From Startup to Exit
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From Startup to Exit
Founding Smartsheet and its vision: Conversation w/ Praerit Garg, President of Product & Innovation
Smartsheet is a major success story for the Seattle Tech ecosystem. Smartsheet was founded in 2005 as a workplace management system based on a spreadsheet style architecture. In this episode, Praerit Garg (PG) talks about the early product vision for Smartsheet. How, unlike dedicated product management tools like Asana, Smartsheet is very flexible and adapts to a number of workplace management scenarios. PG discusses the new product innovations that Smartsheet has introduced based on AI. As a startup founder himself, PG shares some of the key lessons that he learned in starting a startup.
Praerit Garg is President of Product & Innovation at Smartsheet. He is passionate about building a product and engineering culture of innovation that scales, finding simpler solutions to hard problems, and delivering great experiences for our customers.
PG has more than 25 years’ experience building large-scale distributed systems and internet services. Prior to Smartsheet, Praerit was a general manager at AWS for identity, access, and directory services. Previously, he co-founded Symform, a distributed internet storage startup which was acquired by Quantum. PG was also at Microsoft for 12 years, where he was responsible for many of the user identity, access, and encryption features in Windows. While there, he led the delivery of distributed systems management capabilities across multiple Microsoft products and was part of the team that built Active Directory. PG is also co-inventor on more than 25 patents.
PG holds a master’s degree in computer science from Purdue University. He loves to travel with his family, experiencing different cultures and their food, art, architecture, and history.
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 another great edition of our podcast from Startup to Exit. Along with my co-host Sherish Nutkarney, we are happy to bring a great uh uh episode with another great guest. Uh, and I'm sure that all of you will enjoy hearing from him. Uh, from Startup to Exit is uh produced by Thai Seattle. Thai is a not-for-profit organization. And uh my co-host Sherish and I serve on the board of Thai Seattle, and uh Sherish is uh also a serial author, along with being a serial entrepreneur. So we borrowed the name of the uh podcast from his first book from Startup Exit. Uh his books are available where books are sold. Our uh podcast is available wherever you hear your podcast. Once again, thank you for all your support for the last year, and I hope you continue to enjoy our content. Please spread the word and uh come back and listen every time we put out a new episode. With that, I'll hand it over to Shirish to introduce our guest. Shirish.
SPEAKER_03:Uh thank you, Gavri. So today I'm very pleased to uh welcome uh Pradit Garg, also known as uh PG. Uh he's the president of product and innovation at Smartsheet. Uh Smartsheet, as you may know, is one of the success stories out of Seattle. Uh PG has more than 25 years of experience building large-scale distributed systems and internet services. Uh before Smartsheet, uh PG was a general manager at AWS for identity access and directing services. He's also a startup founder, uh, co-founder of a company called Simform. And then before that, he was at Microsoft. Uh we overlapped for some some number of years. He was at Microsoft for 12 years, uh, when he was responsible for user identity access and encryption features in Windows. So welcome to Eric.
SPEAKER_01:Thank you, Sinesha and Gori. Uh glad to be with you guys. Thankful.
SPEAKER_03:Great. So let's start with a little bit of your background. So can you tell us uh a little bit of your arc of your journey from Microsoft to founding two different startups and then finally joining Smartsheet? Uh tell us a little bit more about that journey.
SPEAKER_01:Sure. Yeah, I mean, right out of uh my um, you know, I was I was in the PhD program at Purdue, but uh and I can I I was able to convince my advisor that it's better to actually go in the industry and get a real job uh back in 1995. My advisor was not exactly happy about it because he he had some uh uh you know uh uh funding that was tied to the research work I was doing. Regardless, I was able to get it uh uh uh graduate with a master's and uh join Microsoft in 1995. Um I I ended up joining the Windows NT team at that time and part of the distributed systems um uh sort of division within the Windows NT program. Uh, and that was focused on uh the directory services, um, which sort of led to the creation of Active Directory. Um that was that's sort of where my career started. I was responsible for a lot of the security capabilities uh that we delivered in Windows at that time. Um and then from there I went into doing systems management work at Microsoft, um, sort of part of this system center uh suite of products. And eventually in 2007, I felt like you know, I I had to I had to leave the mothership. Because if I had to keep if I had to keep having new experiences and continue to grow, um, you know, I had in Microsoft terms, I had become a partner. And you know, that's like becoming a professor, and you're just like, you need to leave, otherwise, otherwise you're just will be stuck in the machine. Um, and so I ended up sort of going and doing a startup. That was it, I often say it was a fairly humbling experience, right? Like um when you grow in a large organization like Microsoft that is super successful, it's like a bubble. And you learn how to how to succeed in that bubble. And so leaving Microsoft is like you have to unlearn all the things you had learned about the bubble, and you have to relearn a whole new set of skills. And and you may think that you know how to go find customers or talk to customers. It's totally different when you actually do your own startup, right? Like one of my jokes is like when you have a Microsoft business card and you gave somebody your business card, people call you back. When you're a startup and you give your business card, nobody calls you back. Right? Um you have those experiences, super important experiences. I think they set um we raised 20 million dollars over uh two rounds of capital for that company, eventually sold that company to Quantum. Um, and then I ended up joining AWS um because of um uh James Hamilton. I don't know if any of you know James, but James and I knew each other when I was still a grad student. Um uh and and so he ended up in Microsoft, and then he convinced me that that I should join AWS. And I'm like, why would I join another big company for a startup guy now? And and he convinced me that AWS was set up like a bunch of startups uh inside, and and which actually turned out to be true. I I ended up running many of the identity services there, um, um, got a ton of great experience. But um four years later, I decided that um it was time uh for me to move on, and and I thought I was I I thought I was done with technology. I thought I was gonna essentially maybe go teach or something. Um that's when I met Mark Mader because of a colleague of mine uh and and uh and the rest is history. I uh he Mark convinced me and I ended up uh joining Smartsheet. So I've been here uh what five and a half years now. Uh first running just the engineering team and then picking up product um and running product and engineering, and then uh uh last year many other functions like you know, business intelligence, uh corporate development and partnerships, pricing and packaging, and market many of the marketing functions, like digital marketing functions. So yeah, it's uh it's been um a great journey, right? Which continues through.
SPEAKER_03:Um that's great. Um so what was the uh inspiration behind joining uh Smartsheet? Uh they were still a young company uh at that time. Uh was it uh to be back in the startup world again? Uh or were you attracted to their vision, or you know, what what was it that uh besides of course that personal connection with the CEO?
SPEAKER_01:I I think uh I'd sort of say two or three different things. What one is I had done a startup thing, I had done the large company thing, right? Um uh Smartsheet was at a very interesting point at point in its journey, right? The company had just gone public. So, you know, it was uh few hundred employees, right? Um over a little over a hundred million in revenue. So a very different size of company. So that was one dimension to it. Uh I think I'm at a point in my career where people matter a lot. So my relate, my connection with Mark was a huge part of um the motivation, but also the mission of the company. Um, and so I had read this book, I don't know if you read it. Uh, it's called Sapiens by and the the story behind sapiens, right? One of the key aha moments in sapiens for me was where uh uh he talks about how humans are the only species on the planet uh which can band which on its own volition bands together to go pursue missions, right? Like uh we're the only species on the planet. Like some species are biologically wired to band together, right? Um, for search of food. Uh, but humans are the only species. That's how we have solved uh, you know, food at scale problem, how we have landed a rover on Mars or solved you know diseases. Like it's human collaboration that brings people together to go pursue missions. And the interesting thing about Smartsheet was that Smartsheet's mission was to help all other missions, right? Because we are uh we are a work management platform, and and our mission is to help all these teams and organizations on whatever uh project or program or mission they are pursuing, and and be that tool that sort of helps them go pursue their mission and drive that collaboration across these band of human beings that are pursuing that. So that was super intriguing for me, like as a software guy, right? To be on a mission that helps all other missions, right? So that's a like that's a great thing to um sort of be uh looking forward to getting up every day.
SPEAKER_03:That's great. That's great. Um uh I wanted to explore a little bit uh uh further back in the history about being a startup founder. You said was a humbling experience. Uh what are some of the key lessons that you learned that you can share with our audience?
SPEAKER_01:I think um, yeah, I think depending on where you are in your uh life experiences, I think I'm sure different people will have their own sets of experiences. My uh like I told you, right? One of my big experiences, like I was in my mid-30s, I had had a 12-year career, successful career at Microsoft. Um, unlearning a bunch of things that made you successful was actually kind of a big part of my learning. Just like um, you you basically are back to ground zero. And you have to essentially now go find your customers, right? Like, uh, how do you go find your customers when you work in a large organization where they already have essentially a flywheel turning and customers come to you? So um that's a that's not a simple thing to do. And uh for a technologist who whose natural thing is to go sort of go build technology and right um you figure out, okay, how do I how do I go find the right set of customers, talk to them, and then hear what their real pains are. What are they really willing to even pay for? Right? What are they gonna open their wallet for and actually pay for? And uh all those are kind of you know sort of real learnings uh going through that. I remember, I'll give you a specific example. Um we started the company in 2007, right? Economy crashed in 2008, some like a lot of people would remember, right? And so um and suddenly it becomes very real, right? It's like, oh, your own, you you think you're you're gonna sort of figure it out, right? Suddenly your own portfolio shrinks. Like, now we need to make this real. Otherwise, you have to go back to some corporate jobs. And and I remember one evening staying up pretty late into the night, uh, I went to the Microsoft website. So our technology the technology we were developing was around cloud storage, and um, and it was sort of a backup solution. So I literally got on the Microsoft website and um started looking up this at the small business uh value-added resellers, the VARs. And Microsoft had a special website where you can go search for vars in your area. And I did a search for in a 25-mile radius, uh, how many uh small business VARs are there? And had literally I remember building a spreadsheet with their names and phone numbers, right? And next morning I started cold calling them, right? Because like, hey, hey, we're here's a here's a backup solution, cloud cloud backup solution we have. Uh and would you would you be interested in sort of backing up your customers, your small business customers? And um, and so the you know, like uh so you use your Microsoft credibility, but you also sort of connect the dot for them. And and I was a my view was like if I got um you know five or six people to sign up, um we'll be off to run running something. We could actually get a beta out there. And I remember I talked to like 17 odd um uh small business reps, all 17 of them signed up. And I was like, oh, we have that's amazing, right? Like, but I literally drove in my car to those to you know, these are all people, belts and suspenders, they are going and serving their customers. Um, so they're not always available. So I drove around to meet them in their offices and show them the solution and right, and got got them signed up. So, so uh you know, you learn those things, right? Like you do your startup, like find your customers, make it super real. And and and even in down economy, once you had real customers using your stuff, right? Um you know, if people are then willing to invest in it, right? Like certainly even in down economy, uh at that time Mark Ishida sort of said, Oh, I'll I'll invest in in your startup, and and and that sort of got the flywheel going, right? But that's not the end of the story, right? You also learn about the team, right? Like building the right team, and and it's not easy to attract great talent when you're a tiny little startup with full of risk, right? And so how do you find your first set of team um uh members and how do you how do you focus on building the right uh solving just the right amount of technology problems? Um of those are hard lessons you go through and learn. Yeah.
SPEAKER_03:Yeah that's a great story. Now coming back to Smartsheet, um uh what does your role as uh head of product and innovation uh entail?
SPEAKER_01:Yeah, so I would sort of say um if you if you sort of separate out the various GNA functions, right? Like legal and and finance and all that stuff. Basically, we are organized around the uh our go-to-market functions, like the field team. So Max runs our field team, so uh all of our sales and uh even the marketing functions like events and field marketing, you know, we align them with Max and his team, and pretty much all product-related functions, whether it's engineering, product management, product marketing, the website, uh all the product aligned functions uh are within my remit, right? Um that's kind of the the role uh broadly. So anything that aligns with the product and our priorities in innovating for our customers from a product standpoint uh aligns with.
SPEAKER_03:Okay, great. So now uh wanted to explore um the little bit of history of Smartsheet. I know you joined them uh you know later in the in its lifecycle, but I'm sure you're familiar with its journey. Uh what was the original vision for Smartsheet? Was it simply Excel in the cloud? Uh and how did that, if that was the case, how did that evolve into workplace, collaborative workplace management, which is how you position yourself today? Can you talk a little bit about that history journey in terms of finding ultimately that product market fit?
SPEAKER_01:Yeah. Remember, the company is called Smartsheet. Um, so so it it wasn't just sort of right. I I often joke about this, and I'm gonna say this here, which is I think we need to run an ad campaign which says uh not a spreadsheet. Smartsheet is not a spreadsheet, right? Um it's a work management uh platform, right? It's a enterprise grade, uh, you know, now heavily AI-driven work management platform. And work management is you know managing projects and programs and processes that are running in organizations. So let me tell you the genesis of this uh the founders actually observed this. They were they were serial entrepreneurs, um, you know, Brent Fry and and a couple of the co-founders. They had done a couple of companies, and one of the things they found was that any project or initiative that was getting driven in the organization, people will immediately pull out a spreadsheet like Excel uh right and start tracking all that work in a spreadsheet. Spreadsheets are not really designed for managing work. Yeah. Right? And but but that was the go-to tool, right? People weren't actually using real project management tools. And so, so, so you know, they studied that problem, and then um some interesting things came out of that, their realization. One of the realizations is project management tools uh actually fail the need for work management because project management tools are designed for project managers, right? And but the work is not done by project managers, the work is actually done by the team in the organization, right? And and these project management tools are so sort of specialized for project managers, the team that actually is doing the work can't really even participate. And and spreadsheets just was one of the things people gravitated to is because you can actually share it and people can go in and it's simple enough to use, and people can go and put their own updates into it. Um, and so they've saw they saw that behavior um that was actually happening in organization. They also saw that project managers would basically track work by chasing people, right? It's like they're setting up meetings to get it uh updates, and then they are updating that information rather than people updating that information. There was very little automation built around any of that stuff, right? So like notifications and getting people to actually update. That's what led to the creation of this idea of a smart sheet, which was designed for managing work, right? And managing work in an organization where work is actually getting done by people in the organization and they can participate. It has automations built in, it has a form-based input mechanism, it has reporting and dashboarding. And so, you know, managing work is involves a bunch of things, and you want to be able to track and report on that. And so so they that sort of led to creation of Smartsheet and all so it was not, it was not the vision was not Excel in the cloud.
SPEAKER_03:It was more of a it uses the spreadsheet format as the underlying architecture, but it was really designed for workplace management from the from the get-go.
SPEAKER_01:Yeah. We we have a we have a grid-like view, right? Like view. That's one of the views. You can actually have a Gantt view, you can have a uh a Kanban like card or board view. Um grid-like view is one of the views because because you know it's a very familiar uh presentation format, and people can get into it. But even when you actually look into our the table view, right? Um like it's it's actually significantly more evolved than a spreadsheet, which is a very simple um sort of grid. Like the the columns are actually typed columns, right? So you can have a date column, you can have a contact column, right? Like so that you can assign work to people and then you can notify them. There are automations built around that. So it has a it has a tabular view. Like you know, a typical spreadsheet just has uh A like the columns are named as A, B, C, D. Like that's not what a smart sheet you actually name the columns with real, like, oh, this is an assigned to column, this is a date column, starting, end date column. So yes, it has a tabular view. One of the views is a tabular view, but um and yes, there is a there was a little bit of this inspiration that people see spreadsheets are easy to use and get started with. And so tabular view is a very easy view. Most people understand tables and filling information in tables. So that there's some of the genesis from there, but it was very much about managing work, right?
SPEAKER_03:Yeah, that's where they found the product market fit eventually. Uh yeah.
SPEAKER_01:Yeah. I mean, the company took uh it's sort of Smartsheet is like a pioneer in this notion of uh work management, right? Collaborative, collaborative work management product, right? Um because the traditional project management tools just fail at that idea that work is collaborative in fundamentally. And so um, and so yes, they it actually took uh uh several years um to to sort of realize the journey and and establish and create like that flywheel. So much so that today we today, if you ask Mark, he will say like there is a the real realization on this, which is now Gartner has a magic quadrant called collaborative work management. Right. That's right. You know, it's a real uh you creation of and industry industry which is very hard.
SPEAKER_03:I mean if there's an existing market you can go after that but if there's a new industry you have to go convince the governors of the world to to write about it.
SPEAKER_02:Right, right. And so yeah got it.
SPEAKER_03:Okay. So what are some of the uh I mean there are all kinds of workflows and you know um there's marketing there's uh sales and you know different you know if you look at it functionally or or even across the different functions so uh do you have templates for different types of uh workflows?
SPEAKER_01:Yes uh hundreds of templates uh that exist for for different kinds of workflows um you know and that's one of the challenges around when you you are a work management platform that uh and like you said right it's a super uh flexible data model which is I can this I can lay out the information I want to track for right if it's a if it's clinical trials I can lay out the information I want to track for clinical trials if it's a if it's marketing campaigns I can lay out uh what I information I want to track for marketing campaigns so it gives you that flexibility that ability to adapt uh to whatever work you are trying to manage and track or program you're trying to drive yeah and so you can set it up and you can run so like hundreds of templates. What we see is some of the most popular use cases right where you you would call them flagship ones right marketing use cases are very um like our marketing management and creative management use cases um are the IT portfolio management or enterprise project management right those kinds of use cases service delivery is a very popular use case where um service organizations use smartsheet for sort of driving like convergent is an example of that like Uber uses it for their performance mark uh marketing um programs right where they track all of their campaigns and um report on the performance of their campaigns all of that is done through smartsheet right now some of your um uh competitors uh I saw in the Magic uh quadrant uh are companies like Asana and Airtable and so forth do they have a similar architecture or um like Asana is that more of a project management tool from the get-go and it's not customizable for other scenarios. That's exactly right and that is one of the things that differentiates uh smart and has actually made it uh successful in large in large scale enterprise organizations is that ability to adapt to whatever like I think the the ways the simplest way I try to describe that is now if I have to translate all the work I'm doing into projects and tasks, right? So I'm always translating my work into oh projects and tasks versus if I'm thinking of marketing campaigns and I can describe them as marketing campaigns and I can track them as marketing campaigns, it's just cognitively so much easier for my team to participate and provide that information and right and and that's actually one of the differentiating things about is you can express your work as you see it. Like if it's clinical trials it's clinical trials not clinical trials man transformed into projects and driven I see got it got it excellent let me turn it back to Gaurie and uh I'm sure I'd love to explore some of the new innovations that you have introduced recently.
SPEAKER_04:Thanks Sharish so uh let me double click on this unlearning comment you made right so you're now running uh everything but the GNA functions within within uh Smartsheet so you that means you're attracting talent the reason the talent comes to you is you they have experience uh you're a great place to work but comes with this the baggage of their previous uh experiences how are you uh able to use your unlearning that you went through in your own startup to build a culture that is smart sheet unique that they are smart sheeters if that's even a word rather than uh you know I was at X, Y, and Z, etc and I'm sure they're technically or even functionally excellent at their work, but that's not what makes a great company, right? It's a collaboration of everybody. So you have a unique situation where you're bringing in people who have to believe in you the company and this but they also have to unlearn everything else they've done because that's not the way you do it. How are you uh inculcating that into your company?
SPEAKER_01:That's a great question. So first I I in in addition to GNA I don't my max runs our go-to-market function so I'm responsible for a lot of the product side function so I so it's but it's but you I but you ask a wonderful question about okay like as human beings right like we are all sort of slaves to our experiences I I like to say right we bring our we bring all of our baggage wherever we go right and and so how do you how do you uh yeah inculcate the smart sheet way of doing things right or um and even me coming into smartsheet right like how do I adapt myself to how smartsheet was doing it then and then help a smartsheet adapt to how we want to do it. I think there are a few things I I'll say this is another example of where I learned something from Noah's book, Noah Harari's book and Sapiens. Human beings are incredible and and you and there are lots of books over the years I've learned uh sort of read and then many cultures I've lived in right I lived the Microsoft culture I lived the Amazon AWS culture and and every culture taught me things right like uh taught me things like organizations are constantly evolving right people leave new people come in they all bring their own biases their own experiences so how do you create an organization in this very fluid right the Brownian motion kind of thing um where all these people with their own brains how do you keep them focused on whatever this organization's mission is whatever we are doing right um so one of the things I learned from both at AWS um and also in Noah's book was um this this idea of how do you uh take large number of human beings and and and get them aligned to whatever the mission is right like well at at Amazon and there are there are a couple of meetings that are done at very large scale meetings right so there is a weekly ops review and there is also a weekly business review right there are two meetings and both of those meetings are hundreds of people it's like so so if you if you join those meetings the first time you would sort of look at like oh my god very expensive meeting many many VPs directors right even engineers like in the ops operations meeting and so my analogy is like it's like going to church right why do religions scale right uh and and scale globally right they don't all sort of live in one office right or one building the this idea of every week you go to church and you're reminded of what being a good human being is right whatever the mission of that religion is you see that in organizations as well right um so that's one example of learning you bring in so we run a weekly operations review and a weekly business review in the product and innovation org and we are a SaaS business and two things matter right uh from a product and innovation side. Now one because we are a SaaS business we are earning our customers business every day every hour we can't afford the service to be down right um it's uh it impacts you know thousands and thousands of our customers and millions of users who are using it so weekly operations review is all about creating a learning culture that we are a SaaS business we've got to keep our service up so if you have incidents we do the five eye uh reviews of those and and you know like those meetings are several hundred people with engineers joining in and we do the five eye the team that actually had the incident did the analysis they walked through it so you drive this constant reminder that service uptime and availability and performance and scale are pretty fundamental. And and you do that every week because you know new people are constantly joining the organization. So you gotta keep that thing like um going on the weekly business reviews the same kind of thing the other thing you have to do is you have to constantly innovate you have to constantly solve customer problems. You have to you have to stay close to what support issues are coming through what escalations are coming in what product capabilities customers need to solve their right so that's the other meeting where our support team comes in and presents escalation data, support data we look at the product roadmap that we have committed to actually deliver on to go solve customer problems and how are we doing against that and so so again it's like like two meetings that are like going to church reminding the two fundamental things like how are we innovating for our customers? How are we keeping our service available and serving them every single day every single hour so those are examples of things we do to um kind of align the organization and sort of create this constant reminder why we are here why we do what we do right um hope that's a an example of that that was uh that was uh very well uh put put right that is it looks like you reinforce purpose every week and uh leverage the experiences everybody has to make a better service better product better experience for your customers seems like you're bringing it together the vehicle of meeting is one of them but since they meet and agree on the purpose they can build on it in their own little teams or their own little workforce right so right and these are working meetings right these are learning meetings these are working meetings and so they're the it's not these are not for project tracking but as much as having the conversation what the issues are what's going on like and and that's what it's about right um and the same thing we are now uh post-COVID uh we've sort of seen this um like remote has become the norm if you will right most people uh are remote now and so to another thing we've sort of seen very heavily used in the organization to drive alignment is creating um um these so if we do these things called concept reviews and UX reviews uh and even uh write the customer problem definition documents right so because it's all about aligning the organization or what problems that need to be solved and right and so a lot of it is done is completely asynchronously right so um the team that does our UX design creates a UX review which is literally a video that walks through the the new experience shares that video through Smartsheet so we have a capability called file library they literally upload that video in file library and share it out and then we all of us are at our own time right like I literally watch those videos at 1.5x speed right and I watch them and I can stop at any point and I can put my comments and give my feedback back to the team all collected asynchronously and and the and the and the designer who's actually driving that gets the feedback and can sort of move forward right she doesn't she doesn't need to organize some big meeting an hour walk her through walk through that experience completely collected asynchronously right um and that frees think of it that frees up so much of calendar time like I would say like probably hundreds and hundreds of meetings are not happening in the company right now because we we drive so much of alignment and work asynchronously through Smartsheet so that that's interesting right so in your tenure at Smartsheet the five and a half years two unique world events have happened affected humanity um COVID we all agree it have affected humanity in its entirety and the birth of AI it's affecting humanity and uniquely your company and the product are in the core of both of these events like if you want to collaborate on work in a COVID environment it's you you were there and in AI the promise is that uh there'll be productivity increase decrease uh enhancement that can all be collaborated on on a tool or uh tool like yours so yeah and uniquely you were there in this company both times like the crisis yeah right and the gift right like what is did you uh so now uh if you could talk a little bit about how you guys are uh implementing AI but what learnings you got from COVID which was the ultimate collaboration global collaboration experiment the world went through for a couple of years right didn't matter who you are you had to collaborate in some fashion uh what learnings you got and how are you taking that learnings and uh implementing in AI?
SPEAKER_04:Maybe start with AI and then go back to COVID. What what is it that you guys are doing in the AI travel?
SPEAKER_01:Yeah um so I I often like to say that generative AI is like the gift the that there's probably no better gift uh for for a product and mission like Smartsheet's mission right like we we are focused on helping business users manage work right in a collaborative way. And business users are not sort of technologists right they if you if you're sort of managing clinical trials you focus on your clinical trials you're like you're not building software right same same same so so you know while Smartsheet is fairly easy to get started with and use but there are elements of you think capabilities which are what I call high cognitive load right um like we have capability where you can use formulas in your in your sheet to compute certain values like for example if you're calculating risk or you're calculating uh budget for the work that's happening right and the um so those you need to write formulas to be able to calculate uh for your environment like average business user doesn't wake up in the morning thinking about oh writing formulas right and so one of the things we've done in um with generative AI is we added the generate formula capability where you can in natural language sort of say okay what are you trying to calculate and it generates that smart sheet formula and populates that for you right and and another example like average business users are not data scientists right they're not data scientists so like so you have all this data about potentially thousands of projects that are happening in your organization in a program and you have all this information now how do you analyze that you you're not a tableau expert you're not a right a data scientist so we added this analyze data capability where you can ask your question right which projects are at risk or which uh which projects are over budget and literally we we would generate the um the chart for you will identify that the list project uh using the generative AI capability we've added so pretty uh you know high cognitive load problems right you can go solve like things we are right now working on uh we have a very powerful capability in the product is around automations right so you can configure automations and and like we're adding a capability where you can just say what you want to automate and we'll generate that automation for you. And then you can tweak it and modify it, but you don't have to build the automation from scratch, right? Because you know average business users aren't thinking in terms of some logic steps and if-then-else clauses, right? And so so those are examples of things that now we can do because we have this technology that unlocks um humans being able to talk in a natural language and then we tr we able to actually translate that into a SQL query to be able to analyze and build a chart or generate a formula for them or generate an automation for them. So those are like examples of capabilities.
SPEAKER_04:Awesome so um if I were to think of uh you guys as say OS for work, right? Work where a machine and you are the OS in it, right? But the fact is that because of even with your inspiration how people are using say spreadsheets for managing projects to where you are now using Gen AI to solve or give the user lift in their productivity. In that journey the users the enterprises your customers all have these vertical applications uh intelligent in some cases that are unique to their particular journey let's say it's with construction I may have a construction project management software uh even though you may have a construction workflow associated with it. As a product leader how do you view competition it's it's almost like you have to look at it vertical by vertical because you're horizontal right at least I see that I can I can I can be in clinical trial construction andor banking and I can use it all and you'll have a customer in each of those kind of how as a product leader you're taking such a large vertical where you are the glue but also at times you get uh clear competition from applications built for that vertical and they're very good at that but no more than that how do how are you thinking about it? In when you ask that question you think from a leveraging generative AI leveraging generative AI and also your experiences of how your customer because you I can have a project management for construction but I can also have a smart sheet both can be coexistent.
SPEAKER_01:But as a product leader you use Gen AI to kind of take market share really you are struggling for mind share of employees right I want to be in Smartsheet most of the time not in other places yeah so that's actually one of the powers of Smartsheet is that because it is so simple to use right yeah like just like you guys said it's like how is it different from spreadsheet? Yeah right like the approachability of the product makes it easy where people actually fall in love with it and want to use it because it feels simple right and our our objective with Generative AI is largely how do we because we have lots of powerful capabilities in the product right we have automations we have build building dashboards where you can put widgets on the dashboard with charts and graphs of right how work's happening. You can manage thousands of projects at scale and so we've been very focused on how do we take the powerful capabilities that we have in the product make it much more easy for business users to actually discover those capabilities and start using those capabilities. Because the more deeply they use the product right um the the more their work is now in Smartsheet and it becomes that much more sticky um it uh it's sort of and that much more value creation happens for that organization using Smartsheet right and so so that's right so we don't think of sort of verticals uh softwares as necessarily competition we think of it as more complementary right so like we have uh you know smartsheet doesn't live in isolation in any organization right and they're using Microsoft tools they're using you know Salesforce they're using other tools and so so so we have a bunch of integrations with other products we have uh uh you know we have an integration with Salesforce so customers can bring their you know CRM data into Smartsheet for uh like we have customer uh like uh especially in service delivery you see this often where sales team will close an opportunity right so we have like we have a um a a hospital equipment manufacturer that uses smartsheet where sales will close their uh deal and that opportunity once closed one actually shows up as a project in Smartsheet a project gets spun up in smartsheet um now because yeah they have to go drive a deployment of that customer um right so and all that is driven through smartsheet so a team gets assigned to it and then and that uh diagnostic equipment gets uh for deploying that diagnostic equipment into the hospital so there are lots of such integrations exist right like in construction same thing customers can bring their um construction software data into Smartsheet the place where we add value is that collaborative work and driving and tracking work Right. Um we often we often talk about managing work has has having three dimensions, right? There's the work itself, right? So like what are the tasks and what are the uh uh steps of the work that needs to get done, who has to go do that work. There are people that have to be assigned work and you have to manage. Sometimes people are assigned to multiple projects or programs and they're doing that, right? And and then there is content. Um, so usually there are, you know, like in marketing, there are digital assets that are getting created or are assigned with the campaign that have to be tracked. There are videos and images. Um, there might be SOWs, statement of words that are so Smartsheet brings all of that together. So we we often talk about so there's the work, there's the people that you have to manage in the context of the work, and there's the content that's associated with the work. And you can track all of that uh in the context of Smartsheet, right? And so yeah, we we don't worry about vertical as competition, we worry about as complimentary.
SPEAKER_04:Got it. So this opens up this other um conversation around you have a lot of enterprise data. I mean, the enterprise stores a ton of data in you, right? Then there's the LLMs, and we just recently spoke with uh Adam, uh a very uh famous IP attorney in town, uh about uh LLM and how they've uh been able to train their models, right? Now you guys can build enterprise models within your own uh uh product or within the enterprise. How as a product leader are you able to manage where hey, I'm assuming you're using LLMs, but if not, that's uh you clarified. If yes, how are you leveraging that versus what the enterprise views as proprietary to them and their data so that they get the gender vave AI experiences and advantages, but not you know, get their data to be available for consumption outside of their own.
SPEAKER_01:Absolutely. It's a it's a super important little detail, right? Like, how do we make sure customers' data remains that customer's data? We are a multi-tenant platform, and and so uh very important to making sure customers' data is so yes, we use LLMs, right? But we're very intentional about using LLMs where LLMs are not training on the prompt uh coming in, right? So um LLMs are pre-trained uh with the data and and our our most of our usage is think um you know uh retrieval augmented or uh prompt engineering, those kinds of things where we aren't training LLMs. We are essentially using the LLMs because LLMs are fairly uh well trained and um like you look at um GPT-4.0, right? The um so we use that model and we we're looking at cloud from anthropic. So we're using models to do things like generate a formula for the customer or analyze their data, but we don't actually ship the customer's data for the analyzed, right? So what you do is you you uh you have to be super smart about how you create the right prompt, right? And and creating the prompt, like well, like through a prompt, what we generate is actually a SQL statement that we run against the customer's data in our environment. We don't actually ship customers' data, right? Um what the prompt is about generating a SQL query that answers the question that the user is asking for in terms of analyzing it, right? So so we're very, very careful about not uh training LLMs. Uh there is a there's a whole another discussion about uh should we give customers opportunity for creating a customer-specific LLM trained on their data, and and we're exploring that um as something that potentially in the future uh we talk about sort of this knowledge graph uh-based approach to answering questions where all of the customers' projects and programs that are captured in Smartsheet for that tenant, we can essentially create a knowledge graph and be able to answer questions about all the work that's happening across the organization that they can use to answer questions, right? Um so early days in that um uh that part of the journey, uh, but customer data isolation is critical, right? It's it's our commitment to our customers. Um some of it is sort of just how LLMs work, where you you don't have to actually ship customer data. You can uh design the prompts to get the answers you want.
SPEAKER_04:Uh so shifting gears a little bit, right? So your company is a uh uh a success story in Seattle, where you know we are we all live. So uh it was a startup funded by uh great VCs like Madrona, you went public, now uh you have been, you've announced an acquisition by by uh private equity firms, right? So in in this uh journey, you've gone uh from a really small solving a particular problem to now you're a platform that's solving worldwide a lot of enterprises are using. But for you and the other leaders, has the shift in uh quote unquote cap table made any differences, or has it allowed you to do things one way or the other? Is there is there a you wake up and say, Oh, we have a new cap table owner? Or you guys just kind of go about it because each of them have their own uh specific pull and push and pulls, right? When you're VC funded, market funded, PE funded, they all have push and pulls. Uh and I'm sure that every uh leader has to uh you know uh contend with the push and the pull, whatever that may be. How does that for your journey uh has been uh uh how was that experience for you particularly?
SPEAKER_01:So so just to clarify, right? Like uh we've signed a definitive agreement with the consortium of uh Blackstone Invista. The deal hasn't actually closed. So um so in that sense, I can't really say much about like uh I I think I think we believe we uh that it it's gonna be uh we are super excited about it. It's gonna be a great thing for our customers um uh at this point in the journey where where the company is and our ability to serve them. Some of the things that you just made a point of, right? Um uh we we are excited about like what that would translate at. But honestly, I can't really say much at this point in time uh until the deal closes and we it's a bunch of those things start to become clear to us.
SPEAKER_04:Yeah, yeah. Uh totally, totally appreciate that. The I think I was more exploring has the shift from being a privately held VC funded company to IPO, there was a shift in the way you operated as a company. And uh yes, you joined, but then you had to, you know, there are quarterly earnings and those kinds of rhythms and cycles, right? So the company got into a cadence, right? Whether or not this happens, there's a sh there's going to be some change of some kind. I'm more thinking asking that question: how are you taking the external forces to keep that purpose of the of the church analogy used to keep them all grounded? Because as you said, we are humans. So humans start imagining things that hasn't yet happened. And you gotta keep them together.
SPEAKER_01:Absolutely. Yeah, so I think I think part of it is just being super transparent. Like we're we're in the process. We we we whatever information we have, we we're sharing with our employees, and and uh as the process sort of completes, right, one way or the other, like then we'll know where where to go from there. Uh you're absolutely right about sort of going from the company going from being a startup, you know, VC held startup, um, to going public, and there's some uh a maturation process that comes through, right? Uh you have to report your earnings quarterly, the uh how you manage your books, how you um sort of you know do 10k filings. And as a as an officer of a public company, there are certain levels of responsibility and accountability to that. All of those things are very true. And um and we're hoping some of that stuff simplifies and allows us uh agility and um yeah, right? So the um I think just like the company went through one evolution, it's an opportunity to go through another evolution of it. And you're right that we have to keep the people focused on, right? Like um important thing is smart sheet continues to exist, the product continues to exist, our customers need to still be every single day, need to be taken care of, right? We need to continue to grow, right? Um the investors like Blackstone and Vista aren't putting$8.4 billion to want to do something like this. Um if they like didn't think that we could actually create uh massive returns, right? So so you have to also company needs to continue to grow and and deliver on its promise and on its mission. So that's where you have to keep reminding everybody back, right? Um uh and stayed focused.
SPEAKER_04:Yeah. Uh Brereth, it's uh it's been a great pleasure. We could talk more and more because uh you know you have this whole sapient. I was I was uh visualizing ants working together, just saying humans come together on a mission. Like all these uh smart sheeters are all working on a mission. So thanks a lot for this uh wonderful time. Truly, truly appreciate it. Sherish, uh, if you could close us out, that'd be phenomenal.
SPEAKER_03:Great. Thank you so much, uh PG. Uh this is a great uh conversation. Uh in fact, I'm excited about using Smartsheet uh at uh Ty Seattle because we manage many uh events. Uh hopefully you have some uh special pricing for nonprofits. Awesome. Yeah, it's uh it'll be fantastic to learn. I mean, you have really an innovative architecture uh for building different kinds of uh projects and so forth. So uh wish you all the best uh with your journey and with your eventual acquisition by the PE firms. I'm sure it's gonna be a much bigger company in the future. So um again, thank you so much for joining us today.
SPEAKER_01:Thank you. That was a lot of fun.
SPEAKER_04:Thank you for listening to our podcast from Start of the Exit brought to you by Dy Seattle. Assisting in production today are Isha Jen and Mini Verba. Please subscribe to our podcast and rate our podcast wherever you listen to them. Hope you enjoyed it.
