David Schneider: Why the Worst VCs are "Seagull VCs" & VC Value Add - Is it Real? | E1200

People buy product for three reasons. They either buy it because it's gonna help them make money, they buy product because it's gonna save them money, or it's gonna keep them off the front page of a newspaper. There are VCs that are seagulls, fly into a meeting, fly into a location, they basically take a shit-

(laughs)

... and they fly away. When you're interviewing potential board members, look for relevant experience, not the fact that they've been on eight other SaaS boards-

Yeah.

... but have they ever done anything themselves?

Ready to go? David, I am so excited for this. I mean, I spoke to so many great mutual friends beforehand. Doug Leone said many wonderful things, which is always wonderful to hear. So thank you so much for joining me today.

Oh, it's absolutely great to be here. I've been listening to the podcast and I feel like, uh, listening to your podcast was part of my education in becoming a better investor. So, uh, thank you for doing what you're doing and it's just great to be here.

Do you know what? It's the British accent, I get an extra 10 points on the IQ scale just with that. But I'm thrilled that you like it (laughs) . I do wanna start though, 'cause you have literally, I think, the most impressive operating career that I've had on the show, definitely for a long time. So when we look at your operating career, what are the single biggest achievements to you that you say to founders as, "Hey, I did this in my operating career."?

Well, thank you. It, it was a 30-plus year operating career. So in that 30 years, there were some, some tough years and some good years. But the two things that kinda stand out, I spent, uh, almost nine years at a company called Data Domain, where I joined, uh, at $0 in revenue, and by the time I left, we'd gone through an IPO, took it to about a billion dollars, and then we got acquired by EMC in a hostile acquisition in 2009. Whole story about hostile acquisitions, if you ever wanna get into that. Um, and then the next one is I spent, uh, 10 years at ServiceNow, uh, joining Frank Slootman, again, who I had the privilege of working with at Data Domain, um, into that company, which was about 80 million or so in size when I joined. And when I left, it was five billion in revenue and, uh, it felt like the job was well done, uh, to make that happen.

Uh, listen, you, you gave me such a great teaser there. Hostile acquisition? How can I, like, let that go under the rug? Wha- what was that process and what did you learn from it?

Oh, my God. So, um, in fact, w- here we are in London and this is a fun story, is, um, we knew that our business was very valuable, even though in 2009 the stock price went down because the market went down. And at the time, in 2009, there was another company called Network Appliance that had approached Frank Slootman about a potential acquisition. And we were close to them. We knew who they were, we're neighbors, they l- they're down the street. A lot of our early engineering team had worked there before and we did not know EMC and in fact, Joe Tucci, when we reached out to him to get to know him, he was always hidden from us, um, because of various reasons. So in, in '09 we sound- signed a definitive agreement to be acquired by Network Appliance, and it was a, it was a good offer and we had all these integration meetings. And I was actually here in London having dinner on Brick Lane, I know, judgment, okay, with my sales team. And my phone rings and it was, um, basically the news that EMC was, uh, launching a hostile acquisition for our company and outbidding, uh, Network Appliance. Now, we were not allowed to talk to the other company, 'cause in a definitive agreement, all we could do is stay quiet. But we had lots of, uh, interesting emails and texts that came in over the line. And it was apparent to us that they weren't gonna go away. But then NetApp, NetApp responded, uh, EMC takes full-page ads out in the Wall Street Journal, in the local paper, was driving trucks around our office saying, "Can't wait to work with you people at Data Domain." It was, it was, uh ... We were the prettiest girl at the dance for the first time in my life and it was really quite exciting.