In this episode of "20 Minutes VC," host Harry Stebbings converses with Emmanuel Schalit, CEO of Dashlane, a company revolutionizing internet navigation and authentication with its all-in-one password and payment solution. Schalit, with a background as CEO at CBS Outdoor France and COO at La Martinier Group, discusses his journey from corporate leadership to startup innovation, emphasizing the risk and reward of transitioning to a technology-focused venture. The conversation delves into the strategic decision-making behind raising substantial funding rounds, the challenges of company scaling, and the importance of maintaining a strategic advisory role as a VC while allowing the CEO to steer the company. Schalit also highlights the need for diversity in tech and his vision for Dashlane to significantly improve the user experience of the internet within the next five years.
"You are listening to founders Friday on the 20 Minutes VC with me, Harry Stebings and I'd love to hear your thoughts on the show."
Harry Stebbings introduces the podcast episode and invites listener feedback.
"I was fascinated by their idea of solving what was one of the biggest unsolved problems of the Internet, how we navigate, how we authenticate from services to services."
Emmanuel Schalit explains his fascination with Dashlane's mission and the problem it aims to solve.
"It's the best decision I ever made to follow Bernard's instinct that this would be a big market."
Emmanuel Schalit shares his satisfaction with the decision to join Dashlane and the success it has brought.
"I think appetite for risk is something that changes over time."
Emmanuel Schalit discusses how his willingness to take risks has evolved over his career.
"The excess of capital available today is a fact."
Emmanuel Schalit comments on the abundance of venture capital available for startups.## Impact of Raising a "Mega Round" of Funding
"It's actually quite the contrary, because, and I'm speaking from experience, because six months ago, we raised the mega round because of a couple of things."
This quote emphasizes the counterintuitive experience that raising a large amount of capital can complicate rather than simplify a company's operations.
"You have to exit at a much higher valuation. So suddenly you've raised the bar for you and your team by a massive amount, and it's a one way decision."
This quote explains that after raising a large funding round, the company must aim for a significantly higher exit valuation, which cannot be reversed and adds pressure.
"When you grow at that pace, you don't have the management, you don't have the bench, you don't have the management layers."
This quote highlights the management challenges that come with rapid growth, indicating the need for strong organizational structures to handle expansion.
"Half of the people that are at Dashlane were not there a year ago."
The quote illustrates the dramatic change in company composition over a short period, which can significantly impact the company's culture.
"We are very generously compensated for the job we do. We should look at the company as a shareholder and as such, yes, we need to understand what these hurdles mean and what a good outcome is versus a bad outcome."
This quote explains that senior executives, due to their compensation and stake in the company, should be acutely aware of the company's goals and the pressure to achieve them.
"For all the people on the team, this is going to be something they remember all their life."
The quote conveys the idea that for the broader team, the motivation comes from being part of building a memorable and impactful company.
"The opportunity was actually going to be much bigger."
This quote refers to the realization that market conditions and the potential for category creation warranted a large funding round.
"If we can grow fast, we can get to profitability quickly."
The quote suggests that for SaaS businesses with high gross margins, rapid growth can lead to profitability, justifying the deployment of significant capital.
"Every company and every set of circumstances is fundamentally different, and you can only benefit from advice if you understand what in it applies to your."
This quote advises founders to contextualize advice based on their specific circumstances.
"Do you have the leadership team? Do you have the business model and the gross margin?"
The quote outlines the considerations a founder must evaluate when deciding to raise and spend significant capital, emphasizing the importance of having the right team and business model in place.## Risk-Taking in Business
"We have to learn how to take a level of risk we're not used to taking. All the ingredients are there, the market, the leadership team, the margin structure, the board that supports a new level of risk."
The quote emphasizes the need for businesses to adapt to taking greater risks and the importance of having the right conditions and support in place to do so successfully.
"But if you're not growing at an incredible rate, if you are not guaranteed to be worth way more money without using that capital, then you must deploy it, because otherwise you will have raised your exit bar."
This quote highlights the strategic decision-making needed when managing capital; companies must balance the security of having funds with the necessity to grow and increase value to justify their valuations.
"So VCs, way beyond the money they bring, can be incredibly helpful."
This quote captures the multifaceted role of VCs in supporting companies beyond just financial investment, highlighting their ability to provide connections, advice, and community support.
"But the dynamics are completely different with VCs, because your board is not your boss, you are running the company and you're running the board."
The quote explains the unique relationship between CEOs and boards in VC-backed companies, emphasizing the CEO's leadership role and the advisory nature of the board.
"So investing time with your board members outside of the boardroom is the number one advice, I'd say."
This quote suggests that the most valuable interactions with board members often occur informally and outside of official board meetings, underscoring the importance of developing personal relationships with board members.
"So I think it's also about understanding you're not going to be able to help on every front."
The quote advises new board members to focus on areas where they can provide the most value, acknowledging that they cannot be experts in every aspect of the business.
"You should read sapiens, which I'm sure you've heard about."
This quote is a book recommendation from Emmanuel Schalit, suggesting that "Sapiens" offers important learnings.## Historical Lessons Applied to Business
"Which is why homo sapiens prevailed over neanderthalis and other human species because of their ability to form large groups of humans, because they were able to have a shared vision."
This quote highlights the importance of a shared vision in the success of large groups, an idea that is transferable to the context of growing businesses.
"At that level, obviously, you have that number or that 150 limit, which is really, really very palpable, because it essentially means when you are in an organization where you can't know everyone enough to trust them implicitly."
This quote explains the significance of the 150-employee threshold as a point where personal connections and implicit trust within an organization become difficult to maintain.
"Diversity. More women. More people of color. That is a cancer running through the tech ecosystem today, and it's one that's really hard to cure."
The quote emphasizes the speaker's view on the urgent need for enhanced diversity within the tech industry and the difficulty in achieving it.
"The first one was when we were raising our series A, and I was meeting with Habib Kerose from Roe Ventures here in New York, and I was halfway through my pitch, and he banged his head on the table right in the middle of it. I was not even finished. And he said, I love it. How much is it? I want to do it."
This quote recounts a pivotal moment in the company's funding journey, where immediate investor enthusiasm marked the beginning of a long-term supportive relationship.
"New York is also the city of finance, of retail, of advertising, of e-commerce. And so as such, I find it a very enriching environment that meets people that are not just startup founders and VC."
The quote illustrates the speaker's appreciation for New York's diverse business ecosystem, which offers a broader perspective than a tech-only environment like Silicon Valley.
"In the next five years, we want to build a mainstream consumer brand and a mainstream consumer product that will have made a significant dent in how the UX of the Internet is experienced every day by millions and millions of people."
This quote outlines the company's ambitious plan to revolutionize the internet's user experience and establish a significant market presence within the next five years.