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a16z Podcast | Scaling Companies and Culture
17 segments available
In this episode of the a16z Podcast sharing more founder stories, Ben Horowitz interviews a16z partner Lars Dalgaard about SuccessFactors, one of the earlier software-as-a-service companies. (It was founded on 2001, IPO'd in 2008, and was acquired by SAP in 2012). SuccessFactors focused on software for "human capital management" in the enterprise. But what are the success factors in talent, scaling companies, and most importantly, scaling culture? Lars and Ben cover everything from what motivates (the best) founders, the difficulties of entrepreneurship, and team building and building culture. Especially if you have values -- not just an HR offsite exercise -- that mean something, like "no assholes!" .... but then how do you balance a value like that with the desire to succeed (for example, if you have a 10Xer who is an asshole)?? All that and more in this episode.
Segments Timeline
Introduction to SuccessFactors
In this segment, Ben Horowitz introduces Lars Dalgaard, a16z partner and founder of SuccessFactors, a pioneering software-as-a-service company. They discuss the company's origins, its focus on human capital management, and the overarching themes of talent, scaling companies, and culture that will be explored throughout the episode.
"hi everyone welcome to the Asics & Z podcast I'm sonal and today we're sharing more founder stories this one hosted by Ben Horowitz and starting with one of our very own partners Lars dalgaard we cove..."
The Challenge of Belief
Lars shares his experience pitching SuccessFactors to 73 venture capitalists, all of whom rejected him. He emphasizes the importance of believing in your vision despite external skepticism and warns against trying to catch fleeting trends. This segment highlights the necessity of conviction in entrepreneurship.
"this is Ben Horowitz and I'm here with Laura's da Lagarde and we are going to talk today about how he built success factors and achieved the first great outcome in software as a service and then what ..."
The Relentless Journey
Lars reflects on the continuous challenges faced while building SuccessFactors, noting that the journey never became easier. He discusses the varying degrees of difficulty encountered and the collective effort of his team, emphasizing the importance of perseverance and commitment in achieving success.
"good idea only do it if you have no choice I think so it must be done it must be done and I think that's like I don't I remember asking Reed Hastings a long long time ago over a decade ago rice dated ..."
Creating Meaningful Dialogue
In this segment, Lars explains his motivation behind SuccessFactors: to foster better communication in the workplace. He believes that enhancing dialogue can lead to improved lives for employees and better outcomes for companies. Lars shares his excitement about the impact of their software on millions of users.
"outcome well first of all it was an exceptional effort of a lot of people that all of a sudden began finding a place that was as important to them as their family and their friends and it was a big pa..."
Building a Culture of Values
Lars discusses the importance of establishing core values within a company. He critiques the common practice of creating superficial values during HR exercises and stresses the need for values that resonate deeply with employees. He shares his own value of respect for individuals and the significance of fostering a culture that prioritizes teamwork and accountability.
"change that would not go away so that was exciting for me the second thing is something begins to happen when you're together with people and and it's like a sports team you just have to do it togethe..."
Addressing Toxic Behavior
Lars elaborates on the challenge of addressing toxic behavior within a company. He emphasizes the need for self-awareness and the importance of creating an environment where employees can speak up against negative behaviors. This segment highlights the self-selecting nature of company culture and the impact of shared values on team dynamics.
"I think it starts with values and many times when I say that people say oh I saw those that another company I worked at nobody knew them nobody remembered them and it didn't mean anything well then do..."
Transparency and Accountability in Communication
In this segment, Dalgaard discusses a unique approach to handling negative feedback within the company. He describes a practice where employees are encouraged to communicate openly about issues, fostering a culture of transparency and accountability. This method not only builds trust but also encourages constructive conversations among team members.
"specific example of how we put this into practice which has a lot of allure just because it's kind of funny but it actually wasn't funny to me when I came up with it and became legend for our company ..."
The Cost of Losing a 10X Employee
Dalgaard addresses the dilemma of retaining high-performing employees who may not align with company values. He argues that the collective strength of a cohesive team outweighs the benefits of keeping a single high performer. This perspective highlights the importance of trust and collaboration over individual talent in achieving long-term success.
"as if when they come into an organization they're thinking there's so much of that but I'm willing to do it I get paid it's a good job it's better than the other one and this works for me but I'm gonn..."
Learning to Scale: Data-Driven Decisions
Dalgaard reflects on his journey of scaling SuccessFactors and the importance of adopting a perpetual learning mindset. He emphasizes the need for data-driven decision-making to avoid self-deception and ensure realistic growth strategies. This approach is vital for navigating the challenges of rapid expansion in a competitive market.
"type of power and I've seen that at scale and it's nobody can stop you I believe strongly it's what Southwest Airlines did they came in and turns through everybody said there's not Lee you can't do an..."
Balancing Honesty and Motivation
Lars addresses the challenge of maintaining an honest culture while motivating employees. He discusses the tension between presenting a positive outlook and acknowledging failures, stressing the importance of transparency in leadership to foster trust and commitment among team members.
"was to twelve and a thirteenth month only I would track every quarter and every month was always very easily accessible not hey can you guys go get it it was right there in front of us and that did no..."
The Culture of Public Offering
Lars shares insights on the culture surrounding public offerings, emphasizing that going public should not be the primary goal of a company. He explains how focusing on building value and a strong organizational culture is more important than the financial event of an IPO.
"it's going great like when I told you we were gonna be the biggest company ever when I recruited you and you are gonna make 100 million dollars like that's still true and so how do you think about tha..."
Celebrating Contributions Over Numbers
In this segment, Lars discusses the importance of recognizing individual contributions within a company rather than just focusing on metrics like employee count or valuation. He emphasizes the value of customer testimonials and the impact of team members on overall productivity.
"want to be you want to take everyone's energy and put it into building something of value that they can relate to and that's how you bring it back to well so this quarter wasn't great let's talk about..."
Collaboration Over Isolation
Lars critiques the toxic mentality of 'throwing things over the wall' in organizations. He advocates for fluid communication and collaboration across departments, drawing parallels to successful relay teams and the importance of teamwork in achieving organizational goals.
"customer come up on stage and talk about how their life has actually been changed because of the work you've done or let me pick an engineer that that's something that everyone thought was outstanding..."
The Value of a Strong Board
Lars discusses the critical role of a board of directors in a young company. He explains how a well-formed board can provide invaluable insights and guidance, emphasizing the need for leaders to remain open to feedback and the importance of surrounding oneself with knowledgeable advisors.
"the wall I have something that is like if she's seen Carl Lewis practice the hand oh of that baton there was nothing they hadn't thought about they didn't shatter those World Records by accident Carl ..."
Learning to Listen as a CEO
In this segment, Dalgaard reflects on the challenges of accepting advice as a CEO, particularly when confidence can lead to blind spots. He shares personal experiences of learning the hard way and emphasizes the importance of being open to feedback from board members and mentors. This discussion highlights the balance between self-assurance and humility in leadership.
"rock star but here's some people that couldn't give less of a [ __ ] they have your best interest in heart and they're gonna tell you some things you need to hear so you can either find those things o..."
The Role of Coaching in Leadership
Dalgaard discusses the transformative impact of having a coach for CEOs. He contrasts the role of a coach with that of an advisor, emphasizing the need for consistent, honest feedback. This segment illustrates how seeking help and embracing a 360-degree feedback approach can enhance leadership effectiveness and foster company growth.
"take your company and in most of the cases where there was churn around people geographical trouble pricing issues where you need to one big one that I thought I'd figured out forever was when we had ..."
Harnessing Collective Knowledge
In the final segment, Dalgaard emphasizes the importance of tapping into the collective knowledge of a supportive network. He argues that successful leaders often rely on the insights of others to navigate challenges and maximize potential. This discussion reinforces the idea that collaboration and community are essential for sustained success in entrepreneurship.
"that would be very very valuable to you how did you learn how to listen and then how do you see that in entrepreneurs today where their great strengths can end up undermining all of their efforts so I..."