YouSaid · the spoken record

Jason Rosenthal

lines on the record: 20
first: 2022-05-26
most recent: 2022-05-26
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“You've got to make your own decision on it. That's generally where people go wrong. It's kind of like if you're a football coach and the owner says, you got to play this guy, you got to play that guy. Well, if you go four and twelve, you're getting fired anyway. So you might as well make your own decision because you know what to do. That's really the key. And there, you know, as soon as you look outside for the answer, you're in trouble on that one. Yeah.”
2022-05-26 · a16z Podcast · Stories of Startup Survival Mode · IDENTIFIED FROM THE TRANSCRIPT · source
“Other thing is that a lot of times you'll see a CEO want to get validation on a decision like this. From the board, from the employees, from their mentors, from there. And the truth of this kind of decision is, you know, you make this one all alone because you're the only one in the position to synthesize the knowledge. And so if you ask somebody, should I take like a crazy risk and decommit everything I've committed to this point? Nobody's going to advise you to do that. So you can't get validation.”
2022-05-26 · a16z Podcast · Stories of Startup Survival Mode · IDENTIFIED FROM THE TRANSCRIPT · source
“They spent so much time so carefully explaining in detail all the technology. And then you had all these people who they were explaining it to going, well, I don't understand this. I don't understand that. Why would you do that? That doesn't make any sense to me. And then with the new product, it is actually going to, I mean, like JJ Abrams, guys like that, and they're like, oh my God, this is the greatest thing I've ever seen. Like, I know a thousand things I can do with this like right now. And so when you saw that change.”
2022-05-26 · a16z Podcast · Stories of Startup Survival Mode · IDENTIFIED FROM THE TRANSCRIPT · source
“The thing that you always hope that the CEO gets to is you don't want him to lie to himself. And in my conversation with Jason, Every argument for building consumer product always comes back to how can you sell a premium product with subpar image quality? Because image quality is a number one criteria for every single consumer. And then, you know, we kind of go, well, like, what about video? And it's like, well, video requires a whole lot of storage. And there are people who would pay anything for Lightfield video, but no consumer is going to pay anything for light field video. And so that was it. Look, I mean, it is what it is. Did I wish we would have raised the money on that plan? Yeah, that would have been better. Why don't you tell me this three months ago? Right. Was the natural kind of thing. And he was feeling like I should have known.”
2022-05-26 · a16z Podcast · Stories of Startup Survival Mode · IDENTIFIED FROM THE TRANSCRIPT · source
“It's who you are, it's how you behave, it's your way of doing things. You know, it's not free lunches and yoga and dogs at work and all that other stuff, right? You're right, and people get confused about that, I think”
2022-05-26 · a16z Podcast · Stories of Startup Survival Mode · IDENTIFIED FROM THE TRANSCRIPT · source
“And not burst into tears. That's the other thing, right? Like, not just go like this product sucks. What are we doing or, you know, like we've got this crazy customer issue or any of these kinds of things, you know, to not kill each other.”
2022-05-26 · a16z Podcast · Stories of Startup Survival Mode · IDENTIFIED FROM THE TRANSCRIPT · source
“In Silicon Valley, there's this thing all that matters is product. Whoever's the best product wins, and this and that, and the other. If you're short on product and it's going to take you some time to get there, the thing that actually can make the company survive and get a good outcome ends up being management, culture, the organization. The way we got out of it, we just had such an exceptional team. And not just individually, but collectively and collectively in the way the culture worked, the way the managers work with the employees that we were willing to basically go through any issue to get to the goal line. I have to say, see very little of that. Like people get so, they just completely neglect the things that you would need to do to execute like that. But we would have died. Thousand times”
2022-05-26 · a16z Podcast · Stories of Startup Survival Mode · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, look, we built a system to run our business. It was not a software product that they could buy in their environment with their processes and their people that would work the way they wanted it to. And so the distance from getting that thing from what we had to what they wanted was long. So that was one of the scarier parts of it. And, you know, when we made the change in the business, the very first thing that came up was many of the engineers were like, we can't ship it. There are so many other things we need to do. And I was like, you don't even know what we need to do because we haven't tried to sell this thing yet. So we got to ship it and we got to try and sell it and we got to find out where the gaps are. That was a long, long journey. And I think at the end only about 10% of the code base was the original LoudCloud software.”
2022-05-26 · a16z Podcast · Stories of Startup Survival Mode · IDENTIFIED FROM THE TRANSCRIPT · source
“Just like, let that thing go. And they didn't back it at all. They owed us $25 million. So now we were $75 million in the hook. And we had to disclose immediately that we'd lost our large customer because we're a public company. And as soon as we disclosed that we lost 50% of our market cap and we couldn't raise the money. And so. At that point, yeah, that was like rut row. At that point, it was like, okay, we got to figure out how to pivot.”
2022-05-26 · a16z Podcast · Stories of Startup Survival Mode · IDENTIFIED FROM THE TRANSCRIPT · source
“So we did this analysis of how much money did we need to get to cash flow positive. And we needed $50 million. And so it's like, okay, you know, at that point, the market cap, we were like four dollars a share. So we were probably worth whatever $400 million. Did that sound right? I guess it was. So we were worth $400 million. We could raise $50 million. So we could raise it, but not in a secondary. We had to do this thing called a pipe, which is a private investment in a public entity or public equity maybe. I can't remember. And so we get it all set up. We're ready to go on the road and do it. And the Monday, we're going on the road on Tuesday, that Monday we get the call from Atriax saying that they're going bankrupt. And this was like a city bank and Deutsche Bank built this foreign currency exchange. So we thought they were solid.”
2022-05-26 · a16z Podcast · Stories of Startup Survival Mode · IDENTIFIED FROM THE TRANSCRIPT · source
“At that point, it was pretty clear to me that we needed another path. And then a few things happened that caused us to get there much faster, our largest customer went out of business. HRAX, which made it impossible for us to raise any money. They owed us $25 million at the time.”
2022-05-26 · a16z Podcast · Stories of Startup Survival Mode · IDENTIFIED FROM THE TRANSCRIPT · source
“But so we got to do that. And immediately, like a lot of the smart people in the company were like, what are we doing? We can't be in the software business and in the cloud computing business. And of course, in the back of my mind, I was like, I'm going to try and get out of cloud computing business. You're a 10 years too early. Yeah.”
2022-05-26 · a16z Podcast · Stories of Startup Survival Mode · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, exactly, exactly. And, you know, and it was like a very hard project. And, you know, we had weird things like servers in the building were named in the software code and hardwired. So we had all kinds of in the user interfaces were ridiculous and all that kind of thing.”
2022-05-26 · a16z Podcast · Stories of Startup Survival Mode · IDENTIFIED FROM THE TRANSCRIPT · source
“So, you know, I said, go ahead, kill the deal, and I came back, and I couldn't think about anything, but like, we're going to be in a lot of trouble. And off of that, we started this product project called Oxide, which was basically take the opsware out of Loud Cloud, take the software out of the cloud computing business, the software that ran it, and like make it its own product.”
2022-05-26 · a16z Podcast · Stories of Startup Survival Mode · IDENTIFIED FROM THE TRANSCRIPT · source
“Remember, I had taken my first vacation, it was a three day vacation since we started the company, took the family to... Aslan, Oregon. That was as far as I was willing to go to see the Shakespeare place. And I got a call from John O'Farrell, who was running a business development for us. And he's like, Ben, we're sitting here talking about this data return deal. And all of us are going, that company looks like we're going to look in 18 months if we don't do something. And if we do it with, if we do this, it will probably get there faster. And I said, you know, that's exactly what I was thinking. But it was like, where did you take that call, by the way, where you just like outside like a playhouse? Yeah, I was just standing outside, like talking to him on the phone”
2022-05-26 · a16z Podcast · Stories of Startup Survival Mode · IDENTIFIED FROM THE TRANSCRIPT · source
“After IPO. So you're out there four quarters and then you change the whole business. That was something. It was one of those things where we went to look at a company called Data Return. We were in trouble. We knew we were going to was going to be hard not to run out of cash even though we had over $100 million in the bank at the time because just the nature of the market, there was an oversupply of these kinds of services. Pricing was below cost, all that kind of thing. And we looked at this company that was just like us, but probably 18 months ahead of us. They were very close to bankruptcy. And we were looking at them to acquire them because we were going to mix all the expenses together, you know, kind of cut cost, whatever, save some money. You have two expense structures that are overlapping and one kind of combined set of customers. So you double the number of customers and then you get efficiencies out of the cost structure and whatever.”
2022-05-26 · a16z Podcast · Stories of Startup Survival Mode · IDENTIFIED FROM THE TRANSCRIPT · source
“We had taken the company public. We had a lot of customers, and we had 500 people, I think, at the time working the company. And look, the stock market had not yet given up on us, although they were starting to, you know, we were thinking about $200 million at the time. So also understand how fast it happened. So we founded the company in 1999. We went public in 18 months later, and then we pivoted the whole thing 12 months after that.”
2022-05-26 · a16z Podcast · Stories of Startup Survival Mode · IDENTIFIED FROM THE TRANSCRIPT · source
“The challenge I've allowed cloud pivot was we had built this company, it had tremendous momentum. We went from our revenue growth, we went $2 million to $57 million in one year. Pretty huge $57.”
2022-05-26 · a16z Podcast · Stories of Startup Survival Mode · IDENTIFIED FROM THE TRANSCRIPT · source
“Antigrav does a beautiful job of describing this, and only the paranoids survive. The decision isn't actually that hard, it's the courage to actually make the decision that's nearly impossible and why nobody ever does it, because you're basically, if you continue going on your current route, you know, particularly if the company has got some Hefton momentum to it, nobody's going to blame you like for the market not being there or like it's not the same kind of blame than if you go I'm gonna just dispose of all of our revenue and our customers and half of our employees and go in a completely different direction. If you get that wrong, that's just such awful consequences, even if the other path was going to lead you to bankruptcy. At least that's the mistake everybody would have made. So that's really, I think, the challenge to it and why so many companies just wind down and never kind of make.”
2022-05-26 · a16z Podcast · Stories of Startup Survival Mode · IDENTIFIED FROM THE TRANSCRIPT · source
“Intel used to be in the memory business. Pivoted to microprocessors. That was the legendary pivot that built the PC industry.”
2022-05-26 · a16z Podcast · Stories of Startup Survival Mode · IDENTIFIED FROM THE TRANSCRIPT · source