Jon Gelsey: Building Auth0, the only PLG company in cybersecurity to achieve a multi-billion dollar exit

Our guest in this episode is Jon Gelsey. Jon was the first CEO of Auth0, a leading identity-as-a-service platform, which grew from 5 to 300 employees during his four years at the helm. Auth0 was acquired by Okta in February 2021 for $6.5B. After Auth0, Jon served as CEO of Xnor, a computer vision and machine learning spinoff of the Allen Institute. The company was acquired by Apple for ~$200M in January 2020. 

When Auth0 first started in 2013, there were already several authentication vendors in the market. Okta, ForgeRock, and OneLogin had all built considerable scale by the time Auth0 launched its product. Not only did Jon and the team build a successful company in a very crowded space, but they also did it their way. While all of Auth0’s competitors were running a top-down GTM motion, Jon made a critical decision to adopt a bottom-up, product-led growth (PLG) strategy. Instead of relying on traditional marketing tactics for demand generation, Auth0 built an extensive content rollout plan to help drive inbound interest in the product. To date, Auth0 is the only PLG company in cybersecurity to achieve a multi-billion dollar exit. On Inside the Network, Jon talks about building go-to-market strategies, identifying the right buyer personas, and establishing success metrics for customer acquisition.  

In addition to his experience as a serial entrepreneur, Jon worked on the M&A and strategy team at Microsoft from 2007 to 2014 where he led several acquisitions for the company. Jon shares the tips and tricks founders need to know to plan, negotiate, and successfully close acquisitions with potential buyers. 

Episode Transcript

Sid Trivedi (00:04):
Welcome to Inside the Network. I'm Sid Trivedi.

Ross Haleliuk (00:07):
I'm Ross Haleliuk.

Mahendra Ramsinghani (00:09):
And I am Mahendra Ramsinghani.

Ross Haleliuk (00:11):
We've spent decades building, investing, and
researching cybersecuritycompanies.

Sid Trivedi (00:17):
On this podcast, we invite you to join us inside the
network, where we bring the bestfounders, operators, and
investors building the future ofcyber.

Mahendra Ramsinghani (00:28):
Our guest today is Jon Galsey the former
CEO of Auth0 and Xnor Jon wasthe first CEO of Auth0, a
leading identity as serviceplatform. Under Jon's
leadership, the company grewfrom 5 to 300 employees during
his 4 years at the helm. Auth0was acquired by Okta for
$6,5 billion, the largest everprivate transaction in Seattle's

(00:53):
history. After Auth0, Jon servedas the CEO of Xnor, a computer
vision and a machine learningcompany.
This was acquired by Apple for$200 million. His previous
experience includesresponsibility for strategy,
acquisitions and investments atcompanies like Microsoft and
Intel Capital. Jon started hiscareer as a product manager for

(01:15):
Mentor Graphics, HP, and ConvexComputers. Today, we'll hear
from John about what does ittake to find
product market fit, work withthe very best founders in the
industry, and how to win thetoughest negotiations.

Sid Trivedi (01:32):
Hey, Jon. Welcome to Inside the Network.

Jon Gelsey (01:34):
Well, thank you for having me here.

Sid Trivedi (01:35):
We're gonna talk about 4 different topics, Jon,
with you today. And the firstone is around finding product
market fit. This is an area youhave, in my opinion, having
known you now for almost 10years, you've you've really
perfected this art. So we have anumber of questions that we
wanna go through with you. Butthe first one is when Auth0 was

(01:57):
started back in 2013, there werealready several authentication
vendors in the market.
There was Okta. There wasFortrock. There was OneLogin,
and probably half a dozen otherswho had all built considerable
scale by the time that youlaunch product. So how did you
and the team figure out that youhad sufficient product
differentiation to start a newcompany in an already crowded

(02:21):
space?

Jon Gelsey (02:21):
I guess the short answer of that is that we had no
idea. But sort of the the moreuseful answer is it's all a
series of experiments, ideallyvery low cost experiments, to
try and understand whatresonates in the market and
what's what doesn't. And soyou're you're really to me, your
first step as an entrepreneur isyou create those experiments.
What's the absolute cheapest wayI can see that somebody is

(02:43):
likely to pay or better yetactually does pay at least a
nickel for this? Becausethere's, like, this massive step
function between 0 and a littlebit of you've actually got a
solid product that somebody'swilling to pay for as opposed
to, wow, that's technicallyamazing, but I'm not sure I
would do with it.
And so the sequence actuallyAlcero Inc actually didn't start
till I became CEO. We had aconsulting essentially, a

(03:06):
consulting business in 2013 thatEugenio and Matthias had had
started, Auth 10, I think it wascalled. And the concept for the
Auth0 product, just sort of anamazing, amazing product, which
they were able to get in a veryearly form, one of one customer,
somebody that Matthias knew fromhis consulting background, to

(03:27):
try to integrate with and thendeploy. And so having actually,
and I guess we'd call that thesedays a design partner, having a
design partner is not a badthing. But with that proof that
sort of the concepts were goodand the technology for as far as
we were able to get in thoseearly days was well implemented,
because they seem to like whatthey saw.
So the first thing we did asauth 0 actually was make it

(03:50):
available online, gonna say, ina low risk way. And what that
really means is that we had afree version, the free sample
that people could try out, andthen we had paid versions. I
think it was, like, $19 a month,$99 a month. 4.99 a month is
what we put in place. It was,like, mid January, so, like, a

(04:11):
couple weeks into the existenceof Auth0 Incorporated.
And the the goal there was tosee how many free are we getting
free users and what are theysaying about us? And are they
free users because they'replaying with us or because this
is actually valuable? And so oneof the reasons for the paid
versions was to see if somebodyfound it valuable enough so that

(04:31):
it's like, well, you know, ifyou convert to paid, you'll get
better support. And, eventually,we added things like, you know,
you can have, you know,corporate SSO with the paid
version. But, you know, youdon't get that with the free
version other than I think,initially, it was, like, with a
small number of users, and then,eventually, it was, like, no.
You you need to pay if it'sgonna be for, you know, clearly
corporate use. Our generalphilosophy with this in terms of

(04:53):
pricing was, hey, we don't getpaid until you get paid. Find it
useful and find it useful inproduction, not for, you know,
you're just playing around, youknow, then pay us something.
Otherwise, have a good time. Nowthe dynamics of the product were
awesome for allowing thisbecause our COGS was very low,
or our marginal COGS COGS, I cansay.
You know, once we're set up onon Azure or AWS, which we we

(05:15):
actually did both in the thiswas, like, the 1st year and a
half or so in order to have beable to instantly fall back from
one cloud to another when theyhad problems, which certainly
back in those days, they had alot, Our sort of marginal cost
if you signed up as a free userand you're going to have, I
think those days, it's likemaybe less than 10 corporate
users, like with a corporatesingle sign on or less than a

(05:35):
100 or something in the thatorder. Our cost was low because
transaction costs were low. Wehad and maybe this is another
secret to this, is we hadawesome documentation, you know,
really great quick starts andreally clearly written.
Eugenio's background justbefore, he started the LLC, sort

(05:56):
of consulting business, ineffect, with, with Matthias was
patterns and practices atMicrosoft, I. E, like, here are
the sort of the right ways toimplement code efficiently or
excuse me, implement a conceptefficiently.
And so and a part of that is,you know, being able to explain
it really well. So he wrote alot of the documentation and,
you know, sort of set the tonefor that. So you could come in

(06:16):
as a big buyer at a top 4 USaccounting consulting firm and
look at our free sample, gothrough a a quick start that
sort of in 5 minutes would be,wow, I just set up
authentication with my corporatecredentials, and you know,
Google and Facebook and a customdatabase simultaneous, all of
those working simultaneously.And I did this in, like, about 5

(06:38):
minutes for this, like, helloworld application in Node or
Java or or whatever. You lookedjust by following the recipe for
the quick start, and then you,like, looked at the
documentation, and you sawthings like arc sensibility
through Auth0 rules.
Wow. This looks like it actuallycould work in my multibillion
dollar enterprise with 1,000,000of users. Let me see. And that

(07:00):
allowed a completely automatedcustomer evaluation and hence
customer, or I should say SQL,Sales Qualified Lead
Acquisition. And so our marginalcost for acquiring a customer
was like pennies because, hey,we're keeping the servers going
and, like, we're trying tomaintain the documentation and,
you know, we gotta have youknow, work on that and such.

(07:23):
But it's really cheap. And so wecould allow, really, thousands
of people to come in, and thatdidn't really cost us any didn't
cost us anything. You know, it'slow cost. And a reasonable
percentage, a single digitpercentage, it's always small,
it's like, hey. This looksreally good, but, like, hey, I
need a number to call if thingsgo to hell because this is going
to be in production use.

(07:44):
It's like, hey, I need to beable to show my boss that you
guys are actually a crediblepartner and not like some tiny
little startup in Seattle,which, of course, we were. This
was sort of the the secret tothe early days of of of success
for finding product market fit.You have a cheap enough way to
reach a large enough number ofactual serious users who are

(08:07):
then giving you feedback on yourcomments on your, maybe a blog
post or in your forums or we gotwe actually, for quite a while,
had the this documentation iswrong, you know, click here to
help us edit the documentation.So we had in addition to that
super low cost customeracquisition path for these
dynamics, we also had a superlow cost product management

(08:28):
path. We had the amazinginstincts for sort of just the
right level of abstraction thatwe needed to to give to ordinary
developers so they could beessentially authentication
experts, I.
E. Get it up and running in sortof minutes for something simple
or sort of days or or a week forsomething super complex. Okay?
We had those instinctsaccentuated by sort of the

(08:49):
comments we were getting becausewe had a wrong base of
effectively design partners. Youknow?
Really smart people. And, youknow, especially when it's
online and it's the anonymousperson posting online, they're
gonna be super honest. This isreally shitty. Although this
offer here is pretty good. Youknow, like, oh, cool.
You know, maybe some modestfeedback. That to me and this
was cheap. I mean, very lowcost. Our initial funding,

(09:12):
Matthias and us, Eugenio hadcome up with for funding
development of the sort of theMVP that we could, like, show to
the first customer and, youknow, try others. It was
$20,000.
$20,000 for a company thateventually exited for 6 and a
half 1000000000 to get the MVPto market. You know, then we you
know, after I came in, all of ussort of raised our hands and

(09:33):
sort of we had some friends andfamily people come in for, you
know, some reasonable reasonableadditional funds, still 6 digit.
It wasn't the the giant 7 digitprecede funds you're seeing
seeing fundings you're seeingthese days. You know, and then
use that to bring on severalmore engineers to, you know,
further refine some some someproducts. This is sort of to me,
is the ideal way to do productmarket fit.
Now it depended on the dynamicsof how the product works that we

(09:55):
were able to do that, and I'vegot a sort of a different
prescription for something likeXNOR where these dynamics didn't
work as well. But this is ifyou've got an enterprise
infrastructure product that isat bottom line sort of a low
cost to run, this is an awesomeway to to do it to find product
markets.

Mahendra Ramsinghani (10:12):
And I

Sid Trivedi (10:12):
think from the competitive angle, what you
found different, John, here wasthe ease of use, you know, that
Auth0 provided versus an Okta ora OneLogin or a 4th rock was
second to none. Is that fair tosay the ease of use for
developers to embedauthentication in using Auth0
was different?

Jon Gelsey (10:32):
Yes. That's absolutely the right thing to
say, and there's a sort of asort of sort of detailing that a
little bit more. There werecompetitors, you know, on the
early days, but I think, like,AWS Cognito came out in, I wanna
say, 2016 or something likethat. And it's like, here's
you've already got an AWSaccount, so it's really easy to,
like, check the box and just getanother service, and probably

(10:54):
you don't have to, like, arguewith your boss. And there were
other folks who were trying tosort of approach Rich Dad use.
The what and I give sort ofMatthias and Eugenio the, you
know, full credit for they cameat this as not, we are building
a security product for securityengineers to implement better

(11:15):
authentication. They insteadcame at it as, we are helping
ordinary developers becomeheroes. So you're an ordinary
developer and you understandauthentication, but
authentication is, at one of ourcustomers, you know,
authentication is a tarballcovered with razor blades. Every
time you touch it, your fingersget bloody. And it's there's
asymmetric risks involved withauthentication.

(11:36):
You know, you do it wrong,everything gets compromised, and
your company goes out ofbusiness. And so you really you
really, really wanna get it getit right. Okay? So we made it
really easy for the ordinarydeveloper to get it right and
get it right very quickly. Andso that, in fact, there's
another customer who describedhe said, Hey, I've done this was

(11:57):
a CTO.
He says, I've done 6 digitaltransformations in my career,
and I'm here at this company.This was actually AGL, the
largest utility in on Australia.I can't remember the gentleman's
name, but really smart guy. He'svisiting, and he says, I've done
6 of these. This is my 7th.
The previous 6, we are where wewere in year 2 of all of those
previous 6 in month 2 with youguys because you made the

(12:21):
authentication issues, which areso key to a successful digital
transformation, so easy to todeal with. So, one, it was the
abstraction layer. You have thisportal. You you wanna do this.
And, look.
Here, we're gonna help youconnect to your 16 active
directory silos and your crazycustom database over here. And
we had a second massiveadvantage that I don't

(12:42):
understand why other peoplearen't doing because it's so
advantageous. We had this greatextensibility capability called
all 0 rules, now called all 0actions. We would allow you in
the portal, you could write codewhich you could interrupt the
authentication flow to dowhatever. It's like, hey.
I want to I wanna do anadditional factor of checking

(13:05):
on, you know, geo IP. Onlypeople in the Washington DC area
or only people within thisfirewall can do it. Or,
actually, it was arbitrarybecause the way you would write
these, it was ordinary. It was awe invented effectively invented
Amazon Lambda before there'sLambda. It was a serverless
function to support anylanguage, but everybody used
JavaScript.

(13:25):
It's like, hey, I'm going to doa JavaScript check to see what
the phase of the moon is and thelast three things Taylor Swift
said. Cool. We could do thatbecause, you know, there's an
easy call to third party APIs.You can look this up. You can
make decisions.
You can do processing. So thatwould be like an additional
factor check, or I could do wecould do metadata enrichment or

(13:47):
modification. It's like, hey,you know, [e-mail] just
logged in. I'm not getting muchout of the Google metadata about
this guy or user. You never knowif it's a dog on the Internet.
And so but I'm gonna reach outto 6 Sense or Raply for somebody
like that, and I'm gonna do abunch of enrichment. And I was
like, oh, it's actually this 35year old guy. You know, he's got

(14:09):
an income of a $130,000 a year.And he's like, oh, I'm gonna use
that, well, 1, to be able tofeedback to marketing. It's
like, hey, by the way, here'swhat this user looks like.
I could be able to dynamicallydecide what landing page to send
this guy to. I even send him tothe, oh, here's the upsell
product, which is great, and notthe, here's the really cheap
entry level that you'd send thestudent from Germany to or

(14:31):
something like that. We could dothat in literally tens of
milliseconds. And that was supervaluable because our users
didn't have any other way ofdoing that. We never envisioned
things like you want tointegrate your authentication
solution with your marketingautomation tools to dynamically
select landing pages.
That never occurred to us.Because we had Auth0 rules, we

(14:53):
could see a new form of usage ofour product. And now, again,
that's the automated productmanagement. It's like, oh, look,
you know, here's this do wewanna, like, strengthen that? Do
we wanna make check boxes in theportal as opposed to making them
write, you know, 20 lines ofJavaScript?
That was another, like, superpowerful way to to enhance the
product as we learned over time.

Mahendra Ramsinghani (15:14):
That is a very interesting observation,
John, how a new form of usagefor Auth0 started to open new
avenues. Using these flowchecks, if you could tie in
authentication with marketing,that clearly would lead to more
developer delight, adoption,and, of course, rapid scaling.

(15:35):
My brain is still stuck at thatpoint where you talked about
$20,000 to get from initialconcept to early product market
fit. And I think that's a greatlesson right there for our
audience. Try to achieve earlyproduct market fit with
frugality, great documentation,identify customer evaluation,
and qualified leads.

(15:55):
Those are very fundamentalbuilding blocks in achieving
product market fit, but but atthe same time, improving the
product where the notion ofenrichment, the notion of rules
allows for opening new doors.Let us talk about competition
and especially the go to marketmotion now. When all of your
competitors were going top down,pitching to CISOs, Auth0 decided

(16:17):
to go bottom soft. Talk to us alittle bit more about how that
go to market journey played out.

Jon Gelsey (16:24):
Oh, I'm sorry. You actually brought up that
competitive point earlier, and Ionly addressed it tangentially,
so let me address it heads up.So we looked at the traditional
marketing of the ForgeRock orPing or StormPass or other, how
shall we put it, less successfulproducts like that And said,
well, number 1, our focus is onmaking developers happier by

(16:47):
making them I think allowingthem to integrate into the
authentication environmentthey've got in their their price
already, and that's actually apretty easy sell. Developers
don't have any money, but on theother hand, developers have
enormous influence. And, there'sno better friend and no worse
enemy than your developer forfor your solution.
So we wanted to make them reallyhappy. And so that was sort of

(17:07):
the Trojan. It's like, hey,here's an authentication
product, a security product younormally go to CSO with, and
we're instead going to go todevelopers, and have the
developers use it and like itand actually incorporate it into
their products. And then whenthey move to production, say to
the CSO or CFO or whatever, it'slike, hey, you need to send a
$100,000 to Auth0. But afterthey were we were sort of

(17:28):
already integrated because itwas all, like, really low
friction point or way path tointegrate us in without asking
for permission from the thecorporate bureaucracy.
And it was only when you wereready to generate revenue that
you need to ask permission topay us. And, of course, nobody's
gonna get in the way of revenue,so it was fairly easy to get
paid in that percent. Not muchselling was required there. K.

(17:49):
So that was but again, westarted with we're going to make
developers really happy.
I think it's fair to say thatall of the traditional products
at that time thought that theyhad to sell top down because, of
course, it was the CISO makingit a decision or at least highly
influential and securityproducts to acquire. Okay? And
so this is a grand experiment onour part. You know, for all we

(18:10):
do is gonna fail, failmiserably. In fact, one of the
things, to tell you the truth,when I came in, when I was
first, like, looking at lookingat OCRO, it's like, I think the
way we're gonna get to a$100,000,000 of of revenue, sell
to a 1000000 developers who areusing us because it's sort of
easier to get past this point,and eventually, we'll get
displaced by active directory orwhatever for a $100 a year each.

(18:33):
Okay? We're gonna do the makedevelopers happy. And and very
quickly, like, our first 6 digitannual subscription was in month
7 or 6. Our first order gettingclose to a $1,000,000 annual
subscription came in the doormonth 7, and I think we closed
that month 10 of 0s 0Incorporated's existence. Okay?

(18:56):
So what we found, I thought,well, we're gonna be making a
bunch of money in small dollarsegment transactions for the
credit card swipes. That veryquickly we found that because we
built a product that was soappealing to developers, that
was so well architected byMatthias that it could scale to
billions of users and handle allof these corporate uses, then

(19:18):
very quickly, the awareness wegenerated amongst these tens of
thousands of developers, becausewe we were getting lot of usage
very, very quickly very earlyon, translated to large
enterprise subscriptions. It wasawesome. Okay. ForgeRock, the
StormPass, Ping, who else is outthere, Gigya Gigya, all those

(19:40):
other guys back then, they allkept, like, pounding the door
and having these, like, superlong and painful sales cycles
with the the CISO and the CTOand the VP of engineering and
such.
It was rare that we had to talkto those guys because we spent a
lot of time making developersreally happy generating that
army of, you know, 30 developerswho've tried you and said, this
is great. We have to have this.And telling their management who

(20:02):
tells the CSO we have to havethis. Having the dynamic were
incorporated into our products,so they try and switch, they're
interrupting revenue becausethey can't sell the product.
Having the online reputationthrough our marketing tactics of
extensive content marketing thatgenerated very positive online
sentiment.
Like when you would Google for,you know, authenticate Active

(20:24):
Directory Google customdatabase, we'd always show up as
number 1 or number 2, you know,and certainly the half or top
half of it. Page. Now those wereall the dynamics that allowed us
to have a very different andmuch less expensive and much
faster customer acquisition costand sales cycle than the
traditional guys like Ting,etcetera. All that being said,
because we were selling to ourinitial thought on day 1 was my

(20:48):
first find the paperworkcreating all 0 Incorporated. It
was, well, we're sellingdevelopers, you know, that's a
different approach.
They'll they'll give us a nichethat team can't approach because
they have a hell of a lot ofdifficulty just convincing the
developer just to try them out.So

Ross Haleliuk (21:02):
let's double click on the content side. So
you as you've just mentioned,you have built an extensive
content rollout plan toessentially help drive inbound
interest to the product. Whatwere your top 1 or 2 insights
for how cybersecurity startupscan leverage content to use it
as fuel for their growth? Andcan they even do it if they're
not selling to the engineeringpersona, for example?

Jon Gelsey (21:23):
Sure. I'll talk about how to how to generate
what kind of content. And thenif you're you're not selling to
the engineering persona, itbecomes a lot harder because you
you need someone who is selfconfident enough to say, well,
let me just try this out. Oh,wow. Look.
This works pretty well. And ifyou're selling to the, if you're
selling to the business analyst,you can do that because they'll

(21:44):
try that if it's cheap and easy.If you're selling if you have a
really complex product, youknow, that takes sort of 30 days
to set up and such, you're fromthis perspective, you're screwed
or having to go down theordinary ordinary enterprise
sales path of, you know,cultivating senior management,
the POCs, and the budgetingcycle, all of a sudden it's 18
months before you see your firstdollar. So let's see. The kinds

(22:06):
of content we started with ourkinds of content being, well,
blog posts, of course.
Very early on, we stumbledacross tools as an awesome way
of content to your your ICP,your ideal customer profile, or
or at least your idealinfluencer profile. We had
created Matthias' team hadcreated for themselves a web

(22:26):
page or web application thatwould allow you to translate a
JSON web token, the encryptedbag of bits it is, to plain
text, so they may get the right,token to decrypt it. And it was
like on one side was plaintext,on one side and the other side
was encrypted, and you know youcould play with either and the
other side would change, andthis was I think, like, a day or

(22:47):
2 of effort on their part. Itwas pretty simple. You know?
And Matthias was one of the,sort of active members of the
committee that actually createdthe original JWST spec and said,
you know, he knew it reallywell. So, you know, this wasn't
very hard for us, for him andhis team. And, you know, pretty
early on, like within, again, afew weeks of Austira
Incorporated being in existencean actual SaaS company instead
of a consulting company, it wasMatthias was like, hey. You

(23:10):
know, maybe we should just,like, put this out because it
costs us sort of nothing to run,and so, you know, see if this is
useful to folks.

Mahendra Ramsinghani (23:17):
So I

Jon Gelsey (23:17):
was like, cool. Because our thinking at the time
with our blog posts and othercontent we were generating,
like, the quick starts in ourdocumentation. And, of course,
all of our documentation is onthe other side of the outside of
the firewall, so it's easilyindexable by Google. And so
that's another form of content.Was like, hey, this is gonna be
useful developers, and we wannahave this cultivate this

(23:38):
corporate persona that we're thedeveloper's best friend.
We're trying to do the try tryto help them out whichever way.
We can. That thing was afriggin' workhorse. People would
use it for 6 months beforerealizing, noticing at that
time, it was sort of on thebottom, kinda subtle, you know,
hey. Brought brought to you bywith with love by Auth0 that it
was actually sponsored site.

(23:58):
And then they'd, like, click onthe Auth0 logo and, like, come
through to our site and, youknow, see what we were doing.
That thing still generated.Like, the time I left the
company about 4 years later, youknow, 3 100 employees, it was
generating an 8% of our totalweb traffic. I mean, at least to
the austero.com, you know,public website. It was awesome.
So so, yeah, so tools are greatif you have a tool that's sort

(24:18):
of useful and could be made intoeveryday use as it's generating
trust and cultivating positivesentiment and a positive
reputation. It's also generatingbetter SEO, which is your your
top metric of, how well yourcontent marketing is working
because people would tell otherfolks on discussion forums or in
Twitter or whatever. It's like,hey. Use jwt. Io.

(24:40):
That's a really easy way to goback and forth. It'll help you
with your your debuggingprocess. We, of course, tried
the conference presentations asa form of content and content
conference attendance, and Iguess I'll stop here and say one
of the smartest and luckiestthings I ever did was not
appoint a marketing person tomarketing. Well, okay, I did

(25:01):
initially, but then that quicklychanged. I appointed an engineer
who actually understood ourproduct well.
Okay? And it was an engineer,Martin Goncubnik, is brilliant
guy, and he he had a good sortof instinct for what plays well
for engineers because he is 1.In fact, he originally
interviewed for the engineeringteam and then came to me and
said, hey, I find out I sort ofenjoy talking to people, talking

(25:24):
in front of crowds and such, andI've got to be the developer
evangelist. I'm like, Yeah,sure. I don't know if you need a
developer evangelist, but I'lltry it.
Let's see what happens. Keepcollect the data of what leads
you're generating. See who'sattending, try and do something.
You know? We did, like, earlydays.
One of our fun things was, like,having Bitcoins, couple of
Tsuchis, or I forgot what, youknow, cost us and that thing. Of

(25:46):
course, those cards wereprobably worth $1,000 each
today. But, anyway, you know, wedo that, you know, do do stuff
so that people would engage, andwe'd have some mechanism of
doing attribution as to whetherthe prospects that came to see
Martin or read Martin's blogpost or whatever, his developer
evangelist work, was generatingactual MQLs, marketing qualified

(26:08):
leads, I. E. They came to ourwebsite, you know, then, you
know, they engage or ask that.
And so once as a placeholder,when I needed a new head of
marketing, I said, hey, MarkBontu. Why don't you become head
of new head of marketing as aplaceholder, and we'll we'll
have a real professional in afew months after I finish my
search. And after a I don'tknow. It was only after a month
or 6 weeks. It's like, Gonto'skicking ass.

(26:30):
Why would I ever replace him?This is great. So let's see. So
blog posts. So then heshepherded so that we wouldn't
have to be distracting theengineers to write blog posts
because you have to haveengineers writing posts for
other engineers for it to becredible.
Believe me, I tried, and minewas incredible, so I stopped
doing that. Blog posts, tools,like jw.i.io. We also did

(26:51):
something called samaltool.iothat wasn't as wasn't as, as
effective, but we tried it. Didconferences, we found that
attending conferences was a andour figure of merit was leads
generated per dollar spent. Wasit a good use of of our dollars?
We were doing much better withour online stuff. Oh, we were
curating social media. Alldevelopers I think even today,
it's fair to say all developerstalk to each other on Twitter.

(27:13):
And so we made sure that we werebeing watching on Twitter and
making sure that we wereauthentically engaging as it
made sense to engage. We foundthat when we would try to sort
of pitch, you know, yeah, we'rethe best authentication solution
that would perform poorly.
So instead, we do things like,like a blog post. You know, it's
like, here's the crystalprogramming language. Here's the

(27:33):
1,000 words or whatever on, youknow, this new thing. It was,
you know, new whatever it was 10years ago. That would perform
really well because we were,again, informing developers and
making them helping them becomebetter at their jobs as opposed
to doing something that was anobvious advertisement.
Of course, where we could workin, it's like, hey. By the way,
we have a authenticationproduct, but there's other
things. We sponsored JaredHanson's, Passport was it

(27:57):
passport.com? Passport.js?Anyway, his his website because
Passport was the the most one ofthe most popular I think it was
the most popular NPM module, andit was authentication for for
for node application.
We're like, hey. You know, opensource, cool. We'll sponsor the
open source project. We'll giveyou money. We've got a bunch of
designers, and I gotta get tothat as a for content in a

(28:20):
moment, bunch of designers.
They can help make the websitelook better, shape it up. This
is not gonna be an advertising.All we ask for is that you
mentioned that we're sponsoringyou and that you are a free
alternative. You're welcome tosay you're a free alternative.
I'll see you're out.
You have absolutely no need forus. And he would say that, but
then he would also say, but, ofcourse, you know, that's your
node. And if you want sort of amore universal solution or

(28:40):
there's other things, otherlimitations that that I have.
And so he was was a very sort ofhonest honest and transparent
form of a sponsorship as opposedto sort of an just a just
brilliant ad. We found actuallyif we did technical
presentations at conferences,they started to become more
economical or, excuse me, morehigher yield in terms of the

(29:00):
dollars for leads that we wouldgenerate.
So we actually ended up sort ofstopping going to conferences
other than we had an opportunityto do technical presentations.
So those are the the kinds ofthings we would do for content
to apply to developers. Butbecause of all this, now it's
like, what do I do to, again, togo after accountants? It's like,
I don't know. Or do accountantshang out online?
You know? I don't know. Maybe Icould do, like, the accounting

(29:22):
education site for, you know,erudite accounting thing,
something like that. But it'sit's a, it's something that sort
of, differs for every marketsegment you have in terms of the
messages you're sending in yourcontent, although maybe not the
forms of content.

Mahendra Ramsinghani (29:36):
We've talked pretty extensively now
about product market fit, go tomarket, and creating inbound
demand using content. Let us nowswitch gears to the next
section, founding teams. John,prior to joining Auth0, you were
working in Microsoft incorporate development and
strategy. It would have been apretty cushy job, I might add, a
nice opportunity to continuebuilding your career. But you

(29:59):
decided to leave Microsoft andjoin this 5 person start up at
Auth0.
The fact that you build it from5 people to 300 people and from
a pre seed stage company to a 6and a half $1,000,000,000 exit
is a testimonial to not just youas a CEO, but also how well you
worked with the founding team.Eugenio and others had already

(30:20):
started to build 0 when youjoined them. Similarly, at
Exnor, you came in, worked with2 technical cofounders, and
helped them to get a$200,000,000 exit to Apple.
Please share some of yourcriteria in picking and working
with teams. They are clearlybest in their own categories,
but how do you engage with them?

(30:40):
How do you build trust? And moreimportantly, how do you lead
them to success?

Jon Gelsey (30:44):
I think sort of the first thing to say is that we're
bringing in that outside CEO.It's like selling your company.
You can't sell your company. Youhave to be bought. And so I
actually, for both of thosecompanies, when the idea of, you
know, me becoming CEO wasvirtually brought up, I said,
no.
I have zero interest. Thanks.With Allcio, you know, I sort of
this pushy work dev m and astrategy job with Microsoft. It

(31:06):
was, you know, a lot of fun. Youknow?
It's Microsoft, so you can go doa $1,000,000,000 deal, and
that's, like, just not a bigdeal because there's only
$1,000,000,000. You know? Sothere's and, you know, Microsoft
is a great place to work. Youknow? You you're always learning
there.
For the founding team members, Iguess, more than anything else,
you look at their reputations,what they've what they've done

(31:27):
before, and importantly, whatother people think of them.
Okay? And then you do, as muchas you can, sort of that gut
feel, because I would say sortof the most important thing for
your cofounders is that they arehonest and earnest, you know, as
well as, of course, being, youknow, highly technically
competent in their their field.You know, like Eugenio, like,
you know, he published a book onauthentication, you know, but

(31:48):
Matthias has spent years yearsin the in the area and, you
know, had a great industryreputation from that as well as
an online reputation from hiscontributions to open source
projects or participations andthings like the, the the JSON
Web Token, you know, standard.So it's like these are just good
people, and they'd be fun towork with, number 1.
You know? Number 2, clearly topplayers in their field. And so I

(32:09):
don't know. And then sort of mysort of thought process was
like, you never know, becauseit's always a crapshoot, because
you never know how things aregoing to evolve. But it's like,
this feels pretty good.
So bottom line there, it was agut feel. I mean, DataInform,
but a gut feel. With Exnor, sortof the kind of the same thing.
You know, they're I was justsort of I had been playing
around a lot just as a hobbyist,you know, a super naive

(32:31):
hobbyist. So my background isjust in as a computer engineer
with doing ML, playing with MLtraining, and sort of learning
coming up to speed on it.
I hadn't had time to ever getinvolved with it since the big
breakthroughs happened in 2012or so for object recognition.
And that catalyzed anintroduction by the one of the

(32:52):
investors in Exnor, MattMcElwein of Medrona. And to
Exnor, it's like, look, they'reacademics, they're great. They'd
love some help, because theydon't really enjoy the general
management. They enjoy theinvention and the engineering
management and such.
Maybe you can help. And I'mlike, well, I'll talk to them.

(33:12):
And I got myself sort of loopedinto I said, fine. I'll I'll do
some consulting to help sort ofset you on the on the right way.
I said, I'll do 3 months ofconsulting, half time, which, of
course, immediately turned intofull time not being paid.
I just worked full time becauseit was so fascinating. And, you
know, then they were like, well,you should be you should
reconsider the CEO thing. Oh,okay. 3 months later. And it was

(33:32):
because it was fun.
And Ali and Mohammed are forcesof nature and have amazing
reputations in the ML world. Nowthe technology that they had
developed materially advanced AIresearch, and I think it's fair
to say still are doing that. Aliright now is the CEO of AI 2,

(33:53):
which is one of the preeminentartificial intelligence research
organizations in in the entireworld that's here in here in
Seattle as well as, of course,maintaining his professorship at
University of Washington, whichis also, I think it's fair to
say, the the premier, if not,you know, one of the very, very
most top topmost premier AIresearch organizations. You
know, Mohammed Owen Ali inventedthe with coinventors like Joseph

(34:15):
Redman. One of the, even today,standards for multi object
recognition, a model calledYolo, you only look once to the
was the very first multi objectrecognition model and still the
one of the absolute very bestmodels that are out there.
I actually spoke with anentrepreneur, a very successful
retired entrepreneur, or notretired, but, you know, able to
sort of mess around on his own.I'm like, hey, what's the

(34:38):
current, you know, state of theart multi object recognition? So
I want to play with it. I'mgoing to be playing with it for
a concept that I have. It'sjust, oh, you definitely want to
use YOLO.
It's the best. I don't know ifyou've heard of it. I'm like,
yeah, so much familiar with it.Mohammed had invented a
technique called binarizationwithin, when was it, 2018? Yeah.

(34:59):
Which is the technique DNNs,deep learning neural networks,
are are basically, you know,it's a bunch of math. A lot of
it's just multiply it adds. Andtraditionally, you had to use
multi multi precision, 16 bit,32 bit floating port operations,
which is why GPUs are so useful.So Mohammed invented a technique
so you could do binaryoperation, single bit precision.

(35:21):
It's essentially making adecision of, hey, is the answer
on the left or the right side ofthe number line here?
And that meant you could run andget good results, you know, very
accurate, very fast, which meansyou could run on like really
dumb, cheap, simple CPUs like anembedded processor as opposed to
having to have expensive GPUs.And so it was great for AI at

(35:42):
the edge. Okay? You know, thatwas, you know, that's sort of
seminal research. Nobody Peoplehave tried it before, and nobody
ever got good results.
And he was the first one to beable to actually get great
results. And I'll only work withhim on on on that invention. So
those are the kinds of people Isaw in addition to, well, this
is just a lot of fun. I mean,it's brilliant people. I believe
Mohammed had attracted anamazing team.

(36:03):
Those are made of Matthias wasable to attract an amazing team
of engineers around him becauseof their reputations. So, like,
you know, this is it's been funworking with these really smart
people. Let me let me just trythat. But all of this comes down
to, you know, like, how do youfind, like, the best people?
It's like there's all theseelements, but it it then ends up
to serendipity.
You know, you get lucky. Youhappen to make connection to the
the person who's, like, the mostamazing in that area in the

(36:26):
world. And you're like, wow,maybe we can work together. If I
would be helpful, I'd be happyto work with you. I think that's
what a typical entrepreneur, thepath to be able to follow to to
have the same level of of luckbecause, you know, they were
discount luck in, that that Ihad with with companies like
like Akshnoor and and Alt 0.

Ross Haleliuk (36:47):
How does the go to market strategy impact the
kind of people start up shouldbring on board? Like, what are
the kinds of skill sets foundersshould make sure that they have
on the team?

Jon Gelsey (36:55):
Let's see. So so the way to answer that because or
answer that in an actionableway, the foundation of any
successful company is product.So I think your your number one
goal before you do anything elseis find really amazing product
people, excuse me, and engineerswho can build product, and also
have sort of a bit of a productmanagement sensibility, so

(37:17):
they're building the rightfeatures as well. You know,
product great product solves alleverything else. And so number 1
is technology.
Okay? So if your cofounderconsidering has no product
development expertise and, youknow, has product development
expertise, but sort of no norelationship to what you're
doing now, if they're purelysoftware and 0 hardware
experience. I would tend to becautious because it's it's kinda

(37:41):
hard to come up to speed on onstuff like like that quickly
enough for the for the start upto to do well with the limited
funding that start ups alwayshave. Your next element, to say
the truth, I think, is, is yourgo to market, your marketing.
And there, I think what you wantis somebody with a either a
track record or, you know, aclear capability and intent to

(38:03):
experiment.
And experiment means you know,marketing in general. Because,
you know, you've got a productto announce, like, hey, I want
to find the first 10 customers.How do I go find this? That's
what marketing is. Well, byexperiment, it's so many
marketing executives today tendto be, well, here's the 6
programs I did at the lastcompany I was at, and we're

(38:24):
implementing those here.
You know, here's the conferenceswe attended, and, you know,
here's the ads we created, and,here's the proof of concepts
that we we we put a place toconvince them. And the thing is
you don't know if thosetechniques are gonna be
particularly well suited foryour new startup. So instead of
the marketing person who says,you know, look at all the things
that I've done before,therefore, I'm gonna do it for

(38:46):
you. Instead, say, what are theexperiments you're going to run
to figure out what are the rightmessages? Hey.
Buy my product because of x, andwhat is the right channels,
media? You You know, it's like,hey. Can I just, like, tweet
this out, or do I have to do anad, or can I do a a I don't
know? You know, flyers underwindshield wipers, which, of
course, is a stupid idea untilyou experiment with it, and then

(39:08):
maybe it turns out not to be astupid idea. Not that I've ever
seen it work for a tech company,but, you know, just for
illustration saying that.
So the the marketer who's a goodexperimenter, the the second
thing you want to that marketeris someone who can speak in an
authentic voice and therefore berespected by your ICP, by your
the people you're selling to.And again, so many marketer I've

(39:30):
seen so many marketers thatdon't have enough of a tech
background, which doesn't meanyou have an engineering degree.
It means that, you know, you'vebeen able to hang around and
learn enough so that you cantalk to those people. And so
they sort of spout buzzwords orhave sort of warm, fuzzy text
that doesn't actually tell meanything about why I should, as
a buyer, why I should sit up,spend spend invest the time to

(39:52):
look more closely at this. Andso finding a a marketing a head
of marketing like that isactually really difficult.
That's a that's a hard hard job,but I think that's your your
critical next next hire that youyou really need. And, and the
absence of finding that perfectcandidate, because they are
really, really rare. I mean, Ithink every board I sit on right

(40:13):
now, the complaint is, you know,how hard it is to find effective
marketing people. I would justfind an engineer, find one of
those x percent of engineers whoare actually extroverts and say,
hey. The marketing stuff's easyto learn.
Why don't you try this to expandyour verizons? Because there's a
hell of a lot easier to teachsomebody how to do marketing
blocking and tackling than it isto for them to go through the

(40:36):
technical training that'snecessary to actually being able
to speak in an authentic voiceto the ICP for your complex
technology product. You know, ifyou're you're putting together
a, I don't know, a new onlinemarketplace, yeah, that's
actually fairly easy becausethere's a lot of people who
could talk authentically toother buyers of stuff online.
You know, if you're selling anauthentication product or, you

(40:57):
know, a new laser or a fusionreactor or something like that.
Now the ordinary marketingpeople, ordinary, I.
E, they don't understand thetech, but they understand all
the marketing techniques. Thoseare you need those people. But
after you've hired this head ofmarketing who's setting the
direction instead of vetting themessaging and the media to reach
the the ICT. Because, you know,again, they know a lot of the
blocking and tackling to to makeit easier. And so those are all

(41:19):
staff those can be staff membersof your head of marketing to be
able to more effectively conveythe effective messages through
the effective channels thatyou've your head of marketing
through his or her experimentshave come up with.

Sid Trivedi (41:31):
John, let's move on from, you know, talking about
working with people to talking alittle bit about what we define
as the art of deal making. Andat Auth0, you raised over
$60,000,000 across 4 differentrounds of funding from the seed
all the way to the series c, andyou raise it from some of the
best investors out there, fundslike Bessemer Venture Partners

(41:53):
and Meritec. And I was involvedin 2 of those rounds. I remember
the process, and I thought youran an amazing process. You kept
things competitive, but at thesame time, you were very fair in
terms of what you wanted, andyou ended up with the best
outcome for the company.
What advice do you have forfounders on running an effective
fundraising process?

Jon Gelsey (42:12):
Thanks for your five words there. I certainly didn't
feel particularly competent as Iwas going through those
processes, which, by the way, issomething to point out to all
the entrepreneurs. It's atremendous burden list a
tremendous burden off your backwhen you finally realize that
everybody else is just as stupidas you are. You know, nobody
sort of knows the quote rightway. It's all instinct and such.

(42:33):
And, you know, yeah, just doyour best, and you will be fine.
All that being said, the thefirst thing I wanted to do let's
step back. When you're talkingto VCs, it's important to
understand the psychology ofVCs. And, of course, please
raise your hand as I misstatethe psychology of VCs. But to be
to be very cynical, but is it agood framing, is they're greedy

(42:53):
sharks that are trying toimprove their return as much as
possible.
Cool. And that doesn't meanthey're bad people. It's just
that's their job. That's whatthey were required to do. You
know?
Just like a corp dev guy at abig company. You know? They're
they're gonna get the bestdeals. K? What does that mean to
a VC?
Well, he wants to make sure thathe's got as low risk as possible
and then be able to put it inenough so that he has a

(43:15):
meaningful impact on his fund ifif he's right that, you know,
the risks are low, and thereforehe gets his 10 or a 100 x or
whatever it is. We we did have aa fairly healthy 3 digit x
return for the early investorsin Alcero. And so, really, what
you're doing is conveying theinformation transparently and
honestly to the VCs about, firstoff, what are you doing, you

(43:37):
know, sort of convey why you'redifferent and such, but then
secondly, why the risks are wellmitigated and the that they're
gonna be investing in. Okay? Sooften, I've seen VC pitches from
companies where it's like, oh,we have a black box to make
detecting security anomalies,you know, amazing so you can

(44:00):
prevent all ransomware attacks.
It's like, cool. Everybody saysthat. What exactly are you doing
here? Here. Have a succinctpitch which says, hey, we're
doing this.
We've, you know, trained in LLMover the last 2 years, and it
does this amazing thing. I'mjust making this up. Probably,
I'm sure somebody's doing thisout there. But, therefore, has,
you know, very high success ratedetecting anomalies, and that's

(44:22):
why we can do think we can do abetter job. We've got these
people with a background inenterprise and, let's see,
building technicalorganizations.
That's a risk. Can you actuallydo it? You're not just, like, a
lone engineer who, you know,will fail as a as a manager. We
understand how to market andsell to my buyer. In this case,

(44:43):
it would be to the technicalorganizations.
And even specifically, it's withthis, I I don't have the ability
to go to some sort of lowerlevel, so it's used by a little
group. I know how to sell theCISOs. Like, like, one company,
the I have a friend who's who'sgot a company, and he just has,
among other things, this amazingCSO Rolodex. He, like, knew all

(45:03):
the CSOs. And I was like, I'mgonna go on all of these CISOs.
And in fact, I've gone to adozen of them. And I explained
the concept, and I said, I'llgive you more details of exactly
how we're doing it later. Butwhat do you think of this? And
they're like, man, I would buythat in 30 days. So now now you
go to the VCs with all of thequickly I here's what I'm doing,
and here's here's how I'vemitigated all of the risks.

(45:24):
And now you're having a reallyeasy conversation. Now when you
go in with the not a cleardescription of what you're
doing, it takes a long time toget to the point of, you know,
we're doing this ransomwareattack, you know, prevention,
You know, with with that withouta clear explanation of how
you've mitigated all the risksthat you're you're seeing, then
you're gonna have a have a hardtime. And then do you finally,

(45:47):
to your point of of competitive,you you really wanna you're
doing your yourself adisservice. And in fact, I'll
I'll dare say you're, you know,violating your fiduciary
responsibility to yourshareholders, I. E, your
employees initially and, youknow, and so on your other
investors, if you don't have acompetitive process.
You know? Go to go find in fact,your your your first investors

(46:10):
will be very helpful in findingyour your next investors. You
know? Go have them sort of guideyou. I'm like, here's 3 or 4
likely candidates you could goto.
You know? Go go pitch to them,see what happens, and get
multiple term sheets because youreally don't know what your
company is worth. You'd love tosay it's like, well, look at all
these comps. I'm worth, youknow, $15,000,000 in the series

(46:30):
series seed with, you know, 2guys with a dog in a garage.
What does the market say?
You know, sometimes the marketsays you're right, but, you
know, more likely the marketsays no, you're worth, you know,
$12,000,000 or whatever. And sothat those are sort of the
processes is to think about whatthe VC's real real problems are,
you know. You wanna give him theammunition, him or her the

(46:50):
ammunition so they stand up infront of their partnership that
the that they're not embarrassedby what they're saying. And
instead, it's like, look at thisawesome deal I found. You wanna
make them a hero.
In parallel, your companyproduct should make your buyer,
the person who champions in youwithin the company, a hero. Wow.
I was able to get authenticationdone in a, you know, a week
instead of the 3 months it tookwith, you know, whenever we

(47:12):
tried to use Ping or Microsoft.Wow. He's a hero.
You wanna make that VC a herothe same same way. So think
about so try think like a VC andtry and think of what
information you need to givethem to make make them heroes,
and that'll make yourfundraising process really,
really easy. But, again, it alldepends on you actually having a
a pretty compelling product. Sofocus on that first.

Ross Haleliuk (47:32):
So you were on the m and a and strategy team at
Microsoft from 2007 to 2014where you led several
acquisitions for the company.What did you learn on the buy
side of the business? And, also,how did this help you in
negotiating the acquisition dealas a CEO of several companies?

Jon Gelsey (47:50):
Oh, you know, the very first thing that I found
was a on the buy side thatsurprised me. You know, I came
there after I was a a VC, aninvestor with Intel Capital. You
know, it's just one of thebiggest VCs in the world. You
know, I did lots of deals. But,you know, by its nature, VC has
a lot of gut feel.
It's like, wow. You know? Theseare 2 guys with a dog out of
garage. They got a greatconcept, and they got the track

(48:12):
record, and it's a giant market.And, yeah, sure.
What the hell? Let's go for it.I was astounded how equally or
similarly emotional anacquisition process can be even
at a extremely well run corpdev, you know, organization like
Microsoft. It's like, hey. I'mthe vice president of x, and I
wanna go buy this because Iwanna expand, and it's a new

(48:35):
product line I wanna expandinto, or it'll it'll create a
new product line, and it's gonnabe amazing.
And I really wanna wanna dothis. And it's like, well, yeah,
but do we have any, like, actualevidence that our customers
really wanna buy this? It'slike, oh, you know, we're
absolutely confident that it is.I cannot guess that you have any
evidence. And so you have a lotof emotion that can go into that
buying process at an acquirer.

(48:56):
And so as a seller, that'simportant to understand is that,
you know, hey. Is there a realbusiness justification? The the
best kind of acquisitions for abig company are the ones where
I'm gonna buy you because Icould add you as a new feature
to this product that's alreadygenerating 1,000,000,000 of
dollars a year. And that newfeature is like a quick
checkbox. It's easy for us tosell, for the big company to

(49:18):
sell.
It doesn't take much explanationbecause it's, you know, it's
clearly a useful feature. Thoseare the the best ones because
you have the most compelling,the easiest to realize value for
that big company who is buyingyou, and therefore, the the deal
is gonna go through with theleast resistance. So that would
be a a start, I I would say, foradvice if you're you're getting

(49:38):
acquired and sort of things thatI learned.

Sid Trivedi (49:40):
Let's go to the last section in talking about
advising start ups. You've nowspent most of your time since
the sale to Apple the the XNORsale to Apple advising start ups
and serving on boards, and younow work with over a dozen
different teams. And what's theone advice that you keep finding

(50:01):
yourself sharing with each ofthese founders? Is there one
advice that keeps popping upagain and again?

Jon Gelsey (50:07):
I would say one of the things that early stage
startups, especially ones thatare starting to show some some
traction and generating someawareness in the market, is they
get acquisition reach outsfairly early on. And and, of
course, if I'm a CEO with no notransaction, no corp dev
experience, it's like, oh mygod. What's gonna happen? Hey. I

(50:27):
just got this reach out fromcompany x, you know, the
multibillion dollar company.
It's like, wow. How what shouldI do here? There's always a
process that a big company goesthrough in making an
acquisition, you know, whichincludes essentially a formal
formal committee meeting where,you know, all the stakeholders,
you know, could be you know,usually, it's the CEO.
Sometimes, it has to include theboard. If it's a really large

(50:48):
company, maybe it's just adivisional president or or SVP.
But there's a formal decisionmaking process of, yeah, this
concept makes sense. Go aheadand and engage. There are corp
dev people, inquirers, that willask you for a bunch of
information actually before theygo through the process. And, of
course, that's enormousdistraction for a start up,

(51:09):
which is, you know, to puttogether all these historical
financials and answer thesequestions or maybe even let's
share copies of contracts andsuch. And so I find over and
over again, you know, all of theCEOs, like, oh my god.
We had to reach outreach outand, you know, they're asking
for this, and, you know, this isamazing. And I say, wait. Wait.
Let's go back and askspecifically, have you gone

(51:30):
through the formal process? Andthey've said yes, you know, so
the CEO has agreed that this isworth looking at.
Or if not, well, what's theminimum? Hey. I I believe you. I
trust you that, you know, you'reseriously looking at us. What's
the minimum I can give you tosort of answer the question of
whether we're we're worthcontinuing to to look at?
In in fact, what I really wantand your your figure of merit as

(51:51):
a as a as a CEO is, you know,what price range would you
consider? And when they say, oh,you know, difficult, we need
this and we need that, it'slike, you guys are experts.
You've looked at the field. Youknow what the general range
would be based on the number ofemployees we have, or maybe I
told you my revenue projectionfor this year, next year,
something like that. Give me arange.

(52:11):
I'm not gonna hold you to it,you know, and just need to know
if this is gonna be worth mywhile. A lot of times, that
makes them go away. Iencountered I remember early on
a an offer, I don't know, in thefirst year and a half, 2 years
at Aussiero, you know, an offerof pretty substantial, pretty
robust 9 digit number. And I'mlike, this is great, and this is
clearly a board decision. And sois the board have you discussed

(52:32):
who's who's the board?
Is the board fully signed up?And he's like, well, that's
that's what you and I are gonnabe working on together. And I'm
like, no. No. No.
We're not. I don't have whywould I have credibility with
your board? You know? Go go talkto them and see if they wanna
talk have the conversationsbecause I don't wanna be sharing
all this information with youbecause it's an enormous
distraction from us building thethe company ever busy answering

(52:53):
your request. That's one thingthat I sort of surprised me is
how often those, you know,acquisition outreaches happen.
It's I I don't know. It's badfor on the hard part of the big
companies, in my opinion. Theyshouldn't ask unless they're
serious. So

Ross Haleliuk (53:05):
Many of the founders you work with come from
technical backgrounds andhaven't been CEOs before. What
advice do you share to help themon their journey?

Jon Gelsey (53:14):
I think, Sudha, the the first one is is that, don't
worry. Your instinct of how toreact to that is to x. Whatever
x is is probably pretty good.You know? Don't second guess
yourself, or don't do thingsbecause people tell you or you
believe this is the the way todo things.
Think about the situation, andthen sort of think think about

(53:35):
what you think is a sort of areasonable response. Again, you
can test that. And in fact, alot of the work I do with CEOs
is they'll say, Hey, you know,I'm thinking about this, and I
think this is the right way, butI'm not really sure. And so I
was like, Here, let me frame itup. Your way is actually a great
way.
There's, like, these two otherapproaches. Here's the pros and
cons of of all 3. I'm giving youadditional information or

(53:56):
additional food for thought foryou to make your your eventual
call, but your instincts areright. You know, I kind of agree
with you that option 1 wasprobably the best, but don't
forget there's always option 2or 3 if you wanna consider it.
So that would be 1, is sort ofdon't second guess yourself for
for CEOs.
The second thing I that'simportant, especially for deeply
technical CEOs or some CEOs, isdon't confuse your technical

(54:19):
wizardry with market excitement.You want as early as possible to
try and figure out some way ofdetermining whether the product
that you've built so far orcontemplating of building is
actually gonna resonate in themarket, and somebody's gonna pay
you a dollar for it. Okay? Sohow will you do that? Is there
an MVP that's, yes, from yourperspective, it's a piece of

(54:41):
crap because it's really 10% ofwhat you really want to do.
Can you get somebody to pay youfor that or make some other form
of sort of proxy to revenue of,you know, design partner or an
LOI or this, you know, somethingthat really convinces you the
right path. Because I've seen alot of developers who go down a
long way down a path, you know,and say, look at this amazing

(55:02):
thing, and nobody wants itbecause it turns out to be, I
don't know, like, massivelydifficult to install properly
or, you know, it's got a bunchof confusing features that for
for the giant company thefounders worked out made lot of
sense. It makes no sense to sortof their initial, you know, mid
market, you know, 10 to 300person companies, things like

(55:22):
that.

Sid Trivedi (55:23):
So Very last question to end the podcast.
What's next for John Gelsey? Areyou gonna continue the advisory
path that you're doing, or arewe gonna expect to see John back
in the CEO seat again?

Jon Gelsey (55:34):
Oh, the the problem with that question as, as Yogi
Berra, you know, it's reallyhard to make predictions,
especially about the future. Youknow, I'm enjoying what I'm
doing now with being an adviser,sitting on on boards, working
with VCs in, you know, a formaland informal capacity because I
get to see a lot of things, andit kind of it's emotionally
satisfying to or it gets to seea lot of things, which satisfies

(55:57):
my as an engineer, it's like,wow. Look at this cool thing
that this person's you know,this company is doing and how
they're doing it and wow. Andit's always fun to work with
smart people. The, you know,that that being said, it's, I
guess, I wouldn't fully rule outanother CEO role, but I'm not
really sure that that's wouldmake the most sense, you know,
especially because the sort ofthe emotional satisfaction I
get, again, for the learning,but also sort of from the paying

(56:19):
it forward, helping helping CEOswork through friction points
that I had to essentially workthrough on my own as a as a
first time CEO, you know, helpthem get through those through
those friction points a lot moremore quickly and hopefully in a
way that preserves more valuefor themselves and for the
company over the long run.
So so we'll we'll see. But,right now, I'm pretty happy with
the with not being a a CEO.

Sid Trivedi (56:41):
Well, thank you so much, John, for joining us on
Inside the Network, and andthank you for all those years of
spending time with me personallyas you look through two rounds
of companies as well as theseveral boards that that we've
been involved in both on anadvisory and a formal capacity
at your case.

Jon Gelsey (56:58):
Oh, you're welcome. Thanks, Ian, for inviting me.

Sid Trivedi (57:01):
Thank you for joining us Inside the Network.

Ross Haleliuk (57:04):
If you like this episode, please leave us a
review and share it with others.

Mahendra Ramsinghani (57:09):
If you really, really liked it and you
have some feedback for us, wrapit on a bottle of Yamazaki and
send it to me first.

Sid Trivedi (57:19):
No. Don't do that. Mahendra gets too many gifts
already. Please reach out byemail or LinkedIn.