From Startup to Exit
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From Startup to Exit
Microsoft@50: The Battle for the Internet, with Vice President for MSN, Laura Jennings
In the final installment of the Microsoft@50 series, we interview Laura Jennings, who was the Vice President in charge of MSN and one of the senior most female executives at Microsoft in her time. Laura was the Microsoft executive who shifted MSN's strategy as a proprietary online service to becoming one of the top portal's on the internet. I worked for Laura and together we bought Hotmail and got into the search business in partnership with Inktomi. In 1999, Laura Jennings launched a new version of MSN with personalization, integrated web email and search which went on to become a top 3 portal on the Internet.
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Hosts: Shirish Nadkarni and Gowri Shankar
Producers: Minee Verma and Eesha Jain
YouTube Channel: https://www.youtube.com/@fromstartuptoexitpodcast
What is your channel? What is your go-to-market strategy? And you have to know that from the beginning. And uh, you know, because I I'm helping another person right now. I'm running the go-to-market strategy for an AI company in town now. And it's the same, fundamentally, completely different ICP, different technology, different use case. But the core problem of you better figure out what your what your channel is, is there. It's a it's a it's a business problem that transcends the technology.
SPEAKER_02:Welcome to the Startup to Exit podcast, where we'll bring you world-class entrepreneurs and VCs to share their hard-earned success stories and secrets. This podcast has been brought to you by Thai Seattle. Thai is a global nonprofit that focuses on foster entrepreneurship. TIE Seattle offers a great program including the GoPro Startup Right and Project, the Thai Entrepreneur Institute, and the Thai Seattle Income Network. We encourage you to become a Thai member. You can get access to the become a member of the www.seattle.org.
SPEAKER_03:Hello everybody, welcome to another episode of our podcast from Startup to Exit. I'm here with my co-host Sharish Natcarney. My name is Gary Shankar. We both serve on the board of Thai Seattle, which produces this podcast. First of all, we both want to thank you for all the support that you've given us over the last year, where we have brought this podcast to all of you, and I hope all of you have enjoyed all the content that we are bringing from our guests. We are launching a very special series. We are launching a series that is very close to both our hearts because we are both Seattleites. Microsoft just turned 50. And as a tribute to the company and the impact it's had on the world and our city, we are going to talk to some of the very early executives who shaped and grew the Microsoft brand to what it is today. I hope all of you enjoy it. We will be talking to many of them, and over over the time you will learn a lot of things about the early years of Microsoft. Thank you all and hope you enjoy it.
SPEAKER_04:Laura joined in 1988, and she was one of the earliest and highest-ranking female executives at Microsoft. And I was um I reported to Laura when I was working on Microsoft Mail when she was leading the messaging business unit, and then later on at MSN when we worked on the hotmail acquisition as well as getting search uh launch at Microsoft. So welcome, Laura. It's great to see you after so many years. It's amazing how time has passed.
SPEAKER_00:It is great to see you.
SPEAKER_04:Thank you. Thank you. So let us start with the early days of uh Microsoft. Uh you know, Microsoft was somewhat well known at that time. I remember, you know, Bill was on the cover of Time magazine, but they were still an MS TAS company. What led you to interview at uh Microsoft and how did you decide to Yeah Yeah, so I I like to think that Microsoft was really wasn't that successful um back in those days.
SPEAKER_00:It was it was um you know really early days. Um and there was a another person who had been an intern at Microsoft who was in my MBA class. So I didn't it and she spoke very highly of Microsoft, although she didn't get end up getting an offer from them to come back. And I already had maybe a dozen job offers coming out of Kellogg, but really late in the season I decided to come interview at Microsoft just on a whim. And I loved it there. It was a sort of environment where I just felt like I fit. And so I ended up it ended up being the absolute by a long margin lowest job offer I had coming out of um Helon, and I decided to take it.
SPEAKER_04:Wow. Did you know anything about options at that time?
SPEAKER_00:Yes, of course I did. Of course I did. Okay, okay. And so, yes, using my Black Shell's formula, my options were worth$55,000.
SPEAKER_01:Wow.
SPEAKER_00:And when I talked, I remember talking to Jeff Riggs and telling him, you know, surely I I'm gonna make less money coming out of MBA school than I made going in. And he said, hold tight, I'll I'll bring you another offer. It was pouring rain, and he met me outside in the building. I remember being under his umbrella and me an envelope, and the offer is for a thousand dollars more a year.
SPEAKER_04:Did he give did did he give you any more options?
SPEAKER_00:No, no more options. I wasn't negotiating. Um anyway, I took the job.
SPEAKER_04:Yeah, that's wonderful. That's wonderful. What a story. That's great. So, what was your first uh job at uh Microsoft?
SPEAKER_00:Yeah, so as you pointed out, they were they had just started hiring these classes of of MBAs. And so the way they would assign people to jobs in those days is you would you would be hired by Microsoft, but you didn't know what your role was going to be. And then in the spring, they would bring the class, I don't know how many there were of us, I'd say there were 15 or so who had been hired by the company. We would all show up for a weekend event, and then during the course of the weekend, people would sort of tap you on the shoulder. It was kind of like sorority or fraternity brush. And then you'd kind of go off in a in a quiet place and and they would offer you, tell you what was available and offer you a position. So the person who tapped me on the shoulder was Mike Slade. And he said, You're gonna work for me, but I've got three different roles. What which of these interest you? So we're working on this new database, we have our word processing business, which is big and successful, and then we've got this idea, we've got this kind of weird thing where we have a bunch of applications for the Mac platform, but we don't have anybody thinking about that as a whole. And so 10 times out of 10, if you make me an offer like that, I'll take the weird job. And so that's how I ended up doing what I did, which was to launch the original Microsoft Office, which we did on the map in 1989 or 90.
SPEAKER_04:So I I didn't know that actually, that you worked on Microsoft Office. I mean, that was we interviewed Jeff Rakes, uh, who was I'm uh the I guess the original ideator on Microsoft Office, but that was a huge move for Microsoft. Especially yeah, because uh it wasn't clear that consumers would buy a bundle as opposed to buying best of read.
SPEAKER_00:No, exactly. So there had been a test. It was called the the business bundle had been done before I started at Microsoft, maybe a year before. So the idea had been tested, but it was it was controversial. Yeah, this idea of bundling things together. And if you were a product manager for one of the successful products like Word or Excel, you absolutely positively did not like this idea. And so there was a lot of skepticism. Not only would consumers accept it, but there was internal disagreement and internal scuffling around the idea as well, which, you know, in those early days of Microsoft was not unusual.
SPEAKER_04:Great. Um so um in your class, uh, were there many women who joined uh at that time? Or were you the only uh female?
SPEAKER_00:No, I was not the only female. I still have very dear friends who joined at the same time. But you know, if you look at the the graduating classes of MBAs in that time period, it was about 20% female. So I'll bet our class was about that.
SPEAKER_04:Got it, got it. In my uh class, I had uh Melinda. I think she was the only uh female in my uh class. Um we actually worked together on something called Word Mail. She was a product manager on on Word, and I was a product manager on Microsoft Mail.
SPEAKER_00:Yeah.
SPEAKER_04:It's kind of interesting, yeah.
SPEAKER_00:This this issue, uh you know, so Melinda was one of the people I interviewed with when I came out. And um again, just there was this feeling of belonging, you know, like these are people, there's so much opportunity here to invent things. Things are moving really rapidly. And she was one of the people who convinced me to join.
SPEAKER_04:Got it. So, as a um a new female employee, um, how did you and most of your colleagues? You said you had more uh women in your class, perhaps compared to mine. Um, but this was still the early days. Um and did did you uh what was the experience like? Uh was it fairly normal or did you have, you know, were you assigned mentors because you're you know uh you're female?
SPEAKER_00:No, there was there was no no mentorship back in those days. Okay, so I had been an engineering student as an undergrad. So, you know, I was used to an environment like there I was, you know, there aren't very many women in theoretical and applied mechanics courses. I mean, so you know, when you come from that world and then you go through MBA school, it didn't seem that unusual to be in an environment that was male-dominated. It seemed pretty normal to me. And everybody was working really hard. So I don't think the gender issue was really an important one. Where it became an issue is of course later when people started getting married and having kids. So um you know, as as a female vice president, and the first two there had been other female vice presidents who had children, but they all had had them before being a Microsoft vice president, right? So as a pregnant female vice president, I really felt a lot of pressure, ridiculously in hindsight, to kind of ignore the fact that I was president or pregnant. So, for example, when I had my second child, I had her on a Friday and I was in the office on Monday. Seriously, oh my god, with my baby and my mother in tow. I didn't stay long, but there was a a new employee that we had just recruited away from another big company. It was gonna be his first day, and so absolutely three days later, there I was doing that, and that's the kind of thing that now we look at is being pretty crazy. But at the time, I felt so much pressure to behave in a way that would help other women behind me. And and thank goodness that is, I think those days of doing crazy stuff like that are long gone.
SPEAKER_04:Got it. But it's just pressure you're putting on yourself in a sense, or you did you have peer pressure to come back?
SPEAKER_00:Well, people would say things to me about how they're watching, and so it I think it was a combination of both.
SPEAKER_04:I see, got it, got it. So um after leading um Microsoft Office on the Macintosh, then you became uh group product manager for Microsoft Mail, if I remember correctly.
SPEAKER_00:Yeah, so Mike Maples.
SPEAKER_04:Yeah, go ahead.
SPEAKER_00:Mike Maples was the president at that point, and he kept calling me to his office and saying, you know, we're we'd really like you to go do work on email. And although we ran our business on email, of course, at Microsoft.
SPEAKER_01:Yeah.
SPEAKER_00:It wasn't I mean, we had no business to speak of. Of course, we bought Network Courier up in Vancouver, and you know, they were doing nine million a year. I mean, I had I thought the office thing went pretty well. So this felt like a big devotion. Um but it was fascinating, right? So we we took this little business and then we took some gateway technology coming out of the the Windows group and we put that together and eventually we launched Microsoft Exchange. So that was a pretty fascinating time. But you know, I remember it it's crazy to think about, but I actually would go around the world and I would give speeches about the value of storing forward messaging.
SPEAKER_04:Right. This is a an X Doc 400. Remember that?
SPEAKER_00:Yes, right, exactly. Just nuts to think about that. But you know, but that that was that way. So we're moving, you know, the what the world is moving from mainframe computing to distributed desktop computing, and and we were really evangelists for that wave of computing while we're trying to sell a specific product.
SPEAKER_04:Yeah, yeah. So uh at that time uh we were in a major battle with Lotus, which had CC mail and Lotus Notes.
SPEAKER_00:Right.
SPEAKER_04:Uh I remember one of the major battles we fought was around the messaging API. Uh we had something called MAPI, and then Lotus had something called Vim, but we ultimately uh beat Lotus both on MAPI and on Exchange versus Lotus Notes. How did that how you know what are some of the strategies that you implemented to win those battles?
SPEAKER_00:Well, I think the uh over I don't remember the specifics, but I think that the takeaway is the power of having partners, right? So if you're running a product group like I where you like to think that you're you're responsible for success, but really the infrastructure you have of people elsewhere in the company who are building developer momentum behind your platform just cannot be underestimated. And I think going to market with that behind you and the strength of of um people who are who are getting the development community to choose your your particular API set to build on your platform is really what won that battle. Not anything we really did in the product group, if I'm being honest.
SPEAKER_04:Got it. So um after messaging, you took on a role with the interactive uh TV effort.
unknown:Right.
SPEAKER_04:Which is uh uh under Craig Mundy. Um I understand Craig Mundy, by the way, uh Paul Murritz told us that Craig Mundy was one of the guys who negotiated the OpenAI agreement. I don't know if you knew that.
SPEAKER_00:No, but nothing surprises me about Craig Mundy. He's brilliant.
SPEAKER_04:Yeah, yeah. So uh Microsoft invested a lot of effort into interactive TV to get cable TV platforms to adopt it, etc. But then ultimately uh decided to focus on the open internet, and that's when you took on the leadership role for MSN. But tell us a little bit about you know what happened in that journey.
SPEAKER_00:Yeah. So Craig was working with Nathan Mervolden in this group that we we did a lot of interesting things that were kind of before their time. So we did the first watch that communicated with your desktop computer. Um we spent a lot of time, we did the home of the future. Do you remember that? We built a wired home so we could experiment with how people use technology on the refrigerators, et cetera, and we bring people in to observe. And then I spent a lot of time thinking about interactive TV. And, you know, I mean the technology, the the network wasn't there. In fact, one of the first when I after I left Microsoft and I was a I was a VC, one of the companies I founded was I or I funded Isolon, which understood that the storage needs for that type of streaming environment were fundamentally different from the storage needs for traditional computing. It wasn't just the network bandwidth, but it was lots of pieces of foundational technology were not ready there for interactive TV, but we spent a lot of time thinking about it.
SPEAKER_04:Got it. Got it. So uh when did you take on the role at uh MSN?
SPEAKER_00:I took on the role at MSN after launch. So like everything at Microsoft, it was launched everywhere we were. So it was launched in whatever that was, 50 something countries built on a proprietary X25 network. Um and right at the wrong time because that's when the world is is moving to to the internet. So I took over after launch, maybe six months after the launch of MSN, and really was responsible for then exiting all but seven of those countries that we had launched in and rebuilding the technology and our whole approach differently. So you just couldn't ignore that the the world was gonna change. And then I think about that as this kind of second fundamental shift in technology from thinking about distributed desktop contributing to thinking about software as a service. And MSN was really the first place that Microsoft touched that idea of software as a service as we were we were rolling out MSN and really trying to figure out what are people gonna do on the internet? Are we should we take what we do in terms of productivity apps and that's what the world is gonna look like? Is it gonna be entertainment based? And so you see in those early days of MSN, we're spinning out ideas that represent both of those elements, productivity tools and entertainment, and so trying to figure out what what to do and and what is the relationship of that to our existing software suites. And so that was in so during that transition, we lost$450 million, I think, that first year. And then and wrote a lot of things off on a balance sheet at Hall um at Hall Network. And so it was uh it was a time when you know I would present to the board every quarter what was going on. This was before losing a lot of money.
SPEAKER_01:Yeah.
SPEAKER_00:It wasn't something that technology companies routinely did.
SPEAKER_04:Right, right, right. Got it. All right, over to you, uh, Gauri, uh, to explore more about MSN and other initiatives. Yeah.
SPEAKER_03:So, Laura, the uh one of the themes that's emerged talking to uh all the folks we've talked to as part of the series was uh convincing the leadership team a change had to be made. They were well invested, they go down these paths, go down, and then you got to make a full-on pivot. And uh what was uh because you having presented to the board, you were convincing Bill and the full all of the board, hey, we're going from this to this, which is not not is a non-trivial exercise. What what was your thinking as to convincing them, hey, this isn't gonna work, and we gotta do this? Was there some some leading indicators that you used or was it obvious to them? Or uh how did they get convinced?
SPEAKER_00:Yeah, that's a it's a good question. Um well, it was it was a lot of people, right? I mean, I I would say that I don't think Bill is the guy who needed convincing um in terms of thinking about where the world is going. And we clearly had been behind. And it took us longer to launch MSN than again, I was still sitting over it interactive in interactive television land, but it took us longer to do that. We're looking at what other people are doing. I mean, the competitor we had gone to market thinking about was AOL, and the and the the world was changing, and we were losing a lot of we were losing a lot of money. This was clearly not going to be a successful strategy. So I think it was coming from a lot of different angles that we were thinking about really having to make this change. And and really, I have to say, Russ Siegelman, who had been the person before me who had launched MSN and then left to go work for Kleiner Perkins. I don't know if you talked to him, he largely had fought a lot of that battle. And uh I think maybe that. Something to do with his with his uh decision to leave. You'd have to ask Russ about that, but uh but uh he saw that coming.
SPEAKER_03:So you know you you were an interactive TV, that means I was thinking that entertainment should be part of this internet when people went, but uh Microsoft uh also acquired hot mail at that point. Right. And you had mail. I mean you were the champion evangelist for storing forward.
SPEAKER_01:Totally.
SPEAKER_03:I bet that that was not it's like come on, we could build this in a weekend kind of a thing, right? I mean, it wasn't magic there uh from a from a product person, not taking away anything from the founders. You know what I mean? There's a there's the pride in technology. So what was uh the journey of that acquisition? How did it how did you guys spot it? How'd you convince them? How do you convince your folks, especially uh convincing somebody uh as much as Bill to say you've got to spend 400 plus million dollars buying this thing?
SPEAKER_00:Yeah, that was that was a really that that was a fascinating time. Okay, so first the idea came from this really genius of a guy called Sharish Nad Carney, uh who really had spotted this opportunity. The second thing I will say is that yeah, store and forward messaging, no big deal. Doing anything at scale is non-trivial, right? So the big the big argument internally was why we couldn't use our why is this different than exchange? It's fundamentally different than exchange. To think about doing something at the scale of the internet, right? It's very, very different. The third thing was we're all trying to figure out how to get a toehold in this new world, right? So what is it you're trying to own? You have you have in the same time frame, you have people who are starting to defect for Amazon. And people who aren't paying attention to the fundamental shift are saying at Microsoft, well, why do they want to sell books? Well, that's not what it's about, right? It's controlling the wallet, it's being a major player controlling a focal point in this new world. And so you you also see the evolution, like early evolution of some social platforms, messaging platforms. And they're all about figuring out what are you gonna own? And and in the hotmail case, what you have is you have this address book that's quite large, that is also an asset, plus the understanding of how you build differently when you think you're not building for a really big corporation, but you're building a messaging platform for the world. Um they're they're just fundamentally different. And Sharish, you should you should comment on this.
SPEAKER_04:Actually, I'll tell you a s uh uh um a story uh that um you know uh apparently Bill Gates sent out an email to all the executive vice presidents uh saying, hey, I'm going to buy hotmail for a pretty hefty price. You know, speak your mind now or forever hold your peace, kind of email. And uh I came to know about it, and I knew also that you know, most likely the reaction would be negative, and uh, you know, that there would be a chain of negative emails. So I literally ran to Pete Higgins' office and stopped whatever he was doing and said, Hey, you have to respond to this email. So Pete and I sat together and we composed a piece of email to all, you know, responding to Bill saying, Hey, no, this is a great acquisition, we should do it, blah, blah, blah. And um, fortunately, there was no negative response to that. Because, you know, even at that time, Bill was asking questions, you know, this is hotmail really an application that people are using, or is it all for spamming? And I think uh he made the famous comment that I've never seen somebody's business card with the hotmail email address. So he was skeptical himself. Um, so um, you know, I credit actually Laura and Pete Higgins for really convincing Bill to make that acquisition.
SPEAKER_00:I remember coming home that night after the decision was finally made, because it was controversial at the board at the board level as well, and telling my husband, well, I'm gonna have to kill myself making this successful or my career is over.
SPEAKER_03:But Hotmail was a Silicon Valley company, right? So Bir Bhatia was running it. Uh and you know, at the time, these uh big number acquisitions were still not there. I mean, there were acquisitions happening, but not not big number. And the Silicon Valley investors could not have just said, hey, we go IPO, because you know, uh Netscape was coming around the corner. I mean, there was lots of things momentum-wise from the valley that would have said, why should we sell it to Microsoft, right? And because potentially they could have been a billion-dollar company as opposed to they would say, oh, we only have$400 million. How did you guys convince either the founders or their team that this was a better home? Irrespective of the price, because the price is the price. There was nothing around.
SPEAKER_00:No, the the the the price is part of the price, right? But but the deal was structured so that there was upside, of course. You have to allow the, to your point, you have to allow it, particularly in that in that period, you have to allow the founders to participate in what their vision is for growing the company. So the deal was structured in a way that there was there was an incentive there to help us make it successful.
SPEAKER_03:So so that allowed them, I mean, that that almost put MSN into a new category, right? Because now theoretically you had productivity at home, uh, I mean, by by email. Because email at that time, I remember, was still a work-related software, I mean, or a work-related product. It's not people didn't bring it home, or you know, there was no such thing. There were some early days of pagers, but still that was considered not the day-to-day thing. So this kind of brought it to the masses, so to speak. It's uh I I would compare it to the Netflix of today, right? Everybody has to have one. So it's like you open a browser, you had an email account, and everybody touted that they had one.
SPEAKER_00:Right. Yeah. The earliest earliest type of productivity software before we were doing everything, right? Booking our restaurants and our travel and everything else we ended up doing online.
SPEAKER_03:But right, right. And at that time search was uh opening up. Was there thinking that you would build search in-house because there was Yahoo, there were others. Did what was the strategy MSN decided to do on search at that point?
SPEAKER_00:So we took a run many times at acquiring our way into search. Uh many, many times. And uh yeah, just were never successful.
SPEAKER_03:And so did you then end up doing, I know that there was a partnership that was done with I think Inktomi or something around that time. W was it more so they just white label it uh at that point?
SPEAKER_00:I don't remember exactly the the details.
SPEAKER_03:Mm-hmm. Because even later on there was a run at uh buying Yahoo. Much later on.
SPEAKER_00:Right. So we there were there were many runs at that.
SPEAKER_03:Yeah, yeah. But as you as MSN took hold and it became uh an internet uh place for a destination for internet uh users as opposed to proprietary, and AL was still largely proprietary, and then there were these battles of uh chat messenger and mail and other things. Uh and then you came from Interactive TV. Was there uh I remember a push to get um you know some kind of video content or some content back in jet that was just not text. Was was since you worked in all parts of it, were you able to string that together at MSN saying, hey, we will be the destination to go to for uh for MSN in those days?
SPEAKER_00:Yeah, we we we tried that. So one of the early people we hired was an executive producer out of Time Warner who had before Time Warner had been really early in interactive film production at a company called Interfilm. And so we did have a we we had a uh suite of enter entertainment oriented offerings. So you've got the we're starting companies in the division under Pete that are more productivity focused, and MSN is is really focused on hot mail and uh and and doing some entertainment work, which oh, and brought Michael Kinsley on board and did Slate and you know, so so really you see in that era we're experimenting pretty broadly.
SPEAKER_03:So you there was attempts at creating content and bringing content together so that you can but never in totally into commerce. I mean, even though Amazon was just across the across the lake. Never never in the commerce. So that was that was interesting, right? Because you could see commerce building, but uh uh you said ah that that's that's not what we what uh what we do. But going back to Hotmail, you mentioned scale was difficult to build compared to exchange, right? Was that the driver then in the purchase price too? Was that they was it a multiplier of what they'd acquired? I mean, how because this seemed like a a fairly large number to have come up with. And what was attributed to their IP, so to speak? Because the IP wasn't defendable, so to speak. I mean, it's not uh it's protocols at the end of the day. Yes, they did with scale. I'm not going to take away from that. What how was how would you guys decide this is the number it's gotta be?
SPEAKER_00:How do we determine the price? Yeah. Help me out here. How did you come up with that number?
SPEAKER_04:Well, um, I remember we uh originally when they uh we'd organized a uh a trip by the founders uh to Microsoft uh to kind of um you know really impress them how impressive Microsoft was. And apparently the VCs uh in turn told them that Microsoft was doing it exactly for that reason. Uh but at the end of that meeting, we uh approached them and said, you know, we think you're worth around 200 million, and they were clearly not very happy uh with that. Um, they then sent us a um a response providing you know uh comparables with AOL and other you know user-based platforms, and they had a price of 700 million on the last page. But apparently, as they were faxing that proposal back to us at that time, they decided to not put in that last page. Um and uh Greg Maffey, I was the person uh who was the CFO at that time, was leading the uh conversation with uh with Sabir Bhatia at Hotmail. And uh fortunately for us, uh he had done a good job of of telling Bill that this would be an expensive proposition. So it took some haggling and you know they were at 700 million, I believe we were at 200 million, and ultimately we there's no magic number. It was what you know, there was no math that could justify you know 400 million. It was what was negotiated. Is that your agree collection, Laura?
SPEAKER_00:Yeah, I remember it as 375 being the final number, but it was a lot of money.
SPEAKER_04:It was a lot of money, yeah. Yeah, especially since they had little to no revenue at that point.
SPEAKER_00:Right, exactly. Yeah, yeah.
SPEAKER_03:Yeah, yeah. So um post uh just kind of moving on to post Microsoft, Laura. You uh started NAC, went down the entrepreneurial journey, right? Uh uh for our audience. Uh was there something in between you did or you went from Microsoft to NAC?
SPEAKER_00:Yeah, no, I I actually went to Atlas Venture. So I was VC for a while. So Atlas at that point was the largest international venture firm in the world. And at that point, now they're mo they're I think almost exclusively life science, but but then they had a telecoms practice, IT, and um and life science. And I took over the Menlo Park office, did also opened a Seattle office, and then managed the IT practice worldwide. So I did that for a couple of years. And I actually thought, so there were a lot of different deals that we worked on. Web WebMD was another one. There was a lot of of deal work that went along with the the MSN role. And I really thought that I would enjoy being a VC. And there were things that I liked about it. There are things that are great about it, but ultimately that's where I learned I really enjoyed being on the operating side, ultimately. I'm more of an operator than an investor. But I did that for a couple of years.
SPEAKER_03:You mentioned earlier investment I saw. You mentioned earlier about your investment Isalon, a bit a very successful Seattle story, right? Uh was that part of Atlas or was it you?
SPEAKER_00:It was part of Atlas. Yeah, it was we only did we did ended up doing two deals in Seattle. Uh and uh Iceland was one of them.
SPEAKER_03:Okay, one out of three. And it turned the fund in its entirety. So you did you uh through that journey figured out that you want to be an operator, right? Or you enjoyed being an operator, not you want to be. You enjoyed being an operator. Uh tell us the story of how you hit on the idea for NAC and uh what was the journey like having uh worked at Microsoft for a long time and then being a VC back to you know uh a uh uh early stage startup founder.
SPEAKER_00:Yeah, so there was some time off in there too. Moved to Europe, did some other things, came back, um, and then realized, boy, time is is moving, right? So if I'm gonna be an entrepreneur, I should probably get get my act started. So I was fascinated with the idea of how you can encapsulate and enable founders uh or creators of intellectual content. So the idea behind NAC was how do we allow everybody's an expert in something, how do you allow that expertise at the individual level to be shared, manipulated, possibly purchased by others and have that attribution come back to the individual creator. So that started off as a gifting company largely as a proof point for that idea. And I picked the the gifting, the corporate gifting business, because it lent itself to kidding that the goods are self-stable. But the idea was that we would create a technology platform that allowed people to put together whatever they want into these packages, and then we would create them physically and we would create infrastructure around them. It came with its own web page and it came with some other stuff. But but the core idea was that whatever you had created was encapsulated as an object that can be shared, it can be manipulated by somebody else, and it can be purchased by somebody else with attribution back to the founder or to the creator. So that was the original idea. And my original thought was that we'd start in the corporate gifting space and then we'd move to another space that really lends itself to that kidding idea. So either clothing, outfits, or interior design, and then eventually it would be a browser plug-in. And so that's the original vision behind that. Now it turns out that this is a kind of a story about pivoting because the initial test case turned out to be a really interesting market, and then COVID happened, and all of a sudden it turned out to be for a couple of years, really were one of those just dumb luck businesses that were in the right place at the right time. So you see this exponential increase in gifting during the the pandemic years. And so I never did get around to options two and three, and really started thinking about how do we build, how do we build more and more of a virtual platform around this act of giving a physical gift and thinking about that and what those what those products would look like is where I ended up going and never never brought the idea into another test case. And then of course the pandemic helped things go up. And then the end of the pandemic, when people were like, okay, we've given enough gifts, we're done with this, what's next? That was that was a a challenging time. And that's when um sold the company to a uh another company down in um in Southern California.
SPEAKER_03:So from an entrepreneurial uh journey, right? Um so you had a very clear vision, or you had a vision, but uh, and you were going down the path with with uh with a series of steps, a macro event happens. Uh you couldn't have nobody could have predicted it. Macro event happens. So you had a choice to make at that point um as to how you're gonna pivot, what where you want to take it. Some of it you're pushed in, some of it you could have resisted. But there must have been a moment there saying, hey, we're gonna write this thing and just ride it to the top, because it was even though the vis there was some pause in the original vision and therefore the execution. So what advice would you give entrepreneurs through through that experience? Because macro events are gonna happen to every entrepreneur. You know, if you're a gifting platform today, a tariff could have been a macro event that you couldn't have predicted, right? Yeah, it's like uh it's like a huge hit.
SPEAKER_00:Right. Yeah. Yeah, you know, I think the advice is so specific to the macro event that it's it's hard to generalize. You know, I can I can look back and think about the things I would have done differently. Um I think uh thinking about more broadly about exit strategies. You know, I focused a lot on the business and not about exiting the business and what that would look like. And that was a mistake in retrospect, really thinking about where this was gonna go and who it would who it would partner with and go to. At the same time, you had not only you had the pandemic, but you had the the corporate gifting platforms that really came out of um business development. Right. So they're they're they call themselves gifting platforms, but they're really about how do we get people, you know, their SDR BDR tools trying to get people to take meetings. And that was having its phase right about then, and that was eating into the the pricing structure for my business. So there was there was a lot going on there, and I think I could have done it's very hard as a as an entrepreneur, you want to play with your business. It is so fascinating. It's like the it's like having a baby. You know, you just you want to look at it and make sure it's breathing and marvel about how wonderful it is and and everything you do with that business, thinking about the strategy and the product and how great it can be, it can be really overwhelming. And I didn't I didn't pick my head up enough and really think uh clearly about it as a business because I was so enamored with it as a as a creator, as a founder.
SPEAKER_03:That that's uh that's uh that's a great point you brought up, right? Sherice and I talked to a lot of founders, and many uh uh have long stints, uh like yourself at big companies, right? So they go through they go through this journey of what it is their vision is and their muscle memories that work. But you are pointing out that even though you had all this experience, all this muscle memory, there were spots that you could have, should have, would have focused on as an entrepreneur that you didn't have to because of you know your experiences or other things.
SPEAKER_00:Yeah, it and I yes in fact there I would I knew it at the time. There were times when I would say as a because you know as a BC I've been on I've been on lots of boards. Right? I I can spot that the the problems that are going to come up and see the see the patterns. And there are times when in my head that board member in me is saying do this and the founder of me doesn't want to listen to that advice. You know so yes you're exactly right I knew better.
SPEAKER_03:Even even after everything I had been through when you are a clear eyed board member and when you are actually the founder shepherding something you love it is really easy to make those to make mistakes because you believe in your bank yeah uh you uh you know focus on a what I would argue a fairly difficult market right creators uh convincing them to do things there was a very um you are creating new categories as you went along uh so to speak we talked to a lot of founders today who are you know I would say building a lot of tools developer tools etc and it's easier to build because as AI makes progress it's easier to build but the fundamentals of operating a business are still the same that they they're not changing that dramatically you still need to convince your customers figure out there's a need for the customer the pricing is good all those things don't are not changing and your um as you point out right you have to constantly decide what founder you have to be and who you're serving because you could serve the board or you could serve your customer or you could serve your just building a product alone when you get there it's going to get easier I think but it's not going to be automatic that your core uh reasons to exist as a business still remains the same looks like that's how you navigated the pandemic although it seems like it's a good thing but it was a tough thing because you had new competitors who came into came into being during the pandemic.
SPEAKER_00:Yeah that's true. But and also you know handling that scale of growth was challenging. You know we were going through warehouses like no tomorrow I mean we'd get into a warehouse and think oh this is all we're gonna need this is so big and then you know and and and building the building the technology to allow us to do that. And then eventually we ended up outsourcing and um and that was a really interesting thing to go through. But ultimately to your point the the big miss no matter what business you're in no matter what you're building you better understand what your channel is. What is your channel? What is your go-to-market strategy and you have to know that from the beginning and uh you know because I I'm helping another person right now I'm running the go-to-market strategy for an AI company in town now and it's the same fundamentally completely different um ICP different technology different use case but the core problem uh you better figure out what your what your channel is is is there it's a it's a it's a business problem that transcends the technology Laura I have to say that we um named our podcast from startup to exit based on Sherish's first book he wrote called From Startup to Exit there's a chapter on go to market and a chapter on product market fit that he wrote I tell people don't read it like a book.
SPEAKER_03:I mean it's not a book you just keep it our next to your side table and then you uh you go through it because as a founder you're alone I mean I I tell founders as a founder I felt alone a lot of the time because it's all it's all going back and forth. I couldn't tell which voice to listen uh and you uh I think the founder you're assisting is very fortunate that you've been a big company executive and an operator and a VC that's a rare combination for a founder to land I I want to talk to that founder to understand how they landed you.
SPEAKER_04:But thanks a lot for spending time with us and sharing your story uh Laura uh Shirish back to you great so I had one final question for you Laura um you know my uh unfortunate my son is an entrepreneur uh though he's a um though he's a gym owner he's not in the tech business but we don't see many um women as tech entrepreneurs and I wonder you know as I look forward to having grandkids you know how do I if if some of them are are female how do I make them into entrepreneurs or you know do you have any thoughts on that? Like how do you grow you know do you have to start early? You know what do you have to do?
SPEAKER_00:That is so interesting because I think that women tend to be quite entrepreneurial in life right figuring out how to make things happen.
SPEAKER_01:Right.
SPEAKER_00:I can tell you one of the things that helped me there there was a I belonged to a group of female CEOs in town most of them it it at times it was um very tech oriented at times the group was a a slightly larger so there were tech and non-tech but all female CEOs different size companies and we would get together once a month and every month I would think I cannot afford to do this. Is I got a business to run you know this is not worth the two to three hours I'm gonna spend on it. And every month it was the best two to three hours I spent there's there's power in being able to have a place where you can talk about everything you're doing wrong with people who are also doing things wrong and you can help each other. And so I think that's true of any founder but I think it's all it's particularly true for female entrepreneurs because you are you you are trained not to show weakness in in public and so having the safe place where you can run ideas by and sometimes they're hard things you don't trust your co-founder anymore or you know just things that that everybody runs into but you need you need to have particularly if if you're early stage and your board isn't terribly experienced you need a place where you can go and really talk about not only what's going right which is what you're telling the world and that's what you're telling your employees a place where you can go and sometimes there's nothing they can do but laugh and sympathize. But but sometimes you get really great advice there. So I I think that's that I would recommend that for for any founder to have a place where you can go and be completely honest.
SPEAKER_04:Yeah makes sense. So thank you so much Laura it was great chatting with you after what 22 23 years.
SPEAKER_03:Yeah we haven't changed it all yeah so glad glad you have had a very very successful career and I wish you all the best with your uh current uh startup that you're working with all right thank you it was really nice to meet you Gauri thank you thank you thank you bye thank you for listening to our podcast from Startup Exit brought to you by Dai Seattle assisting in production today are Isha J and Mini Verba. Please subscribe to our podcast and rate our podcast wherever you listen to them. Hope you enjoyed it
