#58 - Personal News: Leaving Microsoft to Build Something New + Reflections on My Path to Being a Founder
A long-form reflection on the experience of helping to build Ally.io to and through its acquisition by Microsoft
I already posted on LinkedIn about my upcoming career change, but this is intended to be a bit more of a free write around what the last three years have meant to me, how I’ve grown, what I’ve learned, and why I’m leaving a big company to go do the delusional thing of trying to building something new. I’ll probably meander off topic (because writing is a journey :))
Structure:
Meeting Vetri in June 2020
Original goals for (professional) life
“I’m just not ready to be a founder. I’m not mature enough”
The typical career path I’ve seen people take to being founders
My career path to that point
Lessons learned from three years of a hypergrowth startup — musings on: (1) mindset, (2) growth tactics, and (3) personal productivity
What comes next :-)
It all starts in June of 2020, almost exactly three years ago
It was the early-ish days of the COVID-19 pandemic, and a friend, Tanvi, had just warm introduced me to Vetri Vellore, the Founder and CEO of Ally.io. I took the call from our small apartment in Seattle, deeply debating whether or not to go back to Deloitte after a 3-month sabbatical to chase becoming a Partner or doing the scarier, far riskier journey of a startup.
As I think back on those early conversations, I expected to meet a founder who would be super aggressive, maybe rude, definitely smart, and probably the kind of person to make quick, bold decisions. … Bold decisions like hiring someone like me really quickly, as long as I “nailed” the first interview.
Whatever I expected melted away within two minutes of talking to this guy, and realizing that he was: responsibly aggressive (from a business POV), extremely kind, most definitely brilliant, and definitely not the kind of person to make quick, rash decisions.
Over the next six weeks, I interviewed with board members, every member of the leadership team, folks within the organization, and spent probably 5-6 hours of time talking with Vetri about the company, the market, what the future could look like, and why it made sense (or didn’t) for me to join. It was by far the most intensive interview experience I’ve ever had. It balanced the need for speed, with radical honesty about my priorities and the priorities of the business and extreme care.
After my six references came back to Vetri — all glowing from some people who read this newsletter! — his response to me was something akin to: “What is wrong with you? What are you not great at? All this feedback is glowing, but if you’re already this perfect then what can we possibly give you? You should come here to grow, and I’m not sure I fully now how to help you do that.”
I loved this line of questioning, and it would lay the foundation for many sprints working together as a leadership layer, where we tackled everything with extreme openness.
So, what did I say I wanted to achieve in my life?
I told him two simple points that we’ve checked in on together over the last three years. “The way I see it, I’m going to do one or two things in my life, and potentially both over time…”
I want to be a founder, and joining this company — working with you — will help me bridge the journey between megacap company land (Deloitte + clients) and the world of early-stage startups
I want to be a venture capitalist, to help founders achieve their goals, and working at a startup for 3-5 years is — I think — critical experience to ensure I can better empathize with founders
At this time, I hadn’t yet achieved what i’ll call Vision Precision — a very refined, specific view of what I wanted to do. I couldn’t tell you what kind of company I wanted to build, or even what stage of venture capital I wanted to focus on. I just knew I loved business strategy, team building, and thinking about markets (how they’re organized, and how they can change).
Anyways, the whole point here was that Ally.io was a way for me to build skillsets + gain experience working at a startup so that I could go do one of the above two things. Spoiler alert: I’m doing both right now, and have been doing VC work for a couple of years. More on that shortly.
“I’m just not ready to be a founder. I’m not mature enough, and I think there’s probably a lot I don’t know.”
This is almost verbatim what I told Vetri during the course of the conversatio around what I could possibly get from joining Ally.io …that I didn’t feel mature enough to yet be a founder. I pride myself on having extreme self-honesty, and that was the right call. I think many people are ready to go be founders when they’re 25 (or 19… or 18, even), but the average age of a successful founder is 45, and in talking with founders I knew at the time, the very best ones usually followed a path that looked like the below.
Spend time in some job right out of school. Maybe it’s consulting. Maybe it’s finance. Maybe it’s marketing. Maybe it’s sales. Who knows.
Find your way into a team building a new product or significantly extending the capabilities of an existing one, and find out you love it
Maybe you went to business school (most of my startup/founder network hasn’t btw…And of all the VCs I know, I’d say maybe 70% of them have)
Do some role where you get general management exposure. Maybe you’re working on strategy in some way
Work at a startup and/or found your own startup. You probably fail
Work at another startup and/or found your own startup. Maybe you fail again
Your wallet hurts, so you go take a “big company” job and replenish your coffers before
Try again at your startup, and maybe this time it works
8A: you keep doing startups
8B: you go to the “other side of the table” and become a VC
8C: you retire and enjoy yachting around the world (I half kid here — I know multiple people who’ve done and/or are actively doing this!)
8D: you decide to go back to big company land with the pedigree of having built businesses, and shareholders / board members want that transformation energy in their lives and make you a senior executive overseeing some business line
What what has my career path up until doing a 2nd startup (Ally.io)?
Whether I wanted to or not (and I did want to!!), I worked at my family business from age ~11 to ~22. (See Letter 14: Ten Lessons I Learned Watching A Parent Build a Business)
In high school, I got very good at producing music, and started making money at it. I learned about groundswell / grassroots marketing, product development, pricing, basic distribution, etc. I also realized how labyrinthine the world of music media law was
In college, I DJ’d for about three years and made a bunch of money doing it! I learned about onboarding, customer experience (translation: managing the energy of a room), and voice of the customer capabilities (translation: very drunk college students telling you that your set was mind-blowing or completely sucked)
In college, my good friend Jesse and I spent about 8 months trying to build a manufacturing logistics / IoT business, and quickly realized our commercial model wouldn’t work and also ran into serious challenges in product development. (Jesse is a total badass btw — that experience informed us both going into careers where we would learn about technology development)
I joined Deloitte Consulting as a business technology analyst after having a last-minute panic about joining a very well regarded investment bank which, up until that moment in my life, had been one of my “first job out of college” dreams. I was thrown into the world of product development with a non-technical background. It was sink or swim, and I fucking swam my ass off
I switched into Deloitte Strategy, promptly got my ass kicked, and then quickly grew. Eventually high quality work + strong recommendations from partners + some very very bold ideas about what Deloitte should look like in the future landed me a job on the CEO’s team.
I decided that business school wasn’t worth it for me, and learned everything I could working with a management team. Eventually I went onto do an insane variety of strategy, innovation, and business building work. I realized, here, that I just freaking love designing new products, pushing them out into a market, iterating on them, and also mentoring + collaborating with amazing, smart people
I burned out doing strategy projects. A c-level exec at Deloitte remarked to me that “It only takes two…” (referring to two bad projects), and I had two rough projects. Extremely sexy work, but the working dynamics were awful. The hours were getting to be ridiculous, and the carrot of partnership — while getting closer at a very fast rate — was too far off for my taste
Scroll up to the beginning of this letter, for when I met Vetri
Because of the consulting + startup experience + extremely obvious passion for early-stage company building, Michael and Sean at Overline extend an offer for me to work with them as a venture partner at the VC firm Overline in 2021. I’ve loved every minute of working with them, and it’s 100% made me a better operator to sit on the other side of the table, so to speak
I’ve done this while also working a full-time job for two years. So, yes: if you want something, you need to be prepared to hustle. Few things in this world are going to be given to you.
So what have I learned after three years at a startup? #LaundryList
It’s impossible to accurately distill down everything I’ve learned over the last few years, but I’m going to try. The categories are: mindset, growth tactics, and personal productivity. Note: I’m not going to talk about post-acquisition integration here. That deserves its own letter.
Mindset
Outputs don’t matter. Outcomes do
Company values should be top of mind always
You have to love the process of doing a startup. If you’re in it for the money / exit potential, you’re probably setting yourself up for disappointment. The vast majority of startups fail to exist after a few years, let alone “exit”
You have to watch your competition like a hawk and adjust to what they do. Notably, however: you can’t be on defense too often. You need to be on offense as much as you can
Startups are marathons. Sprinting marathons oftentimes leads to poor decision making and a notably more stressful work environment —> not great for creativity, employee retention, or durable growth
Your people are everything, and not just the people you may manage. Be supportive to your counterparts, and always bring a positive attitude, candor, warmth, etc. to your partnerships.
Oftentimes, “corporates” can turn into turf wars that are hyper political…where people are battling for scope. If you have this mindset and you join an early-stage company, you are probably introducing poison into that most fragile environment. Leave the territorial shit at the metaphorical startup door
When it comes to hiring, it should be “Hell Yes, or No”
If you have fundamental reservations about a candidate, do not hire them. Give them a chance to talk through concerns you have, but you need to have an incredibly high bar when you hire. And NO that does not mean they went to an ivy league school or something (really don’t give a crap about that stuff). It’s about the person’s track record, how they show up, how they solve problems, their values, how coachable they are, and your ability to say with extremely high conviction that they will be additive (not destructive) to your culture and performance
You can’t be everything to everyone
Know your part of the market and focus on that market. Be careful chasing shiny objects that everyone else is chasing. When you choose to extend into adjacent markets do so thoughtfully and with controlled early testing… And remember that every extension into a new market has impacts on how you can position your overall company / how prospects and customers will see you
Growth tactics
Nail your onboarding motions. Make them as easy as freaking possible
Capture feedback as much as you possibly can, but get good at filtering / prioritizing it
If your employees are going to be customer-facing, hire for empathy and work ethic. Also, don’t skimp on training + enablement. I made every single person on my team go through multiple “simulations” of various customer situations and gave feedback constantly. Over-index on coaching, especially in the early days
Customer advisory boards rock. Bring customers together, let them meet each other, show them new stuff you’re working on, and allow them to become your advocates
Extend the capabilities of your platform to expand your TAM, but make sure to wait until your entire team is sufficiently prepped and ready before going to market. You have to think about things like:
Key talking points
Collateral
Support pathways
FAQs
Hypercare customer support, especially for those earlier customers
Always be Raising… awareness and capital
Investor relations is a nonstop game. You should always be doing it, to some extent. Always be running ideas by folks you know, getting their feedback on what you’re doing… And when you do go out to fundraise, embrace focus in your priorities. Yes, it’s important to paint a picture about the massive market you’re going to capture, but it’s equally important to prove that you have the feedback cycles + focus on precision that yields a focused plan about how you will actually capture that TAM (total addressable market for those who don’t know that term)
Use focused “work rooms” / workshops to go extremely deep into a single problem with folks from across your company. Do it regularly, and make sure you have all key people there — not just executives.
Example: if you have a land and expand problem, then setup two hours and bring literally the entire management team + 1-2 people from each organization into talk through the problem, rapidly develop potential solutions, and then…
Run a high/fast tempo to bring these ideas to life
Do NOT do what my teams at Deloitte sometimes did, which was spend 8-20 weeks “designing” a future state. That is entirely too slow. Do it in 3-4 days, and then meet with the team on a 5th day
Carefully manage your burn and ensure you have capital to make a few bold bets. It’s imperative that you give yourself the capital needed to experiment with new functions, products, etc. Startups are, in some ways, an odds game. There is a zero percent chance that every thing you do will work, so you should bake in a moderate-to-high failure rate with new things you’re doing. Failure is OK
Embed time for reflection and learning into your strategic planning efforts
Always “anchor back” everything you do to your Objectives and Key Results (Metrics). Keep the entire team oriented around your most important 2-3 metrics that matter
Marketing thing: when building a new market, especially in work productivity, invest in analyst relations… The research firms like Forrester and Gartner and G2 that publish all of these lists of the “best companies in XYZ space” are very important to awareness + signaling to prospects
Personal Productivity
Control your calendar
It’s so easy to just get “busy” but in early-stage venture, especially if you have an executive role, you must protect thinking time
Count your time calories
Review your calendar regularly and ensure you’re investing your time wisely (see Letter #37 for a deep dive)
Consider getting an executive coach and/or a therapist
They are two different things for two different use cases, IMHO
My executive coach was an invaluable source of wisdom + a safe space to process sometimes-sensitive matters
My therapist has been a wonderful source of reflection and curiosity as I’ve worked through stuff in my personal life. And side note: being in any executive role means that you’re always being criticized, questioned, blamed, or thrown under the bus in some way lol…and invariably these experiences can be challenging to process. Therapy is a power move, because it shores up your emotional health + helps you grow in ways that can be life-enhancing
Invest in great tools that multiply your productivity. For me those tools are:
Superhuman for e-mail
Endel for whenever I’m doing deep work (or writing Exonomist letters!!)
Krisp for noise cancellation
Headspace for meditation
Calendly for meeting scheduling
Flow by Moleskin for drawing on my iPad / A good ol’ fashioned dry erase board
Be very proactive about feedback. Give feedback to yourself and run it by others around you to help you process —> improve
Prioritize sleep
We have an Eight Sleep. It might seem insane to spend thousands of dollars on your mattress but considering we spend anywhere from 25-30% of our time in bed, it was totally worth it to invest in something that helps me/us sleep better
Prioritize fitness
Movement is key. Taking walking meetings whenever you can. Carve out a bike ride. Go to the gym at least once or twice a week if you can. You should always be in a battle for movement, especially if you need to do a lot of creative thinking. Moving an average of 5+ miles per day for me has been probably the single most important factor to my strong impact on our business
What comes next: becoming a full-time founder
Although I’ve tried to do a startup before, this is really the first time I’m doing this. It’s the first time, as an adult, where a startup will be my full-time job. But that’s maybe where this world is already different: what I’m doing is not a job; it’s a mission.
That’s how I view it, at least. Because what we’re building is extremely important. If we nail our vision, the world will be different, especially for creators / pioneers building up our local neighborhoods.
I’ll share more details in a dedicated letter in a few weeks that fully explains what we’re building and why, but for now I will tell you that we are building a platform to enable owners of high-performing local businesses to achieve more than they could on their own.
But just like Ally.io was different than Deloitte, this next journey will be very different from the last one. For starters, I’ve often mused that “I’ve done zero to one…build new experiences from scratch” but one of my co-founders rightly pointed out that I really haven’t done zero to one yet.
Zero is when no one knows about your product, and most people don’t care enough to use it. Many people probably think you’re fucking insane for leaving a very very good job to go build this thing, but you know it has to be built, and it has to be your team. Zero is when you have few or no customers, and maybe little or no product. Zero is when there isn’t a proven market for your product, and you don’t yet have product-market fit.
Ally.io, for me, was not zero to one. It was… .50 to 1. I joined a team that had largely already achieved PMF (product-market fit), already had some functional structure in place (a sales leader…a marketing leader… a product and engineering leader… etc.), and already had two rounds of venture financing done. We had hundreds of customers (although we’re 5x our customer count to 1000 between when I started and when we were acquired!). In other words, Ally.io, although very early and very much still unproven, had traction and a viable path to success in front of it when I joined.
What I’m doing now is different. It’s true zero. And I couldn’t be more excited about it.
To close, the person who deserves the biggest thank you is my wife, Simi. While many many people have been extremely supportive, the reality is that I wouldn’t be doing this without her encouragement. My family is #1 to me, and I appreciate that when I started exploring this journey, she was nothing but encouraging. She’s consistently empowered me to “take the leap”, reminding me that even when we fail we learn. And you know, failure isn’t the only possibility. This freaking thing just...might...work.
Michael
More to come soon. In the meantime, please do reach out to me if you are an accredited investor who is looking to make investments into local businesses and/or if you know of very high-performing businesses particularly in Atlanta.