Sramana: Did you decide to go into the media industry, or did you decide to go somewhere else?
Amy Pressman: Unfortunately, coming out of business school in Europe I found that the only jobs that would pay the student loans were in investment banking and consulting. I did that for three years in Norway.
Sramana: Why did you go to Norway?
Amy Pressman: My husband is Norwegian. We run the company together, and after my second child [was born] he took over as the CEO. We met at Stanford and both ended up working at Boston Consulting Group together, based on Norway. However, I was staffed on international work cases.
While I was working at BCG, I was thinking about starting a company. One of the themes that was present when I was on Capitol Hill was that I worked with a group of senators that included Al Gore, and they were very concerned with high-tech development and keeping the country competitive.
A huge theme was why Japan was trumping the United States in electronics and in the automotive industry. At the time that I was living in Europe as a consultant. The Internet was coming into its own and the services industry, a huge swath of the economy, was not addressed in the effort to improve quality of manufacturing. Part of the reason is that services do not come off of an assembly line. I felt the Internet offered a cost-effective way to improve the quality of that industry.
The idea crystallized based on work I had done while working on Capitol Hill, on work at business school, and then on the work I was doing as a consultant. I was working in a number of industries, including several projects in consumer packaging. They have a lot of rich granular benchmarking data. The original idea was about getting benchmarking data for services organizations such as hotels. Each hotel would know how it was doing in terms of customer satisfaction, not just compared to other hotels in their brand but compared to their direct competitors. That concept was virtually unattainable prior to the Internet. It would have been too costly to attempt to gather that type of data.
Sramana: Did you leave consulting to start Medallia?
Amy Pressman: I did finally decide to leave consulting to start Medallia. I also recognized that I needed to be back in the Bay Area. I will say that I now think that there are disadvantages as well as advantages to being in the Bay Area. I certainly think that entrepreneurs can start companies wherever they are and that they do not have to come here. At the time, I felt I had to move to the Bay Area.
Sramana: There is a misconception that entrepreneurs need to start a company in the Bay Area. Let’s explore that more.
Amy Pressman: I left the Bay Area in 1995. I came back in 1999. It was as if I had landed in an alien land. I returned in the middle of the bubble. I started to drink the Kool-Aid. Everyone I went to business school with was working at a startup, and they were all worth millions of dollars on paper. Just as we were getting started the bubble started to burst. That turned out to be a wonderful time to start a company.
If you start a company while money is easy, you are expected to spend money fast and create value fast. It is hard to create the type of value in a company that the ridiculous valuations were predicated upon. I think having too much money does not force entrepreneurs to prioritize and make good decisions. It does not force innovation or creativity. In my opinion, it forces you away from true entrepreneurship, which requires a gritty method of solving problems.
Additionally, there is a lot of engineering talent in the Valley. A lot of the engineers who come to the Valley are attracted to being involved in the next big thing. It becomes hard for small startups to attract top talent. It was hard to attract great talent in the pre-IPO of Google period. If you are in other locations, there may be more talent available to you.