Scaling Up [S4.E1]: Ahead of the Curve with Bill Magnuson, Co-founder and CEO of Braze
Screenshot 2022 11 08 133928

In this episode, we learn about Bill’s story of scaling from coder at a hackathon to the CEO of a publicly listed technology leader. Braze has been repeatedly recognised on Gartner’s Magic Quadrant for Mobile Marketing and continues to lead the way in mobile innovation.







Ed (02:22): Bill, welcome. Incredibly excited to have you on this episode of Scaling Up. I think a great place to start because it will build some foundational blocks for what we discuss right throughout this podcast is maybe just a brief thumbnail sketch of your background. You grew up in obviously rural Minnesota. I feel as though that had a big influence on your career to date.

Bill (02:44): Yeah, absolutely. Yeah, I guess bringing you up to speed to where I am today. I grew up in, as you said, rural Minnesota north of the Twin Cities, and lived there my whole life in the same house. I actually interestingly enough grew up right down the street from where my original ancestors from Sweden homesteaded when they immigrated into the United States and set up shop in Minnesota and was kind of the first one to leave the nest, if you will, as I went off to college. I was a first-generation college student, ended up attending MIT out in Boston. I studied computer science there, and right as I was graduating, mobile was kind of rising. Android actually launched to the world during my senior year of my undergraduate. So, I went and worked at Google briefly was out in Mountain View in the Android building, remembered that big fiberglass cupcake getting installed out on the front lawn and using my horizontal qwerty keyboard G one.

So it was definitely right there at the ground floor mobile. I had a brief array in the finance industry after Google and kind of finished my master’s degree and went and did that but pretty quickly got bored of that and wanted to get back into mobile. So, after about 16 months there, one of my coworkers from Bridgewater Associates, which is where I had worked in the finance industry and I, we decided to quit our jobs together. And we started up Appboy about 10 years ago, that became Braze a little bit later. And obviously we’ll get into a lot of the details of that story, but that’s the quick version.

Ed (04:08): I love that. And the reason why it seems to me, the more I’ve read about you, there’s this common thread of humbleness and curiosity and willingness to forward your own path and take risk. And that’s why I brought up the background. It seems as though that was really born out of that upbringing. But let’s tick over to the founding story. You mentioned that John and you were working together at Bridgewater. What happens next when you go to New York for this Tech Crunch Hackathon is just such a wonderful story, and I’d love to hear it in your own words.

Bill (04:40): Yeah, it’s definitely a good case study in how these single moments really set us off on completely different life paths. So, to set the stage John actually, not only a coworker, but actually he was my boss when I first started at Bridgewater. We worked together on systems engineering projects there. we both worked in software and in early 2011, John definitely got bit by the startup bug, and he had left Bridgewater earlier in the year. I was still there having been there for only a little bit over a year at that point, but John actually had entered into the tech launch Disrupt Hackathon. And as it turned out, the partner that he had originally been planning on I think he triple booked himself and needed to go on a rock-climbing trip down in West Virginia or something like that.

But so, John found himself a week before the hackathon without a partner and he hit me up and was like, hey, you want to cancel your weekend plans this weekend? I was originally planning on going up to Vermont with my girlfriend at the time and instead of doing that, what do you think about doing an all-night programming competition? And I of course went, did the Hackathon which was the New York City Tech Crunch Disrupt Hackathon in May of 2011. John and I, we worked all night, built this project. The idea actually came from John’s wife, and it was a plugin for Gilt, which is a flash auction site that was very hot at the time. We built that it ended up actually winning the competition.

That led to a lot of notoriety for us. but importantly for this story, it also caused us to be invited back for the last day of the Disrupt conference itself and present our hackathon project on stage. So that morning John and I wake up, we’ve stayed at a hotel in New York City overnight, and we’re walking to the conference and John is on the phone with Kate, who is now his wife, the person whose brainchild our idea was and while he was talking on the phone, I just started chatting with the person standing next to me in the crosswalk. And I chatted with him during the whole 45 seconds we were walking across the crosswalk, kind of forgot about the conversation, but a few days later, he emailed me and was excited to connect me with another colleague or a friend of his who was looking to start something in the mobile space.

That person was actually Bipul Sinha, who is currently the CEO at Rubric, which is another very fast growing, successful startup. He was a partner at Light Speed Ventures at the time, and the connection that he made the email said something like, hey, I don’t know if you remember me, we met in a crosswalk I saw you on stage later that day. And I know this guy who’s living down in Houston, Texas right now who’s looking to start something in mobile, and I thought you should connect. And that person ended up actually being our third co-founder and joined me and John, he moved up from Houston, and John and moved down into New York City where we got things all started just a couple months later.

Ed (07:37): Just to wind back the clock a little bit, this 2011. The app store, I think was only launched in 2010. So, this right at the cutting edge of mobile technology. I guess in terms of the first-time consumers had got their hands on it at that point in time, have a sense that you had a real feeling that mobile was the future, that the mobile technology was going to change humanity, and you wanted to be at the forefront of that.

Bill (08:04): Yeah, that’s a good observation. It’s interesting to look back on a lot of the mobile penetration, even simple things like the number of smartphones shipped per month or per year and see just how early we were in the graph, because at the time it didn’t feel like it was early. Part of that was because I had been with Google in the very earliest days of Android. I had been one of the earliest Android developers going all the way back to the fall of 2008. So, for me, at that point, I had already been exposed to the ecosystem for at least three years. But when you look at the consumer adoption, wow, we were really in the early days, and, when you consider the fact that we all quit our jobs, moved to New York, started it up just based entirely on the conviction of mobile and then you look at those charts and realize just how early we were and the big disconnect between the level of conviction versus the numbers that were there to back it up.

We did really take a leap of faith, but I got to be honest, it didn’t feel like a leap of faith because I had been so enveloped by just the excitement of mobile having been there on the ground floor and really had built up the conviction over multiple years, even though maybe the conviction wasn’t there for a lot of other people that were evaluating mobile investment at the time.

Ed (09:22): That might be a recurring theme that keeps popping up. Just your ability to be five, 10 years ahead and we might come back to that, but let’s get into Braze. As you mention it was at boy, but it’s a fundamentally very different business today than, than what it was back in 2012, when it all kicked off. In essence, Braze has become the gold standard customer engagement platform. It started in mobile, but it’s much more than that now. It’s cross channel and in fact channel agnostic, but it allows brands and businesses to connect with consumers in, in ways that they’ve only really ever dreamed of, sucking real time customer data in, and then spitting out personalized real time messaging that can really drive engagement and for many brands increase transaction volume. We’ll dig into the technology of this, but, for instance, to be able to drag in weather, location, purchase history, really valuable information, and then deliver a personalized message in real time. What’s been your favorite way that Braze has been used by brands to really drive engagement?

Bill (10:28): so that’s a wonderful question and I think that when you think about the Braze mission and how we approach this problem from the very beginning. We describe ourselves as a comprehensive customer engagement platform. We really differentiate ourselves from a lot of the rest of the kind of marketing technology, marketing automation, communication, automation, technology space due to our intense focus on being able to respond and interact with real time context. So, you included a couple examples of that. We’re architected as a stream processor, and I think that I always used to bristle at us being called mobile first. Mobile has now become the most pervasive technology ever launched, more so with, with higher spread than even things like clean water and electricity in the world. I don’t think mobile first is limiting in any way anymore, but I always tried to think about us as being built for the world that was being changed by mobile.

And the important things about the world being changed by mobile were that it provided this assumption of always on connectivity, the ability to reach someone, and for them to kind of reach out into the world and interact with you wherever they were. Now that had a bunch of knock-on effects because it meant that they were that they were kind of inviting you into the most intimate moments that they had, almost defacto because people started bringing their phones with them everywhere. That meant that you needed to be a lot more respectful about when and how you, you were communicating to people. So, you had this double-edged sword. It was like, on the one hand, you actually had access to a lot more context and information. If you’re listening closely to your customers interact with you, there’s more touch points than ever.

There’s a better ability to understand them through things like stream processor architectures. We can respond to context as it’s evolving in the moment. But the flip side is that one, so can your competitors, right? So, you need to be able to stand out from the noise. And two, you also, you need to be respectful when people invite you into their lives, you need to actually take that seriously and make sure that you’re providing reciprocal value and exchange for the invitation that they’re giving you. When I think about use cases, like so many of them are places where brands have really been able to focus on delivering relevant value on, just going back to what really makes us human and what makes really good human connection and human relationships. One great example that we had last year, with the brand that everyone knows is of course the NBA.

When we look at the challenge that the NBA had as they needed to restart their season last year you effectively had time honored traditions, generations of the way that the playoffs and the schedule and the teams and the engagement and everything that was just completely upended had to change. And it was not only the fans, but also the brand then, the players that were all kind of moving into this unknown space. The examples that we see where you take someone like the NBA, who is definitely engaging with people across a lot of different mediums, the conversation is happening both in their own owned areas, like things like the NBA app, through their Twitter profile, through their broadcast tv, as well as any sort of on demand broadcast.

And then you’ve also got the entire news sphere as well that’s going to be commenting on it. What they really needed was agility as they came back into existence. So, to reengage users and start to deliver to them a whole bunch of unknowns, keep the conversation going in a way that was super respectful, but was still delivering fans what they needed. They created in product messaging that had custom content that was updating not only with daily new developments based off of different localized, different localized conditions, but also based off of the user’s individual preferences and how those were evolving during Covid. They tied that together with email strategies. They tied it to social it was tied together with things they were doing on the screen during the games at the same time.

And it actually led to a 10x increase in their daily active users 25x lift in sessions a 17x increase in new users that were just engaging with their new digital properties. When we look at great examples like that, these are places where people really took the agility in order to then engage the customer base better and built just tremendous presence on their first party properties. A lot of it just goes back to the very kind of just human problem of how do you build a strong relationship? Well, you do it by listening to people. You do it by engaging them on content that’s relevant to them. You do it by being respectful about where you’re delivering it and when you’re delivering it. And I think that when you can funnel that all into business strategy that’s either responding to new opportunities in the moment or it’s building up better first party audiences that all comes together for the bottom-line ROI. But it ultimately always connects back to that very human problem of just building strong relationships.

Ed (15:13): It shows you what happens when you do respect that permission and how much respect you get back as a brand to forge that deeper connection. It’s, the NBA case study is fascinating. There is the very famous Burger King campaign. If someone walked within 200 meters of McDonald’s, a little real time message popped up saying, detour for a 1 cent Burger King Whopper, some amazing, and really interesting things that you can do to build that connection.

Bill (15:40): One of the things that I really love about the Detour campaign is actually not even just in the customer experience, but in the behind the scenes, which is that that was actually an idea the Whopper detour campaign that their agency had been sitting on for an entire year. But the technology, just the pieces to kind of actually execute on it had not been put together yet. And we actually had a client who came from another company. They were a former Braze client who was brought into the RBI family into Burger King. They were tasked with building a technology ecosystem to help bring them into the next generation of marketing. They saw this idea kind of sitting there from the agency that required the ability to pull together technologies like deep linking. They had to be able to guide customers through kind of complicated workflow.

Obviously the geofencing was really important, the ability to not just know the location, but know where the McDonald’s locations were and the nearby Burger King locations, and make sure those were paired together in real time. Fernando, when he spoke about this, he also brought up the compelling point, which is that they’d been trying to give people free food to get them to sign up for their app and join their loyalty program, put a credit card, do mobile ordering, and all of his other goals they had for the first party ecosystem for years, but then they came up with a creative idea where it wasn’t free food, they were still making people pay for it. but because it had this amazing narrative around it, and because it was so interactive, the results were just through the roof.

And that was another great example where much like the NBA one where they had this customer base that was activated in a certain way, maybe they were Burger King loyals in some way, and they were going to interact through the drive through or whatever else. But as things change and as we start to get a better understanding of what makes a customer higher value to you so often the answer to that is that they’re better engaged with first party properties, whether that’s they’re a regular app user, they’re a newsletter subscriber they’ve got a credit card saved in a mobile wallet, they’ve gone through mobile ordering, so they know what that workflow is like, and they’re more likely to do it in the future. Those were all things that were the ancillary benefits of that campaign that Burger King ran.

When you think about the customer engagement required there, it’s not just the promotion, it’s also on the back end, it’s how does, how does the agency idea really come to life by bringing together these different technology vendors? And then there’s also the customer experience side in the long tail afterward, which is, okay, I successfully engage a whole bunch of people, but how do I move them into these personas that will derive better value for me in the long term? Because I was able to take advantage of that high activation energy time period where they were engaged with a campaign, they were engaged with a special event like they were with the NBA reopening and utilize that to really get further permission to engage and help build habits that are going to create more value from you in the long term.

Ed (18:30): As enduring companies obsess about this customer experience and how customers are going to engage with their brand it’s very clear from that even the Burger King case study that you are delivering so much value to these brands and it’s the key reason why you are killing the legacy players in cross channel and being really at the forefront of mobile. What do you think customer engagement’s going to look like 10 years from now? And if we can wind the clocks forward now, having been at the starting point 10 years ago, winding forward 10 years, what do you think the space is going to look like?

Bill (19:05): Yeah, so that’s obviously a super important question. I think, not just for companies like Braze that task us with really being on the leading edge of the technology side of this, but also with brands, the ones that read the tea leaves appropriately are going to make the right investments in the right places. One thing that is going to be a continuous trend throughout this that you’re going to have to get more and more sophisticated in your approach to customer engagement over time. There’s going to be a number of things that are going to drive that. One is that customer expectations are only going to get higher every single year. We see in all the, all the customer behavior as well as in surveying and pulling or whatever customers are less and less tolerant of disjoint customer experiences. They’re less and less tolerant of brands harvesting from their perspective.

They have brands that are harvesting all this data, and then they have an experience that where the brand is not using that to deliver them better value. And it’s doubly upsetting, right? You feel like your privacy’s being violated and you’re not getting anything out of it. When you think about that from a channel perspective we get asked to prognosticate on the future of different consumer technologies. Is this or that medium? What about VR, AR, what about chat bots? What about messaging? What about this, that, et cetera. and I think the answer is like, if you are still in a position where you can’t respond to and kind of handle all of those as they come up and as they become prominent and important, you’re still thinking in a two-channel centric way. When you take those two trends together, it’s like the customer is going to continue to demand better and better, more sophisticated, more contextualized, more relevant communication from the brands that they are willing to give their time and attention to.

The customer is going to continue to care less and less about kind of the channel centricity. Everything should ultimately kind of blur together from their perspective and do a continuous experience that’s being delivered. And then we look at, there’s a whole bunch of other dimensions we can look at this problem on from privacy, from technology, et cetera. But I think that when you really look at it generationally, the bar is always going to get higher, and the experiences need to continue to get delivered in a more continuous and a holistic manner. And that sidesteps a lot of these other technology questions around exactly which channels, exactly which devices, what do products look like, et cetera. It does, however, say that if you think that what you’re doing today is good enough or is going to be good enough for a while, you’re just completely wrong. If you are not still in a growth mindset where you have kind of postured yourself as if you’re in the very early days of how customer engagement is going to be delivered to customers to build relationships, then you’re not investing enough. That applies to team structures, skillsets, technology, investments, and just really every single year challenging yourself as a brand to say, what am I going to do better next year?

Ed (21:55): I don’t think we can underestimate how technically difficult, not just what Braze is doing at the moment, delivering trillions of messages to billions of active users. But as you’ve just described, the complexities are only going to increase from here. But you set up your architecture as you alluded to, with a purpose to build into this growth and your growth that seems has been built on this backend technology. You’re obviously the CTO for five years. Can you, maybe, without going down too much of a rabbit hole, but just give a sense of the complexity of what you’re trying to do technically.

Bill (22:29): So, one of the examples that I use to help people understand the stream processor architecture, which I’ve already mentioned a couple times versus the way that things were done in the past from a batch perspective, is to kind of think of financial use cases that a lot of people are used to. So as an example, when you look at batch processing, what you’re doing in those cases is you are trading off speed and responsiveness for kind of completeness and in some cases for cost. So, something like batch processing is really appropriate when you’re filing your taxes or when you’re closing out your audited financials because you need to have absolutely everything. You don’t need to respond immediately; you’ve usually got some time to deal with it. So, the delay is okay in that world, but take as a counterpoint, something like fraud detection where with fraud detection, you need to be able to make a determination as someone is swiping a credit card as to whether or not you need to flag that transaction or not.

That might mean that you have an incomplete picture of the person or the transaction, but you need to, you need to prioritize timeliness. When we look at just batch versus stream processing stream processing is much better suited for that fraud detection use case. It’s also used in high frequency trading which certainly coming out of the hedge fund industry for John and I we were more familiar with that world than we were with how marketing technology had been built in the first place. We kind of didn’t have any of the legacy architectural mindset that so much of marketing technology had been built with on these batch systems in the past. We started from square one, building a stream processor. Now if you think about the other point that I made earlier where what we tried to build for was a world that was changed by mobile.

The key thing that we saw in how the world had been changed by mobile was this idea of a continuously evolving context around the person it was always on, right? If we take that idea and we say, all right, how do we want to kind of build technology that’s going to be able to live across all these different channels, it’s going to be able to respond in the moment. I like to describe this as your technology ecosystem experiencing the world as it happens, then that’s going to imply certain architectures and different sorts of data processing technologies. And when we go all the way back to 2011 it was the fledgling days of stream processing. The buzzwords at the time were just simply cloud and big data. But even a lot of big data systems were still built on batch.

We ended up architecting in a custom way, an early stream processor that we tasked with going and handling the massive and growing scale of mobile. We importantly put an abstraction layer over the top of the messaging so that we could kind of take everything, which was, what are we going to say? How are we going to say it? When are we going to say it? All of these kind of who, what, how, et cetera. and really make those decisions independent of where it was going to be delivered, on what channel it was going to be delivered. That’s had a lot of implications for how we’ve been able to scale, and our customers have been able to scale across channels without getting caught up in complexity. And we think about this whole framework using this listen, understand then act process.

And if you go back to what I said before as well, about these just being very human problems, and we think about what it takes to build a strong relationship between two humans, if they listen to each other, pay attention to the context around the other person, and then try to use what we learn from listening to understand them better, to have more empathy so that we can understand what’s valuable to that person. Then when we take action, we can have great shared experiences, we can have great conversations, and over time we’re going to build a strong relationship. We try to essentially architect to stream processor to play that same role. Let’s integrate into our customer’s products so that we can listen closely while the customer is interacting with us. We can use that and the revealed preferences that come out of it in order to understand more about what they care about, what’s valuable to them, what and how it is appropriate to communicate with them.

And when and then finally in the act stage, we’re then going to actually make sure the message gets from point A to point B and it gets delivered to them. And then of course, the great thing about listen understand act is that it’s not just a one flow process, it’s a loop, right? We then will observe how that person responds in action, just like a conversation flows back and forth. And as they respond to that will then feed back into the stream presser on the top, and the listen step starts all over again. That allows you to then build that relationship over time by going through that listen, understand act loop and having a mindset that is, again, very rooted in human relationships and how we drive relevance in human conversations. We’ve been able to take the technology and adapt it to the human process because of a lot of the advancements that have happened in stream processing and a lot of kind of distributed systems engineering and cloud infrastructure over the last decade.

Ed (27:35): The last five minutes is a great example of what happens when you get a deeply technical founder who also has the ability to communicate, because what you just described isn’t easy, but gives a great sense of the advantages of being a technical CEO. And as I said, you were the CTO for five years and helped really build that backend architecture. Can we maybe discuss that transition from CTO to CEO and the different skills required and maybe the things that you’ve had to be extra curious on to make sure that you are leading the team? Cause they have very different jobs.

Bill (28:12): Yeah, they absolutely are. The thing that I think I enjoy the most about the CEO role is the place where it’s conceptually similar, which is that as a technologist, you are tasked with solving new problems, but you always have new tools to use to work on them. The building on the shoulders of giants and the way that the technology, especially within software ecosystem there’s a lot of sharing, there’s a lot of new capabilities. And when you look at a company like Braze as well, where we are a technology company trying to use advanced approaches to new developments in technology in order to solve problems that only exist because of the advance of technology and because of the adoption of new technology, you only exist because both the way that you’re solving the problem and the kind of the source of those problems are opportunities both come about because of the rapid advance of technology.

That’s been a place where being a technical CEO has certainly been a massive asset, but when I then think about that from the lens of being a CEO and how that compares when you are at the helm of a fast-growing company, the problem is the same. You always have new problems to be solving that are a rising because of whether it’s the scale of your company growing on its own, you’re expanding into new markets, those markets are changing. Maybe the platforms or the kind of the governance that you’re dealing with is changing on its own, et cetera. There’s always new problems, but you’re also always building new capabilities. You’re installing new systems. You’re evolving your org chart. You’re bringing new leaders in, you’re bringing in new teams, new, new kind of deeper skill sets.

That ability to solve new problems with new capabilities definitely scratches the same image that building software and big systems did for me as a technologist. Now, where is it different? One of the major things I would say is that within engineering computers and humans are obviously, they’re both complicated in their own way, but computers are, are a lot more cut and dry when it gets down to it. Whereas humans are infinitely complicated. So, kind of thinking about it at that high level of abstraction where yes, you’re solving new problems with new capabilities much like you are as a technologist, but in the CEO seat, both of those things are substantially more complex because the human element is much more at the forefront. I think another really important thing is that within engineering, when you’re working with a bunch of engineers certainly there’s a lot of diversity of thought, but people tend to approach problems in very similar ways.

Whereas in the CEO seat we’ve got extremely different ways of approaching problems and different levels of experience when you go across things like a people organization an enterprise sales team, a data science team, and your DevOps function or what have you, just to pick out four examples these are all groups that are going to kind of have completely different backgrounds. Their intuitions are going to arrive in different ways. They’re going to approach problems from different mindsets, and it’s hard for them to speak the same language with each other. The difficulty of kind of gaining value out of the immense kind of tapestry and diversity of capabilities that exist across your organization while also still working with and managing each one of them, I think, has been one of the biggest challenges of that transition.

Ed (31:29): I think that’s a great segue into understanding a bit more deeply the scaling of the people and culture of your business in many ways have a deep advantage because the nexus of not only the founding team, but much of the leadership team have been there from ground zero, either on the product side or the technology side. And it’s rare to assemble a team from zero to many hundreds of millions of dollars of revenue that can all scale and somehow there seems to be some secret source as to what has happened in terms of recruitment, certainly being able to retain the best talent. Can you maybe give some colour as to your view as the culture of your business being the source of a really key competitive advantage?

Bill (32:10): Yeah. Well, I’ll, start out by certainly recognizing that there’s always a little bit of a survivor bias to this. We absolutely, it’s certainly not the case that every executive hire we’ve made along the way has worked out and everyone has scaled. But you are right that we have certainly had the advantage of having a good kind of core group that’s, that’s been with us. We’ve actually had multiple waves of strong groups of leadership as we kind of started out in the early days. A lot of our early R&D leaders have scaled with the business all the way through. And many of them are celebrating eight-, nine-, and 10-year anniversaries this year, which is really exciting. We have a core group from when go to market started to scale circa three or four years later.

There’s another core group of leaders that have come in as we’ve started to look at kind of the next stage of our growth as we get beyond a thousand employees and end up in the thousands and go from chasing down a hundred million in ARR to counting those new milestones coming in, every few quarters or what have you. I think part of it is that we have had to really look at who and where are we scaling, where are we going to have new challenges, try to see around corners on that and make sure that we’ve got a good mix of prior experience so that we’ve got a lot of people who have scaled all the way through with the business, but we’ve had other places where we’ve brought in people that have been there, done that seen the experience overall.

I think when you look at the culture, it’s something that has also adapted as the company has grown. We’ve paid really close attention to employee engagement and communication all the way through, tried to be very transparent with people around, what our vision is, what our priorities are, how we’re growing over time. When we think about how we work through conflict it’s a very open and direct culture one that is very data driven as well. I like the adage that culture shows itself during times of disagreement and conflict and how do you actually then approach those types of problems? One of the things that we’ve always tried to do is first of all, let’s get things out in the open. Let’s make sure that we’re speaking the same language.

Let’s make sure that we’re being direct and transparent with each other. But we’ve also made immense investments in data and making sure that, we can have that unbiased view of how all these different corners of the business and the market are acting as we go and evaluate things so that it’s less of opinions being asserted and less of certain cognitive biases or other sorts of systemic biases sneaking into processes and decisions. And it’s something where we can go back to objective sources of data with aligned definitions and aligned understanding in order to chart a path through it.

Ed (34:47): Yeah, and there are some wonderful very cutting-edge software tools that you can use, like Culture Amp, not familiar with what you might use internally, but they’re certainly world class leaders. Do you think being New York centric and I know there are obviously six officers around the world now, but do you think that has formed a certain culture that would’ve been different if you had sort of deeper West Coast routes?

Bill (35:09): I do as the short answer, how exactly it’s, we’re different. There’s a lot of different dimensions we can look at that problem on. I do think that New York City in 2011, when we started the company, we were just on the other side of VCs like mandating that everyone moves to Silicon Valley as they get their first seed investment. I remember a lot of people asking us if that had happened but not being aware that that had been a thing prior. So, I take that to mean we were right on the cusp of when it was acceptable to start a tech startup in New York. I would say in looking at New York City as the place where we’ve had our headquarters, we have enjoyed tremendous advantages when it comes to the talent that we’ve been able to bring in specifically because of the diversity of New York City as a place.

It is far from a one industry town. New York City is a place that has deep roots across global corporations with every single industry in every single vertical and kind of category of the economy, including spreading across technology. Also, into a lot of the creative pursuits which is just an incredible injection of creativity and energy that comes into the city and also comes to the employee base. It’s also a really just diverse city from the perspective of the people that are here. There’s actually more languages spoken in Queens than in any other city in the entire world for New York City to also be by and large, the English speaking capital, the world global crossroads of sorts, are all just incredible advantages I think that we enjoy as a business. Now, there’s obviously a lot of challenges to starting a brand-new company in New York City, but we have really relished those advantages that come out of just the diversity and the vibrancy of this city and this community.

Ed (36:52): The cultural melting pot that is New York City is hearing you describe it is making me feel as though I want to hop on a plane, but unfortunately won’t be possible for a while. Now, maybe just to shift gears for a moment, having discussed Braze it’s certainly an interlinked topic, but you have a unique view in that you are running a fast-growing technology business. Your board is probably in a somewhat a state of transition to a degree, largely investor based, but you’ve brought in some real big firepower in Philip Fernandez, obviously co-founder of Marketo and recently Tara Levy, but you also have the other experience of sitting on boards as an operator in other fast growing technology businesses. So, I guess the questions are, as a CEO, what do you want from your board? And then conversely, as a board member, the value of being an operator and how you see that through that lens.

Bill (37:47): Yeah, it’s a great category of questions. Specifically, we spend a lot of time on that operator side because as we’re bringing on additional non investor board members and bringing in new independence, we want to make sure that there’s a good balance of people that they’re living the same challenges that you are every day as an operator, especially if it’s an operator at a fast growth company that can really empathize and understand those challenges. But of course, the flip side of that is that those people have full time jobs and so, they can’t dedicate as much time as maybe a more kind of stereotypical professional board member would be able to. So, we try to look for, for balance there and really consider the contributions everyone is able to make the investors around the table, their full-time jobs give them exposure to a huge number of other companies in the ecosystem.

And that gives them a better ability to pattern match and to kind of notice the negative space to see when there are ways that successful companies act, things that they measure things that they get concerned about and other things that they don’t, that they can brush off and move past and such. It gives them a much broader perspective. One of the interesting things about the investors is that even though they’re going to show up from different stages they’re going to have maybe different categories that they invest in, et cetera, et cetera. They’re all going to kind of approach problems from a financial analysis type of lens.

I think it’s really important as you’re assembling the board to kind of think about where does this person come from. How are they going to evaluate business problems, and how are they going to be able to connect with the problems that we are having? When you bring an operator in knowing that they also have another full-time job, I think it’s really important that there’s a connection in what they’re operating to your business, such that they can come in the board meetings once a quarter, anytime you want to discuss a special topic, et cetera, and they could rapidly be up to speed on what’s going on because they’re exposed to your space or your stage or whatever, and they just really understand it deeply because they’ve lived through it. I think also as a CEO being on a board it’s really important to have people, like you mentioned Phil Fernandez.

He can really empathize with the problems that I personally am experiencing as a CEO and the challenges that I’m trying to overcome. And that is just a level of experience and wisdom that he can bring to the table in terms of providing both advice as well as kind of empathetic advocacy and such as we navigate tough issues that the investors just haven’t lived through, right? They might be able to academically understand things, but to really have lived through those problems and made tough decisions is I think an incredible property for a board member to have. All of that then feeds into the other question or the other kind of dimension of this that you alluded to, which is also sitting on boards. I found that one of the most valuable things about me sitting on a board is that I can better empathize with my board members because I know more about what their experience is like.

One of the things that I realized was that you do have to spend a lot of time keeping yourself in the flow and the context of that other business for you to be able to then provide meaningful insights. You’re not in the problem in anywhere near as much depth as the executive team that you’re trying to provide advice to and just being cognizant of that and understanding where you have the right background or the right context and where you don’t and making sure that you’re providing advice at the right level. That’s something that I’ve been able to use to then contextualize the thoughts and opinions and advice from my own board in a better way. So, this really all comes down to listen and understand which we talked about earlier. Making sure that you’re matching up with, with people that can just empathize and contextualize the experience that the business or that you yourself are going through and can really connect that back to providing better advice and better insights.

Ed (41:37): Yeah. Just to, to pick something that you said that is so important, I believe anyways, in terms of those operators really understanding what their domain expertise is as sitting on that board and providing value in that lane, and really being able deep in, into that and providing value is so key. I guess the next question is, just follow on is, does sitting on a board make you a better CEO? You talked about the empathy, the ability to listen, they feel like soft skills as a CEO are so crucial.

Bill (42:06): Absolutely. I think that it’s obviously important in all things that are kind of outside of your primary role that you have the time and the bandwidth to be able to do it. There’s a lot of things that feed into being a better CEO one of them is spending time with your family and being able to pursue your personal hobbies as well. Certainly, don’t go and fill up your free time with a bunch of side things. But I think like sitting on a boar we like to kind of say one nonprofit board and one for-profit board is a good level of outside engagement for any of our executives to have if they want to pursue those types of opportunities. And I think that it does give really good perspective.

Now, I would also go back to the point that I made about being an operator and making sure that you’ve got shared context. I don’t think that it is as helpful if you are a board member for a company that’s in a totally different space or is like a business that’s just run in a completely different way or thinks about growth from a totally different context or mindset. Any of those dimensions being totally disjointed from your CEO experience is just going to add more cognitive load to you being able to engage in a good way. I’ve definitely thought about that, make sure that it’s something where my operator experience of me being the CEO, Braze every day is going to help me do a better job of that and give me the context that I need so that I can then balance those things better. But if you can find a good fit like that, that’ll fit into your life, I do think it’s an enriching experience.

Ed (43:36): One final theme, and you touched on the venture capitalists that sit on your board, maybe just the role of venture, there’s always these tensions and you would’ve lived with these, the advantages of being well funded, but also the pressures that come with it to grow fast board members, that that might have differing views as to how the business might be running at different stages of your business. You probably have less ability to, to push back at that. Maybe just as a general discussion point, the role that venture has played in Braze.

Bill (44:06): Yeah, so I would actually probably say at a high level, I think venture gets a worse wrap than they deserve with respect to, even as you walk through some of the considerations, having conflict over how the business should be run, as an example I’ve found our experience with venture capital to be incredibly entrepreneur and management team friendly, they’ve been very good to work with generally seating, the fact that there is in fact more context and deeper experience from the people that are operating the business day to day. And serving as trusted advisors in those roles, but ultimately trusting the opinion of management when tough calls need to be made. And it’s been my experience that venture capital I think because of just where it’s positioned in the industry, the incredible importance of VCs maintaining founder friendly reputations, especially in a capital environment like this, where more often than not, it’s funds chasing entrepreneurs rather than the other way around.

At least once you’ve got initial traction. The reality is that all of those have created really positive incentives for how they behave if we’re being blunt about it. So, a lot of those types of concerns I think are a little bit overblown, especially when you’re engaging with the venture capital industry and you’ve got people that are kind of storied, venture capitalists that have reputations to maintain as founder friendly. The corollary to that, of course, is that that’s something to look for as you’re evaluating venture capitalists. I think also not enough entrepreneurs actually do reference checks on the people through the venture capitals that they’re thinking of bringing in. Too often I think decisions are being made by just looking at the term sheets and the numbers on the term sheets and deciding from there.

Whereas the reality is that there’s going to be a lot of value created based off of a lot of the decisions and the input and the guidance that’s going to come out of that person that’s going to potentially join your board. And you should be interviewing them as much as you’re interviewing the numbers on their term sheet. I think that’s an important part of it. Obviously, the growth expectation, that just comes with the territory of raising venture capital. One of the pieces of advice I give to really early-stage entrepreneurs who have not yet taken VC is to think long and hard about what their ultimate goals are for the business that they want to build. Because venture capital is a way of funding businesses, but it’s not the only way. And once you decide to kind of take other people’s money that are structured in the way that venture capital returns are you are signing up to kind of be on a growth escalator if you will and to really push for it.

The idea of a home run, one home run matching up against eight or nine zeros that’s a way for a venture capitalist to spread out their bets and spread out the risk but doesn’t help you very much if you’re one of the zeros, right, as the entrepreneur that the that the risk was levered up. I just think it’s really important, a lot of people default into raising money from venture in the earliest stages. And I think it’s just worth scrutinizing and saying where do you want the business to go? How fast do you want to grow it? What’s the ultimate end stage that you want to look at? And just making sure that before you go and sign up for any form of funding source that you are in really strong alignment with wherever that funding’s coming from about how you’re going to be a steward of that capital over time.

And a huge part of that is what kinds of growth rates you’re going to push for now. I love it. I find it to be super invigorating to kind of push a company to grow as fast as we are. That ability to compete in global markets in a way that we wouldn’t be able to otherwise. The ability to invest in R&D to the degree that we are able to by having additional investment that comes in through venture capital is really invigorating and amazing. Those are my personal goals. It really aligns well with how I wanted to grow the business and the opportunity that came into existence with mobile and how fast mobile has grown. But that is not true broadly across every business category and for every entrepreneur and I think it’s important that people are honest with themselves about that.

Ed (48:05): Wonderful advice and a great answer. Last question from me. You’re running an incredibly fast-growing technology company. You’re a dad, you’re a board member. Just the importance of balance. I know that you love to make music and you’re married to an artist and just the role that family has played in creating some balance in your life.

Bill (48:26): Yeah, it’s a really good question and obviously very pertinent as our lives are about to change massively again in the way that we run our lives. I’ve actually been really thankful that over the last year our family has been able to spend a ton of time together. We obviously haven’t been able to go on as many adventures. Most of that time has been spent just inside of our home, but I’ve got, as you alluded to, I actually have two kids. They’re both in high school right now. One of them is off to college next year. And I have actually found myself really thankful that I’ve been working on this company for 10 years now. That’s involved a lot of travel, a lot of late nights. As the kids get older, they have their own activities, they’re traveling, they’re busy on weekends, et cetera, pretty quickly find yourself not spending as much time together, even just because everybody’s lives get busier.

I was actually really fortunate that we were able to spend the last year connecting a lot more with the kids before they move off to college. And it was an important grounding moment for me as well and I think that as the world opens up again and as we start to move back into offices and as business events start to happen again and business travel is happening, that we should all be super deliberate about how we spend our time and what’s worth it to get on a plane and screw up your sleep schedule, leave a time zone be away from the kids and the wife and the family and the dog and the whole family unit and everything that comes together. Just make sure that you’re putting as much time into that as you want to.

And making sure that you’re investing back into those relationships because ultimately, you’re robbing them of a great relationship, but you’re also robbing yourself of a valuable relationship too. And you need to make sure that there’s investment there so that you can have the personal side of your life be invigorating for you so you can show up for your professional life and you can have high levels of energy and you can do things without regret, and you can execute on ambitious goals with conviction and all of those things. and I don’t think you can do that without having a healthy personal side of your life. My advice would just be to be deliberate. I’m not prescriptive advice a lot because I know that everybody’s lives and their values are different, but we’ve got a wonderful opportunity as the world comes back together to rethink a lot of the decisions that we probably defaulted into before as our careers kind of unfolded and take advantage of the relative period of calm to make really deliberate and considered decisions that will allow you to invest in your personal life.

Ed (50:52): I think that’s a wonderful way to wrap up the episode with a big, beautiful bow on top. Thanks, Bill so much for your time. I’ve loved it so insightful and I’m sure our listeners have gained a massive amount of experience hearing from me, so thank you.

Read The full Article
Scaling Up [S3.E8]: The power of compounding with Hamish Douglass, Co-founder, CIO and Chairman of Magellan Financial Group
Scaling Up [S4.E2]: A Modern Day Wonder Woman with Therese Tucker, Founder, Executive Chairperson, and former CEO of BlackLine Inc (NASDAQ: BL)
TDM is currently not open to new clients
Thank you! Your subscription has been confirmed. You'll hear from us soon.