From Startup to Exit
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From Startup to Exit
The story of mega-successful exits with Chronus and Ally.io, A conversation with Seattle serial entrepreneur Vetri Vellore
When Vetri Vellore was given the responsibility to turn around the Systems Management Server business at Microsoft, it was a failing business. In fact, at a business review, Bill Gates famously threw his deck back to him telling him to shut down the business. But Vetri persisted and completely turned it around. Soon Vetri embarked on a remarkable entrepreneurial journey where he successfully started and exited two businesses - Chronus which was a mentoring platform and Ally.io which was a platform for managing OKRs (Obejectives and Key Results). Vetri bootstrapped his first business but raised substantial funding for his second. Listen in to hear the inspiration he got to start both businesses and his thought process behind raising VC funding.
Vetri Vellore is a serial entrepreneur with a track record of multiple successful exits. His last startup, Ally.io, was acquired by Microsoft in 2021. He served as a Corporate Vice President at Microsoft, and after the successful integration of Ally.io, he recently returned to his entrepreneurial roots to launch another startup.
Before Ally.io, he co-founded Chronus, which was later acquired by private equity. He also dedicated 14 years to leading multiple award-winning products at Microsoft. Beyond his business ventures, Vetri is the author of "OKRs for All," a book endorsed by Satya Nadella, and mentors several up-and-coming leaders and entrepreneurs. He is the proud father of two wonderful children and resides with his wife in Seattle, Washington.
Brought to you by TiE Seattle
Hosts: Shirish Nadkarni and Gowri Shankar
Producers: Minee Verma and Eesha Jain
YouTube Channel: https://www.youtube.com/@fromstartuptoexitpodcast
Hello, everybody. Welcome to episode four of our podcast from Startup to Exit. I am very excited today to welcome our guest, our very own Seattle entrepreneur, serial Seattle entrepreneur, Vetri Vellor. This podcast is brought to you by Thai Seattle. I am here with uh uh my co-host Sherish Natkarney. Both of us serve on the board of Thai Seattle. And uh Sherish is now a serial author, having written two books now uh soon to add more to that uh more to that list. You can have your own collection of Shirish authored books soon. And uh it's all it's you can get his books wherever books are sold. And uh kicking off the episode uh for us is uh Shirish. Shirish, over to you.
SPEAKER_00:Thank you, Gauri. Hello everyone. Uh I'm very pleased to welcome Vetri to our podcast today. Vetri is a serial entrepreneur with a track record of multiple exits and also a former Microsoft executive. Uh he started his career at Microsoft in the early 90s, uh, where he led the turnaround of the Microsoft Systems Management Server. He then started a company called Chronos, uh, which is a mentoring platform that he sold in 2015 to private equity. And then subsequently he started Ally.io, a staff platform for managing OKRs that he sold to uh Microsoft. And then he was uh with Microsoft for uh for about two years and has just left Microsoft. So welcome, Vetri.
SPEAKER_01:Thanks, Sri. Uh Sarish, you forgot to mention how you've played such an integral role in my entire entrepreneurial journey. Sri was my first entrepreneur mentor and uh he continues to be such an important influence. Thank you, Srich and Gauri.
SPEAKER_00:Yeah, my pleasure. It's been a real pleasure working with you. All right, so let's get started with your um early career at Microsoft. Uh the first time around, uh, you led the turnaround of the Microsoft Systems Management Server. So tell us a little bit about that uh story and you know what were some of the things that you did to uh engineer the turnaround.
SPEAKER_01:Oh wow, all right. Mostly good memories, right? I'll tell you at some point in my career at Microsoft, I decided that building products as an engineering manager leader was hard enough to be successful. And I want to see the get to the part of confluence on business and technology. And I remember telling that to my manager and saying, Hey, can you find such an opportunity? He was very kind. He called me into his office once one day and said, I have found this opportunity for you that you've been looking for. And I did not even ask him which team, what the product was. I said I trusted him and I trusted, I liked this opportunity. I signed up. The following Monday, when I was introduced to the team, the system management server team, is when I got realized why I got the job. Because no one else wanted it. And the team was in the team was in some serious trouble, right? It was a close to$200 million business, but the revenues were tanking in double digits quarter over quarter. The product they the team had shipped a poor quality release, not on, of course, not on purpose, but it happened that way. And the product satisfaction was the lowest of any Microsoft product. And the team morale was the fourth quartile, and all those negative spiral happening. And it was an amazing opportunity. To be honest, I did not realize what I was in for, the level of the challenge. The biggest is actually the team has lost faith that they can actually do this. Customers had lost faith that this product can be used. In fact, I remember taking calls from customers in my very first week where they were so upset with the product because they thought it had done not just it, it did not work as expected, but it created damage within the networks. And this Microsoft field has lot lost faith in the product and they were not even trying to sell it anymore. In about three, three and a half years, fortunately, we were able to turn it around. I clearly cannot take credit for all of it. I was at best a catalyst for what happened. But by the time I in three, three and a half years when I left that organization, we were uh the product satisfaction was in line with Microsoft Windows, the team's morale measured by Microsoft Surveys was in the first quartile, and so on, right? The revenues are growing very robustly and all the good stuff. The problem I really grappled with, Sarish and Gauri, is that crisis of confidence, right? The sales had lost confidence, the team has lost confidence, but customers had a lot lost confidence. Now, Microsoft execs had a lot lost confidence. In my very first review with Bill and Steve, um, Bill threw the deck back and said we should shut down this business because there is so much customer pain. He was just uh channeling customers' pain. What I had to do was essentially bring a sense of optimism and show through initially through small successes that we can actually make a difference because pretty much everyone it looked like had given up on us, including customers. So it started with actually shipping what was a service pack, but even before that, shipping some really, really small point releases. And I am tend to be in general very hands-on. So I sit literally in the labs with the team, and we were able to get a few things out that immediately made actually a good difference for some set of customers, not everyone, some set of customers. And I think that actually created started creating a positive cycle in this whole turnaround, right? The team actually felt more and more confident. The field felt like, oh, at least this customer is not super upset anymore. Customers are feeling confident, but it took us a long time. I don't want to pretend like it was overnight. We had to do this because to earn somebody's trust takes a long, a lot of time, right? So it is actually those immediate quick fixes, the service packs. Then what we try to do with various things that we continue to release and work closely with customers, one step at a time, we had to earn the confidence back. Engineering-wise, I don't think it was. I mean, it was a hard problem, but I don't think that was the biggest challenge we had. The biggest challenge was everyone had given up on us, and we had to earn the trust.
SPEAKER_00:Great. That's a great story. So uh by the end of your um career at Microsoft, you had been there for about 14 years, uh, and that's when you started your entrepreneurial journey. Uh, what you know, what made you decide to become an entrepreneur?
SPEAKER_01:Good question, Surish. Sometimes I ask myself that. Um, I don't know. Seriously, I remember I always had this urge to be an entrepreneur, right? Um not necessarily to make money. In fact, I remember in my college or undergrad, so there was this yearbook where one of the questions in the yearbook was if you had a billion dollars, what would you do? Billion dollars obviously is a lot of money. And I still said I'll start a company, right? So for me, it was not about money, it's about the journey, it's about getting something off the ground, something that does not exist in the market yet, and working with a great set of people, iterate quickly, learn quickly, and build something that's of value that didn't exist before has been magic. And uh that probably is what pushed me to it because I had a very comfortable job. I was considered as a strong performer inside the company. To leave that in 2007 to go startup did not make a lot of sense. Uh in fact, my old father thought maybe I got fired and that's why I'm doing a company, right? I mean, people couldn't believe that I was leaving this job, right? Uh at Microsoft. And uh I mean, I was running the Visual Studio platform team and the partner ecosystem. It's a substantial role, right? And uh, but I thought if I didn't do it then, I would never do it in my life, and I didn't want to deal with that, right? I said I have to do this, it's been a long time goal. Uh even when things are not going, uh things are going so well, you still have to. I became worried about timing, right? If I don't do this now, when will I do this? Had the realization sorry about that. Uh I had this realization that if I cannot give up on the money and the responsibilities now, next year it will only be more. I'll not do that and I'll never do a startup. And uh that increased the sense of urgency I had.
SPEAKER_00:Got it, got it. So you started your first company was uh a company called Cronus, uh, which was in the mentoring uh platform for for uh mentoring within corporations. Uh, how did you um come up with that idea and how did you um validate if there's a real need for that?
SPEAKER_01:Good good one, I don't think I did the validation as well, and I'll share some of the lessons, right? I made a lot of mistakes. I think I made every possible mistake, in fact. So I'll share some of those. The conviction around mentoring came from my own experience. I have this, I don't triangulate and build companies based on what's hot. I don't go after crypto, I did not go after ARBR or Gen AI, but I actually like to work on problems I genuinely care about. And mentoring is something that I genuinely cared about. Um I had a particularly strong career at Microsoft in my first temp, and that's not as one of the youngest GMs and all the good stuff, but it's not because I was the smartest guy or the hardest working guy in the entire company. I think it's because I had great mentors like Dave Promps and Brian Valentine and later on Satya and others. And while they did not give me jobs, they gave me great guidance, and I thought that made all the difference in how I had a very fulfilling career. And I want to bring that to everyone. I have this huge belief in what's inside each of us. And there's um this unlimited potential inside each of us, and how do we unlock the potential? And mentoring seemed like a great way to do it, and that was the thesis behind why I started Pronus. But one mistake I did make, uh, that being my first startup, is I did not do enough customer validation, Sharesh. Going back to your question, I had such a strong belief. I was also involved in Microsoft's own internal mentoring program, and I could see the ROI of a well-run program can be super high. So I had such high conviction that I did not actually do as much customer research as I should have done. And that was, to be honest, a failure. In fact, I spent about 12 months, maybe even longer, in the CONES journey, first 12 months, trying to figure out the product market fit, right? I mean, it might not look like long enough, but I was doing all kinds of random things that were not even trying to find product market fit, right? Because I had such high conviction I already started building the product for scale, which was a bad mistake. And in Ally, I did a far better job doing uh deep dive customer interviews and open-ended interviews and so on. But with Cronus, it was more like I was learning or doing the validation after I got deeply involved. So we shipped a product. We initially we went after B2C. We had hundreds of customers, hundreds of thousands of uh users, but I could not monetize it well. Then I pivoted to B2B, which is where I always wanted to go. And we had a lot of good success there after that pivot. We had really large Fortune hundred customers like Amazon, G, Coke, and others. Um, and we could see as an enterprise mentoring platform, uh, we have found that kind of product market fit. But uh I looking back, I think I could have done a far better job uh in my initial analysis and customer interviews.
SPEAKER_00:Got it, got it. So now my understanding, uh correct me if I'm wrong, is that you did not raise any VC funding for uh Chronos, it was bootstrapped. Uh if that's correct, uh just curious to understand your reasoning behind it. Why did you not raise um BC funding versus bootstrapping? And did that affect the growth of the company?
SPEAKER_01:Uh I I have this principle, Sri, that I'll raise money only when I have confidence in the business, right? I it is just something I always followed through my first startup, my second, and now to my third one. Um and in Cronus, maybe because it was the first time I was doing the business, also because all the learnings I was doing while after I started the company, uh because I did not do as good of uh customer research as I should have done looking back. Um it took me some time to build that confidence. When that and by the time I felt confident about the business though, uh we had some really high value contracts, right? A lot of uh several high value contracts, which kind of made it not essential for us to raise money. So being Bootstrap kind of started as a principle, uh, I mean, started from a principle and it kind of became the way for the company. It was right for the company. I don't think it crimped the growth rate to go back to your second question. I don't think because we we did well. There was a lot of customer money to make the investments. We, in fact, were able to invest in different go-to-market motions, we were able to experiment with adjacency uh products for adjacent markets. We were able to do, in my opinion, most of what we wanted to do. What I did miss, to be honest, is actually having amazingly good VC partners, venture partners. I had good mentors, great mentors like you, but I did not have VC partners who have many of who are very, very good and have seen the script. I saw the power of that in Ally. That's the thing I missed. I don't think I missed the funding part, the ability to do investments that we wanted to make. I did not miss that. Got it.
SPEAKER_00:All right, so um uh you had a successful exit uh with Cronus uh through a private equity uh firm. And then I recall that uh while you were at Cronus, you were uh kind of um looking at ways to kind of uh enhance the performance of the company and you started adopting OKRs. If people are not familiar with that term, that stands for objectives and key results, it's uh management by objectives philosophy. And that um you were not satisfied with using spreadsheets to track OKRs and decided to build your own tool, and eventually that led to ally. So tell us more about that uh that story. I think it's a very fascinating story.
SPEAKER_01:I mean, when Coronas was just 30, 40 people, and I was, to be honest, struggling to manage the company. And uh I was a little bit confused and flabbergassed, right? Then I managed much larger teams, much larger business. Here's a 30, 40 percent team, what's going on? Uh, have I become a moron? Right, and after I got over the fact maybe I've not become a moron, maybe the world around me has changed, and I went looking for what is this right frameworks, right ways to manage a fast-growing company in a more modern way. And I came across multiple rhythms, there's OKS. And uh and but the OKRS spoke to my own value system. That's the main reason I chose OKS in the first place, right? It's about how do you set, how do you have a growth mindset by setting stretch goals and learning from what happens when you go uh towards uh more ambitious goals. It is about how do you actually be data driven, not personality driven. It is really about how do you bring purpose to work and help people understand context and not micromanage. Things like that, they really, really appeal to me. And so I started using that in pronos. And I had my second aha moment, trying to be lazy or efficient. I tried to do it in spreadsheet and PowerPoint, and had a realized that what I was really trying to do is change how my team thought about work, how we did work, how we set defined goals. It is not something that I could prove successfully. So I really wanted to build a system to transform how my team thought about work, right? How we set goals and how we work towards them. So I started building this tool. I'm a geek, I still write code. So I wrote the code for Ally myself initially, where and we started using it internally as a tool. So my own conviction that this works and how well this framework helps uh company that's trying to scale came from my own usage of this tool as well as the framework myself. Right. For about two, two and a half years we used it. The tool got better and better because of our own usage, and that is, and when we sold Cronus to the private equity firm, I kept rights to this tool because it had did not do anything. I mean, it was isolated from the main business of Cronus. And that is what uh became ally later.
SPEAKER_00:Great, great story. So now um as you thought about, I remember as you were thinking about your next company, um uh you had looked at some other uh market spaces uh and then decided to focus on the OKR space. Um but the OKR space had some well-established uh players who had moderate level of success, um, but you decided to still enter the space even though you were kind of uh late uh to that market.
SPEAKER_01:Uh you know, how did you um you know uh compete with them and and uh what was your the the key I the I mean I did this time around at least ally after Cronus and did actually a lot of customer research today. I remember I was already a huge believer in OKS, right? And uh how we have been successful in using it at Cronus to scale the company while keeping everyone engaged and productive. And so I was personally a huge believer, but I learned from my Cronus journey, right, the importance of customer interviews, and I did a lot of customer interviews. And to be honest, that's where my confidence came from. My confidence came from what I heard from customers in terms of the deep need they had for aligning the teams, bringing purpose to work, but at the same time, how the need was still not met by the vendors in the market. As you said, right, there were two really large vendors that started four or five years before I had, they had raised tens of millions from really well-known. One of John Doe, John Doe wrote the book on OKRs, his own company, he had funded a company to do OKR. Another one was also funded by some really well-known BCs, and I think even Microsoft was an investor in them. And so it was kind of a careful decision I made. Uh, while I had personally believed in the idea of bringing purpose to work, whether there's a business that we could win, and it's a large enough business, is something I spent a lot of time thinking about. And what I learned from the customer interviews was really the vendors were not meeting the need. Right. A lot of the bets we made, the three critical core bets we made in Ally that made Ally successful, in my opinion, other than having a really wonderful team that executed phenomenally well. One was around the go-to-market motion, right? Our computers were coming in with consulting services, with consultants teaching companies how to do OKRs. And I thought the market, based on what customers are telling me, would be closer to how Agile got adopted. Agile, 20 years ago, most companies, product teams or other teams were doing essentially waterfall-based development. And Agile was new, and Agile got adopted more bottoms up than top-down. Sharp X and CEO suddenly said we'll all do Agile. And I thought OKR motion will be similar to that based on what I heard from customers. And we were, it turned out we are right on the back. And that informed our product, the onboarding of the product experience, as well as our go-to-market motion, where we try to actually go bottoms up. That was one thing. Second thing we heard from customers was people didn't want yet another software tool. What I heard from the customer interviews was people said, I in fact, I remember one CEO telling me I already have 72 tools. I cannot have a 73rd tool, but I want this functionality. So we built this. We are the first team, I believe, to build this into Slack and other collaboration platforms so people can have access to the goals and clearly have prioritization of why they are doing what they are doing without having the burden of having to install yet another tool. And the third insight we had was the friction of work doing OKS was still very high, and our other vendors have not quite solved it really well. And we focused a lot on extremely simple user experience and a lot of integrations, extremely easy two-click integrations to line of business tools like Salesforce. So if you are working on an objective that's about generating revenue, you don't have to worry about spending time updating all that okay art. We could just two click kind of Salesforce, pull that information and update it. That's as an example of integration we did on to reduce the friction and improve through ease of use. All three bets, it we just got very lucky, we turned out to be turned out to be right. None of those ideas again came from me, it came from actually all the customer interviews we did. But our team executed phenomenally well, and within about a month or two of launching, we had customers like Slack. It was an RSP process where it went up against other vendors and still wonders. And within 18 months or so, most people are saying, including G2, we were seen as a leader in the OKR market.
SPEAKER_00:Great. So now this time around, um you did raise uh funding and quite a bit of funding for um uh for Ally. Uh was it because uh this time around you had uh conviction and you felt that uh now that you had conviction early uh early on that you could go raise money? That's right, Sarish.
SPEAKER_01:I mean the customer traction was I mean was the main was what gave me the conviction, right? Very, very early on, we started seeing so many trials, really high-profile organizations like Slack again, signing up for the product like Airbnb, signing up for the product. And I realized the trajectory of this company was different from what I saw in Cronus. The second reason I said raise money was my competitors in this market had raised a lot of money, and I wanted to make sure I had gravitas, right? Not just money, but also the right partners. Um but to be honest, raising money, my seed round was very hard. I had a lot of no's, right? At least 20, 25 no's, I think, right? And uh because it made sense, right, from a VC perspective. This is a guy saying he has some insights into how to build a product. He's very four years later than the other vendors were already well funded. So I can understand why from a VC point of view it did not make sense. And eventually, though, some people decided to take a bet on us. And uh I think maybe Sirish, you introduced me to at least one of them, right? So they decided to take a bet on us. And uh what happened though is right, as soon as our seed round happened in I think January of 2020, right? I think uh anyway, January 2019. Um within four months, Axel came in, or Axel and some other few VCs came in, and uh, it was not something I sought out. They came in, and of course, they're phenomenal partners, right? So we decided to actually want to partner with them more than needing their money. And within three months of that, Tiger Global came in. Uh, I mean, if I remember Scott sent me this note saying, Can I grab coffee? And I was a moron. I didn't, I was so naive, I didn't know what he meant. I said, Of course I'll grab coffee with Scott. And then at the end of the conversation, he calls back and says, I'd like to invest, right? So I was not necessarily seeking money, but uh fortunately money found us, and we had the business was doing really, really well. So it made sense to take the money because we knew we could deploy the money, right? In a disciplined way, though. And so, and then our CDC happened like a year later, again, because business action was really good. We had some incredible logos, we had extremely good NRR, right? The retention rate, land and expand was a core motion for us in the bottoms up, and we had like 142% or something. Our NRR was really, really solid. So all of that helped to attract capital. So after the seed round struggle, things are easier. That's great.
SPEAKER_00:All right, uh, over to you, Gavri, to continue the story with Ally.
SPEAKER_02:Right. Petri, you have used the word confidence a a lot in this uh so far in this uh episode. One thing that you uh you brought up in your early days at Microsoft when you took your first job uh or your first assignment was the crisis of confidence, right? Everybody how what would you give entrepreneurs out there um advice on uh how to handle this? Because they're gonna face their own self-confidence crisis, uh employees and teams, customers and investors, but you continuously faced it, you brought around uh a conviction to that story. What would you say that entrepreneurs need to really do or look out for uh to build confidence of uh with people around them, whether it's employees or customers?
SPEAKER_01:Very good question, Zauri. Uh I will say though, right, I think as an entrepreneur, the toughest thing I found is on one hand, I'm extremely confident and passionate about what I'm trying to build. On the other hand, I do maintain a list of all the things that can go wrong, right? What are the things I don't know yet about the business that I need to get to know because that's how I'm mitigating risk, right? We I don't think our jobs to take on a lot of risk. Our job is every day reduce the risk to the business. And so you are trying to play both, to be honest, right? You have to have high confidence. And for me, the confidence in came from I genuinely cared about these problems. That is one thing I'd strongly suggest to entrepreneurs do not look at a space because you uh it looks interesting, but see whether you deeply care about the problem, solving it for that customer, right? The solutions will change, right? I mean, that you'll pivot and you'll do all those things, but you have to deeply care about solving that problem, in my opinion, or about that customer, right? In both cases with Ally as well as with Cronus and now with the third startup, right? I just feel like I deeply care about this problem. I spent in some cases years thinking about this problem, right? And uh I just feel convicted that I have to go and solve it, right? Um, and I think that that is key because and then on the other hand though, you do have your list of questions, right? I there are so many unknowns, particularly in my third startup now. I'm just starting, so a long list of unknowns, right? That uh I can't pretend like I know yet, right? That's dangerous. So I do make a list and say I try to create a plan for what are the top three unknowns at this point that can kill the company, and I try to actually go and solve it. And I share that with my team too, right? We all share the conviction of we are trying to build something amazing, it's also a very important problem, and we all genuinely care about it, but we all are also um obvious. I mean, we also know that there is a list of unknowns, right, that's gonna stop us from solving it. And our job is to go make them known. So I think I would not say it's a blind confidence, it is confidence on one hand that comes from a deep desire to solve the problem. On the other hand, we have to be pragmatic about what is it you don't know and how you can get to know that.
SPEAKER_02:That's incredible that uh you kept this list so you can de-risk the company every morning. Yes.
SPEAKER_01:I think a lot of authority forget that. I think some people do it unconsciously, but I thought it was helpful to actually write it down.
SPEAKER_02:I I I've always believed that you have to uh sort of commit by writing it down, especially something so important, because it's just not uh it's just not investors uh that you only have to de-risk. You have to de-risk your employees, your customers, everybody. And I think in both you had that journey with both Microsoft and at Cronus where you had to constantly de-risk that that seems like that seems like that's stuck. So I think entrepreneurs listening, you know, start making a list of things that you don't know and you need to know.
SPEAKER_01:And focus on the top three, right? There'll be a lot, right? And focus on what can kill your business if you don't solve it or get to know it soon.
SPEAKER_02:That's awesome. Ruthless prioritization. Now, your exit in Ally uh came through Microsoft. You know, Microsoft acquired you. Um was it uh when you went around it, you was there familiarity because you had already worked there, you knew a lot of people, and you knew the gaps, or even though there's been a gap between you departing from Microsoft, they had already had a CEO changeover and and then they had you know massive culture change. How did your Microsoft pedigree help in Ally being acquired by Microsoft?
SPEAKER_01:I think it helped to a little bit, not a whole lot though, Gauri. Where it helped is after we got acquired, the integration, which I'll talk about later, right, went extraordinarily well. Um apparently we are like a poster child for how well integration can go, right? And I think that was hated by the fact me and some other folks on my team, not just me though, right? We're familiar with the Microsoft culture. And we but we'll talk about in a moment. But in terms of the acquisition, right, um I'm sure it factored a little bit, but I should also say Microsoft had invested in a competitor of ours, Carl Workboard. So I mean, clearly they were they would have weared down that path, right? But what I think they really were trying to do is find the best product, and we had the best NPS in the industry, right? And Microsoft obviously can acquire the best product. Uh so it was kind of it must have been hard for them to not acquire a company they had invested in and go acquire another company. But uh even after joining, when I looked at why did they approach us, right? We were not looking to get acquired, right? In October of 2020, when they first did the reach out, our thing was if we of course I have very fond memories, I highly appreciate for Microsoft from my pastime there. And so we said, can we be partners and stuff? We don't want to get acquired, we think we can be great partners and help Microsoft win from being on the outside, right? And uh but they were very, very keen. Uh so every time they will come back with another offer or they'll bring someone more senior, and then eventually I think it was Rajesh, Satya, right? One of them said, Viti, this is not just about you coming and helping us, it's about how we help you. Right, you care deeply about this mission of the company. Ally was not about okay. Ally is the really piece of Ally was how do you bring purpose to work? Most people come to work, they have no idea why they are doing what they are doing. They come in and do something because a manager said, Please do this, or some project management system said you are the next three tasks. How do you help everyone understand? They're not coming to work every day to just lay one brick at a time, but they are building this beautiful cathedral. And that the idea of bringing purpose to work from an employee perspective is really what Ally was about. OKR was a mechanism to get there, right? From a top-down, from a manager or business leader perspective, how do you keep your organization aligned towards the strategic objections, not doing random things, right? And so it kind of met both of those needs, and using OKR as a framework or even as a marketing vehicle is really what Ally did. And uh so when Microsoft reached out, they said, this mission you care deeply about, we can actually get it to a million million users, right? And that moment I realized that I had a path to raise a lot of money and keep building this company, but I had at that time and still don't have a real path to get to 100 million users. We need the power of Microsoft, the power of Microsoft platform. And I cared deeply about the mission of the company, and that is when we decided that we cared more about the mission getting 100 million users than being independent or going IPO, right? And that is really what culminated in the sale. But um I'm sure internally they thought the integration success will be aided by the fact I've been there before, but I don't think that was the number one criteria. They were, from what I could see, or access I had to the documents even afterwards, they were looking at what's the best product.
SPEAKER_02:That that's that's incredible. That uh you set aside uh what I would call probably your own personal uh mission, saying, hey, I I could build a big company, to saying uh the purpose of this company and therefore the purpose of the product has to get many users as fast as possible so that they all enjoy what coming to work. And and during the pandemic, which is when all of this happened for you also, was there uh was did you see the workforce or did Microsoft sort of indicate that this is uh a big deal, a big hole that they are seeing? Uh or did you learn afterwards that you particularly saw the uh the fact that there's purpose in just being on Team's calls than just being on teams calls?
SPEAKER_01:I I I actually saw that, Gauri. I don't know. I I shouldn't say I I saw that as a softy way to put it. I strongly believe that people need purpose to come to work and managers need to lead with context, not tell them tell people what to do, but what needs to happen, right? Kind of this is a bigger picture and let people figure out how to get there, right? That's been kind of something I've tried to do myself, not successful always, but I've tried really, really hard. And I want to bring that to everyone, right? It is that power of knowing why I'm doing what I'm doing and the freedom to do get to the outcome in the way I think is best, right? That unlocks innovation, that makes people feel empowered and great. It's great for organizations, great for teams, great for morale, everything, right? It just makes things click. The center team works like magic. And uh that I always strongly believed in. And the fact that we had to be part of Teams and Slack to enable people to adopt rather than go to yet another tool, at another website, or yet another mobile app was something that was based early on, early, but we made based on customer feedback. And that played very well.
SPEAKER_02:You know, uh, I don't know if you remember it, but I do very clearly. Uh, in the very first early days of Ally when you were pitching to uh, you know, uh uh to get angel investment, actually your pitch deck, one of the one of the uh uh slides was the reason football teams exist is to win Super Bowls, right? Not not anything else. And that's the that's the purpose. And then you build OKR with it, whether your team manager or the or the towel boy, right? That the the equipment manager. Everybody had to have the same purpose. I still sat back and think, man, every team starts out with the same purpose to win the Super Bowl. And nobody says, Oh, I mean it's second. So the purpose was clear, and I thought, man, this is uh this is something that you're building. Now, having been in Microsoft, why did uh it aid? Because by the time you got into Microsoft, which was a good 13, 14 years, a complete generation had gone by, new CEO, new culture, pandemic had onset. What made this work? What did you uh have uh have a special uh approach that they had not done? They had acquired enough companies, they continue to acquire a lot of companies. I what made it?
SPEAKER_01:I mean we are uh good question, Gauri. Let me reflect on that, right? W the reason I think the integration went very well, in my opinion, is number one, uh the culture of the company, Microsoft has changed significantly since the last time I was there. I mean, you wouldn't believe it, right? In the first month, my small team was part of Microsoft, it's a massive company, and people reaching out and asking how we can help. I'd never seen that happen even once in my previous tint at Microsoft, right? If the notion of one Microsoft, right, if we're gonna win together and we're gonna work together as one Microsoft, was very evident, and that actually helped a lot. So many teams helped us actually get integrated, our product, our team, right? That made a very, very big difference. The second thing is actually us, not just me, there are several people on in Ally who are came from Microsoft background. Us being very familiar with the Microsoft culture made it much easier, right? In many cases, I knew other leaders in other parts of the company, so I could reach out and ask for help or figure out how we can get to our product milestones and so on. The third thing is actually uh both Microsoft and my ally team drive to actually make this integration work. The reason we are here, we could have been independent, was to get to 100 million users. And we were we would just want to get there, right? So we were working super hard. In fact, uh, some people remarked, right, we are still working like a startup, right? But now we are part of this$200 billion a year company, right? And uh my take was I don't know any other way of working, to be honest, right? This mission of getting to so many people, bringing purpose is so important, and we didn't want to lose this opportunity. So we were very driven. My team did a phenomenal job, but without the culture, without the help from other teams, uh none of this would have happened. So all three were, I think, core components.
SPEAKER_02:That's that's awesome. So you mentioned you're on to your next startup. Could you share with our audience what's uh what you're thinking about? I'm sure more a lot of VCs will reach out to you, but my world in some ways, Gaudi is small.
SPEAKER_01:I feel like I've cared about only the same problem for the last 30 years. Some ways it's a little boring, right? I care about what makes teams click, right? How do you make teams, organizations happy and productive, right? How do you turn them into this beautiful well-loiled machine where everyone is happy, everyone, the gears are meshing well together, and you keep producing amazing things, right? I tried, I mean, I've shipped dozens of products, right, at Microsoft and otherwise. And pretty much all those products are obsolete now. But what I remember is those moments when the teams had that magical flow, right? And not always, I have not always been successful, but when it happened, it was magic. And that's the problem I constantly keep thinking about. That's what, to be honest, led me to mentoring. How do you get experts to teach the newbies? That's what led me to Ally. And that is what the third company is also gonna be about. Uh, but this time I feel like after 30 years of trying to solve the problem, I might have finally figured out what is the folding grail solution. Uh I I'm not trying to keep it a secret, but I'm it's I just left Microsoft, what, not even 10 days ago. So I'm not yet ready to articulate it in a clear and succinct enough way. So I'm gonna take some time and come back in another time and explain it. But the problem is the same. I'm trying to still solve how do you make teams happy and productive, organizations happy and productive, and not from just culture perspective, but how do you show business outcomes? How do you improve business productivity? Just like Ally was, right? Ally was about how do you improve team productivity towards business outcomes. The next solution is the same. This is what I was telling my wife. It feels like I'm just 30 years, I'm probably the same problem over and over. But this time I feel like I might have figured it out.
SPEAKER_02:Uh so you uh that's interesting, you say you might have figured it out. So you had two journeys in your entrepreneur, right? Ally, which was a lot of VC funding, uh, exit with a huge uh company, Cronus, bootstrap the whole way, exit with a with a PE firm and coming out of there. So did you uh you now have both both experiences. You could do both at this point, or you could do one of them. What do you have a sort of a you lean into one approach versus the other saying, hey, I'm gonna bootstrap this, or or do you uh I'm gonna raise a lot of money? Because either either of these is not a problem for you. You can raise a lot of money because you had a success and you could bootstrap it.
SPEAKER_01:I I really like working with other people. I think I can use all the help I can get. This time around, um I really want to build a company that has lasting impact, right? I'm very happy with outcomes of Cronus and Ally, but this might be my last rodeo. I want to build a large-scale company, not for the sake of money. None of us can eat more or sleep more with more money, right? It is really about what's the impact, right? And uh I want to build, I think it's gonna take me 10-15 years to build a company of the scale that I have in mind, right? Uh, that actually has such a positive impact on millions of lives. And uh that journey, I want to make sure I get the right partners, right, who are gonna stay with me, help me get there, right? To one of the iconic companies in this industry. That's what I would like my legacy to be. And I want to make sure that I find the right partners to do that, right? Can I go it alone? If it's just money, maybe I can go it alone. But if you think about this as what we are trying to accomplish, right? I mean, we want to be one of the handful of uh dozen companies that are in that kind of uh realm, right? And that takes a lot of help and a lot of effort, and so I'm definitely raising money. I'm trying to find partners. I'm leaning towards just going with people I already have worked with, so I've really spoken only with the VCs whom I already know or where on my cap table on Ally because they know me, I know them, and I thought that'll actually get this going faster and uh get us get to the end result we all want sooner. You you are taking money. I I am I am raising money. I'm raising money, yes, yes, yes. And I mean, I've been lucky, give an update, right? We've gotten some sheets already. Uh I've been very lucky. Yeah. Uh that's very good. That's awesome.
SPEAKER_02:So entrepreneurs, right, are are in a new era, right? Because uh when you left Microsoft 2007-2008, yeah, we had a slump then we had this incredible boom, right? 15, nearly 15 years of just only up and up and up. Now we've had some market correction, now you need, now they are on to unit economics, just not growth for growth's sake. You know, those all kinds of other factors have come in. Uh now the now that that all that reality is, and with your experience in two startups and two successful exits, what would you tell first-time entrepreneurs who are just starting out on this journey and haven't had the experience you had with uh with your last two ventures?
SPEAKER_01:Uh uh To be uh Gauri, I don't know if you know that I think you know this, right? When I started Corona 2007, and within four or five months the financial crash happened too. Within a few months, the crash happened, right? It was definitely not a great time, right? Uh to start a business. But I learned actually, I would say two things. One is again what I said before, believe in what you're doing. It's going to be a tough journey. A lot of people think they get excited about an idea, they think it's gonna it's exciting and they're gonna make life is gonna be great. But I that's not been the case for my last two journeys, right? It's a lot of struggle. So every day there's a struggle, every day there's a challenge. There are days where I've uh woken up and thinking, man, everything has gone to hell. I don't know how we're gonna last a day or a month. And that same evening I've gone to bed thinking we are king of the hell, right? So it's it's an interesting journey, but it's not easy at all, in my opinion. So you have to believe in something. So you have to uh that's long long lasting. Right. So uh that is one. I would say the second is I think the constraints are your friend, having less money, right? Um, or whatever the constraints are, right? I think they are they make them your friend, right? They are your friends. The best creative ideas when you're driven and passionate about the idea, the constraints are actually not a bad thing at all. You will find incredibly creative solutions to solve problems, and history has shown this repeatedly, right? And uh that's what we can all do. Uh I I'm not terribly worried about the market conditions or fundraising conditions, to be honest. Uh, because I think people are passionate driven, they will be creative and they'll still manage solved problems. That's why they say the greatest companies get created in tougher times, right?
SPEAKER_02:And that that's why Cronus was successful and you built on top of it because you started the hardest. I was like bad timing. No, I think that was a good timing. Actually, imagine your dad said, Why is he leaving this company for what? And uh and uh and then four months later he wakes up and says the world is coming to an end. What are you doing, right? Especially I I can I can totally I can totally empathize. Now that I have I have children who have grown up, I can empathize.
SPEAKER_03:What are you doing?
SPEAKER_02:Vetri, you gotta you gotta make one promise. You gotta come back on a future episode when you have more to announce about your company. But it is this has been very fascinating to hear your journey with uh Microsoft Cronus and Ally. Uh, it has been a pleasure to watch you uh grow in the Seattle area. Uh I hope you stay and come back off into the area, even though you are now speaking off to the Bay Area. Uh but thank you very much for your time and uh you know keep us uh keep us posted because we want you to come back and announce uh the game changer. That's your new that's what I should call it. Thank you very much. Thanks, Gaudi. Thank you very much.
SPEAKER_00:Okay, thank you, Getri. Uh amazing story uh as uh as always, and all the best with your new startup. Thanks, Marshavis. I'm sure we'll be in touch.
SPEAKER_01:I can use a lot of mentoring and help. Yeah.
