In this episode of Not Another CEO Podcast, David sits down with Phil Fernandez, a SaaS legend with over 40 years of experience. Fernandez is the Co-Founder and Former CEO of Marketo, which has become part of the Adobe product lineup.
Fernandez reflects on his journey leading Marketo to become one of the most successful marketing automation platforms in history. From pioneering brand-building strategies to navigating fierce competition and near-death challenges, Phil shares valuable lessons for entrepreneurs and leaders striving to make an impact in today’s fast-evolving business landscape.
Takeaways:
Start with the Brand: Fernandez emphasizes the importance of building a strong brand presence and engaging customers early, even before launching a product. Marketo’s success was rooted in creating a community of advocates who believed in the company’s vision from day one.
Customer-Centric Leadership: Fernandez shares his philosophy of focusing entirely on solving customer problems rather than fixating on competitors. This approach allowed Marketo to foster trust and loyalty, even during challenging times.
Overcoming Challenges: Fernandez recounts a critical moment when Salesforce acquired a competitor and temporarily disrupted Marketo’s integration. By focusing on customer impact, the company was able to regain their Salesforce integration.
Navigating Funding Hurdles: Despite a stellar track record, Fernandez faced resistance raising Marketo’s initial funding in 2006. He recalls the perseverance needed to secure their first $1.5 million and how he and his co-founders built momentum from there.
Hiring for Culture: Fernandez reflects on the importance of assembling a team that shares the company’s values. He shares the story of recruiting Bill Binch over a year-long process, ultimately creating a sales organization aligned with Marketo’s mission.
Quote of the Show:
“ All of our communications with the market was about customers, was about what we were seeing, how to be better, how to do better, how to think better.” - Phil Fernandez
Links:
LinkedIn: https://www.linkedin.com/in/phil-fernandez-6902881/
Twitter: https://x.com/philf1217
Ways to Tune In:
Spotify:
Apple Podcasts:
Amazon Music: https://music.amazon.com/podcasts/7c6328f0-9b42-41db-8fe2-d263b4fbb261
Transistor: https://podcast.notanotherceo.com/
[00:00:25] David: Today's guest is a legend in the SaaS world. He's been involved in countless successful private and public technology companies over the course of his 40 plus year career. He's been a founder, executive, board member, and investor. He's served on the board at companies like Yext, Calibra, PTC.
[00:00:47] He's currently a board member at Braze. He built one of the first And definitely the most successful marketing automation platform in the world. I actually met him early on in his journey and was [00:01:00] one of his first customers. Um, he founded that marketing automation company and led it through its IPO and ultimately retired as CEO after it was taken private.
[00:01:10] It's now part of Adobe. Please welcome co founder and former CEO of Marketo, Phil Fernandes.
[00:01:17] Phil: Hi, David. It's
[00:01:19] David: Hey Phil.
[00:01:19] Phil: to be here and great to be called a legend. I think you just called me old is all you did, but that's just fine. I am.
[00:01:25] David: Well, thank you for doing this. I, this is, I feel like this is like 15 years in the making for me. So, um, so thank you for, for doing this with me. Um, we're going to jump right into it. First question I ask everyone. What is the one thing that you did at Marketo, big or small, that had the biggest impact and you'll absolutely do again if you're CEO of another company in the future, which may or may not happen, uh, given that you're retired, but, but, uh, if
[00:01:48] Phil: old part.
[00:01:49] David: you were, if
[00:01:50] you were, what, what's that one thing?
[00:01:52] Phil: Yeah. That's just so clear to me. You know, um, I founded Marketo with two co founders, Dave Mirandi, who was my technical co founder and John Miller, who's [00:02:00] super relevant to this topic, who was my business and marketing co founder. And and I just built this amazing resonance from day one, which was that the day we started the company, he started to work on building brand, on building messaging, on building thought leadership, on building networks and reaching out to CMOs.
[00:02:18] And he was literally starting to bring customers into the fold and get them interested in Marketo before we even got going on the product. We at Marketo had the first product built actually only two months after we started and opened the doors and got our funding. So we raced. The product to market to get our SAS engine stood up to get billing stood up to get lots of business things stood up.
[00:02:41] But we still had a year to go to really build the product we had been founded to build. And it was amazing. I put my head down and got into the engineering department and we built what was, you know, the killer product that took Marketo its entire way. But John was probably doing even the most important work during that period of time because during that year we were building the product. [00:03:00] By the day we were actually ready to release about 13 months after we took funding. had 20 or 30 CMOs in round tables informing us. He had a line of people waiting at the door to buy the first product. And the day we announced the product, it was literally a competition about who was going to get to be our very first customer and take the product out.
[00:03:19] And the answer is John Watton at ShipServe at the time in the UK, actually was that first buyer and stayed with us for many, many more, um, long years. You were one of the very early buyers after that, but that ability to bring together the product and the market. together at that exact same moment. And we just came out of the box like a slingshot and never, never looked back.
[00:03:40] It was the best thing. And if I ever did this again, you know, the thing that we would be doing is immediately building brand, immediately building presence, immediately reaching out and talking to customers long before putting a product in the market.
[00:03:52] David: I love that. I love that because as I've been working with early stage companies, what I see is all these people in stealth who stay [00:04:00] in stealth and don't talk about anything related to anything until they have the product fully working and ready. I remember it. I remember John's blog posts back in the day.
[00:04:11] Like, they were, I mean, it was, it was, It was, I mean, it was amazing content, frankly, you know, before you even had a product to back up. And now I feel like I don't see too many people do, I don't see too many people doing it. It almost feels like everyone's being secretive
[00:04:26] Phil: Well, I think many companies don't even necessarily have the, the, you know, they, they staff themselves first for engineering, right? And you've got to build a product, you know, you do enough to figure out, you know, what your MVP is and what your, you know, ICP is and blah, blah, blah, play the, play that soup. But you don't have somebody staffed on day one that is, you know, You know, the kind of talent, the kind of prolific thought leadership that John was able to provide and, you know, complimented the kind of thought leadership I was doing. And I just think, you know, in building any kind of a startup, you know, starting to think about staffing, that role ought to be just as important as anything in that founding [00:05:00] team, as far as I'm concerned.
[00:05:01] David: yeah, well, I, I credit you and John literally with a play that I ran at BetterCloud with our first set of customers where. I, I didn't do as much of the thought leadership, but for that first set, you're talking about those 20, 30, 40 CMOs, for me, it was those first set of IT directors where we, Went over the top to make them part of the process.
[00:05:22] And you did that with me. I, I remember seeing the wire frames back then. There was no Figma, but I remember seeing the wire frames. I remember, you know, um, I couldn't remember if it was Marketo 15 or something, but you sent me a t shirt. You said you're one of the fifth, first 15 or first 10 or whatever it was.
[00:05:38] And I remember how special I felt. And I felt like I was like in at the ground floor. I mean, of course. It turned into what Marketo turned into, but at the time, no, we didn't know it was going to do that, but I felt like I was having an impact and I had a vested interest in your success. And I, I [00:06:00] really, I tell, I preach that to people today.
[00:06:03] And I, I reference that because I think. I think that was, people wanted you to win when the product was launched.
[00:06:10] Phil: Yeah, yeah, exactly. We, I mean, that was the whole arc that carried us for years into the IPO, into the, you know, the ongoing successful outcomes was that we succeeded at building true brand. Advocacy in our, in our customers before we had customers, you know, for it just, it just, as you said, because we were very hard, the thought leadership we did was never about us, right?
[00:06:34] It was never about, you know, why Marketo, why our product's going to be great, this or that. It was always about what's going on in the world. You know, what are we seeing out there? Google was changing everything. AdWords was emerging at the time, you know, ancient history now, but all of our, Communications with the market was about customers, was about what we were seeing, how to be better, how to do better, how to think better. And as a result, people were seeing us not as a vendor trying to [00:07:00] come and, you know, start to say, Hey, you ought to know about us. But they were seeing us as a trusted partner that was actually making them better at their jobs. And so by the time the product was there, we had a reputation already as the vendor that was that had the customer's back, you know, and we, that became so deeply entrenched in the culture, so deeply entrenched in our go to market, so deeply entrenched that ultimately, you know, as we worked on building community, it was sort of like magic, you know, people just started to bleed blue.
[00:07:30] John had decided he wanted to pick purple as a color. That was fine with me, you know, and, and people, uh, wanted to, to bleed blue. And it was, you know, it was like, Like going to our first user meetings and things were like a revival meeting because the customers just wanted to be there with us. And it was, you know, I don't know if I could ever create something like that again, but it was, it was truly special.
[00:07:49] David: Well, I mean, I think the community that came from that, you said, like it was in the culture and the DNA of, of the company from day one, the community, I mean, [00:08:00] I remember hiring people where they literally said to me, I'll never, one person said, they said, I won't join on the marketing team, unless you use. I was like, Oh no, we are using Marketo.
[00:08:11] They're like, well, good. Because I'm in the, I I'm in the user group in whatever state they were in. And like, there's no way I'm leaving that user group. Like I, I, I'm going to be a Marketo customer. And I, you know, I, I had Nick Meta on the podcast and he, I think he's done a similar thing
[00:08:28] Phil: Mm
[00:08:28] David: with,
[00:08:28] Phil: Mm hmm.
[00:08:29] David: and when you have that,
[00:08:34] someone else could raise a billion dollars to compete with you. And you can't overcome that moat.
[00:08:41] Phil: Yep. Yep. Yep. by the way, you know, that's not an accident that Nick did the same thing. I don't know if you know, but that company was originally, um, um, incubated uh, Marketo at Marketo.
[00:08:51] David: What?
[00:08:52] Phil: Yeah. Yeah. So, you know, Dan
[00:08:54] David: I did not know. I did not know that.
[00:08:57] Phil: it was all about, you know, working.
[00:08:59] And [00:09:00] so, you know, that common customer cultural core, I think, actually has a common root in that. point in time, Nick was a fellow traveler. I knew him even though he wasn't the CEO at that time. But that whole same idea is just like embedded in those two companies like you'd never believe exactly.
[00:09:16] David: Wow. Wow. I, I actually, I did not know that. And it's, yeah, you can feel, you can feel it though. You can, it is the same. It's the same, you know, and, um, and yeah, I love that. Um, one of the things that you, when I think about Marketo and I think about what we're talking about with the marketing and the community and all that stuff, like you were building a company, That was really about, um, performance marketing.
[00:09:45] I mean, in, in many ways, right. I mean, we're, we're talking about, uh, it was about driving results and all of that, but then from a marketing perspective of Marketo. It was kind of a brand marketing play. Um,
[00:09:59] Phil: Yeah.
[00:09:59] David: [00:10:00] how do you square that? You know, it's kind of like the complete, you're, you're pitching this one thing, but you're kind of doing the other thing.
[00:10:05] Um, how do you, how do you square that?
[00:10:09] Phil: it was called left brain marketing at the time. Everybody wanted to use that term, you know, meaning we use our left brain as mathematical and analytical. I'm thinking your right brain is supposed to be, you know, creative and, um, and whatever. And that to me in that, in that, you know, time I got interested in marketing was always. It's phenomenally interesting to me. I mean, my own self and career and history, you know, my degrees in history. I'm a, I'm a liberal arts major. I'm not a technologist. I'm not a, not a computer scientist. my time growing up as a kid as an artist and a sculptor and a painter and stuff. And so I've always been a very right brained person, but, you know, 800 SAT and math and all that kind of stuff.
[00:10:43] So, you know, I do math just fine, but it just has never been the same thing. So I bring this unique kind of personal thing in my head of thinking about problems like this from both of those directions. And I think it was, it was itself really valuable. But I remember while John was doing all his thought leadership early days at [00:11:00] Marketo, I was of course doing a bunch of that stuff too.
[00:11:02] And I remember one of the most impactful interviews I'd done even, you know, maybe before we had a product and got some pickup because of my history. was talking, refusing to talk about left brain marketing to the, the, um, interviewer that was doing this interview with me, where I just wanted to talk about brand.
[00:11:16] And I just wanted to talk about the importance of brand and the importance of getting the customers and influencing opinion. And they're like, but you're building this left brain marketing company. I'm like, that's all fine. That's all going to be good. That follows from brand. And I was just actually looking back the other day.
[00:11:29] I published a book in 2012 called the Revenue Disruption. Um, that, you know, I get a little traction at the time. That's all about this stuff. And my first chapter was all about how brand was where it all starts and customers. are going to form their preference before you ever talk to them. You know, and you still see that being talked about every day today on LinkedIn or any place else, what that's all about. But this notion that if you don't ultimately start creating preference for your company, your product, if you don't start to create people wanting to support you, wanting to buy, [00:12:00] you don't have anything. You can build a product, but if you don't have somebody that wants it, you don't have somebody that cares about you, you have nothing.
[00:12:05] And so that whole idea of balancing. for the customer, the idea that what you have to do is earn the respect. You have to, you have to earn things from customers and you have to do it with a true sense of humanity was just the thread that carried through everything. And I think, you know, applies to pretty much anything anybody's ever doing.
[00:12:24] David: Yeah, well, I think, you know, one of the things I wrote about recently on LinkedIn that seemed to resonate a lot with people is how I just see so many, it's so easy to build a software company today. It's so easy that. Everyone has like a hundred competitors. Anything that's successful immediately has a hundred competitors.
[00:12:42] And I said, what are the things that actually can separate you from the copycats and brand is brand community. Like these are the things they're hard to measure. That is what separates you. And, and it's, it's, it's, but it's not, um, [00:13:00] I think we are trained, at least in my opinion, like most investors, they would love to be an investor in a Marketo or Gainsight or whatever that has the brand and the community and But when you tell them I'm going to go invest in the community, they say, is that the best place to put the money?
[00:13:15] Is there a direct ROI on that? You know, how, how do you, you know, if you had to navigate that today, obviously different, different world, but if you had to navigate that today, as an early stage founder, how do you get your board? On board with that or you just do it?
[00:13:32] Phil: You know, I don't know. I had the, you know, I had the luxury when I did Marketo of having put enough wins on the board that, you know, I didn't, I didn't necessarily have investors, you know, wanting to kind of around. So I had a degree of trust and it's a little hard to map that to maybe a first time entrepreneur.
[00:13:48] But I think, I, I actually think that in some sense, The commentary we see about this is a little bit of a lagging indicator. I, you know, I spent a year at a venture firm, um, as [00:14:00] a venture partner after I left Marketo. So I got to sort of sit on the other side of the table. I looked at a bunch of deals. I've been involved in venture ever since or, you know, my whole, my whole career.
[00:14:07] I think lots of investors would understand this today. I think there's an issue. I think there is an opportunity. It's really the entrepreneur that needs to understand what their brand message, I mean, you know, needs to bring that idea to the table, because if they're only talking about, you know, TAM and PMF and all this stuff, and not talking about the emotional side of what they're doing, and why they're connected and connect with a buyer on the emotional side. You know, it's just missing. And so I think, I think it's not that people on the investment side, for example, don't want to hear it or won't support it. I think it really takes, you know, we just have too much of a culture in Silicon Valley. And I mean that worldwide Silicon Valley, not just in California, that celebrates technical prowess rather than, you know, creation of great solutions for customers.
[00:14:49] And as long as it's going to, you know, have somebody who's the smartest technician in the room around the venture table or whatever, it's always going to get over biased towards. You know, the technology and the product and not towards the [00:15:00] brand and the community and the bigger, the bigger idea.
[00:15:02] David: So you,
[00:15:03] Phil: I see lots of companies doing it right.
[00:15:04] David: yeah, so you, you had, you had, um, you had a lot of competitors. I mean, not a lot. Like dozens, but you, you had, you had, you had a lot of, even when you started the company, even though you were early, you, there were competitors. Um, how did you, first of all, decide to attack the market given that there were already these established quote unquote competitors that were there already?
[00:15:27] And then secondly, like, you know, how did you deal with that competitive environment?
[00:15:32] Phil: yeah, yeah, yeah, we did. You know, Eloqua had a multi year head start. They were probably a 10 million dollar runway when we started and it was Manticore and there was, I can't even name the other ones, Acton was around then, you know, and a bunch of a bunch of ones we, um, we ended up vanquishing. Um, John and I started, you know, with a Really, you know, strong vision, and it was just amazing.
[00:15:52] You know, I can go back and read the original business plan we wrote together when we started, and now we just, you know, executed that thing. [00:16:00] And what we did, and what has been one of my, you know, management philosophies from well before and well since, is focused on what were we trying to do for customers?
[00:16:11] What was the business problem we were trying to solve? How are we going to build this sort of right brain, left brain thing that we that we talked about? And what did customers need to be successful? And what we didn't do If we didn't look at the other products, the entire time I was at Marketo, I can say this with a completely, you know, honest sense.
[00:16:30] I never, and I was the key product driver, visionary, you know, whatever for the whole time, you know, a product didn't happen in Marketo that didn't somehow pass through my head, whether I thought of it or edited it. But the point of that is I never looked it up. a competitor. I never looked at Delacroix.
[00:16:45] I never saw it. I, I,
[00:16:46] David: No way.
[00:16:47] Phil: once. I never, never once. No, I knew what it did. I didn't live under a stone, you know, I mean, but I, but, but I, but, but I was, I refused to look at competitive products. I didn't go to their website. I didn't read their [00:17:00] messaging, I did pay attention to how, what customers were telling me about, what they were saying, where they were hurting, where they were saying they were successful.
[00:17:08] And what that really led to is this culture, again, of being, of being customer first. It was, you know, that, that, you know, led us a really long way. I remember a story fairly early on at Marketo when we were getting into the annual evaluation cycle from Gartner for our category, and that was, you know, even more important then than it is today. And we did our whole, you know, half day long or three quarters of a day long dog and pony show with the senior Gartner people. Kim Collins from Gartner was leading the practice at that time. And when we were done presenting for a half day, she said to me something that I've never forgotten, which is that she said, Phil, you know, your colleagues From Eloqua, we were in here yesterday doing the exact same presentation, and they were in ready to launch their new Eloqua 10 product.
[00:17:51] And they came in and told us. about how Eloqua 10 was going to be the Marketo killer. And they showed me the features in the product that were going to be the Marketo killer [00:18:00] features. What she said is, you came in and you and your team never mentioned Eloqua today. You never mentioned a single competitor. You told us over and over and over again about how you were making customers successful. What problems you were solving, what they were saying, how you were learning from your customers. And you did that for an entire half day or three quarters of the day. And all Eloqua did is told us how they were going to kill Marketo with the new product.
[00:18:23] Marketo talked to, you know, Marketo, Eloqua talked to us about Marketo all day yesterday. You talked to us all day about your customers. And she just saw that as the most bright line differentiator between two ways to behave as a vendor. And that whole idea of talk about the customers, not talk about the competitor.
[00:18:43] And that was part of our sales organization. And that Bill Binch built at Marketo, which was that, you know, the sales mantra was never get into a mix it up. If the customer asks you, Well, you know, why are you better than Eloqua? The answer is, let me tell you why we're better for you and another customer you [00:19:00] can reference that'll tell you why it's us.
[00:19:01] Go ask them about why we're better than Eloqua. Don't ask me. And that would be what our sales people learned to say was, you know, let me give you a customer that can tell you about that, meanwhile, let me talk about you and that just absolutely repeated sense of, at the competition, don't talk about the competition, just focus on the customer. I'm fiercely competitive. We can talk about that later. So none of this is like a lack of being monstrously competitive, but it is a way to be competitive that on the
[00:19:31] David: Wow. Where did, did you learn that somewhere earlier before Marketo? Did you, is that just something you have lived by forever? Like, cause that is pretty unique. Honestly, that this is the first time I've heard that in all the interviews that I've done with all the different CEOs, this is the first time.
[00:19:49] And I love it. I actually, and I remember you and I having a conversation at one point when we were looking at using a different platform and it was exactly the conversation you described and you were very [00:20:00] competitive and very. Insisted that we,
[00:20:02] Phil: Yeah,
[00:20:02] David: we stay with Marketo and we did. But my question is like, where does that come from?
[00:20:06] Where does this come from?
[00:20:07] Phil: don't know for sure, but it sort of, in some sense, gets back to the very, very start of my career. You know, I was just, you know, as I said, a history student and not quite sure what I was going to do for a career. But, you know, I had done some computer programming back in the 1970s and was actually a secret assembly language programmer and stuff.
[00:20:23] So, I actually had some pretty good skills, but through just a set of things, it's way too long of a story to tell. I managed to trip into a In 1981, I got hired by a venture backed company, you know, Kleiner Perkins and Menlo Ventures on Sand Hill, you know, way back in the in the 1981, had founded this company in Sunnyvale, California, and I got hired to literally drive down to where a printer facility was and pick up, um, pick up printouts and drop them off and then go back to college and finish up my history degree. But somewhere along the line, An engineering director there met me and figured me out and realized kind of, kind of what I [00:21:00] was and took me under his wing and eventually hired me and gave me my first job as a, you know, as a professional engineer and engineering manager. And this guy had a great Silicon Valley career, you know, retired now and, and just gave me the best foundation as an engineering leader and an engineering director and whatever.
[00:21:17] But the very best thing he did was about six months in or eight months in, he introduced, introduced me to the company's number one sales rep. Supermoney and Sashi Kant, uh, who was, uh, based in Hartford, Connecticut and served the big insurance companies and banks in the Northeast. And so he sent me out to go, go sell with Sashi.
[00:21:37] And I was, I was 21. I was just brand new, somehow spotted that I had this interest in talking to customers and listening to customers and what kind of, you know, I was with, with a sales rep and he realized that I could like go sit in a meeting with customers and hear things that they were saying. beyond what they were saying, you know, kind of have this sense that, you know, what did they mean?
[00:21:58] And that's some was some sixth [00:22:00] sense I have. I had, I don't know, spotted it in me. I don't know where it came from, but what I could do, I, what I could do is I could go on one of those things and come back and like know the next year's product plan because the customer just would tell it to me, you know, in as much chapter and verse.
[00:22:13] And I also learned the art of the art and the craft of sales in that. I could never have carried a bag for a long term. I have carried big numbers. I've done sales, and I know it enough to be dangerous, but I couldn't have been that as a career. But the ability right on day one in the first six months of my career to be sitting in front of the world's largest insurance company, telling them why they needed to buy my product, but really listening to them. And at the same time, learning to be a great product guy. came together for the rest of my career and that notion of customers, you know, everything you need to know about building a product, customers are just going to tell you if you listen, you know, and if you know how to listen both to what they say explicitly and listen to what they're saying, you know, behind the scenes and it just, I don't know, it just, it just became this kind of snowball thing where from each job to each [00:23:00] job, it became the piece of magic that worked for me to kind of push the career and my product successes forward.
[00:23:06] David: And basically you, you go listen to the customer, to your point, the customer tells you what to build. You build what that customer tells you, what the customers tell you to build. And then when you go sell it, you tell them we built what. You and your peers all need, I don't care what everyone else has, basically.
[00:23:21] We, we are solving your problem,
[00:23:23] Phil: Yeah, and they keep listening, you know, rinse, rather, you know, rather
[00:23:26] David: right?
[00:23:27] Phil: That's not a one time thing. That's a continuous process you have to keep doing, but that notion of always listening and always listening to what they do say and what they don't say and what they of are saying, but they're not really saying, you know,
[00:23:37] David: Right.
[00:23:38] Phil: So it's really, you know, it is a, it is a very high empathy, very high, right? You know, kind of EQ process, but, you know, it's, it's
[00:23:45] David: I love, I really, I love that. I love that. I, I think that everyone could benefit, not just CEOs, like It has to start at the top. It does have to start at the top because so many CEOs are so obsessed with their competitors. To your point, then they're going [00:24:00] into Gartner meetings. I think most Gartner meetings, probably everyone is showing a thing.
[00:24:04] These are my competitors. This is what I do differently. And so that's the start at the top, but oh my God, how different would sales people's lives be if they Just had to worry about talking about their own product, their customers versus like memorizing every, Oh, do they have that button on that one feature that does that one thing that really doesn't actually matter, but that's how, you know, so I, man, I, I love that.
[00:24:27] I love that philosophy. I, I, um, and. So Bill, who was your, your, your, your head of sales, your CRO, um, he's had a pretty amazing and storied career. And you talk about this, this management philosophy. When you were hiring him, did you know, how did you find him? And did you know him? And did he have the same philosophies or did he adopt yours?
[00:24:52] Like I'm very curious about that. Cause he was super successful, obviously
[00:24:56] Phil: Yeah. Yeah. Yeah. He was, he, you know, it would have just [00:25:00] would have never happened without him. There's just no question in the world that he was like a founder. Um, one of the people that just became part of the, part of the secret sauce. I recruited Bill for a year. Um, I got introduced to him by, uh, one of my Siri Day investors. Uh, and, uh, he was just not, you know, he was at a place in his career. where he wasn't ready to take anything quite so small or quite so raw. So I literally spent a year, um, in a, in a long term courtship ritual and meeting for coffee every, every, you know, kind of quarter or two and whatever. And talking about what I wanted to build and talking about what was going to be important is that we were building a product that was about reforming how marketing and sales work together.
[00:25:37] You know, that's what Marketo was all about was how. Buying started earlier, you know, with brand and earlier than when sales would get involved and how marketing sales needed to work together. It's my book with about and all that kind of stuff. So I was talking to Bill about the essential success factor is that you need to come in here and build a relationship with marketing and live what this company is all about. [00:26:00] on the other hand, what I saw in Bill from the minute I started that, that courtship ritual, as I call it, was not that he was somebody that was going to, you know, go make nice with marketing, but that he was a wicked talented sales executive that had more eyes open curiosity about the craft of sales than anybody else I had ever met, meaning that he was interested in it, not only the way to make a bunch of money and do his thing well, but he really cared about it. What it meant to be good at being sales, and he meant that as a bag carrying salesman, and then as a leader. And what I said, and what we built was, but this needs to be this connection where everything you do is live, What Marquette was all about with John and then later with Sanjay, who is as Sanjay, uh, Delakia came in and and led the marketing organization and Bill just took that idea, totally put it into his heart and soul and lived it. For, you know, 10 years or however long it was where he just never took an action with [00:27:00] sales or in the company that wasn't aligned with that vision that we needed to not have strife between sales and marketing. We needed to role model this could happen inside a company. And it's the most powerful thing that ultimately took Marketo where we went is the fact that we just built this revenue machine that just. And it's just, it's just a tribute to Bill, you know, I, you know, maybe set it up and help put it in motion and John and Sanjay built the other side of the relationship that that had to happen. And we were very self aware about how this was one of our strategies was to live it, you know, kind of live what we preached, practice what we preached. But the fact that Bill was able to do that and build one of the most brutally, and I say that only in the nicest way, you know, brutally successful, competitive sales organizations he sent. You know, dozens, if not hundreds of people that are now CROs and sale leaders out of that company now doing, you know, their thing at other companies.
[00:27:48] So it was a better place to learn to be a salesperson than ever, but that he was able to take that core idea and just it and live it. got lucky. [00:28:00] It's all I can say. I got lucky finding that guy and worked.
[00:28:03] David: Wow. I have a bunch of different offshoots on this that I, first of all, you know, I mentioned when we were preparing for this, that I, I worked with Sanjay Dhalakia when he, he is a operating partner at Warburg and they were an investor. And in one of my first conversations with him, when he was looking at what we were doing, he said, I was asking him, how do you do attribution and how should we measure the marketing team versus the sales team?
[00:28:27] He said, Dave, in the best, the best experience I've had in my career was working with Bill in this single revenue motion. And I remember that so distinctly. He said we would work together in a way where if, if, if we needed each other's budget, if we needed to support each other, we would do literally whatever was necessary to be successful as one revenue org.
[00:28:52] And I think that is, that is another pretty rare I mean, at least in my experience, that [00:29:00] is pretty rare. Most companies, they have the MQLs and the SQLs and the this, and who's responsible for what, and if you didn't do your number, then you're, you know, and, and, um, I'm sure there were elements of these things being measured, but from what I understand from the, and I've talked to Bill about it before, like, It feels like that was definitely the secret.
[00:29:22] I mean, that was for the, from a revenue perspective, that is unique and special.
[00:29:26] Phil: yeah, yeah. Well, I've, I've seen, you know, in my stuff before and, you know, or, or, you know, along that time and since companies do this better or worse, but I've never seen anybody do it as well as we did. And I think it's partially, you know, partially is the leadership from the top, right? I mean, I, I, I believed this to the core and I, you know, I worked to build it, you know, to assemble that outcome in that year of courtship and, and in working with, with the folks since, but the fact that, you know, we were all able to just, you know, genuinely believe it, trust each other. You it, you know, as soon now, that's just a totally virtuous cycle. You know, you do that a couple of quarters, [00:30:00] then you see it pay back, and then it just becomes completely embedded in the culture such that it just, you know, infused the, the organization from top to bottom. It was, it was.
[00:30:07] David: Uh, I, I love that. So the other piece of that is you talking about recruiting him for a year. Um, and. I think that most people, again, I'm not gonna say most, I would say people, usually first time founders or whatever, they're, when they need a person, they run a search to get that person. Like, that's how it works.
[00:30:26] You hire the search firm, and then you run the search, and then you do all of that. Um, but to get the people like Bill, that doesn't, Really work. I mean, you know, you have to get super lucky, like hit the lottery for it to work like that. Um, is that an approach you took on any other roles? Is that an approach, you know, that kind of long courtship and that kind of, were you constantly recruiting or is that the one person you're like, I need that person.
[00:30:53] And you did it with, with Bill.
[00:30:55] Phil: Well, no, I mean, you know, if, if you're a, a founder, a CEO, I mean, if you're not constantly [00:31:00] recruiting, you're not doing your job right? I mean, you know, the, the whole, as organizations grow, as companies scale, you've gotta be loyal to a team, you know, whatever else. But you need new people and you need to bring people in and you need to, you know, you need to, to things change.
[00:31:11] And so if you're not constantly recruiting, uh, uh, one needs to be, I needed somebody urgently before I was able to get him to sign on the dotted line. I needed somebody that could actually, you know, fulfill this vision. And I wasn't finding anybody else that, that I had this resonance with. So it took a long time.
[00:31:29] There were other searches that, you know, I did at Marketo that I, you know, went to a, uh, an outside search firm and set up to pay a bunch of money. And the very first candidate they showed me was, uh, Was the person and I had a board that was like, don't you want to develop a candidate pool and meet some more people?
[00:31:43] And this is kind of rash that you're trying to hire your first person. I'm like, no, they're the right person. I talked to them, you know, so my hiring philosophy has always been, you gotta know what you gotta find. You need to be intellectually agile in that. Adaptation. Hiring and staffing is not hiring for a role.
[00:31:58] It's like assembling an [00:32:00] orchestra or putting together a symphony or something like that, where things play off of each other, people adapt. So you see a strength in John or in Sanjay. So then you want a different strength in Bill to complement that. And so my view about building teams is that, you know, it's, it's this, like, it is the best thing of being a manager and a leader because you're working with this sort of Petri dish where you get to kind of play with it and assemble and put it together.
[00:32:22] So my view about staffing and, and hiring is, you know, number one, never be dogmatic about it. You know, understand that it's a constantly changing, adapting thing and that the people you meet will be different from your model, but that, you know, the minute you see the right person make it happen, you know, so
[00:32:42] David: this is a question I like to ask people who've done this multiple times. Like, what do you think your hiring success rate? Of executives were, you know, would, would you say you were right? 80 percent of the time, 50 percent of the time, a hundred percent of the time. I don't think I've gotten an answer higher than 60, but you, you, you may have a [00:33:00] higher answer that I'm just,
[00:33:01] Phil: no, no, I, I, certainly know, certainly know better than that. It's just, you know, and it's ridiculously hard you know, this is, you know, when you're hiring, you're hiring for a whole set of talents and skills and You know, at the senior level, and you're going to, you know, build a company with somebody, it's also like, you know, finding a life partner and dating and, you know, the human relationship and all of that.
[00:33:24] And it's just way too complex, the set of factors that are, that are both, you know, sort of explicit and literal, like. You know, can they do the job and do they have the knowledge and headroom and stuff? And how do they behave in an organization? And it's just, you know, you're just never going to get higher than 60 percent
[00:33:38] David: yeah.
[00:33:39] Phil: like that.
[00:33:39] Anybody tells you they can is lying to you. And so, you know, and, you know, all the stuff about, you know, hire fast to fire fast, you know, with and do that with the heart and do that with, you know, with a soul and with respect and all that kind of thing. But, um, but there's, but there's just, it's just way too complex of a thing to ever ever be better than that.
[00:33:58] David: Um, one of the [00:34:00] things, you know, you, you obviously obsessed about product and, and in the weeds on the product. And you mentioned nothing kind of went out without it going through you. How deeply involved were you? I mean, were you at the level of like. Looking at the screens of every, you know, like how I'm, I'm, I know in the beginning you were, cause I know we had conversations about it.
[00:34:16] I'm curious, like over time, I mean, the company got, but what was the, how big was the company at the end when, when you retired,
[00:34:23] Phil: I don't know, 1600 people, something like that, 300 million error run rate, you know,
[00:34:27] David: were you still involved at that point? Wow.
[00:34:34] Phil: tremendously hard from very early on to kind of in some ways get myself out of that. And in fact, the very first hire at Marketo was a user experience designer who was with us for many, many years.
[00:34:46] A gentleman named Glenn Lipka, who was just, who is just amazingly good. And the relationship I built with him and with some of the product management folks gave me tremendous headroom to increasingly step back as a designer. [00:35:00] I grew because I was able to form a mind meld with these people and, you know, an hour with Glenn times a week was worth, you know, 30 hours in engineering every week and the ability to force multiply or to, you know, to amplify and to find those kind of tools was essential.
[00:35:18] But that said, I was involved in every, you know, last piece of the project. I actually had a, I had a, um, Um, said with respect, but I'm sure behind my back was sometimes said with maybe an F word or something in there. I was called a pixel perfect fill, and I have this very strange thing that I can't explain, but I can walk into a room or a Zoom or something and have a full web page or an app screen or something like that on the screen. And if, like, there's things that are lined up or buttons or this or that, I'll say that that button is a pixel lower from that one over there. And I can like walk into a conference room and go into my first thing my eyes will do is say, that's wrong. And that so, so I have this, and I don't, I don't [00:36:00] want to do it.
[00:36:00] It drives people crazy sometimes, but I can see things at that level in the product that always focus on the perfection of that last little bit. some sense, but that's really sort of a symbol for being able to, to, to just, I just live it, you know, I live products are like alive to me, you know, in some sense, I see them there, you know, and so my role came to be, you know, kind of how, how might this work better?
[00:36:27] What's it got to do? What's it? What problem are we solving? Reminding people what the problem we're trying to solve is. Hey, that seems like it's kind of, you know, we don't, it's more than we need, you know, we, let's, let's cut that feature right now, whatever. And so, you know, I went from inventing the features or inventing the things to sort of being just somebody who could a few words and invent them and then kind of check in. But I, you know, I was able to therefore work, you know, at the 100, 000 foot level, setting the strategy right down to ensuring that. Like, the end result was beautiful, you know, and in some sense, I always wish I [00:37:00] could have, like, been in Steve Jobs shoes or something like that, where I could look at an iPhone or, you know, something that everybody's touching, because, because just that notion of, you know, trying to go for that sense of sort of beauty and perfection. at the same time of, you know, really solving a
[00:37:13] problem is just what I love about product.
[00:37:15] David: I love it. One of the things, you know, I was involved when you were doing your fundraising. I did one of the reference calls early on for the Series A. I assumed that it was easy to raise money when you started out because You had had success before, you knew that, you know, you knew everyone out there, like, was, was, um, was, was it easy to, to raise the first round for Marketo?
[00:37:39] Phil: No, um, it was, it was, it was just a horrible time. It was a horrible, horrible time in 2006 when John and I started, uh, raising money. I had had, I had had two super successful outcomes before that called Red Brick Systems. It was the second best IPO of 1996 after Netscape. I was the president chief operating officer there, but, uh, had, you know, was, was [00:38:00] effectively a founder.
[00:38:00] And then Epiphany, Uh, which was a bubble year, you know, 9 billion market cap at one point in 1999 and 2000. And, you know, again, a super successful IPO. So I had a pretty darn good track record of this. And these were both, you know, ultimately marketing or, you know, data marketing software companies. So right up the line of what we wanted to do in Marketo. But when we were raising money, it was like, number 1, there was this perception that the marketing products of the 90s had failed. Because of the, sort of the it meltdown that happened in the early two thousands. So it was a sense that the category I was trying to work in had failed. And there was also, you know, the pendulum and, and, and in venture goes from early stage investing to later stage investing.
[00:38:38] And this was sort of a peak where all the VCs had had, like I heard, moved into series B and series C and D investments and there just was nothing happening in a, and I remember that I was gonna get it done, uh, by going up to, um, one of the top firms on Sand Hill. where one of my biggest mentors, um, my first marketing software job, um, in the late eighties was, uh, was a [00:39:00] very senior partner up there then as an investor and taught me everything I knew about marketing software at that point, in some sense, um, or the first stuff I knew. And we gave our presentation and David was his, his first name and he pulled me aside and he said, That is the fucking stupid idea I've ever heard. Excuse my French. if you'd walked in here and told me you were going to build a data storage company or a networking company or a, you know, a data security, you know, whatever it might be, I would be sending you out of here with a check because I want to invest in you.
[00:39:36] But that is the dumbest idea I've ever heard. Sorry. And it was like, just, like somebody punched me in the gut, you know, because I was sure that he was going to write me a check. And it just wasn't. That way at all. And it was just, I remember when John, I was just, it was just desperate when John and I were doing this.
[00:39:51] And it was pretty funny because. John and I, probably once every month or something like that. Brian Halligan and Dharmesh Shah from [00:40:00] HubSpot were out trying to raise money for their thing right at the same time. They were doing it on Sand Hill and we would get together on University Avenue in Palo Alto. a soda in the afternoon and cry on each other's shoulders about why no one would, would write checks. And it was just amazing, you know, we somehow got it done and, you know, who knows what the market cap would have been if, you know, I had been able to keep going to Marketo and, you know, Brian certainly put his numbers on the board. And so, you know, there was just a tremendous amount of value created by those 4 guys. You know, crying on each other's shoulders on University Avenue. But it was, it was just, it was just terrible. Better part of a year to get it done. We raised a grand, whopping 1. 5 million Series A, um, to get started and get that first product out the door. Um, and so, um, scars that I could, you know, just horrible time. Just horrible time.
[00:40:47] David: Wow. Um, what, what is the biggest challenge you ever faced? Marketto. And, and how did you overcome [00:41:00] that?
[00:41:00] Phil: Yeah, it's probably pretty easy. Um, we went public in May of 2013, had a great, good IPO, performed really well. We were pretty high flying. Um, company was performing well, stock price was good, performed, you know, up and stuff. About three weeks, I guess, after the IPO, out of nowhere, the news broke that Salesforce, that Mark had bought ExactTarget. Um, and to become the marketing cloud, um, which wasn't that much of a threat. We'd been partners with ExactTarget before, and, and, and sort of that was fine, but ExactTarget had just also bought one of our competitors, Pardot, kind of low end competitor, but probably the best of the lower end competitors, or, you know, best beside HubSpot, depending on how you, how you would, would evaluate it. And so, and they were very high on competing with, with Marketo with this, with this Pardot acquisition as well. so, you know, it's not really very fun to have three weeks in the market as a public company. And Salesforce was a critically important partner at that time. We were the single biggest partner in AppExchange in terms of, you know, the money we would spend [00:42:00] to show as the biggest booth on their floor.
[00:42:02] And we were moving the most business through their AppExchange partnership as any one of their partnerships. And while it was always a not very relationship, it was a critically important relationship because our technical integration between the two products was essential to customer success. And so, wow, you know, investors didn't much like the idea of Salesforce buying our biggest competitor and they were coming right at us, you know, flying. And that wasn't very fun either and was pretty scary. And then I, you know, was obviously then being asked to do some interviews and all the press wanted to talk to me about, you know, what's this mean for Marketo?
[00:42:35] And I started to mouth off a little bit about that. Next thing I knew was that Mark decided that it was time to shut down the interface between Marketo and Salesforce, which is like turning Marketo off, you know, effectively in some sense. if you knew the product. And that was, you know, that's a near death experience when, you know, your biggest partner buys a major competitor, declares war, and then shuts you down, right? Um, and well, you know, we talked about customers earlier, [00:43:00] and the success here, the solution turned out to be just the same, which was, it was like, Mark, you didn't just shut Marketo down, you just shut Marketo's, you know, 1, 500 customers down, you know, and General Electric, who just did a 50 million license with you at the time, GE had just done Mark's biggest sale, was one of Marketo's biggest customers and was like, you know, are you sure you really want to shut Beth Comstock down?
[00:43:23] Because she's not going to like that very well, you know, she was the CMO at GE at the time. boy, you know, we just hit that drum for about two days and done, you know, it was back, it was running. And it just, you know, while, you know, while Mark's the fiercest competitor I've ever competed against, well, except maybe Larry, um, the, the, uh, the fact that we again made it about the customer and the fact that it was, you know, you can do this to us, but you can't do it to your customers, won the day.
[00:43:52] And then it was right back to the game of not talking about them, but talking about us. And, you know, I'll be damned. You know, it just didn't [00:44:00] hurt. It
[00:44:00] David: Wow.
[00:44:01] Phil: We didn't miss it. We didn't miss a quarter. We didn't miss a beat. We put our numbers on the board. We made the quarter where that happened. And, and the ability to just, and that for me was one of, you know, my company was freaking out. Everybody's freaking out. I was freaking out. I couldn't show it. And I think that was just the ability, number one, to recover, to get back on track for the, for the customers. And then just a level and just be zen and just, you know, this, just don't get, don't get off your game.
[00:44:30] Don't go chasing into something different. Just, just relax and just keep doing what's working was extremely hard to find the depth of just to just keep doing that near death experience. Worked out fine.
[00:44:43] David: Wow. It, well, it goes back to this theme of the customer. I, the power of the customer in that relationship is, is, and, and, and having them, you know, You know, not just cause they need it, but I think my guess is most of your [00:45:00] customers, they wanted you to be successful, whether they were using it or not. They, they back to the point of community and everything like, and, and so you had that leverage on your side.
[00:45:09] And of course those customers were also Salesforce customers. And so
[00:45:12] Phil: Yep.
[00:45:12] David: that, wow. What a story. Um, wow. And yeah, amazing. Um, so. You know, technology continues to evolve a lot, obviously, and there's the kind of this rise of AI, everyone's talking about like what, I'm curious your view on kind of what the future looks like now, not for marketing tech, just in general, like when you think about AI in the marketplace and, and, and you're still involved in so many different things and companies, like what, what do you, what is your thought on that?
[00:45:45] Phil: Gosh, you know, I mean, it's just, it's not, you know, my degrees in history. I've already said a couple of times and I think about this a lot. And as I think about what I've had a chance to see over my career, right? You know, I started in the mainframe era and I was programming IBM mainframes and assembly language when I [00:46:00] started and stuff like that.
[00:46:01] So, you know, I couldn't hardly believe when PC's came out. Popped out and I watched the PC revolution and, you know, set in my book about how I remember I sent my first internet email message in 1978 to a friend at UCLA when I was at Stanford. And so I've been, you know, a citizen of the Internet since 1978.
[00:46:18] I'm like a lot of people and did my search first Searches on Archie and Veronica in the late 80s when those were the first search engines before the web was there and stuff. So I got to watch the web emerge, and I got to watch big data emerge, and I got to watch Web 1. 0 emerge, and, you know, e commerce and all of that, and Web 2.
[00:46:33] 0, and then everything that's come since, and social media, and, you know, and the cycles, and, you know, now, uh, obviously, you know, crypto and now AI, right? And so, you know, man, I've seen them up, and I've seen them down, and I've seen Bull cycled and I've seen bear cycled on tech and on Silicon Valley. And so, you know, with that long view, you just realize that the durability and the, the just persistence and [00:47:00] transform invention that tech can be, and that entrepreneurial tech can be, and it's just, um, you know, ongoing drive in our society and our culture.
[00:47:08] AI to me is maybe, you know, the PC in my career, maybe, um, The Web 1. 0, probably, you know, I think Web 2. 0 is more destructive than than accretive to culture. Um, and, uh, and now AI is going to be probably, I believe, in five years or, you know, now and continuing. The biggest transformative engine that's going to drive us for many, many more years to come.
[00:47:30] And I think is going to have all sorts of birthing pains and all sorts of rapid evolution and all sorts of concerns about concentration at the top with the big players and is there room for entrepreneurs? And is it safe? And will it ever be AGI or this or that and everything else? There ain't a chance that this isn't a complete change.
[00:47:47] fundamental transformation of the tech space, of the work, of how technology applies, how work gets done, how people exist and work with machines. And so I am at the belief that, you know, we are, you know, I've [00:48:00] probably seen five minor cycles and three major cycles. We're at the beginning of one of the biggest major cycles in the history of tech, and it's just still the Wild West,
[00:48:08] David: Hmm.
[00:48:09] Phil: awfully fun.
[00:48:10] David: Yeah. Yeah. It's, um, it does feel, it feels that way on so many, like, I actually, on so many levels, you can see how it's, how it's changing. Even my kids, they're already using ChatGPT and all, they're 10 and 8, and they're, they're using it this morning. My 8 year old literally told ChatGPT, took a picture of a bunch of vocab words and asked ChatGPT to quiz him.
[00:48:37] On the vocab words, like that was wild to watch. Like, that's what went through his head. Like, I'm going to do that. And you're like, okay, wow. This is like, this is really, as that generation, you know, gets into the workplace. I mean, it's just, it's going to change everything.
[00:48:57] Phil: Well, it changes everything at that level, [00:49:00] right? And how we, how we access information, how we, how we get smart, how we work with each other, how we learn, enable ourselves. And so it changes everything at that level, but it completely changes the technology foundation too, right? I mean, you're already seeing, you know, what APIs mean and what loosely coupled
[00:49:15] David: Yeah.
[00:49:15] Phil: and how things discover each other and work.
[00:49:17] You know, we've been working on these problems. I, you know, in 1990, I was working on composable software. How do we start to build software systems out of, um, uh, we were doing some of the seminal work together with Sun Microsystems at the company I was at around the early days of composable software.
[00:49:31] This is 30 years later, 35 years later. And it's finally going to be true where, like, we're going to actually realize systems that can sort of self discover each other and work together. And the way these systems
[00:49:41] David: Wild.
[00:49:42] Phil: predictive, the non deterministic nature of AI will continue to be true for a long time. These, these are not just small things. These completely warp the mind about how software is built and how it works together and what software even is. And so as a result, in addition to the way we experience it today, it is. [00:50:00] Deeply structural to how the whole industry works and how software works and what skill people will need to have. And, you know, that's scary, but, you know, mostly that's fun.
[00:50:08] David: It's amazing. Um, do you, I want to talk a little about your background. Like, did you. Always know, like, did you know forever you wanted to be an entrepreneur? Like, did you know you want, did you, did you imagine you'd be a founder? Like, was that your childhood dream?
[00:50:23] Phil: No, not at all. I, I, I wanted to be an architect that I, I, you know, I I wanted to be an art. Well, I wanted to be, I wanted to be an airline pilot. I wanted to be an Air Force pilot and I wanted to be an airline pilot. Um, is what I really wanted to be, but I had a problem in my eye that would have disqualified me from from doing that that I discovered it when I was about 16. and so the next best thing was to be an architect because I just love design and, um, got to Stanford for my freshman year. to enroll in their school of architecture and 1st thing I did when I got to campus was went to the department and found a sign on the door that said, as of [00:51:00] August 15th, the Department of Architecture at Stanford had been terminated, has been closed permanently. The school, the university had decided to terminate the department. And I was moly, that's not good. And my mom, you know, insisted that I become an electrical engineer. So I spent about six months being an electrical engineer before I declared history. Um, so, but, but I was kind of lost, you know, actually, I would say, until this, you know, amazing
[00:51:25] David: Right.
[00:51:26] Phil: about a while ago about, about, you know, this, like, break where I got swooped into this, you know, company and, The experience of being hired at age 21, being in the field, selling, building products and being, learning how to talk customer got me, you know, kind of, I moved very fast in that organization and I was, you know, running some big projects and it was an engineering director.
[00:51:46] So I'm on the way in my career. We had an IPO that was quite successful in 1984, I guess. And I didn't make much money. I was still junior, but what I saw was how that whole venture cycle had worked, had taken an idea, had invested, [00:52:00] created value, had. Produced an IPO, produced wealth, produced, you know, all the things it did. And it was just like a, you know, a brain worm that got into my brain. You know, it's like, I love this. And, and it, you know, it's what I've been ever since. And it just was this instant transformation. I found my career. I found myself. I found the whole thing, but
[00:52:19] David: Wow. Did
[00:52:21] Phil: would have never expected it.
[00:52:22] David: you have, is there one person in your career? A mentor or someone that kind of, you know, that you can think about specifically in the CEO job, like that, that really had a massive impact. Was there one person that you could think about? Or is it multiple or
[00:52:43] Phil: Oh, it's, it's, it's multiple, but, um, I joined a company and, well, it was, you know, this ridiculously hot company in, in, uh, 1999 called Epiphany, um, and, uh, it was founded by, um, some amazing people. Steve Blank, who, you know, did a whole bunch of the work [00:53:00] on, you know, gave us a, gave us much of our, our structure was, was there and, and, uh, overlapped a little bit with me when, when, when I came in. I actually, you know, did Steve Jobs or Steve Blank's job there after after he left. Um, and, uh, the CEO there, um, was recruited by John Doerr, a client at Perkins at the time, kind of the top DC, and he was a guy named Roger Sabony, who was running KPMG globally at the time, one of the You know, big top accounting firms out of New York City and the story was, you know, top New York City exec comes west to join tech company and all that.
[00:53:32] So he hired me and he was, he was my boss and an extraordinary mentor. He, he did probably two things that just, just in small things. Number one, um, uh, he, he gave each one of the executives when they joined, uh, a small copy of Sun Tzu's The Art of War, this tiny little book about that side written, I don't know, you know, Before, you know, I don't
[00:53:55] David: Yeah,
[00:53:56] Phil: years ago, I don't want to agree. But, you know, it's 3 or 4 or 5 messages [00:54:00] that, that he taught and believed that formed the basis of my entire management, you know, kind of philosophy at the, at the executive level. And he had 5 things that he called Roger's rules that he taught that were, you know, things are never, never as good as they seem, never as bad as they seem, you know, never make a decision after 6 PM that matters.
[00:54:19] You know, there's, there's a series of just some very small. Things that were wildly, wildly applicable, wildly easy to inculcate into your brain. And there is to this, you know, literally probably day, not a day I, you know, engage in the business world that there isn't something from that. Roger's rules and the Sun Tzu's rules and the way he put those two things together, and lots of other good mentoring there, but he taught me how to think about competition, about how to conduct oneself, about how to win, about how to keep things in proportion, about how to prioritize, um, and [00:55:00] profoundly impactful mentor in my career.
[00:55:01] David: well what what you so you've had this like really true storied career Um, and you just kept driving and driving and driving like what what motivates you deep down at your core? Like what what is driving you what has driven you to keep doing this?
[00:55:19] Phil: I love building things, you know, I mean, designing things, building things, building things. Um, to me, the notion of having nothing, at some point, a little bit down the road, having something, which is starting a company, right? I mean, there is nothing when you start a company. Zero! Except some stuff up here.
[00:55:35] Um, and, you know, have a multi hundred million dollar company worth billions of dollars that employs thousands. You know, that, to me, is itself just incredible. I mean, it just, it feels, you know, It, it, it just, it just strokes it, you know? And so it's a drive that comes from that sense of, of building it, it, you know, that drives me, um, fiercely, fiercely competitive.
[00:55:59] Um, [00:56:00] and so, you know, I wanna win, uh, the, the, the ability, you know, I just, you know, I just, I just. You know, I'm competitive with a heart. I'm competitive with the soft side. I've got lots of soft edges around being competitive in some ways. People actually mistake me for being not competitive very often, which is actually one of Sun Tzu's rules you learn. but I'm fiercely competitive. And then one of the things that drove me that's actually just makes for a great story, so I'm going to tell it. Um, um, you know, I, I mentioned that I wanted to, to be in the Air Force or fly and be an airline pilot, but my eye messed up. I did manage when I got to Stanford.
[00:56:35] In fact, the first thing I did the first day I got to Stanford, I got a chance to fly in a Cessna 152, uh, with my resident fellow in my dorm who had just gotten his pilot's license. And I had never been in a small plane. I'd never been in anything but a big jet. And I was his first passenger. And I signed up for pilot's license, training that afternoon, my first day on the Stanford campus.
[00:56:57] I couldn't afford pilot's training. I kept [00:57:00] it hidden from my mom. It was a secret from her because she was paying for my college. And I managed to figure out one way or the other to pay to get my pilot's license. So that's another passion of mine that I've had my entire life. And somehow I got in my head, like, literally right then that I wanted to fly a business jet. I couldn't care about owning a jet. You know, I have no interest in the trappings of, you know, flying around the world in my Gulfstream and being whatever and whatever. But man, I wanted to fly a bit of jet and I wanted to make enough money that I could fly at this jet. And that literally, if you ask people in 1988 or 1993 or whatever, you know, I had all this passion, but someday I wanted to realize that dream, but it was never going to be because I went blind in my right eye and that wasn't going to work.
[00:57:40] And, you know, so forth. So I stopped flying before I joined Epiphany in the nineties. Somehow, I launched out of Marketo when Vista came a callin and, you know, offered me the chance to go on down the road. That I got a corneal transplant, and I turn out to now be 2015, better than 2020, better than new in that eye. It's all [00:58:00] fixed, and I all of a sudden had the eye and the knees. Freed me pretty well and the time to do it. And so that's the thing I've been doing since, uh, I ejected out of, uh, out of, uh, Marketo's. I, and I linked up with a mentor, um, who is, uh, still one of my best friends who's a, a, a captain for United Airlines, uh, flying the, um, the, uh, 7 3 7 max these days, uh, who brought me into sort of flying, uh, uh, jets at the highest pro level, you know, doing it.
[00:58:31] And I have a, I have a, you know. of a big jet. My husband turns out to also be a pilot and it's a two pilot airplane and. are able to get in front of the plane and fly around the world now. And so the ability to have, have, to have started in 1982 with like an animating passion that I'm going to do this thing because know, this is, this is where I want to get and to actually like achieve it. You know, I just, I, I get literally goosebumps [00:59:00] like my back when I tell the story, because it's just like, I don't, you
[00:59:05] David: That's an amazing story. That is,
[00:59:07] Phil: some, there's some luck in life, you know, leave a clean life or something. I don't know.
[00:59:10] David: that's an amazing story. Um, well, knowing everything you know today, after all this career, getting to where you wanted to get to, reaching your goals in every way, um, what advice would you go back and give yourself before you started your first job? Like knowing everything you know now, what, what advice would that be?
[00:59:30] Phil: Yep. you know, I've talked about these things of being driven, competitive. Um, uh, I've always, you know, I've always been a pretty smart dude. So, um, I, I, I can get frustrated with people that maybe think differently, or don't, you know, think as fast or in different ways. And that has You know, I knew from an early age I wasn't good dealing with that, and I got to tell you, you know, a lot of my career, [01:00:00] um, was, you know, wickedly successful because of some of those things, and wickedly held back because, you know, there was an inner monster also that, you know, I could be short with people, I could be aggressive, I could be mean, and probably pretty early on, I sort of, I'm a very self aware person, so I could see that monster, I could understand it,
[01:00:19] um, And I never, for too long, got my head around the fact that I had to fix it. I had to. It couldn't, it wasn't optional. You know, it was going to hold me back. It was going to ruin my career. It was going to be impossible. And I probably Spent 30 years of the 43 years, or 25 or something like that in denial, not quite getting it done, telling myself that, you know, the business successes would be better. And if I had figured out how to get the monster under control and taken it seriously
[01:00:52] David: Hmm.
[01:00:53] Phil: in 1982 or 1983, I don't know, would have been, would have been better still. All I know, all [01:01:00] I know is that.
[01:01:00] David: Wow.
[01:01:01] Phil: I think, I think I'd be it eventually, you know, and it's one of the things I'm proudest about at Marketo is I think, You know, even then, in the early days, there were probably a lot of people there that, you know, mostly thought I was an asshole, even though they kind of liked what I was succeeding at. And I think I managed to eject out of there where most everybody, you know, thought it was a pretty good time together and that, you know, it was all a success for all of us. And so that sort of sense of, you know, it's all inside you and, you know, denial is just a river that, you know, you don't want to go down, it will be with me forever now.
[01:01:34] David: Phil, um, thank you very much for doing this with me. I really, like this was, I feel like I can listen to this back like three times and keep learning new things from, from this. And, um, a lot of things that I'm sure the listeners, um, a lot of founders, a lot of CEOs, like I'm sure people will take a lot from this.
[01:01:53] So I really sincerely appreciate you doing this.
[01:01:56] Phil: It's a thrill. I just love the stuff. You can probably tell. [01:02:00] And, uh, glad, glad to tell the story. I, it's, it, thanks for, thanks for putting this together, David.
[01:02:04]David: Awesome. Awesome. Well, everyone who's listening, I hope you enjoyed. If you did, please share this episode out with your networks. And, uh, we look forward to seeing you for the next episode of Not Another CEO Podcast. Thank you.
