Startup Grind Interview With Mike Abbott (Partner @ Kleiner Perkins)


[00:00:07.13] DEREK: Let me introduce Mike. Mike is a founder, Mike is an entrepreneur. He’s also been a senior executive at companies like Microsoft, Twitter and Palm. He’s an investor in a number of companies including Cloudera, Gumroad, Code Academy. He’s currently a partner at Kleiner Perkins. Let’s give a big warm Startup Grind welcome to Mike Abbott, here we go.

[00:00:45.16] DEREK: Welcome, that was a lot of build up there.

[00:00:47.27] ABBOTT: A lot of pressure.

[00:00:50.25] QUESTION: We love to start these interviews by just learning a little bit about yourself. Tell us where you grew up. Tell us about your grandfather and your father and what they did for work.

[00:01:08.16] ABBOTT: Okay life story. So I grew up in the Bay Area which I think is a little bit unusual now. I grew up on the edge of San Jose and Saratoga. I was fortunately, now I can say this, raised by a dad who was an engineer. My grandfather was an engineer. He actually taught at Berkeley so for me what that meant was I was always around computers. We used to go to the flea market at Dienza on Saturday mornings not Sunday, that’s the normal flea market, but this was the computer market. Our first computer was an Apple 2 Plus. I taught myself Basic as well as Pascal.

[00:01:50.09] DEREK: And what did your grandfather teach?

[00:01:52.03] ABBOTT: Electrical engineering.

[00:01:53.25] QUESTION: So you had computers in your home early — just tell us about this experience you had with Steve Jobs and Steve Wasniack.

[00:02:02.01] ABBOTT: So I was in — I don’t even know this was the third or fourth grade — and growing up in the South Bay Apple computer had actually donated a lot of computers to the school there so for me it just felt normal that there was a computer at home and there was a computer at school. Well predominantly what my friends and I did were actually break the security codes of games and trade games but for some reason a friend of mine and I wrote a small little grading program for my teacher and at some point Steve and Steve came by to visit Blue Hills Elementary school in Saratoga and got to meet these two guys and they seemed like really nice guys and this friend and I were just more impressed like wow maybe we can actually do computing and actually make a living out of it. I remember coming home and telling my dad that I met Steve Jobs and he was more shocked than I was because I really didn’t know who he was. I just got a cool Apple sticker at the time.

[00:02:58.18] QUESTION: Do you still have it?

[00:02:59.07] ABBOTT: No I think my mom I’m sure cleared it out from our house, but I wish i would have kept it.

[00:03:03.18] QUESTION: So was the expectation you come in with this background with your dad working at Lockey your grandfather an engineering professor was there this expectation that hey you’re going to do engineering or was that kind of naturally ingrained in you where did that come from?

[00:03:18.27] ABBOTT: No, actually it was kind of more random just because I was just always around it either on the computer doing heath kits and actually as I got into high school I became more interested in science I actually studied biochemistry as an undergrad. I was really interested in looking at how I could potentially apply computing to biology which at the time was just a glimmer of light way in the future.

[00:03:45.25] QUESTION:And were you doing entrepreneurial things growing up?

[00:03:51.25] ABBOTT: Actually no, I don’t have some story like I was selling products outside my door when I was kid. I didn’t. Actually my path as we kind of will talk more about is pretty unique. I think I as always one where I was really scrappy and I would go figure things out whether it was teaching myself Basic or Pascal or later in my career just jumping into brand new domains, but there wasn’t some big predetermined path. As a matter of fact even after my undergrad I actually did an internship here at SRI where I did research on human livers and I got real interested in primary research and actually always coming back to [INAUDIBLE] the one thing for me like I always came back to computers, that was my comfort food. It was like okay I can do that, I’m interested in these other areas, how can I find these intersections of domains and that’s kind of been my story of my expiration of my career I think.

[00:04:53.08] QUESTION: So you start here in California and school studying biochemistry and you end up at the University of Washington, is that right?

[00:04:58.13] ABBOTT: Yeah, so I had this idea that I think I may want to teach or I’m going to be really good at science so I go up there and not quite before my second year I kind of had two epiphanies, one I didn’t really want to write grants for the rest of my life and be a professor and secondly I just really came to the realization that i was better at math and computer science that I was at just doing primary research and science. What helped kind of have me come to that conclusion was a friend of mine had a gotten a grant at SRI to spin a company out of SRI so I came back. I told my adviser oh I’ll be back I’ just going to try the startup thing and you know, low and behold I never finished, much to the misery of my parents.

[00:05:43.12] QUESTION: And this is Composite, right?

[00:05:44.14] ABBOTT: No, actually this is a company called Gene Trace. A friend of mine had developed a technology to use a mass spectrometer to put DNA sequencing and I was doing the informatics work and that’s what kind of really started to focus a lot of my time just on computer science.

[00:06:01.20] QUESTION:Yeah, and what happened to that. Was that a short thing?

[00:06:05.11] ABBOTT: So the company never took any venture. This actually is interesting for me now especially in my current role. We never took any venture financing we all wrote grants and so had grants from the Department of Justice and other groups. Eventually Monsanto bought a large chunk of the company and moved the company to use the technology to profile genetically modified crops. But Composite, in graduate school and even at Gene Trace I started doing a lot of work in an area that will now be called Bio-informatics which then it was primarily working on an algorithm called Blast looking at public databases as well as and often times private genome databases and I started doing all of this work and federated querying. Basically querying multiple databases and after Gene Trace I started getting more experience frankly on the Internet. I went to a company that got bought by US Web and then the founders of US Web started a company called Electron-economy, which I was a part of the founding team there. I was the first engineer. I built an engineering team of about a hundred and twenty people, but key data point here we closed our series B in March of 2000 so those of you who are in this room during that time the timing was both the best and the worst because our evaluation was very high yet we had all this money but long story short, company got up to 220 half of that was in engineering by the summer of 2001 I was the last executive, we had laid off 180 people and sold the company because we had 40 million dollars in the bank. That was a humbling experience to say the least. After that is when I started Composite software that is actually still around today and doing very well looking at how you bring data across vertically partitioned data into one place. What does that actually mean? How do you create a single view of a customer. And frankly a lot of the initial work that I did there was based on some of the stuff I had done in graduate school.

[00:08:09.12] QUESTION: You were there for a long time, I mean four or five years is that right?

[00:08:13.13] ABBOTT: Six years in operation and then I stayed on the board. So this is a company that I had five guys in my house. I financed the company, I wrote the original query engine we did a series A ten years ago this last summer so we were one of a handful of companies that got financing so one of the differences then versus today was certainly I had to give a lot more of my company up for that financing but I was really grateful to be able to move the company out of our house and actually build a company. I mean the company’s around today ten years later with over a hundred employees and doing quite well in the revenue side.

[00:08:52.13] QUESTION: Can you remember those days very clearly of being in your house, having your team — Perkins office is maybe one of the nicest offices I’ve ever been in in my entire life. Is it easy for you to recall those days?

[00:09:18.26] ABBOTT: A couple of comments, one it was both liberating and fun but it was also really tough as hell. I think often times people forget and I’m sure people in this room don’t forget but starting a company is hard.

[00:09:33.19] DEREK: Feel free to use the word grind in what you’re talking about.

[00:09:36.24] ABBOTT: We had to grind it out. I had these five guys, three of which are still at the company ten years later, which is awesome, who were working out of my house. They just kind of trusted that I was going to go somehow magically get financing and there was a lot of pressure so it was like both awesome that like I didn’t have to deal with a lot of meetings and BS I had to deal with fund-raising BS, but you know it was just a lot of fun to go do that. I think one of the things that influences me today is I can remember the amount of time I spent in financing and fund raising with firms where I wouldn’t get any feedback and I had meeting and meeting and meeting and meeting and all of a sudden I wouldn’t hear anything again and I would be like okay that really sucks. I’m a big boy like you can tell me no. It would be really awesome if you would tell me no and why but this other model of disrespect is not cool because I know how hard it is and I think the motivation to also start a company tends to be I think in general very pure for the companies that work. I mean you don’t go start a company to go make money that will not play out well and so when I look back on it I look at it very positively, but I’m actually more proud of what the team collectively did to go build the company and be able to hire those you know hundreds of people and actually create a business and maybe it’s not the ten billion dollar business but it’s a business.

[00:11:02.20] QUESTION: Is that something that you apply today as a venture capitalist. Are you very honest in your feedback?

[00:11:08.05] ABBOTT: It’s one of the reasons I actually got into venture capital. So I closed the series A and it was a little bit north of five million dollars which is awesome. I was the CEO, I built the management team. I had no idea how to build a management team and the reason why that’s relevant is the two primary investors were and are great people but they’re more financiers and not necessarily company builders and actually an angel — it wasn’t really an angel — but a small investor in that series. Because we didn’t have any angle investors was a professor named Rejeev Talwani and Rajeev who unfortunately has passed away provided a really kind of key link between Stanford and the startup community — He was kind of a key link. I met Rajeev because three different firms asked him to do technical due diligence on the company. It happened that what we were building was exactly the research he was doing at Stanford so he invested, but coming back to why he was so influential and why he actually is one of the reasons I’m in venture capital is I think as a technologist and someone who was very close to startups I got so much great counsel and mentoring from him on how to either hire or build a company and I felt like it was really balanced that I was like wow that’s really helpful help because I think there’s examples that I saw we’ll call like bad help that sometimes investors will provide. I think they mean well but unless you’ve kind of been there and done that –

[00:12:40.07] QUESTION: Give us an example of that.

[00:12:41.15] ABBOTT: Well I’ll give you a very specific example I wish i would have gotten help on and that’s hiring a VP of sales. As an engineer I had no idea how to a hire a VP of sales. Rajeev gave me some advice that was helpful and I asked the investors as well but like I just wish there was someone that could have paired with me a little more to do that and at the end of the day.

[00:13:04.08] QUESTION: So is that no advice or are you saying that people like that they didn’t really have expertise in that, they’re giving you advice, but it wasn’t good advice.

[00:13:07.13] ABBOTT: The VP of sales in that case was a tough one because I did get advice from both the investors and Rajeev as well and it was helpful but i think what is more helpful to me as an entrepreneur what I would have loved is to have someone on my board or an investor who had been there who said hey you know what I know that you’re going to probably gravitate more towards this type of a person because as an engineer you’re more than likely going to want to hire this type of a person. So I’ll give you an example a very specific one so there’s kind of two categories in sales at a macro level that I’ve been coached one one are kind of a group of hunters and a group of farmers okay? Farmers are really good traditionally in areas like partnerships and business development, relationship building where in the other category of hunters these are coin operated sales machines. They are awesome when you know what your product is and they will go out and sell it. I will tell you from my own experience that I kind of like hanging out with the farmer more so than the hunter and but it’s also tough as a startup because a lot of times you need that farmer to get going but then you have to transition into the hunter and I had to learn that the hard way. I had to remove someone that I hired for that farmer role. I’m still good friends with him but you know that I’m sure could have been handled smoother.

[00:14:30.15] QUESTION: Well that’s part of this whole strategic shift in venture capital too right? There are all these firms — I mean there’s one firm here in the valley that has dozens of people that support their startups in marketing and I don’t think we’ve seen that previously is it that type of thing where you’re actually literally supporting and hiring?

[00:14:46.15] ABBOTT: Well, I think there’s support but you gotta make sure the company can develop its own muscles so you know even in the case of Composite you have a board meeting every six or eight weeks you have somebody that’s flying in maybe you’re talking to them in between but you know day to day you’re running your company. So I think ideally and this is what I’m trying to do with the companies I’m involved with is ask the right questions and encourage entrepreneurs and founders and CEO’s just to think through the implications versus saying here’s how to go do this. It may or may not apply.

[00:15:21.09] QUESTION: So you found Composite, you also found another company called Passenger, right? We can talk about that if you like or and a couple of years later you end up at Microsoft as a very senior executive. So tell us why did you make that decision to leave being an entrepreneur and to kind of take this role at Microsoft?

[00:15:41.08] ABBOTT: This is in kind of 2006 and at the time Rajeev was having me look at a number of investments with him and buys and I was really stuck on wanting to work on Cloud computing and I felt like I could do that at two places — I could do that at Google or I could do that at Microsoft. While I was at Composite I did a lot of our initial sales which were into a lot of the financial institutions so JP Morgan, Morgan Stanley and when I saw a lot of those guys were you know seven eight years ago were frankly running their own clouds doing their own infrastructure and I saw Microsoft there, but I did not see Google and kind of that same time I kept saying no to Microsoft but I ended up agreeing to join up as an IC so I went up as an engineer I worked for one of their 12 technical follows and helped write their app fabric or their DHT for [INAUDIBLE] part of it was I just wanted to go back to writing software but I wanted to do that at a larger scale.

[00:16:43.10] QUESTION:And talk to us about transitioning there — you were there for several years and then how did you moving down here and moving into Palm. How did that happen?

[00:16:53.05] ABBOTT: That was a massive shift for me. There was kind of a set of family things that had me come back, but when I came back a friend of mine had been recruited by elevation partners to rebuild the management team at Palm so quick history in the fall of 2007 or so Elevation Partners put in three hundred and twenty-five million dollars into Palm to rebuild Palm to relaunch Palm and John Rubenstein joined John was the originator of the iPod under Steve he brought over Mike Bell to run hardware and after spending time with John and Roger. I decided to go lead software. I can tell you I had no real clarity on what my role was going to entail, but what I did feel really pretty intrigued was not only Verizon Mobile but bringing in a very different orientation to mobile from a cloud computing perspective that I didn’t feel like traditionally had always been the case for mobile.

[00:17:55.19] QUESTION: Who in here owned a Palm Pri? I did. The Trio, which you didn’t work on is still — I mean the brand loyalty of Palm users was incredibly –

[00:18:08.17] ABBOTT: Very very proud of what the team did with Web OS. It was Web OS is what the team designed and shipped and I think the team did an awesome job, but I think it’s also a great example of doing you know 1.0 software that entire OS was effectively written in less than a year most people don’t know that a month after I joined we reset it entirely. The hardware was 1.0 I mean entirely new team so there is a a lot of uphill challenges you look back like hey there was never a chance in hell but actually I think that borrowing the rise of Android and others I’m very proud of the product we shipped with Web OS that’s for sure.

[00:18:49.08] QUESTION:Those challenges, do you feel like that was the biggest challenge that you had to come in and start from scratch was it that the engineering team you had to come in and build that?

[00:18:59.12] ABBOTT: I think the number one challenge for me I don’t think I realized how fortunate you are when you’re an entrepreneur you get to pick everyone you work with, everyone you hire you kind of have to be responsible for that. If they’re a bad hire you have to eliminate them if they’re a good hire, good for you and I was very fortunate at Microsoft just because I was working with the top 20 technical people in the company there were not a lot of but some people at Palm who had been there for while and the company hadn’t shipped anything in a while well getting someone to ship something in ten months when they’ve bee comfortable not shipping something for a couple of years, there’s a little bit of a problem and so I had never had to go okay and I couldn’t necessarily remove everybody at once and that wasn’t the case there were a lot of great engineers there but how you can get a C player to operate as a B player and how do you work with that team was a humbling experience and the team did an awesome job.

[00:20:01.07] QUESTION:So you’re at a Palm through 2010 and then you moved to Twitter and this is kind of going to move into us talking about hiring and some of these things I think are just incredibly current and relevant right now, but talk to us about how difficult it was for you to eventually leave Web OS and leave what you had build there.

[00:20:19.15] ABBOTT: Well Composite was a humbling experience when you’re going to leave your child, but I stayed operationally through 2006, I stayed on the board until Microsoft asked me to leave the board because it was just too close to some of the stuff I was doing there and that was hard and I still stay close because I was the first engineer to leave Composite and the same way with Web OS there’s a lot of people there that I recruited into the company directly, but it was apparent that you know a lot of these same people that i brought in were not necessarily were people that would apply for jobs at HP to be frank, these were I mean we recruited six different technical co founders of companies two from their own companies they were not through any acquisitions, right? Awesome team, but also you look at what the situation was after our launch and that wasn’t going to necessarily play out and I think people understood that, but it wasn’t easy i would never pretend that because I think there’s a deep responsibility to that, but part of your responsibility as a leader i think is also putting your team in a situation where they’re not as dependent on you and you’re kind of putting yourself out of a job and I think that’s the important thing to do.

[00:21:28.00] QUESTION: Talk about that a little bit, when you say putting yourself out of a job you hire such good people that they –

[00:21:33.09] ABBOTT: They just take over, I mean the case with Composite like I didn’t run engineering I was originally the engineer at night and the CEO by day. I hired a CEO he’s still the CEO today it was not forced on me by the investors I became the CTO and part of me wanted to do a lot more frankly than writing software, but what I really actually had to do for the company was sell. I did probably our first fifteen to twenty million in sales and that’s start to finish and i think when you’re a founder or when you’re in a leadership role you have to think what’s the right thing to do for the team and putting that rule first.

[00:22:12.10] QUESTION: So you come into Twitter. Twitter’s got about seventy five engineers you then grow that team to more than 350. Let’s talk about this a little bit because I know there are people in this room like including myself that have had at times had a horrible time hiring one engineer you know let alone three hundred so where do you even begin?

[00:22:41.05] ABBOTT: A lot of coffee and trolling on LinkedIn. I can expand on it. There were probably two things engineering wise at Twitter one was the real underinvestment in people just the hiring enough people. There were too many people that had to firefight twenty four seven had to be heroes and that is brutal to go through and the other was just an underinvestment in infrastructure okay? So, kind of on both of those dimensions there was massive change in the case of on the people side we had great people we just needed more people and so how do you actually do that? Well, I don’t necessarily know if there’s a secret piece but I’ll tell you a couple of things that we didn’t do. So, especially when i joined it wasn’t like Twitter was a place that all engineers wanted to flock to . I mean the site was down a lot and so I was like those guys don’t care and it actually turned out it wasn’t that people didn’t care people actually cared a lot but it was just grossly understaffed. One of the things that I think a lot of startups that I see even today they do is that they hire a set of recruiters and then they trust that those recruiters will take care of all these hiring problems for them now this isn’t a comment that recruiters aren’t needed, recruiters are great but recruiters are not the dependency for hiring engineers the best person to recruit an engineer is another engineer often times the founder or the VP of engineering so a lot of the closing i should say i focused on it at Twitter and I don’t know what the specific number is, but I would say probably at least 80% — that’s one. the second is –

[00:24:30.07] QUESTION: That one thing is that an engineer needs to close an engineer.

[00:24:32.27] ABBOTT: Yeah, and then an engineer pulls another engineer out of accompany I mean look, in this day any grade engineer is very gainfully employed it’s unlikely they’re looking. So let’s look at two different email scenarios. You get an email from you know Joey recruiter — hey maybe they spelled your name wrong or right, best job ever or you get an email from the woman engineer saying hey I’m working on some really great projects let’s go grab some coffee I think in those two scenarios most people are like I’ll listen this sounds interesting like interesting problems like we actually did an exercise where we just like what are the interesting problems we’re working on and then let’s go actually reach out to people we think might have an interest in working on those problems because you think you step back and you think what does an engineer really want? It’s I want to work on tough problems, I want to work around great engineers and I want them to have an impact around me. You get those three things, everything else kind of falls in place and yeah your comp has to be in range and things like that, but I can tell you it wasn’t like our comp packages were you know commensurate with the [INAUDIBLE] here I mean this place does very well and they pay very well.

[00:25:43.17] QUESTION:And we thank them for hosting us tonight Google Ventures.

[00:25:46.28] ABBOTT: And I’m not trying to trivialize that it is hard to go hire engineers but I think it really yo have to think ownership so what we would do is we would do a lot of internal referrals a large percentage of our hires were internal referrals you go how do you do that? Well, one failure mode might be a company you hire you know Matt the engineer and it starts and you sit him down and you go okay who do you know oh I know this guy at LinkedIn, I know this guy at Gear Hub or whatever.

[00:26:13.15] QUESTION: Is this you? Is this you literally you sitting in a room with him white boarding names?

[00:26:19.05] ABBOTT: Well, initially it may have been me, but the key here is you do that conversation and I can tell you and — keep in mind, it’s Matt’s first day the last thing he’s thinking about is like the guy he worked with two companies ago — so how do you do this on a recurring basis? And this is something that we really tried to focus on, how are you going to recruit? You make a competition, how many names can you get on a board from LinkedIn, how many names can you get on from Get Hub especially if they’re on a certain open source project how do we think through whose the right person to go reach out to that engineer.

[00:26:59.17] QUESTION:And is the right person a connection is it somebody that’s an expert?

[00:27:04.08] ABBOTT: It could be somebody who knows, I mean that first reach out the goal, the win is just getting that coffee and the other recommendation I would do is to not do that meeting at your office you go why would you do that/ There’s something about making it more informal that people are more willing to go with and this is particularly important for various senior hires, now I say this but at the same time I’m saying it’s not that you don’t need recruiters, recruiters are very helpful to fill the top part of that pipeline to help manage that process so it’s a good experience for the candidate and it gives the candidate another person for he or she to talk to especially when you’re negotiating or competing with other companies, which is often times the case, but you want to know who you’re competing with.

[00:27:44.28] QUESTION: Can I ask you just a few nuances about that meeting outside of the office, is coffee better than lunch is you paying better than him paying?

[00:27:51.24] ABBOTT: I think you should always pay, I mean they’re doing you a favor. If you give me now your time I really appreciate that. I would do coffee, because I don’t know lunch seems like a set amount of time it seems like a longer amount of time because like if it’s not a good connection then you should move on. But I think this is what I would do I did these same things at Composite so you have to remember my career has always had to hire uphill lie in the sense that it wasn’t like I had joined Google and Google was public and you could hire at Google That’s easy when you have momentum right? I’d say probably the last third or so of my time at Twitter, it just became more difficult on the senior side, but most of the companies that you’re involved with or that I’ve experienced, it’s hard you’re selling yourself, you’re selling the experience you’re not, you know you may be selling the vision and the equity in your company, but I just think you have to think through what would you want to go experience.

[00:28:53.13] QUESTION: Some of the questions that you would ask, like how hard to you pitch in that initial meeting?

[00:29:00.17]ABBOTT: Most of the time at Twitter I was closing more than than anything else, but I think one of the questions I had asked and I think I shared this with you is you know what do you want to do after Twitter? People go huh? Yeah, like what do you want to do after Twitter? Like, oh I want to go start a company. Okay, so let me walk through with you the different things or experiences that you might be able to do here at Twitter to learn to go increase your probability to succeeding when you go do that and I always found that really helpful exercise and I think it helped the candidate too because then it’s like oh — and it’s not that I want that person to go join Twitter and then leave immediately, but let’s face it everyone’s going to go leave and like I’ve told every team I’ve ever lead like the strength, the value is the people in this room it’s the network it’s not any particular company.

[00:29:50.00] QUESTION: What are some of the best practices for testing technical you know ability do you have specific things that you do?

[00:30:01.24] ABBOTT: Every engineer has their own favorite questions, but let me answer that a little bit differently, one is you want to make sure that your interview process is very very difficult and you go yeah yeah of course, but actually I mean that really serious because if it’s easy or perceived as easy by an engineer he or she will not want to join your company because they’ll go wait a second if this is the interview then everyone that’s here, I don’t know if they’re the caliber of engineer that I actually want to work with and so that’s one thing and the second is it is worth while coming up with a list of questions that you collectively want to use as a company to actually go interview and the reason why you want to do that is not everyone has as much experience interviewing as other people so like in our case to do that type of growth to use quick numbers you go okay if you hire three hundred and on average you talk to thirty people for every person you hire in close that’s nine hundred people that’s a lot of interviews and you know we had a lot of folks that had never done that many interviews and so how do you train people to interview? Is it you know, do we do pair interviews and at least having a common list of questions you ensure that there is a degree of consistency A that the same question wasn’t asked every candidate and then B how do you actually train up people to go hire? That was something that you know still do probably a better job at but it was something that we thought about.

[00:31:27.09] QUESTION:Just to bring it down to this level of two guys in a garage, which we are and I’m sure a lot of people in this room are, to even at this point define thirty great engineers or for me to get those thirty interviews that might take me I mean I’ve done this it probably took me four months to talk to thirty engineers, I don’t know if that’s fast or slow, I’m just throwing out a number, but like so if I meet an engineer who seems pretty competent and I’m a startup of one or two guys, I mean you tell me shouldn’t I just be like I should just hire this guy like make the interview process easy, let’s get this going.

[00:32:10.18] ABBOTT: Well I think there are a lot of considerations when you’re under ten people. You always want to get the best engineer. It’s easy for me to stand up here and go oh make them really hard let’s go back to data structures 101 and you know see how strong the are actually there, but there are also other nuances that you have to make too around culture as a percentage when you’re two people I mean every person has such a large percentage and I would argue that most cultures in companies are set after probably the tenth employee and then you can maybe very slightly change those, but for the most part you’re pretty set in terms of is this an engineering centric company or design centric or where you sit kind of in that area of gravity so you kind of have to be thoughtful about that so it’s not a common saying lower your bar, but if you think about who you’re hiring for, I’ll give you an example, so you know you can find I think great self-taught computer scientists that maybe are not far along in their career, but are so ambitious are willing to sacrifice so much to get your company going, that’s awesome, and you know maybe they didn’t do the best on you know the mobile sort problem or whatever, but like you’re willing to take that bet and I think you have to have a balance and you have to be pragmatic about it too.

[00:33:25.10] QUESTION:Yeah, or maybe they didn’t go to Stanford, they didn’t get a degree from Stanford –

[00:33:28.01] ABBOTT: I think that’s fine, you know? I think there are plenty of great smart people that don’t go to CS at Stanford.

[00:33:37.15] QUESTION: So finally I convinced this guy to join me, hallelujah angels are singing, how do I keep this guy engaged? He’s still getting all these meetings for coffee from all these people who are trying to hit him up every single day.

[00:33:54.13] ABBOTT: Make sure he’s really dealing with work. We’re in like a free agency, but look there are a lot of opportunities and i think it puts a lot of challenge on the people in this room to create an environment where people want to go work with you on the journey expiration that you’re on I think a lot of people — I mean speaking for myself I look back at Composite you asked me you know would I look back on those fond memories, it’s the journey, right? It wasn’t like there was some end game of like oh when we hit this point then we’re done — awesome. I think that’s and it’s hard and there’s times where there’s ups and there’s downs and many of you have probably seen this and i think that’s why people ultimately go and end up staying and you know one of the challenges when you get that first employee and you start growing and that pond is gross right so they’re used to being a big fish in a small pond, the pond has grown and they go wait a second I’ a small fish, that’s a tough time for a company to go through. Probably during my time at Twitter I saw like six times because there are these many different step functions where companies go through where it’s just kind of this compression or expansion and they just go oh this is awkward you know because a lot of times the early part of a company’s history you’re hiring a lot of generalists because you kind of need everyone to do everything and then you end up with typically more specialists over time not always but in certain domains certainly.

[00:35:21.03] QUESTION: Talk to a little bit about acquahires is that something in terms of your experience is that you know with all the acquahires you’ve been a part of or that people you’ve seen over at these companies, what is your take away? Is it good decision is it better to just bring people in and train them?

[00:35:37.06] ABBOTT: From a company? We we enlisted a number of these at Twitter and I think they can work as long as the team’s really small and ideally the team physically co-locates wherever the mother ship is.

[00:35:55.04] QUESTION:And small being how big?

[00:35:56.03] ABBOTT: Probably five or less honestly. I think you can maybe stretch it to seven, but it just get’s hard just because to get that group assimilated to the other culture and you kind of have to over time tease that group of five apart because you really want them part of the collective larger team than that smaller team. I’m sure that if you talk to a number of those acquihires there will be a certain set of companies that say it was a complete disaster and there will be another set that says hey it was awesome and you know I think one of the things from the acquire side that I think we often times look at is you know what’s the motivation behind the people that are in the company, why are they there is it are they really deeply focused on building this one product — the worst thing is when someone tells you what they want to hear like yes I really do want to go work on that product, but I secretly want to finish this other one over here that I didn’t finish at my startup that didn’t work out and that can happen and that’s something that’s important for both sides because that will usually never end up well.

[00:37:07.27] QUESTION: So I’m a founder, I hire this guy i think he’s going to be amazing we get started it’s great and a month in i realize oh my gosh this guy is no good this is not working What do I do? How do I get rid of somebody? How do I fire somebody?

[00:37:24.14]ABBOTT: I think what you first do is you have a conversation with him and you give him that feedback and you’re really clear on the expectations of hey thought it was this and you delivered this and there’s two reasons to do this one is just to be really clear with the person about your expectations you don’t know if maybe that person has something going on outside of work, you don’t know, but it’s really important I think to be really clear and direct and then it’s also important legally that you documented that you had that discussion. I would not wait a long period of time for that person to go correct behavior after that, but I think it’s important as much as you can to not surprise the person if you eliminate them often times most people may still feel surprised even if you still had that conversation, it’s human nature, but i just think being as direct as you can to give that person an opportunity to go correct that.

[00:38:13.18] QUESTION: And a long time being how long in your book?

[00:38:16.07] ABBOTT: Two weeks, three weeks max.

[00:38:19.03] QUESTION:Is it if they work through it, I’m sure you’ve had this experience literally dozens of times, so typically if there is an issue you have this period of two or three weeks, you reassess and then?

[00:38:34.05] ABBOTT: Here is what normally happens, there are two paths that get pretty evident in the first couple of days. Either the person goes oh shit I’m going to get my act together and it’s immediately resolved and the person is higher in delivery than they were before or the person goes and resigns because they don’t want to deal with getting exited and then there’s the third category where they’re just still not hearing or they’re not listening to the feedback.

[00:39:03.02] QUESTION: So I want to talk quickly about you being at Kleiner Perkins and then we’ll take questions from the audience. Talk to us a little bit about that move now you go from entrepreneur you go to Microsoft, Palm, Twitter and then into Klein, what influenced that decision.

[00:39:19.07] ABBOTT: The dark side. For me this is like a little bit of a test to see how I can scale myself to help engineers and designers go start up companies and I mean that very sincerely I mean we are in the service business you can make an argument that the capital part of it is probably the most monetized part of venture capital so my motivation is genuinely to go frankly go do full time what i was starting to do four or five years ago, which I was doing a bunch of advisory work, a bunch of angel work and if I can go give and share some of these experiences back like that’s awesome, unlike an operating roll the feedback in my role is very different it takes years so i won’t know for quite a while how good I am at this but I just passed my first year and I’m having a lot of fun with it.

[00:40:09.23] QUESTION:Would you back a non-technical founder?

[00:40:14.11] ABBOTT: I think if they were not paired with a technical guy then I probably wouldn’t it would fall out of my area of focus, which I totally realize there’s like certain types of companies that I probably won’t back and that’s okay, there are plenty of other investors.

[00:40:32.04] QUESTION: And for entrepreneurs too that’s okay it’s quick, it’s simple, it’s hey, he’s not the right guy to invest in you or he is it’s one of those things. Talk to us about being at Kleiner Perkins, they’ve been in the news over the last six months, talk to us about what’s this last year has been like for you being there and what is in store for the Kleiner Perkins brand and investments here over the next three or four years.

[00:40:58.27] ABBOTT: Yeah, I didn’t answer your question about why — so one of the things that really impressed me about Kleiner Perkins I saw this when Kleiner Perkins invested in the Twitter was that the partnership really operates like a Partnership meaning different partners work together on certain companies to help them succeed or get built whether it be my partner Ben Gordon who is the rounder of EA to other partners we have basically a number of folks who started companies different scale different size so we’re all kind of this set of company builders effectively. I think that’s really cool and it’s fun to be around a really eclectic group of people we have really interesting high bandwidth discussions certainly the firm has been in the news a bunch I can’t comment that, that predates me, but what I do think is going on in venture capital is this kind of we’ll call it return frankly to what venture capital was really about when it started in the fifties which was about getting capital to groups of engineers to drive innovation and you know part of it I think our responsibility and my responsibility at Kleiner Perkins is to figure out how I can give advantages to those entrepreneurs so with that be in recruiting, so you know not just giving advice, maybe even help close which I’ve done and I’ve done that not just for the companies I’m involved with across the portfolio or on partnerships so you know we’re a firm that is fortunate to have board members of amazon Google apple and so there’s a lot of things as well as additional relationships in those companies besides the board membership that we can use to help our portfolio companies and so Kleiner Perkins has been around for forty years, this year is its 40th anniversary and I think for a period of time in the firm also did not focus as much on digital as the firm did on green tech and if you just look at the focus and the number of partners at the firm today we’re not just back, I’d say we’re even more focused than we were on digital my partner Mary Meeker put out an updated version of her Internet trends report two weeks ago. So, if you haven’t read it it’s really worth looking at. As I was mentioning to someone earlier it’s just data, right It’s not making any huge bold predictions, it’s just saying here’s the data and you start looking at the data and in particular where we are in mobile and it’s very clear that we’re very early. We’re very early on just adoption globally with smart phones we’re very very early on kind of the mobile monetization you’re still looking at the amount of advertising dollars going into TV versus times watched versus dollars going into mobile content I mean there’s these huge gaps and so I think we just feel like it’s very early. I mean we do invest both on the enterprise and the consumer side I’m kind of the oddball GP that does both.

[00:43:58.19] QUESTION:Talk to us, and if you want to ask a question, just come right up here and line up right where kind of where Nathan is sitting right there and we’ll turn some time over to you. We’ve had guys like [INAUDIBLE] Gumroad, whose company you sit on the board of Gumroad, tell us about what have you seen in a guy like him or the guys at code academy. So tell us what have you seen in those guys as young as they are and actually I think the code academy guys made the 30 under 30 Forbes today.

[00:44:46.25] ABBOTT: Yeah I saw Zack in there. Congrats Zack.

[00:44:50.17] QUESTION: So what have you seen in those guys, why out of the thousand pitches that you get or have seen, how did they make it through, what did they do?

[00:44:59.14] ABBOTT: One of my filters if you will is I look at the company and the founder and I say would I like to go work there and would I want to go work with this person and would that be fun, that’s kind of my first metric and Sawmill I met before he was fund raising, he was never actually fund raising I had to convince him to fund raise and I met this guy and I clearly could see just that he has a very unique talent and if you meet him i think you would agree part of that is just from all the hiring I’ve done over the years, but he’s just a really gifted entrepreneur and second when is aw what he was doing and the network effects of what he was doing thought hey this is a company that would be a real privilege to be a part of and at one pint I even offered offered to do a peer program project with Sawhill to just get to know me better because I think one of the things that entrepreneurs forget is the relationship with an investor is very long lived. There’s no logical path to go fire an investor and so I think this is important because as you go fund raise you really want to get to know the investor which is why it kind of bothers me at times you hear about term sheets hey it’s going to expire tomorrow morning at ten it’s like you really want to get to know these people trust me so Sawhill and I spent time over two to three months just to get to know each other and I go up there once a week.

[00:46:38.03] QUESTION:You work out of their office? Are they in an office?

[00:46:42.12] ABBOTT: They’re in an office as of a couple of months ago.

[00:46:45.26] QUESTION: Yeah I mean this raises the question again kind of like the engineering question of if I’m looking for an investor like Sawhill he came out of Pinterest he checks all these great boxes, he’s a very talented designer and engineer so he’s one of these guys that probably had lots of options he could have date anybody if he felt like and you came in and you got him to get to know you, what if I’m an entrepreneur who doesn’t have a lot of options, I only have one term sheet?

[00:47:17.28] ABBOTT: So that’s a scenario there where it’s like the individual leading I thin you can also build a great product and come in and have a very similar outcome and I do believe that and you could have data that supports how popular that product is, but that’s a very reasonable path and I heard really great quote from an entrepreneur on the way over here, I was on the phone with him, and he’s like you know I just love this product I’m building I almost feel like I’ve created the business to build this product and that type of entrepreneur in my mind is like one that I love to back because it’s just that deep passion for what they’re doing and obviously that has to be matched to a product that the market demands and all these other pieces but you kind of has to start there and it comes down to like why are you doing this and what’s that core motivation. That’s the common thread I think with most of these and other entrepreneurs as well — what’s the kind of deep motivation.

[00:48:17.28] DEREK: Great, can we give Mike a big round of applause?


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