Omar Tawakol is a serial entrepreneur whose latest company, Voicea, was acquired by Cisco in 2019. On today’s episode, Jon Sakoda speaks with Omar Tawakol about his journey to becoming a three-time founder and his advice to new founders caught up in the noise of the industry.
Omar Tawakol is a serial entrepreneur whose latest company, Voicea, was acquired by Cisco in 2019. On today’s episode, Jon Sakoda speaks with Omar Tawakol about his journey to becoming a three-time founder and his advice to new founders caught up in the noise of the industry.
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OMAR TAWAKOL: Don't be distracted today by all this talk about, you know, unicorns, size of rounds, and stuff like that. Like, it's noise. Focus on the customer, the depth of your knowledge of the customer, the depth of the problem you're going to solve, the health of your team. Everything else follows those things.
JON SAKODA: Welcome to the Decibel podcast, the show where we bring founders together to talk about the personal journeys, the highs and lows, and the lessons learned along the way. I am so excited to welcome my friend, Omar Tawakol, to the show.
OMAR TAWAKOL: Hey, thanks for having me.
JON SAKODA: I know that you are too humble to tell your whole story, but let me summarize some of the highlights.
Most recently, Omar was the founder and CEO of Voicea, a company that was recently acquired by Cisco. Prior to that, Omar was the founder and CEO of BlueKai, a company that was successfully acquired by Oracle. And Omar has actually been a serial entrepreneur. This is his third successful exit. So, if you don't mind, if we could start at the very beginning and talk about where you grew up, and eventually what led you to become an entrepreneur.
OMAR: Awesome. Yeah, thanks. I was born in Egypt. And what was interesting is that I left when I was 21 days old and came to the States. And then when I hit middle school, my parents took me back to Egypt. And when I went back to Egypt—not just for high school, but after I went to MIT, I did one year back in Egypt—and kind of the pressures that you got in that world were, “Hey, we're here in Egypt. If you have any wealth, it's all about selling things other people do. You guys aren't original creators. Like, we’ll create products in other areas, and you guys are going to just like, sell them, and you're gonna make a lot of money by selling them into that market.”
And you couldn't have rubbed me the wrong way more than that. It was like putting a red cape in front of a bull. And I'm like, uh, no. Original creation is how people produce value. And what is our value we need to bring to the world? And that was like my internal driver of wanting to create things and create value and share that with people. And I think that's one of the biggest drivers for an entrepreneur. So, I think that's kind of what got me excited.
JON SAKODA: And maybe just to connect some of the dots, where do you think that creative drive came from? Was that innate? Do you think that entrepreneurs are somehow deep inside artists and they just have this fundamental genetic need to create?
OMAR: I honestly can't help myself. I love the creativity that comes in business model creating, not just the product, and then the product creation process. I get drawn to it like a magnet. I remember, you know, an entrepreneur once came to me and was like, “I'm thinking of starting a company. I'm not sure.” And they were talking about all this, you know, potential hesitation. I'm like, dude, When you’re ready—when I saw my wife when she was ready to have the baby out, you know, and we had to go to the hospital ‘cause the water broke, there was no power in the world that was gonna tell her no, no, no, stay home. That's how it feels to me when it's time to create something.
Where did that come from? I don't know. My mom was an artist. My dad was a builder. And I probably, in addition to that nurture, probably just had nature in me. Now, I'm not as creative as the most creative artists. Like, they have a different type of creativity. But my creativity applies itself to like ,product market journeys.
JON SAKODA: Yeah. What eventually led you over here to the US?
OMAR TAWAKOL: College, both times. Well, first, my parents came here, and then when we went back to Egypt, I just wanted to go to the best college. I remember my father came to me in ninth grade. When people in my school didn't go to the best colleges in the States, it was hard to do. And he came to me and said, “If you get into MIT or Harvard, I'll pay your way.”
And I remember at that same time, I was like, ninth grade, I talked to some of my friends. And their dads were talking to them about whether they had girlfriends. You know, they were motivating them with things like that. And for me, it was my dad just wanted me to excel. So I'm lucky that I had a dad like that, ‘cause that's not the case for everybody.
And so, I got in, and then eventually went to grad school.
JON SAKODA: So, you are out here in Silicon Valley. You're a great student. You've gone to MIT, you've gone to Stanford. And it's the late ‘90s. Tell us about your first company.
OMAR TAWAKOL: Yeah. So, my first company, basically, we built a recommendation engine. And my co-founder is actually with me today on what became my third startup, and now at Cisco. And even internal to Cisco, we're doing something that's kind of like an internal startup, and he's with me on that journey.
JON: May I call this the fourth startup?
OMAR: Well, the fourth one internal, yeah. And his name is Basem Nayfeh. He was a PhD and great computer scientist, a great partner. But we started a recommendation engine, and I think it was 1999, we got Nordstrom as a customer. Barnes & Noble was our first customer.
JON SAKODA: This company was called CoRelation, right?
OMAR TAWAKOL: Yeah. We basically did recommendation engines for people other than Amazon. And in retrospect, that actually, I think it was a better business than I would have thought. The business model was just hard. Getting retailers to pay for core tech at that time was hard because the crash of 2001 came when the bubble burst. And that was a hard time. And about at that time we ran into a very well-funded startup that was doing crazy growth. They acquired us. And I think that was my first mistake, in retrospect, which is getting acquired by a company that wasn't public. [laughter]
JON SAKODA: No, I don't think SPACs had been invented, or if they had been invented, they had not gone mainstream yet.
OMAR: Nope.
JON: So, I know you had fewer options back then.
OMAR TAWAKOL: That’s right. But the technology was great, and it continued for many, many years after that.
JON SAKODA: And now, there was some time before you guys started BlueKai. But then what inspired you to start BlueKai? And tell me a little bit about that story. What was the founding story?
OMAR TAWAKOL: Yeah. BlueKai was a blessed experience, through its six years to acquisition. Just something about it was right. So, I'll start with a story what was different between the first time we did CoRelation was, CoRelation, I had—was just out of school. I didn't understand the retail space well. And I violated what would later become one of my rules, which is that if you're doing a B2B, you need to be an expert in that category and really know it well. And I wasn't. And so, at the time, it was hard to find funding, when it was easy for other people. Like, I found funding, but I had to struggle harder than you would expect at a time when, you know, money was dropping out of trees.
JON SAKODA: Tell me more about that. Is this 30 meetings? Is this a hundred meetings? How hard was it to raise money?
OMAR TAWAKOL: Yeah, probably 30 meetings. And I raised some money at an okay valuation. But what was interesting was when I did BlueKai, I remember raising around, in 2008, when you're walking to VCs, and all you see is charts of the stock market—red, down, panic.
JON SAKODA: Ah, that's right. This is like, October 2008 when Lehman Brothers is going bankrupt and Bear Stearns is going bankrupt, right? This is a famous time.
OMAR TAWAKOL: Yep. We did our round in two weeks, multiple offers.
JON SAKODA: Wow. So, what was the difference there? So, you had the go-go years and you had trouble raising money, and then you had the worst of times, and you've had no problems raising money. So, what, what was the formula there?
OMAR TAWAKOL: Deep expertise in the category. By then, I had been in the category for a long time, and I knew the buyers. I knew the CEOs. I knew the CEOs of my competitors. I knew both the buy side and the sell side in ad tech. They knew me, and some of the VCs had tried to recruit me to run companies for them.
So, by then, everything, you know, just was a lot easier for me, based on that deep knowledge of the buyer, the producer, the ecosystem, the investors. And they would talk to you because they wanted to understand the way the market was going. And what started off BlueKai is a really interesting insight. First of all, BlueKai came from—I read a book called Blue Ocean Strategies, and “kai” is ocean in Hawaiian.
And the inside behind Blue Ocean Strategies was, you want a market that doesn't have blood and sharks in it, which is a red ocean. And the example was like Southwest. When they came in, they didn't see themselves as competing with airlines. They saw themselves competing with buses. And they created a completely new market.
JON SAKODA: That’s right. That's right.
OMAR TAWAKOL: And the same thing was for BlueKai, which is, I was in the ad ecosystem, and I had this insight that we were going to move from contextual advertising to data-driven advertising. So, rather than look at the words on the page, look at what you know about the person. And that was insight number one, but that wasn't unique. Other people had that insight at the time. I was just more bullish on it. What was unique is I decided to build a company that would never in its life serve an ad—that it would instead provide the data and data platforms for everybody in the ecosystem. And the reason I believe that is I didn't think I could be number one in the ad ecosystem.
I didn't think I'd beat Google, Facebook, Yahoo, all those people. And why build a company to be number four?
JON SAKODA: That's right.
OMAR TAWAKOL: Maybe. And so, what I said is, what if I could become number one in data to the ecosystem? And I stuck to that knitting from the beginning and that just worked magic.
JON SAKODA: Yeah. And before we get back to that part of the story, if you don't mind, because I know that there was a successful exit, can we fast-forward for a second and talk about Voicea? So ,when did you decide to start Voicea, and what was the founding story there?
OMAR TAWAKOL: Yeah. So, when I was at Oracle, after they acquired BlueKai, I had such a great opportunity to sit with all these leaders, CEOs. So, I of course had the privilege to meet with Larry Ellison. I had met with Satya Nadella—a bunch of CEOs like that in person in meetings. And I started to kind of catalog what set them apart in my mind, in terms of productive behaviors. And for a few years, just started to play around with ideas. And I did interviews, and a bunch of them solidified these ideas, how to make people more productive in meetings.
And that's when we honed in on the idea of building an assistant that would help executives be more productive in meetings, because if you also noticed, some of these executives that I mentioned, they've got lots of handlers, right? Lots of people who help them, you know, take notes and action items and follow up, and so on. So, we wanted to bring some of those capabilities to help people become way productive in the time they spent in meetings. And the area we decided to attack to do this was looking at conversational intelligence, which is an area that was kind of quite open. Nobody had a system of record for meetings.
Could you be the voice intelligence that would go in there and help transcribe, and create caption items, and extract actions to put into Salesforce, to put into your to-do tracking system or your calendar?
JON SAKODA: So, the third time you went out to raise money, easier or harder? Super easy? People writing you blank checks? Demystify that process for us.
OMAR TAWAKOL: Super fast. By then, I had exits underneath, kind of in my history. And in addition to that, I had some co-founders that were great. So, Ahmed, who was at Facebook at the time, you know, had worked with Yann LeCun. He had been at Google. He was one of my co-founders, and we were building an AI company. I had built SaaS companies before, and we had a SaaS model. David had been with me across multiple journeys and ran product and is a great guy. So, we just had a great team in a hot market. And we started a pitch on Wednesday and had our first term sheet on Friday.
JON SAKODA: Wow. So, I think the lesson learned for founders that are out there, just get to the third company. [laughter]
So, if we look back, I mean, you are the founder of three different companies. Is there a formula now for building a successful startup? You've talked about domain expertise. You've talked about hiring in technical experts. But now do you think that there's a recipe or a formula for building a successful startup?
OMAR TAWAKOL: I would say there's three things that I would drive, and I'll touch on a fourth also. But the first one is knowledge of the buyer, the buyers and producers and decision makers in your domain. Has to be very, very deep. Starting a company with the sentence ,“Wouldn't it be good if”, to me, scares the hell out of me. It's like, eh, you need a lot of depth in the category before you make a statement on that. Because from the outside, it's so easy to come up with these “what ifs” that are just not reality in that domain. And sometimes for good reason. So, knowledge of the domain of the buyers in particular, is number one, unless you're doing a new B2C category where you can self-introspect, and that's okay, right? And create a new domain. I have no objection to that. But if it's a B2B, you need to know the domain.
The second one is having enough passion for the category so you can go the full distance even after you iterate your product, your business model, the way your team works. You iterate so much that it doesn't look like what you started with. If that's the case, the only thing that’s gonna keep you going is the love and passion for that domain, and energy so that you can do number three. And number three is all about the ability to attract and maintain a fantastic team—that your success won't be about you. It'll be about how far that team goes and what that team evolves into. And so, if you do those three things, nail your domain, have the passion of love to be able to iterate and have the curiosity to find a solution, and number three, get that awesome team humming, you will likely find success somewhere.
Now, the fourth would really be about product market fit, but let's get to that as a separate thing, because that's its own universe.
JON SAKODA: Before we get there, because I think that there's something to demystify here. There are these counterfactuals, right? People who start these companies that are outside of their domain. And because they're outsiders, they, you know, they're able to bring different insights or different perspectives to a space or a field. And I imagine that this time it's different. So, do you see these as contradictory ways of looking at building startups? And what advice do you give to founders that are out there that are starting their companies today?
OMAR TAWAKOL: Yeah. I mean, there are the counterfactuals, I'll talk about two types of it. Number one, when I first came to Cisco, Amy Chang, who was my boss, awesome leader, just really knew how to motivate people, got me to do something that was totally something I would never do, which is run the contact center business. I didn't come from the contact center. It's not something I understood. And I always thought you should get leaders who understood the domain.
JON SAKODA: And contact center, just for people that are out there, this is the—these are like, when you call Delta Airlines, it's the people that are picking up the phone, or responding to emails, or responding to tweets. That's what you mean by contact center.
OMAR TAWAKOL: Correct. We produce the software that in the United States is the most used software for those large businesses that answer the phone, that does the routing of the call and all that kind of stuff. So, she asked me to run that business. And I was like, “But I'm not an insider, and you need an insider.”
She goes, “No, I need a disruptor, because I need someone who's going to completely change what we do. We need to go to the cloud, and it's very different, cloud contact centers from on premise.” And, you know, here we are 18 months later, and our cloud businesses is growing triple-digit. We rolled out a completely new platform. And so, there's something right in her thinking there about getting a disruptor.
JON SAKODA: And you've been a true change agent, not just in the way in which you build the software, but also in the culture and the way in which people have come in to think about building products in the cloud.
OMAR TAWAKOL: Yeah, and that may be the case, but I really fundamentally believe that the only reason I was able to do that is I identified a few leaders in the category who were experts on my team and who really kept me from doing stupid stuff, which I could have easily done, given my newness to the category.
The general stuff about how to go to cloud and build product and discover and all of that, I knew, but they provided the guardrails. So, there are counterfactuals, but I just got lucky. If I didn't have those three really strong in domain experts there to keep us pointed in the right direction, I could have made some serious mistakes.
JON SAKODA: Yeah. I mean, I think what may be one universal thing that we can all agree on because we see this from all different dimensions, there just are no shortcuts. So if you're not coming from the domain, it just makes it that much harder for you to do the other things that you mentioned, right? To bring passion and endurance and a certain persistence and resilience, and to hire the absolute best people who probably do know the domain.
So, I think if you're willing to tiptoe into a space as a founder, you’d better be sure that you're committed to the passion and the resiliency and the team-building that's required to sustain yourself, because there are others in the domain who are going to bring all that and more.
OMAR TAWAKOL: Yeah, actually, I think you hit upon something that, rather than being counterfactual, is just this orthogonal vector, which is, you need fresh perspective constantly to challenge all the old assumptions that a domain is built on that are maybe no longer relevant. And that's what an outsider has. But the way you make up for that is if you have a character that continually challenges the status quo.
So, I think you hit on another ingredient, which is, regardless, needed, which is not being fooled by the way things were done in a domain.
JON SAKODA: I always like to say the four most important and the four most dangerous words in every startup are, “This time, it’s different.” [laughter] Yep. “This time, it's different.” I actually do feel that sometimes we are just reliving a movie, and sometimes in a startup, we run an experiment and it fails, and a year later we say, should we try and run that experiment again? And half the company says, “No, let's not run that experiment because it failed the last time we did it.” And the other half the company wasn't there for that experiment. And so, they obviously want to try it, because this time, it's different. [laughter] And both are, in fact, correct.
OMAR TAWAKOL: I agree with you. Yeah. If you're cognizant about something and the conditions that changed, or something about the experience changes, it could be worth it. And blocking those doors just because it didn't work last time, it's not good, but you're right, it has to be for the right reason.
JON SAKODA: So, you are somewhat of a student and now an expert in finding product market fit. And I know that this is hard, it's elusive. It requires tons of trial and error. It sometimes feels like it's black magic or even luck. So, what advice do you give to founders about iterating and finding product market fit at the very earliest stage?
OMAR TAWAKOL: Yeah. I think there are some keys to it. And I'll talk about what I think are my five keys for doing it. But before I do that, I want to say that product market fit, to me, is more about surfing than it is about sculpting, right? So, I've used this analogy before, but sculptors basically see a big block of stone, and in their mind’s eye, see the beauty that will come out of that, and they just work on etching it out. And surfers basically have this completely different mentality, which is, we don't create waves. We identify the right wave, the right timing, and the right style of riding that wave. And I believe product market fit is fundamentally about surfing, otherwise it would just be called product. And so, how do you get those five elements of getting the right fit?
So, the first one, you already kind of alluded to, which is, iterate early and often, and understand that the truth about product market fit lies outside of the building, outside of your company, right? It’s not about the hypothesis that you make that will magically be right. It's about understanding that you have to continually discover, and that you need a ton of data and metrics—metrics about performance and usage and repeat usage and voice of customer, and then video capture about how people traverse through your product and how they react, and all sorts of data.
Number two, though, is you really need a strong hypothesis about the buyer, about the buyer’s need, about the buyer’s context. And to do this, you're going to need insight that you can't just straight depend on the data. You need insight on top of that data so you can understand the nuances. So, what I mean by that is, sometimes your data averages out things about your customers, and your customers, they're not a monolith. You have to go deeper in understanding them. So, sometimes, you might have a segment of customer that's actually a diminishing segment. And by trying to just focus on that, you're ignoring some growing, thriving, underserved other set of customers. Or what if you start chasing one customer base, and they're not representative of the really big next wave of customers that are coming in some sort of adoption curve?
And it's easy to get lost in the fog of that, because you've looked at how data averages out across customers, and you can’t have such a simplified notion. You've got to be able to look at your customers, you know, almost get to the point where you can name them and understand the differences between how they behave. So, don't let the just robotic averaging out of lots of data tell you the wrong thing.
JON SAKODA: I think these two things, just to be clear, are some of the great challenges that people have, right? In some ways, people really need to see a lot of data to have conviction. On the other hand, there’s that famous expression from Henry Ford, right? “If I'd asked people what they wanted, they would've said faster horses.” And I think a lot of people will point to Steve Jobs as an example of somebody who just was able to imagine what people would want, as opposed to serving five million people and asking them if they wanted a phone that had a nice browser on it.
OMAR TAWAKOL: Yeah, absolutely. And there was a great story about Steve Jobs I just read from Adam Grant's Think Again. And it was, when they were thinking about doing the iPhone, a team came to him and said, “Hey, we want to do an iPhone. And we're going to sell it through carriers.” And he responded and said, “That's the stupidest effing idea I’ve ever heard, right?” And originally, he hated the idea. But this team, with conviction, came back, and basically, they first identified, “Okay, what are your objections, Steve?” And he talked about, “I hate selling through carriers” and all these things. And they said, “Okay, great. We'll come back to you.” Now that they understood his objections, they came back with a plan and with lots of data, what was broken, what would be fixed, and so on. So, I think even Steve's myth has some nuance to it.
JON SAKODA: That’s right. And I also think, you and I probably remember this, the iPhone initially was the iPod, right?
OMAR TAWAKOL: Yes.
JON SAKODA: I mean, it was a great music player first. And it was—the killer app, initially, of the iPhone was actually music.
OMAR TAWAKOL: Yep. Yeah, yeah. Totally. Totally with you there. That's right.
So, the third one after getting the strong hypothesis and nuances about the customers would be something that I find hard to get right, honestly. And that is, you start creating a surface area in your product, and you start to get these hypotheses about other surface areas, or features, or feature areas that are really, really needed in order to get it.
And I often find that people have this temptation to move to add surface area before they add enough polish on the existing surface area. It's so tempting to do that. And I'm starting to believe that you have to painfully kind of withhold that temptation, and get beauty and simplicity more than abundance. And not only that—it's so easy to add another surface area, but it's really hard to subtract things.
So, you need to explicitly fight bloat. If something is wrong, in terms of, you just did a surface area that takes up all focus in your product, and in the end, you're going to try to build another one that's completely unrelated, and you don't find the first area was really the right one, you need to find a way to subtract so that you can fight bloat. And I find subtracting to be very hard.
JON SAKODA: I think there’s a few insights in here that are universal. So, one is using, say, a military analogy, I think every startup has to initially take a beachhead. And I do think a lot of founders move off the beachhead, right? They try to conquer all of Europe without actually really establishing themselves in any one particular beachhead. And I definitely think that that's something that a lot of founders struggle with.
Also, I think it is perhaps counterintuitive to a lot of people who are building a startup, but sometimes less is more, right? It allows you to go faster and have more simplicity for your users, and kind of cut through the noise in a market. It also allows your engineering team to execute more quickly. And so, I think sometimes people forget that in the beginning, the key is to go fast. And the only way to do that is by having laser focus.
OMAR TAWAKOL: Absolutely. Yeah. So, that's a great way to summarize it.
The fourth area for me is nailing the distinction between a horizontal, a functional, and a vertical. So, horizontal, something like Zoom or WebEx meetings, those are used by everybody. A functional, which a lot of people ignore, is like, just focusing on sales as a buyer or marketing as a buyer, which is different than a vertical, which is something like the healthcare industry.
And then, even if you decide on a functional or a horizontal, you probably need to nail a use case. So, if you look at WebEx in its really early days before it got acquired from Cisco, they recognized that if they went to salespeople—
JON SAKODA: That’s right. Sales presentations,
OMAR TAWAKOL: Sales presentations was the thing. And eventually, meetings became this horizontal, but it started out with a use case to a specific buyer that they nailed.
JON SAKODA: That’s right. That’s right. Slide sharing. Slide sharing.
OMAR TAWAKOL: Exactly. Slide sharing. So, I think even if you're doing a horizontal, being able to have the discipline to end-to-end to make a use case awesome is really important. And don't use the excuse that you're just doing a horizontal; or the opposite, which is, maybe you shouldn't be doing a use case. Maybe really what you should be doing is functional, and you just nail everything around that use case for that set of users. And don't try to get to another set of users. There is no right answer here. But the only wrong answer is a lack of clarity on what you're actually doing—
JON SAKODA: That’s right. That’s right.
OMAR TAWAKOL: … because I think people slide between these a little too easily.
JON SAKODA: I think we classically used to call this the ideal customer profile. I think now with more product led adoption, and we talk about user journeys or the narrative of the user. I think sometimes we don't finish the job of really being empathetic to our user, which is not caring about them because we want them to feel good about themselves, but it's caring about them because we understand what their job is and what they're trying to do every day.
OMAR TAWAKOL: Right. Absolutely. And then the last of the five for product market fit would be build growth and virality into the product. It's not a separate function in some senses. It has to be in the experience itself. So, if you look at something like LinkedIn, they wrote the address book. And they had this tension that was constant between needing to ride the virality of the address book and not being too noisy to the user. Or Calendly—loved their kind of product-led growth approach to everything they do, and Calendly rode the calendar.
And what's really nice about some of these things is you want to ride these vehicles before it's obvious to everybody else that they’re vehicles to ride. Or another one, which may be not a huge success now, but in the beginning, its growth was fantastic, is Bird and Lime, which you would walk down a city street and you would see it there. It's just part of the environment. And you would ride it and then leave it somewhere else so the next set of people would see it. So, building virality into the product experience itself is part of product design. It is not only a marketing function. Getting that right is hard and interesting, and a lot has been written. I love reading stuff from Andrew Chen about this category. But it's not an afterthought.
JON SAKODA: Well, to build on this, I mean, these are five really important words of wisdom. But if I was to take your three startups and the multiple decades of entrepreneurship, and ask you to look back, what advice do you have for founders today? And then maybe similarly, are there any lessons to your younger self?
OMAR TAWAKOL: Yeah. So, first one for founders, don't be distracted today by all this talk about, you know, unicorns, size of rounds, and stuff like that. Like, it's noise. Focus on the customer, the depth of your knowledge of the customer, the depth of the problem you're gonna solve, the health of your team. Everything else follows those things. And don't be distracted by the white lights and how fast you're going to get to marry up with a SPAC or an IPO, or—all that stuff is secondary. So, nothing else matters. And if you are in a domain that you're going to change, and you don't have experts in that domain with you, or you yourself are not an expert, you are missing something serious.
So, I can't tell you how many founders come to me, and they describe an area, and I'm like, “Oh, do you have someone for that category?” “Um, no? We're thinking of hiring a salesperson.” Not just that. Deep, deep depth.
JON SAKODA: Right, right, right.
OMAR TAWAKOL: And if I had to give advice to my younger self, I guess it would be, everything's going to turn out okay. Don't be so busy with succeeding with startups and your career that you have less energy and bandwidth to give to others. The only thing that I actually saved from when I was younger for my future is what I gave to others. If I had known that back then, that would have been useful. And that applies to your time as well as your wealth.
JON SAKODA: Can I ask a question? Because I know that many people might say, “Well, that's easy for you to say because you've had all this success.” And obviously, not every founder has had as much success as you have had. So, is it true today that you can go back to the version of you that is in your late twenties and really, I guess, convince yourself that it's all going to be okay? Because I can't think of a more stressful job than being a founder. And I can't think of a lower hole to sit in than a founder who's not successful, right? Somebody who's tried and failed. And many people fail once or twice before actually having a great success. So, is it just that you've been successful, or do we all feel over time that everything’s just gonna work out?
OMAR TAWAKOL: Yeah. I think that’s just people, as they age, figure out how to be less stressed. That’s, I think, universal. I think if you could have it when you're younger, it'll give you more of your bandwidth in terms of your energy to help others. And that does nothing but help you. That's the part where I think the mental model that I got trained in, both in, going to the universities I went to, working with execs that I got to work with early on was kind of like just watching 300 on loop—you know, the movie 300? That hard-charging—
JON SAKODA: Of course. Of course. Who doesn't admit, who doesn't admit, who doesn't admit to loving 300?
OMAR TAWAKOL: So, it's like that hard-charging view of the world obviously has some benefits. I mean—
JON SAKODA: I also still play “Lose Yourself” by Eminem on my phone every morning. I don't know about you, but. [laughter] We all gotta find a way to get out of bed and take the mountain, right?
OMAR TAWAKOL: Yeah, totally. But the time and bandwidth for others makes you better everything. So that's just the one thing that I would tell myself.
JON SAKODA: Yeah. I'm glad we're talking about this because I do think that fear is just a part of everyone's life, and fear is unquestionably a part of being a founder. But I do think over time, the more you understand that the fear is out there for everybody, the more you become fearless. and the more you become fearless, the more ambition you have, the more risk you can take, the more you remove some of that friction of getting in your own way out of your startup. I think in some ways, founders feel like that fear is what gets in the way.
OMAR TAWAKOL: Yes. Yeah.
JON SAKODA: And they do everything they can do to remove it. Because there's certainly no benefit from obsessing about the fear. Amy Chang, who you mentioned before, actually, when I did a founder interview with her, mentioned about how one of her greatest coaching skills for founders is to tell them to lean into the fear. So, to embrace it and to recognize that it's there. And then leaning into it, it is a great visual way to ensure that it's not getting in your way, right? That somehow, you're able to just use it to your advantage.
OMAR TAWAKOL: By the way, that is great advice. I remember, it might've been my older brother who taught me this one. When I was a kid, whenever I was scared that there was something lurking out my window or something in the closet, he would just say, “Go open the closet or open the window.” And that's actually what I would do. And so, that kind of lean into it? Fantastic advice.
JON SAKODA: So, we've talked about some of the lessons learned and some of the wisdom that you have, but do you feel like there are some things that you have to unlearn or some things that become calcified that you have to, in some ways, remove from your life in order to keep succeeding as a founder?
OMAR TAWAKOL: Yeah, I do think that is one of the most important skills that you start getting in your forties and beyond is constant unlearning, because there's so many things that served you well that won't serve you well. I'll give you a couple examples. So, one, early in my career, I had to learn that you never win a debate. You enter a room full of execs with some great ideas. And I remember at one point, somebody called me the avalanche of reason, only later to discover that it actually wasn't a compliment. And so, what I had to learn over the years, and I think I did actually learn this, was instead of winning a live debate and later having people leave feeling like they lost a debate, talk to them offline. You'll learn something from them. They'll learn something from you. You'll arrive at something.
JON SAKODA: If I could just add onto that for one second. I remember a great mentor of mine said, “Look, being right in the board meeting may feel good, but it's not always helpful. The important thing is to get the effect that you want from a company or from a team. And sometimes showing everybody that you're right is not going to get that effect.”
OMAR TAWAKOL: That’s a great way to look at it. The second one really was—of course, kind of had to do in the time that I went to college and the time I started early startups. And it was, there's so much written about great leaders and CEOs, and the myth of the hero CEO and what that does. And it kind of warps people's understanding of what really drives entrepreneurial success. And it drives a self-centered fame-seeking kind of way of thinking. And there's so much in society that drives all of that limelight and reward, and not enough that basically gives you a deeper understanding of, hey, maybe CEOs don't have to be paid that much differently than the folks in their company. Maybe sharing the limelight with a lot of people—yeah, okay, they say you want one person who only goes and shows up in the news repeatedly. But maybe sharing the limelight is a good thing and helping your team.
And if you actually look at many companies, many of the people who are three levels down in that company are going to become future CEOs better than the current CEO. And if you understood that everywhere you work, then basically say, maybe my job is to accelerate the emergence of that great leader, and it isn’t about you. That way of thinking really needs to be actively fostered, because everything in the ecosystem is going to give you compliments on how great you did with your team. And so much of that, that noise will delude you.
JON SAKODA: Can I ask, because I feel like in the last 20 years or so that you and I have been founders or working with founders, it does feel like our economy went from being more about sort of sharing credit and being part of the team, to being one that is definitely more influencer or star-studded.
OMAR TAWAKOL: It's a really good question that you ask. So, I'll tell you what I've done differently with my LinkedIn. Because I do believe you should foster a lot of content in social, and that you should grow your following, absolutely. It's so useful. Who the heck wants to depend on PR? Use your own influence. I'm all about that.
So, how did I change? I think a couple of years ago, I started saying, hey, if I could do more posts that are attractive to people that aren't pictures of me. It's not about Omar. It's about the content, or the team, or the product, or the ecosystem. And if that ends up building a followership, that's great. But if you can kind of train yourself to tone down. And I see a lot of rookie CEOs do this. And actually, it might even work. But I don't think it works for them, building a better person. So, if you can avoid that a little bit by getting more about the message or less about the limelight, I think it’ll be good. But you don't want to ignore building a followership or influence, because that's super useful.
JON SAKODA: Two last questions. So, you're one of the few founders who's been acquired successfully three times, and I know that there are some founders out there that likely will go through an acquisition. Do you have any insights about how to survive and thrive post- acquisitions?
OMAR TAWAKOL: Yeah, great question. This is really, really important because people think their job is done once they get acquired. I've acquired many, many companies. So, let's flip it from the perspective of the acquirer. You're paying people a boatload of money because you want to do something better together. It's not for them to hand over the keys and walk off. And so, I think it's very important that you realize there is no rest invest option. There's only two options that are honorable. You negotiate for you not to be there, or you are there and you are truly there to help your acquirer succeed. And you kind of have to know that you're going to be in a bigger company that's not going to move with the same speed of decision-making when you were the only decision-maker.
And you have to be okay with that and find the other aspects of that group that you can utilize. Maybe it's more distribution utilized for your advantage and for you to have fun with. And it's not always going to be peachy. But it's not honorable, in my opinion, to take the money with all these smiles at the time before the deal, and after it, start complaining about why big companies are X, Y, or Z, right? Everyone's going to have to complain a little. I get that. But really put your heart into making that second part succeed.
I can say, like when Oracle acquired us at BlueKai, we actually—we went through our struggles. But we had another aspect of our journey. And we went out and we acquired a bunch of companies. And we grew from, I think at the time of acquisition, we were just shy of $100 million in gross revenue. And just the data part of our business grew over two years, two-and-a-half years, to about $500 million. And that's because we kept growing and acquiring. So, there is a life after acquisition. Don't give in to the complaints of somebody who's decided to rest invest. That is not a great option.
JON SAKODA: I just want to wrap up with one last question. So, I know that you're in a phase in your career now where you do love to give back to the community. What are some of the ways that you're doing that, either in the entrepreneurial world or in your physical community? Tell us about what you're doing now.
OMAR TAWAKOL: Yeah, I think two main ways, time and money. So, on the time side, I find that I'm better off focusing on helping entrepreneurs, or even if somebody is starting something that's charitable, it's advice as a person who starts and grows things, and then money for charities. And I don't mix the two. Other people do. Meaning, I find that some charities will come to me, and they'll want my time. At least, that's what they'll state. Really, they just benefit more from my money, and they know what they're doing a hundred times better than me. And it usually gets phrased in some way, “We want your expertise,” and they're much better off with your check. [laughter] Whereas your expertise, it's probably better served for those where you actually have expertise. And that, I enjoy.
JON SAKODA: That’s right.
OMAR TAWAKOL: And that's a really good way to give back. Sometimes people think that, well, it has to only be giving back directly to a cause which is not financial. And I’m not there. I think helping people is useful either way.
JON SAKODA: Okay, I did lie. I have one last question. Is there a fourth and maybe even a fifth startup in your future?
OMAR TAWAKOL: Oh, yeah, I think so. I keep a list of four or five awesome ideas. And the only open question to me is whether I can help several teams go do those things and be a force behind them, or am I going to be in a single battle all alone? I haven't decided that yet. But I do have specific ideas and see lots of people that I think would be great for it. I just—I'm not ready yet. I still have some really big missions here that I'm accomplishing at Cisco and having fun, doing it.
JON SAKODA: Awesome. Well, Omar, you've been a great friend to us. You've been a great friend to so many founders. You are an inspiration to many founders, and I'm really excited to have you on our podcast.
OMAR TAWAKOL: Hey, it’s always great to talk to you, Jon, and you guys are doing great things here at Decibel. Thanks for having me.