20VC How The Best Founders Approach Bet The Company Decisions, How to Put Your Board to Work & How To Optimise Strategic Thinking on Boards with Maynard Webb, Founder @ Webb Investment Network & Everwise

In this episode of "20 Minutes VC," host Harry Stebbings interviews Maynard Webb, a seasoned executive with a multifaceted career spanning various leadership roles. Webb, founder of the Webb Investment Network and co-founder of Everwise, has also served on the boards of major corporations like Salesforce and Visa, and was the former chairman of Yahoo and COO of eBay. The conversation delves into Webb's insights from his extensive experience, particularly focusing on the evolution of startups, the impact of venture capital, and the importance of building strong companies. Webb also shares his perspective on effective leadership, the CEO's role in managing a board, and the intricacies of talent acquisition and retention. Additionally, Webb discusses his book "Dear Founder," which compiles the wisdom he's accumulated throughout his career.

• Maynard Webb is recognized for his diverse and successful roles in the tech industry.
• He founded the Webb Investment Network, focusing on personal investments in companies like Zuora, Goat, WePay, Okta, and PagerDuty.
• Additionally, Webb co-founded Everwise, a startup providing enterprise-scale training, which raised over $26 million from Sequoia Capital and Canvas Ventures.
• He has served on the boards of major corporations such as Salesforce and Visa and was previously the chairman of Yahoo, CEO of LiveOps, and COO of eBay.
• Maynard Webb authored the book "Dear Founder," which encapsulates his extensive career learnings.

"So Maynard Webb is truly unique. He's worn three different hats and excelled in all of them."

This quote highlights the versatility and success of Maynard Webb across different roles in the technology sector, emphasizing his unique position in the industry.

• Maynard Webb's journey into startups and investing began when he was the CIO of Bay Networks.
• His colleagues, Jim Gets and Monty Kirsten, founded Vital Signs and invited him to chair their advisory board, marking his first private investment in 1997.
• This venture was Webb's entry point into the startup world and proved to be highly successful and enjoyable.

"And that was my first private investment outside of the stock market and it was a blast and it did really, really well."

The quote explains Maynard Webb's initial foray into the startup investment space, indicating a positive and profitable experience that kickstarted his interest in this area.

• Maynard Webb has observed that starting a company today is much easier than it was 20-30 years ago.
• Previously, significant capital was required to build infrastructure, whereas now, services from Amazon, Google, or Salesforce can be utilized to start more easily.
• The startup ecosystem has evolved with more angel investors and larger funds like South Bank providing substantial capital.

"It's far easier to start a company today than it was 20-30 years ago."

This quote reflects the decreased barriers to entry for starting a business in the modern era, with more accessible resources and infrastructure.

• The current market has a higher availability of capital, especially with the emergence of angel investors and large-scale investments.
• While this makes it easier for startups to obtain funding, it also means that venture capitalists can invest in more mature and proven companies.
• However, despite the abundance of capital, there are still many companies that struggle to secure funding.

"There's a lot more money in the market today, both at the low end, which frankly makes it even easier for the VCs who used to have to do more of the funding."

This quote acknowledges the increase in available capital in the market, which has shifted the dynamics of startup funding and venture capital investment.

• Maynard Webb believes that a good company will experience multiple market cycles, and timing the market for liquidity events is unpredictable.
• His focus is on building robust businesses that can withstand market fluctuations, rather than trying to time the market for investments or exits.
• Market conditions can change significantly over the decade-long journey to a liquidity event for most successful companies.

"I am always focused on just building a great business to last."

The quote encapsulates Maynard Webb's investment philosophy, which prioritizes the long-term viability and quality of a business over attempting to capitalize on market timing.

• Investing in seed rounds requires a focus on nurturing early-stage companies to relevance and scale.
• Market timing is less of a concern for seed investments as the path to scale is years away.
• Investment decisions can be influenced by personal attachment to a deal, leading to higher investment than initially planned.
• The investment environment has changed since 2010, with higher valuations in seed rounds.
• It is essential to maintain price sensitivity and the willingness to walk away from overpriced deals.

"Like I'm trying to get companies that can worry about market timing because I have to get the babies up and walking into relevance and then to scale."

This quote highlights the long-term perspective required when investing in seed rounds, focusing on company growth rather than immediate market conditions.

"And the market, the environment for deals has gone up."

Maynard Webb notes the increase in deal valuations since he began investing, indicating a more competitive investment landscape.

"But we also are willing to walk away from deals that we think are way ahead of the pricing because we found that doesn't service well."

The willingness to walk away from overpriced deals is emphasized as a prudent investment strategy.

• The quality of investors is deemed more important than the price of the investment round.
• A bad board member can negate the benefits of a good deal, making it crucial to choose investors carefully.
• Founders are advised to ensure all parties feel positive about the investment round, leaving sufficient ownership for the CEO.
• The investment process is iterative, with multiple funding rounds expected.

"Well, I just think it's way more important who you get the money from than the price you get."

This quote underscores the importance of the investor-founder relationship, prioritizing the investor's quality over the financial terms of the deal.

"So you got to be super cautious about who you add."

Maynard Webb emphasizes the need for founders to be selective about their investors due to the long-term nature of the relationship.

• As an angel investor, Maynard Webb is selective about investing in later rounds due to the personal nature of the funds.
• Maintaining good relationships with VCs is important for continued synergistic interactions.
• The decision not to raise outside capital is a personal choice reflecting an investment strategy.

"I'm very selective in going deeper into later rounds."

Maynard Webb discusses his cautious approach to investing additional funds in later rounds, highlighting the importance of selectivity in investment decisions.

"And I also want to be friendly with all the VCs, and I think I am."

Maintaining positive relationships with VCs is presented as a strategic approach to investment.

• Being a CEO is described as a complex, multidimensional, and lonely position.
• The CEO must balance the needs of employees, customers, and board members.
• Social skills are essential for managing various stakeholders and maintaining alignment.

"You have employees that you have to inspire and motivate and get to do things."

This quote reflects the CEO's responsibility to lead and motivate the company's workforce.

"And they're not all always in sync."

Maynard Webb notes the challenging task of aligning different stakeholders with potentially conflicting interests.

• The CEO has a significant role in ensuring the board functions effectively and receives necessary information.
• While board members are independent, the CEO should not relinquish responsibility for board management.
• Collaboration between the CEO and the chairman is crucial for organizational alignment.

"But I think the CEO has a big responsibility to make sure the board's working well and getting the information they need."

The CEO's duty to maintain a well-informed and functioning board is highlighted.

"I wouldn't cede all the responsibility of the chairman."

Maynard Webb advises against the CEO relinquishing all board-related responsibilities to the chairman.

• Successful CEOs are skilled at attracting, retaining, and inspiring top talent.
• They anticipate the company's growth and hire ahead of need.
• Internal promotions are encouraged, but external hires are necessary for scaling.

"The best CEOs are able to attract, retain, inspire talent, and they know that that's a huge piece of their job."

The importance of talent management in a CEO's role is emphasized, highlighting it as a key aspect of successful leadership.

"Meg used to go hire people before we needed them because she knew we were going to scale into needing them."

Forward-thinking hiring practices are praised, illustrating proactive leadership in talent acquisition.

• Rapid company growth often necessitates external hiring, as internal promotions alone cannot meet scaling needs.
• The best hires may come from promoting internal team members who step up to challenges.
• Transparency about role expectations and opportunities is essential when hiring.

"You can't do internal promotions to cover that."

Maynard Webb acknowledges the limitations of internal promotions in the context of significant company growth.

"Some of my best hires were when I gave my internal team a chance and they stepped up in a big way."

Promoting from within is presented as a successful strategy when the internal team is capable and ready for new challenges.

• Hiring stretch candidates can be beneficial, but there is a risk of stretching too far.
• Clear communication regarding job expectations and growth opportunities is critical.
• Hiring mistakes can occur when candidates are not aligned with the company's current needs.

"There are times that you have a stretch too far."

This quote acknowledges the potential pitfalls of hiring candidates who may not be suitable for the company's current stage.

"I have made hiring mistakes where I hired way above where we were."

Maynard Webb shares his experience with hiring missteps, emphasizing the importance of matching candidates to the company's present situation.

• Assessing the performance of team members using a traffic light system: green, yellow, red.
• Consideration of an employee's current performance and potential future performance.
• The importance of team members being able to work across boundaries and replace their manager.
• Building teams that are not just happy, but also competent and forward-looking.

"I used to always look at everybody that I had and I'd say, how are they doing the job today? Green, yellow, red. And a lot of times they were not always green."

This quote explains Maynard Webb's method for evaluating his team's performance using a simple color-coded system, which quickly indicates the status of each team member's effectiveness.

"And then even if they were green today, where would they be in twelve months with the scale that we, the amount we were growing."

Maynard Webb highlights the importance of not only assessing current performance but also anticipating how team members will handle future growth and challenges.

• The problem of disengagement and dissatisfaction with management in the workplace.
• The evolution from a command-and-control management style to inspirational leadership.
• The importance of improving listening skills to inspire teams.

"I think I was always a decent manager, but I certainly had to evolve and learn how to do more inspirational leadership than just, okay, let's go take the hill."

Maynard Webb reflects on his growth as a leader, emphasizing the need to evolve from a traditional management style to one that is more inspirational and engaging for the team.

• The analogy of decision making to torpedoes hitting a boat.
• Understanding the potential impact of decisions on the company.
• The importance of considering both positive and negative outcomes before making a decision.

"And so, for example, when we were looking at to buy Skype at eBay, we used that analogy to say, okay, if it doesn't work, is it going to hit us above the waterline where it's going to be ugly and we're going to have to fix it, but it's fixable, or is it going to hit us below the waterline where you can't do anything and the boat sinks, meaning the company goes under."

Maynard Webb uses the torpedo analogy to describe the process of evaluating the potential risks of a major business decision, such as eBay's acquisition of Skype.

• The practice of presenting both optimistic (white hat) and pessimistic (black hat) scenarios to the board.
• The importance of making decisions with a full understanding of the potential consequences.

"And so we would do a white hat and a black hat for the board, where one of the executives would have the white hat, which is the one that this is popular. Oh, this is going to be the best thing we've ever done. And here's what could happen when all these miracles happen. And then the other would come in and say, no, just like most startups fail, most acquisitions don't do well. Here's how this is going to end up being horrific."

Maynard Webb describes a strategy used at eBay to ensure that the board was presented with both the best-case and worst-case scenarios before making a significant decision.

• Advising against forming a board too early and maintaining control until necessary.
• Recommending a smaller board size and including independent members alongside VCs.
• The board's composition should evolve with the company's stages of growth.
• The CEO should seek advice from board members who have strengths in areas where the CEO is weaker.

"I wouldn't have a board until I was required to have one because I had to raise enough outside council that they would not give it to me until it came with a board seat."

Maynard Webb suggests delaying the formation of a formal board until external investors require it, advocating for a cautious approach to ceding control.

"But when I was a CEO at liveops, I tried to make sure I had a room full of people that provided advice that I wasn't as strong on."

This quote demonstrates Maynard Webb's approach as a CEO to seek out board members who complement his skills and can provide valuable advice in areas where he needed support.

• The importance of transparency and communication with the board.
• Utilizing the board as a resource to serve the company and assist in its advancement.
• Encouraging founders not to fear their board but to engage them in meaningful dialogue.

"But I think transparency and putting your board to work are things that could be very helpful."

Maynard Webb emphasizes the need for open communication and actively engaging the board in the company's challenges and decision-making processes.

• Recognizing the difference in treatment between operators and board members.
• Understanding the balance between providing advice and stepping into management as a board member.
• The importance of impactful contributions as a board member with a focus on listening more than speaking.

"But as a board member, you probably need to be 2080, talk 20% of the time and listen 80% of the time. But you need to make sure your talk percentage is impactful."

This quote underscores Maynard Webb's view on the role of a board member, which involves listening more than speaking, but ensuring that when they do speak, it has a significant impact.

• Innovation is crucial to maintaining a leading position in global progress.
• Diversity and inclusion are seen as essential components to be improved alongside innovation.

"I think we want to continue to be the most innovative place on the planet, and we need to continue our progress and improve diversity and inclusion."

This quote emphasizes the speaker's belief in the importance of innovation and the necessity of enhancing diversity and inclusion as part of that progress.

• Competition is viewed positively as validation of working on something significant.
• It is believed that competition drives improvement and indicates that the project is important.
• Lack of competition may suggest that the work is not needed or not understood by others.

"I always viewed it as validation that we're onto something and I couldn't get scared of it."

The speaker expresses that competition should not be feared but rather seen as confirmation that the work being done is valuable and has attracted attention.

• Overwhelm can be tackled by shifting focus to action and problem-solving.
• Teams should be leveraged to address different aspects of a problem.
• Communication and rapid response are key during crisis management.
• The speaker shares a personal story of feeling overwhelmed when a critical system failed and how action was taken to resolve it.

"But when somebody made an error and corrupted all the data for the backups, we were then in a big issue, a long issue."

This quote describes a moment of crisis caused by a technical error, leading to a feeling of being overwhelmed, which was then addressed by taking decisive action.

• Strength: Aiming high and making an impact, with a strong commitment to follow through on promises.
• Weakness: A bias for action can be a double-edged sword if it leads to acting too quickly without full consideration.

"I think strength wise, I actually do want to change the world and I want to make an impact."

The speaker identifies their desire to change the world and make an impact as a personal strength.

"But the thing that I've gotten both Meg and Marissa talked to me about from time to time was what I would call my bias for action."

The speaker acknowledges feedback received regarding their tendency to act quickly, which can sometimes be premature.

• Work-life balance is subjective and varies for each individual.
• Balancing work and life is a journey that involves finding joy in both aspects.
• The speaker suggests that attaining top positions may require sacrifices in work-life balance.

"I think life and work are a tapestry. And you have to find a way to get joy out of work and joy out of time with your family."

The speaker conveys the idea that work and personal life are intertwined, and finding joy in both is crucial to achieving balance.

"You're going to have to work hard. I hate to say that the top jobs require lots of energy and time."

This quote acknowledges the demanding nature of top executive roles and the impact it can have on achieving a traditional sense of work-life balance.

• The speaker's future focus is on health, family, fun, and making an impact.
• Helping others is also a priority for the speaker moving forward.

"I just want to stay healthy, spend more time with my family, have more fun and have more impact in the world."

The speaker outlines their personal goals for the next five years, emphasizing well-being, family, enjoyment, and positive influence.

• The conversation concludes with mutual thanks and a brief mention of the speaker's book.
• The host promotes the speaker's book and social media presence for further insights.

"It's been awesome. Thank you so much, Harry, and good luck."

The speaker expresses gratitude at the end of the conversation, highlighting a positive interaction.

• Teamsnap: A sports team management app with features like registration, scheduling, messaging, and payments.
• Casper: A mattress company offering a trial period with free shipping and returns.
• Lattice: A people management solution for growing companies, offering tools for performance management and employee engagement.

"Teamsnap is a sports team management app that makes communication and organization a breeze."

This quote introduces Teamsnap as a useful tool for managing sports teams, indicating its functionality and ease of use.

"Try Casper yourself for 100 nights in your own home, risk-free."

The speaker advertises Casper's trial period, suggesting confidence in the product's quality.

"And Latice is the only solution that combines performance management and employee engagement."

Lattice is presented as a comprehensive solution for managing employee performance and engagement within a company.