Danielle Morrill joined the show to talk about how she’s starting over from zero after the recent acquisition of Mattermark to FullContact where she held the role of CEO and co-founder who walked away with “zero dollars and a job”. We talked through the details of the company, the acquisition process, the deal — which she brokered herself — as well as her outlook on the startup grind and silicon valley today, and what she’s planning to do next.
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I’m a huge fan of yours. We kind of have a history going back to early days, I suppose, Twilio days, 2008 or 2009-ish (I don’t know what year it was, but a long time). So I’ve kind of been a fan of yours, carefully watching your moves on the internet and the different things you’re doing… I’ve always been a huge fan of yours, and I’m just kind of curious where you’re at in life right now?
Thank you for being a fan. I think we did a podcast together about Twilio - it’s gotta be nearly ten years now. So where I’m at right now… I sold Mattermark - my most recent startup that I founded - in December of 2017, and moved to Denver, where the acquiring company is based. I’ve just wrapped up my transition there, and so I’m kind of in an interesting place right now where I don’t have an active project, and depending on who I’m talking to, I’ll say I’m funemployed, or maybe we would call it sabbatical - whatever you wanna call it, but I’m sort of in this interesting in-between place.
How is that different from day-to-day for you? Do you just not take care of yourself, do you not get enough sleep, do you not exercise? What is funemployment, how does sabbatical work out for you?
Yeah, I mean, I’m still figuring that out, to be totally honest. I’m definitely getting more sleep. I think the last 18 months or so, as we were going up to sell the company, I started to focus more on self-care, so fortunately some of those things are a little more in check… But I definitely have more time right now for reading, spending a lot more time with my dog, taking care of life stuff… Stuff you don’t do, like go to the dentist or whatever, just because life gets in the way.
I kind of have this backlog list that I always keep of prioritized life stuff, and right now I’m actually trying to get through a very significant chunk of that backlog. That’s sort of how I’m structuring my days. Then also a significant amount of unstructured time, just like “Hey, I can sit and read all day if I want to”, and that’s also been amazing. But I’m only four weeks in, so that’s what I’ve figured out so far.
I don’t really know what to call it… It’s a weird thing, I guess – I mean, I’m 33, so I don’t really know when that’s an appropriate thing to say, and I’m not like a professor… But I don’t know what else to call it. I’m not planning to work for the rest of 2018.
Wow, there you go. I’ve actually taken a sabbatical myself; it was three months. I was in an interesting position in my life. I didn’t have a ton of responsibilities, although I had enough money in the bank to take a break from things… And if I didn’t take that three months – I just thought about it now, in this conversation with you… In retrospect, I’m not sure if I didn’t do that if I would be here today. Not like alive on earth, but…
…in this moment. That sabbatical provided me enough time to recharge myself, find out who I was, focus on health, focus on relationships, focus on healthy things that rebuilt who I thought I was, and find out who I was, in some cases.
That’s awesome. I’m so glad you did that.
Is that kind of the same for you right now? You’re four weeks in, but maybe that’s your perspective…
Well, I think that identity piece is definitely in there, sort of in the sense of like “What do I wanna spend my time on?” I’m not planning to never work again, obviously, so… There’s just a lot of things going on. I’ve worked on startups for 13 years, and then before that, I had briefly (for like three years) a Fortune 500 gig… But I didn’t go to college, so I think I spent a lot of time feeling like if I stopped working at any point, they’re gonna figure out that I’m not legit, and it’s gonna be really hard for me to be employable again… And I realize that’s probably ridiculous. At a certain point, that’s completely disconnected from the reality of my skills, and self-worth, and all of that… But I think this is the first point where my reality of how I see myself and my actual situation line up, so I feel like I’m not afraid that I can’t get back into something cool, whether it’s starting a company or a gig. And I just took no time off between things, so I’ve just been really running pretty hard for probably too long… So yeah, I think it’s like recovering from that, and figuring out what I wanna do next, whether that’s starting a company, or maybe something totally different.
I can relate to that too, because I myself did not go to college. I’ve been kicking butt for – I’m not sure if it’s 13 years, but definitely a while, a long time; I’ve been going from one thing to another, never really had a serious break other than the three months sabbatical that I mentioned. That’s the only time I’ve ever really – and I don’t even think that was long enough. I think it should have been longer… I really enjoyed that time, and now my wife - at the time my girlfriend - is like “You tricked me”, because I met her when I was on my sabbatical… And I had all the time in the world. I was very chill, didn’t have a lot of things to – “Yeah, whatever…”, really blaze about anything; “Yeah, let’s do it. Come on, let’s go. Let’s go to dinner, whatever…” And obviously, when you get back into the swing of things, you’ve gotta be more regimented, so it’s just like “You tricked me. You tricked me.”
But anyways, I can relate to that, because impostor syndrome creeps in all of us; we have it every second of the day. We’re always, to some degree, winging it. Even if we’re like the most knowledgeable person in the room, we’re still like “I have no idea. I think this should work. Maybe it works… Oh, it worked! Great!” and we sort of get by. And I kind of feel like somebody’s gonna creep up on me one day and realize that I never went to school, I don’t know anything, and I’m just not that smart… I don’t know, they’re gonna find out somehow I’m just not worth it.
I mean, on some level you know, like “No… Actually, look at all that I’ve done and what I’ve created.” You can look at your business, which has progressed so much since the first time we’ve talked… And it’s like, “Oh wait, I did that.” So it’s like, both things can be true at the same time, right? Isn’t that weird? I think it’s very weird.
[07:53] It’s very weird. I think that’s the struggle of being an entrepreneur. This show is not about me, but I’m gonna share a short version of this, because you might identify, as well…
I never thought I’d be an entrepreneur. I just sort of stumbled into it. One day I realized I was kind of good at helping people, and that turned into just like being the person who should lead to make the thing, so that other people can gather around and do the same thing, and make progress in life and help people, and serve value to people. So I just sort of like fell into entrepreneurism, and I think that at some point you’re just like “How did I get here? How am I that person leading?”, and there you are.
I think that happens all the time. I think even if we hadn’t been entrepreneurs, we might have felt that way about our careers at some point, just because I think – it’s like, it happens as this slow progression… But you know, all those decisions that we’re making, they add up to something over time. I’ve been reflecting a lot on just time passing and how it’s really an accumulation of choices.
Before I set off on this next path, whatever it is, it’s like “Okay, what kind of choices do I wanna be responsible for?” is a big question I’ve been asking myself. One thing I’ve been really enjoying is actually not having customers… To your point about helping people, it’s like, that is a wonderful thing and that’s obviously one of the most important things that you think about when you’re building a startup, probably another big one is employees… And the minute that I’m free of that, it’s like “Oh wow, that was actually quite a responsibility”, and it’s really important, so I think there’s something really powerful about – you know, we fell into it, right? So it’s like you don’t even think “Oh man, now I have customers… Who do I want my customers to be?” and then there are these moments to pause and reflect on that… So that’s been something I’ve been contemplating a lot.
I like what you said there about time… I think you said it’s a reflection of choices, or a summary of choices, and it seems like you’re in a position now to make more deliberate choices, right? Every choice is deliberate to some degree, of course, but now you have time to pause and truly examine, like “Is this next step a wise move for me, for my health, for my future, the direction I actually wanna go for happiness?” How do you answer that question every day?
Right now it’s pretty weird. I have this backlog of life things that I wanna do, and I use it to help me deal with guilt. So it’s like, if I feel like I should be “productive”, and I’m putting out little quote marks here with my fingers, then I’ll pick a few things off that list to do, so that at the end of the day I can kind of ask myself “What did I achieve today?” and there’s something on that list.
I feel like part of the meditation and what I’m going through right now is actually letting go of that a little bit more, and it’s a gradual process… I’ve been functioning as a startup executive for most of the time that I’ve been doing startups, maybe 10 of the 13 years, or something… So your life is regimented, like you’ve said before, so I’m having a really hard time becoming unregimented. That’s almost like the challenge that I’m facing, it’s like “How do I not live and die by the calendar? How do I not get up at 6:30 and check the stock market?” There’s all these things that I do that I don’t need to do anymore; they’re like vestiges of a previous lifestyle. So yeah, right now it’s actually about slowly deprogramming that a little bit.
I guess the question is – it’s part of the journey, I’m sure, but will you go back to that lifestyle? Is that something that actually makes you happy?
I don’t think it’s an issue of happy or not happy, I think it’s an issue of goals. It’s like “Does it serve the goals that I’m gonna be setting?” Because I think that that lifestyle, to some extent, was quite successful for me, and those choices, things like getting up early, or living and dying by the calendar, were just necessary for my context… So I think the important question is “What do I wanna be doing day to day?” Let’s assume I start another startup, or take a job, or whatever I decide to do - what’s my day to day gonna look like and how do I craft a cadence of life around that, that isn’t just holdovers, like memories from previous lifestyles? I think that’s why the deprogramming is so important, to get back to almost like a bit more of a blank canvas to design a life.
[12:09] I don’t really think that I would say all those things were necessarily bad; they just accumulate into a lot of responsibility, and if I keep carrying that around on top of whatever else I decide to do, it’s kind of limiting.
If I continue to live the lifestyle I’ve been living as a startup founder, then the most likely thing I’ll do is become a startup founder again, because it will be easy to slot that into the design of that cadence of life. But if I can really clear the canvas, then that opens up a much broader set of possibilities… Because you don’t think of yourself as a painter if you check the stock market at 8:30 in the morning. There’s just storyline stuff that gets messed up there; I might not mean to, but I think it would cause me to maybe limit the possibilities that I would consider… So I’m trying to open up the aperture as wide as I can.
You’re using a photography reference, I like that. That means that you’re letting all the light in, full-on bokeh, shallow depth of field, total focus.
That’s really interesting, what you notice when you can widen that perspective. There’s things that were there, that you were maybe not paying attention to.
What matters to you?
My health is a really big one. I think I gained 50 pounds in total since I started working on startups… Now, part of that is just getting older, and that’s fine; going from being in my early 20’s to my early 30’s… But part of it is not that. Like, probably 10-20 of those pounds are reasonable, and the rest is like “Okay, really? I probably don’t need to be eating such crap.”
That’s sort of a thing, because I feel like that’s the foundation that everything rests on… So part of that is like appearance, and part of it is actual physical health, and it’s all kind of tied together. So that’s a big one, and just something I didn’t prioritize.
My family is a big priority. My sister just had a baby, so it’s my fourth time over – I don’t have any kids, but I’m an aunt four times, and I’m not planning to have kids, so it’s like really important to me to spend time with my sister and with that baby, and kind of just re-engage with my family. That’s actually been a big thing I’ve been doing in the past four weeks - pretty much seeing everybody. So that’s a big one.
And that sense of not – like, you know you’re gonna have regrets; life is about choices, and that means there’s always something else on everything you say yes to, there’s something else you’re probably saying no to… But I think there’s a little bit of like risk reduction or regret mitigation that I can do right now. Very small, simple things like seeing people I care about, and making sure my priorities are maybe a little more long-term focused.
So that’s kind of what I’m thinking about right now, it’s like “Hey, what are the things I’ve put off, where if I don’t change that soon, I’m actually gonna miss out on something permanently?” I’m finding there’s a lot of things like that that are fairly easy to turn around if you just put the focus on them. That’s what I mean, I guess, with the wider aperture, you’re like “Oh wow, I haven’t gone to Seattle in like a year. Wow… How did that year go by?” Things like that.
Right, yeah. You start to reflect… I’m a huge, huge fan of restrospectives. That’s one of the reasons why I fell in love with Agile and Scrum and the whole methodologies of software development - they play out in life, too. I really enjoy the process of getting to the end of a sprint, and I enjoy the demo and delivering, but I so much enjoy the reflection with the team even more… Because it’s like, you can be human, you can talk, you can commune, and you can discuss where things went right, where things went wrong, what you would do differently, and all that stuff. I think to do a self-reflection in that case - I’m a huge fan of doing those things, because it’s such positive dividends to play out from that…
If you don’t look back on what you’ve been doing, you’re just gonna keep making the same mistakes, or never really understand why you did it in the first place, and you just repeat it
I totally agree. And I think even beyond that, I think it’s partly about mistakes, but it’s also about not seeing all the possibilities for the narrative that you have. I think it’s easy to just stay kind of on the narrative line that makes sense… Like, I can see that it will be very plausible for me to announce that I’m becoming a VC of some big firm. That’s sort of like one of the really obvious next things that could happen, right?
[16:13] And I think that it’s very easy to just say “Well, that’s so plausible that when that opportunity comes along, I’m just gonna take it.” And I think the reflection causes you to say “What else might not be so plausible to other people, but for me, when I actually look at it, it’s a really great opportunity, a great idea?”
I feel like I was sort of in that space when I joined Twilio, I was sort of in that space mentally when I started Referrly, which became Mattermark… And so part of it is like to create things, whether it’s your life story, or companies - I think you have to not just play out the narrative other people are expecting from you, because it’s obviously really hard to stick to a narrative that you don’t really feel is your own… So it’s about mistakes, which is looking backwards, but it’s also looking at all the future possibilities and maybe like trying to predict which versions of that future you might be happiest with if you pursue them.
You’re kind of caught in a bunch of yeses sometimes, because you just feel compelled to say yes, because like you said, it’s plausible…
Especially if they’re great opportunities, right? If I offer you a GPC at one of the top ten VC firms, with great returns and so much prestige and all that - if that happened, I think it’d be very hard to say no. There’s so many things going on, but the question is “Why are you saying yes?” You’re about to say yes to something that’s another ten-year commitment. Next time I come out of whatever I do, I’ll probably be 44… So I feel like it’s really important to think about those chunks of time in this really intentional way that I probably honestly was not that intentional in my 20’s, and I got really lucky, I worked with amazing people and all these good things happened… But I think that intentionality is really important.
I like how you said “Why are you saying yes?” People don’t often examine their yeses as much as they examine their no’s.
I totally agree… Oh my gosh, you’re so right.
I mean, I’ve said yes so many times to things, I’m like “Why did I say yes to this again?” Like, here you are, in your yes, doing your yes, and delivering and executing, whether it’s private and personal, or professional and work-related or whatever… You get into the middle of it and you’re like “Um, this was a silly yes. Why did I do this?” and you have regret. You’re like “Jeez, I missed that opportunity” because you didn’t scrutinize it well enough. You could also over-question things too, so let’s not – there’s a balance.
It’s tricky. This is actually one reason I’m really happy that I’m not in the Bay Area right now… And I love the Bay Area. It wasn’t like “Screw the Bay Area, I’m leaving.” I don’t feel that way at all; I love San Francisco. I lived there for ten years, and I’m missing it every day… But the amount of opportunity that’s presented every day is so much, and it’s actually kind of great for me to not be there, because I don’t have to say no constantly; I’m just like a little bit harder to reach, and so certain things make it through the filter, but a lot of stuff just doesn’t.
I think you kind of go through decision-fatigue in an environment like that, of saying yes, saying no… And by the way, I was a CEO, so I was kind of professionally saying no all the time, because there’s just not enough resources to do everything. You can’t give everybody what they want. So it’s kind of actually nice to scope my life down into a size where I can actually say yes without ending up over-committed, if that makes any sense.
Yeah. Well, since you’ve mentioned Mattermark before, just a few minutes ago, and being a CEO, let’s talk about – I would say the part I’d like to focus on maybe is the 18 months, since you’ve mentioned that earlier, too. I’m also learning about your story as we talk through it, so it’s sort of like real-time discovery… But you mentioned there was an 18-month stint there where you were working to sell, so you must have recognized at some point that you needed to… Can you talk a bit about maybe that time, and sort of give me and the rest of the audience a frame of reference to key off of?
[20:02] Yeah, absolutely. Let’s see, we’re at the end of May now… The company was sold – officially, December 22nd was the close date, so we closed just before the calendar year ended… So I guess the 18 months includes the six months of transition time, but if you look at the beginning of 2017, that’s kind of where we kind of reached a point of making some decisions. The company was struggling; we began to expand beyond our initial market… Our initial market was focused on private investors, and we had taken a go at a market strategy that was gonna bring the company into sales and marketing, and make it so people could identify and qualify leads…
We were selling about – let’s say roughly 40%-50% of our revenue was in that bucket, but it was growing very fast, and just churning very fast… So we didn’t have product/market fit there, and we were trying a lot of different things; we had a lot of indicators that it could be lucrative, but we started to run out of time. We had successively missed maybe our fourth or fifth quarter.
So we had a board meeting, and – you know, it’s just difficult… When you’re missing quarters, you’re usually also turning over senior executives, you’re trying out different things… And our board is amazing and super-supportive, but it was sort of like “Okay, we’re at this place now where we’re flirting with not being financeable at this point, and we still have money left, so we need to make some choices.” I don’t know if I have the timeline quite right, but we didn’t make the decision in that meeting to sell.
Kevin and I went off on vacation with his family - we went to Hawaii I think in like February - and we did this really difficult hike, and it just caused us to be alone together for a really long time, and just kind of cut off from our phones, and cut off from everybody, and it was great, it was so beautiful… And we were sitting on the beach and just talking about “What would it be like if we sold the company?” Kevin is my husband, my co-founder… And it was like “What would this really feel like? Are we really emotionally prepared to do it, or not do it? What would it do to the marriage?” and all these questions… It was just this great exploratory conversation, which really I think culminated in coming back from that trip and being like “Okay, well if we did do this, we can see a future on the other side”, which I think we just never had really truly contemplated; selling was a very abstract thing.
So we got back and we had a board meeting I think in early March, and that’s when we kind of presented to the board, like “Hey, this is kind of how we see the business. We don’t really wanna ask to take more money at the same valuation as before. We would be signing up for 2-4 more years of grinding, just to get another round of financing… It would still not necessarily be that big of a business. We think we should find a buyer”, and we just got a lot of support there and kicked off a process.
I could talk more about the process, of course, but I think it’s really important just to pause on the first part, which is the making the decision… Because I think there’s the abstract idea of like “Hey, I should sell the company now, because I can’t raise more money”, but I think for me another big part was just actually being able to visualize life as not the CEO at Mattermark… Which was really different, and at first really scary, but then slowly became kind of compelling, too. It was like “Oh, I could, like, sleep, and I could not have to run HR.” and all these things… I just never really considered that I could set those burdens down. So I’ll pause there… I know that was a bit of a long answer.
I think that’s a good place to pause too, because – again, I’m still learning this story, but it sounds like you’ve put a lot of effort into creating Mattermark. It was recurringly a passion project in lots of ways, that pivoted or not pivoted, based on–
Or just kind of died… [laughs] We killed it.
[23:50] Well, you know, you’ve put a lot of work into it, and to sell it and not – I don’t know, would you consider it admitting failure, to sell? What does that mean to you?
I mean, the company was sold as a revenue-generating business; it’s generating revenue for its acquirer now, so that’s great… And the product is still alive, and customers still use it, so I think those things are successes.
You didn’t know that was gonna be true though… Did you know that would be true?
I mean, I negotiated the deal – I chose some things, and I was fortunate enough to have built enough of a business where those were viable options. I think it’s admitting an ending. I think if you wanna call it a failure, that’s totally fine. I think it’s –
No, I’m not trying to label it as a failure. I’m trying to figure out how you–
Oh, I know, but the thing is it doesn’t matter at the end. You’re just so happy to be done… It’s just an ending, it’s some sense of punctuation… That’s what I would say - it gave it a proper burial, a proper transition. I think it’s also… What I would really say, and I think a lot of companies get into the kind of situation Mattermark is in - it was just an acknowledgement of reality. You can keep doing things to artificially keep these companies alive; there were other options we could have taken, and some people might say that that’s what you’re supposed to do. I think we kind of came to a decision point of like “Okay, what’s the ROI gonna be on some of those other things?” The ROI was pretty bad for the founders, pretty bad for – I mean, most of the employees at that point would have been let go… And the odds it was gonna get something better for the investors were very low versus the amount of years of time that me or my co-founders would be giving.
So I think it was just sort of like a proper acknowledgment of reality, with all the facts that you could possibly know, knowing you can’t obviously predict the future and know everything, and then taking action from there to create some kind of endpoint.
Investors have stock from the company that acquired us, and I think there’s a very good chance that that company is going to be very, very large, so I hope very much that – that is gonna take a very long time, but ultimately, investors have a good chance of recouping and even making a profit off of the investment, on a time horizon that’s probably much longer than they wanted… Which is better than zero.
That’s basically what it comes down to - you kind of have an order of who you owe, and I think we did our best to kind of satisfy that order of operations, if that makes sense.
That’s interesting to frame it – I mean, it’s the truth, but to frame it as an order of who you owe… Because when you get to a – we talked earlier about the layers of responsibility, and you mentioned HR, you mentioned some things that like “Oh, I wouldn’t have to do this…” Those are all things that sort of like just weigh on you, and you end up owing people… And whether you actually have debt to them or not, it’s some sort of things, like “Hey, I owe you at least an explanation, or actually money, because you’re an investor” or “I’m sorry, because you’re an employee and things didn’t turn out the way we had anticipated, and we have to go this road…”
How do you feel like you personally handled that transition? We talked in the pre-call about change, and I think we even referenced the book “Who Moved My Cheese?” which is one of my favorite books in the world; I think everybody should read that book… But how did you deal with change at that point?
Personally, I feel like I had to come to terms with the fact that I was gonna go from as the sole founder of the company, having more stock than anybody else, and having that go to zero. That was a pretty big psychological thing. I knew it was paper money, so it was never like “Oh, the company is valued at (whatever) 42 million dollars and I own a quarter of the company”, or whatever; I think it was more than that, so on paper I have this much money – I never actually let myself think about that that way… But I did think of it as being worth something, and so having it go from something to nothing - because the common stock was wiped out in the deal - for me was something I was like “In order for me to do a good job for everybody else, I’m gonna need to just kind of let this go, and grieve this…” And I knew very early, as we started to look at term sheets, that that was probably the scenario. So the best I could hope for was gonna be a good job offer, with some stock options and stuff like that.
I think that was sort of, in a weird way, a level one… And it’s funny, because you might say “Well, you should deal with yourself last”, but I felt like I really had to deal with my own greed first, so that I could just be an operator.
So once that was out of the way, and I was like “I’m not expecting anything out of this deal for myself. Now I just need to do the right things, and run a really clean shut down process” - that was actually super liberating.
The only challenge then - it’s like you’re just kind of your own mercenary, because you’re just like “I need to do these things, I need to do the steps to complete this process.” So that was like a big one… And how did I do that? I kind of just decided “I think the honorable thing here would be to land the plane”, which I think is the metaphor we like to use in startups, “…and I’m not sure I can do that if I’m angry all the time, so I’m gonna have to let that go…” Not just for me, but between my husband and I, we owned a huge portion of the company, so it was just like “Okay, we’ve gotta let that dream die… That dream that we’re gonna make a lot of money off this.”
In startups we don’t talk about that. I think actually it’s a huge issue we don’t talk about money more, because… It’s not that every day was like counting the beans, trying to figure out how much money Mattermark was gonna make for my personal net worth, but you don’t go into it not wanting to get something… So you have to kind of rerationalize it at the end and say “Well, what did I learn? Who am I? Am I a better person? Did I grow?” and you have to kind of retake inventory, especially when there’s no money in the deal, because… I kind of have to, I don’t know; it’s an interesting thing, that I wish I had spent a little more time at each financing or at each major milestone, just checking in on myself a little bit more, so that I wouldn’t have had so much processing to do at the end… Because there were a lot of unspoken things I was feeling about it, like just “Wow, should I have had a job for the past seven years and just been paid market salary?”, things like that. You just have to come to terms with like “Okay, I’ve probably made a few million dollars less than I could have made in my career over the past ten years”, and look at the upside to me, and that’s the trade.
Anyway, long-winded, but I had to cope with my own feelings about change first, and then the next thing we had was layoffs. We did I think three rounds altogether. I think you never know for sure, as you’re doing these layoffs, whether that’s cutting deep enough or not, and whether you’re gonna turn the ship around or not, so I think coping with unhappy people whose expectations are probably dashed a bit… They’ve joined a startup, and I think no matter what you say, people’s expectations are often very, very high, especially if they’re really young and inexperienced, or maybe it’s their first startup that they’ve worked at… So it’s just a lot of disillusionment, and just being around people who are just not very happy with you… Who, of course, you worked to recruit, and you convinced to join you, and you think are amazing. So it’s like, the people you most would like to have admire you, in that moment, honestly, they don’t, usually. I mean, they might admire how you handled it in the end, or you might come to terms, but in the moment, you’re letting everybody down.
That’s kind of how I felt… It was like I’m letting myself down, I’m letting my co-founders down, letting down the employees, letting down the investors, letting down all the people who’ve been rooting for me… You said you’ve been a fan of mine for a long time…
But that’s the thing, you start thinking that way, and it’s very interesting…
Yeah. In the moment, you can’t help but feel that way…
In the moment, yeah. So then you don’t know the difference. You don’t know the difference between who you’re actually letting down, and – so actually when people are like “Thank you for saying that. It means a lot to me”, and my investors also said similar things, like “Look, this sucks. We wish it had turned out differently, but it’s okay… You didn’t let us down, you’re a good person” - that actually was incredibly powerful, the people who said those things.
Absolutely. It’s hard.
And for anybody out there listening, tell founders those things if you get the opportunity, because they’re gonna assume – it’s kind of that… There’s a funny song, “Everybody hates me” - I think it’s Chainsmokers… Anyway. “I walk into the club and everybody hates me” - that’s kind of how it feels.
As you were telling that story, I was kind of envisioning you walking back into the office every morning… You’ve gotta get dressed and feel good about yourself and have your self-esteem, and then meanwhile you have the feelings you just described and you try to walk through an office where you’re navigating people who maybe they were let go that day, maybe they were let go weeks from now, but they’re on their way out and they know it, or they know that things are changing, and you’re just sort of like trying to be invisible…
Yeah, but you can’t be invisible. That’s the thing… Literally, at the end, we were in WeWork office where there was no way to be invisible; we were in this tiny seven-person office suite with no walls, or anything. I feel like it’s what you’re training for, on the downside case; you’re training to be strong enough to do that part of the process, and to walk in and keep telling people the truth, and keep telling them what they can be hopeful for, what they can expect or what they can’t, and keep basically running the company.
So yeah, I think there’s a desire to be invisible, but… And yeah, I probably took some longer lunches and a lot more walks and a lot more one-on-ones with the people who were still there who were like my confidants… But yeah, you have to keep going, because we still had customers; we were still selling, we were still closing new business, we were still shipping software… We shipped software up until like a few days before the close date, when we eventually said “We probably should stop deploying, because if we break something now it’s gonna be really bad”, but yeah, you have to keep running the company.
Can we go back to – just for clarity, not so much to go through the details, but for clarity… So when you say “Go down to zero, to nothing”, does that mean that you walked away with no money?
Yup. I walked away with a job, and I got relocated to Denver, so that’s awesome… But yeah.
The reason why I go back to that is because I think about – we’re here in the United States, both you and I, so this is sort of like localized to here, at least… It may be similar in other areas, but I can only speak from experience here - I feel like it’s so freaking hard to build and run a business, and sometimes you’re just like “Is it worth it?” And I think it’s kind of what you’ve talked about - you scrutinized “Hey, I could have just had a job and got paid market salary, and maybe made a couple more million dollars”, and you kind of reflected on which would have been better or worse, to some degree… I just think like, “Man, it is just so hard.” I just wanna say that, because that’s just how I feel in those moments; it is hard, and you sacrifice, and you may make just as much as you may have somewhere else, but you know what? In the words of Gary Vaynerchuk, you may be happier doing what you’re passionate about than doing something that you’re not for somebody else… And there’s power in that.
[35:50] I think he’s right. I mean, the thing you can never take back is time… But I’m so glad that I’ve spent the time this way, but I also feel like I didn’t spend a minute I didn’t want to. When we decided to sell the company, I feel like that was the way of getting paid, was saying “I’m not gonna spend two or three years more than what I wanna spend on this.” If I had done that, and then walked away with nothing - I think that would have been the real shame. But where I ended up, and I said what I would look at it as is a proper recognition of reality; I think we kind of got to this sweet spot where I don’t think I wasted time, I don’t regret spending any of it, but I do think there was a line coming up that, you know… And I don’t know what would have happened past that point, like what would happen to my motivation, to my mental health? I don’t even know if we would have gotten a deal done at all, so…
Yeah, I think it’s probably not talked about enough. I think a lot of founders don’t walk away with anything more than a job offer, and there’s kind of a positive press engine around acquisitions, which obviously we didn’t end up tapping into… It provides a cover story, or kind of a different kind of payment, like a reputational payment, and I think that’s great; I think that’s fine, and that’s a good reason to do acquisitions, but… Yeah, unfortunately, I have a pretty low responsibility life; I don’t have a mortgage, I don’t have kids, so for me this is not really a big deal, but I can totally imagine people in other situations, where my outcome versus the amount of time I spent - I don’t know, maybe the math goes a different way.
I think that we don’t talk about it, and if you don’t talk about it, people don’t know what’s normal or what’s not normal. I have founders calling me, saying “Hey, I wanna sell my company the way you did.” I’m like, “Let me make sure you know what I did, and if you decide it’s what you want – if you still wanna get out, I’ll help you think through that, or I can kind of walk you through my process… But you need to know that I don’t have advice for you on how to get your ten million dollars, so… Some other founder would probably be a better person to talk to for that part.”
Well, now you can just link them to this show first, and say “Listen to this, and then come back to me and see if you feel the same way.”
There you go, yeah. I think the thing too is like, you don’t know going into the process of selling your company what you’re going to get. M&A is fascinating, actually… I actually really enjoyed running the process. I’m sad I didn’t have a better outcome, but I think I learned quite a bit about how big companies value small startups and how they think about buying them… You don’t have very much leverage. It’s very hard to create a bidding situation, an auction, it’s very hard to set a price when you’re talking about a company – like, Mattermark was doing roughly three million dollars of recurring revenue annually… Like, yeah, the valuations you’re getting in your fundraising have absolutely nothing to do with what a blue-chip public company wants to pay for innovation. It’s pretty fascinating.
I mean, especially kind of knowing some of your history, it’s gotta be fun to be – it’s sad that it was your company, but in the moment of doing the deal, those are fun things to actually execute… Negotiating, and sending the terms, and talking to certain people and evaluating certain things - that’s actually kind of fun stuff. I’ve never done it, but I can imagine, because I do similar things, in other ways, on smaller scales, and if I multiply it, it would be similar to that… To me, it’s a lot of fun. I really enjoy that kind of process, to just make deals happen. Those are fun. I enjoy sales.
It was fun. I would definitely say, like, for founders, if you’re thinking of shutting your company down, you might as well try to sell it just to learn something about what that looks like… Because there were so many things I didn’t know about that… It was kind of like closing a loop for me on my startup knowledge journey. I mean, sure, there’s tons more for me to learn, but it was a major piece I didn’t know; I had never seen a terms sheet for buying my company before. I had never read the terms, and I had never really – there’s so many other things, and actually, I think next time around if I do another startup, probably when I do another startup, some of the things that matter at the end are things that are good to be working on the whole time…
[40:05] So it kind of gave me a little more insight, like “Cool, if I wanna mitigate some risk and make my company more buyable next time around, there’s some things I could have done”, that would have potentially increased the value, or just made it easier to do a deal, or given me more leverage, and it’s nice to know what those are now.
You linked out to – his name is Ryan Caldbeck… I wasn’t familiar with him until you linked out to this… Some call them tweet storms; I just call it a thread, a self-conversations, essentially, of his position as a CEO, and essentially talking about the health of how he looks at his current position. He shares how he’s tired, and he explains how it’s not often enough a conversation happening in the public to tell other entrepreneurs or other CEOs to sort of like have a place to voice their feelings.
You linked to the one that I think is kind of relevant to you now, which in your words you say “This whole thread speaks to so many of my own thoughts about being a CEO, but unwinding this one is probably the biggest challenge of my life since selling Mattermark.” The tweet said “I feel tired, mentally and physically, constantly. I sleep less well than I ever have in my life, and I’m almost never able to catch up on sleep… Not because I’m so busy, but because my mind races and refuses to rest. This has been my reality for six years.” Why did you link to that? What spoke to you about that?
I know this resonates, that feeling of your mind racing, and you’re not doing anything productive necessarily; you’re just laying in bed, trying to sleep, but your whole being is oriented around trying to kind of predict the future, or play out scenarios. I think sometimes it’s easy to just kind of get into this almost like manic, or kind of just cyclical way of thinking.
I thought that I was rested at the end of this process, just because I basically decided – once we decided to sell, I was like “I need to basically take better care of myself starting right now, just so that I can get through this process.” And then I found like a whole other level of energy after I wrapped up the transition of the company and was actually just completely free of the schedule, free of the clock, all of that… Just this feeling of like “Oh my gosh, I forgot what this feels like, to just actually be rested.” I kind of was telling everybody “Oh, I’m fine… I’m rested now. I’m sleeping eight hours a night”, but there’s a big difference between eight hours of quality sleep and eight hours that are punctuated by waking up and tossing and turning three or four times.
I just think this sleep thing – I mean, they say sleep deprivation has tons of interesting mental impairments it creates for you, just as a person functioning in the world… And you see this with new parents, for example. I think probably many startup CEOs are suffering from a lot of the same impairments… And then you’re being asked to make decisions, really difficult decisions, complex ones, about money, and people. I just really can relate to how there’s a lot of layers of that to unwind as you start to recover from that amount of stress.
Ryan also mentions loneliness. Have you ever experienced loneliness as a CEO? I’m just trying to dig into some of the CEO journey, like, the day-to-day grind of being a CEO, what it feels like… I mean, sure, you’ve got some great days, you feel on top of the world because you did a great deal, or you’ve got a new–
Sometimes those are the loneliest, though…
Yeah, because you – you know, at least for me, I think sometimes it’s like “Who should I be sharing this with?” Because there’s kind of a light side and a dark side to everything. Say you close a really amazing deal; in my case, I’m also co-founders with my husband, so maybe we’re on a date, and we’ve kind of agreed not to talk about work… So this is the most important thing that’s happened to me maybe this week or this month, but I’m trying really hard to be a good wife and to live up to our agreement, so we don’t talk about it. There’s kind of a loneliness in that.
Or you’ve got investors and you don’t want them to doubt you, and you’re feeling uncertain, but you’re trying to figure out “Do I let something play out a little longer, or do I look for advice now?” Maybe you decide “I’ve gotta let it play out a little more. I don’t want them to feel like I’m jerking the wheel”, so you don’t bring it up. That’s lonely.
[44:10] So I think a lot of the loneliness comes from maybe good decisions, but I mean, honoring other agreements, or just that sense of like “Hey, no one else has a mirror of my brain. There’s not someone I can necessarily always confide in, who will understand all the context that I would need to share either a win or a loss.”
And as a CEO, you’re like “Well, I’m probably annoying if I just am going to my team, especially the people who are reporting either to me, or up to me through other managers…” If you express vulnerability or doubt or questioning, as much as we wanna think that people are people handling that, it gets misread a lot… So you can’t necessarily confide in very many people on your team without there being consequences. Now, I’ve tried it both ways; I’ve tried doing it anyway, and just saying like “We’re gonna be an open, transparent, vulnerable company” and there’s consequences (good and bad) there. I’ve tried being really kind of cards held close to the chest, and I think that’s also got consequences… So there’s this sense of a constant battle to figure out “Who should I be sharing this seemingly important thing with? Or do I just keep it to myself?” and I think sometimes when you’re exhausted with that decision, it’s easier to just not share… That’s where loneliness for me has come from.
I’m similar with my wife. I’ll tell her I had a great day, and she’s like “Do you wanna go and have dinner to celebrate?” We may talk about the details of something, but I’m like, I wanna share, but at the same time I just wanna spend time with my wife and my son… And I do that because it’s like, I don’t want to burden them with my stuff all the time. It’s our stuff, but it’s really my stuff, it’s work-related; I’d just rather not have to deal with it, and that can kind of definitely be lonely.
Then maybe in your position it’s like, “Who can I confide in and share with and have trust remain intact? That they can understand enough of what I’m doing to trust why I made that choice and share that with them.” And then I was thinking, you know, therapists… People undervalue the need for mental health therapy; there’s no shame in sitting down with someone and actually talking through like “Hey, this is how I’m feeling this week.” Have you explored that at all? Is that something that you’ve done before?
Yeah, so I had a CEO coach for (I wanna say) four years; pretty much from the time we raised our series A onward… That was massively helpful. I think we met weekly, and then eventually every other week, as I started to kind of have more stability, and I think we were always able to text and call each other, so that was really helpful. And then we also have a marriage counselor, which I think is massively important just in general, but I think for married co-founders - you’ve gotta have that.
So yeah, I’m a huge fan of therapy, I’m a huge fan of peer therapy, like mentorship, especially if you’re able to find some people who maybe – like, I worked with a company called Reboot.io, and they have a CEO community, so it’s nice because they’re working with similar coaches, or similar coaching styles, so we can kind of support each other’s coaching, as well. I love that stuff, and actually, I’m kind of missing it, in a way. Now I’m like, “Oh man, that was really great!” Maybe I’ll take up – you know, with a life coach, or just someone else; it’s nice to have a way to externalize those thoughts. So yeah, huge fan, I love it. It’s too bad there’s any stigma around therapy; I think that’s gone away. Anybody listening, go get an initial coaching session, and also, if you don’t like the coach, just date around until you find a coach that fits with your personality.
I think I had to go through like – in my career, I think I’ve had like four or five coaches until I found the one that I stuck with for years and years.
[48:01] Wow. I’ve been given that advice, to get what you just mentioned, but I don’t know what the first step is… And I live in Houston, so I’m not in the Valley to have access to maybe the next startup that’s just doing it as a business or as a service… What advice do you have on finding that kind of person?
Well, I’ll just straight up shill for Reboot, because I think they’re amazing… But I think asking other CEOs, like asking me, and I can certainly provide some suggestions, I would say who are you working with because a lot of these coaches work remotely over Skype. So I don’t think you should look at being in Houston, or being in Europe as a reason why you can’t get access to someone here. And the same thing is – like, there’s coaches everywhere. I think it’s probably just very much a referral-based thing. So I would start there… I’d say there’s more founders working with coaches and therapists than maybe people wanna admit.
I don’t know if it’s appropriate to share more about Reboot on your show now, but I could certainly send you some information about them. They also have a great network of referrals. So I think it’s just kind of starting to ask one person, and then spider-webbing out from there.
Yeah. I think it’s interesting… I never really considered to flatten the world in that case; I always thought like “That’s the kind of relationship that should be face-to-face, and I’ve gotta look locally”, or something.
I do think it is nice if it can be in person, but I think for founders – and I’m not in the Bay Area right now… I think for founders outside the Bay Area, if you feel like you want to be talking to the same people that like the Bay Area startups are talking to, for whatever reason, I think they’re actually much more available than ever, because CEOs are traveling all over the place, so these people have to set up their businesses to serve CEOs who are on the road 50%-75% of the time.
So what’s the difference between a CEO who’s based in San Francisco but on the road, versus you, who’s in Helsinki, who needs a startup coach? You should totally be rocking out in Helsinki right now, by the way. It seems like a good time of the year to go.
Yeah, I’m sure it’s nice there. I do have some travel planned… I think it’s Portland in July, Denver in August - that’s always fun…
You’re coming to Denver at like the best time.
Yeah… It’s usually in July we go there, the second week in July, which is always also a great time… And it’s not a good time here in Houston. In August, it is like at least 100 degrees.
Oh, my gosh…
And we’re known to be humid… It’s not good. It’s not a good month to visit Houston; don’t ever come here in August and early September. It’s just not the best months. But it’s a great place otherwise. Those are the worst timeframe, but… You know closing things out, let’s talk about maybe – I sometimes ask people the super-secret question, which is like “What’s next for you?”, but I feel like you’re still discovering that, and it’s just maybe too early to ask you that, unless you have a great answer… But I would say maybe – we’ve shared lots of advice, but what’s some who’s a CEO now listening to this, someone who’s dealing with either successes or any portions of your story that we’ve just shared through Mattermark, and the transition for you… What advice can you give someone that is questioning whether they should sell their company or continue, or how to keep leading and sort of portraying a good face and all this good stuff while things may not be the best behind the scenes? What kind of advice do you give to someone like that?
Yeah, so many things… I mean, first I just wanna give that person a hug, because it’s pretty stressful… I think something that really helped me - I made this spreadsheet… People who are listening who followed me know I love spreadsheets…
Yes, you do.
[51:48] I made this spreadsheet that I think really helped me… Basically, it lays out what are all the possible things that could happen, like big picture - like, sell the company, turn this thing around, go in this new market… Whatever the buckets are. And then what would the impact be on the core constituents that I care about? So my employees, my investors, myself, maybe my co-founders, my family… Whatever you feel are the core constituencies that you are responsible for representing. I hope I said customers in there; if not, the customers should definitely be in there.
And I just kind of filled in the grid, and I started to look at like what would just be deal-breakers? What things am I not willing to do? Maybe one of the scenarios is just so bad for my investors that it’s not acceptable, or it’s so bad for my family that it’s not acceptable. And then I think from there, kind of getting a sort of stack or make sense of “What are the outcomes or the scenarios that I’d be okay with and how okay would I be?”
The reason to do this is I think this is actually where there’s a lot of fuzzy thinking… I feel like it’s not okay or it’s not kosher to talk about selling your company, and I think that’s why this conversation with my co-founder and husband about what would life be like afterwards was so powerful. So I would just say rather than waiting till you’re in a really bad spot, laying these scenarios out now and maybe seeing new scenarios you weren’t considering because you just took the time to think about it is very powerful, it lets you feel like you’re in control, and that you’re choosing what’s happening… Even if maybe your choices get crappier and crappier as things don’t work, you’re still actively choosing and maybe you’re adding new options to the list.
I ended up making that and I ended up sharing it with my investors when we got to a certain point, and they actually pointed out some other deal-breakers or possible scenarios or twists on the things that I had put there. And I think just giving yourself permission to play out all the possibilities in the privacy of your own spreadsheet is something I think for me made me feel like “Hey, I don’t like this, but at least I’m pretty much seeing the full picture, as well as I possibly can.” That’s sort of tactical, but I wish somebody had maybe encouraged me to do it 18 months even earlier, because I’d probably had more freedom than I realized to change the way things were playing out.
That’s interesting, that ending there… Because you can regret that, obviously, and now it’s a lesson learned… But you know, in the moment, had you been advised earlier or just known earlier, maybe things could be different.
Obviously, you can’t sit there and hem and haw over it; that’s the whole point of Who Moved My Cheese - you’ve gotta move on, but things could be different.
I mean, all we’re gaining in doing this is we’re getting better and better at making good decisions, so I just feel like if we would come away with that skill improving, then I think that’s a win, even though in my case there’s not a monetary win… So I feel like if that’s the thing that I got from this whole thing, then I would love to get to share that.
[54:49] Well, in closing, I had no idea this was your first time doing any sort of interview like this… I’m so thankful that you said yes to come on, because I didn’t know that. I just knew when I restarted Founders Talk I definitely wanted to talk to you. I didn’t know when in your life that would be, or the circumstances, and it just happens to be after the acquisition and there’s a different story to tell, but I’m so thankful that you said yes and have the ability to come back and talk through things without, I don’t know, just it being bad for you, I guess… I’m really thankful that you’re in a good place, and the company went well, and you’re on a happy path, and you’ve got so much wisdom to share… So I’m thankful that you came on and did that.
Thank you, it was fun. I think I realized some things that I had thought, but I haven’t said out loud before, so… I really, really enjoyed it.
What’s interesting is whenever you say things out loud, they become true, and until you say them out loud, it’s like “Was that really true? Did I just think it or did I say it?”
Once you say it, once it’s vocalized, and you vocalized and you admitted it - whether it’s good or bad - it’s like, now it’s true.
Now it’s real.
There you go.
Alright. Well, thank you, Danielle.
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