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Insights On CEO Transitions with Matthew Hoffman & Jeremy Warren
4 Plays4 years ago
It's common knowledge that entrepreneurs put in long nights and sacrifice basically everything for the benefit of their companies. But here's a curveball for you: if the success of your business meant stepping down as CEO...could you do it? Today we're talking to Matt Hoffman, the founder and former CEO of Monarx who stepped away to make room for growth and Jeremy Warren, the current CEO. They'll be joined by investor Gavin Christensen of Kickstart (a VC firm for startups in Utah, Colorado, and the Mountain West) to bring you both sides of a perfect pitch. In this episode, we'll cover:
How an entrepreneur can know if they're the right leader for their company
Insights on an investor and board's reaction to an entrepreneur's desire to step down as CEO
Joining a startup as a CEO, when the company was previously run by someone else
The importance of remaining transparent – having difficult conversations sooner rather than later
Recommended
Transcript
Introduction to the Hosts and Guests
00:00:00
Speaker
It's common knowledge that entrepreneurs put in long nights and sacrifice basically everything for the benefit of their companies.
00:00:07
Speaker
But here's a curveball for you.
00:00:09
Speaker
If the success of your business meant stepping down as CEO, could you do it?
00:00:14
Speaker
Today, we're talking to Matt Hoffman, the founder and former CEO of Monarchs, who stepped away to make room for growth, and Jeremy Warren, the current CEO.
00:00:24
Speaker
They'll be joined by investor Gavin Christensen to bring you both sides of A Perfect Pitch.
00:00:37
Speaker
What is Perfect Pitch?
00:00:39
Speaker
It's a podcast from Kickstart that reveals the minds of both investors and entrepreneurs throughout a startup's journey.
00:00:45
Speaker
So whether that's uncovering what everyone's really thinking during a startup pitch or learning how entrepreneurs like you have managed their first major roadblock, Perfect Pitch offers an honest, quick, and tactical guide to help you on your startup journey.
00:01:00
Speaker
I'm your host, Karen Zelnick.
00:01:01
Speaker
Gavin, Jeremy, Matt, thank you so much for joining us today.
00:01:05
Speaker
Happy to be here.
00:01:06
Speaker
Thanks for having us.
00:01:07
Speaker
Yeah, thanks for having us.
00:01:08
Speaker
Glad to be here again.
Jeremy Warren's Journey and Insights
00:01:10
Speaker
Going to be a great discussion.
00:01:11
Speaker
I'm going to give a quick bio for each of you.
00:01:14
Speaker
Jeremy, we're going to start with you.
00:01:16
Speaker
You graduated from MIT with a computer science and engineering degree.
00:01:20
Speaker
Is that correct?
00:01:21
Speaker
Actually, I am the prototypical MIT dropout.
00:01:26
Speaker
I left my senior year to join a startup and never looked back.
00:01:30
Speaker
I would say haven't looked back since.
00:01:31
Speaker
That's amazing.
00:01:32
Speaker
My parents are about to get over it any day.
00:01:36
Speaker
That's good.
00:01:38
Speaker
And before joining Monarchs, you worked at Vivint as the VP of Innovation, Chief Technology Officer, and Strategic Advisor to the CEO.
00:01:47
Speaker
Anything else you'd like us to know about you?
00:01:49
Speaker
I spent close to 10 years at Vivint, moved out here to Utah for 2GIG, which was an incubated startup from Vivint.
00:01:57
Speaker
I joined Vivint.
00:01:58
Speaker
And before that, spent some time in government at DOJ and earlier to that in startups back in Boston.
00:02:05
Speaker
Okay, so you've got a lot of insights.
00:02:07
Speaker
Okay, I'm excited to get into the discussion here.
00:02:09
Speaker
It's going to be great.
00:02:10
Speaker
And Matt, you graduated from Stanford with a bachelor's degree in economics.
00:02:15
Speaker
You're currently the vice president of Decathlon Capital Partners.
00:02:18
Speaker
And before Monarchs, you were the CEO for Panoptic Security.
00:02:22
Speaker
I was the former CEO of Monarchs and then also ran a company for a short time called Panoptic that was in Fund One, Kickstart's first fund.
00:02:32
Speaker
Did you spend some time at vSpring Capital, which is... Gavin also worked there too.
00:02:35
Speaker
Did you overlap at all?
00:02:37
Speaker
I did, yeah.
00:02:38
Speaker
In fact, that's how Gavin and I met each other.
00:02:40
Speaker
We sat next to each other for a while at vSpring and really cut our teeth.
00:02:46
Speaker
I was new to Salt Lake and Gavin was an easygoing dude who would listen to my crazy ideas.
00:02:52
Speaker
So we got along well.
00:02:54
Speaker
Yeah, lots of great stories from that time.
00:02:57
Speaker
One is how Matt got the job.
00:02:59
Speaker
He just walked in.
00:03:01
Speaker
Yeah, I walked in off the street.
00:03:03
Speaker
I didn't know anyone in Utah, no family, no connection.
00:03:06
Speaker
I knew that they had a capital officer who did hiring.
00:03:09
Speaker
And I literally physically walked in and said, Hey, I'd like to meet with this person.
00:03:15
Speaker
And they said, do you have a meeting?
00:03:16
Speaker
And I said, no.
00:03:17
Speaker
Luckily, he came out and then just wheeled my way in and saying, hey, I'm from California.
00:03:23
Speaker
I moved out here.
00:03:24
Speaker
I've done a startup before and I wanted to introduce myself.
00:03:27
Speaker
And that led to an interview with the fund, actually.
00:03:31
Speaker
It was a bizarre way to get a job.
00:03:34
Speaker
It was impressive.
00:03:35
Speaker
Well, Matt's always had an incredible ability to sell.
00:03:38
Speaker
And then I think within the week, we'd see Matt challenge some of the senior partners in front of everyone.
00:03:43
Speaker
We're like, all right, this is going to be awesome.
00:03:47
Speaker
It's only going to get better from here.
00:03:49
Speaker
That's so good.
00:03:50
Speaker
That's funny.
00:03:51
Speaker
I describe that period as being the most behaved period of my life.
00:03:54
Speaker
I didn't have any friends.
00:03:57
Speaker
Didn't know anyone was from out of town.
00:03:59
Speaker
So good.
00:04:00
Speaker
And Gavin, welcome back to the show.
00:04:02
Speaker
For those who are new, we're going to have a link to Gavin's bio along with Jeremy's and Matt's in our show notes.
00:04:08
Speaker
But Gavin, to help return listeners get to know you a little bit better, why don't you tell us about what you're currently reading?
Gavin Christensen's Inspirations
00:04:14
Speaker
Well...
00:04:16
Speaker
I'm actually listening to a book called Caste, which is exploring some of the societal and racial roots of our current system and really comparing it to India, which is pretty provocative, actually.
00:04:27
Speaker
And it really has helped open my mind.
00:04:29
Speaker
And then I just finished a detailed biography of Churchill, which I found incredibly inspiring.
00:04:36
Speaker
I always like asking you because I feel like I always love what you're reading and I just put it on my to read list.
00:04:41
Speaker
I already had cast, so I'll just put the church.
00:04:43
Speaker
Okay.
00:04:44
Speaker
Well, so glad to have you back.
00:04:45
Speaker
And now we're just going to jump into the discussion.
Matt Hoffman's Entrepreneurial Motivations
00:04:48
Speaker
So Matt, you have a long history as an entrepreneur.
00:04:51
Speaker
As mentioned, you were the CEO for Panoptic Security before founding Monarchs.
00:04:56
Speaker
Tell us a little bit about Monarchs, what it does, and then why it was enticing to be a founder again.
00:05:01
Speaker
Tell us about that journey.
00:05:04
Speaker
I think it started because I had gone through these transitions in my career where I had worked at startups or worked in venture or been a part of the founding team, but not really the CEO or the core founder.
00:05:17
Speaker
And I'd gone through these cycles of building those companies and sometimes selling them.
00:05:21
Speaker
And then interestingly, I took huge amounts of time off in between some of those companies.
00:05:26
Speaker
So at one stretch, I took, I think it was 13 months.
00:05:29
Speaker
And another stretch, I took 19 months in between jobs.
00:05:32
Speaker
And I spent a ski season in Europe.
00:05:34
Speaker
I rode a motorcycle through Baja.
00:05:36
Speaker
I did other things other than work, even though every responsible person in my life always told me not to do it, especially when I was younger.
00:05:44
Speaker
They were like, your resume, what are you going to do about your resume?
00:05:47
Speaker
In fact, the reason I got a job at V-Spring is because one of the partners likes to ride motorcycles.
00:05:51
Speaker
And he said, well, what are you doing for the last two years?
00:05:53
Speaker
And I said, well, actually, riding a motorcycle around Mexico.
00:05:56
Speaker
And he's like, oh, awesome.
00:05:57
Speaker
You're hired.
00:05:58
Speaker
That's all we talked about for 30 minutes.
00:06:02
Speaker
So I did those periods of working a lot and then taking time off.
00:06:06
Speaker
And after I was coming off my last time off, it sort of occurred to me that I was always really critical of the CEOs that I worked for.
00:06:15
Speaker
and sometimes critical of the other founders in probably a way that somebody who doesn't have children would be critical of parents.
00:06:22
Speaker
It's pretty difficult to throw stones if you've never really done it yourself.
00:06:26
Speaker
So in this case, I just said, I'm not young anymore.
00:06:30
Speaker
And if I'm going to do this again, I better do it now.
00:06:33
Speaker
And if I'm going to do it, I want to make it mine.
00:06:37
Speaker
And so I really put it together myself through my own network with my own resources, and then raised money from people that I had already worked with in the past that already knew me that I had some track record with.
00:06:48
Speaker
So really, it was sort of my child, if that makes sense.
00:06:51
Speaker
That was why I wanted to do it.
00:06:53
Speaker
So what does
Monarchs' Cybersecurity Challenges
00:06:54
Speaker
Monarchs do?
00:06:54
Speaker
This is where my wife tells me not to talk about this at parties.
00:06:58
Speaker
She literally would say, nobody wants to know this.
00:07:01
Speaker
Nobody wants to understand this.
00:07:03
Speaker
So Monarch protects web servers from intrusions.
00:07:08
Speaker
And there are ways that you can insert these tiny little files called web shells.
00:07:12
Speaker
And web shells are essentially command and control mechanisms.
00:07:15
Speaker
So you can log in and tell the file to go do other things inside of the system.
00:07:20
Speaker
You can pretty much do whatever you want once you insert one of these things inside of a web server.
00:07:25
Speaker
So that's what Monarchs does.
00:07:26
Speaker
It's an unsolved problem in the cybersecurity space.
00:07:29
Speaker
And really, it's a very painful problem for a lot of people that is really hard to stop for a bunch of reasons we could potentially talk about later.
00:07:37
Speaker
But that's what they do is they stop these intrusions into websites.
00:07:41
Speaker
And bizarrely, cybersecurity is not something that I know a ton about.
00:07:45
Speaker
Monarchs was a company that was really born of my two other co-founders.
00:07:49
Speaker
They were the technical people behind the idea.
00:07:52
Speaker
I wouldn't have known a WAF from network security to save my life at that stage.
00:07:57
Speaker
But I also kind of have a history of doing companies in new verticals that I don't really know.
00:08:02
Speaker
I'm a very strong believer that you can kind of learn most industries in a year, year and a half.
00:08:08
Speaker
I've done banking software.
00:08:11
Speaker
I've done fingernails for women in the cosmetics world.
00:08:14
Speaker
I've done a credit card company, a cybersecurity company.
00:08:18
Speaker
I just went all over the map.
00:08:20
Speaker
So cybersecurity didn't scare me.
00:08:21
Speaker
It was actually really interesting and fun.
00:08:24
Speaker
It was extremely intellectually engaging after my last job that wasn't very intellectually engaging.
00:08:29
Speaker
Also, really hot, growing space.
00:08:32
Speaker
The argument is it's going to get more and more prevalent in our existence on planet Earth that everything is going to have a cybersecurity component and a connectivity component.
00:08:41
Speaker
So I was really attracted to those things about it.
00:08:45
Speaker
Definitely something that I feel like I need to know more about.
00:08:47
Speaker
That's exactly how people respond at parties.
00:08:50
Speaker
They nod their head and then they say, I need to go get a drink or something.
00:08:54
Speaker
And they walk away.
00:08:55
Speaker
Wow.
00:08:56
Speaker
Yeah, that's so interesting.
00:08:57
Speaker
And it impacts us all in ways that we don't even know.
00:08:59
Speaker
And so I'm glad that Monarchs is here.
00:09:01
Speaker
And Gavin, Panoptic Security was a Kickstart portfolio company.
00:09:06
Speaker
You already had a relationship with Matt.
00:09:08
Speaker
How did your experience with his leadership skills impact your decision to invest?
00:09:13
Speaker
Good entrepreneurship is good process.
00:09:15
Speaker
And Matt, despite his success, is a guy that really believes in the process.
00:09:20
Speaker
So he immediately went to work learning as much about the space as anybody, doing 100 interviews with people in the space, and really found a really interesting problem and solution set that we could execute against.
00:09:33
Speaker
That's the next part of the story, which is that solution was really hard to actually create.
00:09:38
Speaker
So Matt, was it harder than you thought it was going to be?
00:09:42
Speaker
Yeah, on a couple of levels that inherent in that question about imagine assumes that I even understand how to solve these problems or that I understand the mechanisms through which these problems are created, which I don't.
00:09:53
Speaker
And that's the defining reason why this was such a struggle for me is because I don't write code.
00:10:00
Speaker
I'm not an MIT dropout.
00:10:02
Speaker
I couldn't even read the files that we were looking for, much less write the software and the algorithms to find them.
00:10:09
Speaker
So I was very dependent on other people to really execute.
00:10:12
Speaker
Imagine, I said, hey, we're going to go build a four-story house tomorrow.
00:10:17
Speaker
And you're like, well, I'm not a general contractor.
00:10:19
Speaker
That's sort of where I was at.
00:10:21
Speaker
I can sit and talk to engineers about software.
00:10:23
Speaker
I'd worked at software companies most of my career, but I could never really write that code and solve those problems.
00:10:29
Speaker
So yes, it was much harder than I could ever understand because I didn't really understand it fundamentally.
00:10:34
Speaker
And I think also the guys that I originally tried to solve the problem with didn't have a full understanding of it either, which Gavin will tell you is not uncommon.
00:10:42
Speaker
In venture-funded scenarios, you jump in the pool, what you're really relying on is everybody knows how to swim and will learn how to swim and...
00:10:50
Speaker
learn how to solve these problems.
00:10:51
Speaker
And we did.
00:10:52
Speaker
We made lots of progress.
00:10:54
Speaker
But there was a reason this is an unsolved problem in the cybersecurity space.
00:10:58
Speaker
The old cliche about if it was easy, everyone would be doing it.
00:11:02
Speaker
That's true.
00:11:02
Speaker
This is really difficult to solve.
00:11:05
Speaker
And it causes real economic pain.
00:11:07
Speaker
And there are real buyers who are willing to spend money if you can solve this problem.
00:11:11
Speaker
But it's just not easy to do.
00:11:13
Speaker
Jeremy can tell you in much greater detail why, but that was the defining problem of the first couple of years of the company.
00:11:22
Speaker
And we did meetings with literally 120 or 130 different companies and asked them all about this problem.
00:11:29
Speaker
We were just years behind in terms of being able to actually execute on solving the problem.
00:11:35
Speaker
A lot of solutions in the space are sold to people based on fear, and they don't really solve a problem.
00:11:42
Speaker
It's the old idea of like, you should really make sure you don't get hacked and you should buy the software and it doesn't really solve the problem.
00:11:49
Speaker
Jeremy, I want to hear from you.
00:11:51
Speaker
What do you think about that?
00:11:52
Speaker
Yeah, I call it scare a CISO sales.
00:11:56
Speaker
It's something bad might happen to you six months down the road, a year down the road.
00:12:01
Speaker
Do you want to be the person that the board is looking at saying, why didn't you try to do something about this and getting fired for it?
00:12:08
Speaker
And there are a lot of decisions in cybersecurity that buy software just based on that kind of decision matrix.
00:12:15
Speaker
Okay, so you're three years into the company, Matt.
00:12:17
Speaker
This is where Jeremy comes into the story.
CEO Transition: Challenges and Dynamics
00:12:20
Speaker
Can you tell us more about how you connected and how the decision of Jeremy Takeover Monarchs came into play?
00:12:27
Speaker
I guess to preface that a little bit, there were two dynamics that were happening that led to the discussion even to bring someone like Jeremy in.
00:12:37
Speaker
The first dynamic was that I've never found a vertical market where more people wanted what we were selling.
00:12:43
Speaker
It was bizarre.
00:12:44
Speaker
Every single company that we went and talked to, they said, this is one of our top two engineering problems.
00:12:49
Speaker
And we have 35 full-time employees working on blah, blah, blah.
00:12:53
Speaker
It was millions of dollars they were spending...
00:12:56
Speaker
to solve this problem.
00:12:57
Speaker
This is every salesman's dream.
00:12:58
Speaker
You go in and say, is your water running?
00:13:00
Speaker
Yes, our water has been running for six months.
00:13:02
Speaker
Well, hey, I have a way to shut the water off.
00:13:04
Speaker
Great.
00:13:05
Speaker
Because our building is flooded.
00:13:06
Speaker
That's literally what we were hearing.
00:13:08
Speaker
And literally, we were this rinky-dink startup with six or eight people.
00:13:12
Speaker
And we'd say to these big companies, will you test the software?
00:13:16
Speaker
And they'd say, yes, next week.
00:13:17
Speaker
Put you at the top of the list.
00:13:19
Speaker
And that's really uncommon.
00:13:21
Speaker
There's lots of startups that go out and have a solution and they really can't find people to test it or they don't really fit where they think they fit.
00:13:28
Speaker
And there's no product market fit is the way people would refer to it.
00:13:31
Speaker
That was not our problem.
00:13:33
Speaker
So I was extremely excited.
00:13:35
Speaker
I was going to the board telling them, boy, we're going to get people to buy this relatively quickly for big amounts of money.
00:13:41
Speaker
Very, very promising on the demand side.
00:13:44
Speaker
And then the issue was that when we first started testing it, it wouldn't work, or that we would cause problems on their servers or have other issues, which of course isn't uncommon to startups either, that you have to get around those things.
00:13:56
Speaker
So we just set about trying to execute.
00:13:59
Speaker
And literally, I had a salesman that didn't have much to do during that period because I had to tell him to stop because we had way more demand than we could ever have fulfilled near term.
00:14:10
Speaker
And then I started going through a series of engineering hires to try and solve the problem.
00:14:14
Speaker
And again, being ignorant as I am in that world, I was really relying on the CTO or my lead engineers or my VP of engineering to tell me, hey, how are we going to solve this problem?
00:14:24
Speaker
How long is it going to take?
00:14:25
Speaker
How much money is it going to take?
00:14:27
Speaker
And I was participating in those conversations, but I never felt like I really understood.
00:14:31
Speaker
And that created a dynamic where I was missing my expectations with the board.
00:14:36
Speaker
where I would go back and say, I think we got it solved.
00:14:38
Speaker
And then we put it in and it wouldn't work.
00:14:41
Speaker
And then I'd go back to the board and say, well, we're not solved yet.
00:14:43
Speaker
We need to hire this one other person.
00:14:44
Speaker
Another three months.
00:14:45
Speaker
And then I'd go back and say, okay, it's working again.
00:14:48
Speaker
And we're going to put it in.
00:14:49
Speaker
And then it would work for a little while and it would break.
00:14:51
Speaker
We went through that cycle, which was just terribly frustrating to me because we're trying to build a wall and I can't participate in the bricklaying.
00:15:01
Speaker
it was heartbreaking to me because it was an apple that we could just pick right off the tree and it just wasn't happening.
00:15:07
Speaker
We just couldn't get it done.
00:15:09
Speaker
So I had to make some pretty difficult decisions that wrecked some personal relationships and let some people go and try and upgrade the kind of people we were hiring.
00:15:18
Speaker
And then another thing happened, which was engineers are kind of a fickle bunch.
00:15:22
Speaker
They're a goofy bunch.
00:15:23
Speaker
And I'm sure they'd say the same about salespeople, but they don't really want to come work for a salesman.
00:15:28
Speaker
They want to come work for another hotshot engineer.
00:15:32
Speaker
And that's totally understandable to me.
00:15:33
Speaker
So I struggled recruiting, but
00:15:36
Speaker
This problem that we're trying to solve is complex enough that you really need top shelf people to solve it.
00:15:41
Speaker
They tend to be expensive.
00:15:42
Speaker
They tend to already have awesome jobs like Jeremy in both cases.
00:15:47
Speaker
And they tend to be very smart and very headstrong about how they want to solve the problem.
00:15:53
Speaker
And I remember literally, I went home and talked to my wife and I said,
00:15:57
Speaker
Boy, I'm struggling.
00:15:58
Speaker
I don't know what to do.
00:15:59
Speaker
I don't want to burn all this money and disappoint my investors.
00:16:02
Speaker
And this is our third iteration of trying to solve the problem.
00:16:06
Speaker
And it's so frustrating because we have all this demand.
00:16:08
Speaker
And my wife said, Well, if you were going to find someone to run the company, who would that person be?
00:16:16
Speaker
And I said, What do you mean?
00:16:18
Speaker
And she said, Well, what would the resume be like?
00:16:19
Speaker
Tell me what would be on this person's resume.
00:16:22
Speaker
And I literally said, I want an MIT computer scientist.
00:16:26
Speaker
I want someone with a cybersecurity background, both of which I don't have.
00:16:30
Speaker
And I would like someone who has like 15 years of experience.
00:16:34
Speaker
She said, that's not you.
00:16:37
Speaker
That's not what you're good at.
00:16:38
Speaker
I said, I know that.
00:16:39
Speaker
And that really sort of stuck in my head for the next couple of weeks.
00:16:42
Speaker
I was like, this is not me.
00:16:44
Speaker
I'm not going to be able to solve this problem.
00:16:47
Speaker
And then I started thinking, well, I can stick around and sell.
00:16:51
Speaker
As soon as we get this thing built, then I will really be able to do what I do well.
00:16:55
Speaker
So I never really thought about leaving completely.
00:16:58
Speaker
And that over the course of the next couple of weeks, when I considered talking to the board about it,
00:17:04
Speaker
If you have good communication with your board, there's no possible way you're going to raise the subject of replacing yourself without causing all kinds of political problems because they've really invested in you.
00:17:15
Speaker
And we had just taken on a new round a year prior, less than a year prior.
00:17:19
Speaker
So there are some pretty fixed expectations about me being involved in the project, unless they marched me out of the office and fired me, which I always told them they could.
00:17:27
Speaker
Had the board come to me and said, hey, we think we need to make a change, I would have listened.
00:17:32
Speaker
But I knew that even having the conversation was basically going to cause problems.
00:17:37
Speaker
So then it was just a question of like, hey, do I try and hire a CTO?
00:17:41
Speaker
Then I kept thinking, well, if I want someone who is as good as I would like to recruit, who could really solve this problem, they're going to want to run the company.
00:17:49
Speaker
And then what am I going to do?
00:17:50
Speaker
I'm going to sit around waiting for the problem to be solved.
00:17:53
Speaker
So that was kind of what led up to making a decision to try and find someone of Jeremy's caliber, which to be totally honest, there was no way we were ever going to be able to attract Jeremy.
00:18:04
Speaker
Well, we talked, right?
00:18:04
Speaker
I mean, we talked a year earlier about it.
00:18:06
Speaker
When we first met, I was introduced to Matt and the team by a common friend in Salt Lake City.
00:18:13
Speaker
And based on what I was already doing and based on where Monarchs was, it just didn't make sense.
00:18:17
Speaker
It wasn't interesting enough.
00:18:18
Speaker
It was like Monarchs or Vivint for the same role.
00:18:21
Speaker
Which one would
00:18:22
Speaker
you?
00:18:22
Speaker
Which one would you choose?
00:18:24
Speaker
Yeah.
00:18:24
Speaker
I remember telling Gavin and the board, hey, I don't think he's a real candidate for us until we started talking about him running the company himself, which I think is something Jeremy can speak to.
00:18:35
Speaker
But he had communicated to me that he had aspirations to do that relatively soon.
00:18:40
Speaker
And frankly, it made more sense because the stage the company was at and what the company needed, it was Jeremy's resume.
00:18:48
Speaker
Then we started talking about it and we're interviewing a couple of other people as well.
00:18:52
Speaker
But every single person I looked at was heavy tech.
00:18:56
Speaker
CTO their whole career, coder by trade.
00:19:00
Speaker
When we were selling it, I couldn't even sell it because we were selling it to a CTO of a hosting company who would ask all these esoteric questions that I wasn't able to answer.
00:19:09
Speaker
I had to bring my VP of engineering to every sales call.
00:19:12
Speaker
So we needed a person like that.
00:19:15
Speaker
And I think that's proven to be a good decision.
00:19:18
Speaker
Yeah, totally.
00:19:19
Speaker
And Gavin, a CEO transition like this doesn't happen every day.
00:19:23
Speaker
As Matt mentioned, it was a tough conversation with the board.
00:19:26
Speaker
How involved were you with this decision and what were you thinking during this time?
00:19:31
Speaker
I mean, it was definitely tricky.
00:19:33
Speaker
But I think as we thought about it and talked through it, it's just hard to imagine a scenario where Matt didn't feel like this was the right answer.
00:19:43
Speaker
it's weird to look back on it a year later because at the time, like I could not sleep.
00:19:50
Speaker
I did not sleep a full night for weeks.
00:19:55
Speaker
I'm from a crappy little town in Illinois.
00:19:57
Speaker
My family didn't come for money.
00:19:59
Speaker
The fact that someone would write me a $3 million check so that I can build a company is still amazing to me.
00:20:06
Speaker
So to walk through my hands up and say, I don't want to do this anymore.
00:20:10
Speaker
I'm going to walk away.
00:20:11
Speaker
That wasn't an option for me.
00:20:13
Speaker
And so I lost a lot of sleep over it about how can I thread the needle because I really felt strongly it was the right thing to do.
00:20:20
Speaker
tactically for the business.
00:20:22
Speaker
But then emotionally, I'd spent 3 years getting to know all these people and building it and loved going to work and liked what the people worked with.
00:20:30
Speaker
And Gavin and I have a friendship that's 17 years old.
00:20:33
Speaker
I don't want to blow that up over something like this.
00:20:36
Speaker
I remember I flew down to Los Angeles to talk to our other investors.
00:20:40
Speaker
And I was almost in tears.
00:20:43
Speaker
I just was like, look, I don't know how to do this.
00:20:47
Speaker
And they were not psyched about it.
00:20:48
Speaker
So it was a pretty difficult scenario for me.
00:20:52
Speaker
I can feel that.
00:20:53
Speaker
I can feel the weight of this decision.
00:20:56
Speaker
I hope Jeremy understands how much pressure is on him for me emotionally.
00:20:59
Speaker
Do you, Jeremy?
00:21:01
Speaker
I feel like you're the man of the hour.
00:21:02
Speaker
We really like, now it's over to you, Jeremy.
00:21:04
Speaker
I'm just kidding.
00:21:05
Speaker
Everything's fine.
00:21:08
Speaker
My main thoughts is I'm listening to this.
00:21:09
Speaker
Number one, Matt is really selling himself short.
00:21:12
Speaker
It's not like someone coming in with a deep technology background.
00:21:15
Speaker
All of a sudden, it's like, oh, there's a clear path to solving this thing.
00:21:18
Speaker
And just Matt was blind.
00:21:20
Speaker
And now I've got vision for this.
00:21:22
Speaker
No, this is hard.
00:21:23
Speaker
A deep technologist trying to solve this problem would go through multiple iterations of thinking they knew what they were doing, realizing they didn't, having to adjust, move to the next thing.
00:21:33
Speaker
So this is a bit more complicated.
00:21:35
Speaker
And the other thing I'm thinking is that I hope people are talking about me this positively a year from now.
00:21:40
Speaker
Yeah.
00:21:42
Speaker
We hope so too, Jeremy.
00:21:44
Speaker
I'm just kidding.
00:21:45
Speaker
That can be part two to the podcast, right?
00:21:47
Speaker
How does the board feel about Jeremy in 2022?
00:21:51
Speaker
And I do think that's maybe a unique aspect of just this story.
00:21:55
Speaker
Just like, hey, we're still in this.
00:21:57
Speaker
Now, Jeremy has accomplished some important things.
00:22:00
Speaker
Matt stayed really involved here, but we're still on the journey here.
00:22:04
Speaker
There's still a fight.
00:22:07
Speaker
I would say though, Gavin, that I think the company has a substantially greater likelihood of succeeding in a way that will be accretive to your returns and your fund than it would have.
00:22:17
Speaker
Oh, for sure.
00:22:18
Speaker
If you look at it from my perspective, it's
00:22:21
Speaker
coming in as a CEO to someone else's company that was started and there's something they want to leave.
00:22:26
Speaker
It's like the number one assumption is this thing has hair all over it.
00:22:31
Speaker
That's why it's like trying to get out of here that what in the world?
00:22:37
Speaker
And so, no, for me, the number one thing is, is this a real thing?
00:22:41
Speaker
Or is this just a dog and pony show to go and take up something that he wants to get away from as quickly as possible?
00:22:47
Speaker
And to see the emotional attachment and the commitment and the passion that Matt had, I wouldn't be here otherwise.
00:22:54
Speaker
Yeah.
00:22:54
Speaker
And a year in, how are you feeling about it?
00:22:56
Speaker
I'm loving it.
00:22:59
Speaker
Matt talked a little bit about what got him to want to be a CEO the first time.
00:23:04
Speaker
It was similar for me.
00:23:05
Speaker
And in particular, it was feeling like I would get to a place where I had a really passionate sense of what I thought was right to be done, what I thought the right course was.
00:23:15
Speaker
And it's like, I want to...
00:23:17
Speaker
Go and see if I can do this myself.
00:23:20
Speaker
And being a CEO for me was about all of that.
00:23:22
Speaker
It was about the accountability, the ownership, the pressure, the leadership that was required, and hopefully invigorating myself with that.
00:23:30
Speaker
For that, check.
00:23:31
Speaker
It's done it.
00:23:32
Speaker
So my guess is that, Matt, you're sleeping a little better a year into the decision.
00:23:35
Speaker
Jeremy, you're probably sleeping a little worse.
00:23:37
Speaker
Gavin, how are you sleeping?
00:23:40
Speaker
I didn't sleep last night at all, but it's not Monarchs.
00:23:43
Speaker
How about that?
00:23:43
Speaker
I know.
00:23:45
Speaker
Not because of Monarchs, because there's a hundred other companies.
00:23:48
Speaker
As you said earlier, Gavin, we're still in the middle of Monarchs' story.
00:23:52
Speaker
And so it's going to be so interesting to see how this pans out.
00:23:54
Speaker
I've loved the discussion we've had around the fact that these are hard decisions.
00:23:58
Speaker
Matt, we can feel how much that weighed on you.
00:24:00
Speaker
Jeremy, you weren't sold in the beginning and then there were things that had to be in place.
00:24:03
Speaker
for that to happen.
00:24:04
Speaker
And it's just such a fascinating story.
00:24:06
Speaker
And I'm excited to see it play out.
00:24:08
Speaker
So we'll be keeping an eye on you.
00:24:09
Speaker
We're having you back on the podcast in another year.
00:24:11
Speaker
It's going to be great.
00:24:12
Speaker
But I do have one final question for each of you.
00:24:16
Speaker
What's an effective practice that you've implemented in your work or personal life that's had the greatest impact on your success?
00:24:23
Speaker
In terms of practices that I feel like have been effective for me, I would say that
00:24:31
Speaker
I have a sincere belief that I can learn just about anything I need to learn.
00:24:37
Speaker
Maybe short of coding.
00:24:39
Speaker
I would say that.
00:24:41
Speaker
I'm too old for that.
00:24:42
Speaker
But I'm not afraid of the process of being dumb.
00:24:47
Speaker
of being in a room and saying, I don't know what that means.
00:24:50
Speaker
Can someone explain it to me?
00:24:52
Speaker
And if someone does explain it to me, I will learn it.
00:24:55
Speaker
And pretty soon after a year, I will have a pretty good grasp of whatever I'm working on.
00:25:00
Speaker
I just don't see how anyone can succeed without constantly learning stuff, learning new things.
00:25:07
Speaker
That, to me, requires an element of humility where you have to be comfortable in a room and raising your hand saying, I don't know what laugh means.
00:25:15
Speaker
Jeremy, I looked at our notes from Monarchs and the first week of me working there, I didn't know what a web application firewall is, which is just laughable given what I was about to set off and try and do.
00:25:27
Speaker
I'm sure lots of people laughed at me in the first six months of these meetings.
00:25:31
Speaker
I probably asked really stupid questions.
00:25:33
Speaker
And I would say that's maybe the thing that has allowed me to do what I do, which is I just don't really care that I don't know that stuff.
00:25:41
Speaker
If someone explains it to me or I can read about it, I'll get there.
00:25:45
Speaker
And then I will be effective after that.
00:25:48
Speaker
I can't imagine staying in the same industry for your whole career.
00:25:50
Speaker
That just seems like a punishment to me.
00:25:54
Speaker
Everyone listening who has to this point is now like, oh, great.
00:25:56
Speaker
No, they're really lucky.
00:25:57
Speaker
They have all these connections and they know everyone and it's easy to get a job.
00:26:01
Speaker
There's all these advantages of that.
00:26:03
Speaker
Trust me.
00:26:04
Speaker
Yeah.
00:26:05
Speaker
Thank you so much.
00:26:06
Speaker
I think that's a really interesting insight and takeaway.
00:26:08
Speaker
I've been taking notes and I love it.
00:26:09
Speaker
And Jeremy, I'd love to hear from you.
00:26:12
Speaker
Just a practice that I'm committed to is just really being transparent and open with folks to really...
00:26:22
Speaker
try to take on the hard conversations earlier.
00:26:26
Speaker
I just think that in the end, there's value to having people rely upon what you're saying, even as it's creating sometimes short-term problems in terms of creating more visibility for stuff that sometimes people aren't going to completely understand or they might overreact to.
00:26:42
Speaker
Thank you.
00:26:42
Speaker
And Gavin, I'd love your thoughts on how these concepts of humility and learning and curiosity and then trust and transparency have positively affected monarchs.
00:26:53
Speaker
Well, I think we see here a very difficult situation and set of decisions that often doesn't go this well.
00:27:02
Speaker
And so I think you can clearly see how the learning aspect of what Matt's talking about kept himself aware enough to come to a really hard truth about the situation that few founders are able to have that level of self-awareness.
00:27:14
Speaker
So I think it's a real strength.
00:27:16
Speaker
With Jeremy, that's really enabled him to hop in the job as the CEO and learn and really improve quickly and get to a point where he's
00:27:24
Speaker
really executing well and learn from that.
00:27:27
Speaker
These are all qualities that I think many of us would really benefit by trying to apply these better in our roles and really saying, hey, how do we help this company, whatever I'm part of, succeed?
00:27:38
Speaker
And it may mean that I might need to change roles.
00:27:41
Speaker
It may mean that I need to learn something that I don't know or admit something about myself that's hard.
00:27:47
Speaker
But that's what the best companies do to get to success.
00:27:50
Speaker
Rarely is it a straight line up and to the right, as these gentlemen know.
00:27:54
Speaker
And
00:27:55
Speaker
We all know the norm is always a little more challenging that typically.
00:27:59
Speaker
So I think this is a great illustration of how these qualities are contributing to success.
00:28:04
Speaker
I think you've really just summed up the conversation perfectly right there.
00:28:07
Speaker
So we can just end on that.
00:28:10
Speaker
Another thing I wrote down in my notes too that I circled is trust.
The Importance of Trust in Startups
00:28:14
Speaker
The trust that you first had in Matt to start the company and then Jeremy was to join the company and take on that role and Gavin trusting that Matt was making the right decision.
00:28:22
Speaker
It's just so vital the connections you make in startups and
00:28:26
Speaker
the need to establish relationships of trust throughout the entire process.
00:28:30
Speaker
So thank you all so much for being here.
00:28:33
Speaker
Really appreciate your willingness to be candid and to talk about the hard aspects of startups.
00:28:37
Speaker
So appreciate you being here.
00:28:40
Speaker
Thanks for having us.
00:28:41
Speaker
It was a pleasure.
00:28:42
Speaker
Thanks for having us.
00:28:44
Speaker
And of course, thank you for listening as we dive deep into what it takes to create a perfect pitch.
00:28:49
Speaker
If you want to learn more about our investor, Gavin Christensen from Kickstart or Jeremy Warren, Matt Hoffman and Monarchs, we'll have a link to the company and a longer bio in our show notes at kickstartfund.com.
00:28:59
Speaker
You can listen to more episodes of Perfect Pitch wherever you listen to your podcasts.
00:29:03
Speaker
And if you like what you're learning, leave us a reviewer rating.
00:29:06
Speaker
We'll be back next time with more insights from the entrepreneurs and the investors who fund them.
00:29:10
Speaker
So be sure to subscribe so you don't miss a
00:29:12
Speaker
thing.