I read “Zero to IPO: Over $1 Trillion of Actionable Advice from the World’s Most Successful Entrepreneurs and Venture Capitalists” (Zero to IPO 世界で最も成功した起業家・投資家からの1兆ドルアドバイス 創業から上場までを駆け抜ける知恵と戦略) by Frederic Kerrest, and I’d like to share the insights I gained from the book.
I read this book because I thought I could learn a lot from Frederic Kerrest’s background and his writings.
Frederic KerrestVice Chairman, COO, and co-founder of Okta, an enterprise software company that went public in 2017 with a $2 billion valuation and now has a market cap of over $40 billion. He is responsible for establishing and driving corporate priorities, promoting company-wide innovation, engaging with customers, partners and prospects, and serving as the primary liaison with the investor community. The author, a software entrepreneur, co-hosts the “Zero to IPO” podcast, where he invites founders, entrepreneurs, and innovators to share insights gained from their experiences building innovative technology companies. He also serves on the Executive Advisory Board of the MIT Martin Trust Center, advising entrepreneurs at early-stage software companies. He is also co-founder and chairman of Herophilus, a drug discovery platform company. He holds a B.S. in Computer Science from Stanford University and an MBA in Entrepreneurship and Innovation from MIT Sloan School of Management. In his personal life, he values time with family. His hobbies include reading, skiing, and ice hockey.
Source: 創業からIPOまでの流れを網羅的に扱った起業家のバイブル！新刊『Zero to IPO 世界で最も成功した起業家・投資家からの1兆ドルアドバイス』｜翔泳社のプレスリリース
Below are quotes and notes from memorable passages.
"You can't do many important jobs simultaneously and do them well. Very few people can do that. This means you need to hire specialists. And quickly."
? I’m currently facing this problem.
However, be careful if your stomach is churning. Sales is the foundation of your company. As mentioned in the "Introduction" chapter, "Nothing happens until you sell something." If no one buys your product, it's not a business. You can't work on ideas or grow. Going public is a pipe dream.
? Nothing happens until you sell.
So why did they choose Okta? "Because you came in person. Twice." (Omitted) However, enterprise sales is different. It takes considerable time. Hours, days, months are spent convincing potential customers that your product is what they need and is trustworthy. Some companies only require working with one person, but with huge organizations in the Fortune 500, you might need to persuade two, three, or even ten people.
? The difference in enterprise sales.
The final reason to build relationships is that executives who buy now will move to other companies. If you build good relationships with them, listen to their evolving needs, and repeatedly demonstrate you can meet them brilliantly, they'll continue to buy at their next company, and the one after that, and the one after that.
? Build relationships with a medium to long-term perspective.
No matter what you're selling, remember their words.“How to Win Friends and Influence People” (『人を動かす』KADOKAWA, 2016) Dale Carnegie
“The Sales Bible” (『営業の赤本』日経BP社, 2006) Jeffrey Gitomer
When customers ask if your system has a specific feature, it's tempting to say "yes" and then rush back to figure out how to make it happen. But this is not good. First, unless it's a very simple feature, you'll fall victim to Murphy's Law. Second, if the prospect contacts the reference customers you mentioned, your lie will be exposed immediately. Finally, and most importantly, being honest about what you can and can't do actually earns high trust from customers. When Fred Luddy of ServiceNow was trying to do business with an international megabank, he was asked if his software could do something. Luddy said, "Not only did I say we couldn't do it, but I also said I didn't know how to do it."
? Murphy’s Law. Be honest about what you can’t do or don’t know.
Engage in "Unnatural Acts" ~ How to Succeed with Early Customers at All Costs The best practice Todd established at Okta that worked well was not to consider a new product fully launched until it succeeded with at least five companies. Following this rule, you can discover all the challenges with the product and implementation strategy with the first few customers.
? New product launch = success with at least 5 companies
Running a startup is tough, so it's easy to lose sight of what's happening around you. However, like other companies, tech companies are members of the community. In our industry and location (Northern California), the gap is widening.
? Startup management is tough, so interest in surrounding events tends to decrease.
Entrepreneurs create more new jobs than other sectors. But job creation isn't the only way to support the community. You can also distribute wealth (company stock). By doing so, when the company does well, your neighbors do well too.
? Job creation and wealth distribution.
You might still be in startup mode, operating on equity, barely paying rent, with almost no extra cash. However, it's important to plan now for making a social impact in the future. If you're lucky enough to succeed, where would you like to make an impact? What problems does your company care about? What activities will you be involved in? Also, think about how to allocate some of your company stock for these goals.
? I want to plan for making a social impact in the future.
"I told everyone, 'I don't know if this will succeed, but let's have fun trying'"
? Have fun doing things even if you don’t know if they’ll succeed.
"Fun" means being playful, open, and adventurous. Research shows that the more playful you are, the more creative discoveries you make. When assigning new work, emphasize exploration and discovery rather than achieving specific results.
? Playfulness
There are many excellent books on leadership in the world. I personally prefer those that follow one leader's career. For example, Disney Chairman Robert Iger's "The Ride of a Lifetime" (『ディズニー CEO が実践する 10 の原則』早川書房, 2020), Bryce Hoffman's "American Icon" (unpublished in Japanese) about Alan Mulally's challenge to turn around Ford Motor Company (Ben Horowitz's "The Hard Thing About Hard Things" (『HARD THINGS 答えがない難問と困難にきみはどう立ち向かうか』日経BP社, 2015), a must-read in Silicon Valley, is also one of my favorite books, but you probably already know it).
・Discard what is neither important nor urgent ・Delegate what is urgent but not important ・Put what is important but not urgent on the do-later list ・What is both important and urgent. This is what you should focus on and "prioritize." Make a decision or at least start working on it.
Be skeptical of every meeting request. Ask yourself: Is this meeting really necessary? Even if it is, do I need to attend? If I do attend, do we need an hour? Can't we discuss everything in 30 minutes? Be especially careful with recurring meetings. You probably don't need to attend most of them (every month to month and a half, I review my schedule and delete recurring meetings that other employees asked me to attend). Then I wait to see how many of those employees invite me again (spoiler: almost none do).
? Be skeptical of all meetings.
When my team starts to wander, I bring them back and say, "What's the top priority?"
? Direct the team’s attention to top priorities.
Most managers hold regular reporting meetings with their direct reports (often called one-on-one meetings or abbreviated as "1:1"). But Tien Tzuo of Zuora doesn't do this. Never. (Omitted) Such meetings quickly fill 80% of the week, which isn't a meaningful use of time for anyone. That's what Tien decided. "I just told the executives, 'If you need my help, call me. I'll do the same.'" (Omitted) The one-on-one meeting system ultimately results in solving problems in a so-called "hub-and-spoke" manner. Then, "leaders don't tackle problems themselves but bring everything to the founder," says Tien.
? 1-on-1 and the hub-and-spoke problem
The harsh reality for founders is that they must constantly make important decisions with very little information.
So just take the previous situation into consideration. Use lessons from last time as one piece of information among many. But don't rely on it alone.
? Use previous situations only as one piece of information. Don’t use it for pattern recognition.
However, always be in a position to talk to people on the ground.
As the company grows, founders themselves must take on more high-level work. This means founders must always delegate lower-responsibility work. The more authority you give to subordinates, the more they grow and can take on more work. This reduces what the founder has to do and creates time to focus on the most important strategic matters for the company. This is the ultimate goal.
? As a co-founder, constantly delegate lower-responsibility work.
A founder's job is to identify which tasks on the to-do list are important and devote all efforts to them. For example, since Okta is publicly traded, we must successfully deliver quarterly earnings announcements to the financial industry. Even a small failure in Q&A could cause the market cap to fluctuate by billions of dollars.
? Identify important to-dos and devote all efforts to them.
This habit was so important that Maggie built it into her weekly schedule. She called this act "lion hunting" because the lion (Maggie) "walks around looking at what's happening." "The front line is your company. There, you engage with customers every single day. It was important for me to maintain close distance and build relationships with people who could tell me what was really happening."
? Lion hunting.
So here's my advice. Develop the ability early on to predict when parts of your work will become too big and you'll need to delegate them to someone. Start looking for replacement talent six to nine months before delegating work. Resist the fear that if you let go of "too much" work, you'll "have nothing to do."
? Start looking for replacement talent 6-9 months before delegating work.
Two departments that don't fit the advice so far are finance and legal. Laws apply to finance. Don't be creative. Don't be unconventional. Follow standard practices. To manage these departments, either gain the knowledge yourself or hire trusted experts.
? Don’t innovate in finance and legal.
Your most important job as a founder or CEO is to never run out of money. Make decisions with that as your top priority. Whatever you do, don't run out of cash.
? Never run out of money.
Building a startup is truly a marathon. Prioritizing everyone's physical and mental health now will bear fruit someday.
? Startups are marathons.
But what about more trivial things? Sometimes it's okay to let things take their course.
? Sometimes let things take their course.
That’s all from the Gemba, aiming for IPO from zero.