20VC Sonos CEO Patrick Spence on His Biggest Lessons Building and Growing Blackberry, The Right Way to View Competition and Innovation Cycles & How To Make The Transition From COO To CEO Most Effectively

In this insightful conversation, host Harry Stebbings interviews Patrick Spence, the CEO of Sonos, a sound experience company known for connecting listeners globally. Patrick shares his journey from a childhood fascination with technology to a pivotal 14-year tenure at RIM (makers of BlackBerry), before taking the helm at Sonos. He discusses the importance of adaptability in corporate culture, drawing lessons from RIM's complacency and Sonos' strategic responses to competition. Patrick emphasizes the value of vulnerability in leadership, the need for a diverse and inclusive work environment, and the significance of balancing innovation with not overburdening the team. The discussion also touches on personal growth, maintaining integrity, and fostering a culture where employees feel safe to share ideas. Additionally, Patrick credits board member Mike Volpi for his clarity and guidance, while also hinting at Sonos' future with more innovative products and possibly services.

• Speaker A has a longstanding personal connection with Sonos products, which have been a part of family life and personal moments.
• Sonos is portrayed as a reliable and integral part of the speaker's life, highlighting the brand's impact on consumers.

"Ever since I was very young, we always had Sonos playing in my household, whether it be Mr. Brightside for birthday parties or Carly Ray Jepsen's call me maybe for some of my own taste, I know, very questionable indeed, but Sonos has always been there for me and my family."

The quote expresses Speaker A's personal connection and positive experiences with Sonos products from a young age, emphasizing the brand's presence in their life and family celebrations.

• Patrick Spence's tenure as CEO of Sonos is introduced with a mention of his previous work experience and the company's successful fundraising pre-IPO.
• Spence's 14-year history with BlackBerry (RIM) is highlighted, indicating a significant background in the tech industry.

"Prior to their IPO, they raised over 450,000,000 from the likes of Mike Volpet, index satish at Redpoint and eventures, to name a few." "Spent an incredible 14 years with Rim, makers of BlackBerry across multiple different roles."

The first quote outlines Sonos' financial achievements and support from notable investors before going public. The second quote provides context for Patrick Spence's extensive experience in the tech sector, specifically with BlackBerry.

• Speaker A expresses gratitude to individuals who provided insightful questions for the podcast interview.

"And I'd also want to say a huge thank you to Mike Volpe at Index Sonos founder John McFarland and Robbie Buck for some amazing question suggestions today."

This quote shows appreciation for the contributions of Mike Volpe, John McFarland, and Robbie Buck, who provided valuable input for the interview's content.

• Speaker B endorses various services including AngelList's fund admin platform, Letter banking experience, and Terminal for building remote tech teams.
• The services are praised for their convenience, innovation, and utility in simplifying investment management, banking, and remote team building.

"I just love using angel list fund admin platform to manage my investments."

The quote is an endorsement of AngelList's fund admin platform, emphasizing its usefulness in managing Speaker B's investments.

• Speaker A formally introduces Patrick Spence and expresses excitement for the interview.
• Spence's reputation precedes him, with positive feedback from mutual connections.

"So now I'm thrilled to hand over to Patrick Spence, CEO at Sonos." "Patrick, it is such a joy to have you on the show today. I've heard so many great things from my Volpe and from John Sonos, founder."

The first quote transitions the conversation to the guest of the show, Patrick Spence. The second quote conveys Speaker A's enthusiasm and the high regard in which Spence is held by others in the industry.

• Spence's introduction to technology began in elementary school with a Commodore pet computer.
• His passion for technology was rekindled in university, leading to an internship at IBM and exposure to mobility and computing.

"I fell in love, started programming in third grade, lost it a little bit along the way, was always into computers and tech and everything along the way, but lost it a little bit and then rekindled it when I was in university as well."

This quote details Spence's early fascination with technology and programming, which was reignited during his university years, shaping his career path.

• Spence discusses his departure from BlackBerry (RIM) due to differing visions for the company's direction.
• His move to Sonos was influenced by the company's simplicity, magic, and alignment with his own experiences and values.

"And serendipitously at that time, John McFarlane, the co-founder of Sonos, had reached out."

The quote explains the fortuitous timing of John McFarlane reaching out to Spence, which eventually led to his transition from RIM to Sonos.

• Spence applies lessons from his time at RIM to avoid complacency and maintain progress at Sonos.
• He emphasizes the importance of hiring quality over quantity, drawing from past experiences at RIM.

"Every day at Sonos, I'm always thinking about how we keep pushing ourselves and making progress."

This quote reflects Spence's commitment to continuous improvement and progress at Sonos, informed by his experiences at RIM where complacency became an issue.## Delivering Growth and Charting a Path

• Companies need to focus on delivering consistent growth over time.
• The importance of having a unique path and not simply copying competitors.
• Reliability, quality, and a great experience are crucial for a company's reputation.
• Adapting to market changes and trends is essential for long-term success.

"to fulfill today's requirements, right, to deliver the growth that we need to, and maybe 100% this year, but to keep growing for years and years to come."

This quote emphasizes the need for a company to not only meet current goals but to sustain growth over an extended period.

"We ended up in a situation where after the iPhone came out, Verizon offered us the opportunity to build a product and waived a big check to say they needed a response, right, because it was running on at T."

This quote illustrates how companies can be influenced by market pressures and competitors, leading to decisions that may not align with their strengths.

"We basically took ten years of building an amazing reputation for reliability, quality, and great experience and threw it out of the window over the course of a weekend when we first launched storm and a whole bunch of people had a really bad experience."

The quote reflects on the consequences of rushing a product to market, which can damage a long-established reputation.

• Adaptability and courage need to be ingrained in a company's culture.
• Making hard decisions, such as pivoting business strategy, is necessary for staying competitive.
• Learning from past mistakes is crucial for future success.
• Experimentation, like the IKEA collaboration, can be uncomfortable but necessary for growth.

"That's a super hard decision to make after you've built hardware for at that point, 10-12 years, but you've got to build that adaptability and that courage into the culture of the company."

The quote highlights the challenge of shifting a company's focus after many years but stresses the importance of adaptability in a company's culture.

• A culture of safety is essential for internal innovation.
• Leaders must react appropriately to encourage idea sharing without bias.
• Allowing room for failure, particularly in hardware development, is important.
• Demonstrating commitment to quality over schedule reinforces a culture of excellence.

"I think you're exactly right that the keyword there is some safety ultimately, so that those ideas can be put on the table."

This quote acknowledges the importance of creating a safe environment where employees feel comfortable sharing ideas.

"We have teams on advanced technology. So looking at technologies that are 5-10 years out, like allowing those people to come together."

The speaker discusses the forward-thinking approach of considering future technologies and fostering collaboration among diverse teams.

• Customer usage insights and market trends inform product development.
• The North Star for decision making is delivering an excellent user experience.
• Healthy tension among diverse teams contributes to better decision making.
• Product managers utilize insights and trends to prioritize and make decisions.

"We're looking at customer insights, we're looking at market trends as well, and then we're looking at those technologies that are developing out there for kind of new experiences we might be able to deliver."

This quote explains the multifaceted approach to decision-making, combining customer behavior, market trends, and emerging technologies.

• Leaders should be authentic and not feel the need to act a certain way.
• Vulnerability can be more powerful than trying to appear perfect.
• The pandemic has highlighted the importance of authenticity in leadership.

"And I've realized there is way more power as a leader in being vulnerable, in just being who you are and leading in that way."

The speaker shares a personal realization about the effectiveness of vulnerability and authenticity in leadership.

"One of the all hands, one of our daughters was unloading the dishwasher, and she was doing it in a very loud way because she wasn't happy about it."

This anecdote exemplifies the human side of leadership and the relatability it can bring to a team.## Leadership Evolution

• Patrick Spence experienced a shift in leadership style from his time at RiM to his role at Sonos.
• Initially, he adopted a "macho" leadership style, demonstrated by managing 19 direct reports at RiM, equating quantity with capability.
• At Sonos, Patrick learned to value delegating and empowering others, reducing his direct reports to eight and focusing on building a sustainable culture.
• The change in approach led to a more manageable workload and a more effective team dynamic.

"And so if I go back and I'm hard on myself now, I look at it and I say, wow, you were trying to show, aren't you tough, aren't you great that you can have 19 direct reports and do all this work and work 24 x seven?"

This quote reflects Patrick's self-critical reflection on his previous leadership style, which he now views as unnecessarily burdensome and less effective.

"So today I have eight director ports, and it's much more manageable and much more powerful in terms of building the right kind of culture, getting the people in the company that we want."

Here, Patrick explains the benefits of having fewer direct reports, which allows for a more focused and culture-driven leadership approach.

• Patrick Spence discusses the importance of acknowledging personal battles and the misconception that leaders have everything figured out.
• He shares the value of seeking support from friends and family during challenging times, as opposed to keeping struggles private.
• Patrick emphasizes the need to recognize that everyone is continuously learning and to extend the same grace to oneself as to others.

"I think how the saying goes, right, everybody is fighting a battle you know nothing about is something that's very important to keep in mind."

Patrick highlights the universal struggle of personal battles and the importance of empathy, as everyone has challenges that may not be visible to others.

"And I've found through my wife, through some friends, that actually sharing and leaning on some of my friends and my wife Erin, has been tremendously helpful in kind of navigating those dark moments."

This quote underscores the significance of having a support system and the positive impact of sharing one's difficulties with trusted individuals.

• Patrick acknowledges the presence of self-doubt and the humbling realization that knowledge is infinite.
• He emphasizes the importance of striving to learn and grow, and giving oneself credit for the effort and progress made.
• Patrick values learning from others, including through podcasts and conversations with experienced leaders.

"I think the more you go through, you realize, the less you know. And so it's humbling every single day."

Patrick conveys the idea that experience brings awareness of one's limitations in knowledge, which is a humbling and ongoing process.

"But I work as hard as I can to make sure that I am trying to figure it out and trying to find great people to learn from."

This quote highlights Patrick's commitment to self-improvement and his proactive approach to learning from others.

• Patrick credits his preparation for the CEO role to his experiences with three founder CEOs and the lessons learned from them.
• He discusses the support and advice he received from board members and mentors when transitioning to CEO.
• Patrick reflects on his childhood interests in technology and team sports, which he believes contributed to his development as a leader.
• The full support and step-back approach of the founder, John McFarland, was crucial to Patrick's successful transition to CEO.

"And so when the time came, one of our board members, Robbie Bach, had said, I want you to know, like, you're not ready, right, in terms of that."

This quote reveals the candid advice given to Patrick by a board member, emphasizing that readiness for leadership is not absolute but requires stepping up and taking on the challenge.

"John McFarland stepped away completely. So unlike most founders and ceos and large shareholders that maybe go onto the board or become executive chairman or something like that, john said, no, I've seen how this works and goes badly at many companies, and so you need to fully take the reins and I need to get out of your way."

Patrick highlights the unique and supportive decision of John McFarland to step away entirely, allowing Patrick to assume full leadership without interference.

• Patrick Spence shares his approach to fostering leadership and commitment in his children through team sports.
• He emphasizes the importance of commitment, adaptability, and cooperation in developing leadership skills.
• Patrick believes experiencing both supportive and challenging environments, such as good and bad coaches, is essential for learning to navigate adversity.
• He values family dinners and open discussions as a means to support his children's growth and development.

"And both of our kids are into team sports and we try to give them a big taste of those throughout their upbringing."

Patrick discusses the role of team sports in teaching his children about commitment and teamwork, which are key components of leadership.

"But then as well, I think it's a good thing for them to have both good and bad teachers and coaches in terms of where they are right now, because that's life."

This quote reflects Patrick's belief that exposure to a range of experiences, including difficult ones, is essential for his children to develop resilience and leadership skills.

• Patrick Spence shares his perspective on competition, influenced by Simon Sinek's book "The Infinite Game."
• He contrasts the finite nature of sports games with the ongoing nature of business competition, which is about staying in the game and progressing.
• Patrick believes in learning from competitors without being distracted by them and emphasizes the importance of finding one's unique path.

"I think this is where, as I go back to it, one of the most helpful books that I've read recently is Simon Sinek's the infinite Game."

Patrick credits Simon Sinek's book for shaping his understanding of competition as a continuous process rather than a finite event with a clear endpoint.

"But we need to find our own path and we need to be clear how we're Sonos, not how are we responding."

This quote encapsulates Patrick's strategy for dealing with competition by focusing on Sonos' unique identity and path, rather than merely reacting to competitors' actions.## Continuous Innovation and Competition

• Emphasizes the importance of constant innovation to stay ahead of competitors, which includes big tech companies, new entrants, and traditional audio players.
• Highlights the need to improve existing products and fix issues while also paying attention to market trends.
• Discusses the balance between partnering with big tech companies and competing with them.

And that's what I mean when I go back to a lesson from Rim is are you pushing yourself to continue to innovate and bring out those new products all of the time to keep staying ahead of whoever it might be, right.

This quote underlines the lesson learned from Rim about the necessity of persistent self-driven innovation to maintain a competitive edge in the market.

• Patrick Spence shares his perspective on managing relationships with competitors, including both partnerships and legal disputes.
• Mentions the unique Canadian viewpoint of looking outward and navigating global relationships.
• Uses the example of Sonos' relationship with Google, where they are in litigation but still collaborate on certain services.

We're suing Google right now, but at the same time we still work with them on YouTube, music service, on Google Assistant, and some of these other areas.

This quote illustrates the complex relationship between Sonos and Google, where they are involved in a legal battle but continue to collaborate in other areas.

• Patrick Spence mentions Simon Sinek's "The Infinite Game" and Jim Collins' "Beyond Entrepreneurship 2.0" as influential books with refreshing insights.
• He values determination as a core part of his personality and credits it, along with support from key individuals, for helping him through challenging times.
• Highlights the importance of making the right personal life decisions, referencing Scott Galloway's "The Algebra of Happiness."

Favorite recent book would probably be the infinite game from Simon Sinek.

This quote reveals Patrick Spence's admiration for Simon Sinek's book, which offers insights he finds valuable.

• Discusses the challenge of driving innovation consistently, especially during remote work and growth periods.
• Emphasizes the importance of balancing innovation with not overburdening the team.

I think it's trying to make sure that we are continuing to push ourselves ahead and drive that innovation on a consistent basis.

The quote stresses the ongoing effort required in leadership to foster innovation and prevent complacency within the team.

• Patrick Spence was motivated to improve diversity at Sonos after moving to the United States and observing racial challenges.
• He implemented employee resource groups and set hiring targets to increase diversity.
• Believes that CEOs need to actively drive diversity and inclusion as it is integral to talent and culture.

I was moving to the United States and watching some of the challenges here around race just shocked me, quite frankly.

This quote explains the catalyst for Patrick Spence's focus on diversity and inclusion within his company.

• Shares his exercise routine, which includes early morning beach workouts and weekend mountain runs.
• Believes that physical exercise contributes to a balanced mental attitude and builds endurance necessary for leadership.

I'm on the beach every morning at 530 with a group of people working out.

This quote details Patrick Spence's commitment to physical fitness and its role in his leadership approach.

• Cites his father as a significant role model due to his integrity, determination, and commitment to family.
• Values the clarity of thought and guidance provided by board member Mike Volpi, who helps balance support and challenge in leadership.

My father, in a big way, I think is a shining light for me.

This quote reflects the profound impact Patrick Spence's father had on him as a role model for leadership and personal values.

• Envisions more innovative products and deeper service experiences in the next five years.
• Indicates a willingness to experiment and adapt for long-term success, acknowledging that not all experiments may work but emphasizing quality.

Yeah, it looks like a lot more great products and I think deeper experiences or experimenting with some services that we put out there as well.

Patrick Spence's quote conveys his strategic vision for Sonos, focusing on product innovation and service expansion while maintaining quality.

• Acknowledges the support from his wife and board members like Robbie Bach and Mike Volpi during tough times.
• Discusses the importance of having a support network for personal and professional challenges.

And look like during some of the tough times, certainly having people like Mike Volpe and Robbie Bach and my wife that I can just talk to and work through some of the things we're going through was absolutely critical.

This quote highlights the invaluable role of support from close relationships in navigating difficult periods in one's career.