BILL: and founders who exit but don't have much
of their equity left, arguably you might as well
have had a job.
TREVOR: Hello, and welcome to the Foundershares
podcast, brought to you by Hutchison, a law firm
in Raleigh, North Carolina, that helps founders
and entrepreneurs in technology and life science
companies start up, operate, get funded, and exit.
So whether you're already an entrepreneur or want
to be one someday or are just fascinated by the
stories of how a business goes from idea to success
or not such a success, this podcast is for you.
Today's guest is Bill , entrepreneur, investor,
board member, and most importantly, someone who's
focused on the growth and connectivity of the
Research Triangle Technology ecosystem. You may
know Bill as the founder of Global Data Consortium,
which sold 18 months ago for hundreds of millions
of dollars. And in the process made 25 new millionaires
right here in the Research Triangle area. We'll
get to that. In our conversation today, we talk
about how Bill is fostering a workplace revolution,
how he's thinking about his legacy and diversity,
or really the lack of diversity in funding. One
thing I was excited to learn is that throughout
his life, Bill has been into science fiction books
and movies, which is something that shapes his
career and leadership style even today.
BILL: Of Isaac Asimov, his character Harry Seldon, and the whole exercise of psychohistory, the idea that
you could predict the movements of a society through
the actions of a few or the many, just fascinated
me as a youth. And it still fascinates me today,
thinking all the way from the 50s to now, how
I think psychohistory actually is perhaps even
more applicable potentially out there. And the
idea of the Second Foundation being this invisible
group whose objective it was to keep the plan
on track really kind of forms the foundation of
how I look at things. You know, I look at my family
office, my team as a group of people who are trying
to make the Research Triangle area of better ecosystem, a better environment.
And our job is to try to keep that on track.
TREVOR: Bill and his team are definitely on the
right track, and the Triangle's lucky to have
him here continuing to give back and build what's
next. And that growth mindset started all the
way back to step one of his career as employee
number five at CED, the Council for Entrepreneurial
Development. There he met entrepreneurship leaders
like Monica Doss, Mitch Mumma, and my partner,
Fred Hutchison. Bill's eyes were wide open.
BILL: The big things I learned there were, you
know, the value and where fundraising fit into
the equation, the need to build a team, the need
that you had to have a core idea that Not everyone
had to believe in, but you needed to be a big
believer and advocate for. I think the greatest
example of that was watching the journey that
Bob Young took with Red Hat early days. And I
can guarantee you that most people, I remember
very distinctly, most people could not fathom
how you could build a sizable business off of
free software and professional services. Right.
And lo and behold, we ended up with a rather sizable
company called Red Hat that was built on that
model. And I remember that things for Red Hat
really took off when they recruited Matthew Szulik.
To come in and work alongside Bob to accelerate
the growth of that business. And accelerate that
growth is exactly what they did.
TREVOR: So then what led you to leave? I mean,
it sounded like a great position, great kind of
experience and exposure. What led you to leave
that role with CED?
BILL: So, you know, I would tell you it was evolution
is the term I've been using a lot more lately.
It was time. You know, I bumped up to the limits
of what I could do at CED. And also there was
the allure of going out and doing that in a for-profit
mode. So I left there and actually went to try
and do a for-profit version of CED that was called
Startup Street that was part of Fusion Ventures.
TREVOR: Okay.
BILL: And, you know, I left at a very interesting
time, 99-2000. And I got to also witness, you
know, startup, the high-growth startup universe
on the backside. Yeah. Of a high. Yeah. And I
most certainly got to participate in the first
winter of tech when web meltdown occurred. Yeah.
TREVOR: So, I mean, I... Having seen a couple
of cycles, you learn different things from the
up cycle than you do from the down cycle. What
are some of the things that stand out to you that
you learned from that experience?
BILL: People who know me have heard me espouse
this many, many times. But your customers should
be your number one funders. The number one thing
I usually will talk about is raising money is
great, but raising money from customers is better.
And that was something I learned during that cycle
and process. The other thing I learned and took
to GDC on the journey was your money, the money
that you raise, the money that you have should
be spent frugally on the business. And when I
say that, I mean, you know, I'm not a big fan
of parties, ping pong, beer, and so forth. I'm
a big fan of spend the money on your team, spend
the money on, you know, building great product,
selling great product, growing your customers.
And so, you know, things like swag, things like.
All of that stuff. Never part of my DNA. And people,
I think, question that, but they don't understand
that I watched us go from a point where we were
throwing lots of parties, having a lot of fun,
to we were trying to find coins in the couch.
I was there when a company came and reclaimed
our phone system. And not a fun experience. My
last paycheck was an IBM ThinkPad and an office
chair. And because we didn't have the cash to
pay me on that last check. Right. Those, you know,
those learnings I was able to take forward. Yeah.
TREVOR: Well, and it certainly shapes your view
of the value of money, the value of what you can
do with it, how you spend it. Absolutely. It's
got to shape that. So then what do you do? So
you talk about that last paycheck coming in and
Where do you go from there?
BILL: Unemployment for a little while was the
answer there. And then I was lucky that I had
a friend from CED who actually connected me into
a job at what was then Dataflux, but it was a
local tech company, but then it was acquired by
SAS Institute, Inc.. So I basically went to work
at SAS Institute, Inc. As a business development
manager. And that was where I cut my teeth on
enterprise software.
TREVOR: Now, I think I'd read somewhere that up
to that point, your exposure to enterprise software
had been through other people's companies, essentially.
So how did you feel you could kind of take on
that role, or how did you have the confidence
to kind of play that part?
BILL: Well, what was identified to me, and this
was a great person, her name was Katie Fabizak.
I got to know her through CED when she was in
marketing for Ernst & Young, and she moved out
into the private sector at Dataflux. And one of
her points that she drove home was one of my superpowers
was relationship management. I'm a great relationship
person, and that is one of my superpowers. I'm
a super connector. I love building longstanding
relationships with people. So doing that in enterprise
software was a natural fit for me.
TREVOR: And had the technology side always been
a draw, or do you think... Again, that was just
a matter of connection. Could you see yourself
doing the relationship connection outside of technology?
Sure.
BILL: There was a point in time where probably
a little known fact, I was in the independent
film community here in the state. And I helped
organize something called the North Carolina Independent
Filmmakers Association and tried to help organize
that community. So, you know, whether it was film
or whether it was tech, I was always going to
try to bring people together to do something interesting.
For me, it was just enterprise software turned
out to be the right combination of things for
me. That's interesting.
TREVOR: And when we think about kind of your superpower,
is that something that you would say? Has it come
naturally to you, or do you feel like you've honed
that skill and developed it intentionally over
the years?
BILL: Raw, natural, absolutely, but honed it over
the years 100%. If I had been able to hone it
even more so earlier in life, who knows where
things would have ended up. But most certainly,
all along the way. And I would tell you that from
my upbringing, whether it was being in leadership
in Boy Scouts, being an Eagle Scout, being a member
of something called the Order of the Arrow, all
the way through my university days, career arc.
Those were always things I was good at was relationship
mechanics. Okay. And this was all even in the
pre-internet days, mind you. Okay.
TREVOR: Yeah. Well, I mean, it's just interesting
to think about how that changes and how you develop
that skill and, be able to apply it in different
scenarios. It seems like an important skill set
to have.
BILL: It is. It is. I still enjoy it. I use a
euphemism that I like to collect people. And it's
a truism. I love spending time with people. After
this conversation today, for instance, I'm going
to spend the day in Durham having interesting
conversations with four or five people. No business
objective whatsoever. It's just about having some
really good conversations with some interesting
people.
TREVOR: Well, I think that's interesting, too,
is having that interest in people and not necessarily
what that person is doing for you or anything.
Just you have that fascination and interest with
people.
BILL: 100%.
TREVOR: So when Dataflux was acquired by SAS Institute, Inc. Institute, Inc., was SAS kind of a big operation at that point
of time? Absolutely.
BILL: The campus was amazing. I think they only
went up through maybe the letter K on building.
I think. At that point, maybe a couple short of
K. But it was amazing campus. If anything, I think
there were two, maybe three cafeterias on site,
so forth. But Dataflux was off campus. We still
wanted to maintain our independence at that point.
So we were off of Western Parkway. Okay. And still
had our operations over there, still kind of maintained
a separate P&L and very much operated as an independent
org.
TREVOR: That was going to be my question, because
there seems to be a huge difference between working
with a startup kind of in that scrappy environment
versus working kind of a larger, more established
entity. Did you kind of run into any of that,
or were you able to stay far enough siloed away
that you could avoid some of that?
BILL: You know, I most certainly ran into that.
I would tell you, again, one of my great stories
I share with people from my early SaaS days was...
Our manager came to me one day and said, I need
you to go down to Dallas. And I had only been
with the company maybe for a couple of months
at that point. He was like, I need you to go to
Dallas and meet with IBM, talk to them about a
strategic relationship. And so I said, OK. And
it was like, all right, how do we do that? Work
with SAS Institute, Inc. Travel, work with our office managers.
So SAS Institute, Inc. Travel had a look. They
had an arrangement with American Airlines at that
time. And so for myself and my engineer to go
to Dallas, fly there, fly back, it was going to
be $2,500 a person. And I was like, that's for
one meeting that doesn't sound rational to me.
I can't do that. Right. And, uh, I looked online
and found that Southwest Airlines, um, basically we could fly
there the night before the meeting, stay at the
Omni Hotels next door to the IBM campus. Rent
a car, do all of these things, everything for
less than $2,000 for the both of us. Okay. And
so I said, well, this seems like a much more realistic
exercise. And I remember the office manager at
that time said, oh, you can't do that. You have
to go through American Airlines. Okay. And I knew
at that point in time, we weren't making money
as a company. And I said, meaning the data flux
wasn't making money. And I said, well. This doesn't
make sense. So I just went my own way. And we
booked through Southwest Airlines. And we stayed
overnight. We had a great meal. We did everything
we needed to do the next day. And we came home.
And it all worked out great. And I'm glad I did
that because that relationship, that meeting didn't
necessarily yield it.
TREVOR: It didn't need to justify the expense.
Exactly.
BILL: Exactly.
TREVOR: That's interesting. So tell me a little
bit of how you go from Dataflux then to Global
Data Consortium. Sure.
BILL: Sure. So I did a five-year stint at SAS Institute, Inc..
It was great. Learned a lot about enterprise technology.
Learned a lot about licensing. I actually helped
write the first OEM license at SAS Institute, Inc..
OK. And because they use a perpetual licensing
model, but- Uh, most of our, the people we were
trying to license to weren't interested in perpetual
licensing. So we actually found accommodation
by doing a hundred year licensing. So it created
the same dynamics, but it wasn't perpetual. So
everybody was happy with that particular negotiation.
But the thing for me was I was always a small
company guy. So much like I talk about that Southwest
Airlines versus American story, I'm not the greatest fan of large company bureaucracies.
I think they have their place. Large companies
grow for a reason, and SAS Institute, Inc. is a wonderful organization.
But I thrive in small company environments. The
smaller, the better. In fact, I've learned through
all of my experiences now over a 30-year-plus
career history that At best, I'm great up to about
20 people. Beyond 20 people, it starts to shake
and shudder a bit. Once we get to 40 people, I'm
probably not the best guy.
TREVOR: Tell me about that. So what is it about
that size of a company that appeals to you or
is within your skill set or just your lane, I
guess I would say?
BILL: At 20 people, you still know everybody.
You still have a very clear understanding of where
people's dynamics are, what their drivers are,
and how they want to move ahead. At 30 people,
it gets a little bit harder, especially if you're
putting the right leadership layers in beneath
you. So you're not doing all the hiring anymore.
Others are doing that hiring. And then at 40,
you're removing yourself more and more from that
feature function. Right. And how you scale beyond
that 40, I just haven't had that level of experience
yet to say, okay, how do I make sure I still have
that? That impact on people, but not have to be
involved with every single individual.
TREVOR: Well, it sounds consistent, again, that
whole relationship drive.
BILL: Yeah. You learn the things you know and
do those well, and the things you don't do well,
don't do those anymore.
TREVOR: Yeah, absolutely. So you've had this desire
to kind of be in that smaller space. Did that
lead you to leave SaaS then?
BILL: It did. That led me to leave SaaS. I actually
went out on my own. I had a stable of companies
that I worked with, or portfolio is a different
way to look at it. I worked with this small company
out of Germany called Address Doctor. They were
an address verification software company. Okay.
I had another set of companies as well that I
was working with, but Address Doctor at that time
basically started to grow. And in parallel with
that, I actually met my co-founder for the second
time, my co-founder, Charles Gaddy. I was working
from a local coffee shop called Helios Coffee
way back in the day. And so I would sit in there.
And then Charles, I had met him years before working
at SAS Institute, Inc. on the partnering side.
And he would come at Helios on a regular basis.
So we reconnected. Turned out he was a product
technology guy. He was out on his own doing product
technology work with people. I was out on my own
doing sales biz dev with people. And we got to
a point where we said, we're spending a lot of
money on coffee and lunch here. We could probably
pool our resources and rent an office. What would
that look like? And we had that conversation and
we found an office on Fayetteville Street in downtown
Raleigh that was cheap enough for us to rent with
flex terms and moved in there. And the rest was
history. We actually, Address Doctor took off
as a business. We both ended up working there.
I became COO. He actually ran US on that side.
And it was a great experience for us. We helped
to sell that business to a company called Informatica,
which was a large enterprise software company
out on the West Coast.
TREVOR: So was that the idea at the time? You
were going to find, I guess, the clear winner
and kind of run with that one? Or were you imagining
you were going to just continue to serve multiple
companies?
BILL: You know, the idea at that time was going
to serve multiple companies. We didn't know what
we were going to find. It was all experimentation
for us. And it just turned out, Address Doctor
definitely at the time was not a clear winner.
When I joined that business, they were doing less
than a million in revenue. And when we sold the
business, we were over 10 million in revenue.
And a lot of that was through the biz dev relationships
that we put in place. Sure. We grew a set of channel
partners. Uh, SAS Institute, Inc. was one of them as well as a number of others.
And we grew those partnerships on a global basis
and they generated a great, you know, royalty
revenue string for us. And then that allowed for
us to sell that business.
TREVOR: Yeah, well, it seems to me like in a number
of different kind of levels of your career, you've
had exposure to a broad number of companies and
had that opportunity to see things that are working,
things that may not be working. So I guess what
stands out to you kind of from that early stage?
About companies that you found to be successful
or the ones that were kind of making a go at it
in a way that others weren't?
BILL: You know, the thing I will say is the success
of Address Doctor was very interesting because
much like GDC, it had raised no venture funding.
The founder had bootstrapped it. I was not the
founder of that particular company. The founder
and I were good friends. He bootstrapped, he was
a technologist, and he got it to a certain threshold.
Then I was able to come in working with him and
the rest of the team to take it the rest of the
way towards that great successful outcome. Along
that journey, I also got to observe, also while
I was at SAS Institute, Inc., I also got to observe
a number of companies in our space and field who
went down the venture route. And there was a variety,
you know, there was varied success and failure
around those models. And so I got to observe all
of that being the partnership, you know, that
partnership relationship universe. I got to actually
engage and observe what was working and what wasn't
working. And really I found that people who were
able to concentrate on their business, grow their
customers, look at growing their business in a
profitable modality, Those seem to work slightly
better than free software, no consistency around
revenue model, on establishing true product market
fit. Yeah. It's not to say that one model was
better than the other, but I found at least that
I indexed towards one more so than the other.
TREVOR: Sure. I think that makes sense. And does
that change, I guess, how you think about funding
now? Because now it feels like you're at the other
side of the table in some respects, investing
in companies. Yeah. How do you think about the
value of bootstrapping versus the value of taking
outside funding and what you can do with it?
BILL: Well, I'm going to paraphrase something
that another great podcaster, Ben Gilbert, from
the Acquired podcast, he and I had a conversation
last year. We were talking about this subject.
And something that we both observe is that a fair
number of companies out there, technology companies,
are not venture fundable. They should not take
venture money, in other words. There's a deep
logic well one can go down around that, but I
think there's a difference between what type of
money you take to achieve the objectives that
you need to achieve. It's not to say that you
don't raise money, but you might do better raising
money from angels or other types of capital versus
venture capital. Because the math for venture
capital requires much higher growth multiples,
much faster. There's a lot of dynamics that come
with venture funding that don't come with every
high growth company. Right. Yeah. You can be high
growth, but not a venture fundable company. Yeah.
And it's always interesting when I talk to people
around, you know, is a business growing at 100%
a year? Business, especially if they're growing
profitably at 100% a year? I would say no. Right.
Yeah. But are you really venture fundable in that
model? Maybe not. Right. And so it most certainly
has, you know, all of those experiences and observations
along the way have definitely influenced how I
look at companies and say, does venture funding
really work for you? And I try to talk to founders
about that a lot. Is this really the path you
should be on or should you be thinking about a
different path?
TREVOR: Yeah, I think it's a super helpful conversation
because I think there's a model that people have
in their expectation that we start, we grow a
little bit, we get some funding in the door, we
get more funding, we get institutional funding
and then exit the business. But that doesn't have
to be your path.
BILL: It really doesn't. And in fact, I would
argue starting the business as scrappy as you
can with the resource base that you can bring
to bear and raising as little capital as possible
until you reach what I would call product market
fit. And when you're ready to scale, then raising
money. And definitions of scale can always be
different. But I would argue if you actually can
wait until you get to one or two million in revenue,
then you can actually write your own terms into
the equation. And oh, by the way, you're retaining
a lot more of your equity at the end of the day.
And founders who exit but don't have much of their
equity left arguably you might as well have had
a job. Yeah, so you really, I think a lot of times
founders don't do the math. Right. And that's
something we talk a lot about at the Second Foundation
is the venture math. Do the math.
TREVOR: That's good because you've got to see
it and you've got to have realistic numbers put
down. Right.
BILL: Think about the end in mind and then if
you back into it. And the end in mind is ultimately,
what do you want as a founder? What do you want
your personal outcome to be? Right. There's a
difference between your personal outcome and what
the company may sell for. Right. Those two very
different things. And if you don't understand
what those two outcomes need to be for yourself,
you're just sort of… randomly setting yourself
off on a path and you have no idea how you're
going to do that.
TREVOR: Hoping it works out for the best.
BILL: Exactly. Hope is not an option, as a friend
of mine just pointed out.
TREVOR: That's a good one. So, after Address Doctor,
then, did you go straight to a global data consortium
at that point?
BILL: So, we had already started iterating a global
data consortium. I invested in a company called
Locate. Which did something very similar to Address
Doctor, which was again, international address
verification. Sold that company to a UK company
called GB . And so that was another exit on the
docket. And then in parallel with that, and I
guess I should step back and explain that my co-founder,
Charles, and I, all along the way, we had this
separate parallel entity that we had created early
days called BSG. Now, on the corporate, it was
Black Book Solutions Group. And the idea was we
were leveraging our little black books to, you
know, people don't know what those are anymore.
But we leveraged our CRM, our contact database.
There we go. There it is. And to create business
opportunities for ourselves. But the real funny
thing around the name BSG really was that it meant
it was actually stood for Battlestar Galactica,
the reboot. Okay. And so we were both big fans
of the reboot.
TREVOR: Another great, great show.
BILL: Another great show out there. And so we
created a company name that could embody that
while also embodying the business. That's what
we were doing.
TREVOR: I like that. A little piece of trivia.
I hadn't heard that one before.
BILL: So all along the way, we still had this
other entity that was out there. And that's where
GDC sort of sprung from. Okay. Was we were, again,
observing, experimenting. So we started GDC with
the idea that we were going to, you know, license
raw data to larger organizations like Visa, LexisNexis,
and others. And then we actually moved into this
model of being able to provide that data via web
services. Wow. And then we moved and it was all
around addresses. And then we migrated into a
universe where we said, oh, actually, we're going
to pivot into providing these via identity because
we realized that identity verification was far
more lucrative than address verification. For
address verification, that market had been somewhat
commoditized down to about five cents a transaction.
Okay. For ID verification, I could get 50 cents
to a dollar a transaction. So you look at the
math and the margins associated with that for
roughly the same costs underneath on the data
side. Kind of say, I like that dollar transaction.
TREVOR: That makes, that margin makes much better.
100%. How did you manage alignment with BSG and
as you're exploring these different companies?
Was there any challenges associated with that
with you and Charles? Or has it always been kind
of an easy work relationship?
BILL: Charles and I, I will always and forever
say he has been one of the best co-founders to
work with out there. We certainly by no means
have achieved the same heights as Buffett and
Munger did. But I would definitely argue that
Charles has been very much that. Now, which one
of us is Buffett or Munger? Neither. None of us
will say. But I will tell you that that co-founder
dynamic, we always have been able to work together.
And he and I, in fact, there was a third founder
and I'll tell this story. Um, and hopefully he
will, you know, I'm sure he'll come back and say,
oh, okay, that's how this played out. But there
was a third co-founder in the business. And one
of the first votes Charles and I actually united
on was, we don't know that we need the third co-founder.
And so we voted him off politely and everything.
But it was like, we got this. And we just realized
we could work together. And that's what we did
across multiple companies over, again, a 20-year
span. That's fantastic.
TREVOR: And I think it's important and kind of,
I don't want to say rare, but that founder dynamic
and being able to find the people that you can
work with. Having complementary skill sets, having
the ability to kind of trust that other person,
I think it's a huge, huge element to the success
of some companies.
BILL: 100%. And, you know, our relationship over
the dynamics across all the companies grew and
grew and grew so that when we were doing GDC,
we kind of... We knew what the other one needed
all along the way. And I could tell you that when
we knew we couldn't talk to our spouses about
things, we could always talk to each other about
things. And the fact that GDC was a very global
company, so we did a lot of international travel
together, it just built a really, really strong
relationship dynamic there. So one that will last
a lifetime.
TREVOR: I love it. So I guess at this point in
time, it sounds like you've had multiple exits,
multiple different kind of experiences, even before
starting GDC. So I imagine there was no hesitation
kind of when that opportunity came that this is
what we can do.
BILL: No, that's a great question because I like
to talk to people about the fact that all along
the way in my career, I've had the opportunity
to just stop and settle. Yeah. I could have stayed
at SAS Institute, Inc., made great money. I was
doing well and so forth. Could have stayed at
SAS Institute, Inc.. Could have stayed with Informatica.
Making even better money and doing quite well,
no issues at all on that front. And all along
the way, I could have just sort of stopped and
settled. Uh, but. No, there was always that, let's
go for the next thing, let's go for the next thing.
TREVOR: And tell me a little bit about that. Is
that a competitive drive? Is that a curiosity?
Is that just? I would tell you. Restless motion.
BILL: Well, you know, it's interesting. That's
a great question, too. You know, I get that one
at home. It's like, why aren't we, why aren't
you relaxed? Yeah, but I would tell you there's
an argument that it's both competitive for me
and important to say, move for the next thing.
Bump up against a ceiling, break through, move
to the next thing, move to the next thing. And
the one thing I determined when we sold GDC, I
had a series of people. One set of questions was,
what's next? What are you going to do? What's
next? And I was like, I am not doing another company,
but I'm going to do something a little bit bigger
than that. And that is to try to help grow an
ecosystem. So, again, doing another company, been
there, done that. I've won some, lost some. So,
I've had my failures as well. I don't need to
really continue to experiment with that. How do
we actually make the overall ecosystem better?
But I remember my head of sales at GDC at that
time, I remember we sat down and, We were having
celebratory drinks after the deal. And he says,
well, what's it feel like to get to the end and,
you know, and just be like, all right, you're
done. You don't need to do anything else at this
point. Right. And I said, what makes you think
I'm anywhere near being done? I'm just actually
getting started. And you know, that's just the
way my brain operates.
TREVOR: So was there even a point in time where
just like, well, I'll take a break for a little
while, or were you just like, as soon as it closed,
you're ready to jump into that next thing?
BILL: You know, I had the benefit November we negotiated the letter of intent in of 21.
And we didn't close till May of 22. Okay. So it
was a long closed cycle due to regulatory reasons.
And so I had the benefit of recognizing that I
knew I was going to be getting off this bus. Yep.
And I knew because of my past experiences with
Address Doctor and others that I didn't really
want to stay in that big company environment.
LSEC's huge. Yeah. You know, by the way, 100,000
plus employees. Yeah. Just a huge organization.
So I knew that wasn't going to be for me. So I
started that thought process of, okay, what's
next? And I talked to a number of people. They're
like, oh, you need to take a year off, go sit
on a beach and just relax. And sure, on the surface,
that sounds really nice and pleasurable. But I
was like, you know, I get bored quick. Yeah. I
do a few things well. I only, you know, I enjoy
a few things in this life. And doing what I do,
you know, sitting on a beach in some remote place
was not going to be the answer to that. Yeah.
Yeah. So I kind of came up with the foundation
off, you know, along the way, uh, as, uh, we were
going through that process. Right. And once I
knew the deal, once we closed and we were done,
it was, it was melancholy to sort of leave GDC
behind, but. I very quickly moved into the modality
of, okay, we've got this next thing. Now, I took
a month off. Okay. You gave yourself a little
bit. Good for you. A whole month of September
and went out traveling and enjoyed that.
TREVOR: It's on to the next thing. On to the next
thing. Well, I do want to talk about Second Foundation.
But before I get to that, you did mention kind
of like through your career, you made some mistakes.
That's bound to happen. But anything that kind
of stands out that a mistake that you really learned
something from or something that could be helpful
for somebody who's thinking about coming on.
BILL: Yeah. Learning, something I probably guide
founders to more and more is understand who you
are faster. Learn what you're really good at and
what you're not good at faster so that you can
index toward those things. I probably made a set
of mistakes along the way. I'll say immature mistakes.
I think about when I left CED, we didn't leave
that in the best possible way because I knew I
was going to this other thing. But I didn't necessarily,
you know, I didn't negotiate my exit the way you
normally should have or would have. And that was
just an immaturity exercise, if you will, around
how do you do that kind of thing. But more importantly,
I was not confident. So immaturity and confidence,
I wasn't confident about who I was and what I
was going to be. So the sooner you know who you
are and what you're really good at, then the better
off you will be. And that's something I very much
try to get founders to think more about, especially
early stage founders who are fresh out of college
or early in that exercise. First, is this something
you really want to be doing? And then second,
do you understand where you really fit in the
universe and what you're really good at and whether
this is something you want to do?
TREVOR: Well, and sometimes I think that especially
early on, there's that pressure to be all things
to all people. I'm like, oh, I'm the CEO. I'm
the founder. I've got it. Be able to do everything
in the company, at least at a surface level. But
you really don't have to do that. You have to
know what you're good at, know your skill sets,
and then surround yourself with good people.
BILL: Surround yourself with good people and ideally
find a great co-founder or two who can actually
augment wherever those weaknesses may be.
TREVOR: That's great. So now let's talk about
Second Foundation, because you talk about this
vision of kind of building an ecosystem here in
the Research Triangle. So talk a little bit about
that and what the goal was and really what prompted
you to start down this path.
BILL: Sure. So this is just a derivation of the
story from my CED days. So CED, Council for Entrepreneurial
Development, has been one of the first and still
one of the longest- running nonprofits that are
focused on the development of entrepreneurial
ecosystems. It was there before anybody else was
really talking about this thing. They were there.
CED did some amazing things during those early
days, and they went through a lull where things
just like companies do. You get off the rails
a little bit, a little ahead of your skis, whatever
the case may be. And for me, I've always looked
at that organization as being the ecosystem developer.
Had they not existed, I would say we might not
have Red Hat here. Would Crew have existed here?
Maybe. There's a number of companies. Would Pando Daily have existed here?
Maybe. I would argue probably not because of the
early days of CED. I would argue Channel Advisor
exists because of that. All of this came about
because CED set that foundation for a lot of these
early-stage entrepreneurs. And how we actually
get the next generation of entrepreneur engaged
and understanding why you have to pay it back
into the community is a really important thing.
I think a lot of times entrepreneurs, founders
in particular, I say entrepreneurs, but founders
in particular are guilty of revisionist history.
And we forget that others helped to bring us.
Right. Along the way. It might have been a little
thing. It might have been a big thing. But we
generally will come at it and say we did it all.
We were the greatest thing since sliced bread.
And the honest truth is we didn't do it all. And
so growing the ecosystem is really about getting
this ecosystem's current exited founders reengaged
and supporting and getting the future founders
to understand that you have to reinvest and engage
in the next generation if we want to see this
ecosystem continue to grow and grow and grow.
And so that's really a big part of what we're
about. And again, it sort of goes back to if you
think about the Harry Seldon aspect of Second
Foundation, it's realigning to the plan. Yeah.
And getting us back on course to say this is what
the original mission was and this is what the
mission is now.
TREVOR: And how are you finding the kind of are
people responsive to it? Are the founders that
you're talking to open to it and kind of ready
to engage?
BILL: 100%. It's been great. Yeah. Look, the wild
success that we had within the community gives
us a lot of social capital to be able to talk
to people about this type of thing. And the fact
that I'm willing to put my money where my mouth
is on this exercise without any return on that
front is another big driver, I think. And again,
there were people doing things in the community
well before I was. I reference some of my blog
posts around the fact that. You know, one of the
big people I wouldn't use the term idolize, but
I deeply respect in the community, Scott Winger.
And that's because as a serial, you know, he's
one of the few truly serial entrepreneurs we've
got in the community. And he pays it back. You
know, he's doing tweener not because he has to,
but because it's something that interests him
and he feels like it's a great gift back to the
community. Yeah. And he puts that time and energy
into that. And again, when you're doing that kind
of thing, the more and more of us do that, that
is the secret. Sauce of the, of the valley is
the fact that you have this preponderance of people
who just put it back into the system. Yeah. And
they put it back in either as investors or mentors
or whatever the case may be.
TREVOR: Well, I think that's important, too, because
it's not just money. There's a number of people
I talk to, young founders are like, yeah, I talked
to Scott, and Scott was very generous with his
time. And other founders that have come back and
just are willing to share that time and that mentorship
about what worked for them. I think it's just
huge.
BILL: Yep, putting it back in. And so that's really
what we stand for. And the work we're doing at
NC State right now is sort of the tip of the iceberg
around focusing on hard science and deep tech.
And getting more focus and investment and access
to spin-outs and truly deep technology plays where
we have defensible modes. This is something that
I've learned along the years is, is the Southeast,
is Raleigh a big place for us to be building what
I would call B2C, business to consumer businesses?
No. When compared to Silicon Valley, which is
more deeply funded, more deeply experienced, all
of those things. We shouldn't really be focused
there. But where we have great experience and
resource, agritech, material science, medical
device. We have great domain experience here.
We have talent. We have all sorts of network resource
here between the universities and the private
sector. So doing more of that seems to be where
we need to be putting our energy and resource
and not trying to emulate others, be who we are.
TREVOR: But again, I think that's important. Again,
not trying to be, you've talked about it for yourself,
you've talked about it for other founders, but
even as an ecosystem, not trying to be Silicon
Valley, not trying to be Austin, Texas, not trying to be Boston.
Correct. We're Raleigh-Durham. Let's do what we
do.
BILL: Let's do what we do, and let's do that really,
really well.
TREVOR: So I think you've touched on it a little
bit, but what are some of the positives and negatives
that you see about our current ecosystem here
in the Research Triangle? Yeah.
BILL: Ah, okay. So, you know, look, the three
areas that I would tell you that we focus on,
which kind of highlight, you know, and I'll talk
about positives and negatives from those. So,
normally I talk about it in terms of capital formation,
ecosystem development, and minority achievement.
I'm going to reverse the order and talk first
about minority achievement. In this community,
as an ecosystem, we have not had widespread minority
engagement and success, both on the venture investing
side and as well as just true founder engagement
side of the equation. So, part of my mission is
to actually improve that. Now, what it does not
mean is that I'm specifically only focused on
minorities as it relates to tech investing and
so forth. But what it does mean is we should have
a more inclusive environment around minorities.
And I very much mean people of color, to be very
specific on that front. So, I'm very intent on
trying to see how we make this ecosystem better
around that. You know, when I talk about the broader
ecosystem, I absolutely mean that the tech ecosystem,
high-growth tech ecosystem is important, but also
the supporting underlying needs. So, Main Street
retail is important. And one of the things we've
forgotten in the post-pandemic universe is that
we have restaurants and we have Main Street retailers
that make our community a community. And by not
coming into the office, for instance, we literally
are causing them to go out of business or have
to change their business models. And many of them
are going away. Yes, new ones are springing up.
But I think it's important that we think about
our community. Mental health is an issue. We don't
talk enough about it, both at the founder level,
but at the community level. And if we're not dealing
with Mental health and the issues of homelessness
and other issues associated with that, our community
will fracture and become less interesting as a
community. And so instead of just thinking about
it as a bunch of people making money at the top,
and it's all about us making money at the top,
it's about, yes, we want to have great outcomes,
but we also need to make sure we're funneling
the results of those outcomes into the broader
community. So that's what I mean when I talk about
ecosystem development. It's not just this one
piece. There's a lot of layers underneath that.
And then capital formation. We don't have enough
seed and Series A money focused in this area.
We just don't. A lot of people like to try to
parse that. The math is there. Yeah. The actual
math is there. And so as a result... Our good
companies end up being underfunded good companies.
And it's not to say that we have a preponderance
of good companies. I'm not going to throw that
out there because I'll go back to what we said
at the very beginning. Not every company should
be venture fundable. But the ones that are venture
fundable should have the most robust venture funding
possible from our community. Because if we want
those monies to stay, you know, I used a coffee
shop example all the time. If you have a choice
of going to a local coffee shop or to a Starbucks,
you should always remember that when you go to
Starbucks, that money goes to Seattle, right?
When you use a local coffee shop, that money trickles
back into your community. So do you go to a Benelux?
Do you go to a Helios or Morning Times? 100%.
You go to Starbucks, you know what you're doing
on that front. I think the same is true within
our community. I think we need our investors investing
more locally and getting better returns out of
those investments so that that cycle helps drive
a much more local environment. But I do also want
to attract outside area investors to help bulwark
that as well. But I want them to be participants
on that, not drivers of that, if that makes sense.
TREVOR: It does, and I appreciate the view of
the ecosystem. I feel like sometimes in these
conversations, there's this idea of the startup
ecosystem or the tech ecosystem as being somehow
separate from the broader economic community here
in the Research Triangle. And we operate. We operate
in our own kind of little silo, and downtown retail
is a little bit different. But I appreciate that
view that it's all connected and really kind of
to make it a community that we all want to be
a part of. It needs to be interrelated.
BILL: We don't want to end up like San Francisco
is dealing with right now from a downtown perspective
because they forgot that aspect of community engagement.
Right. And how do you actually make the community
better? And we need to jump the shark and try
to get ahead of that curve before we end up along
those lines. And the answer can't be retreat to
the ex-burbs and hide out in our apartments or
homes. That's not the answer.
TREVOR: That's just not going to work.
BILL: It's not going to work.
TREVOR: So I want to ask about the minority engagement.
Are there areas of kind of low-hanging fruit that
you see that could easily be done that aren't
being done that people could focus on?
BILL: So one of the things, we've got two programs
that we've really fixated on. And again, this
past year, a year and a half, has been a lot about
learning. Went around to a number of communities.
Went to Seattle. Been to San Francisco. And really
tried to understand how is it working in other
communities and understanding sort of the landscape
around minority participation. One thing, before
I answer your question, I'll point out. It's a
factoid that I don't. I've used a number of times.
In the history of enterprise software exits, my
exit is number four. And when I say that, in the
history of enterprise software exits led by a
minority, my exit is number four in a 40-year
history of software. Now, let's just think about
that. In 2021. There were roughly 70 non minority
exits. Right. At my same level. So that's the
disparity we're dealing with in our ecosystem
right now. And I don't know if I explained that,
if people really understand what I'm saying with
that. But I shouldn't be number four. I should
be number 400. But right now I'm number four and
we've done some digging. I had a bounty out there
for anybody who could give me a list of 15 people
who had done better than myself in a minority
community in software. No one thus far to date
has been able to collect on that bounty. And so
I'm pretty confident around the accuracy of those
numbers. But More to the point, the low-hanging
fruit, I think, is basically access. And it's
access and engagement around networks. So we're
looking at identifying high achievers, people
who are already doing well and who most likely
might take a development role at a VMware or something
like that and try to put them on a path toward
a much steeper inflection point. And the idea
is you might want to work for a startup or you
might want to take a corporate route. I'm okay
with either path as long as if you take the corporate
route, you can't just be a senior director. We
need to get you into the C-suite. So what are
the things we need to get you tuned up to so that
you actually end up in the C-suite? Or if you
decide you want to take the startup route, how
do we make sure you get not just the funding that
you need, but the access to mentorship, guidance,
network access, whatever the case may be, so that
we help you actually achieve those outcomes? And
that, if you actually study sort of how different
people have really accomplished what they've accomplished,
those access points have been generally the answer.
Those network access points.
TREVOR: I think it's super important, again, because
you kind of… Talk to people that you know, but
sometimes you need to expand those networks to
include a much more diverse group of people on
both sides.
BILL: On both sides. And we call that the The
Initiative. And I modeled that one off of the
Avenger Initiative, which, of course, Marvel Comics.
And so, again, my second great love of Marvel
Comics.
TREVOR: Okay.
BILL: And so, very much as Samuel L. Jackson was running around seeking out aspirations.
And I think that's what we're doing. Okay. And
we're trying to bend their arc. Yeah. And make
them part of something bigger. And if we can create
a cohort of those individuals and help them break
through the barriers that are out there, then
they become the next… They move me further down
that list. Right. And that's the name of the game.
TREVOR: And that's the goal, right?
BILL: That's the goal.
TREVOR: So, I mean, let me ask you this question
because I think it relates to that. How would
you define success with Second Foundation? When
will you look back and be like… We did what we
came to do.
BILL: Look, if there are 100 Bill Spruills that
are running around out there doing what they're
doing, you know, and frankly, 100 Bill Spruills
doing the exact same thing that I'm doing. And
whether you're a minority or not, I don't care.
But 100 Bill Spruill's out there doing what I'm
doing over the arc of their careers is success.
So it's not financial. It's not, you know, it's
our people out there doing the work. Does someone
take up the banner when I can't hold it up anymore?
And run forward with it. That's success for me.
That's a great legacy to be built. Oh, yeah.
TREVOR: If you could do that, that'd be amazing.
BILL: Absolutely.
TREVOR: So we are the Founders Shares podcast.
And so I always like to ask all of our guests,
if you had one piece of advice for somebody that's
either starting out in a career, starting out
with their startup. What would that piece of advice
be?
BILL: Piece of advice I could give is talk to
10 other founders who are at varying spots on
their journey. And tell them what you're doing
and why you're doing it and listen to what they
tell you and refine your plan and your model from
there.
TREVOR: That's great. And anything that we haven't
talked about today that you want to share with
people? Anything that's on your mind that people
need to hear from you?
BILL: No, go out and do good things. Keep doing
good things if you're already doing them. Engage
with CED. Engage with your ecosystem. And I'm
an open connector on LinkedIn. So if you hear
this and actually decide something I said is interesting
or you want to debate anything I happen to say,
feel free to hit me up on LinkedIn. Be happy to
take it up there. That's great.
TREVOR: I appreciate it so much, Bill. Thanks
for your time.
BILL: Absolutely. Thank you for having me. Appreciate
it.
TREVOR: That was Bill , who you can find and connect
with on LinkedIn, or you can check out his website
at 2ndf.org. That's the number 2ndf.org. Thanks
for listening to this episode of the Foundershares
podcast. If you're a founder or business owner
and need legal advice, be sure to check out our
team at HutchLaw.com. That's HutchLaw.com. We
have the capacity to help you out with just about
any legal need your company may be facing. We're
passionate about the innovation economy and ready
to help you on your entrepreneurial journey. The
show was edited and produced by Earfluence. I'm
Trevor Schmidt, and thanks for listening to the
Founders Shares podcast. Good.