The a16z Show - a16z Podcast: Truth and Humanity in Leadership

Episode Date: March 16, 2016

How do you get into tech when you don’t have a tech background? And what special expertise can leaders from other fields -- like the military -- bring to tech startups? This Q&A -- with Lars Dalgaard interviewed by Bethany Coates (assistant dean at Stanford Graduate School of Business who runs global education and social mission programs that primarily focus on entrepreneurship, innovation, and leadership) -- covers these topics. As well as what it means to what to bring one’s raw, real self to work, beginning from the interview to working together and sharing feedback later. The conversation took place before a group of 25 veterans who participated in the Breakline education and hiring program (one week of which was hosted at Andreessen Horowitz) for veterans shifting into careers in the tech industry. Stay Updated:Find a16z on YouTube: YouTubeFind a16z on XFind a16z on LinkedInListen to the a16z Show on SpotifyListen to the a16z Show on Apple PodcastsFollow our host: https://twitter.com/eriktorenberg Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see a16z.com/disclosures. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to the A16Z podcast. I'm Michael Copeland. In this segment of the podcast, Stanford's Bethany Coates and A16Z's Lars Dahlgard talk about how he found a place in technology with a non-technical background and why, as uncomfortable as it may be for himself and others, Dalgarde always opts to discuss hard truths from the get-go. The discussion you'll hear happened with the participation of a room full of military veterans, who are part of the breakline program, an education and hiring initiative designed to help veterans transition into post-military careers. Okay, everybody, we're going to get started. It's really my pleasure to have my friend Lars Delgarde here to chat with us today.

Lars is a Stanford alum. He founded and ran the company's success factors, which he ultimately sold to SAP, and he's now an investor here at Andreessen Horowitz. And we're going to have a wide-ranging conversation, and then we'll open it up for some Q&A as well. Lars, I'd love for you to share with this group. We have a group of distinguished veterans here. And you came to the tech industry, but you weren't a technologist. That's correct.

And so can you talk about your kind of introduction to the field and what you brought to the field and how you also shored up some of the skillsets that maybe you didn't have in order to be successful? Yeah, so first of all, let me just say, I want to thank you all for your service for the country. Very, very much. I'm sure you hear it a lot, but I don't think you can hear it enough. So I'm also an immigrant. I came here about 17 years ago, and I literally knew nothing about tech, but I had a huge love for it, huge love for it. And what's very clear is that there's nothing in the world in the future that's not going to be done with tech and software. So, you know, looking around where you are in your life and your career and your age, I think you're perfectly time for it. Like, there's not a late time for this. I thought I had missed the internet.

I was 30-something. And I literally thought I'd missed it. No matter how little you know about tech, you can really get to know tech. People have all these insecurities that somebody has told them in middle school or whatever. Like, honestly, like, if you have a passion and you have an idea or on a product, you can go there. You can get to know a lot of it yourself through proxy. But guess what? If you're not a programmer, you can hire some.

And they're amazing people who want to partner with leaders. Because no company, no matter how great it is, can get anywhere without a business. leader. So one thing that I admire about you is that you have really deep philosophical opinions about talent and how to evaluate talent and how to bring out the best in people. And you have strong opinions about that. So I'll just start with grounding it in what you now know as real leaders of people. Yeah, it cannot underestimate how important that is in Silicon Valley. What you know about leading people and how you have understood that. And you've obviously, you weren't born leading people. Nobody is. but you learned a lot about the differences in people

and different types of people in different situations can end up doing very different things. One of the biggest issues I run into in tech companies, no matter how big they are, how successful, or how they're great there, is there's no time for not having a real conversation about this is how you fucked up and this is not going to work. Let's figure this out together. Like that type of conversation is a conversation that most leaders in Silicon Valley

are afraid to have because they've never experienced it. And so they had all the good stuff. Like I remember one guy saying it perfect to me. He was so honest. It was just grown up in these fabulous companies that never had anything wrong. And he said, if I go into fire someone, they end up coming out with a promotion. And he really meant it. And that just would never happen for you guys.

I mean, you know what it's like to say this shit wasn't working and this is a problem and this is going to break down what we're doing if you don't fix this. Like immediately. And let's put an action plan together. How are you going to fix this? Otherwise you can be part of this organization go forward. Frankly, the best part is the humanity of it. you owe it to the person.

And they know themselves. If you do it with respect when you're done, like you don't have to sit there and put them down. You just say, listen, this literally doesn't work. Like, let's figure out what to do. Don't you agree? Then you're treating them with respect and it's going to be an amazing experience

for them coming out of that meeting. So I'd love for you to talk a little bit more when you're evaluating in an interview. Well, I think that what happens in an interview situation, what happens that's very important is that it's, to me, it's an emotional contract. Mathematically, it's one interview I'm going to meet with this person 600 times,

the next five years, who cares? Oh, maybe it's 2% more important. I think it's like 90% more important that first interview because you create an emotional contract with that person forever. And there's no one in the world that can't go back to that first interview and remember exactly, well, you said this and I said that, you know, and you can go through all these battles together. And then when you come on the other side, it still goes back to, well, remember when you hired me? It's something very funny that hasn't really played up in books, but it really is how it works. So you're in New York Times interview. One of the things that you said, it was something like, what have you learned from your mom?

I don't ask it in the first minute because then it's useless. I ask it like 20 minutes in because you've built some rapport and they know who you are and how real you are. And that's what you're bringing to this game. You're like, this is how we play here. Like you've set that stage for 20 minutes. And so now when you ask that question, you know, it's not a silly question. They know they really got to think about it. And what it means is for me, I got to try and turn on the motion.

so it's as real as I can, as transparent as I can, and certainly in business because it's so frigid and nebulous and weird. I just want to bring out the real humanity and the reality of everyone. We waste so much of our life at work. It's probably the thing we do the most. And so you want to make it fake and nebulous and weird and protocols that don't matter. Funny thing is, if you bring it there with those interviews and the way that you can understand human beings,

what happens on the other side of that, the commitment you get for that, I had three different commanders from the seals come and speak to us, And specifically in their case, I said, I don't want to hear a word about weapons and stuff like that. I only want to talk about how you relied on each other. And that's what they talked about. And that was kind of the discipline that we brought to the game. Let's switch gears a little bit.

So I heard a little birdie told me that you're called The Closer about Andresen Horowitz. I'm just wondering if you could shed some light on why that's your reputation here. I don't know why that made me sweat, but it did. No, I think, you know, it's like what I'm really good at is, is being very crisp on what this could become and why I believe in the people that are doing it, if I believe in them. If I don't, I can't fake it.

So I want to switch gears again and talk about moments in your life where everyone was saying no to you, when you were trying to get a job, and then when you were trying to get funding for success factors, and how many VCs turned you down? 73.

73 VCs turned you down. Yeah. And so you had to push... Three called me an idiot. Oh, only three? So you had to push really hard through a lot of adversity. And that's going to happen with the veterans in the room when they're going out trying to pursue their dreams.

That's a very real issue. Yeah. How do you handle that? I think that that ties into which company. I mean, if you start a company, it's very different. I understand that most, how many people are thinking about, it's not a lot, right here? You think about joining a company? How many do you think about a starting one?

Four or five, okay. So there it's a lot different, right? And what I would strongly recommend, like, on, like, the most extreme thing I could give you as a benchmark for is pick something you really believe in. If you're not starting a company, which is the majority, I would never be apologetic in an interview around, you know, like, I'm not a tech person. I'm not, like, I can just see it because I've interviewed a bunch of people that had your background. And I saw some, you know, apologies. And then also there's sort of like, I'm really strong when it comes to the military stuff. Don't even think about it. But on this other

stuff, sure, you're the boss, whatever it is. And like, that will just not. put you in the position that you need to be in. So I would have the natural confidence of, I fucking know leadership, but I'm interested in this industry, and this is why. And I've done my research, and this is what I know about you, and this is what I know about the industry. If you can begin to create a dialogue in that interview around this is how leadership in my mind happens, what do you think leadership is? How do you think about leadership in this company? Because that's got to be your super strength, leadership. We have some amazing people in the room. I'd love for you to hear from some of them. And I'd love to open up to

all of you to ask a couple of questions. Yeah, I got one. I did a lot of offensive cybersecurity and I designed to develop capabilities. What I was interested, when I was reading your bio about, you know, how you were, like, you said, the youngest CEO by 13 years. Yeah, I was. Then you went and started

and then you went to... I want to hear like how you got to... I mean, I love the tech side, but how did you get there in the first part? You mean ad unilever in that company? Yeah, that was like the same. I was running an industrial cleaning business in Europe that was everything from the ground up. So the walls, the toilets, all this shit, very unsexy.

But for me, being 24 or whatever it was, it was like amazing to run this global business. So it was ecstatic. And there was a guy who was by a decade older living in Switzerland, and he was an acquisition. And he was doing all the floor because there's big cleaning machines. You've seen him in airports. And so, of course, it's clear that those two businesses belong together. but they were both so substantial that nobody had had the courage

to put them together. And I met with him one day in Switzerland where his office was. Mine was in Holland and I said, why don't we put these things together? Does it make sense for a customer to call you when they want to clean the floor and me when they want to clean the walls?

It's like insane. And his first question was the absolute wrong question was, well, who's going to lead it? So then we worked on six months, this gigantic, we put it all together. We went and presented to the board. We went through the whole thing. It was like the beautiful thing.

We had a new logo. The whole thing was going to merge. You know, and I sort of did my thing and he did his thing. And then they asked who's going to run it. And then I said he is. And I'll never forget the CEO's eyes. And then I got up to leave and I was like, I've got to go figure out what the hell I do now. And I didn't get further than picking on my back and the CEO and his CEO said, can you stay for a minute? The board of me was over. And they're like, we have decided you're going to be the first CEO that's under 30 years old in our company.

And I was just like, I can cry right now. I was like, oh my God, right? I didn't expect him to get it, so political, nothing is moving. But it was like, fuck, they got it. Like, they understood how much leadership this was to get this done. It was third large company in the world. They had 320,000 employees, and I was the youngest CEO at 26 there by 13 years. I wore an money suit because I looked so young in all the meetings, I had to, like, try and look older. But what I never minced words on was the truth in what I had seen. And then I had a ferocious appetite, like at understanding the unit economics of how. every business worked. It's what you'll heal a lot from CEOs too are adjectives that are completely

meaningless. Like we grew a lot and we had a hell of a and it's insane what we're doing and crushing all that nonsense. It's just noise in my head. So I'm like, just feed me like a CSV 5. Just give me that. And the point is it's all relative to everyone. What I would do in those businesses was I would break the whole thing apart until it made sense in my own head. I had to do that. But I don't, I can't understand how you're not selling, let me go back to where it starts. So it starts with the pipeline. How many, how are you grading this pipeline so that it's valuable? Because the whole pipeline can't be the same. The early leads in the beginning of the pipeline surely can't be as valuable as the one you just met with us that's about to close. Don't we have to somehow mathematically

figure that out and then grade that? And how do you get the leads? Like, did you get them from, like some random thing that somebody just got an idea one day that they want to buy this and then they wanted it? Or can you actually understand how they keep coming back so we can repeat it? Those are the questions that are asked, which are not particularly intelligent questions, they're curious questions. They're like, I don't get how this shit works. So another thing is, find the fucking truth, even if it's not there. Like, so in this case, I would go to these meetings, and German is not my first language. So I just drove around Germany. You know, I'd get up at five in the morning, and I would just, like, drive 200 kilometers an hour

up to, like, see one of our breweries, or go and see one of our, like, a Coca-Cola plant. whatever the hell it was, and I would just spend two weeks meeting every single significant customer. And I literally had no clue what I was talking about, but I just listened to them. And then I would ask the questions that I had just gotten in the last six meetings. But this guy said that, and then this other guy said, is that right for you too? Well, kind of because this is different than this and this is different than that. And so I built up this huge repository of what's actually happening. And then at the end, people actually would like to be listened to, particularly when they spent money with you.

and then you say, oh, by the way, if I changed all that, would you buy more shit? Maybe I'm trying to be as practical as I can around how I did those things. And then I'd come back to the head off as I sit with this whole group that I presented my new strategy. And so does that even answer the question? Yeah, yeah, that's great. So that's kind of the approach, right? It's just like... It's like, do the right thing.

Yeah, exactly. And you're going to be disappointed many times. I'm not telling you that now you have the answer and you can just go run with it. Like, it's tough to do that. But the real deal is, it works. Even more important than that, it makes you. feel fantastic and you show up every morning with endless energy because you know you're doing the right thing and the other thing that happens is the people in the room they just want to be part

of it like oh my god this is so refreshing this is the real shit let's take one more question any other questions Heather I mean you're speaking truth and I think all of us really are excited that you came to spoke with us today that's awesome I'm curious where did you learn this insight in humanity like did your mom did your mom teach you that Yeah, my mom taught me a lot. You know, I'm beyond grateful to my mom, and I'm paying it back every day in many different ways. My mom very early on, it was just very focused on, like, her key sentences stuff around judgment and bias and all these types of things, and her view is it's ignorance. Yeah, I'm very lucky with her.

I'm very, very lucky. There's no doubt about it. And I'm lucky with my dad. My dad was all ethics, you know, and so, and very hard work. How did you find this insight into humanity? How do you have that clarity? Yeah, you know, I think I just continue to, like, I used to use an excuse of some very traumatic things that happen in my life later.

And everybody I tell that, they're like, bullshit. You had that always. And so, I don't know, I always just go to truth. And I'm just amazed at what truth does, even though it's hard. I just, I go a place where I literally in my brain or my heart or wherever the hell somewhere in here, where it hurts the most, I just go there. And it's like we've trained ourselves to stay the fuck away from that place. But I go straight where it hurts the most. And I talk about that. And it never fails. All these CEOs, they're very, very successful, running public companies.

They look in the ground. They take whatever they had written and they're out. And they're like, I see you and I raise you. You know, like, that's just what happens when people go after humanity. It's just what happens. And so it's so damn rewarding. But it never gets easy. Please thank Lars with me for joining us today.