Chris Gladwin is a true business builder. It is his craft. He has now launched four startups, including one which raised $100M and sold for over $1B to IBM. His current venture is Ocient, operating out of Great Lakes. It has raised more than $65M from top-tier investors like Gaingels, Massachusetts Institute of Technology, PSP Capital Partners, and Northwestern University.
In this episode, you will learn:
- Ocient and how it is tackling massive amounts of data
- Scaling yourself as a leader
- Managing your time as a founding CEO
- How much better your solution needs to be to succeed
For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here).
Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.
About Chris Gladwin:
Chris Gladwin founded Cleversafe in 2004, bringing to the company the same innovative and entrepreneurial approach that has signified his executive leadership throughout his career.
Chris, who was previously the creator of the first workgroup storage server at Zenith Data Systems and was a Manager of Corporate Storage Standards at LockheedMartin, also created and managed a number of successful new technology start-ups, including MusicNow, which was acquired by Circuit City.
Chris has been the creative force behind the development of the first Dispersed Storage system to solve the growing global problem of Big Data storage.
Chris Gladwin has created over 300 issued and pending patents related to Dispersed Storage technology. Cleversafe, inspired by Chris, continues to be one of the most patenting U.S. companies per employee.
Chris Gladwin holds a degree in Engineering from the Massachusetts Institute of Technology.
Connect with Chris Gladwin:
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FULL TRANSCRIPTION OF THE INTERVIEW:
Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we have an entrepreneur that has done it, not once, but multiple times, what they call the full cycle of the entrepreneurial journey. I think that, again, you’re going to be very much inspired—the ups, the downs, the successful exits, the capital raising, you name it. Without further ado, let’s welcome our guest today, Chris Gladwin, welcome to the show.
Chris Gladwin: Hi. It’s great to be here. I look forward to the conversation.
Alejandro: Originally born and raised in Ohio. How was life growing up in Ohio?
Chris Gladwin: Pretty mid-western and stereotypical. I just went to school, and mowed some lawns, and got good grades. That’s pretty much what I did.
Alejandro: And, obviously, you didn’t get out of Ohio much until you went to university. How was your upbringing there in Ohio? Was there anyone in the family that was into building companies or businesses, or how did you get that bug?
Chris Gladwin: Not really. I don’t know. It was just always something that I wanted to do. I remember one of the companies we’ll talk about later, MusicNow, we had a musician as a guest speaker, Corky Siegel. We asked him, “How do you write songs?” He said, “You just have to learn to let them out. If you’re really a songwriter, they’re inside of you.” I think that’s true, at least for me, and I think for a lot of people that are entrepreneurs, you just have to let it out. It’s what you do, and it’s who you are, and you’ve just got to express it.
Alejandro: Absolutely. Obviously, getting out of Ohio happened with MIT. How did you land at MIT? How was that for you, getting out of the state of Ohio for the first time?
Chris Gladwin: I had been out a little bit, but never more than like a weekend or week vacation. It was culture shock going to Boston with a subway, and homeless people, and tall buildings, and all that kind of stuff was new to me. MIT is a phenomenal place. For me, it was transformative. It gave me the experience to operate on a global scale in terms of innovating. MIT is just wonderful in that respect.
Alejandro: And especially engineering. You probably had that problem-solving in you.
Chris Gladwin: Yeah, for sure. MIT still kicks your butt, believe me. Everyone that goes, “You’re the smartest kid in high school,” and then you go there, and you’re just average. That’s a good experience because it challenges you and makes you work harder. It also makes you humble. You realize you’re not that great. You’ve got to work just as hard as everybody else.
Alejandro: So the first gig out of school was Martin Marietta. Then after that, you did Zenith Data Systems, which was the segue to building your first baby, your first rodeo. Tell us how that segue was to Cruise Technologies, that incubation process, and bringing it to life, and so forth?
Chris Gladwin: I was really fortunate in a lot of ways because that was what enabled me to start my first big venture-backed startup, Cruise Technologies. Back then, it was pretty uncommon, and I think it’s still pretty uncommon for someone young and early in their career to lead a company with a lot of employees and a lot of capital that goes into building hardware. Fortunately, I had helped build that division at Zenith Data Systems while I was there that we spun out into this new company. I had the advantage of knowing every customer; I knew all the engineers; I just knew the business. Even though I was relatively young, and I didn’t have a lot of experience, I knew that business better than anybody, so that’s why I got the opportunity, which was phenomenal.
Alejandro: How did you guys capitalize this business?
Chris Gladwin: In the mid-’90s, there was a battle for the dominant end-user computing architecture. The PC had risen to prominence, but there was a real battle that Sun, Netscape, and Oracle waged to establish an alternative architecture, which was a network computer, a thin client. We were in that battle, Cruise Technologies, and we were the company that made all the mobile or wireless clients in the market, except one. All the Motorola products, all of IBM’s products, Wise’s products, Tellus’ products, etc. Behind the scenes, we made all those. That was pretty cool to be in that battle. The problem is, Microsoft and Intel ultimately won. It was by ourselves; little Cruise Technologies ultimately couldn’t compete with those giants.
Alejandro: Yeah, and in this case, you guys ended up selling the business to Motorola, NTC, and that was the end of this rodeo. But then you started another one, MusicNow. As they say, once an entrepreneur, always an entrepreneur. So tell us about MusicNow, and before MusicNow, one lesson that you learned with Cruise Technologies.
Chris Gladwin: I think that one, for sure, the lesson was I thought the way to be successful as a new technology company was to do something that was really, really hard and to build a team of people that knew how to do that better than anybody else in the world. The problem with that is you can overshoot the market. Basically, we were building iPads 20 years before the market was ready for an iPad. Obviously, the market now, you look at it, and yeah, mobile computing, thin clients, essentially. Most of how apps operate today is more and more a thin client. So we were right about a lot of stuff, but if you come to market decades early, it’s not going to work. That was the big lesson, which was you’ve got to time the market. That’s the most important thing so that you enter the market right as there’s some kind of new demand for what you bring.
Alejandro: MusicNow was the next one, and you alluded to it earlier. How did MusicNow come about?
Chris Gladwin: The way I started MusicNow was a calculation. At that time, music was a plastics distribution business, in which music would be printed on a CD, and that dominated. You could see this every year: bandwidth was getting faster, and hard drives were getting bigger, and CPUs were getting faster. I thought as soon as the basic CPU comes in any computer could decode, or encode, compressor, decompress music in real-time—in other words, as fast as you can listen to it. Then as soon as the bandwidth that goes to most houses for broadband is fast enough so you can hear in real-time something that streams in. Then as soon as the average size of the hard drive, which was always increasing, you could hold an average size music collection on about one-third of a hard drive. I thought, “As soon as those three things happen, this thing is going digital.” And I was right. That’s why we sold MusicNow.
Alejandro: And here, another exit. You sold that to Circuit City. What was the lesson learned from MusicNow?
Chris Gladwin: We were a little bit early there, too. But we made that business unable to go, which meant we couldn’t get the rights needed to do that effectively. I don’t need to do a focus group with you to know that we all knew what the market really wanted was to buy a song for a dollar. That was obvious. We just couldn’t get that right. At that time, all we could do was sell a whole album for $15. Again, you don’t need a focus group to know that’s not going to sell as well as a dollar song. We just couldn’t get the right to do it, and Apple did. That’s a whole other story that we don’t have time for today. Apple was almost out of cash, almost out of business when they launched the iPod and iTunes. Two trillion dollars later, here they are. I think the lesson there was, you’ve just got to be in the right place at the right time, and we weren’t.
Alejandro: Got it. At least you know this was the segue to your biggest exit to date with Cleversafe. I’m sure that at this point, you had two startups under your belt, two companies that you had built from the beginning, all the way to the exit to doing the transaction, but I’m sure that in Cleversafe, you were able to apply many of the lessons learned from MusicNow as well as Cruise Technologies. I’m sure that many of those were around people and how you would surround yourself. When you were thinking about Cleversafe and bringing the idea to life, how did you think about, as well, the band—that founding team and those initial employees?
Chris Gladwin: You’re right. It’s definitely true that as I’ve gone through these experiences, including prior ones where I was just working at companies as opposed to starting companies, I was learning and learning and building my network. When I started Cleversafe, I had a much bigger network. I had much more ability to—people I knew or people who knew people to build the team, and just my playbook was so much deeper: all the different ways to finance a company, all the different ways to organize the team, all those things. I had a pretty big playbook at that point. Each time, I get better at it because that playbook gets bigger, and also because the network gets bigger, I’m able to identify and attract a much stronger team.
Alejandro: What was the process of Cleversafe? You were alluding to it before. When you’re a musician, the songs and inspiration just come to you. Here, you had to let it out, so for you now, having started so many companies, now looking back at the Cleversafe moment, how did the idea come to you, and why did you think it was a good idea to execute on?
Chris Gladwin: The idea for Cleversafe came from MusicNow. At MusicNow, we built a system to store all music in the world, which back in 1999 was one of the biggest data storage systems ever built. Plus, I did some work at Martin Marietta and Zenith on storage. So I knew data storage technology pretty well. What I experienced at MusicNow was—we evaluated and understood all the technology that was available for these big storage systems. We bought one and used one. We actually bought three. I honestly thought that the state of the industry was terrible. For example, the systems you would buy wouldn’t be very reliable, so the standard practice was just to buy three of them. That way, if one or two fail, you’re still good. I thought to myself, “I understand why that’s good for the vendor, but as the customer, I’m going to pay triple. This is terrible.” I had also done a lot of work in wireless through all of my prior experiences, so I knew the ways that wireless signals are encoded and decoded to deal with the fact that when you’re sending out information into some kind of wireless network, what you receive is not necessarily that great. So how do you code and decode that information and code it as you send it and decode it as you receive it to deal with all this error and loss? I knew those techniques really well. I looked at what they were doing in storage, and I’m like, “This is like what everyone was doing 30 years ago.” State of the art has moved so far beyond this. In wireless, I thought we could bring those technologies to storage, and we did. That was one of Cleversafe’s fundamental innovations that has changed the whole data storage industry, which is, we didn’t store data. Everyone before us, data would come in as a string of bits. You’d write it to the media. You might throw a parody bit or two on there, and then you read it. That’s not how wireless works, so that’s not how we did it. Instead, we would encode data, which is, we’d run it through some mathematical algorithms, and what we’d physically store were codes. Then when you’d read the data, we’d reconstitute the data in real-time, and that allowed us to build systems that were about the size of a single copy but had the reliability as though you had made six, seven, or eight copies. That was a fundamental problem I experienced as a customer. Like, “Man. This can be solved.” That’s why we started Cleversafe.
Alejandro: With Cleversafe, for example, this was your third rodeo now, and I’m sure that at one point, you were able to compare with your other ventures, and maybe you realized, “Wow! I think that I’ve hit the nerve on something big, and I think that this company is going to be massive.” What was that point like?
Chris Gladwin: We just knew. Once we got the product working, and we got it built and performing fast and reliable, we would just smoke competitors. We would go in there, and we were like 10x better on price performance. I mean, literally 10x better. Not only was everyone else making a lot of copies, and we didn’t’—physically, the amount of copies you make is what drives your cost. If you’ve got four or five times the bits, you’ve got four or five times the hardware, electricity, floor space, management, and it’s four or five times more expensive. Then on top of that, because the technology that we previously used was so fragile, they would just get the most expensive hardware. Because our technology was so resistant, we were like the first to take. “Let’s take the lowest cost, desktop, consumer-grade as opposed to enterprise-grade hard drive. Let’s use that because we can tolerate so much failure.” For the same amount of capacity, we had about half the cost, and we only needed about one-third of the capacity. We were just smoking our competitors. We knew we had it.
Alejandro: For the company, the incredible exit to IBM, but prior to the exit, how much capital did you guys raise.
Chris Gladwin: We put about $100 million of equity financing in the company, and I believe an additional $35 million of debt financing.
Alejandro: Nice. How big was the company right at the time of exit? How many employees or anything else you can share?
Chris Gladwin: I think when IBM bought it, we had 215 employees.
Alejandro: Got it. What was that process like, because you had some good experience already on doing acquisitions, but not at this scale?
Chris Gladwin: Whole different deal.
Alejandro: What was different? You’re saying now a whole different deal, but probably the same process. Why was it different?
Chris Gladwin: IBM, for one thing, was an incredibly thorough company when it comes to this kind of stuff. Just the documents—my prior acquisitions were much smaller. It would be the complexity of the deal that was captured in maybe a 50-page document. With IBM, it was like 5,000 pages of documents. Just the complexity was pretty severe. That was a big change, and the money was so much greater. That has an effect because it was life-changing. The others were nice little bonuses to have at the end of a company, but IBM’s purchase of Cleversafe was life-changing for a lot of people. I think it’s been widely reported that over 80 people at Cleversafe got a million dollars—not as widely reported—I think I calculated the other day that it was over 30 people got at least five million dollars. That changes a person’s life, that kind of money. It’s great. I remember friends of mine paying off their mortgages and all kinds of great stuff that came out of it. So that was a wonderful difference.
Alejandro: What was the size of the transaction?
Chris Gladwin: It was over 1.3 billion.
Alejandro: Wow. That’s a lot of zeros. How long did it take from the beginning of the initial discussions to the actual signing? Also, what was that day like where you put pen to paper to close this thing?
Chris Gladwin: It began in earnest around March of 2015. I knew then, even though there was a lot, you could tell there was a lot to do. You could see that both sides had the right motivations, and both sides were doing their job in negotiating hard. You could tell this deal was going to get done. Then we signed a term sheet. It was still a big secret, but we signed a term sheet in 2015, either June or July. Then the deal was announced in October of that year. The funny thing is, the actual pen to paper—the deal was announced when the market opened at 8:00 am Monday morning in Chicago. We didn’t sign the deal until about 11:00 pm Sunday night, the night before, the actual physical approval. We had a board meeting around 10:00 pm that night. It was cutting it close.
Alejandro: For you, you were saying that it was life-changing. It’s also interesting on the transactional side, and seeing all those zeros; it’s also nice. But to a certain degree, if you associate it from a psychological perspective when you sign those papers, it’s like an emotional roller coaster as well. How was that for you?
Chris Gladwin: For me, delivering that result to my investors, my employees, and everybody. That was very satisfying, and it’s my job to ultimately do something like that. It’s like, “This is my craft.” We were talking about letting it out. If it’s your craft, this is who you are. This is how you self-actualize. So a measure of the quality of that craft is delivering that kind of outcome. It was very satisfying to have done what I do well.
Alejandro: Yeah, and for you, it was a life-changing event. You could have taken a boat and enjoyed life, but you didn’t do that. Why did you keep going?
Chris Gladwin: It goes back to the same thing. I actually enjoy the process of building these companies. It’s like I have to do it. It’s who I am. It wasn’t about, “I don’t really like this, but once I get enough money, I’ll stop.” I’ve never been in this for the money. Like I said, I’ve been in this because this is my craft; this is who I am. I had already been working on Ocient, my next company when IBM bought Cleversafe.
Alejandro: Oh, so you were already thinking about it?
Chris Gladwin: Yeah. Some friends of mine had started working on a project, and one thing led to another, and that turned into Ocient later on.
Alejandro: Tell us what that thing was that led to another and landing on Ocient.
Chris Gladwin: It was similar to Cleversafe. One of the things that I feel like I’ve learned to do well is to listen, at least with enterprise businesses. The way it works is, you’re not so smart that you sit around and think of this great idea that everybody wants. That’s not how it works. I feel like being good at it means I’m really good at listening. What I’ll do is I’ll ask enterprises, “What do you need? What are your problems? What are unmet needs or problems you can’t solve? When they start to tell you, take notes. Listen. The skill is not: how smart are you? It’s like: how good are you at listening and interpreting what they say, and like in this interview, ask them questions. What do you mean when you say it’s slow? Really digging in and understanding that. Through Cleversafe, I had spent ten years of my life selling to the 200 largest bit storing organizations in the world, and I knew them all really well. There are only so many ways you can have an exabyte of data, and we knew them all. Some of those, we got as customers. Some of those we chased as customers, but we knew them. They started to tell us a need they had which they could not meet, which was this explosion of data that needed to be analyzed, not just stored. If you’ve got a billion smartphones, and they just keep getting smarter and smarter, what happens is they make more and more data to analyze. If you’ve got a bigger, faster network, and you’re a telco, that network is making more and more data every day, every year that needs to be analyzed. Examples like that, and we were hearing the biggest of the big, the really massive enterprises had these data sets that they needed to analyze, but they couldn’t; they were just too big. Once I heard that five times, I’m like, “Look, if these people can’t find an answer, it doesn’t exist because they know how to find these answers if they’re out there. That’s gold. When you hear that from customers, that is gold. That was it. We just listened, and our customers told us a problem they needed solved.
Alejandro: Why did you decide that your co-founders here, George and Joe, were the right ones for this?
Chris Gladwin: They had spent their career building databases. One database, in particular, I was very familiar with is they had built a large database, which is now used—I think 90% of the beverage cans in the world are built using their software that runs those factories. That was one of many things they had built over the years. They new high-speed databases. It’s kind of like people who know cars. They know all the different kinds of carburetors and all the different kinds of suspension systems. These guys knew databases, and they knew all these different techniques and some old ones and some new ones. They knew them pretty well. They were the first people I turned to when I was hearing this from customers, like, “Here’s what I might need,” as I turned to them and said, in some detail, like ten pages of detail, “Here’s an unmet need. Can you think of a way to solve this? That’s how it got started.
Alejandro: At Ocient today, how do you guys make money?
Chris Gladwin: We sell software, really at the end of the day, or our software as a service. That’s what we make. We have built a brand-new architecture to analyze the largest data sets in the world. We focus not only on massive data sets but massive data sets where your business requirement is you need to continuously do complex analysis on massive chunks of that data second after second or minute after minute. It’s a very specialized thing that we do, and we are the best in the world at it.
Alejandro: Here, you’ve raised money, and I’m sure that there are a lot of people that are listening now and watching that are wondering, “Chris, you made all this money on previous transactions. Why did you have to raise money here?” I think I have an idea of what the answer could be, but I’ll let you take a stab at it.
Chris Gladwin: One thing that has changed—back in the day when we did Cleversafe, if you looked at the enterprise storage startups—when IBM bought Cleversafe, going back the prior 20 years, there were five companies that had billion-dollar and above exits. That was it. That’s as big as it got. All those companies exited between one and three billion dollars. Then they all raised between $100 million and $300 million. That was the formula back then. If you look now at the enterprise database market, the numbers are all substantially bigger. Not only are the exits much bigger like eye-popping, record-setting numbers; instead of a $1-$3 billion range, you’re seeing exits all the way up to the $100 billion range. What that means is it cascades back in that the amount of capital that you have to put into these companies is substantially higher. Instead of $100 to $300 million, you’re seeing up to $2 billion of capital, $2 billion, which is two thousand million. It’s a lot of money being put into these companies. If you really want to go dominate a category in enterprise database these days, you’re going to put at least $300 million in. Again, maybe even a billion dollars. Actually, the interesting thing is, the more successful you are, the more money you need because success costs money, growth costs money in these kinds of businesses. To answer your question, at that range, it’s well beyond my capability to fund on my own.
Alejandro: Of course. You’ve been talking about listening and how important listening has been, especially in this case for the birth of Ocient. Listening is not just applied to customers, but then also to employees as well as to investors, and I’m sure that in fundraising, listening came in handy. So how did you apply listening to really onboard these people?
Chris Gladwin: I said this many times. When you’re on a fundraise, you don’t want to just go to anyone. You want to go to the investors that have the most expertise in what you do. Actually, I’m working on it today. I’m about to raise another round. I’ve been researching who are all the investors who have made investments at the valuation range that we’re in for similar companies. Not directly competitive, but adjacent. I want to go to them because they really know this market. Then from a listening point of view, if they say no, it’s not because they’re not smart. They’re right if they say no. You’ve got to really listen. What are they telling you? They’re telling you; They’ll articulate: “I don’t like your model. I think this is inefficient. Whatever it is, you really need to listen to that feedback because it’s probably right. The answer is not, “If I go to the most informative investors, and they all say no,” the answer is not, “Let’s go find some less-informed investors and see if they’ll invest.” That’s not the right answer. The right answer is that you need to address the reason they said no because if the most important people aren’t investing in your company, the problem is with your company, not with them.
Alejandro: Absolutely. It’s all about identifying concerns, and I always tell founders that fundraising is not about talking; it’s about listening because that’s what separates you and the money—removing those concerns. Chris, in this case, how much capital have you guys raised to date for the people that are listening?
Chris Gladwin: About $65 million.
Alejandro: $65 million. Okay. Now, in terms of the size of the operation, how many employees do you guys have? Anything that you can share?
Chris Gladwin: Yeah. We’re right around 100 right now. I think any day now, we’ll cross 100.
Alejandro: I’m sure that you’ve learned quite a bit and a few things when it comes to culture and leadership, so how do you scale your sales at the same pace as the organization?
Chris Gladwin: Well, this is so cliché, but it’s all about your team. If you’re up to a 20-40% company, anyone, including if you’re the CEO, you can have a sense of everything going on. As you go beyond that, forget it. No one at the company, including yourself, will know everything going on. What you have to do is manage in terms of being a founding CEO. It becomes about managing your team. You need to get people that know how to do the job and then do the job. My job is, obviously, recruiting those people and then enabling them to do their job. I help with communication amongst the team. Sometimes, I’ll work on who does what type of stuff. At the end of the day, whoever is responsible for sales needs to be selling. If I’m in there doing their job for them, that’s a problem. I have a role to play in certain things and help them in certain ways, and I also have to do fundraising, for sure, and then manage the board and investors. That’s one thing I’ve learned as I moved through this is how to manage and lead versus do. I have a role to play, but my role is to enable them to do their job great as opposed to doing it for them.
Alejandro: Chris, imagine you go to sleep tonight, and you wake up five years later in a world where the vision of Ocient is fully realized. What does that world look like?
Chris Gladwin: We have a seven-year plan if I can just go to your five. [Laughter] Generally, what you see for companies like us is—we’re in an important year this year. The year before, we had no revenue, and then last year, it took that long to build the product. It took us literally close to about 250 person-years of engineering to get version one out the door.
Chris Gladwin: That’s just the nature of the beast for enterprise storage these days. The anti is so high if you want to sit at the table. Then last year was the year of the pilot. We sold some pilot systems. Now, remember, we’re selling systems to analyze the largest data sets in the world, so a little pilot in Ocient land is on a massive system. Now we’re getting into initial production systems, which are even bigger. What generally happens is, once you get through those first years, if you look at every other database company that’s been successful, generally doubling your revenue every year is very good. Occasionally, people do a triple once you get into scale, but that’s pretty rare. From a where-would-we-be point of view, we will be doubling, doubling, doubling. At that point, five years from now, we’ll be beginning to dominate our category of these massive systems. We’ll be winning the majority of new wins as companies decide to implement a new type of system. We should be winning the majority of those. That’s where we should be in five years.
Alejandro: Tell us about your other passion nowadays. Tell us about The Forge. What are you doing at The Forge?
Chris Gladwin: I also helped start a company that makes outdoor recreation parks. We’ve opened one of them, which is The Forge: Lemont, which is where I am right now because I have a place here. I come out to the park for various reasons. This is like my weekend and evening thing. It’s also very similar. My other partners are both people from the technology entrepreneurship world. It’s very interesting to watch us apply all of our technology entrepreneurship thinking to the outdoor recreation industry and doing things that have never been done before. I’ll give you one example. At MusicNow, I worked a lot with Best Buy. This was back when Best Buy was dominating the market. The most secret thing going on at Best Buy was what they called the map room, which is where they were going to open new stores. What they were doing at the time, which was revolutionary, and now it’s common in retail is for each possible store location, they would map every single household, how far away it was, what the demographics were, so they could know exactly what would happen if they put a store there. I remember asking them once, “How accurate are you?” They’re like, “Plus or minus 7%. We know exactly who is going to walk in the door on day one. We can tell you their demographics, their income, and all this stuff about them, and they were pretty accurate. We did that for outdoor recreation activities, which we’re pretty sure no one has ever done that before. We thought about placing an outdoor recreation park. We modeled the location in that same way so that we can tell you within 15 minutes, 30 minutes, 45 minutes how many active climbers, or bikers, or hikers, or whatever there are. What we’re building is our capture-rate model so we start to know like if we were to open a new park in a new place, we could tell you how many climbers are going to come and how many bikers are going to come and how many zipliners are going to come because we’re building this capture model. That’s an exact example of the innovation we brought from the technology world into the outdoor recreation market.
Alejandro: Chris, you’re definitely a wealth of knowledge. If I ask you this question that I typically ask the guest that come on the show, and that is, let’s say I put you in a time machine, and I’m able to bring you back in time to that moment where you were thinking about starting Cruise Technologies, and you have the opportunity of having a chat with your younger self, and give that younger Chris—even though our younger selves don’t listen, but let’s pretend—
Chris Gladwin: I would listen to the old me. [Laughter]
Alejandro: There you go. So imagine the young Chris is listening to the now Chris, and you’re able to give your younger self one piece of business advice. What would that be and why before launching a company?
Chris Gladwin: The piece of advice I’ve given a lot of the people: even when I look back now at MusicNow or Cruise, which were right about what they were making, but wrong about the timing. That would be the advice, which is you’ve got to get the timing right. Just because you can make it doesn’t mean the market wants to buy it, so you’ve got to align the timing up of when you are coming to market to the point right when the market wants it. If you’re early, you have to find a way to last until the market is ready. Because you can’t push it too much forward. If you’re five years early, it’s not going to happen. If you’re six months early, you might be able to push it, but five or ten years, forget it.
Alejandro: Is there a way to know? Maybe there are a lot of people that are listening and watching, and they’re probably wondering, “Hey, Chris, how do you know if the timing is right? How do I know if the idea that I have or the startup that I’m working at right now is right if the timing is right for the market?”
Chris Gladwin: The rule of thumb that I use—in the case of MusicNow is very easy because that calculation that I shared was right. As soon as broadband could deliver and had enough bandwidth that it could stream music as fast as your ear could hear it—bam! It’s on. That’s exactly what happened. In other cases, like in enterprise stuff, if you’re going to bring something to market that’s 30-50% better, no one’s going to buy that from a new vendor. Forget it because it’s just so much change and so much risk. In the enterprise market, your initial offering better be at least three times better if it’s five times better, like legitimately that much better by a metric that matters to the customers. On the enterprise side, that’s pretty much what we’re talking about. On the consumer side, it’s harder to judge. Like, Google Search. How could you tell Google Search was better because it was enabling things that didn’t exist before? So that’s a little trickier. There had been search before, but the way that Google made it better, maybe they could tell you. But as a consumer, it’s sometimes hard to tell if it’s something really new; that’s a tougher one. I think if you look at the companies that are—you have to be honest with yourself. It has to be like breakthrough-better. It’s sometimes hard to quantify what they mean, but it can’t be just nice to have. No one’s going to buy from a new company or deal with some new software they got installed for a nice-to-have. It’s got to be either breakthrough compelling or three to five times better.
Alejandro: I love it. Chris, for the people that are listening, what is the best way for them to reach out and say hi?
Chris Gladwin: Just check out Ocient.com.
Alejandro: Amazing. Well, Chris, thank you so much for being on the DealMakers show today.
Chris Gladwin: Thanks. It was a pleasure to be here. I enjoyed it.
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