20VC From Construction Worker to Billionaire CEO; The 21Year Epic Journey of Procore to an $8.6BN Company, Advice from Tobi at Shopify on Being a Great CEO & Why The Idea of Becoming an Entrepreneur is BS with Tooey Courtemanche

Summary Notes


In an enlightening conversation with Harry Stebbings on "20 VC," Tui Cortimosh, founder and CEO of Procore, shares his journey from a struggling entrepreneur to leading a public company with a revenue of over $890 million. He reflects on the tough early years, including selling personal assets and going without paychecks to keep the company afloat, and the pivotal moment when his wife Hillary inspired the creation of Procore. Tui emphasizes the importance of being authentic, the role of luck and persistence in success, and the value of direct, honest feedback. Despite the challenges, he underscores the significance of following one's passion, being patient in building a brand globally, and the critical nature of capital allocation for a CEO. Tui also touches on the personal aspects of work-life balance, maintaining a grounded relationship with his wife, and instilling values in his son amidst success.

Summary Notes

Personal Identity and Entrepreneurial Struggle

  • Tui Courtemanche experienced a personal identity crisis and struggled for two years.
  • He had to make significant sacrifices, including selling his possessions and going without a paycheck, to sustain his business.
  • His wife played a crucial role in supporting him and reinforcing his self-identity.
  • Procore's revenue growth was slow initially, taking 13 years to reach $9.6 million.

"I was miserable for probably two years. And I'm like, look, I don't know who I am and who I'm supposed to be."

This quote reflects Tui's period of personal struggle and identity crisis as he tried to figure out his place in the world and align it with his entrepreneurial journey.

"We had to go without a paycheck. We had sold everything that we had acquired in life."

Tui's sacrifices for his company's survival are highlighted, showing the extent of his commitment to his vision.

Procore's Growth and Evolution

  • Procore took 13 years to reach $9.6 million in revenue, which is considered slow growth.
  • The company later experienced rapid growth, reaching over $890 million in revenue and becoming a public company.
  • Procore has become a leading provider of construction management software with a global reach.

"The company featured today took 13 years to reach $9.6 million in revenue. So not rocket ship growth."

Harry Stebbings points out the slow initial growth of Procore, contrasting it with the rapid growth it experienced later.

"Under his leadership, Procore has grown to become a leading global provider of construction management software, connecting over 2 million users across 150 countries."

Harry introduces Tui and Procore's significant achievements in the construction software industry.

The Role of Tui's Wife in Procore's Origin

  • Tui's wife, Hillary, was instrumental in the move to Santa Barbara and the creation of Procore.
  • The idea for Procore came from Tui's wife's suggestion to solve the problems he faced while building a house.

"And that was the origin story of Procore, so it's all her idea."

Tui credits his wife with the foundational idea that led to the creation of Procore.

The Great Financial Crisis (GFC) Impact

  • The GFC severely impacted Procore, with their customer base of custom home builders going out of business.
  • Tui and his co-founder Steve Zahn had to forego their paychecks to keep the company afloat.
  • The company's survival was due to a shift to commercial construction and the support of investors.

"Yeah, myself and Steve Zahn, my co-founder, we had to go without a paycheck."

Tui discusses the sacrifices made by the founders during the GFC to ensure Procore's survival.

Founder Mindset and Persistence

  • Tui believed in the inevitability of the construction industry's digitization.
  • Founders often possess a unique determination and belief in their vision that drives them through difficult times.
  • Tui's persistence was fueled by a desire to prove his capabilities beyond his early academic struggles.

"I knew it was a foregone conclusion that somehow this industry, this construction industry was going to get digitized."

Tui's conviction in his mission and industry trends underpinned his perseverance through challenging periods.

Advising Founders on Market Fit and Persistence

  • Tui suggests that founders instinctively know if their venture will work.
  • Founders are often driven by a relentless pursuit of their vision, which can lead to varying levels of business success.
  • Tui advises founders to be aware of their venture's market fit and the importance of persistence.

"I also believe that founders are usually cut from a different cloth, which is, I always say, like, I'm a dog on the bone."

Tui describes the tenacity and unique qualities of founders that contribute to their determination to succeed.

Overcoming Personal and Academic Challenges

  • Tui's early life was marked by academic difficulties and low self-expectations.
  • His transformation into a successful entrepreneur was driven by a passion for his work and a desire to prove himself.

"I was a horrible student in school. I was flunking out of school left, right and center."

Tui shares his struggles with education and how it influenced his drive to succeed beyond expectations.

The Intersection of Passion and Entrepreneurship

  • Tui believes that having a passion for one's work is crucial for enduring tough times and achieving success.
  • Procore's long journey to success required a deep love for the work and the vision behind it.

"For me, I wouldn't have made it if I didn't love what we did, because we just had so many years of just strife and turmoil."

Tui emphasizes the importance of passion in sustaining an entrepreneur through challenging periods.

Market Adoption and Timing

  • Procore's slow growth was partly due to the construction industry's slow adoption of digital technology.
  • Market timing is a significant risk factor for startups, as it involves external factors beyond the founders' control.
  • Tui's experience highlights the importance of market readiness for a product's success.

"So rewind time to 2002. If you walked onto any construction site in the world, there was no Internet at the job site yet."

Tui explains how the lack of internet access at construction sites was a barrier to Procore's early growth.

  • Tui acknowledges that Procore's early investors faced high market timing risks.
  • He compares Procore's situation to Qualcomm's, where multiple factors had to align for success.
  • High-risk investments can lead to significant rewards if the market conditions eventually align.

"The more things that have to happen in order for a company to be successful, the higher the risk ratio is."

Tui discusses the relationship between the number of market conditions that need to change and the risk level for investors.

The Inflection Point in Procore's Growth

  • Procore's inflection point came when they no longer needed to rely on daily checks for payroll.
  • The decision to seek institutional financing was based on achieving product-market fit and having sufficient revenue.

"We realized at that point we had turned some sort of a corner and that it was time to step on the accelerator."

Tui describes the moment Procore realized it was time to scale up the business and seek additional funding.

Initial Venture Capital Experience

  • Tui Courtemanche felt intimidated during initial meetings with venture capitalists.
  • The early meetings with investors were not successful; they were dismissed and laughed at.
  • Initially, investors did not see the value in Procore's approach and suggested they mimic Facebook.
  • Later, the same investors who dismissed them called them geniuses as Procore became successful.

"And literally the guy said to me, he goes, look, this is really an interesting idea, and there's probably some opportunity here, but if you did it more like Facebook, we would be interested in investing."

This quote illustrates the early skepticism and misunderstanding investors had about Procore's business model, suggesting a more popular approach like Facebook's would be more investable.

Learning from Early Investment Rejections

  • Tui Courtemanche and his team were initially demoralized by the rejection from investors.
  • They realized the importance of the partner over the venture firm's brand.
  • Tui built personal relationships with Will Griffith and Brian Feinstein, who shared Procore's values.
  • These relationships led to successful investments and long-term board memberships.

"But the good news was we learned it's almost less about the brand of the venture firm and it's more about the partner."

This quote underscores the realization that individual relationships with venture partners are more critical than the prestige of the venture firm itself.

First Major Funding Round

  • Procore raised $30 million in their initial funding round.
  • Bessemer Venture Partners had a conservative investment thesis on Procore's future valuation.

"Bessemer had an investment thesis on Procore that they, of course, they don't tell the company about. The best outside scenario they could come up with was that Procore was going to be worth $300 million in the future."

This quote reveals the conservative expectations investors initially had about Procore's potential valuation.

Reflecting on Fundraising Strategies

  • Tui Courtemanche advises being wary of emotional manipulation during fundraising.
  • He regrets not using a closed envelope fundraising method to avoid guilt tactics from investors.
  • Tui chose investors who were straightforward and ran a good process.

"I literally would get in calls from institutional investors saying, know you're taking food out of my kids' mouths because you're not giving me access to this deal and stuff."

The quote illustrates the emotional manipulation tactics used by some investors during the fundraising process.

Procore's Rapid Growth

  • Procore experienced exponential growth, doubling revenues repeatedly around 2017.
  • Tui compares the growth phase to skateboarding at high speed without time to reflect.
  • Procore reached a billion-dollar valuation without the team fully realizing the scale of their growth.

"Those years were us running as fast as we possibly could, trying not to crash."

This metaphor captures the intense and rapid growth period Procore experienced, emphasizing the need to keep pace with the company's expansion.

The Role of Naivety in Business

  • Tui Courtemanche believes that a certain level of ignorance can be beneficial.
  • Focusing on solving real problems for customers rather than business expansion kept Procore on track.

"I actually do believe ignorance sometimes is bliss."

This quote suggests that not overthinking and maintaining focus on core goals can be an advantage in business.

Expanding Procore's Product Line

  • Procore expanded from a single product to multiple offerings based on customer needs.
  • They prioritized building enterprise-grade products after initially rushing to market.
  • The company had to rearchitect a financial product line to make it enterprise-grade, halting new feature development for a year.

"So we had actually had to stop developing that product at a certain point and go back and rearchitect it."

This highlights the challenge and necessity of ensuring products meet enterprise standards before scaling them.

International Expansion Lessons

  • Tui Courtemanche emphasizes the importance of building a brand and loyal customer base in new markets.
  • He recommends deploying customer success and marketing teams before the go-to-market team.
  • Patience is crucial as building a brand internationally takes time.

"You have to build a brand and you have to build loyal customers and referenceable customers in those markets before you really can expect any sort of scale and growth in those markets."

This quote emphasizes the strategic approach required for successful international expansion, focusing on brand and customer relationships before scaling.

Pricing Model Innovation

  • Procore chose a construction volume-based pricing model over a per-seat model.
  • The decision was made to ensure all team members could access the system, fostering collaboration.
  • Despite initial unpopularity, the volume-based model proved to be the right choice.

"Our mission is to connect everyone in construction on a global platform."

This quote explains the rationale behind Procore's unconventional pricing model, which aimed to facilitate industry-wide collaboration.

CEO's Role in Customer Relations

  • Tui Courtemanche no longer negotiates deals but focuses on building long-term strategic relationships with customers.
  • He believes CEOs should always engage with customers, but not in a transactional manner.

"I think there's nothing more important that a CEO can do than to talk to a customer."

This quote underscores the critical role of customer engagement at the executive level for understanding and serving customer needs.

Leadership Transition from Doing to Leading

  • Tui Courtemanche advises new CEOs to shift from doing tasks to leading and empowering their teams.
  • Letting team members fail in a controlled manner is essential for their growth and development.

"You have to learn how to stop doing and start leading."

This quote captures the challenging but necessary transition leaders must make from individual contributors to strategic leaders.

Acknowledging and Hiring for Weaknesses

  • Tui Courtemanche believes in recognizing one's weaknesses and hiring others to address them.
  • He does not advocate for leaders to focus on improving their weaknesses but rather to complement them with strong team members.

"Know your strengths and know your weaknesses and hire to your weaknesses."

This quote encapsulates Tui's philosophy of building a strong team by hiring individuals who can fill the gaps in a leader's skillset.

Understanding Personal Strengths and Weaknesses

  • Tui Courtemanche acknowledges his strengths lie in setting the company's vision, building the annual plan, and understanding customer needs.
  • He admits to not being great at low-level operations and surrounds himself with competent individuals in finance, HR, and legal departments.
  • Tui emphasizes the importance of focusing on areas that energize him and contribute to the business.

"I can't be a mediocre finance guy and I can't be a mediocre HR guy and I can't be a mediocre salesperson because that's not going to help the business. Right? So I know where my strengths are and I know my strengths are I set the vision for the company. We help build the annual plan. I provide resources to our teams. I spend all this time with our customers, knowing what their needs are."

Tui Courtemanche discusses the importance of understanding and playing to one's strengths for the benefit of the company. He recognizes that being mediocre in key operational roles will not aid the business, hence he delegates those responsibilities to others who excel in those areas.

The Reality of Being a CEO

  • Tui Courtemanche contrasts the perceived ease of being a CEO with the reality of its complexity and the 24/7 nature of the job.
  • He mentions the high level of stress that remains constant, regardless of company success, due to the large impact potential mistakes could have.

"The job, it's a 24 hours day job. I've been doing it. I'm like an 8900 days of procore, right. Never having a day or a moment off. And it's a hard job."

Tui Courtemanche emphasizes that being a CEO is a demanding and continuous role, dispelling the myth that it's an easy job once a company becomes successful.

Company Culture and Hiring

  • Tui Courtemanche stresses the importance of being intentional about company culture.
  • He describes Procore's hiring process, which focuses on aligning with the company's values over just skill sets.
  • The company values of being hungry, humble, and smart are critical in their hiring decisions to maintain a positive culture.
  • He shares experiences of regret when hiring individuals who were not a cultural fit, emphasizing the importance of teamwork and collaboration.

"We hire to our values. So if you go through the interview process at Procore, you may think you're being interviewed for your skill set, but to get into the interview process, you've already had to demonstrate that you have the skill set to do the job. The real hurdle to get over is, do you live our values and do you value our values?"

Tui Courtemanche explains that while technical skills are a prerequisite, the primary focus of Procore's hiring process is whether candidates embody the company's core values.

Leadership and Scaling

  • Tui Courtemanche discusses the challenge of scaling leadership skills at a rate that matches or exceeds the company's growth.
  • He speaks about making difficult personnel decisions and the importance of having conversations about growth opportunities within and outside the organization.
  • The concept of leading by example is highlighted, with an emphasis on delivering results that merit promotion rather than expecting titles without demonstration of capability.

"Chewy, what's important about leadership is if your business is scaling at 100% a year, that means you and your team needs to be scaling their skill set at greater than 100% a year."

Tui Courtemanche relays advice from a mentor, Toby Lutkey, on the necessity for a leader and their team to develop skills at a pace that matches or surpasses the rate of business growth.

Authenticity and Self-Identity

  • Tui Courtemanche shares his personal journey of self-discovery and embracing authenticity, particularly in high-profile, high-pressure environments.
  • He recounts a period of imitating others before realizing the importance and liberating effect of being true to oneself.
  • The value of authenticity is discussed in relation to leadership and the positive response it can elicit from others.

"I was miserable for probably two years. I tried. I even went out and bought the Patagonia vest and whatever. I desperately want to figure this out. My wife said to me one day, she know, on a personal basis, you're miserable. And I'm like, look, I don't know who I am and who I'm supposed to be. And she's like, that's not true. She goes, you know exactly who you are, and you know exactly who you should be. Stop trying to be somebody else."

Tui Courtemanche describes his struggle with fitting into the stereotypical CEO image and how advice from his wife helped him to embrace his authentic self, which ultimately led to greater personal satisfaction and positive reception from others.

The Role of a CEO as a Capital Allocator

  • Tui Courtemanche believes one of the top responsibilities of a CEO is to be an efficient capital allocator.
  • He discusses the importance of making judicious decisions with capital and the concept of learning from mistakes rather than viewing them as regrets.
  • The idea that making smaller decisions with manageable consequences is preferable to risking large mistakes is highlighted.

"I am a huge believer. I don't know if you've read the book the outsiders, but to me, that was an absolutely cathartic experience for me to actually understand that that is truly what, one of the top four things a CEO has to do is be an efficient capital allocator."

Tui Courtemanche expresses his strong belief in the CEO's role as a capital allocator, influenced by the book "The Outsiders," which helped him understand the critical nature of this responsibility.

Relationship to Money and Success

  • Tui Courtemanche reflects on his relationship with money and success, emphasizing passion over the pursuit of wealth.
  • He warns against the desire to become an entrepreneur solely for the sake of success and advises following one's passion.
  • The conversation touches on how success can alter interactions with others, leading to less candid feedback.

"I don't really think about it that much, frankly. There's a lot of young people will come to me and say, I want to be an entrepreneur. And I'm like, that's not a thing. You don't become an entrepreneur. You follow a passion and you deliver, you build a business and you whatever."

Tui Courtemanche advises against pursuing entrepreneurship as a means to an end, stating that true entrepreneurship stems from following a passion and building something meaningful, not from a desire to gain wealth or status.

Parenting and Setting Boundaries

  • Hillary enforced strict parenting by teaching Henry a lesson on consequences.
  • Being categorical in instilling right and wrong without leeway proved effective.

So Hillary said to him, like, look, either you stop acting like your friend and you become Henry, or you can leave my house.

This quote shows Hillary's firm approach to parenting, emphasizing the importance of setting clear boundaries and consequences for actions.

Work-Life Balance as a CEO and Parent

  • Tui Courtemanche regrets not being more present during his son's life due to Procore commitments.
  • He maintains a strong relationship with his son despite the challenges of balancing CEO duties and family time.
  • Difficult decisions still have to be made, such as prioritizing work over attending events with his son.

I would say my biggest regret, Harry, in life, is that I didn't do more. I wasn't there more.

Tui expresses regret over not spending enough time with his son, showing the difficulty of balancing a high-level career with family life.

The Necessity of Sacrifice for Success

  • Tui acknowledges the need to make sacrifices to be successful at the helm of a public company.
  • He still faces tough decisions, like missing a football game with his son due to work obligations.

I think there's not enough time in the day to be able to do both amazingly well.

Tui suggests that time constraints make it challenging to excel both as a CEO and as a parent, highlighting the sacrifices required for success.

Coping with Overwhelm and Stress

  • Tui Courtemanche deals with stress by engaging in activities like building complex Lego sets.
  • This hobby allows him to focus and clear his mind, drawing parallels between the meticulous nature of Lego and business.

If I'm really overwhelmed, fortunately for me, Hillary understands I'm an introvert.

Tui explains how his wife supports him by respecting his need for alone time, which is crucial for his stress management.

Maintaining a Healthy Marriage with a Demanding Career

  • Tui and Hillary have been together for over 35 years and allow each other space for their individual interests.
  • Hillary actively maintains a separation between family life and Procore, contributing to a healthy marriage dynamic.

Hillary and I have been together. We dated before we got married, obviously, but we've been together for like, 35, 36 years, something like that.

This quote indicates the long-term nature of Tui's marriage and the mutual understanding that has contributed to its success.

The Misconception of Marriage and Happiness

  • Marriage is not solely about happiness but also about persistence and dealing with challenges.
  • Tui believes that life is inherently unstable and unpredictable, and resilience is key to happiness.

The thing that people get wrong about marriage is they conflate marriage and happiness.

The quote suggests that marriage should not be solely equated with happiness, as it involves ongoing effort and the handling of difficulties.

Views on Success and Luck

  • Tui believes success comes from pursuing one's passion and having luck.
  • He attributes a lower ranking to skill compared to persistence in the success of Procore.

First and foremost, that if you do what you believe in and you're lucky, you can be successful.

Tui emphasizes the combination of passion and luck in achieving success, challenging the notion that skill alone determines success.

Reflecting on Key Decisions and Moments of Luck

  • Tui recalls critical moments that led to his success, such as a pivotal job offer in technology.
  • He acknowledges the role of luck in these moments and the potential for different outcomes.

I think about moments in my life that had to have happened, literally, like, single moments in my life that had to have happened that got me to where we are today.

This quote highlights the significance of specific moments in Tui's life that were crucial to his career trajectory and the role of luck in those events.

Balancing Product Development and Financial Prudence

  • Tui and his co-founder Steve had disagreements over resource allocation, with Steve often being right in advocating for financial caution.
  • Tui's inclination was towards product development and customer satisfaction, sometimes at the expense of financial stability.

Generally, it was resource allocation, and he was right and I was wrong.

The quote reveals the internal conflicts within Procore regarding the balance between spending on product development and maintaining financial health.

Aspirations and Personal Interests

  • Tui expresses interest in being the CEO of a complex company like Microsoft for the challenge it presents.
  • He finds joy in construction and plans to spend his retirement building on his ranch.

I would think it would be Microsoft because I had the fortunate privilege of having Satya be a mentor of mine.

Tui's admiration for Satya Nadella and the complexity of Microsoft reflects his interest in understanding and managing large-scale operations.

Competition and Customer Focus

  • Tui prioritizes customers over competition, likening it to focusing on the finish line rather than the rearview mirror in a race.
  • He believes that maintaining a customer-centric approach is key to outperforming the competition.

Keep it into a healthy perspective. I definitely think about our competition, but not very often.

This quote indicates Tui's philosophy of not fixating on competitors but rather concentrating on delivering value to customers.

Legacy and Role Models

  • Tui would have dinner with his late grandfather to discuss their shared experiences in business and seek advice.
  • His grandfather's authenticity and leadership serve as an inspiration for Tui.

He always carried himself with such dignity and poise, but also authenticity.

Tui's respect for his grandfather's character and leadership style reveals the impact of role models on personal and professional development.

Advice and Productivity

  • Tui shares the best advice he received: to use idle moments productively, which has contributed to his success.
  • He believes in the efficacy of tackling small tasks during short periods of downtime.

When you have five minutes, like you do right now, do a five minute job, tackle something.

This advice suggests the importance of constant productivity and making the most of every opportunity to progress.

Self-Perception and Overcoming Expectations

  • Tui always believed he would be okay, even though he never expected to achieve his current level of success.
  • He was considered the underachiever in his family, which makes his success more surprising to them.

I never in my wildest dreams believed that I would be where I am today.

Tui's quote reflects his humble self-perception and the unexpected nature of his success relative to his family's expectations.

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