Acquired - Opsware (with special guest Michel Feaster)

0:00So we also grade acquisitions. Yeah, David and I will each give it a grade and our guests can opt to either grade or not. Yeah, especially since you were apart. I'm happy to grade. Yeah, all right. Welcome back to episode 42 of acquired the podcast about technology acquisitions and IPOs. I'm Ben Gilbert. David Rosenthal and we are your hosts. Today we are covering the 2007 acquisition of Opsware.

0:36by HP. We have with us a fantastic guest, Michelle Feister. So David will give Michelle's full bio in a minute, but I want to say I'm personally very, very excited to have Michelle with us. A lot of people know the story of the deal from the Opsware side as told in Ben Horowitz's The Hard Thing About Hard Things. So Michelle was the director of products for the division that purchased Opsware and is going to share the story from the HP side of that acquisition today.

1:04So David, can you tell us a little bit about Michelle's background? Yeah, so Michelle today is the co-founder and CEO of User Mind, which is a unified customer engagement hub based in Seattle and that she founded in 2013.

1:20But as Ben was alluding to a decade ago before user-mind, Michelle was working at the opposite end of the tech spectrum from a startup. She was the director of product for a division of Hewlett Packards Enterprise Software Business, where she led the acquisition of Ben Horowitz and Mark Andreessen's legendary company, Opsware, for $1.6 billion.

1:43Most fun, flash forward to today, and the tables have turned. Ben Horowitz is now on her board at user-mind, on behalf of Andrews and Horowitz, his mentor capital firm. And we are honored to have Michelle on the show to cover this deal. So thank you for joining us. Thanks for having me, guys. Really excited. Yeah, we appreciate it.

2:03I appreciate it. Before we dive in, we want to mention two new listeners of the show. We've got a Slack, and we are over 800 strong. That is at acquired.fm on the sidebar. You can join us in the Slack and talk all things, M&A, tech news, and anytime there's something pretty exciting that happens, like the whole food acquisitions. That's when it really shines, and there's lots of great speculation in there.

2:25Second is, we love reviews, so you can help us grow the show by leaving a review on iTunes. I'm sorry on Apple Podcasts. That's what we call it now. And tell your friends, all right listeners. Now is a great time to talk about a new partner of ours here on Acquired. LaGoura, the agentic operating system that is redefining how the world's best legal teams work.

2:52Yup, it's sort of obvious that AI is going to completely change the legal industry. I bet most of you listening have dropped a contract into some sort of AI chatbot out there. Legora took that insight and asked the question, what if you really built something with that power from the ground up for the legal industry? So the founders did exactly what great founders do, operate with obsessive customer focus. They embedded inside a massive law firm.

3:18for months. They sat with the lawyers just watching how the work really gets done. And that's how you get features that customers love, like tabular review, where you drop in a folder of hundreds of contracts and it pulls every key term into a grid a lawyer can actually work with. Lagores Bed here is interesting. Since it lets each lawyer handle more complexity, any given person can increase the quality of their work and do higher value work. And this means that the pie can grow even as each individual task takes less time.

3:47And they recently launched LaGora agent offering greater intelligence and performance. The agent lets lawyers set an objective. Then it can handle the planning and the execution and delivery of the final product. Legal teams get to maintain full control and transparency since they're still involved where judgment is required. And LaGora works where you already work. You can use it within Microsoft Word while redlining or drafting. The early LaGora numbers essentially speak for themselves when they have a head-to-head pilot with their top competitor they win 70% of the time. Legora now has over a hundred thousand lawyers on the platform from 1200 legal teams in 50 countries and crazily they went from one million to a hundred million in ARR in about 18 months. Truly insane numbers and that is the real test.

4:40Plenty of things demo well, but the question is whether a busy associate actually reaches for it during crunch time, or whether a partner trusts it before going into a conversation with a major client. If your legal team wants to check it out, whether you're a law firm or you're in-house at a company, you can learn more at logora.com slash acquired, and just tell them that Ben and David sent you. David, do you want to take us through the acquisition and history and facts? Yeah, as always.

5:08So as Ben alluded to, we're going to try and focus mostly on that HP side of the story with Michelle because much ink has been spilled about the Opsware side. And if you haven't...

5:20heard about Opsware, we totally recommend reading the hard thing about hard things by Ben. It is such a great book and there's also a really great sort of period piece that Wired did in August 2000 right before the tech bubble burst. All about the company and about Ben and Mark Andreessen and this being Mark's sort of second act after Netscape. So we'll link to that in the show notes and that provides a really good full history of Opsware.

5:49But to sort of set the stage, I'm going to take five minutes and do a quick, truncated history, just so we're all on the same page and can then dive in with Michelle about how HP viewed things.

6:03So, the company that ultimately became Opsware was founded as a different company called Loud Cloud, and it was started in September 1999 by Ford people, Mark Andreessen, who had been the co-founder and CEO of Netscape, and was famously the Internet's Golden Boy on the cover of Time Magazine among many other press outlets, and Ben Horowitz, who was the CEO of Loud Cloud, and Ben had been a PM for Mark at Netscape, and two other folks, Tim Howes. Howes was the CTO of Netscape's server division, and he was a total expert in internet infrastructure and plumbing. He created LDAP, the lightweight directory access protocol, which if you use any internal company directory service or log-on service these days, it's probably

7:00based on that. Pretty amazing. And then the fourth person was a guy named Sick Re and Sick. I believe had briefly been part of Netscape, but when Netscape got acquired by AOL, he was CTO of the e-commerce platform division within AOL. So that was the division.

7:20And this becomes important for a loud cloud that when companies back in the day, did deals with AOL to be part of the sort of walled garden and sell things on via e-commerce through AOL, they needed to spin up sort of microsites to do that quickly and re-was kind of in charge of helping them, helping Nike or whatnot do that at AOL. And so the idea for what Loud cloud would be it actually comes from sick from re and and the idea was basically that it would be AWS before AWS it was going to be an infrastructure as a service product and the idea was that just like these companies who didn't have software developers or internet infrastructure teams you know like Nike or

8:08LLB, or whomever, needed to spin up websites to sell on AOL. They would also need to do that on the broader internet. And why would they go build their own teams to do this? They should just use a service to do the infrastructure for them. And that was both David. That was the human power as a service, as well as the actual servers as a service, right?

8:33Well, I think it was mostly the servers as a service. Remember, the idea of the cloud doesn't really exist in these days. If you wanted to build a website, the first thing you had to do was go buy a bunch of servers and stick them in a closet somewhere. That's what Loud Cloud was designed to be your virtual servers. By the way, that is why they partnered with that.

8:58EDS. So later there's a big transaction they did with those guys and that was for the managed service offering. So Ops were sold. They WS element and they partner with EDS to provide a full managed service. And that'll be a chapter in the later element. There's two to come. But there's this there's this great Mark Andreessen quote from the first press briefing that they do about the company when they're and there's so much buzz around this company before they even launch because these are obviously sort of early the first generation of tech celebrities and this is their second act and the quote from Mark is that it's like providing the electric power grid and companies can plug in and I just thought this was so awesome because we'll also link in the show notes when Jeff Bezos

9:43launches AWS later in the mid 2000s. He goes and he talks at Y combinator and he uses this exact analogy for AWS. So he's literally, I didn't realize this. I don't know if Jeff realized this if he came up with it independently or not, but he is literally using the same analogy that Andreessen used when he was launching Loud Cloud. Wow. And so Michelle, I mean, we'll get into this in tech themes, but Clearly, AWS huge successful business right now, loud cloud, not a huge successful business, then obviously timing is the issue, but what was it about the timing? Well, I think, look at the readiness of the internet for enterprise cloud adoption. I mean, the reason to me, Bezos is so successful today is one.

10:29development is so much more pervasive. So the number of people who could leverage AWS has exploded. Number two, the cost of starting a company has gone to zero. So the number of targets who would be leveraging something like AWS is so much greater now. And three, I think security privacy have evolved enough that companies are actually willing to build. So the number of target enterprises, your deal size, all of these elements around go to market have finally matured to where AWS the US is not an idea. It's a business. There's another really big piece of this, which is that the whole concept of virtualization, server virtualization, didn't really exist yet. It's sort of existed. The company VMware, which listeners may or may not be familiar with, but it's one of the largest enterprise software and infrastructure companies in the world. It's majority owned by EMC these days.

11:27what they do, they created a product that was just starting to take off around this time, but wasn't widely used, that essentially let you take physical server machines and slice them up into multiple virtual machines. So one box could serve multiple customers essentially. And that was a big key for making something like AWS work because without that you needed essentially a separate box for everybody.

11:55And that was not yet a paradigm that existed in these days. Yeah, it feels like that would hamstring Amazon these days. I don't know. Well, you know, now we're on the containers, right? That whole technology is emerged. By the way, you know, on our side, when we were doing the deal, virtualization is a key reason why HP needed to buyops were. So it's not really just about, you know, do you need virtualization to be able to run an effective, you know, AWS offering? It's what what problem does that create NIT? And so one of the central reasons to me for Optsware's growth is that as virtualization exploded in the IT infrastructure, the old human way of managing servers and networks and storage couldn't scale. And so one of the single biggest reasons for their success was the exponential growth and complexity that virtualization drove in IT. So if you look at Optsware's

12:48As it went from Loud Cloud later to become Opsware, it's growth from whatever $410 million to $80 or $100 million in its exit. Virtualization was the technology that drove the majority of their market opportunity. It was a big factor in our belief that we needed to be and own the technology. That this was a key control point in the future of how IT was going to work.

13:16We'll come right back to that. But for the in the meantime, this isn't really what what Loud Cloud is trying to do. They're trying to be AWS and there's so much hype and We'll just run through really quickly sort of the corporate timeline. And fortunately, Ben Horowitz himself made a nice little truncated version in a blog post that we'll also link to in the show notes. But this is 90s bubble era internet at its finest. So November 99.

13:48Before launching the product, Loud Cloud raises $21 million at a $45 million pre-money valuation, and Andy Rackliffe at Benchmark led that round. January 2000, so just a couple months later, they raised another $45 million in debt from Morgan Stanley of all places. They haven't even launched a product yet. A few months after that, June of 2000, they raise $120 million at a $700 million pre-money valuation. And then things go start to go a little rocky. But nonetheless, the company sort of...

14:24Perseverance, they do end up going public in March of 2001. They list on the NASDAQ. They raise another $160 million. But the valuation goes down from the last private round. Echoes of this happening again today. So they have about a $480 million market cap. And then the whole world just blows up the tech world. And all of the customers for a loud cloud were these pets.com era startups. And they just go out of business. And so there's essentially no business left for LoudCloud for the AWS managed service product. So in August of 2002, as Michelle was alluding to, they sell that business to EDS, which is Ross Perot's software company. What does EDS stand for? Is it electronic data service? I think it's electronic data systems. They sell that for just over $60 million.

15:21but that's the whole business. There is no other business within the company and Ben writes about this at length in the book. But what they do have is this technology, this internal tool that they'd created called Opsware and Tim Howes, the guy who invented LDAP previously at Netscape. He had created this tool within Loud Cloud that was basically an automated way to provision and then deploy and manage all the servers that they had in their data centers. And they sort of have this idea that like, okay, loud cloud isn't working at all. Let's get rid of it. We have this tool. We use it. We think it's great. Maybe other customers who have big data centers would want to use this. So they essentially completely pivot as a public company after the tech bubble burst. And they start down this journey to build an enterprise software company selling

16:17data center technology. Michelle's shaking her head over there. What's going through your head right now? Well, I mean, that's an almost impossible task. I was hearing it read about, you know, I obviously got to know Ben much later in his life, but you know, it's hard enough to build. So think about how hard it is to build shrink wrap software that you're going to sell and install at a customer when you know you're going to do it.

16:42And this is before SAS, right? So his stuff was all on prem. And they had to take basically tooling that was built for internal ops people to manage customer environments and turn it into a shrink wrap product. And so you just think about the usability of stuff you would build for internal use versus the UI for customers. And level of complexity you tolerate. And so just the amount of heroic effort that it must have taken to get that product to be a real product, I think, pretty huge. On the flip side, if you think about it, they built something that was ahead of its time because their business was so complex.

17:22to my earlier point, as enterprises start to adopt virtualization, they start needing something that looks very much like what they built for their own internal management. So, you know, is it crazy or genius, I don't know, but talk about, and I can't even imagine doing that public. Like, that would be incredibly hard as a pivot, if you're, you know, a private venture backed company, never mind, you're on the stock exchange. Right. Yeah. So just for context, or you go ahead, Ben.

17:51Yeah, I mean, we'll get into tech themes later, but thinking about my job all day and working on an early stage idea and doing customer validation, you have to always find a proxy for your customer and figure out, would someone use this, is this feature useful? Try and get inside their head and be into it what the customer might want. But Michelle, you said on the flip side, they were their own customer and they were yours ahead, so they were kind of building something that was going to be valuable a few years in the future once all that does settled with absolute perfect information on what the necessary components of the thing were. The perfect scenario there is they had the persona 100% right. They were building tooling for server admins who were needing to manage environments at scale with multiple applications in there. That's the way IT began to look five years after they started selling that software. So you're dead right. Probably their biggest advantage was they were ahead in the kind of software.

18:53where operation they were building. And they had the persona 1,000% dialed in because they had lived that pain all day, every day trying to run that service offering. So with the challenges came huge advantages that they were able to parlay into an incredible software company. And I'm wondering, given that you both saw this when you acquired the company from the outside, but now you're a founder and CEO of an enterprise company.

19:21I mean, when you founded User Mind in 2013, how long did it take you and how long did you work on building the product before you felt that it was ready to ship for customers? You knew the customer persona when you started, but just so we have context and our listeners have context, how hard is this task? Oh, it's really hard. I mean, we spent four months interviewing. So for me, just to...

19:46think about and define the persona, the use cases, the product, four months of interviews, probably 300 interviews just to kind of get to a set of requirements. And then we went through multiple iterations. So probably it took us two and a half years to go from an alpha or prototype alpha beta to launch the software publicly and begin selling it. And you know, look, necessities, the mother of invention. So they had to do what they were doing or fail. And I'm sure that was, you know, that gritty determination was another, you know, big part of their later success. But that's a pretty hard turn to make, right? To take that software and figure out how to package it up. And I would imagine a lot of their challenges were UI-related, right? Where how do we now expose this tremendous tooling and IP into an application, right, that users can use who are not-opsware employees?

20:40And oddly enough, by the way, I never really talked to Ben about that part of their history. And I didn't never spend a lot of time talking about this particular moment in time. Well, what's funny is, you know, you'd imagine, I think if I went through this, I'd probably never want to talk about it again. But Ben went and wrote a whole book about it. Yeah. Yeah. Thank God. Right? Yeah. I mean, I feel like he's the first, not investor, but first CEO who essentially exposed the myth that it's all perfect all the time.

21:09and kind of gave I think CEOs and leaders permission to talk about all of the hard things, right, that really make, or what he calls the struggle. I remember when I was going to found that he told me, you know, your hardest challenge is going to be managing your own psychology. And it's he's, you know, dead right. And to me, his book gives people permission to talk about what that's really like. Yeah, I never, I never attribute it to that, but you're right. The last few years, it does seem like the climate of OK-ness to talk about these things is dramatically increased. Yeah.

21:38I think he was a big part of it. I don't remember. And I wasn't an entrepreneur. Ben is the person who changed my life and kind of got me out of Mercury and into startups. But I think, at least in my mind, that permission from someone like him to talk about the truth. It's a great gift. You met to Mercury just for context for our listeners.

22:03The way you came to HP was you had been at Mercury Interactive, right? Which HP had acquired shortly before the Observer acquisition. Yeah, I'm sad day. Sad day when HP acquired Mercury. Yeah, I love Mercury. I mean, we weren't looking to be all acquisitions are hard on all sides. All right, listeners. Now is a great time to tell you about a longtime friend of the show, Vanta. AI has scrambled the whole security picture.

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23:25Which is exactly why more than 16,000 companies today run on Vanta companies like ramp cursor and snowflake all stay audit ready and catch the risks that crop up between audits across every vendor every AI tool the whole environment and that's the real value.

23:44Trust has to be continuous now, which is why Vanta automates your security, your compliance, and the work to earn and prove trust. We're huge fans of Vanta over here and literally hundreds of acquired listeners have become Vanta customers at their companies over the years. So you can get $1,000 off Vanta at Vanta.com slash acquired. That's V-A-N-T-A dot com slash acquired for $1,000 off and just tell them that Ben and David sent you. So what was Mercury and how did you come there and what ended up being the fit that you saw between whatopsware became and Mercury? Yeah, well, so one, so I was at Mercury for almost eight years. I was originally in the pre-sales organization, so I was in for people who don't know, it's like technical sales, right? You're going out installing software and you're kind of the technical half of the selling motion in an enterprise software company.

24:36And I joined Mercury, probably about 200 people, or 250 employees. And I stayed through 3,000 through almost a billion in revenue. So it was an incredible experience. I bet. Really amazing. Yeah. And I spent half my time there in the field in New England. And in fact, started out really just POC-ing and selling technology. And I was very blessed as the company scaled. I ended up owning more strategic accounts from a technical presale perspective. And so when you're selling to GE or Fidelity, they'll say, no, we want a three year roadmap with Mercury. We want to talk about how to partner strategically. And so I started to work very closely with the product organization and eventually moved out to the California and took my first product role. And I was very blessed. So I was the second product manager of a product called Load Runner, which when I took over that product was already a $250 million business. It had 65% market share. Customers loved it. The product worked. And so I learned product management or how to think about product strategy.

25:34you know, taking over it and like an incredibly successful business. And so I was given such freedom to put it in tele sales, put it in partners, innovate on the product. And I can't imagine a better school of product management. And I, you know, rotated around, I basically managed all pieces of the testing business. And then when we got acquired by HP, my boss called me and said, Hey, you know, there's this really broken business. So this is now the time when virtualization is just exploding in the enterprise. Opswars probably is the market leader in data center automation competing with Blade Logic at IBM. HP had a business. This is kind of five years after the pivot. And as you said, in 2007 now virtualization is finally a thing.

26:19It is. When you look at that, what that really means is that all these human methods, the manual ways of now automating data center management end-to-end start.

26:31you know, to break down, essentially. You can't scale human beings indefinitely. And so there's this incredible froth and excitement over this automation market. And H.P. had acquired a couple companies. They acquired a company called Radia. They had acquired a company, which did, you know, serve kind of like Opsware Server Automation, but they did client desktop management as well. And they'd acquired a storage product called App IQ. But really, You know, after spending probably $100 million, having 200 engineers on this problem, we're fifth in the market. And so, you know, you've all said to me, my boss, the head of products at Mercury said, hey, you know, there's a lot of heat in the sales organization about this, customers want a solution from HP and we're losing a lot of deals. You know, you're kind of my glass breaker, you want to go in there and figure it out. And it'll be a great opportunity for you, a great exposure. And so that's kind of how I got in a position where

27:25I needed to think through a strategy which ultimately led to acquiring optsware. Yeah, did you, I might be skipping ahead here a little bit and then David could take us back but this imperfect yet for how did you do that build versus buy? How did you do that calculation? How is that done in a company like that? Yeah, you know, this is kind of interesting. So I took over the grid to do it, took over the business and two weeks later we had this.

27:47I don't even know what we call it, quarterly business review, KBR. And I'm supposed to be updating, you know, the head of software, Tom Hogan and Deb and Yvall, kind of all the execs of software on our strategy. And I don't, I just took over, like, I don't know what our strategy is.

28:01And so I just kind of went back to first principles. And so to me, first principles are what I users want to do and what's happening in the market. And so I kind of interviewed everybody in the team and I talked with the analysts and I got some basic data. And the math to me was incredibly clear. So when I looked at it, we had 200 engineers on something where we were generating whatever, 20 million in revenue. We're fifth in the market.

28:26And when I looked at the first three players, so to me, there's either emerging markets or consolidating markets. And it's important to know what market you're in. And when I looked at that, I thought, well, gosh, between Opswear, Market Leader, Blade Logic, Second Player, IBM, who'd done an acquisition, 80% of the market is in the hands of three vendors. Well, that's not an emerging market. That's a consolidating market. And so that's kind of question one is where are we at in the market evolution?

28:52And question two is who are we as a company? And there are companies who can disrupt a market that's consolidated. I mean, Mercury could have done it if we wanted to. But my point of view is that HP at the time and still, by the way, probably is, is a channel company. And what they really have is just like IBM is an incredible channel. And what they're great at is selling good software to companies who trust them and delivering it. And what they're not good at is building new things from scratch.

29:21And so the second part of my calculus was, you know, Sonsu says, you know, if you know yourself and you know the enemy, you'll be victorious in a thousand battles. We have big fans of Sonsu on this podcast. I'm a huge fan. And so my second rationale was in a consolidated market, there is no path for a company like HP to build its way to victory. So you're only left with buy or exit the market. And you think if it was an emerging market, then HP would have had a chance at building their own, but still would be typically worse than a startup. It would have been almost impossible for that to happen. But yes, I mean, in theory, we could have had a chance. And you probably would have taken a different strategy in that context, right? But so that, I mean, I actually was given a very simple problem. There was nothing really complex about answering that question. I mean, there's more to it, but that's essentially the math. And so, and you know, and

30:16Even more, if you looked at it in the context of the whole portfolio, why would you invest so much engineering for so little return? Because the other part about software, which we all understand in valuation, is that the only players that make any money are the number one or number two player in the market. So even if there was a path for HP to become from five to four or take out IBM and five to three, profitability goes to the winner.

30:43And so you lose money and definitely on a software business unless you become the dominant player and then you make insane profit. And to me, if there's no path to number one or number two for you based on who you are.

30:56you know, that's really why you need to look at a buy solution. And so that was really, I think I presented five slides. It was very concrete. I probably, I also, by the way, spent a bunch of time interviewing salespeople and trying to understand how important this was, meaning, you know, how often was it coming up in deals? What was the channel relevance? Because the other piece of it is if we did a deal.

31:18can we monetize? Are we talking to the people who'd buy it? Do we feel like we could have gotten that money that went to Opsware IBM? And that was maybe the last piece of the calculus was the channel that was very high. So HP at the time had many brands open view being one of the most famous ones that we were selling to the operations teams. So we had a very experienced channel selling to the same buyer.

31:41that would be buying elsewhere or buying Blade Logic. And when you really step back and look at that math, it's pretty obvious that it has to be an M&A scenario or you should shut the business down. So that was phase one. But you probably did enough calculus on what does this market look like in five or 10 years where it was like, we can't afford to not play in this market? Yeah, I mean, that's all the obvious math. Yeah, I guess that was implied in my head. I mean, I think probably if that didn't make sense, HP wouldn't have already been in this space. So maybe that's why I didn't reference it. You know, I think it was for the future of the data center, right? I mean, virtualization is now.

32:21I mean, I don't know that there's any data center probably in the world that doesn't at least have some degree of virtualization now. Oh, yeah. Oh, and by the way, now it's become containerization. So if you had won this battle in theory, you have a very strategic control point. So to me, that goes to the, now you're in the second question, which is, okay, if it's either go by the winner or shut your business down.

32:41You've asked the next question, which is, is this strategic land? Do we have to own this land? Is it a strategic control point to owning the future disruption of the enterprise, or does it, is a strategic to my buyer, to the point where, if I don't have this, I undermine other businesses, and you've kind of... And the buyer being the end customer here, the business... This is IT operations person, yeah.

33:02And so you guys have already made the argument. It's pretty clear that our actual Uber theory at the time was that for IT operations folks, automation and monitoring were ultimately converged.

33:13And so the winning vendor for IT operations wasn't just the winning vendor who had HP OpenView, but it was the one who had the best automation and the best monitoring. And when you think about it at that level, by the way, then your competitors are very few people. You're competing with HP and with a BMC and CA. And so the number of people who could actually, if that's really the winning strategy and IT operations, how many people are positioned well to compete with us? And so we really thought that if we did this deal, us and BMC competing to dominate IT operations. And in light of that, you can see why the buy decision became very clear that we felt it was strategic land, not just because of the immediate opportunity around virtualization.

34:00kind of the core automation problem, but our hypothesis that it would become a converged solution, and that that would actually strengthen our already dominant open view business, right? And that it would be a one plus one is three.

34:15in the broader IT operations business. So you can see what drove from our point of view, we called it a coveted asset. We felt that Opsware would be not just bringing the Opsware business, but it would be affecting a much larger existing business within HP. Yeah, so you do end up buying it in July 2007 for $1.6 billion.

34:38And after the pivot five years earlier, in the public markets, the public market pivot, What then became Opsware was trading for $28 million market cap, which was $40 million less than the amount of cash that they had in the bank. So they had $60 million, there's $70 million of cash in the bank, and they're trading for $28 million. So five years later, incredible turnaround and achieve an exit that's 50 times that. What was it like after you bought them, though. I mean, from an integration process and a culture, I mean, this was a team that had been through the fire twice. And now the coverage. Absolutely. I want to know that. And Michelle, one thing I've really been like, with holding back from asking is, okay, so you make this presentation and it's five slides and you can make the decision like, what logistically happens after that? Like you shoot an email to like,

35:40you know, Ben at Opsware, like, how does that happen? Yeah, yeah. So there's actually two interesting things that happens if you don't mind before we get to the integration. So the process, obviously the executives have to kind of come to some consensus that they agree to that. And there was, you know, quite a lot of discussion.

35:59that I wasn't part of, but where the head of software talked to his head of sales and so kind of validating, hey, this is important. You know, hey, we're seeing them in all the deals. So, you know, the executives needed to go and both think about it as well as kind of validate the data I put forward to them about how important this was going to be. So, you know, it took some time for us to get kind of organizational alignment on the state of the market and, you know, how key this could be. And, you know, honestly, that was There was not that controversial. I think, you know, it's really clear that we needed something that customers wanted us to have a product. The interesting discussion was then, who do you buy? So kind of before you get to the buying ops where there was an alternate, you know, a vendor and so we played logic, right? Yeah, so it's BMC. Did buy.

36:46which BMC did by right so you know the interesting thing about that is you know you don't email so what happened is someone from CorpDev was assigned to us right so Sandeep a jewelry at the time was running corporate development and he he kind of took ownership of the project on the CorpDev side and I wasn't you know actually that involved in that Not in that piece of it, but I wasn't on all the email chains where they're emailing Ben. I was in most of the meetings. I did all the technical dediligents. So you kind of start these threads and we ran our threads in parallel. So we were talking to both ops were blade logic. And that involved financial dediligents, customer reviews, technical diligence was pretty fascinating. In fact, once we had decided our vendor, I was actually on site.

37:33We were on site during their sales kickoff, which was a little known fact. And I, in fact, couldn't leave the room. So everybody else is allowed to leave. But there were so many mercury people at Opsware that people were worried that if I left, everyone would know who I was. So there was quite a lot of drama to that. But look, the net of, you know, why YHP versus, or YOPS versus Blade Logic, you know, to me, it boiled down to what do you need to buy and how many acquisitions can we execute?

38:02there's kind of a little known wrinkle here, which is while they started as a server automation company, that was the loud cloud heritage. Ben's vision was to automate the entire data center, so they did acquisitions to acquire.

38:15a runbook automation technology from a company called Iconclude that was based in Seattle actually. And they bought a network automation company, actually believe that one was based in Seattle as well. So they made a couple acquisitions to extend their product line from server automation to what they call data center automation.

38:32And our theory was actually slightly bigger than that is we felt that what customers wanted to do was deploy services end-to-end. And so the winning vendor would be executing a product strategy to bring, you know, desktop, server network, storage, all of the automation elements into a suite to automate application deployment so that, you know, servers on some level are just one tiny piece of an end-to-end IT service. So that was the strategy we were executing.

38:58And when you look at that, we had a client product already at HP, and we had a storage product from these acquisitions we had. And so really what, you know, there was a lot of differences from a market share perspective. Clearly, Observer was ahead of Blade Logic. And that's very attractive. You kind of de facto always want to buy the market leader. However, at the time Blade Logic had a better product than Observer. So that is the downside of this kind of loud cloud.

39:26And I would say better product in the sense of usability. So where they lost deals, it was on usability. Where they won deals, it was an enterprise scale. So there were product implications to this kind of pivot that they did. And this is, I don't know, to preview tech themes a little bit. I mean, this is something that for listeners that aren't as familiar with enterprise technology, you know, it's just such a hard thing initially to get your mind around. Steve Jobs talked about this that like in the enterprise, It's not always the best product that wins. You know, Opsware was the market leader, but as you're saying, they didn't have the best product. They had the best sales motion. Yeah. Well, and at least in server automation. So, you know, their strategy was to basically move to the suite motion. So, they had the best suite. Blade Logic did not have other products. They had partnerships to solve that problem. So, you know, if Opsware could, you know, could move the buying criteria to being data center automation, they won.

40:21Because it isn't just head to head product to product so You know our assessment was number one We wanted to buy the market leader and that having the you know first mover in our channel best best current position in what we thought was one of the best channels in the world is the best combination, but the second piece of math for us was that if we had gone after a blade logic, we would have had to do three additional acquisitions. And we felt that the risk, even though if it would have been cheaper, we thought that actually the likelihood of our ability to successfully acquire four companies was significantly less than one. And if you look at big companies buying small companies,

41:05In many cases, the medium-sized ones do the best. They're big enough that... they can be put in the channel and it works. And in many cases, these little technology tokens, you know, a $10 million acquisitions harder to make work than a billion dollar acquisition, because there's not critical mass of people and ideas to teach the rest of the company how to sell. So the two pieces for us on Opswear were, I guess, three strategic alignment. They had the full suite. They were the market leader. And even if they had some product efficiencies, we felt that we were much more likely to be able to execute that successfully.

41:39then Blade Logic plus three others. And so that's kind of the math that led to the end of us saying, you know, our preference, our top partner, you know, our top target would be optsware versus Blade Logic. And you know, we continue talking about Blade Logic to the end. So if we had lost optsware to BFC or to whomever, you know, we would have had a fallback plan, but we had a clear preference and paid a premium for it, frankly. So now I want to jump to the to the culture and the people piece now. I mean, that all makes, that is bullet proof logic there. But, you know, you read hard thing about hard things, are you listening to Ben or you look at Andrews and Horowitz and, you know, the first thing that comes to mind is not, you know, HP. What was it like, you know, integrating this team? Well, you know, interesting. So, you know, one, if you've read the book, Ben has a management technique called Freaky Friday. So, I thought, hey, I'm going to run the integration and they're just going to give me some special projects and send me off in the sunset.

42:39you know, I didn't expect to have a product ownership at that point. So Ben actually swapped me and his had a product at the time, Eric Vishria. So Eric took over ITSM. Eric is now a benchmark capital as a VC and founded his own company kind of in between his stinted HP and that and big joining benchmark. But Eric joined the ITSM team and took it over. And Frank Chen, who was the product management half of that partnership. And as now it has moved into engineering to help under Jason Rosenthal, who was the head of engineering there at the time. And so Ben gave me product.

43:20And that was incredible. So he calls it freaky Friday where he swaps executives. Oh, I like that. Like the Jamie Lee Curtis movie. Yeah. That's what's one of his management techniques that he wrote about. And I think so and then and I worked directly for him. So that was pretty amazing as an as an opportunity and experience.

43:37I think a part of why it worked is that I was an HP. So, you know, I was a Mercury person where the DNA is much closer to Opswear. You know, many, many by the way, like that silly sales kickoff story, there were many Mercury people at HP. You know, Mercury was a very Israeli company, very, very aggressive, very direct. You know, we were...

43:55you know, very customer focused and winning was incredibly important. So a lot of external values that I think mapped really closely to the ops were teams. So I think one piece of it was, you know, he put someone in charge of the integration who had the same cultural values as his own team and I think that made things easier. But, you know, for sure there's culture friction. I mean, you know, as an example, we're going through the integration, the formal integration process. And I remember being on the phone with the IT organization and the IT organization is insisting that we have to shut down all these non-approved apps that Opsware has. And one of the non-approved apps, I'll give you two that are just outrageous. One of them happened to be the license key generator for all of the Opsware software. And we had to shut it off at the time of acquisition, of course.

44:42to IT and I'm like, someone helped me understand why we would spend $1.6 billion and then basically be unable to sell and turn on any of them. You know, or the other one was they wanted. And it was no like grace period of like we should spin up something else. Day one. So you know, you're in this like, you know, six month, whatever it was for a month. I don't even remember. It was kind of like dog years. You're in this integration, which is super intense, but you have this deadline. And you know, IT had very strict objectives. I mean, Mark Hurd was running HP at the time. So it was Mark Hurd's HP. Second, you know, they had a source control standard within the company. And of course, they were like, well, you don't have to migrate all the source control in source code into this new and like as you get up. Yeah. And as you know, like, you know, in that.

45:27in that time, that was just almost impossible. So there was a lot of these weird operational hurdles that I wouldn't have anticipated. That's a whole class of problem that you have to deal with. Again, I feel like I was very lucky because I was kind of a liaison between, I probably absorbed a lot of that weird cultural friction for those guys in that sense, at least during the integration. And actually at the time Scott Cooper was my partner on the opposite side. So he's now the, I guess, COO, running all the operating arm of Andrews and Horowitz. And he was a great partner on the opposite side.

46:03I found for me working with them was very easy and a lot of my job was basically trying to prevent the big mechanism of HP from, you know, making unnatural things happen. But, you know, once we had them integrated, I think, you know, then there was a lot more interesting. So, you kind of get this middle period where you're dealing with all the...

46:26organizational, administrative, that's frustrating. You know, I think one thing we did well in that period was we took market share. So we kind of, you know, really sold the heck out of optsware in that period and gained a pretty good advantage over blade logic because of the time, you know, BMC hadn't yet announced their deal with blade. And then, you know, as we formally integrated them, we had all of the challenges you can imagine. So the software, the sales organization, you start to break up the teams, right? So instead of being optsware, now, engineering's part of Ben's organization. So Ben took over products and engineering for HP software. And so, you know, on some level, that's a little safe. You know, the sales organization got put under some of the sales leaders as overlays. And to be honest, that's an area where if I look back, gosh, I wish we had done a better job. So, you know, the good news is we had these experts, these black belts, and an obstacle was global. So we immediately got traction globally. But, you know, overlays are a hard thing to make work. And I feel like, you know,

47:24And you say, you say overlays as in there is HP management on top of each of those, sorry, not the unclear sales overlays. So, so generally speaking, when you, you know, put a new product that's hard to sell, there's a lot of IP and how to sell it. And so you take these sales organization of Opsware and who used to just sell Opsware and now they're basically what we call overlays, they work with the HP people because the HP people already own all those accounts and they sell this use portfolio software, but they don't know.

47:53know, optsware. So you have this kind of digestion period where you're having, you're trying to disseminate the expertise of the acquired company into your sales organization. And eventually you want the motion to be that it's fully absorbed and everybody's fully trained and you can sell. But, you know, that's the biggest question is how do you train and enable that sales organization to be even half as effective as an optsware person was in, you know, objections and challenges and competitive landscape and so forth. And so that presents just as a whole own set of challenges. I'm sorry. Oh, I was going to say, I think this is a, this is a big thing for listeners to understand, you know, when it's easy to look at this from the outside and say, you know, okay, like each, you know, enterprises about sales channels and sales motions, like, I sort of get what that means. But like, this is it in practice. I mean, the ops where sales team was

48:51a finely tuned machine to sell data center automation and management. But the HP sales team is selling all sorts of things, a whole portfolio of everything you could imagine to CIOs at companies. And so now, Opsware is going to be just a small piece of that portfolio. And so you need the HP sales team to digest that and understand how to sell Opsware best. But it's not just about selling Opsware, it's about selling everything.

49:20yeah so you have a huge enablement challenge and that you know that was I love that you know I ran I ran the product management and product marketing organization for the combined business what we ended up calling BSA so it was business service automation we kind of did away with the DCA term but it was you know phenomenal challenge I mean we did so much training I actually flew in the year after that acquisition I think I flew 350,000 miles worldwide you know, visiting customers, doing deals, trading reps, you know, is pretty phenomenal. And we saw huge growth. You know, it's been a long time for me. It's been a decade. But, you know, I don't, I don't remember. I think, I think by the time I left, we'd see, you know, 350% growth in the business. So from that perspective, you know, talk about a huge, you know, it's at least a huge early down payment of success on your, on your vision of kind of the value of that technology. Yeah.

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51:12because they've spent more than 20 years building the operational backbone of the enterprise. The workflows, governance, approval, security controls, and institutional knowledge that power how work actually gets done across IT, HR, customer service, finance, and security. Service now already runs more than 100.

51:30billion workflows annually, and trillions of transactions for more than 85% of the Fortune 500. So when companies need a place to govern AI at enterprise scale, they're building on a platform at the center of how their business already operates. And in a future that isn't going to be one AI, it's going to be thousands of AI agents working across every function of the company. But the question is, who's managing them all? So if you're trying to turn AI ambition into real business outcomes and make it work safely, securely at scale, Go check out servicenow.com slash acquired and tell them that Ben and David sent you. We've got a format to this show that at some point we'll move here into categorization, but I'm curious looking back on it all where the state of data centers are today and with the rise of cloud services and the major player is being Google, Amazon, Microsoft, or you can make arguments about that, but you don't often hear HP thrown around in there.

52:27What do you think happened in the last decade from the world of, you know, data center automation into business software, business center automation, business service automation into the world that we have today and, you know, why is an HP one of those big three, big four?

52:42Yeah, interesting. Well, I mean, I look at the natural successors of Opsware and I think of companies like Puppet and Chef. And by the way, how fascinating, you know, one's local in Seattle here, but they're both going to be public companies. I don't remember if Puppet already filed, but, you know, it's pretty clear that those companies are on their way. So, you know, the inheritors of the problem in the market opportunity are those companies. And in fact, it'll be very interesting to see, you know, whether you know, dockerization brings a new generation, a third generation, or whether dockerization just accelerates chef and puppet, they're able to capitalize on that motion. But why not HP? Look, it's very hard for big companies to innovate. And here's the reason why innovation number one is a people thing. So you have to have a really high quality of thought. And that's all people.

53:38And at least at the time I was at HP, it was interesting. It was a very, you know, herd had a very manufacturing mindset. And manufacturing companies look at people is very interchangeable. Software companies have this idea of the 10X or where, you know, the 10X developer can do things that no one else can do. And the 10X product person can see things, no one else can see. And it's really true that there isn't a scalableness to the way software works inherently. Like you can't replace Steve Jobs with you know, a hundred other people and get the same work that Steve Jobs did, right? It just doesn't work that way. So, you know, when you look at kind of...

54:12our software organization or a software business. One, you need to retain those top people. And I think big organizations have just an incredibly hard time doing it because of a culture mismatch. You know, my level of patience for the HP culture was very low. And by the way, my culture fit with them was very low. You know, I swear to much for HP, for example. But so you get that like we're DNA mismatch. So that's kind of one big challenge. I think the other big challenge is that Institutionally, you need courage. So actually, I think Mercury is an example. There are big software companies that can innovate and can not have a disruption, destroy their business, but take advantage of it. Maybe chef and puppet will as an example. But Mercury went from zero to 3,000 people, zero to billions. You can do it. And I think the second thing required besides these 10 Xers in your key roles in product and engineering and sales,

55:08is you need the courage to basically bet before the data's obvious. So, you know, Ops was an unusual situation where the product, you know, by the way, their vision was, you know, whatever 10 years ahead of its time released, so timing might have been a problem for them. But the vision's...

55:23dead on and product was close enough that they could go monetize it and they ended up their timing was right on virtualization so talk about the confluence of events you know i think when you're in a big company the second challenge that's really hard is that disruptions often sneak up on you so if you're hp and you own opts where you've won do you really have anyone in the company who can feel that dockers coming and know that existentially dockers a threat to your control or that you know whatever it was um I don't know, I wasn't close enough to the business around the chef and puppet timeframe. Yeah, I actually probably was DevOps, right? So the fact that like development and ops were converging represents an existential threat to your business. So the second challenge a big company has is not only do you have the right person, but that person would see that threat coming and be able to mobilize the leaders to move. And so, you know, how do you, in a big company, you need that

56:18the geniuses, you need them to see far like with almost no data, you need leadership who bet based on that. And that's, I mean, to be honest, you know, most executives in big companies are used to waiting until the entire PowerPoint deck is 50 slides and all the data's there. And the decision's safe. And you have Microsoft and not under Satya, but maybe that's Balmer's Microsoft. And you missed the entire market. And so I think that's.

56:41That's probably why it's not HP and it is puppet because it's much more than the software is the outcome of the people and the process the leadership used, right? And that once that falls apart, it's almost impossible to replicate. Oh, man, I'm just sitting here. This is so good to fit in so perfectly with my tech theme. Should we move along to get there? I do. I definitely want to come back and talk about what it's like now having Ben on your board at User Mind. But let's finish out, I'll first. So acquisition category, for me, this seems pretty clear. It's a product that you bought to put into the HP sales channel. So to me, this is a product acquisition. Yeah, and I've been torn between product and business line. And we sort of define business line as

57:31self-sustaining, independently functioning product that comes with sales and vision that just may not be independently broken out to shareholders as a separate line item, but basically functions as its own independent business. It seems like after hearing you talk and after David asserting product, I'm closer to product now and I'm thinking there's much tighter integration much more quickly, and it was not really an independent business, but would love to hear your thoughts on that. Yeah, no, not really. Ben took over the whole HP software business. He became the head under Tom Hogan of Product and Engineering. We definitely had the Opsware organization separate for a short period of time, but the integration was incredibly rapid. The purpose of that was to inject the DNA into the broader organization.

58:23So, you know, there was a larger transformation happening within HP software at the time, right? You know, the acquisition of Mercury was, I think, the first and then, you know, OpSwear, and they did others after I left, you know, autonomy, not being a great example, but there was a bunch and there was an Uber strategy and overarching strategy there that they were trying to transform the culture and transform the software organization.

58:49The integration strategy was very much driven by this overarching vision that they had about kind of bringing in a bunch of fresh DNA so No, it was not run as a standalone business except for the you know period during the integration when that's required cool Moving to David go for it. Well, I was gonna say then we have what would have happened otherwise I actually I think we probably covered that pretty well with the discussion of BMC and blade logic. Yeah, I have one thing to sort of pause it on that. And Michelle, if you guys had made the decision that you know what, we're not going to buy, we're not going to build, we're just going to be done in this market, would HP be in a significantly different position today? Well, you know, I've been gone so long. It's a very, very hard question to answer.

59:42Look, I think, I mean, I guess if I had been there and the answer was we didn't want to do Opsware or Blade, then I think I would have proposed that we take all the engineers, I would shut down the DCA business and I would have proposed essentially shooting for the next product and taking that engineering team and building a converged automation and monitoring.

1:00:04product with every engineer from the team and basically give up the land for the current iteration and wait for the next disruption and bet that we'd be on time. I don't know if that would have happened or if it would have been successful, but I believe I wouldn't have gone down without a fight. I would have fought for what I thought was the right thing for the company. It's very interesting tech theme where This is, we've seen this multiple times with multiple companies, but when you miss one hill, it really gives you an opportunity to see the world from a different perspective and be better at taking the next hill and be better at targeting exactly what customers want. And there's a little bit of desperation there. I mean, Apple on the iPhone. There's tons of examples of mother of invention. Yep, yep. We miss this war and we miss the battle, but hopefully then we hit the next one. Yeah, I mean, loud cloud into upswear. Yep.

1:01:01Should we jump into tech themes? Yeah, yeah. Ben, you want to kick it off? Well, that was the main one that I wanted to point out, so what do you go for it? Okay. Well, I just loved, I was smiling, grinning ear to ear, Michelle, when you were talking about timing and management, and this is for me what this story just illustrates so well, it's like the absolutely critical role of timing in technology, both consumer and enterprise. Loud Cloud was 100% the right product. It was AWS before AWS, and AWS is one of the probably top three biggest and most important products in technology today, but the timing was wrong. I can't remember where I heard this, but

1:01:58I think Sequoia, the venture capital firm, did a study a number of years ago about what is sort of the most important factor for their investment partners in how the quality of their decision making and the quality of their investments, and they concluded that it was timing. It was getting the timing right in a market. But what I think you said, so that was what I had down as my theme for this episode, but I think what you said, there's more to it than that.

1:02:27And that's that the role of talent in technology, both from a product and a management standpoint, is managing that timing. It would have been so easy at Loud Cloud to say, well, we got the timing wrong, we're done. But what Ben and Mark were able to do was say, we got the timing wrong, but we're going to get the timing right on this other piece of it, and we're going to pivot into that. And I think that's what you know, talking about 10X folks in tech, that's like what it's having that vision and being able to manage timing in a market that's really, you know, what it comes down to. I think both in consumer and enterprise. I mean, yeah, look, I think timing is just, it's the one law you just don't control. You know, I think it's interesting. I think Mark Andreessen talks about it, you know, you know, good market bad team, they do all right, you know, terrible market grade team.

1:03:26You kind of screwed. And so like what Trump's what? you've got, you've got kind of what is the idea good enough, how big is the market, you know, timing and then people. And so I always say like, what's the, what's the why? Why, what's the idea? What problem are you solving? Why? The second question is why now? Why is it inevitable now that this idea should matter or be more relevant or actually be a business? And the third part is where team is and is like, you know, what's the likelihood you have to execute into that?

1:03:56And then it's interesting, you know, I think on the people front, it's, you know, if you go into Ben Horowitz's office within, and Jason, he has people on the wall, pictures of people, and it's scientists on one wall and boxers on the other. And we're both a big boxing fans. But he would summarize it this way, which he says, entrepreneurship is the intersection of intellect and courage. And so I think it's not just seeing that the, that the, thing is happening. It's having the courage to fight for the deal, in the case of an acquisition or fight for the strategy or fight for your life in the company if you're failing. And I think that can't be underestimated is that the level of grit and I call it a little bit of irrationality that's required in that human capital to be successful.

1:04:51Yeah, I mean it was it was that rate that took a a negative equity value public company At the time of the pivot to you know a 1.6 billion dollar acquisition, right? Yeah, I think that it's a great man. There's no question about that and and one of the most genuinely humble and nice people I've ever met in my life, which just is doubly incredible That's awesome. All right, should we grade this?

1:05:18Yeah, yeah, so Michelle we were talking before the show and you said yes indeed I will I will help great so I'm curious You know looking back on this and sort of taking yourself out of the equation. Yeah, you know how to go I would probably give it a B I think we were able to get a huge revenue boost. We essentially accelerated the market dominance of Opsware. I think the reason I wouldn't give it an A is I don't think we saw the strategic long-term vision come to fruition in the way it certainly could have. I think the biggest difference is people. You lose Ben, you lose me, you lose Mark Cranny. Those are the people who would have made that next wave of value creation happen. That's my perspective.

1:06:02Although I guess maybe it's an A plus in the sense that if we hadn't acquired Opsware. Mark and Ben wouldn't have founded injuries. David wouldn't have founded user mind. And I think they've disrupted the valley. So, you know, maybe it's an A, an A from that point of view. David's pulled that card before where the actual financial outcome for the company was something but the goodness for the world was something else. I think David yours. And maybe I meant B from HP's perspective, you know. Yeah. And that is how we grade on the show typically is how good of a decision was it for the acquired decision? Great. And David, I think the time when you pulled that was PayPal Mafia.

1:06:34Yeah, well, and it's like I think it's completely relevant here again. I mean, there is an office where mafia, you know, you talked about Eric at Benchmark and you know, the whole practically the whole Andrews and the Horowitz team or at least the initial team. You know, you and we're sitting here in the in the beautiful user mind office looking out over the the skyline of Seattle. So well, I mean, locally in Seattle, obviously, aptia was their first investment. So that's work.

1:07:03I was there, had a product, and that company has since IPO'd, and you know, setting up to that CEO, Ben had acquired his last company, I conclude. So I mean, there's many more, right? You know, their initial investment in Okta, and you know, now Signal FX, where that's one of the CTOs of Opsware is now the co-founder there, and Karthik Rao, Eric Fishery, as roommate is the CEO, and it just, and it goes on and on and on. Wow. Yeah, it's pretty crazy. Wow.

1:07:33It's totally crazy. Well, I can't argue with those grades. I have far less perfect information, so B sounds great to me. Before we jump into Carvettes, I'm sort of dying to talk about, given all that, what's it like now on the other side of the world where Ben's at Andreessen Horowitz and he's on your board?

1:08:00Well, number one, I mean, Ben, an incredible board member. So taking away user mind and just my personal journey, he's phenomenal. I think their whole philosophy. So now, obviously at AppTi, I was in the leadership team, and I was part of the board meetings and would present to the board. And so I got to see that board. And now I've got my own board.

1:08:21It's really striking to me this thesis that they have, even more broadly than Ben, that operator's former CEOs make better board members. For me, I don't know if that's true broadly because I'm working with Ben, but I feel that Ben's experience as a CEO helps me every day, every week, every month, every board meeting. He's been just incredibly...

1:08:44I mean, I've just been invaluable in my development as a CEO and helping me kind of think about how to grow the company on every level. And you think about board members as being really valuable in the context of a board meeting, reviewing financials and helping you think about when to scale what function and when do you add what executive and how are you doing from a customer attraction point of view? And he's phenomenal there.

1:09:07But, you know, bend to me as as or more valuable to a CEO in your one-on-ones, where I might be talking with him about a management challenge, or how do you run a staff meeting as you grow the company, or, you know, how do you think about different inflection points in your own leadership style, and the way the business is changing, and where do you spend your time, and think about hiring your first exec, you know, how do you do that, and what's what are you looking for?

1:09:30There's so many more ways that a board member adds value to a CEO's both decision making and growth as a CEO than the board meetings. And I found him to be, you know, and part of it is our relationship. I'm sure because I trust him and he knows me very well. But he's just an incredible sounding board with such a wealth of talent. You know, I remember asking him.

1:09:51as an example to share advice. I asked him when I was hiring my first executive, my first non-co-founder executive in the company, kind of like, what's the central thing I'm looking for? And I'll just generalize it because I don't need to talk about the specific role. And his answer was an executive is someone who gives you leverage. I'm like, okay, that's the, actually that is the ultimate truism. So if you're hiring as a CEO, a person, one of the things is they probably know more about their function than you.

1:10:19which means that it's very hard to interview them and know you're slightly the way person. But on the flip side, it also means that if that person joins and doesn't give you instant leverage, you've hired the wrong person. And talk about like, I've never in my entire life heard anyone in like a single word. To steal it so easily. So succinctly articulate how to evaluate.

1:10:38a hire and how to both pre both before hiring them and as they've joined the company. And those, that's just a simple example of like one question I've asked him and the kind of response that I get. So I don't know if that's the type of information you're looking for, but yeah, I feel blessed every day. Hey, I learned something today. So yeah, me too. Well, and it's just, I mean, this is something I've been reflecting on a lot recently.

1:11:05being in venture myself and Ben and I've been doing this together too. Really, this is making the case for as a venture investor, there's this concept of being a company builder and contributing to the building of the company. You called it adding value Michelle, but when I really think like, if you're not doing things like that, then you're then what are you, you're a stock picker, right? And does that even make sense in startups? Like, you can't pick stocks in startups. And if you want to earn returns for your investors in yourself, the only thing that makes sense really is to do, you know, approach this craft like Bendos, you know, and like Eric does at Benchmark and, you know, like many, many good VCs do, which is, you know, there has to be, and for you, I would imagine, that provides a,

1:11:59hugely compelling value why you would want them on your board. Oh yeah, well you know there's so many kind of elements to how you think about your board composition and I think what you're looking for but you know if you can get a person who is you know that level of genius right who can contribute in such a fundamental way to value building you know let's not underestimate when the value of the brand as well. So not just Ben Horowitz, but Andreessen Horowitz. I remember in the early days of the company, engineers would say, I'd be like, why did you take the meeting with us? And they'd say, well, you're an Andreessen Horowitz company. So the brand is also something that helps you build the company and separates you from other startups that helps you be competitive in this war for talent, which is happening all around us in Seattle.

1:12:49And then I think just the particular expertise that that board member brings is something extremely unique. So I did not know Ben was going to leave and start a venture capital firm when he left HP, but it's shaped my life. I mean, he's the person who said to me, you need to go be in a startup. He's why I went to Aptio and joined. And in fact, at the time, he said, you should just found.

1:13:14But I had never worked in a startup. So I wanted to go work for a serial CEO and learn something. And I'm glad I did. I mean, I think it's the right choice for me. I knew the right choice for me. But, you know, he fundamentally shaped my life trajectory. So if I shaped his by kind of changing his trajectory by the acquisition, he's profoundly changed mine. I mean, I wouldn't have done. I'd be a CEO. I wouldn't have thought I would end up in startups. You know, I love product. I'm certainly a product person.

1:13:42And I don't wake up at 23 thinking that's what I was going to do. Well, what a great perspective. Great, great note to wrap this one up on. We do have our last final segment of Carbouts. And actually, this is a really good tee up for mine for the week. Mine is Jimmy Iovine.

1:14:11The record industry executive and co-founder of Beats with Dr. Dre, who he produced as a music producer, was on the Bill Simmons podcast on The Ringer last week. And it's wonderful. And, you know, it's the music industry and the record industry and lots of great stories there from all the artists, from all genres that Jimmy worked with. But he talks about kind of just that what you were talking about, Michelle, and like the sort of courage to go and do his own thing and blaze his own path in the business and he talks about this concept of like having fear and like fear can be sort of paralyzing and for a long time he was paralyzed until he found like this this thing and that was music in the music industry that like the fear kind of motivated him the fear was like you know I

1:15:04I fear that I'm going to miss out if I don't go. If I don't go and I capture this opportunity, he's the analogy of when you're playing baseball and either you're in the outfield and you could think don't hit the ball to me. You could be fearful of it or you could say hit the ball to me because I'm fearful. I'm going to make the play. If it doesn't come to me, I'm not going to make the play. It's an opportunity to succeed rather than an opportunity to fail. Yeah, it's great. I highly recommend.

1:15:33Man, I love the ringer podcast. If you're listening to this show and you're thinking, I've listened to a lot of shows and I've listened to a lot of episodes that have acquired. If there was any that was particularly good where I was pumped up and you felt like I was on my A-game, it's because I listened to Bill Simmons before and I got this voice in my head and I was ready to go. That's your carve out. You can take that one but I also recommend you listen to the ringer podcast.

1:16:01Mine is a software package called Starstacks. It would be overselling to say I've been an amateur photographer. I've enjoyed taking pictures for a long time, and especially I do these big backpacking trips every summer with my dad.

1:16:20this time I decided to carry the extra weight and bring about a two and a half pound tripod out with me and try and do some star photos and so this is super hard and I was bad at it four out of the five nights with either crazy blurry photos or like you know it was cold and the lens fog or the clouds rolled in but one night or I kind of nailed it and the the process is wild you like leave your the the camera out on a tripod, you go to bed, you set an alarm, you wake up in the middle of the night, like three, four hours later, and you go collect it, and you cross your fingers and hope for the best when you imported it all later. And Starstacks is this incredibly cool piece of software on your computer that will take hundreds of long exposure photos that are taken over several hours and overlay them all on top of each other kind of automatically. So you don't have to do it all manually in Photoshop.

1:17:12and really produce some cool star trails. So if anybody's interested, we can link to that from the show notes. And I highly recommend Star Stacks. That's all we've got. Michelle, thank you so much. Where can our listeners find you? Are you on the socials? Yeah, so Michelle Feast or Twitter, we're at User Mind Inc. Both easy ways to meet my acquaintance. We're also on Facebook, obviously, as User Mind and I'm Michelle Feast or pretty much everywhere.

1:17:42socially. Or Michelle, use your mind. You know, if people are out there and you're an early founder and you're terrified, you don't take every meeting because I'm super busy. But I feel like I've only gotten where I've gotten because so many people have helped me. So, you know, easy to get me. And, you know, if I could make time to help folks, I definitely will. Awesome. All right, listeners.

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1:19:02Listeners um Listeners check out the slack acquire.fm and we would love love love review on iTunes So thank you so much. Have a great day. We'll see you next time