Jason Smith & Sarathy Naicker - AI Powered Competitor Insight | Klue | Afternoon "T" Podcast - # 48

I can't think of any one day where we didn't support each other in some small way. If somebody is falling down, then they put them on their back, and when they fall down, that person puts them on their back. That is the culture that I'm talking about.

Happy to be here, Chris.

I'll let Jason go because he was the one instrumental in making that happen.

Celebrations are hard for me because I'm never satisfied. I'm a nitpicker. Jason is that way too on different things. We complement each other. But we realized we need to celebrate the wins. Our way of celebrating is by calling out the people who made it happen. Jason and I, with our spouses, went for a nice dinner. Our spouses have been the biggest influence and they rarely get called out.

You haven't mentioned, Jason mentioned us aligning on culture first. We wanted to create a place we would enjoy working every day. We've kept that focus.

It's organic. We decided early on that our Google Drive would be open by default for transparency. We share board meeting notes freely. We also have a Friday meeting called 'Show, Don't Tell' where people show what they did. That has been a defining feature of our culture.

I had no preconceptions. I got a fellowship to do a PhD in architecture at Michigan but left to get a master's in CS. I got involved in Perl and was recruited by ActiveState in Vancouver. I visited in 1998, loved the mild weather and multiculturalism, and moved here. I've stayed ever since.

Five years, then Sophos acquired them and I stayed for another 10 years.

We built an anti-spam tool using Perl and Sendmail, which became PureMessage. Sophos acquired us for that. I continued working on perimeter protection software and hardware, including UTMs.

I needed a language to embed in a traffic simulator for my graduate work. Perl was easy to embed. I started fixing bugs and got involved in the community. I became the hacker at large of the Programming Republic of Perl. The community had compelling cultural stories.

Don't, don't say I'm just 'Hello World.' I'm just waking up right now. It was... Car is sorry, finish speaking. I can't. I'm like... Yeah, it's uh, no, I like it, you know. Sorry, that I have a wonderful relationship when it comes to that. There's um, I uh, I am not a coder. No, the best I did was create a clown in Visual Basic back in um, on an Apple IIe, and had it printed on a dot matrix computer, and I think I won the 'Least Likely to Be a Programmer for a Living' award at Lakefield Computer Camp. That was my claim to fame on that.

But it is actually funny enough, as I try and get my two daughters into coding, probably my biggest regret is not going down that path. I did solder at UBC and graduated with a marketing degree, and embarrassed my family by starting a company right out of university.

Yeah, yeah. Tell me a little bit about that. So this is going way back, like Netscape era, early days of the web. Two friends and I started a company effectively building websites, and we just tried to do it in a kind of programmatic way, more of a custom way, like a web planning process that would lead to an outcome. Back in the day, it was like you want Package A, B, or C from your internet service provider, and so it was a slight differentiator that we brought in. We ended up building that company from the three of us, university, we can't get our jobs so we'll start our own company mindset. Awesome. Five grand in a pot, and that ended up being a 100-person company that got acquired by Telus, just before the first dot-com era came to an end.

And so it was a good outcome. When you do that straight out of university, you've got this mindset that building a business is easy somehow, right? Because you get lucky and you think it's you, and then you realize that there's a lot of factors that come into play. I think the best entrepreneurs out there would admit there's a lot of grit and persistence and grind that you have to do, because you need a big healthy dose of market luck that's going to help you tailwind.

So I came out of solder in '94.

Yeah, it was very different. That was a startup with two HBS grads, so they had the whole Harvard mafia to leverage to get into the right types of CEO offices and venture capitalists. Where the first company was services, five grand in a pot, buy some Macs and go hang a shingle and hustle, this one was think of it like Groupon before the social graph. Timing-wise, too early. Learned a big lesson around looking for trends and dovetailing those trends to not be too far ahead or too far behind. But that one was interesting because SF was going off, everyone was at dot-com everything, and just at the tail end of that we were trying to raise basically 20 million dollars on the back of a PowerPoint deck. It seemed like that's what you're supposed to do. Odd for me as the bootstrapped, grindy entrepreneur to be exposed to that world. But hey, I didn't go to Harvard, so let's follow these guys and they seem to know better. It was interesting to see the difference in approach from how an MBA thinker would go about building a business. Unbelievably smart people, but the difference between 'is there a loose brick in that wall' entrepreneur and 'I'm going to analyze everything and come to a probabilistic outcome and make a decision on that' versus ignoring the odds was quite clear to me.

In fact, in my next thing, I worked at Electronic Arts for a guy named Don Mattrick. We'd won some Entrepreneur of the Year awards through our first business, and he kind of we won the kid category, the emerging one, and he went for the real technology one. I remember going up to him and saying, 'Look, I graduated, we started this company, and I really don't know what I'm doing. I could use a mentor.' Kind of developed a relationship. So when Columbus sold, I was going to go work for him, and then did the Spicy thing with the HBS grads. I remember talking to him about doing it instead of EA, and he's like, 'Oh, I'm so disappointed in you.' I'm like, 'What do you mean?' 'I'm so disappointed that you would go not start up a company, but that you would do it with a couple MBAs.' And I'm like, 'What are you talking about?' He literally said, 'Look, the difference of a successful entrepreneur early: you have a mindset of you've done it, you pattern match, you think you can do it again naively, and it's a big thruster engine that you need to get your business off the ground to mentally think you can just do it and find a way. Whereas the MBA world teaches you how to analyze and be a little more cautious, probabilistic outcomes.' So that disappointment ended up revealing itself. It was more the timing of that business idea, and he ended up bringing me in to look at mobile gaming at EA. It was a completely different world for me, going from 'Is that a door? Can I use that door and put IKEA legs on it, flip it over, and is there a box we can sit on?' to three air chairs and a couch in my office, IT people that would set everything up for me, thousands of people, a VP title that seemed to matter, working for the president of Worldwide Studios. It was just completely different, a real income too, a paycheck, whereas we paid ourselves nothing in our first company. Very different worlds. I realized I was a fish out of water there and didn't want to stay too long. Also, it was very unique how people thought about it. There was a lot of career concern for individuals versus let's put the company first. There was no 'let's do this all together.' It was, 'I'll say that, but really, you're not going to screw me, are you? Because I need to climb this ladder.' I thought, 'It's not for me.' That's just a general shot at when you get bigger, there's politics, right? Yeah, not for me.

It's a left. I was big into the ultimate frisbee world and got into a company that a friend of mine from solder started called Gaia. I was an early snowboarder, so I had this conviction that if you could be the brand that's emblematic of the sport, then you can rise as the sport rises. I was convinced that everybody in the world was going to play ultimate, ultimate was going to take over the world. So we built a company effectively like an Umbro soccer cleats, bags, and custom jerseys. It got to a couple million bucks, but it was never going to take off. Real inventory, for those of us in tech listening, we're lucky. Hard to see when you get real inventory: men's and women's cuts, 15 different colors, plus extra small all the way to XL. How many do you order of each? Where do you store it in the US and Canada? The logistics associated with that, getting product delivered on time, quality suppliers, just a different world. So I bailed out of that and then started to work at... Actually, truthfully, I looked around and said, 'I don't want to start another company. I want to go work for somebody who's been there, done that.' That's when I found Vision Critical and Angus Reed and his son Andrew, kind of getting that thing off the ground. There's Betty folks. I know Andrew's been on your show, good friend.

He's unbelievable, he's a force of nature. He was impressive from day one when I met him. His father obviously had a great reputation, sold his company for a hundred million dollars, so I thought let's get on board there. It was like eight people at the time, and let's see if I could help that. Joining it, I really thought of it as my own company as an entrepreneur very much would. That's a beneficial thing, and it's also maybe a negative because you expect certain things, not financially, but just control over your vision, and it's not your company. But it was a good gig there that grew over seven years to 500 people. Vision Critical is now called a leader, and it was certainly a good Canadian success story. But when I look at it relative to what maybe we could have become, when our biggest competitor is now public for 25 billion dollars, Qualtrics, and we were equal to them at a certain point in time, it's frustrating to think that we look at a couple hundred million dollar valuation as a success, which it would be, and yet there's a 25 billion dollar outcome that was in your grasp. That context certainly helped sharpen my focus into Klue and say, if there is a big opportunity, that's where you want to try and scale up and win it and be the category leader, instead of in our case being very conservative on our financial raises. In Vision Critical, this time actually maybe raise the capital to really accelerate yourself ahead of the competition and be that category leader.

So it's a great question. I think there's Mark Bergen now runs all global revenue for Shopify, and he and Chris were both on the sales team at Vision Critical. I think there's a magic moment in any company's history where you have the wind at your back, the sails are full, and you're cranking, and the culture feels right, the market feels like it's yours for the taking. There's still lots of grinding, but there's this magic feeling of possibility. I think everybody was infected by that in the early days of Vision Critical, and that sense of what we can do. I think we found that balance of American-Canadian, just enough ego to sit at a table and be confident with other highly confident people, but at the same time have the humility of a Canadian that says we still don't know and there's lots we should learn and listen for. That's part of what we tried to build at Vision Critical culturally. Again, there's a lot of people there that we had the right motions in place. We certainly had Chris and Mark and I and Andrew were all more on the SaaS product side and go-to-market side of that business. Actually, Chris Whitmore and Tamara X from Vision Critical both work at Klue now. Chris was the CTO and he's now our VP of Engineering, Tamara was running product and now she runs product at Klue. I think a lot of people had a taste of what could be and what was a great success, but it feels like we could maybe tweak that model a little more and get to the next one. So I think it's really just what everybody tries to do: attract good people, give them room to move, build a culture that elevates them, and see how far you can take it.

I think the primary factor for success is probably finding a great partner. To me, what has led to this is my wife, a great life partner, and my friend Jason was a great business partner. In so many ways, we support each other. We complement each other and yet we're similar in other respects. That mix of complementary skills and attitudes always helps, because business life has its ebbs and flows. Some days you're bullish, some days you're down and not bullish, and you need the other person to lift you up. Throughout the six, seven years that we've worked on this thing together, I can't think of any one day where we didn't support each other in some small way. So I think that's a big success factor. The advice I would give any entrepreneur is to always be hopeful. No matter how bad things get or how hopeless things are, you've got to find a way to create the hope within you. You have to find the bright side of whatever it is wherever you are, and motivate yourself with hope rather than push yourself with despair. It's not the right way to motivate yourself. Instead, motivate yourself with positive visions of how you would move forward from wherever you are. Find the hope within you.

Actually, there are a lot of entrepreneurs that I admire, but I'm going to go with the technologist. Because technology evolution requires a lot of guts and the same entrepreneurship mindset to break through and do something new. You've got to have the courage and the balance between ambition and contentment that it takes to achieve things. So I'm going to pick two Canadian technologists. The early one that I was inspired by was Rob Pike. Rob Pike is probably most recently well known as one of the authors of the Go language. He has been involved in Unix development for many years, he was at Bell Labs in the 60s, and built a lot of the later evolution of what Unix became, Plan 9 and other things. A lot of the foundational things in the Go language were a result of Rob talking about them and inspiring those directions. So Rob was an early influence in the things I learned and what I focused on. Then more recently, a big influence is Geoffrey Hinton, one of the big three AI pioneers, who is Canadian. He's an academic, but he was instrumental in making huge strides in machine learning and deep learning. So that's what I'm going to go with. Over so many years overlooked, and then they said 'I think there's something in this,' and then the world discovers him and he has it right and rightly elevates him. He had it right. I'm really proud to say as a good Canadian that one of our meeting rooms is named after him, which is really important.

Thank you.