Cyriac Roeding is a full-cycle entrepreneur who has been launching his own ventures since he was a teenager. He sold one of his companies for $250M and has since helped lead two new health tech startups which have raised tens of millions of dollars.
In this episode, you will learn:
- Cyriac’s top advice before starting a business
- Why it’s so important to fail fast
- How to face failure
- The advantage of international travel for entrepreneurs
- Working with Reid Hoffman
- What great board members are like
- Finding and filtering startup business ideas
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.
The Ultimate Guide To Pitch Decks
Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.
About Cyriac Roeding:
Cyriac Roeding is a Silicon Valley-based entrepreneur (co-founder, former CEO of Shopkick, acquired for $250M in cash) who invests in and works with startups and venture capitalists that drive change in the world at scale. Focus areas: consumer network effects, mobile, human-machine interfaces, and AR, robotics, software meeting biology. LimitedPartner in Founders Fund, Andreesen Horowitz, KPCB, IVP, ZhenFund (China), SV Angel, SVB. Direct investor and advisor in over a dozen startups, including Karma Science (acquired by Facebook), Carspring (acquired by Twitter), Grofers, Curbside, Zumper, Brilliant. The World Economic Forum named Roeding a Tech Pioneer 2013.
Previously, Cyriac Roeding co-founded and led Shopkick, the shopping app that rewards users just for walking into retail stores, as CEO to over 20 million users and its $250M acquisition by SK Telecom/SK Planet (Fortune 100 from South Korea). Fast Company ranked it one of the world’s 10 Most Innovative Companies In Retail by Fast Company, along with Apple and Starbucks.
Previously, Cyriac Roeding founded and led CBS Mobile (New York Times), the television network’s (NYSE: CBS) mobile division, covering CBS Entertainment, CBS Sports, CBS News, and The CW. He created the first location-based mobile ads in the U.S. and grew CBS Sports Mobile into one of the top ten highest traffic ad-supported mobile websites in the U.S.
Prior to CBS, Cyriac Roeding was the co-founder of 12snap, a European mobile marketing, and entertainment company working with Coca-Cola, McDonald’s, L’Oreal, Adidas, Nokia, Vodafone, and MTV Europe among others. Before that, he was at McKinsey & Company in the media, software, and high-tech sector.
Cyriac Roeding co-authored the Harvard Business School Press book Secrets of Software Success.
Connect with Cyriac Roeding:
* * *
FULL TRANSCRIPTION OF THE INTERVIEW:
Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we have an exciting entrepreneur, someone that has done it, been through the full cycle, and I’m sure that you’re going to find his story remarkable. So without further ado, let’s welcome our next guest today. Cyriac Roeding, welcome to the show.
Cyriac Roeding: It’s great to be here. Thank you.
Alejandro: So originally born in Germany. Talking about a remarkable story, you were born there, but all of a sudden, you find yourself in a town of 5,000 people. Tell us about your upbringing.
Cyriac Roeding: I was born in a tiny town at the Lake of Constance in Germany in the very south. Two years into my life, my parents decided to pack up and move to a tiny place called Wertheim, which is a 5,000-people village in the middle of Germany by Frankfurt—milk from the local farmer; that kind of thing. That’s where I lived. I always picked up the milk with a bike.
Alejandro: And you got started in business very early carrying the newspaper.
Cyriac Roeding: That’s true. I carried the newspaper when I was 12 years old. At 13, I upgraded from advertising flyers to newspapers, which was a bit of an upgrade. Then I talked to the company that made the newspaper and told them about what I was working on by myself, which was programming computers. Then I suddenly got a call from them saying, “You know what? I think we might need your help. Why don’t you come during your next vacation break from school and program something for us? Before I knew it, I sold my first computer program to them at age 15, which was about making the job that I had previously in a summer job obsolete by automating it with a computer in the advertising department. It worked; the job doesn’t exist anymore.
Alejandro: That’s pretty extreme. Like selling your first thing at 15 years old. Wow! That’s pretty cool. In your case, something that was pivotal too was to really get that exposure to the American culture. That happened to you during an exchange program in Austin. How was that for you?
Cyriac Roeding: I was very determined on becoming an exchange student in the United States. I wanted to experience America. I told the organization that organized it that I wanted to live in the sun. I thought of California, and they did exactly what I asked them to, which was placing me in Texas in the sunshine in the southeast Texas area, a swamp area called Orange, Texas, by Beaumont. It turned out that I loved it. I had a wonderful time. I went to high school there, and I ran the school flag on Friday Night football. I was a male cheerleader. There were 7 guys and 15 girls, and I ran the school flag across the stadium. Since then, it’s really gone downhill. It was the best job I ever had. [Laughter]
Alejandro: Good stuff. In your case, you come back while still in high school. You start to work with Hewlett Packard. How was that experience? Tell us about that.
Cyriac Roeding: I was going back to Germany. I had two more years of school, although I had just graduated in Texas. That was kind of tough, going back to school. I had experienced a lot in Texas with host families and changing them. My first family were alcoholics, and I found another family, a wonderful family that had no money but had a wonderful heart. To this day, they’re like my second family. Then I came back, and I was in high school, and I was itching to do something in addition, so I became a programmer for Hewlett Packard on the side. Every Wednesday after school, I went to Hewlett Packard and programmed for them as well as during the breaks. Then I also helped an architecture firm with software technology, as well. This was all at a time when you could still be quite differentiated even as a high schooler if you knew something about software and programming. So I made full use of that.
Alejandro: Your journey is very interesting because, obviously here, you had exposure to business very early on. Then you end up after university and doing a little bit of radio DJing, and all of that stuff, you end up in consulting. I have to say that some of the most remarkable entrepreneurs that I have come across are those that went at it and launched a business with that background of either consulting or perhaps investment banking or having been investors before. In your case, why consulting? Why did you go into consulting, and how do you think consulting has shaped you and also your mentality and the way that you see through things in order to see entrepreneurship the way that you see it?
Cyriac Roeding: It’s a great question. I was always interested in a lot of different things. I loved media; I loved software; I also love strategy—the idea of defining the path of an organization and helping them shape that in a substantial manner. If you are 19 years old, then what options do you have to help shape the organizations of thousands of people if not going through a path like consulting or investment banking. I thought it was an incredible thing that at age 21, I started doing consulting work when I was in Japan. I was in Tokyo for half a year. While I was in college, I did radio reporting, and I did radio DJing at night, which led me to the fact that I hardly ever—I slept half of the day because I worked at night. But then, when I came to Japan, I thought, “This is the time for me to start exploring the whole consulting world. As a young person, you can move a lot of large stones. I joined Roland Berger, which is a European Consulting firm in Tokyo, as a summer associate kind of thing, like a freelancer. Then I came back to Germany. I joined them again for a while in the retail business. After that, I became what’s called a Summer Associate at McKinsey. I did that during the winter, the Summer Associate thing, which was funny. My first project was international. Before I knew it, I was in Texas again, believe it or not, with a German/American company that we were helping shape their future strategy. After that, I joined them again while I was writing my Master’s thesis, and I wrote it together with McKinsey about something called Creating Killer Ideas for Radical Business Growth, a new creativity framework and much, much more efficient and effective than brainstorming that McKinsey had developed. I found it fascinating to write about a creativity framework. I ended up doing all these creativity sessions about developing radically, growth-spurring ideas for very large companies in multiple industries around the globe while I was doing my thesis for my university program. What an incredible experience! Then my first job at McKinsey when I joined them full-time after I finished my degree, my diploma, believe it or not, to help write a book. For one year, I was helping write a book about the software industry. The idea was: are there any lasting management principles in an industry where your products are obsolete after 18 months. We interviewed 100 software companies around the globe, and of course, that brought me to Silicon Valley. When I touched down here, I have to say that there’s something strange about the smell in the air here. There’s something about the pine trees. I don’t know what it is. There’s this association I have with this place. The moment I touched down, the world smelled different; the world behaved differently; I fell in love with this place, and I knew that this was the center of innovation, and I had to be here. That happened in 1998. Then in ’99, I tried to get a permanent transfer with McKinsey to the Palo Alto office and stay here. I was very, very excited about it. But believe it or not again, three months before I moved, I quit McKinsey. Why in the world would I do that? It’s because I had always said, “If the right people and an idea I believe in show up, I will drop everything I do, and I will start a company. So we ended up staying in Munich, and I started a company out of Munich.
Alejandro: 12snap. Tell us about 12snap. Obviously, your first rodeo—putting in your notice—going from the 9 to 5 to building and scaling something, your first baby. How was that experience for you?
Cyriac Roeding: It was definitely a 9 to 5 at McKinsey. I can tell you that. [Laughter] Handing in the notice was certainly a big move. We started a company in mobile, talking about mobile phones at a time when cell phones didn’t look like this. They had green screens with one line on them in black and white. It was ridiculous for us to do that. We were crazy. We did it because we believed that cell phones were going to revolutionize the world in how we interact. My first experience with mobile phones happened in Tokyo, believe it or not, in ’94. I saw cars driving around with big massive antennas on their roofs. I was wondering, “What are these people doing? Are they watching TV in their cars?” It turned out that they had mobile technology in the trunks of their cars to have a mobile phone call. The phones were mobile in the sense that you could drive them around. You could not carry them because they were too big. But then, in ’96, already, I had my first mobile phone, and I thought this was going to change everything about how we interact with each other. When the idea came up to start a mobile shopping service in ‘98/’99, we dropped out of McKinsey and started the company. Of course, it was way too early. We were raising money in the dot-com boom. In early 2000, we figured out that our business model was terrible. The idea was to auction off new products over the mobile phone using voice technology and text messaging in a combination of the two. People did actually call in and place bids. But of course, you’re destroying your margin if you’re auctioning off new products that are not used because everybody is trying to get the cheapest deal possible, and you’re destroying the margin of the product. So, it was a really bad idea, to begin with. Then we ran out of money, and we had no business model, and the Stock Market attack, so talking about full entrepreneurship. Then the other two founders’ jobs became to find fresh money. My job became to find a new business model. I don’t know who had the worst summer that year. Then we ended up signing an agreement with McDonald’s to become a mobile marketing company for them using mobile technology. Everything that we had already used for ourselves, we now used for companies like McDonald’s. At the time, we signed, I believe it was a $250,000 deal for one year at a time when our competitors were doing $5,000 deals in mobile marketing. That’s how small the business was. In fact, there wasn’t even a name for mobile marketing. We were thinking about calling it mobile channel marketing, and then somebody said, “Let’s just drop the word channel. It doesn’t really help. Let’s call it mobile marketing because the term hasn’t existed yet.” That’s how early this was. We were real pioneers, and it was a wonderful time because we explored everything. We invented it, and we invented as we went, as we needed it. Then my obsession became to sign Coca-Cola. I thought, if I have McDonald’s and Coca-Cola, two of the biggest brands in the world, then mobile marketing is established, which of course, is a fallacy, but I went for it. It took me three years, and I finally signed Coca-Cola for a label print on 160 million Coca-Cola bottles. It had a unique code on the back of the label that you could text in. When you texted it in, you would receive a wallpaper or a game or a ringtone back to your phone. This was all brand new at the time. It actually drove market share for Coca-Cola in Germany substantially, and it was the largest mobile marketing campaign that ever happened around the world till that day.
Alejandro: Wow. And after this experience, you decide to leave—three. Then to fast-forward a little bit, you did CBS, but then that got you into what ended up being a pivotal moment for you in your career, which was becoming an Entrepreneur in Residence at Kleiner Perkins, which was eventually the birth of your biggest success to date when it comes to doing the full cycle as an entrepreneur. So tell us how that came about and what ended up becoming Shopkick.
Cyriac Roeding: Yeah. I had moved to Los Angeles and joined CBS to build their mobile television business and mobile business in general—one of the largest media companies in the United States. It was a very fascinating time. The iPhone had just come out. In 2008, I left CBS because I always wanted to move to Silicon Valley. Remember?
Cyriac Roeding: So I said, “This time is it. No matter what, we’re going to move to Silicon Valley. My then-girlfriend, now wife, and I took a trip around the world. We went to all these different places and observed how people use their mobile phones. We took 1,500 photos in Bhutan, the Himalayan Mountains, South Africa, Brazil in the Amazon jungle, and so on. Then I came back, and I said, “We’re going to move to Silicon Valley whatever happens.” We subleased a little house that was up for sale, and every Sunday, it was Open House in our own house, so we kept the house nice and tidy. I got very lucky that Kleiner Perkins, the venture capital firm on Sand Hill Road, offered me to join them as an Entrepreneur in Residence. So I joined them. My timing was terrible. I joined on September 15th of 2008. If you remember, on that day, Lehman Brothers went belly-up, and the financial crisis hit, and funding froze to a halt in Silicon Valley. So I was sitting here at Kleiner Perkins in a tiny office, and I was waiting to be fired any day because why bring an Entrepreneur in Residence on board if nobody gets funded anyway. But, strangely, they were very kind to me and kept me going. I got very lucky that I found this idea of Shopkick, which is about rewarding people simply for walking into a store with your digital smartphone without buying anything. So if you walk into Target, Macy’s, Best Buy, you earn points that turn into gift cards, and you can earn these points at Target and spend them at Walmart and vice versa. This idea then got funded by Kleiner Perkins. Reid Hoffman joined the board. At the time, he was still at LinkedIn. He became a great partner shortly after another venture capital firm. Then we built this business and brought Target on board, and after, Best Buy and Macy’s initially took the plunge. Then we added Procter & Gamble, Unilever, and various other players to the party. That company then turned profitable. In 2014, we had 20 million people having downloaded the app. At the time, the app drove over a billion dollars in sales for its partners. The company itself got sold for $250 million to SK Telecom from South Korea that wanted a U.S. market entry. Then I stayed for one more year; in 2016, I left.
Alejandro: That’s amazing. Let me ask you, Cyriac because this story of Shopkick is remarkable. I know from other founders who had the opportunity of sitting at the board of LinkedIn told me it was just unreal the way they were as a team, like really incredible. How was it working with Reid Hoffman at a board level? You need to share; how was that experience?
Cyriac Roeding: The thing about Reid is, he is probably one of the best entrepreneurs in the world. When he gives you advice, he has the ability to differentiate very well where he has exact information that you should absolutely follow unless there are really good reasons not to, or where he has a belief based on a lot of data points, or where he really doesn’t know and has a gut feeling, or where he doesn’t have any idea; and he will tell you so. That differentiation is extremely helpful and quite unusual because most people don’t dare to say, “I don’t know.” Reid has no problem with that. He will tell you when he has an opinion that’s well-founded based on data or based on experience but not direct data or whether he doesn’t know. The other thing that I experienced with Reid was the most productive sessions were usually outside of the board room. They happened at his house while hanging out for two hours talking about the company or strategy or about life. Or they happened in some restaurant having dinner together and talking about any topic from world politics to religion to the actual company and the problems at hand. That kind of partnership is rare, and I learned what it means to have a great board member. Matt Murphy from Kleiner Perkins was also really good on the board. We built a long-lasting friendship till this day.
Alejandro: That’s incredible. So here you go from subleasing a small house to selling a company for $250 million, so not bad at all. I’m sure that your wife was very happy that finally, you guys could move out of a subleased small house to buying a place. One thing that is super interesting in your journey is that you’ve been quite a traveler. We’re talking about Japan and China because you did a few years traveling after Shopkick, the U.S., Germany. How do you think all this exposure to different cultures and to seeing different parts of the world has polished your mind view of things?
Cyriac Roeding: It’s a great question. I would say the short answer is when you live in a country like Japan where the value system is almost the opposite of what we’re used to—for example, individuals are not the most important thing. The group matters; the success of the group. There are funny stories that I experienced. I don’t think we have time for it, but when you experience those kinds of value shifts, it helps you understand that you can look at a problem in a very different way and from a different angle from this side or from that side. When you look at it from a different angle, it might make complete sense to come to a completely different solution. That opens your mind to think about problems in very different ways that otherwise, maybe you wouldn’t look at. I think the other thing is, of course, it makes you value diversity. I have a firm belief that you want to make up your team with very different backgrounds and experiences so that they look at a problem in multiple different ways: different backgrounds, different hobbies, different looks, different genders, different upbringings, different clothing, different appearances, whatever it may be as long as they share a set of core values like integrity, honesty, change-the-world attitude, can-do attitude. Those values are not flexible, but everything around it is. That was one of my takeaways from living and traveling to many different places.
Alejandro: Wow! That’s remarkable. You did a little bit of traveling to China for a few years after Shopkick, and then also taking a look at entrepreneurs in Europe, too, as they say: once an entrepreneur; always an entrepreneur. But instead of going at it again with one company, you went at it again with two at the same time. So you got Earli on one end, and then you got Rewind on the other end. Earli, where you are the CEO and Rewind where you were more like the Chairman/Cofounder role. Can you tell us why you went at it double, two times in one go? Also, what are you doing with these two companies, and how did you come about these two companies?
Cyriac Roeding: The short answer is because I’m crazy. [Laughter] I just can’t help it. The real story for me is, I decided to follow my heart and not my mind. My heart led me to science this time. I wanted to do something that could literally help everyone. I wanted to create companies that if they win, everyone wins, not just the company or the people in it. Earli is an early cancer detection company based on amazing technology from Sam Gambhir, who used to run a very special lab at Stanford, where he brought together ideas from molecular imaging technology to early cancer detection technology to new medical devices. It was an incredible idea that he developed where he forces cancer to make itself visible by basically becoming its own slave that has to make something, where the tumor or cells have to make a synthetic biomarker that doesn’t belong in human bodies at all, such as limonene. Limonene is not in humans unless you eat oranges. If you haven’t eaten oranges, but you’re exhaling limonene, you might have cancer. When I heard that idea, I thought it was so crazy. One of my first filters when I hear an idea is that I try to forget it. If I can’t forget it, then it has passed the first filter. I kept thinking about this idea. I looked at over 200 of them. I couldn’t not do this. I had to do it. Then the other idea about Rewind—Rewind is a collaboration between Peter Tulson and me. Peter, who I used to work with at Shopkick, was one of the best people we had at Shopkick, an incredible entrepreneur with an amazing level of resilience. We thought about what we could do together. It was clear that since I was the CEO of Earli, I wasn’t going to be able to be the CEO of another company at the same time because they were both at the same stage almost. Therefore, he took the leap of faith; he did it, and I support him as a cofounder on the board. It’s a great model. I really enjoy it. He’s making major strides. He got funded last year from very good investors in a Seed Round, and meanwhile, Earli has been funded twice now, one in the Seed Round with $19.5 million from Andreessen Horowitz, Marc Benioff, Menlo Ventures, and ZhenFund from China. Then in the second round—we just closed a Series A three months ago. That’s a $40 million round that was led by Khosla Ventures and also included the previous investors as well as perceptive advisors, very good late-stage life science hedge fund, Caston Capital, Sands Capital, and various others. We are able to do this in parallel by me running Earli and by him running Rewind. It’s a very rewarding experience to work on things that could if they work—and they’re hard problems, but if they work, they could help so many people. I find that to be very motivating.
Alejandro: Let’s say if you go to sleep tonight, and you wake up in a world where the vision of Earli and the vision of Rewind are fully realized. What does that world look like?
Cyriac Roeding: Wow! That’s a wonderful question. In the case of Earli, it means that you can now detect cancer before it becomes so mutated. It’s called heterogeneous versus homogeneous. In other words, multiple different mutations that are very hard to treat. If you find it before that, you can use precision surgery or targeted radiation to take it out. And if you’re saying it’s realized, then let’s assume that we also realize the next stage, which is, what if you could force the cancer not only to produce a biomarker to make it visible but even to kill itself. What if you could force the cancer to express a toxin that kills itself and actually makes you experience cancer, not as a terminal disease, but as a benign experience? That’s our mission statement. Earli is supposed to make cancer a benign experience so you can move on with your life and live again. In the case of Rewind—Diabetes Type 2 affects 26 million people in the United States alone. That’s just one country. It leads to people losing their feet, their eyesight, all kinds of terrible things. What if you could actually get people to reverse it, and not only reverse it for short periods of time but make them healthy for long stretches, for decades. That is how this world would look if both companies succeed.
Alejandro: Wow! That’s amazing. It’s rare that you come across entrepreneurs like you. You were saying that it’s not about you winning or the company winning; it’s about everyone winning. It’s about advancing humanity. It’s remarkable what you’re doing with those two companies with your teams, whatever you guys, all of you, as a whole, are doing. One thing that I want to ask you, Cyriac, is to imagine I’m putting you in a time machine. You have the opportunity of going back in time to sitting down on that couch of the tiny house that you were subleasing with your wife, and here you are. Finally, you got the approval from your now-wife of going at it as an entrepreneur and building what is going to be this next company based on what you know now. Now, we know about this exit, these different companies, these incredible people that you have had the chance to associate yourself with and build a network. If you had the chance of going in time and being there with yourself sitting down on that couch, what would be one piece of advice that you would give to your younger self, and why, before launching a company
Cyriac Roeding: Yes. I would tell myself to be even more focused on moving the ball forward and taking the risks necessary. Do not be afraid of the failures that come along with building any company. They are a normal course of building a company. It is absolutely not possible to prevent them, so, in fact, force them to happen sooner. Force yourself to move at a point where you’re taking substantial risks that either gives you a yes or a no answer about whatever the question at hand is more quickly because I have observed myself being afraid of getting the answer that something doesn’t work, and therefore, trying to edge around and trying to make it work so that it is giving everyone the feeling that we’re moving forward, including myself. But, in reality, the answers are coming one way or the other, so make it quicker. It’s absolutely okay if the result is negative because then you know, and you can do something different, or you can counter-steer, and you can take action. The more I do this, and the longer I do this, the more I’m moving toward results. I want to get the answers. It doesn’t matter if they’re positive or negative; let’s get to the answers so that we can move forward. We’re doing that at Earli right now. At Earli when we told our investors in the Seed Round that we want to be in-humans in a clinical trial within three years from starting the company, they smiled, they chuckled, and they said, “That’s great. Normally, it takes six to seven years.” We said, “We’re going to do this, actually. We found ways to cut time in half here and there. One of the results is that we’re going to Australia for the clinical trial instead of to the United States first because we’re shaving off nine months of approval timelines because they’re deciding at the local level, not at the federal level. The data is all usable in the United States afterward if you run it the correct way, which we’re doing. Now, if all goes well, we’ll start our first human clinical trial in the next four weeks in Australia.
Alejandro: That’s amazing! Just to expand on that, you were mentioning not being afraid of failure. I always say that you either succeed or you learn. That’s just the way it is. How do you recommend for all the people that are listening right now, all these founders out there, what’s the best way to embrace or to deal with failure?
Cyriac Roeding: The answer is very simple. Follow your heart and do what you’re really passionate about, and accept that failure is part of the journey. You will not succeed without failing along the way. So just accept it; take it in, and take it as a step toward success. That will make it easier for you in your mind and in your heart. If you follow your heart, your passion will be strong enough to overcome the extreme adversity that you’re going to experience to become a successful entrepreneur. There is no way you’re going to succeed without failing along the way. It doesn’t exist. It’s true for any startup, regardless of how incredibly successful and easy it looks from the outside, I bet you that at Facebook, there were lots of problems too, even on a rocket ship like that. You just have to keep going.
Alejandro: I love it. Cyriac, for the people that are listening, what is the best way for them to reach out and say hi?
Cyriac Roeding: They can ping me on Twitter @cyriac1 or reach out on LinkedIn, and we’ll get in touch.
Alejandro: Amazing. Cyriac, thank you so much for being on the DealMakers show today.
Cyriac Roeding: Thank you very much. It was fun. Thank you so much. Your questions were great.
* * *
If you like the show, make sure that you hit that subscribe button. If you can leave a review as well, that would be fantastic. And if you got any value either from this episode or from the show itself, share it with a friend. Perhaps they will also appreciate it. Also, remember, if you need any help, whether it is with your fundraising efforts or with selling your business, you can reach me at firstname.lastname@example.org.