YouSaid · the spoken record

Henry Ward

lines on the record: 69
first: 2022-04-21
most recent: 2022-04-21
sittings or episodes: 1
sources: podcast

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“One of my favorite stories to tell is when Mark Andreessen led our series E. And I remember having breakfast with him in Menlo Park in the morning. I basically said we're at the late stages and I gave him the terms. And I said, hey, Mark, if you'll match these terms for me, I'll go with you. I'd love to work with you. We're having breakfast. He said, give me till the afternoon. I'll talk to my partner so I'll get back to you. And so he calls me in the afternoon and says, hey, can I come buy your house? I want to give you a term sheet. And I said, sure. So you drove by, he brought the term sheet and a Lego set my son, my toddler son. And he gave me the term sheet at my home. And I tell this to all the venture capitalists I talk to for VCs giving a term sheets routine. Do it all the time. But for an entrepreneur, it's seminal moment in their journey. And I tell all the investors, hey, if you have a chance to go to an entrepreneur's home and give them the term sheet, do it. I'll never forget that moment.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“Money raised into these funds that's committed for a decade now, that it could very well be that private markets continue to be hot and continue to have a large valuations because all this capital needs to get deployed that's just sitting there, that's been committed for a decade, even as public markets repriced. And what that will do to the IPO timeline, what it's going to do to late stage companies, all that stuff, I don't know, but it'll be fascinating to see because there is a real argument famous last words this time is different. There is a real argument that this time is different for private capital.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think what's going to be really interesting is this public market dislocation that's happening in the private markets and how long the two differences can last. The typical adage is the private markets are three to six months behind the public markets. And so this price correction that's happened in the public markets should feed into the private. We're seeing a little bit of that in our late stage public companies, but much less than you would have thought now in April, four months in since this started. And in the early stage, you're seeing it's as hot as it's ever been. I think one explanation could be just give it a couple more months, Henry, and private markets will correct across the board. I think the other side of this is we were talking about loan duration. I'll talk about capital duration. In the public markets, there's no tide of capital. You invest, you buy it, and then you sell it, and people can come and go. The capital flows are instant. In private markets, they raise these venture funds on 10-year cycles. And there's been so much money.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, we're very close with Goldman Sachs. They're an investor, but JP Morgan just bought one of our competitors, Global Shares. They also have created a private markets trading desk. They're also doing venture loans. So they're coming in. I still view them as a friend. We actually use them for Car to Acts as our bank. You are definitely seeing all the banks come in and they're trying to figure out what to do with private markets just like we are. So I would say today in the ecosystem, we play in that sub 100 million. Goldman won't talk to a company if they're trying to raise 20 million bucks, but we will. And so we're filling this niche of sub 100 million dollar capital formation problems. But we'll see. You know, in five, ten years, I definitely think there'll be crossover.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“And that's who you dealt with, and that's it. It was very niche. Now, what's happening is the scale of venture is no longer niche. When I do angel investing and I talk to my founders, the number one question they always ask me is, who should I talk to to raise my Series A or my seed round? And when I talk to emerging managers that hire us to be fund administrators for them and I say, welcome to the platform, the number one question they ask me is, hey, if you see any great companies, send them my way. So one of the things we're really experimenting with is Has venture reached the scale where we can actually help investors find companies, help companies find investors and play this matchmaking role in the ecosystem and it not be a negative selection bias. That's really fascinating problem. I've been talking to a lot of our customers about.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm learning that there's an explosion of emerging managers happening in the world. This may not be new news, but there's so many emerging managers that are creating funds that are finding niches and soft spots in the market that they're filling, whether it's geographic-based because they're in Kansas City, Missouri and they're the only venture capitalist if you're in Missouri to like niche markets, I focus on this specific type of company or this specific sector. The second thing they all have a similar problem One of the things we're experimenting with is Canca help companies not just raise capital, but help investors find companies. Traditionally, the idea of an intermediary, whatever the private market equivalent of as an investment banker, was really frowned upon. If you hired an investment banker to raise money, venture capitalists wouldn't talk to you. That was a negative selection bias. And part of the reason was there was like eight firms I live a block from Sandhill Road. There's eight firms on Sandhill Road that you just walk over to.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“About Carter Acts, private market liquidity is inevitable. I do believe that somebody is going to crack the code on this. And obviously, I think we have as good a chance as anybody, if not the best chance. And so talk about things that make me fear is what if we aren't the ones that crack the code and we were right there, we were on base and we just couldn't round out the corner. That will haunt me my entire life. That's what I'm focused on.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“Liquidity is a tale of two stories. So, one is there's incredible amounts of liquidity that are happening in this tender offer regime where following a financing round, companies will allow excess demand of investors that couldn't get into the primary round to buy secondary stock from employees. And that's most of that $7 billion number last year comes from. And we do a ton of those. And so what we haven't been as successful about is all the bespoke transactions. I just want to do an auction or I just want to do something else that has been slower to adopt. And so the question that we've got to ask is, I think we have V1 of private market liquidity, which is the tender offer. We're doing a ton of that. I think we have v9 of private market liquidity. And we're trying to figure out what is V2 through V8. How do we bootstrap in? It's a little bit like my car versus scooter analogy. We built a car. Now we've got to go back and go, what's the scooter? What's the electric scooter? And start building out that pathway. Because I do think private market liquidity, this is one of the really fun.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“Have a very succinct answer, which is what's missing is debt. It's really funny in Silicon Valley and tech. We're equity people. We don't understand debt at all. I have all this equity in Carda as a founder. I can't get a loan for a house. And the entire world runs on debt. The entire world runs on debt, except for this one little weird anomaly and technology companies. I barely have any personal debt. Our company doesn't have debt, but we have tons of equity investors. We only understand equity. And the reason why that's true, or at least one reason why that's true, is that it's really hard to create debt instruments or loans when you don't know duration of liquidity, how long it's going to last. And tech companies, because we don't know when they IPO, it's impossible for banks to calculate duration. And so it's very hard to figure out terms on loans. And so that's why debt hasn't been introduced. And I think one of the really”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's the science that we put on top of it to help companies make better decisions on Compt. That's the real value. And I think what does the data enable you to do today that couldn't be done before?”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“Build our own stuff. But if we can integrate with other platforms, ecosystem could build much faster than any one company can. So I believe, especially in B2B enterprise, deep integrations into the customer platform matter a lot. And then I think the second thing is when you do have this unique core data set, how do you use it to create new product areas that you couldn't do without this? And so I'll give you the example for us. We launched CARTA Total Compensation last year, which is basically Radford, but real time and in the cloud. And we did this because we were getting option grant information from 30,000 customers that we have for every employee in Silicon Valley that gets stock options. And we also have their salary information because we integrate with all the HRAS systems. So we can tell everybody what E6 engineer at a series feedback company makes in stock and cash. And then we can benchmark that for everybody else. And it's that materialization of the data. It's not the data itself.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think data is super valuable, but I tell all entrepreneurs and I tell my exec team this now, you know, any angel investing that I do is that if your business model is predicated on data, you're going to die. That was true in the last 20 years that you could build data businesses. I don't think that will be true in the next 20 years. That data will become commoditized. You have to do something else on top of it. Just having the data is not defensible anymore. When we think about data, I think we have two strategies. So one is, and this is very much a Salesforce strategy, one is embed ourselves into a startup ecosystem or a customer ecosystem through integrations where other platforms can use our data for things that are useful to the customer. I think that's where all the values going to be. It's not the data itself, but how do you materialize that data in ways that create value for customers, either via workflows or decision making, whatever that is? And the way that you can do that at scale is obviously we can.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“Unrealized potential. The business and platform that we have is just we have so much optionality that we're building on this. I don't know what the inverse of peeling an onion is, but the more problems we solve, the more problems we get to solve. And it's just the solution space that we can go after just keeps expanding. I think the saddest thing for me might be 10, 15, 20 years I retire and I say, well, we didn't realize our potential. That's, I think, what keeps me going.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“As garden of innovation, and how do you balance those two things? And again, everybody's correct. It's just which aperture you're looking for. If we want to be an innovation-based company, we should look through the aperture of innovation and gardening. And if we want to be an execution, like we know exactly what to do now go after it like sharks, we should go be that. Which aperture do we look through it today? I would say fighting the battles of bureaucracy is my biggest challenge.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm a very classical zero to one product founder. I'm just your typical, you ask me what gross margin is. I have to look up on Wikipedia. You talk about like what products we should build. That's me. I love doing that stuff. And I love the early stage and building new things. The worst part, I would say about my job is fighting the inertia of bureaucracy that builds into a company as it gets larger. It just happens. In part because the company gets bigger and you have to, you have to have more process. You have to have more standardization. You have to tell people how to work in a way that you didn't when you were 20 people like we are now at 2000, partly also you have executives come in where you hire them because they know how to standardize and operationalize things at scale. And how do you work with these executives where I'm like, hey, but don't make it too bureaucratic. And like that's what you brought me in for make this place hum and turn it into a machine. And I'm like, but I don't want to be a machine.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“To we have all the data, we can tell them what an E5 engineer at a series B backed company should get in stock options. We can tell them that, let us talk to your head of people and see if we can be helpful, figuring out how to navigate the organization to step two. I would say we're early days on that. I don't have the secret sauce yet.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“All of those things, that's key one because what you want is the customer when they do have a problem, you don't want them to quit on you, you want them to call their CSM and go, hey, I don't feel like I'm getting the value out of this product. Tell me what I'm doing wrong. That customer health metric with CSMs deeply engaged, part one is the key thing. Part two is this is unique to us, not true of all companies, but the products that we have for companies often have different buyers. Sometimes it's the same, but often it's different. So like our cap table product might be bought by the general counsel. Our 49A product might be bought by the CFO, and then our compensation benchmarking cardio total compensation benchmarking product might be bought by the head of people. The ability to parlay one relationship into an organization, into a broader relationship where we can say, hey, we should talk to your head of people because they're hiring, they're issuing stock options to all these new employees, but they don't know how.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think two things that we're learning, I definitely would not be so bold as to say we figured it out, but we're trying to. So one is having a customer success organization, a CSM customer success manager organization that deeply understands the customer problem set is critical. And I know that sounds like a lot of business school buzzwords, but I can tell you exactly what that means. If you can figure out a customer health score, an automated customer health score, and then make”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“You just look at these startups, you see which one's getting traction, and you buy it, and you push it through your pipes. That is how you do Salesforce level execution”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“Tends to be a little bit easier getting to Prague Mark fits the hardest part, and then at some point, unless your databases or payroll, you're going to run out of oxygen there. You're going to have to have a new product or a new customer expand the market. And then it becomes a multi-product, multi-customer company, a platform. Vast majority of companies die there. That's where you get the single digit billion outcomes. Two billion dollar market cap and always will be. But if you want to get the 10, 20, 100 billion dollar market cap, you have to become multi-product. Being in the midst of doing it right now, that's actually really hard to do. It's harder than I would have thought. And building a GTM motion that becomes the pipelines of distribution where we can invent a new product, we can acquire through M&A Corp dev a new product and then push that through the lines of distribution to our customers in a scalable way. That's really challenging, but the teams that can do that, it's incredibly valuable because now if you get a good product market fit and a lot of that can be experimented with outside.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“For us, I have a very specific answer. I don't know that I can speak for all companies, but definitely for us, we are in this, I would say, later innings transition of moving from a single product company to a multi-product company and the platform, yes, multi-product, and I would even say multi-customer because we both sell cap table software and compensation, benchmarking software to companies, but we also sell back office and fundamental to venture funds. If you look at any life cycle of a company, obviously they start with an idea and they're trying to get to product market fit. So that's stage one. It's trying to get to product market fit. Then after product market fit, most companies die before that ever happens. That's the first wave of death. The second wave that happens is they get to product market fit, but they can't scale effectively. And that's stage two, which is how do you scale this product that seems to be working? A lot of companies die there, but much, much fewer.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“Failure. I use this phrase friction is failure. And most people think friction is good because it shows a healthy debate. And so to me, it's a great exec team works really well together and is okay if they don't get the right answer. My favorite lines that I learned about partnerships is great partnerships work where when the relationship matters more than the answer. And I think that's true for teams. How we work together matters more than the answer. And we're okay making mistakes to preserve the collaboration of what we're working on together.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“I talk a lot about this with my execs where I have this interpersonal theory about how people talk and work together and I call it process and content. So process is how you work together content is what you're talking about. And so most teams and management C-level execs talk a lot about content. What's the right budget here? What's the right product here? What should we do here? All of it's around the decision making and what's the right decision. I spent a lot of time with them, especially with execs that come from bigger companies where vigorous debate is good because it gets you to the right answer. Another management maxim I can't stand is debate is good. And what I talk to them about is what I care most about is process, how we work together, how we talk to each other. You'll give this example where two execs are arguing and not getting along and upset about something, but they ended up getting to the right decision, to the right outcome, and agreeing on it. They would consider that success. I would consider that.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“Get wrong a lot because they have so many resources, they're like, we'll just go straight to the car. We'll build a chassis. We'll build this. We have executives that know how to operationalize this. We have a roadmap and a plan. But if you're in a discovery company where you're like, you're not sure what this car is going to look like, you have to start with utility early. And this is why it works really well for founder-like companies, because that's what venture is like. Nobody gave me a billion dollars to start Card out. I started with 200K and then a million and a half. And each way I had to show utility. I had to show something that at that stage of the company was sustainable we could build off of. And big companies don't have that. And so they do these massive projects that often fail three years in where we instill that deeply into our product teams. Even though we're 2,000 employees, that your job is to build the scooter for us and not the chassis.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“This great image I shared with all my product managers. I'll try to describe it hopefully in words of product management if you want to build a car. And the first one was this iteration of how to get to a car in pieces. You start with a chassis and then you start with a wheels and then you start with a steering wheel and then you put in a steering wheel and you put in seats. And at the end of this, you get a car. And then the other solid project management was you start with skateboard and then a scooter. Then you put a stick on it. It becomes a scooter. And then it becomes an electric scooter. And then it becomes a go-kart. And then you get to a car. I love that one because what's so powerful about it is the first version of this product has utility in the second style, but not in the first. And so we talk a lot about everybody wants to build a car. Like we know that's what we want to do, but that's not the hard part in product management. The hard part in product management is the path to the car. And how do you provide utility along the way? And this is one of the things that big companies”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think you'd probably see me do two things. So one is a lot of external stuff. I try to focus helping the company on the outside. I leave a lot of the operational detail to my exec team. I think you'd see me do a lot of that. And then the second is I hope you would see me do a lot of positive mentorship. So meeting with one-on-ones with employees, helping them think through problems, meeting with teams, helping them think through problems, doing roundtables, getting advice. I mean, one of the things I love about Andy Groves' book first chapter is he spends like 12 hours sitting in meetings all day. And then at the end of the day, makes one decision. And he's like, all that mattered is I get that decision right. I very much feel like my job is to mentor, help, and then occasionally make a decision and make sure that decision is a good one. And so you'll see me getting a lot of information. We're just.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“Go like everybody's kind of a wuss, you know. He thought he doesn't force the issue. I'm the opposite of that. I'm a discovery curiosity type leader, not a hard charging execution leader.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“Get curious. So the big question for me to figure out is if I feel like this was not a great job, what does the employee think? Do they think they did a good job? Do they think they did a bad job but don't want to admit it? Do they think they did a bad job and now they're going to tell me they did a bad job? All of that is such important questions because depending on how the employee feels, it decides my solution. If the employee thinks they did a good job, I have a different problem. I have an expectations problem. And I have to find out why this employee thinks this was great and why I don't. And I could be wrong. Maybe I'm missing something and they actually did a good job, but I just don't know it. So it's a discovery process to figure out why the employee thinks they did a good job. If the employee thinks they did a bad job, but they're being defensive about it, that's a very different problem. That's not about the project. That's about the employee. Why is this employee feeling defensive? So for me, it's an entire discovery process. And I'm sure the hard charging CEOs that are listening to this.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“Team was a failure. It was like they were heroes for trying. And that's the most important thing. I have this another management thing. If a team does a bad job, you should be upset. And I have this rule with my execs. You should never show that you're upset. Full stop. There's no excuse for it. And it's because once you show you're upset for any reason, people won't want to tell you things. And it's hard. It is hard when you see really stupid things happen. Like it's hard not to get upset about it. I can do 99 things right and be cheerful, positive, optimistic. And that one time I'm upset about something, that's what everybody will remember.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“I started CARTAX too early. I would say this is actually the third swing I've taken at creating a liquidity product. And I've done it twice before, both times abjectly failed. And part of it was me noticing, but mostly it was the team realizing, hey, given the constraints and how we're going to measure progress. And they set it up. It wasn't, hey, I consider success A, B, and C. They're like, Henry, here's how we think of a success, A, B, and C. And I'm like, that sounds reasonable to me. Let's run with it. And then over time, as they kept reporting, they weren't getting to A, B, and C. And it was really painful because we believed the team believed it's so hard for a team to admit failure, especially to the boss. And it's so hard for me to watch them suffer as they're trying to get this thing off the ground. And those things are really tough. But for most part, I would say 90% of that team stayed with Carta. It wasn't like we disbanded the team.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“They're unhappy. Can I escalate that? Because I don't know what to do. That is critical to uncovering problems in the organization.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's really hard, and it comes down to culture is often overused term, but I would say, I hate to put everything on culture because there's so much more to organization building than culture. But I would say in this one, culture matters a lot. One of the old management maxims I hate is don't come to me with a problem without a solution, which is the dumbest management thing I've ever heard because then you don't get any of the problems that don't have solutions, which is the ones you really want to know about. If anything, I'd go the other direction. Don't come to me when you have problems that have solutions because you've already figured out. Come to me with the ones that you don't have solutions for so I can help and instilling that into the culture of my job is I'm a servant leader. My job is that when you have problems, you don't know what to do. Come to me because I might be the person that can help you. And ingraining that culture and that feeling all the way down the leadership stack to the support analyst that goes, I have a problem with a customer.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“Shoulder to shoulder, desk the desk with them, helping them. I take those two sides, and 90% of the time I trust and let people go. And then the 10% of the time I'll sit and I'll invest with them. And if they come out the other side of that micromanagement investment, which micromanagement, you know, it's a bad word, but I think it's a great thing. I think it means you care and they come out better. And now you trust them. That's fantastic. And 50% of the time that'll happen, 50% of the time you can't help them. But now you know you made the effort and you can figure out what to do after.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think the hardest charging version of my leadership style is when I go into micromanagement. I'm a big fan of extremes. There's complete competition, perfect competition or monopoly. I kind of view there's autonomous management, let people do what they want to do and stay out of their way or micromanage, but don't live in the middle. And it comes down to confidence. So if you have confidence in the executive or product manager or whoever it is that you're working with, let them run. Be there, help them give frameworks, give ideas, be a thought partner to them. Treat them as a peer in this, but let them run. This whole trust but verify thing, just trust, see that it works. And if you trust them, they'll come and tell you when things aren't working. They'll tell you when you should be worried, but leave them alone. If you don't have confidence in them, micromanage them incessantly because management and all this stuff is an apprenticeship. They really need your help and not just from afar. They need you.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“Working for the CEO and working for everybody else you've ever worked for in your career. And I'll usually get business school answers. Like you have to be collaborative, you have to be cross-functional, all this kind of stuff. I say, all of that's true. But the biggest difference is it's the first time in your career you work for someone that knows less than you do. I'll click on my CFO. When you were the director of finance working for the VP of FP&A, that VP became VP because they did your job and they did it.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“A huge fan of Snowflake and Slovenia. I mean, the numbers they put up are just like the Steph Curry of B2B SaaS. It's just amazing. We all aspire to execute the way that team does. I would say though, and maybe this is why we're not a snowflake, but I'm the opposite of Frank Slimman, literally the opposite. As one example, I don't push hard because I believe that people will work harder for themselves than they will for anybody else, including me. There's this really such a subtle thing. Most CEOs, if somebody does something well, they'll say good job with approval. I'll say congratulations because they didn't do it for me. They did it for themselves and good for them that they were successful at it. I give them the credit that they gave themselves for doing a good job rather than making it paternal. I also do something else. I do this exercise with execs where especially newer execs that are promoted or recently started working for me. This exercise, I'll ask them, hey, what's the difference between?”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“An outcome based company. Results matter. We're an input based company, not an output based company. The results will be the results. What we question is, did we do it the right way?”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“Big part of it is roadmaps and decision making is pushed all the way down to the people that matter. So we're very good at allowing experimentation to take place. I'll give you like a very practical example of this, which is really hard, hard to figure out. Let's say a director level or senior director, something their project tried a new product or new thing and it didn't work out. And now their performance review is coming up. We do a four-point rating. Four is the best. One is the worst. Do you give them a two? because it didn't work out or do you give them a four because they tried. That question is, it seems so simple, but it's such a fundamental question because if you give them a two, nobody will ever take risks because they'll only do things they know that work. People will want to take risks because they know that they'll get rewarded for that effort. And we're a company that gives fours. Most companies won't. If you ask most companies, what do you do when somebody tries something and they fail at it? They'll say, well.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“So, for example, my framework is only N of One markets. We only do new market creation. So we're not going to try to invade an existing market. We're going to find a way for money to exchange hands that hasn't happened before and make that true. I give all the frameworks for how to make these decisions, but you really push decision making to the bottom. And what it feels like for employees is it's scrappy, it's exciting, it's also incredibly chaotic and they have no idea what's going on half the time. And I would say the best thing if you want to be a founder, CARDA's right place to do this. If you want to be an executive, this is a terrible place to learn to be an executive. But if you want to be a founder, this is how you do startups. We have the Carta Cartel. We affectionately call it early stage employees that have left to do startups. And there's a dozen of them already. We breed founders. That's what we do here.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“Would say that the experience of the employee is a top down versus bottoms up management style. If you're an execution company like a database company or a payroll company, they know exactly what to do. The roadmap is defined from the top. Execution is measured and progress measured. Okay, ours, all this kind of stuff. And so they're given the thing. Here's what you got to go do and you just have to go do it. And it's great. And you'll do it really well and all that kind of stuff. I think employees that come out of those companies become great executives. Because how do you become a great executive? I call it deterministic management. You know exactly what to do. You have a roadmap. You have a plan and your job is to operationalize that plan. And they become great executives. If you work for a company like ours, we have no idea what to do. It's very bottoms up. We intentionally organize that the best ideas come from the bottom. And my job is not to actually make decisions on what to do because I'm not close enough to the customer, to the markets, to all these things. My job is to give people the framework that they make the decisions on what to do.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“Cheaper product. For us, we've never seen line of sight to a billion in revenue or 10 billion in revenue in any one product line. We're like that company that sort of has a machete and we're hacking our way through a foggy jungle and we're building the path as we go. The first type of company I would call an execution company. They know exactly what to do. The question is, can they organize a team and execute against that plan better than anybody else? For us, we don't know what to do. We have to keep innovating and finding new markets because in any existing market, we're going to run out of oxygen. And we've raised venture capital. We raised too much money to just flatline. And so we constantly have to innovate and find new paths. And the question is, which company do you want to work for? High performance execution team or an innovation discovery company where we're constantly beating our own path. And for some employees, it was better to go to an execution company. I would say everybody that comes to CARTA is here for the journey, not the destination because we don't.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I used to have this conversation a lot with candidates that I was trying to recruit back in the early days especially. I'd compete against Instacart and I'd compete against MongoDB and Gusto and payroll companies and health tech companies. And what I would always tell them is I would say, hey, when I had a candidate that had an offer from a payroll type company and offer from me and they were trying to figure out the two. And I would say to them, hey, there's two types of businesses that you can pick from. One is a business like this payroll company you're we're competing with that has line of sight to at that time a billion in revenue seemed crazy now i would say 10 million in revenue but they had line of sight to a billion in revenue when they were a series a or b company the question was could they out execute there's a billion dollars easily available in tam for a payroll company or for a database company the question is can they just execute better than the incumbents and get there and build a better”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“Makes it tricky because when you enter new markets to be an end of one player, by definition, you have to go to relatively small markets because large markets are really hard to become an NFO one player. It takes a lot of time. You have to have the scale to take over these N-of-1 markets, like Amazon still not NF1, but boy, are they heading that direction? That is the balancing act where the investors that invest in CARTA, the criticism might be, hey, they only go after small markets. The bullish case is, well, hey, but they win all these markets. Each time they win a new market, it gives them optionality to build on top of that market.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“I am a huge fan of one of N versus N of One framework. And I just have to give credit. I probably talk about it more than anybody else because I'm such a disciple. But this actually came from Arjun at Tribe Capital, you may know. He told me this framework and I just ran with it. So an N of One business is one where the market structure allows for a monopolistic effect where there can be one and one winner, the end of one winner. A one-of-end market is one where there's lots of competition. You almost think of it like Peter Thiel's competition is for losers, right? He has a very black and white view of the world. There's either perfect competition or there's monopoly and there's nothing in between. And we subscribe to that view. And our job is to never enter one of end markets, never enter anything where the end state of this marketplace has to be one with multiple competitors and only enter markets where we have a real chance of becoming the end of one player. And that actually...”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“Send everybody vesting reminders and teach them about how important it is that they exercise their options. And both are correct answers. The question is which aperture do we want to look through today? And that's how we look at everything is what's the right aperture to look through a decision and then make a decision through that aperture. And my job as a CEO is not to opine on yes, no versus good ideas, bad ideas. My job is to help the executive team to figure out what's the right aperture for decision making.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“Product manager focused on your user and the user wants feature X. We should do that. But then if you look at it through a different aperture, let's say what is core to our mission over the next 10 years, that feature may not actually be important to us. And we're both right. And so the question is, which aperture do we look through? I'll give you one really good example. If you talk to some of our CEOs that are customers, some of them don't like to give vesting email reminders to employees. This is a really weird one, but they don't like it because they don't want employees worried about equity. It's also sometimes they don't want employees if they leave to know that their options can get exercised. There's some weird dynamics that happen with some companies investing email reminders from employees. And so if you look through the aperture of what do I do to make my customer happy, you might say we should turn that off if a customer wants that. If you look at through the aperture of our goal is to normalize equity as a means of compensation and educate the world about equity, we absolutely”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“Took something from our friend Mark Andreessen where he talked to me about Andreessen Horowitz. There's no I bad ideas. It's only timing. And if you have that belief system, he'll walk you through this history of ideas that happen that were before their time, but then actually ended up being a good idea. I can do it for like webband versus Instacart, but the Andreessian people can do it for the last 150 years. So we've taken that. But what's so great about that model is the question isn't what's a good idea, what's a bad idea. The question becomes is now the time for this idea. And that's such a different way to think about investment decisions. I love that framework. We're not investors. We're operators. So we have our own framework, which is there's no bad ideas. The question is which aperture you look at for this idea. And so if you're looking at an aperture saying, hey, we're trying to solve this one problem for a user. It feels like we should do this for this user. That aperture is correct when you're a”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“Was market size? How big is the market for cap tables? That's what every investor said to us. The investors that invested in us didn't see us as a cap table company. They saw cap tables as a wedge to not just liquidity, but all kinds of other things that you could build on top of the capital structure of a company. The captables gave us optionality. And I would say now we've got eight, nine different products that we sell into the venture ecosystem. And one of the things we look at when we think about what new products to sell to build, the curse of optionality that we have, which is we have so many options to go after, is we ask this question, what gets easier and what gets harder to build? And so some things, if we wait, actually get easier because we get more network effect, we get more critical mass, et cetera, some things actually get harder if we wait because competition's coming in, because incumbency gets stronger if we don't change behavior, et cetera. And that's how we decide what to do first and what to do second is what gets easier to do.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“Two parts to how we grow with our customers. So, one is our pricing model on the cap table product is basically predicated on, we don't have seats. What we do is line items on the cap table, which include every time you add an investor, you get a new line item, every time you hire an employee with auction grants, you get a new line item. So as these companies grow and raise more money and hire more employees, we grow with them and they pay us more. It's absolutely true. We see it. Vast majority of companies don't grow. And then in any individual cohort, but then a handful of these companies grow for everybody else. And we average out at roughly 120% that dollar retention, but you can see the power law dynamic happening in a cohort by cohort basis. We just get the law of large numbers by cohort, which is great for us. So we grow in a more normal distributed way. The second thing is we build a lot of products on top of the cap table. One of the criticisms of investing in eShare slash Carta in the early days.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source
“There's less competition from buyers, where, as I said, there's seven institutional buyers that will buy in the private market. So it's easier to find stuff that's overlooked in the public market. So many things are scrutinized. It's hard to find stuff that's completely overlooked. And then I think in private markets, what's really interesting is if you're asset manager, you believe in efficient markets and you believe in efficient portfolios and your job is really to understand the world as a Gaussian distribution and allocate correlations correctly. That is your job and you believe the world is normally distributed. We know the stock market isn't completely normally distributed. It's got a fat tail on the downside, but it's close enough. And it's so close that we can create options and derivatives and all kinds of financial mathematics that work in the public markets. Private markets, especially in venture, are not normally distributed. They're power law. The best companies win it all.”
2022-04-21 · Invest Like the Best · Henry Ward - Transforming Private Markets - [Invest Like the Best, EP. 273] · IDENTIFIED FROM THE TRANSCRIPT · source