In this episode, I talk with Brett Hurt. Brett is an accomplished entrepreneur, advisor, and investor. Among his many accomplishments, he’s the co-founder of Coremetrics, which was acquired by IBM and Bazaarvoice, which he took public.
During our time together, I focused on asking questions that cut through the clutter and get to the heart of what you can do to make your own luck and increase your odds of startups success. You won’t want to miss what Brett reveals. Enjoy!
Have comments, questions, ideas, or feedback? I want to hear it. Tweet me at william_griggs.
Topics Covered In This Episode
- Before we dig into the actionable tactics, I want to start with the day you took Bazaarvoice public.
- What was running through your head?
- What emotions were in the air?
- What was the single hardest thing you had to face when working to get Bazaarvoice off the ground?
- How did you overcome the challenge?
- How do you think founders should think about their advisory board?
- How can someone listening to this get someone like you on his or her advisory board?
- What do you typically help entrepreneurs that you invest in with?
- What are the two biggest mistakes you see early-stage entrepreneurs make?
- What the heck does a Chairman of the Board do?
- What impact can a good chairperson have on a startup?
- Do all startups have them?
- When do founders need to secure one?
- What should they look for in a chairperson?
- What should they expect from their chairperson?
- What three things did you learn about how venture capital worked, that our audience of founders must know?
- What surprised you most about how things work?
- Why did you invest in…
- Can you talk about the impact going to business school has had on your success?
- Can you talk about the impact having an executive coach has had on your success?
In this episode, I bring in Brett Hurt to help with all three. Brett is an accomplished entrepreneur, advisor and investor. He’s the cofounder of Coremetrics, which was acquired by IBM, and Bazaarvoice, which he took public. During our time together, I focused on asking questions that were crafted specifically to cut through the clutter and get to the heart of what can make or break your startup. Enjoy. Brett thanks for joining us today.
Brett Hurt: Thanks a lot. Being on Startup Slingshot reminds me of that time I was interviewed by Larry King. This is fantastic.
William Griggs: Larry King, never heard of him, does he have a podcast?
Brett Hurt: He’s a little bit beyond the podcast. He’s got a TV show. It’s a little well-known TV show.
William Griggs: Hmm, interesting, I don’t think anybody watches TV these days –
Brett Hurt: Yeah, pretty much.
William Griggs: – especially not cable. It’s all about the Internet, it’s all about new mediums, but you know we have a limited time here so we’re gonna dig right in. We’re gonna cover a lot in this interview. We really appreciate your time for coming on. We’re gonna go fast. We’re gonna bounce around to a bunch of different topics and experiences so we can really maximize our time together –
Brett Hurt: Sounds great.
William Griggs: – and leave the founders in our audience better prepared to change the world. But before we dig in to all the actual tactics you’re gonna share, I want you to take us to the day you took Bazaarvoice public. Can you tell us kind of what was rolling through your head, what emotions were in the air?
Brett Hurt: Well, I’m glad you asked that. I’m actually pushing a blog post live tomorrow about that exact same topic. Tomorrow’s my 43rd birthday. It was a very emotional time. I actually set a goal for myself when I was 25, and I did what you’re supposed to do. I wrote the goal down. I told my parents about it, I told my wife about it and I told a handful of friends. And that goal was that one day I would found a company and take it public, and I wanted all that to happen by my 40th birthday.
And unfortunately, I missed that by a few days. We started our IPO road show on February 20, 2012, I turned 40 on February 14, 2012 and we took it public on February 24. So, I gave myself a hall pass. I thought well, a ten day miss is not too bad and, of course, I’m being a little bit funny here, but in all seriousness I did write down that goal, and it is amazing how when you write down a goal sometimes dreams can come true.
And it’s all the things that people say about the IPO process. It’s a very, very long process in terms of the number of hours that you spend each day with incredibly high-profile fund managers that are just constantly asking you questions to really probe into the business model and then just the grueling travel schedule of it all. But frankly, I found the process very exhilarating. I loved the company from the very beginning, and I found it to be an incredible honor to be on the road telling our story of all the great people that had made it possible for me to actually be there.
And the process was very successful. We actually went public; we priced the IPO at $12.00 a share, $8.00 to $10.00 was what was on the cover and the maximum you can price an IPO is 20 percent above the max end of your range, and so we were able to do that because of the incredible demand that we saw in the IPO process. And the really neat thing that happened on the day of the IPO was back in the Austin office following the road show on February 24 for the opening of the NASDAQ, and NASDAQ did something that they had never done before.
They had a live stream into our office where we could see the orders come in in real time and we could see the price change in real time, and I think that the market for our stock, it doesn’t actually open immediately, it takes a while to build the order book on the day that you actually go public, but I think that it opened around 9:45 a.m. or so, so about an hour and 15 minutes later. Then the market generally opens in Central Time, and it opened right around, I think around $14.50 per share and the energy in the office was amazing and everybody, of course, was cheering and everything else.
And then I gave a talk about how now that we’re a public company it’s even more about the performance of how we work together as a team, that was what had gotten us to that point and I reminded people to from this point on to the greatest extent they could ignore the IPO price and the stock price and reminded them of companies like Amazon and Salesforce.com, which traded sideways for quite a long period of time after they went public, traded down and then sideways for quite a long period of time after they public and how it’s all about us working together for the long term so it was a really neat moment though.
The energy in the Austin office was electric and, of course, all of our offices all over the U.S. and all over the globe were piped in for that real-time event.
William Griggs: Yeah, that’s really cool. You know the realization of that goal that you set when you were 25, that’s really interesting. That shows to the power of, you know, setting the goals, keeping them in front of you, allowing you to focus on that goal. Like you said, you gave yourself a ten day grace period. I will also give you a ten day grace period, you know, we can actually probably go and change your birth records to say you were born ten days later if we wanted to, but it’s that long term –
Brett Hurt: I don’t know if my mom would be too happy about that.
William Griggs: Well, we don’t have to send her this. She doesn’t need to know. It makes the story even better, but that’s an awesome story.
Brett Hurt: Well, thanks.
William Griggs: To think about the emotion in the room, think about –
Brett Hurt: And by the way, you’re one of the only people that know that story. Of course, now your audience does too and I’m putting a blog post about it live tomorrow, but I didn’t talk about that on the day of the IPO. That was my personal goal, and I was very determined for us to hit it and I was really glad when we almost did. We were so close, ten days.
William Griggs: Well, we will link to your blog in the show notes below the podcast so everybody can dig in and see some of the more recent posts, once this goes live, dig into that post if they wanna learn more. But we have a lot of entrepreneurs that they like to look forward to those moments, that exit, that IPO, but really what they’re in is they’re in the trenches right now. They’re trying to figure things out; they’re trying to get things going.
So, let’s take a step back and start thinking about the beginning of Bazaarvoice. Was there a single hardest moment that you faced trying to get it off the ground, and how did you overcome that challenge?
Brett Hurt: So, every company, every startup faces some really tough things at the beginning. With Amazon, for example, I think Jeff Bezos’ toughest thing there was he was one of the first dot coms and 87 out of the first 100 people he pitched past and he never thought he was gonna get the company funded. With Bazaarvoice, that wasn’t the issue. I already had a track record. I had investors who wanted to invest and wrote me checks from close to the beginning. I think our first angel checks came in when we were about two weeks old.
This individual in New York named Ralph Mack, who if you look him up, he’s probably the best angel investor for marketing SaaS type companies in the world. His portfolio is just amazing, and he believed in me at the beginning of Coremetrics and the beginning of Bazaarvoice. But getting to the crux of your question, our big issue, our big existential threat, if you will, was that almost no retailers in the U.S. had customer reviews on their site and there was a reason for that.
As a matter of fact, no one out of all of our clients at Coremetrics, which was one of the largest web analytic solutions for the retail industry, not a single one had customer reviews and that was kinda the gap that Brant Barton, my cofounder, and I looked at and said, “Wow, this is a wide open market for us to go after.” But the reason as we dug into it, and we had both left Coremetrics on the leap of faith that this would work, we actually didn’t have any data that it would work; we just had faith, and some might say blind faith.
It could have worked out to be blind faith, but you have intuition and you kinda go for it and it is the metaphorical leaping off the cliff, but we quickly found out that the reason that people didn’t build this in-house is that it was incredibly tough to staff, they were concerned about how much content they were gonna get and how they were gonna moderate all that content and what if people wrote profane things or racist things or, you know, illegal types of content and then that would deface their very property.
But the other thing that they were terrified of was what would happen when negative reviews started coming in. And Bezos had faced a lot of pressure on that in Amazon where he just said, “Look, it’s the right thing for the customers.” But publishers were up in arms when Amazon first launched customer reviews. They were incredibly angry at Jeff Bezos and Amazon for allowing that level of transparency out there.
And so I needed a hook because left and right, you know, when Brant and I were talking with potential clients, they were saying, “Well, we’ll never allow negative reviews on our site.” And so I needed a hook, and I had to kind of really step back and think about human behavior and what Brant and I came to realize is that it wasn’t this little website feature. What it was at the end of the day was it was word of mouth. It was the way that we had always been wired to talk to each other as customers.
Of course we’ll all consumers. I find this word consumer to be kind of a derogatory word, and I always remind anybody that uses it, I’d say, “Well, you’re a consumer too, aren’t you?” So, we’re all customers, right? We’re all wired to share in our products and experiences and tell friends about a book we just read or a hotel we just stayed at or a great travel destination or a new camera we just bought or the new iPhone 6 or whatever it is, you know, we’re made up, we social beings, we’re physical beings and products and services are a huge part of our lives and a huge part of our own kind of happiness. And so the hook that I ultimately used was word of mouth.
I got our clients, our prospects at the time, to start thinking about the fact that their customers had always talked to each other in a very authentic way, but they themselves talked to their friends in a very authentic way and that that frankly was already reflected in their metrics, that they already had negative sales trends or negative return trends or positive sales trends because of that content that they couldn’t hear, and they had been trying to get at the truth through marketing, research, through surveys, through focus groups, but if they just had a medium to listen to exactly what their customers were saying in an unbiased way then they could have the most powerful data in the history of their business.
They would be able to precisely know how well their new product categories were performing. They would be able to predict when they were gonna get high returns, they would be able to collaborate much more effectively with the brands that they carried and that hook worked. And then we started to get a lot of clients, and of course the company, I think you know the history, it grew from zero to over $100 million in sales in six years and went public six and a half years from inception. And that took an enormous amount of execution and rigor, but if we hadn’t gotten that initial hook right then the world may be really different.
There’re of course a lot of forces that came along that helped us along the way. I would relate forces like Facebook. Facebook was a tiny company when we started Bazaarvoice. It was close to the public, it was only at a few schools. There was no such thing as Twitter. There was no iPhone or android for that matter when we started Bazaarvoice in 2005 and of course no Pinterest or Snapchat or WhatsApp or any of these other things.
And when Facebook really started to get traction, I would tell people inside the company that this is like a sledge hammer to the wall, like the metaphorical Pink Floyd wall that’s gonna come tumbling down and is going to unleash this era of authenticity and so there were several driving forces that came along that really, really helped Bazaarvoice make the case.
But when we first started, we had to make the case on our own. There was nothing to point to except for Amazon, and you may think knowing what you know about Amazon now that they were a force to be reckoned with ten years ago, but ten years ago they were only about 4 percent of U.S. online retail sales and most people dismissed them. Today, they’re around 20 percent of U.S. online retail sales.
And amazingly, they’re still only 1 percent of U.S. retail sales overall so they have an enormous runway to grow. But back then, people largely dismissed them and they thought that things like customer reviews were just Jeff Bezos being crazy or doing something to differentiate that frankly could tank your sales. That’s what they believed when we first started.
William Griggs: Yeah, that’s interesting because it seems like you’re saying you had that hunch that more retailers, more websites needed these reviews, but when you went to talk to them, they said, “Hey, staffing is a concern and the negative reviews.” And it sounded like the negative reviews were the issue because they thought hey, this is actually gonna lead to a lower conversion rate versus you actually going to them and kinda flipping that on its head and saying, “Hey, you’re gonna get this amazing data, you’re getting all this information.”
Brett Hurt: And so here’s a really neat story that happened. So, we’re going out there trying to make this case, you know, and telling the story as I just told it, but it really was a leap of faith for them as well. And then along comes this Coremetrics’ client that launches customer reviews, the very first Coremetrics’ client globally that launched it. By the way, when we started the company, there were only around three retailers in the U.S. that had customer reviews, believe it or not.
And so along comes this Coremetrics’ client, like the fourth retailer in probably the world to launch it, and because of the way Coremetrics was set up to allow you to measure any new feature like this that launched on the website, we were able to precisely identify those that read reviews versus those that didn’t and what happened afterwards. And this retailer was actually so afraid of customer reviews they didn’t even put the stars on their product page.
They hid everything behind a product reviews tab that you had to click on, and you ask them why they did this from a customer experience standpoint and they literally said, “Because I don’t wanna get fired if it doesn’t work. I don’t wanna put stars on the page because if people see that, they may freak out if it’s like one star.” And so they hid everything behind this kind of dark tab. Well, that created the perfect AB split test, which is the most precise way that you can measure the effectiveness of this new feature on conversion. And what we found out astonished us.
We leveraged Coremetrics; we did a free study for them, a study that Coremetrics would have charged around $20,000.00 to do, but we did it for free. I was the founder of Coremetrics and my cofounder, Brant Barton of Bazaarvoice, was previously the head of account services at Coremetrics so he knew exactly how to do these analyses along with me. So, we basically did the study for them for free, and we found that customers that read reviews converted at a 92 percent higher rate than those that didn’t. And to put this in context, we measured over thousands of clients at Coremetrics.
We measured every website feature you could possibly imagine that came along, and we had never seen anything perform like that, literally nothing, and so Brant being my skeptical better half, he said, “Well, you know, what if this is selection bias?” And I said, “Okay, fair enough. Let’s assume that it’s a third of that conversion. Let’s assume it’s 33 percent or 30 percent.” I said, “Have we seen anything like that in the history of Coremetrics?” He said, “I don’t think so, you know, we’ve seen stuff come close to that.” So, it literally was the Holy Grail to drive conversion and that is in fact, you know, the story that we developed and then the results is in fact the reason that Bazaarvoice grew as fast as it did.
William Griggs: Got you, very cool. So, you definitely learned a lot during the starting of Bazaarvoice and we might have you back on the show to kinda talk through the whole origin story maybe from beginning to end, but I know –
Brett Hurt: Sure, I’d be happy to.
William Griggs: – currently that you leverage a lot of that experience to kinda serve as an advisor or on an advisory board of a handful of startups. I wanna dig in there and ask, you know, how should founders think about advisory boards?
Brett Hurt: Well, founders of companies recruiting advisory board members should think of them as an extended member of the team. So, when people recruit me as an advisory board member, they’re thinking about me as someone that can help them go from zero in sales to over $100 million in sales and potentially through an IPO and multiple acquisitions because that’s the experience I have. So, I can help them all along the journey. If they’re also recruiting me because their company is selling to retailers and brands, well, that’s what I’ve done since 1999 so a number of companies in that area reach out and they not only wanna leverage my scale experience but leverage my domain experience and my network.
But you know at one point, Bazaarvoice had over 30 advisory board members, and I actually wrote a post on my blog. My blog by the way is lucky with the No. 7 dot IO, lucky7.io, and I wrote a post on my blog called How to Leverage Your Advisors and Investors, and I would encourage your audience to read that. But in that post, I wrote about how we had these 30 some odd advisors at Bazaarvoice and some of them were for strategic input. I would have them together regularly to discuss strategy and they weren’t big names at the time, but they were people like Mike Maples, Jr. of Floodgate. He was on my advisory board.
There were people like Josh Kopelman, the founder of First Round Capital. There were people like James A. Crouthamel, the founder of Performics, which got bought by DoubleClick and then of course DoubleClick got bought by Google. There were people like Ralph Mack, who I already told you about, and Steve Katz, who was an amazing serial entrepreneur and Julie Constantine who – or sorry, Julie Allegro, who now has Allegro Partners as her BC firm. So, I’d bring those six together regularly to discuss strategy, but there was this whole other range of advisors that I would leverage very tactically.
There was an advisor specifically to open up the luxury retail space for us because we didn’t have good contacts in that space. There was an advisor specifically to open up the travel space for us because we didn’t have good travel contacts, one for the media space. There were technical advisors that our technical team leveraged very heavily. So, the thing you have to keep in mind if you’re a founder is there’re a lot of people that would love to be on the journey with you but not doing all the day to day work; just kind of giving you advice and leveraging their network and experience.
And especially like Fortune 500 execs, this is a great outlet for them to get into a very entrepreneurial adventure but not have to leave their day job, and they find it a lot of fun and it’s good fodder for the cocktail party conversations and everything else to talk about this cool startup that they’re involved in. I think there’s an entrepreneur in all of us by the way. And so the founder should not look at a one size fits all advisory board. They should not think of building an advisory board of 30 people and having to bring them together.
That would have actually been a disaster had I tried that at Bazaarvoice. I leveraged certain advisors for certain things, for things that I thought that they would be good at. Some advisors I only talked to once and then our team would talk to them probably 20 times over the course of a year so, you know, that’s how it scales. But if you look at that post, I actually talk about how you should leverage them specifically for maximum benefit, and it will make them happy and you happy if you do so because they do wanna be along for the journey. It’s a lot of fun for them too.
William Griggs: Yeah, I’ll definitely put the link to that in the show notes as well. I mean in that post, do you talk about compensation? Are you compensating with equity or is it more of a –?
Brett Hurt: I don’t talk about that in that post. There’s lots written about that out there, but in general I would say that equity for an advisory board member is in the eyes of the beholder. You could recruit a professor type to your advisory board that’s really happy with .05 percent. You could recruit someone like me maybe at 2 percent so it’s all over the board in terms of equity.
And frankly, it’s based on the person’s capability to help you grow and scale that business and what their market value is, and there’s no transparency in terms of that market value. But I would say as a general rule of thumb, most advisors get somewhere between .1 and .25 percent as a general rule of thumb.
William Griggs: Got you, very interesting. So, we’ll definitely link that up in the show notes, people can dig in. Definitely interesting to think about how advisors can help with strategy, networks, technical issues, that stuff. Let’s hop over to the next section, which is talking about the position of chairman of the board. I know that you currently serve as the chairman of the board of a company called Edgecase so let’s dig in there. What does a chairman of the board do? How should founders be thinking about that, etc.?
Brett Hurt: Well, so in that case specifically, think of chairman of the board as kind of a mega advisor. In the case of Edgecase, I attend their executive team meetings pretty often. I’m constantly on the phone with them and their team. I’m spending a lot of time with the CEO of the company, constantly mentoring him and other members of the team. And Edgecase is completely up the fairway in terms of my domain experience. It’s a solution that’s selling to brands and retailers.
It’s creating a big data asset; it’s creating the first universal product catalog with all the attributes you can imagine about products and data asset that even Google or Facebook doesn’t have. Amazon doesn’t have a data asset like that for that matter. So, it’s creating this incredibly powerful level of data in the market space that I know the best, and they wanted me to be as involved as a founder would be and that means that I’ve got a very deep level of involvement there; now having said that, there are certain things that chairmen do not do or chairwomen for that matter.
They do not make the decisions for the company. They respect that the CEO is there to actually lead the company and that they are there at best as a grandfather or a grandmother, and their job is to make sure that that CEO doesn’t run into a wall and really hurt the company, but they’re not there to make that CEO’s decision. And so they’re there to provide a lot of advice, leverage a lot of their pattern recognition, a lot of their experience and network, but they’re not there to actually run the company.
And that’s where a lot of chairman types in my experience fail because people like me that have been entrepreneurs for so long, I mean I’ve been an entrepreneur almost my entire career, they often don’t transition well into this type of chairman role. They’re used to running companies, they’re used to doing it their way and I’m a product of good experiences and bad experiences like any of us. And I’ve worked with people on board of directors that are not good board members that literally try to step in and run the company when they shouldn’t, and so I’ve learned a lot from those bad mentors to not be that way myself.
But it’s a really interesting role where because it doesn’t have a great definition, and for that matter the CEO role does not have a great definition. This is just as a divergence … CEOs often put all this false pressure on themselves thinking that they should do this and that when in actuality the CEO role in the company is the only role in the entire company where it’s not defined. I mean there are CEOs that spend a lot of time on engineering and not a lot of time on other things, and there are CEOs that spend all of their time on sales and not a lot of time on other things.
The key for a CEO, kind of the universal, is that they’re there to set the overall vision for the company, they’re there to secure the overall resources for the company whether that’s people, clients or funding or partners for that matter and they’re there to ultimately leverage the best of their strengths and fill in the areas where they have weaknesses with people that are far better than them at those areas.
It’s cliché; everybody says that, but it’s actually very hard to do because it means you have to be extraordinarily self-aware, you can’t be a control freak, you have to be someone who knows what your limitations are and you have to be someone that’s strong enough to recruit people better than you in those areas and then not micromanage them. So, as chairman, I’m there as a guide for the journey from start to finish.
William Griggs: Very cool. So, we talked about advisory boards, we talked about chairmen, chairwomen, chairpersons; we talked about CEOs and how they should be thinking about it. I know after digging into your background you spent some time as a venture partner over at Austin Ventures working with them. What are some of the things that you learned about how venture capital worked that you didn’t know, you know, you kinda went on the other side of the table as Mark’s sister would say, what did you learn there that you can kind of enlighten our audience about?
Brett Hurt: Sure, and you know just to preface this, I wouldn’t say I just learned this at Austin Ventures. I’ve also, alongside my wife, been investing in startups for the past two and a half years. I’ve seen over a thousand pitches, we’ve invested in a number of startups and we actually have 34 companies total in our portfolio now, and most of them are in Austin, two thirds are in Austin. We’re really focused on Austin as our concentration and really trying to make a difference here locally.
William Griggs: Very cool.
Brett Hurt: So, at Austin Ventures, they offered me that opportunity and I took it because I thought wow, what a great way to get behind the scenes for Austin’s oldest and largest venture capital firm and really learn from people that have been doing this for 20, 25 years.
So, when I was there, I made a point to pull each general partner aside in one on one meetings and ask them about life, the universe and everything so to speak, a nod to one of my favorite authors, Douglas Adams, and I learned a lot from them in terms of the way they went through the process and everything else and I learned how to think skeptically like an investor. I learned how they leveraged their pattern recognition. I learned in really difficult situations how they decided to continue to support a company or not, and I basically was like a sponge because it was this fascinating thing for me.
You know, I’d been kind of the Dorothy of Oz, you know, I’d been the entrepreneur and always walking up the yellow brick path, but I’d never actually seen behind the curtain and seen Oz so to speak and seen people pull the strings from the other side and it was really eye opening. There were things that I found incredibly eye opening about it in terms of the way they went through the process. And one of the biggest things that I learned about it is that it’s just like a law firm or an accounting firm. It is a service business, and it is very dependent on the specific partner that works on your company and this is true of all VC firms.
You know all VC firms, the pitch is hey, you know, it’s a charrette and we’ll leverage the entire partnership to help you and etc., etc. Well, the reality is that each partner at these big VC firms are on 10 to 14 board of directors apiece, you know, that world means that you’re going to a board meeting every few days and you’re constantly context switching and they don’t have a lot of time. There are times where maybe a partner will lob in, help on a specific issue and that is indeed helpful, but 95 percent of your experience when you take VC money is gonna be on the partner you specifically work with.
And this gets to another blog post that I wrote, and that’s called The Critical Importance of Checking References and How to Do It. And one of the things that I learned early on – I was 26 years old, and I was the founder and CEO of Coremetrics at the time, and I pitched very large venture capital firms like Accel Partners. Accel Partners is one of the Top 3 VC firms in the world, most notable for investing in Facebook when it was worth $100 million. They put in $10 million, got 10 percent of the company at the time and returned an insane amount of money to their investors.
William Griggs: They even had a venture partner recently have two IPOs in a single day I believe.
Brett Hurt: Okay, well, that’s amazing.
William Griggs: Ridiculous.
Brett Hurt: So, Accel Partners actually wanted to invest in Coremetrics. And I went out there and I checked the references for Arthur Patterson, the cofounder of Accel, and I write about this in the blog post. And the people that I talked to thought I was insane. They were like, “I can’t believe you’re checking the references for the cofounder of Accel. You realize this is one of the top venture firms in the world.” Like, you know, “Who are you?” You know, “You’re this 26 year old CEO.”
And I said, “Look, I’m a 26 year old CEO that cares a tremendous amount about my company and frankly, I’d find it disrespectful to the company and all of our current shareholders if I didn’t care to the point where I checked their references.” And so I write about in this blog post that there’s this weird thing that happens, and this is really important advice for all of those founders listening. The higher up you go in a company, if you’re recruiting an executive or you’re recruiting a board member – in this case, Arthur Patterson and Peter Fenton, he was an associate at the time and is now a general partner at Benchmark Capital, they both joined my board of directors from Accel Partners.
And if you’re recruiting someone to the board of directors, you should check their references much more than you should check a junior person’s references joining your company. But in fact, I find that it’s the opposite that the higher level you go, the less typically reference checks happen because people assume well, this is Arthur Patterson, I mean this is the man like how could you possibly check his references. But that’s wrong headed because a board of director’s member can hurt your company much more than a junior person can, and an executive can really poison your company, too, on a day to day basis.
If you hire the wrong executive, they’re gonna hire the wrong subordinates, and you’re gonna have a whole department that potentially needs to be replaced if you fire that executive. So, it actually is the complete inverse that you should check the references more for these higher level people and not get so star struck by their resumes and their pedigree, you know, go out there and talk with people where the deal hasn’t gone as well and see how the VC firm has acted when the company was in a crisis mode, not when everything was just going well.
Go out there and talk with an executive, I mean talk with references of that executive where the company didn’t go as well, find out what happened, dig deep. I got a call recently from a recruiting firm that was recruiting someone that used to work with me directly to be the CEO of a public company. And I thought to myself this is a recruiting firm calling me. I can’t believe that the board of directors won’t call me for a public company when they’re recruiting the CEO.
They’ve got a recruiter on it, and as soon as I started to get constructive with the recruiter, because I’m a very authentic reference, the recruiter changed the subject. And I thought gosh, what a failure, you know, this person just wants to check the box and just get this person hired and they’re gonna hire a CEO for their public company, I can’t believe it. Well, needless to say, that public company didn’t do very well.
This was actually a couple of years ago that this happened, and I kind of tracked it and it didn’t do that well at all. But shame on that board of directors and shame on the current executive team for not personally reaching out to each and every person and digging deep on references.
William Griggs: Yeah, no, that’s definitely something we should drive home for the audience and I’ll definitely link to the blog post you mentioned in the show notes as well. Let’s do a couple rapid fire questions before we have to wrap up. We know, like you mentioned, that you and your wife invest in a bunch of companies, a bunch of companies here in Austin, 34 is the last count I’ve seen.
Brett Hurt: Yeah, that’s right.
William Griggs: Let’s dig into a few and why you dug into them, just like a one- to two-sentence description to say what you thought was so special about the company. So, let’s start with OneSpot.
Brett Hurt: Yeah, so OneSpot, actually I’d been involved in the company for a long time, and it faced a very difficult pivot and almost went out of business. But I really fell in love with Steve Sachs, with the new CEO of the company, not that new anymore; it’s been there about a year and a half or so, and their new pivot. And the company has done extremely well. They secured Mohr Davidow as their Series A backer. We invested alongside Mohr Davidow and specifically Bryan Stolle. If you look up his profile, he’s an amazing investor that occasionally invests in Austin companies, and they’re in this area of leveraging the content that these big corporations produce that almost never gets eyeballs.
So, like Procter & Gamble spent all of this money, you know, millions of dollars to produce these amazing independent websites focused on a topic, kind of like the Always brand, Like A Girl campaign that you just saw for the Super Bowl, like the No. 1 Super Bowl commercial, but if they don’t get the eyeballs to it, like what’s the point. And OneSpot helps them get the eyeballs to that content and therefore drive the conversion and the brand impact that they’re looking for.
William Griggs: So, it seems like you saw the market need, you liked the leadership team, there were other people validating as well, it sounded like they got the right people on the ship.
Brett Hurt: Yeah, and I loved the founder too. I mean they retained the founder, Matt Cohen, but he’s much better in the current role he’s in, and Steve is just an incredible CEO.
William Griggs: Got you. What about Clarify?
Brett Hurt: Clarify is really interesting for me. So, there’s a company out there called Twilio, and there’s this whole development layer that’s emerged on the web because of the cloud. And Clarify is this amazing cloud service that sells to developers. It’s all a pay per use on the API basis where it can dynamically search any audio or video and take you to the exact spot in that audio or video just by typing it.
So, if you wanna to search all the TED videos for example for anywhere it mentioned Israel, you could type that and it would take you to the exact spot in all the TED videos where the word Israel is spoken. It’s like magic; I mean I’ve never seen a technology work this well. It literally is magical when you see it working.
William Griggs: Very cool, yeah. I definitely think there’re some links floating out there, some sample projects that we’ll add too. I think there is a TED example floating around the Internet somewhere.
Brett Hurt: There is a TED example actually that Sam Decker’s new company, the one he’s chairman of, called Mashbox Develop, but to see it in action, I mean the technical complexity of doing that in real time is insane and, of course, the web is becoming much more audio and much more visual and so being able to search that with immediacy is a really hairy problem, and it looks like Clarify has solved that problem.
William Griggs: Got it. For that one, it seems like there’s that interesting business model that’s been proven by Twilio like you said, the kind of paper use, API model. I think they have some Twilio people on the team so that helps as well as, you know, kind of like you’re saying; everything’s being recorded, right? You call up customer service, hey, this is being recorded. The call may be monitored or whatever, right, all that stuff’s getting recorded so how can you make sense of it? And then seeing an interesting sexy example like the TED example is pretty cool to kind of make it come to life. So, this is all kind of actionable stuff people can take away.
A couple more questions before we wrap up. You know I saw that you went to Penn for business school. Do you think that that was a, you know, in hindsight, it’s often hard to ask this question to people. There are lots of people in the audience saying I wanna go to business school. Well, they talked to someone in business school currently and the likelihood that they’re actually gonna talk negatively about business school is gonna be pretty much zero, right, because that would just be at odds with what they’re currently doing with their life so they’re not gonna share it.
Now that you’ve had some distance, and I know you go back and speak a little bit so maybe you’re still, you know, leaning towards that, but do you think it was valuable for you in hindsight?
Brett Hurt: Well, I would be entirely honest about that, I mean I have no reason not to be. It was a transformational experience for me, but it was because I was at a moment in this life where I was very open to being transformed. And so I would say that it’s not for everybody, depending on what stage they are in their life. For example, I believe that you learn the most from the school of experience, and if you’ve got a really hot startup on your hands, maybe the best thing for you to do is stay at that startup, finish it out before thinking about going to business school.
But if they wanna really dig into my experience there and how Wharton has evolved, read my post which is named My Return to the Wharton School as Entrepreneur in Residence because that post lays it out in excruciating detail, and it specifically talks about what I did there to make it a transformation. And the short version of it is I worked every day when I was at Wharton until 3:00 to 4:00 in the morning. I started three businesses while I was there, and then my fourth that I started at the end of it was Coremetrics.
So, it was very, very valuable for me, but I would say that it was more valuable for me than others because I was insanely dedicated to it transforming me and being transformative for me and that meant an insane amount of work. And I was able to do that because I was married, still am married to the same woman I should say, and we didn’t have kids at the time, and she’s fiercely independent. She knew that I needed to do what I needed to do to become a successful entrepreneur.
Like I said, I was at Wharton when I set that goal when I was 25 that one day I would found a company and take it public. So, there’s maybe a lot of bravado in setting a goal like that, but I actually achieved it and I was actually shocked that I did it frankly.
William Griggs: Very cool. It seems like yeah, maybe business school is not the answer, but it’s a means that you can reach those goals, but it sounds like it depends on how much you actually invest in the experience itself so definitely –
Brett Hurt: I think that’s true of everything in life, I mean a startup could be very transformative for people too, but they need to invest a lot of time in that as well. So, there are these inflection points in your life where if you really invest time, they could be transformative for you, and sometimes that’s as small as changing your diet forever or adopting a new exercise program forever or whatever it is, but it takes a lot of mental perseverance to make a change of any type.
William Griggs: Got it. So, we’ve talked about chairmen, chair people, and we’ve talked about advisory boards. What about executive coaches? Do you have experience with them? Are they something people in the audience should be looking towards for advice?
Brett Hurt: I’m a huge, huge fan of executive coaches, and I actually have a CEO coach and have had a CEO coach for the past four and a half years. His name is Kirk Dando, and he recently came out with a book called Predictive Leadership, which I highly recommend. I’m actually referencing it in that blog post I’m putting out tomorrow.
The post tomorrow, by the way, is about transitions and how difficult transitions can be. So, I wrote it with this heart to help people through transitions when they wanna change the song on the record of life like they typically keep playing the same song over and over again, but occasionally you’ll wanna change that song, and to do it is very hard because life and society will wanna pull you back to the old song, kind of like if you’re being typecast for a role as an actor too long.
So, Kirk Dando is absolutely amazing. And, you know, Kirk made this point to me that I’ll never forget, which is when you’re growing a company and it’s going great and you’re on your path to IPO, it’s kinda like being in the Super Bowl of business, and you would never imagine in the Super Bowl of business or in the Super Bowl of football not having a coach, but in business, there’s this falseness about it where I think some people look at having a coach as being weak, that they should have all the answers and it’s ridiculous. Like could you imagine anybody playing professional sports of any kind and thinking that you don’t need a coach? But in business, some people view it as a weakness.
I mean I remember Scott Cook, the founder of Intuit, talking about how he resisted having a coach for a long, long time, and then finally when he got one, he found out that there was a lot of ugly things that he needed to change and then he said it was absolutely transformative for him. So, he also was in that camp along with me saying that it was the best decision he ever made. But this is an interesting thing that somehow we’re seen as weak if we have business coaches. It makes no sense at all. It’s ridiculous.
William Griggs: Yeah, that doesn’t make any sense because like you said, if you kind of use the analogy of an athlete, I mean the athlete, if they’re in the NFL, they have so many coaches.
Brett Hurt: Right.
William Griggs: They have dietary coaches, they have coaches that’ll help them work on their speed, they have other coaches that’ll help them work on their power, they have other coaches that’ll help them work on their playbook, there’s everything that kinda goes into them.
Brett Hurt: And when you’re growing a company from zero to over $100 million of sales and, you know, I mean we’ve moved nine times in the first five years of Bazaarvoice just because of our growth, you know, the company is over 800 people now and has 12 offices all over the world.
When you’re growing that fast and you’ve never done it before, your personal growth is challenged to the extreme. And so to not have a coach guide you through that is just crazy honestly, I mean it’s very, very dangerous I think to not have a coach. And I know for a fact, for example, that Dick Costolo, the CEO of Twitter, had a coach in that business since he first started and he told me that it was transformative for him as well. So, it’s crazy that this is seen as a weakness by some.
William Griggs: Got it. I’ll put a link to Kirk’s book in the show notes as well. We’ve talked about your blog; definitely put a link in there. How else can people connect with you online?
Brett Hurt: I tweet a lot so it’s bazaarbrett, B – A – Z – A – A – R – B – R – E – T – T, on Twitter, and I’m constantly tweeting articles that I think will help entrepreneurs. That’s what I’m all about. I mean I really wanna look back ten to 15 years from now and say that I not only founded companies in Austin that made a real difference but then I helped entrepreneurs found companies that created lots and lots of jobs, created lots and lots of economic impact and philanthropic impact.
The amazing stat about this hard work today, the stat that I’m probably most proud of, is that there are now 22 businesses that have been founded by former Bazaarvoice people, the largest of which is one that you’ve interviewed, Sam Decker, who founded Mass Relevance, but Edgecase is a very large business founded by former Bazaarvoice people and there’re many, many others. I just met with the 22nd yesterday, and it’s amazing how well these guys are performing. And he told me something that he wasn’t saying this to flatter me, but it was really humbling for him to say this.
He said, “I remember when you walked into our department, into the product department, and talked with all the product managers and all of us as engineers that one day some of us in that room would found companies of our own and that I would clap and celebrate them when that happened.” And he said, “Well, I’m here now, and I’ve got a very successful business, and I want you to know that moment for me was very inspirational.” And so this is exactly how the capital cycle works. There is a ripple effect to it all, and it’s a really beautiful thing. This is conscious capitalism, and I’m proud to be a part of it.
William Griggs: That’s really exciting, really motivating and I really appreciate your time. The audience really appreciates your time. Brett thanks for coming on the show today.
Brett Hurt: Thanks a lot William. I appreciate it, and thanks to everybody that listened.
Brett Hurt’s Bio
Brett is a seed-stage investor at Hurt Family Investments (HFI) in partnership with his wife, Debra. HFI are involved in 34 startups and 6 VC funds. HFI has directly made 25 startup investments, and Brett has also joined the Advisory Board of 9 additional companies. Prior to HFI, Brett founded Bazaarvoice (NASDAQ: BV) and served as CEO and President for 7½ years, leading the company from bootstrapped concept to almost 2,000 clients worldwide and through its successful IPO. He subsequently guided the company through a successful follow-on offering and two acquisitions, PowerReviews and Longboard Media. Prior to Bazaarvoice, Brett founded Coremetrics and helped grow the company into a global, leading marketing analytics solution for the eCommerce industry before its acquisition by IBM.
Brett holds an MBA in High-Tech Entrepreneurship from The Wharton School at the University of Pennsylvania and a BBA in Management Information Systems from the University of Texas at Austin. He serves as an Entrepreneur-in-Residence at the Wharton School. Brett previously served as an Entrepreneur-in-Residence at the McCombs School of Business and also served on the Board of Directors of Shop.org for six years. Brett established the Bazaarvoice Foundation and is very active in the philanthropic arena. He received the Austin Entrepreneurs Foundation’s Community Leadership Award in 2012. Brett is entrepreneur empowerment group RISE’s Serial Entrepreneur of the year for 2012. He was named by E&Y as Entrepreneur of the Year for Austin in 2009 and is a member of the Austin chapter of the international Young Presidents’ Organization (YPO). Brett was named CEO of the Year for large companies by the Austin Business Journal in 2012 and received the Joseph Wharton Award for Young Leadership in 2013. Brett and Debra received the LBJ Humanitarian Award in 2014 for their dedication to public service, philanthropy, and the Austin community.
To help support Austin’s entrepreneurs, Brett serves as a Partner at Capital Factory and Mentor at Techstars Austin; invests in early-stage companies, funds, and philanthropic endeavors with Hurt Family Investments; serves as the Chairman of the Board at Edgecase (formerly named Compare Metrics); and blogs at Lucky7.io. He can be followed on Twitter at @bazaarbrett.
Connect With Brett
- The critical importance of checking references by Brett Hurt
- My return to The Wharton School as an Entrepreneur-in-Residence by Brett Hurt
- How to leverage advisors and investors as your extended team by Brett Hurt
- Predictive Leadership: Avoiding the 12 Critical Mistakes That Derail Growth-Hungry Companies by Kirk Dando