eric for you I'm curious maybe you can talk to us both in the beginning days and then also now at Zoom.

[457] How do you think about pricing and account strategy?

[458] Yeah, so, you know, our case is a little bit different.

[459] You know, ideally when you start a SaaS company, either focus on vertical market or focus on departments.

[460] That's probably the best business model.

[461] Unfortunately, you start from building up a horizontal collaboration solution is really hard, right, because, you know, a lot of other competitors are there, right?

[462] so our strategy free competitors exactly a lot of you know free solutions so our strategy to you know more like you know you open up a new restaurant business right so and you have a better service right and a better price and a better food that's pretty much even today you know want to make sure our product are better than our competitors make sure in the constant pricing also better and they also make sure you know offer the better service so you look at any time our product always, always have better price, you know, across the board, any product, compared to any competitors.

[463] So life is about tradeoffs, and if you're telling a customer, oh, we're better, faster, and cheaper, what has to give?

[464] Is it something organizationally?

[465] Is there something?

[466] Efficiency.

[467] Efficiency.

[468] Yeah, exactly.

[469] You know, see, like, a customer, they are probably going to spend a lot of money on marketing.

[470] You know, what we can do to level the network effects, right?

[471] You know, they hire, like, 100 sales wrap, what we can do to have a 50 sales rep, you know, can deliver same value, right?

[472] So that's why it is very important to have, you know, internal, you know, the efficiency.

[473] Which is, you know, it's so funny, that efficiency translates to capital efficiency, which translates to gross margin, not gross, to operational margins, which translates to cash flow, which is the whole point.

[474] Yeah, give you more flexibility, right?

[475] Yeah.

[476] Yeah.

[477] But I would say the key also is just the product excellence, right?

[478] And that comes from the core set of engineers you hired, I think.

[479] And then also the, you were, you were especially very focused in the early days, right?

[480] Totally.

[481] You are not thinking about something else, right?

[482] You were thinking about video counseling.

[483] I would say, you know, that's why I got to know Eric.

[484] I got to know Eric.

[485] I thought, that's a pretty focused guy.

[486] I bet his product is good.

[487] And then I tried out his product.

[488] I was really good.

[489] I want to join his board.

[490] So I think that's always the product excellence can make you more efficient.

[491] Your sales cycle's more efficient.

[492] Everything's better.

[493] If your product was twice as good as WebEx, right?

[494] If your product was only 10 times better.

[495] 10 times better.

[496] But I guess my point is if your product was only 20 % better, it wouldn't have been enough.

[497] It wouldn't have mattered.

[498] That's why I always like this restaurant analogy, right?

[499] You know, you store buying a restaurant, a brand new restaurant, is food done all work.

[500] Even for free, you do not want to stop by anymore, right?

[501] So again, you know, I think back to the Peter's point, it's extremely important.

[502] Everything starts from one thing in the product.

[503] Product are excellent.

[504] That's a foundation.

[505] You can optimize a lot of things.

[506] If a product are not work, forget it.

[507] Everything else.

[508] Just double down, triple down on product.

[509] That's the number one thing, you know, Peter right on.

[510] And that's a lot about people, right, Eric, about which people you put on the product.

[511] Yes.

[512] Eric was very particular about getting the best people.

[513] Yeah, so people, we can come back to that.

[514] You know, I remember when we talked about with Santi on the episode we did on Zoom's IPO years ago now, you know, your named executive officers in your S -1 were not like you think typical, oh, here's high -flying SaaS company, there's going to be a VP of Sales from Salesforce, there's going to be a chief marketing officer from HubSpah, you know, whatever, like, and nothing wrong with those companies and those people.

[515] But I think at both of your companies, the people you brought in as leaders were up -and -comers.

[516] They weren't, you know, the established superstars.

[517] Yeah, I think you, I always wanted to have some people with some range.

[518] You know, they could get very hands -on, but also grow into managing.

[519] I guess I've always thought to try to get people to do something that they haven't done before, you know, so they would have a little bit more mojo have an opportunity to do something that they haven't done before.

[520] And the team is very important.

[521] The chemistry of the team is much more important than the skills of the individual players.

[522] In a lot of ways, that comment reminds me there's a parallel between you not signing multi -year deals where you're forcing the product to earn the customers and you promoting internally where you're keeping people hungry and forcing them to do their best work to earn that job.

[523] It's more thrilling when you can give somebody a chance to do something that they haven't done before for me and for them There's more fulfillment.

[524] Otherwise, it's why you're doing the same thing you've done three times and what's the allure?

[525] Well, I can get rich Okay, just at some point that doesn't keep you going at the end of the day.

[526] I would also come I imagine there's an element of Compensation to this strategy too, which translates to capital efficiency No, not really no. I always think of equity versus cash, but I don't think so.

[527] I never really made any kind of decision on people based on that.

[528] You get to get the right person and then pay the right compensation for the right person.

[529] But always the right person first and then figure out the compensation.

[530] Peter, right, actually back then when we try to make an offer, right, to some executives, right?

[531] You know, at that time, you know, the feedback, why not hire someone very experienced in seasoned leaders from all the side?

[532] It's not really not about a calm package because, you know, when it comes to hiring, you know, at a Zoom, we really like to hire those people with a self -motivation and a self -learning mentality, right, including the senior executives.

[533] And they can grow themselves along with their company grows.

[534] And plus, you know, they are very loyal.

[535] I think that's our, that was our philosophy.

[536] I thought that's the best philosophy.

[537] After COVID, I think I was wrong.

[538] Actually, there's a big flaw also.

[539] Because, Because when business auto -growth your team, and guess what, the executives or team, they are not ready.

[540] You know, like usage like 15 times, 20 times more.

[541] Revenue like seven times more.

[542] You know, our team, even not myself included, even not twice better.

[543] This is one challenge, I learned, that's a mistake.

[544] Another mistake is we think all those executives or KT members, they can learn along with the complex growth.

[545] However, the pace is different, right?

[546] You know, someone can learn quickly, somewhere very slow, right?

[547] That's why also that's another flow, right?

[548] That's why looking back, I feel like, ah, we should have a mixed, you know, team structure, right?

[549] Someone, you know, they have a potential, they can grow themselves, somewhere else, you have to hide some seasonal leaders.

[550] You never know, right?

[551] In case, you suddenly your business is going to take off.

[552] At that time, your team know already.

[553] You know, that's a challenge we are facing today.

[554] So you need to have some members of the team who have experienced scale bigger than your company but other people that you're developing.

[555] Exactly, that's a healthy mix.

[556] You know, back then prior to pioneering, you know, I was, I think a two -stopping, I should learn more from the future.

[557] I think everyone you have to have a potential.

[558] You do not have a greater background.

[559] Actually, looking back, that's not right.

[560] Interesting.

[561] Maybe a mix would be better.

[562] Mix is much better.

[563] Do you think that applies even, do you think you should have done that even in the early stages of the company?

[564] Not early stage, right?

[565] You know, for the first of four years, no need.

[566] But down the road, you already see the market of fate, right?

[567] The product of faith.

[568] You want to skill your business at that time you have to change your philosophy.

[569] There's another, I just keep, these parallels keep popping up for me where Zoom is one of the greatest product -led growth companies of all time.

[570] And yet here you are talking about the beauty of predictable revenue that comes from enterprise contracts.

[571] And it's the same thing.

[572] It's not that experience people are better or that intents.

[573] how its talent is better is that you need that mix.

[574] Totally.

[575] The healthy mix is very important.

[576] So the last, one of the last sort of disciplines within a software company that I want to talk about operationally in this context is marketing with both of you, but particularly with Eric when we were chatting with Saty and with Peter.

[577] We sort of asked this question where like you scaled, once you got the product develop, You scaled with such beautiful capital efficiency, but you did spend money on marketing.

[578] I mean, you joked about the billboards, but there are Zoom billboards now.

[579] I asked them, you know, how did Eric and Zoom think about spending money on marketing?

[580] And, well, I'll let you tell the punchline, but how did you think about it?

[581] Yeah, that's, yeah, even today, you know, every Tuesday, you know, we have three hours in the stuff meeting, right?

[582] You know, this morning, the first topic read about, reviewing our marketing top -ten marketing programs even today still I think it's very tricky the reason why is you do not have I would say is a sort of like a formula right you know when to spend more when to spend less it's not like that as a founder you know you have to spend time on marketing as well do not always focus on product or the sales marketing also is very important right however when to invest in marketing is very tricky every business is different in our case, we specifically, you know, made a decision, no marketing team for the first several years.

[583] You know, because this is not something new, right?

[584] It is a product or, you know, this is very, very, you know, mature market, everyone understands video conferencing, you know, if your product works, you really don't have a marketing team, right?

[585] We try to prove that point.

[586] You know, after that, after we have paid a customer, a lot of customers, a customer told us, Eric, I never heard about Zoom, but I tried a product, a product works.

[587] Right, why is that?

[588] We received a very consistent feedback like that.

[589] I know that's a signal, right?

[590] Then we doubled on that.

[591] Then, 2015, we created a marketing chip.

[592] And also, even after that, we also merit every marketing program spending.

[593] Early on, I spent a lot of time trying to stand.

[594] I give one example, like SEM, right?

[595] Every company you spend money on SEM.

[596] First time I sent a check, oh my God, this is the price of paid Google.

[597] Oh my God, this is the largest check.

[598] I'm getting a sense.

[599] Do you remember how large that check was for context?

[600] That's more than 200 ,000, a month.

[601] A month?

[602] Oh, my goodness.

[603] This is crazy.

[604] You know, that's why I see I wanted to deep dive to understand, you know.

[605] But by the way, the marketing team is all very well educated by Google, right?

[606] You know, you give me $1 ,000, I give $1 .50 back.

[607] You know?

[608] Let's do that.

[609] It's pretty good, right?

[610] Yeah.

[611] But I tell them, no, you should have $3 back.

[612] Why is $4 .45?

[613] Right.

[614] Well, I particularly want to ask you about the time frame you wanted that money back.

[615] How to optimize that, right?

[616] And again, marketing is very important, but quite often very creative.

[617] If you do not know how to measure that, do not spend.

[618] The stories we heard were, you know, most founders, CEOs, marketing teams think about cact -telTV with marketing, you know, and there's more complexity to it than that, but I'm going to spend a dollar, I'll get $1 .50, or I'll get $3 back.

[619] If that pays back within a year, I'm doing great.

[620] Don't believe that.

[621] That's a mistake for all the Suss companies.

[622] It's not $1 .50 back, not $3 .00.

[623] It should be $4.

[624] Right?

[625] It's to optimize.

[626] Just went up in the last minute.

[627] Yeah.

[628] That's a common mistake, I think, for most of the Suss companies.

[629] And Eric, when, how fast do it pay back?

[630] As I would say, as big as possible, right?

[631] It's got to every brain is different, but you've got to optimize.

[632] You keep optimize every day.

[633] do not feel satisfied, oh, give one dollar, get $1 .50 back.

[634] No, optimize, code to get $2, you know, $3, right?

[635] You have to optimize.

[636] This is one example, right, for every marketing dollars.

[637] However, if it works, you'll have a double down.

[638] I remember, you know, first time we had the billboard in one -on -one.

[639] Many customers shared very positive feedback with us.

[640] They feel like, oh, early on, we decided deploy Zoom.

[641] I saw the billboard.

[642] I feel like you guys is a bigger company.

[643] We've been the right decision, right?

[644] It was about validating the decision then.

[645] And plus the employees feel very happy, right?

[646] They say, oh my God, Zoom has a billboard now.

[647] After that, I realized, why not to double down that?

[648] I told our team, how many billboards we have in Wyoming?

[649] This is one.

[650] I said, no, three.

[651] It works.

[652] So that's why you have to know when to double down, when to take step back.

[653] If you know how to effectively measure that, that's very important.

[654] Well, we spent most of today talking about how to build the castle and how to be how to have a profitable castle not sure that really extends but now let's talk about the the defending the castle i'm curious um maybe let's start with eric and then go to peter since we've been on a good zoom streak where do you see the source of zoom's defensibility as a business over the next 30 years yeah so you know i think it's more like a sports, right?

[655] We need to focus on both offense and the difference, right?

[656] So I think back to the period of point, you still need to, even your product is works today, even better than other competitors.

[657] You have to be paranoid, right?

[658] You're happy to keep thinking about what you can do differently.

[659] Keep innovating, keep innovating.

[660] Either the new services or new features, right?

[661] That's the most important thing, right?

[662] But doing that, at the same time, you know, you also need to think about what's next right you know from our perspective right we started from a unified communication the next step will be you know the not a unified communication is collaboration platform right at the same time how to build multiple new departmental applications you know you also need to play offensive as well you know the better offensive play is probably is for the defense as well right so that's our strategy yeah peter i very similar so Product excellence is you can get there, but you also got to work hard to stay there, right, and keep reinventing yourself.

[663] Also, you do want to expand to different areas because if critically, and I think something that people don't realize, if you get a high market share in an area and you don't expand to another area, what will happen just because of the nature of your company and the creative people, you'll do more stuff in your established area than you should, right?

[664] And that creates its own set of problems if you do more stuff.

[665] And, you know, if Eric is constantly rewriting his codec unnecessarily, right, it's disruptive.

[666] So you've got to expand to give yourself a creative outlet.

[667] And then this may be more particular to us, I don't know, but we also have a goal that we set out about five years ago to be the leader in light.

[668] That was our code name for it.

[669] Because if you get to be quite dominant arrogance is your, there's a few things that will knock you off.

[670] arrogance, the customers will get turned off over that and they'll naturally find an escape hatch.

[671] Also, we audit for integrity of the leadership team because when you're quite well established, that can throw you off integrity issues in the leadership team.

[672] So we audit myself and others and also energy in the leadership team.

[673] Because these are things that you've got to audit for them because if you wait for the results to show those things, it's too late.

[674] So, you know, determined to have product excellence, have a goal to be the leader in like.

[675] We actually tell our customers about that, and that holds us to a higher standard.

[676] So we want to be the leader and liked, and then they bring that up sometimes.

[677] Like, hey, that's not the leader in liked.

[678] Oh, God, why did I tell you that?

[679] But, I mean, it's a way to be set yourself out there, right?

[680] Not only do we want to be the leader, we want to be liked, product innovation as an outlet, and then avoid that arrogance.

[681] You talked about it.

[682] But I think I really did this question.

[683] I want to share with you a conversation I had with Peter, I think probably can help some of the founders here as well.

[684] I think I forgot which quarter, a year before we went in public, and I look at our growth plan, I realized, wow, we wouldn't have one service, right?

[685] If we have another service, it also can monetize, you know, the growth's trajectory very different.

[686] At that time, Peter told me that, Eric, that's sort of like that ideal case, but that decision should be made two years ago or three years ago, right?

[687] If you wanted to have a new service, you cannot have a new service today, right?

[688] You need to think about, you know, try to make this in two or three years, you know, before that, right?

[689] I clearly remember that a conversation, you know, that's looking back, that's a big mistake, the biggest mistake.

[690] The reason why, you know, because you have one service, at the same time, how do you think about what's the next service, right?

[691] You know, always plan ahead, right?

[692] This is probably the better way, right, the back -to -all question, you know, all with a single head to build another service, another service.

[693] That's exactly what I was going to ask as a follow -up.

[694] Peter, I know you, Viva launched a second service after the first CRM service around content, CMS, content management.

[695] When did you start planning for that second product, and then when did you launch it relative to your first product?

[696] That was, we started thinking about it to the first part of 2010.

[697] I remember Gordon and I and others started thinking about it at the first part of 2010, so we had 150 people in the company or something.

[698] something like that?

[699] That was four years into the company, three, four years.

[700] So three and a half, yeah.

[701] And then we made our first hire in the fall of 2010, and that's when we started going.

[702] So I viewed that as critical.

[703] It was a turning point.

[704] I thought, hey, I could have a single product company, do really well of that, maybe go public, but then it probably has to be sold to somebody or something like that, or I can try to make it a multi -product company.

[705] And the decision was to pick something that was clearly not an add -on to our first product.

[706] Like it was clearly so far away from our first product.

[707] I was worried that our second product would maybe become an add -on to our first product.

[708] And so I just picked something that was just way out here, just way, way different.

[709] Sold into the same company, but different buyer, different product, different codeline, different everything.

[710] So I thought, this is the way to become a multi -product company, and it'll either make us or it'll break us.

[711] And I thought the odds were more likely that it was going to sink us.

[712] That's so counterintuitive, because normally you would think you'd want to give the same, sales rep, something that they could sort of bundle in for an incrementally higher ticket price and leverage what assets you already have.

[713] But that you will do anyway.

[714] Like if you don't go out of business, gravity will take you there, right?

[715] As you go along, it's like, oh, well, maybe we should make an add -on product or not.

[716] Like, yeah, duh, you know, but if you get confused, you know, and you think that ad -on product is really going to float your boat, it's not.

[717] your new product, if you have a chance, it should be way out here and maybe have the potential to be bigger.

[718] So that's, but it's risky.

[719] What's the scale of the two revenue lines today?

[720] The second one is a bit bigger, but the second one has also quite a bit more potential.

[721] You know, maybe it's a 5x or 10x potential.

[722] Wow.

[723] But it was risky, right?

[724] We debated that at the board level because that could have sunk the company because our rocket ship on our first product was going up and I had to take my eye off that ball to start this thing and it did cause that first thing to suffer but overall the tradeoff was worth it but it could have worked it was risky our most recent episode was about NVIDIA which had a tiger by the tail with gaming as everyone knows they totally took their eye off that ball to start building for life sciences for scientific computing for what became neural networks and machine learning and boy, was it a good thing, they took their eye off that ball.

[725] You know the hidden thing there?

[726] You need a CEO that was an engineering type that went to Oregon State University.

[727] Because that's what Mian Diva have in common.

[728] I don't know him, but there are very few of us Oregon State Beavers as CEOs, let me tell you.

[729] That's an amazing company.

[730] I know Jensen well, actually.

[731] Look at the Nvidia stock price.

[732] It was flat 10 years in a row before they took golf.

[733] That's such an amazing story.

[734] The conviction, really he had to persevere through that decade is amazing.

[735] Hard work, right?

[736] He's a hard worker, too.

[737] He's a very hard worker.

[738] He is focused.

[739] Yeah, there's no. I remember when starting Viva, the first time I started a company, I asked a friend who had started some other companies, because I realized about three months in, God, this is really hard work.

[740] I'm working every day, really hard, every hour.

[741] So I asked my friend, is there any way to do this without working that hard?

[742] And he very quickly said, no. There's not.

[743] So isn't that true, Eric?

[744] I do not think that's a work.

[745] Because we all enjoy that, right?

[746] This is a part of life.

[747] Otherwise, what can you do?

[748] Are you going to play golf?

[749] No. There's no shortcut.

[750] Exactly.

[751] No short card.

[752] Our sponsor for this episode is a brand new one for us.

[753] Statsig.

[754] So many of you reached out to them after hearing their CEO, Vijay, on ACQ2 that we are partnering with them as a sponsor of Acquired.

[755] Yeah, for those of you who haven't listened, Vijay's story is amazing.

[756] Before founding Statsig, VJ spent 10 years at Facebook where he led the development of their mobile app ad product, which, as you all know, went on to become a huge part of their business.

[757] He also had a front row seat to all of the incredible product engineering tools that let Facebook continuously experiment and roll out product features to billions of users around the world.

[758] Yep.

[759] So now Statsig is the modern version of that promise and available to all companies building great products.

[760] Statsig is a feature management and experimentation platform that helps product teams ship faster, automate A -B testing, and see the impact every feature is having on the core business metrics.

[761] The tool gives visualizations backed by a powerful stats engine unlocking real -time product observability.

[762] So what does that actually mean?

[763] It lets you tie a new feature that you just shipped to a core metric in your business and then instantly know if it made a difference or not in how your customers use your product.

[764] It's super cool.

[765] Statsig lets you make actual data -driven decisions about product changes, test them with different user groups around the world, and get statistically accurate reporting on the impact.

[766] Customers include Notion, Brex, OpenAI, FlipCart, Figma, Microsoft, and Cruise Automation.

[767] There are like so many more that we could name.

[768] I mean, I'm looking at the list, Plex and Versel, friends of the show at Rec Room, Vanta.

[769] They like literally have hundreds of customers now.

[770] Also, Statsig is a great platform for rolling out and testing AI product features.

[771] So for anyone who's used Notions' awesome generative AI features and watched how fast that product has evolved, all of that was managed with Statsig.

[772] Yep.

[773] If you're experimenting with new AI features for your product, and you want to know if it's really making a difference for your KPI's STATSIG is awesome for that.

[774] They can now ingest data from data warehouses.

[775] So it works with your company's data wherever it's stored so you can quickly get started no matter how your feature flagging is set up today.

[776] You don't even have to migrate from any current solution you might have.

[777] We're pumped to be working with them.

[778] You can click the link in the show notes or go on over to statSig .com to get started.

[779] And when you do, just tell them that you heard about them from Ben and David here on Acquired.

[780] All right.

[781] Well, we got to wrap, but there's a quick way that we end every acquired episode, which is with grading.

[782] And for companies that are in the middle of their journey, like both of yours, we like to ask it as a little bit of an open -ended question.

[783] What makes the future of Zoom and Viva an A -plus?

[784] What's the scenario where it goes incredibly well?

[785] Paint that for us.

[786] And what's the failure case?

[787] Oh, let's see.

[788] I don't have any time to think about the failure case.

[789] Honestly, I just not wired that way.

[790] A plus is we really help automate this big industry.

[791] It's a $2 trillion industry.

[792] And if we can help to automate it and be that trusted partner that is essential to that industry and using that word very specifically essential and appreciate it.

[793] There's not been anything like that before where you're automating a whole industry in a meaningful way, right?

[794] Essential, you're going to be a life sciences company, you've got to use Viva.

[795] And man, you like that.

[796] you so that would be a big success and then we have a bit of a social mission to to prove that you can you know you can be a good company profitable etc but also be a a good contributor to society and and the employees so that would be success and you were the first public company to convert to a B corporation to a public benefit corporation but that's just the more the formality of it it's you know the way we've operated the company is always like that so that's success.

[797] Essential appreciated really automating this industry and contributing to a good, you know, being an example of a good employer so that other people could copy it.

[798] Love that.

[799] Yeah, so in our case, I would say that's a good question.

[800] A plus scenario would be, you know, Zoom will be a very successful platform company.

[801] We are going to introduce multiple new services and people can count on Zoom to achieve more.

[802] At the same time, we can also grow up revenue every year.

[803] That's probably a plus scenario for many years to come, right?

[804] In too much of a failure scenario, I would say maybe you go back to use WebEx, that's a failure scenario.

[805] So, yeah, Peter, right.

[806] And I did not think about the failure scenario, but we just think about it, be very optimistic, think about the future.

[807] Otherwise, seriously, you know, we're all founders, right, the CEOs, we all feel the huge pressure.

[808] But sometimes you cannot be, you know, too paranoid.

[809] Otherwise, every day you think about too much about a failure case, figure a case, guess what?

[810] You do not dare to move forward, right?

[811] So that's why I say, do not think about that.

[812] So next time, do not ask me this question.

[813] So only the paranoid survive, but don't let it consume you.

[814] I think you're paranoid about not doing your best, right?

[815] I think, Eric, you put a ton of pressure on yourself.

[816] You don't feel good if you don't do your best, right?

[817] I think that's, I see that in Eric.

[818] I love that.

[819] Well, thank you all.

[820] Thank you for being here in the room with us.

[821] And mostly thank you to both of you.

[822] Thank you to Emergence for facilitating this, making it happen.

[823] Yeah, but thank you, Emergent Capital.

[824] Thank you.

[825] Sandy, thank you.

[826] All of you, I really appreciate.

[827] Thank you, my great mentor, Peter.

[828] Yeah, thanks, thanks, thanks to that group.

[829] Thank you.

[830] All right, listeners.

[831] Well, thank you so much for joining us.

[832] for this.

[833] I actually cannot imagine a more useful topic right now than dissecting how to build great companies on Little Capital based on the era that we're going into.

[834] I think, you know, David and I don't need to debate this endlessly.

[835] Like, you can hear the drumbeats on Twitter of how much the market is changing.

[836] But, you know, the reality is it is.

[837] And everyone has to play the game on the field.

[838] And Peter and Eric have just, it's just unbelievable and impressive of what they have built on so little capital.

[839] They're two of the greatest of all time, literally two of the goats at this, which is so funny.

[840] You know, now everybody thinks of Zoom as the, you know, you know, high flyer.

[841] And it's like, I was just thinking every time for the last few years, like, that people would talk about Zoom in whatever context.

[842] I'm like, do you people realize how much cash flow this company is generating?

[843] And it's all because of, you know, this DNA and mindset and everything we talked about with them.

[844] And after spending time with Eric, I mean, it feels to me like the amount of time that he spends thinking about, oh, no, the stock was going crazy and, oh, no, now it's going down is like approximately zero.

[845] They're thinking about how do you build a great company and how do you generate happiness for customers, build a profitable enterprise, and grow that profitable enterprise.

[846] And it was a nice refreshing viewpoint to get to spend time with him and Peter.

[847] Well, if you want to chat about this with us, we would love to do that with you.

[848] you should join the Acquired community Slack at Acquired .fm slash Slack.

[849] 12 ,000 smart, courteous, and kind people have done so before you.

[850] So you would be in great company.

[851] We also have our limited partner show.

[852] And if you want more acquired between now and our next special, which we have recorded and is awesome and we are very excited to release, you can search Acquired LP show in any podcast player, Spotify, Overcast, Apple Podcasts, anywhere you can.

[853] listen to podcasts and find that there.

[854] We have a job board, Acquired .fm slash jobs, where we curate the most interesting jobs that we think we should make available to the acquired community.

[855] Huge thanks as well to our friends at Emergence for making this possible.

[856] That's so true.

[857] I'm so happy I'm wearing my Emergence Capital Fleece right now.

[858] You got to rep the swag with pride.

[859] We've got to rep the swag.

[860] Seriously, I was thinking as you were saying that, I mean, I know we talk about the slack at the beginning and end of every episode.

[861] It really is like it's not just like oh you should join the slack because you like acquired like you know if you're listening to this you are probably a founder an employee an investor you know working at companies of any size where this is relevant and so is everybody else and people are like this community is amazing people are talking about this in slack Jake from emergence is right there in slack to talk about this uh people DM each other there's so much vibrant discussion can't underline it enough it's such a great part of the acquired community and if you're not part of it.

[862] You should absolutely join.

[863] That you should.

[864] All right, listeners, we'll see you next time.

[865] We'll see you next time.

[866] Who got the truth?

[867] Is it you?

[868] Is it you?

[869] Who got the truth now?