Devdutt Yellurkar: I came across this company in Copenhagen. At that time, Twitter had just launched. We were one of the first investors in Twitter. Twitter Search had just launched. I went and searched on Twitter for sentiment around Zendesk. All I found was just pure love. Everybody was saying very positive things about it. Then I googled for the founder of Zendesk. I came across his number. I cold-called. I think it was pretty late into the night. I said, “I’m from CRV. I found you on the net. Can I meet you tomorrow?”
I just found so much love and passion for the product that I felt like I should go there. In the meantime, I asked a couple of my friends to start using the product. It was so easy to use. I flew down the next day. I went up to their loft. The three founders were there. We spent the whole day talking about life and business.
They were unique people. Mikkel had built and implemented support systems before. I found that he had a very clear sense. His philosophy was 80% of the people need only 20% of the functionality. He just wanted to design that 20% of the functionality as well as anybody else. Morten was very early to the cloud. Rather than hosting somewhere else, he wanted to host on the cloud. Alex was a designer.
For the first time, I found an enterprise software where a visual designer was part of a founding team. I have not seen it in enterprise companies. I’ve seen them in consumer companies before. I just felt that these guys were onto something special. They had already raised half a million dollars and they were trying to make do.
The financial crisis had hit. Most of the venture capitalists were running away from venture capital. I was naïve and stupid enough not to understand the significance of that. When everybody else was not investing, I was investing. I put some money behind them.
Sramana Mitra: How much were they doing at this point? They had so much love from customers. That’s how you discovered them. This is something that I like about European companies. European companies are more fundamentals oriented.
Devdutt Yellurkar: They were doing around $30,000 a month. The love for the product was just amazing. It was like Slack. People were just signing up and using it.
Sramana Mitra: That’s awesome. What are other highlights in your portfolio that illustrates other ways that you think about businesses?
Devdutt Yellurkar: Have you heard about Amy Chang?
Sramana Mitra: Sure.
Devdutt Yellurkar: Amy is now a senior executive at Cisco. Prior to that, she was a senior executive at Google. She built and ran Google Analytics. She is a legend in the industry. She was thinking of doing something new. She had left Google and was advisor to a few companies. She along with her CTO were thinking of doing something. She had a two-slide deck.
Her point was that you don’t remember more than a hundred and fifty people. Today’s networks are more than 150 people. Relationship management is a huge part of the success of people. She said, “There’s a natural limit to your brain of 150. Some people have slightly more and some have slightly less. What if I can expand that?”
Because of who she was, it was a hyper-competitive project with all the platforms in the industry wanting to invest in her. Somehow she got convinced maybe because I had more empathy. I was an entrepreneur before and understand how tough it is. That was the first time she was being an entrepreneur. She had been an executive before. She was taking a plunge. She felt comfortable that I’ll be a more empathetic Board Member. We came to a handshake agreement on a Saturday. By Tuesday, the money was in her account.
It was very quick, primarily because we think that she is very special. She was solving a complicated problem. It’s very rare to see somebody who has this relentless pursuit of opportunity and wanting to chase down something that’s very gnarly and complex. At CRV, we have something we call founder quotient. We specifically look for quality of entrepreneur.
One of my partners has written a great post on this called Founder Quotient. Is the person able to recruit people? Is the person able to inspire people? Is the person able to raise capital? Does the person have a unique insight that nobody else knows? There’re multiple attributes that we look at and we sum it all up in something called founder quotient. Amy’s fonder quotient was off the charts.