Ep. 7 Jim Franklin former SendGrid CEO

Show Notes

LP for early-stage Colorado tech funds & the former SendGrid CEO

https://www.linkedin.com/in/jimfranklin08/

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Kevin Horek: Well, John and Greg, what are you most excited to learn from Jim today?

Jon Larson: Oh, I'm looking forward to the interview. I'm especially interested as he was the CEO of SendGrid for a while. That'll be a really interesting because we come from a background of, as an email service provider. I'm really interested in, and what he's has to say about that. It's, he's also been involved in the Boulder, Colorado tech scene for a while, and that's a really dynamic Cubs startup scene. I'm interested to hear about that as well. I'm sure. And what he's learned along his journey.

Jim Franklin: Well, Johnny, so my thunder on both those points, because they're super close to my heart too. Like the email side of it personally, it's really a fun connection. The Boulder, I got to see all the show my age here when I hear Boulder, Colorado, I still think Mork and Mindy actually, which is not at all what it's about these days. Anyone old enough listening will also remember more, but the thing about Boulder is it has got a really cool tech scene and some really great ideas have come out of there. Some, that it's like a, I don't know, like a school of thought coming out of there of how to build tech companies and basically a lot of people that are a bit contrary and I guess in a way, and we'll try things in different directions that are new and different and that always gets me interested.

Jim Franklin: I'm curious what we're just going to have to say for sure.

Kevin Horek: All right. On with the show, welcome back to the learner.co show today. We have Jim Franklin. He's an LP for early stage Colorado tech funds and the former SendGrid CEO. Jim, welcome to the show. Thanks for having me. Yeah. I'm excited to have you on the show. I think what you've done in your career and tech is really innovative and cool, but maybe before we get into that, let's get to know you better and start off with where you grew up.

Jim Franklin: Born in Iowa, raised in Pennsylvania in a small town. I guess what was unusual about my upbringing was I had a very normal family. My parents were high school sweethearts. I think I won the parent lottery and I have a brother who's a year older and we had different strengths and we got along as kids and he was a good student and all that, and kind of paved the way for me, like going through school, right? If your older brothers, president of the class, that's one thing. If they're always in trouble, that's another. And so I got a nice draft. I think we talked a lot about privilege these days. Boy, I feel like I have been privileged so many times over. It's hard to come from all great role models in the various coaches and teachers and guidance counselors and raise me like that along the way.

Jim Franklin: I'm very fortunate, but I went to what, the school that the college of William Mary, which is in Virginia and I looked at schools for two years and it really, it was the people I knew who were graduates from that school. I thought were just like good people, just like kind and nice. When I got to the campus, I'm like, this is beautiful. This is for me. I applied early decision and I got in and I stayed eight years. I hadn't got three degrees. Okay. What did you take and why? Well, I took accounting because it was one of the top programs in the country. I think they were fifth in the country and you kind of major was considered to be very difficult. As you would, oh, it's fun to do difficult things, right. That's why we climb mountains and all that stuff. I had no particular intention of being an accountant.

Jim Franklin: I didn't really know what one was actually. I just knew it was like math, but not that hard. That was a good balance. Right? I like business math, but I wasn't very as an excellent undergrad liberal arts institution. I accidentally took a real kind of business classes and didn't do as much of the liberal arts side as I, I thought it'd be fun with one of my free electives to take the investments course from the finance major. That was their big gut-check hard course. As an accounting major, I thought, huh, what, my free time I'll go do your hard work again, because it was hard. It would be fun. I did the same thing over in the English department and took a writing course, which was a junior level. So that was fun to do. I didn't want to be an accountant when I was a senior.

Jim Franklin: The accounting program, it takes you through, like this lockstep thing where you get the big firms come in and review and they'd love to hire Mary grads. I didn't see my future as a accountant in DC or something. I applied to law school was basically reading and writing, which balances out all that additional subtraction you do in accounting land. I went to law school and we married and stayed there. Because I was dating someone to be honest, right, who was a year behind me in school and that worked out well, but I got to law school and I hated it. Oh, because the people are not quantitatively oriented. We would have arguments towards class about, what should automotive, how, what measures should automobile manufacturer take to make sure that their gas tanks are safe in an accident and you implicitly have the value of human life.

Jim Franklin: A lot of the students who were like, oh, the human life is like just, infinitely valuable. So, they got to do all this stuff and I'm like, well, if you really think it's infinitely your life, if it's viable, that means like you're saying they have to do like everything possible. Cars would be super heavy to get back gas mileage and look bad and all this other stuff. Right. Be super expensive and don't could drive one. And, there's people wouldn't recognize trade-offs. I kind of missed my accounting friends who were, quantitatively oriented bunch. I ended up applying to the MBA program. Actually, I was in my contract's final that first semester and I walked out of it. It was like, oh, I hate this class. And I got a drink of water. I thought, well, a good life lesson should finish with, to start. I started law school, so I'm gonna finish it.

Jim Franklin: I started this exam, so I'm gonna go back and finish it. The only part I liked about the exam was calculating the damages, doing like that. I applied the MBA program and it just got me, I kind of knew this school was happy to have me back. And it was in the MBA program. I found my people and I was just like, they're, quantitatively oriented. Like in MBA school, you get to be in a different industry in a different role, like five times a week. I just loved that sense of dabbling and being a VP of marketing and a court being company. You have to know how to go. Contact lenses, the next thing, or just, what are the, I loved all the casework and the different studies. I did the joint degree in four years. I really had a very broad education also in the MBA program.

Jim Franklin: I about venture capital and have a strong tendency to not be bored. I like uncertainty and I kind of moved towards uncertainty. I moved towards chaos a bit and not away from it, which may be not a natural accountant, right? Accountants are backward looking and very into certainty were finance people like in the MBA program are forward-looking and are comfortable with uncertainty. Think of, spreadsheets doing all of your performance. That thing is very much in my wheel house. I really liked venture capital wrote my industry paper on that. As an MBA student, I got a very low grade with the professor said venture capital is not an industry, which back then was probably pretty true. This would have been like 1990. I think the global and venture capital and all of the U S was about two to $3 billion per year. Wow. It's grown a bit, but there was a supply demand pricing and there's some interesting stuff about the market tracing from say the 1950s forward, which I did in my paper, I was asked to do with lag actually how humans aren't good with lag.

Jim Franklin: We tend to associate cause and effect with time, think about teenagers, smoking cigarettes. I'm not getting cancer. I'm fine. Right. I spoke one today. No problem. I don't smoke, but I like cheeseburgers. Right? So I'll have a cheeseburger. I'm like, oh, this tastes good. Like, I'm gonna have heart disease someday. Right. It's we don't, we're not good with lags. In the venture capital world, there's this big lag between when LP is making investments. When routine returns mature, which is seven to 10 years later. Let's just say, if VCs are doing well today, they're showing high returns. That's really, investments that were made seven to 10 years ago. LPs, they'll be all excited and say, oh, we're gonna put money in the sector. Look at these good returns. It's like the, exactly, usually the wrong time to do it because it's 10 years later, they should've done it 10 years ago.

Jim Franklin: Right. Whatever the facts and circumstances were, at that time, where we are today here in 2021, were in a long full cycle. The last great time you had to buy in, I was at work, it was 2009, 2010, because were just on the backside of the oh 7 0 8 recession. And so prices were low, right? You want to buy low, sell high there's some business advice, which people tend to forget. If you can buy, right, that business is easy, but if you buy it wrong, right. If you're an investor paying, 10 30 X revenue, it's hard to make money. Right. A lot has to continue to go. Right. If you haven't learned about multiple compression is you will someday you'll feel like it's a branding iron on your back. Like, oh s**t, right? Like we tripled our business. Why are we worth more? Well, multiple compression, right?

Jim Franklin: Just your sector is now one third of what it used to be so tough. So loved venture capital. That's how I ended up in Boulder because I also got involved in lawns when I was doing that JD MBA program back in 1991. I wanted to do triathlons just as an amateur. I really was into it. Boulder is a world headquarters for that. There's a tiny bit of venture capital, even from the early nineties in Boulder. I thought, I want to go and get involved in venture capital, but that's not exactly how it worked out.

Kevin Horek: Interesting. So walk us through your career. Maybe some highlights along the way, because you've been through a bunch of acquisitions. You were the CEO of San grid, which I think everybody's in the tech space has heard of you. Like you mentioned before, probably everybody on the planet's got a SendGrid email many times and they probably don't even know it.

Jim Franklin: Yeah. Maybe we could. Okay. We'll walk like, so how did I become the SendGrid CEO? Right. It wasn't by applying for some job and I didn't get promoted into it. I had done basically had been very active in the Boulder Denver community for probably 24 years at that point. It was well-known by the investor community. How do they get well known by the investor community? Well, when I showed up here, when I was 26, I had no money. I had a good education and with handy with spreadsheets and I had one referral, Jeff Rudolph and Coopers and librarian. I met him and he said, you should go to Rocky's metric club. So I did that the next month. The people at Rockies are smart enough to say, oh, grab me by the Scruff and said, come here. Right. Why don't you volunteer for us and help us run our club.

Jim Franklin: I'm like, awesome. It was a perfect venue to get to know people. I could be on the membership committee, I call people who attended for the first time and say, Hey, why'd you come? Why did you come the next time? Or people who didn't renew? I said, Hey, why didn't we do, what's going on? I was on the sponsorship committee. I'd call all the lawyers and bankers and say, Hey, would you read, redo? They'd say, well, you tell us about your programs coming up. You know, we'd be happy right now. I was on the programs committee. I called the VCs and say, Hey, would you kind of speak on our panel about, how to raise money in these times? They'd say, sure, I'd love to write. And, because were good at putting butts in seats and like the sponsors, we're happy to write checks. Was there a busy pill and clients are stopped and the VCs, they never write checks, but they're happy to, be on panels and stuff and, help get their brand out there and increase their pipeline.

Jim Franklin: I would call all the successful entrepreneurs who could raise money or sold a company and say, Hey, why don't you come in? Why don't you come down to our program and tell us your story? How'd you raise that money, how'd you start your company. Of course, everyone's happy to talk about those sorts of things. So, yeah, I didn't have any friends. I didn't know anyone here. This kind of became my life and this was my social network. I was on the government affairs committee. I'll put air quotes around. That was really, that was just me and three other guys drinking beer and LoDo and complaining about the government and that wound, and just that hasn't changed. Right. Except maybe it's more people and I don't know, government, I just like our government, especially in Colorado, we've had good democratic and Republican governors and it's great place to do business, but, we can all complain about something on that store, but it was a great way just to be, to be known.

Jim Franklin: I started off, you really just had to pay bills. I waited tables in school. I wasn't like I was waiting tables. I need to pay rent. I got a job through Robert half account temps, doing some spreadsheet, work for a couple of different companies around town that do taxes and some other things, but just, kind of pay the revenue lives in a cash rent. You have no credit check kind of place in Capitol hill and east Denver. That's kinda where you start is I think every here's the lesson is that everyone has something to give. If you're in that stage of life, you have your time to get right. You need to find a role in the ecosystem or create one. I was giving my time, I was learning a lot about all the different facets of venture capital. I shared the Cowell capital conference, a number of years where we would run through like a whole day of curriculum around angel to exit, just like, early stage finance around what's the role of the banker.

Jim Franklin: And what about friends and family financing? And, there were angels real right. Great angels. Right, right. What about local VCs? What about coastal? The CDs corporate venture, just, kind of all the one-on-one on that stuff and the role of investment bankers versus commercial bankers. What about an exit, and the life pokes deck exit. On the other side of the conference, we would actually, do a pitch event where we'd have, vetted good speakers, give eight or 10 pitches, which was great. Every month we'd run a program, we would have like three, five minute presenters. Those five minute presenters by design was like, maybe the first time they've ever pitched their idea. We were pitching in Denver. We had a lot of female and people of color, pitching for the first time and we might get criticized, the pitchers weren't very good, right? Cause they weren't curated because Rockies was a volunteer organization.

Jim Franklin: I had the day job I had that cobbled together, rent every month and whatnot. I can't be, coaching that many people every month to get a, to get, quote unquote good pitches, but they were authentic. I think those are some of the better pitches. I love Techstars, but boy, they're so good at getting people ready to pitch. You have to kind of unpack all the Polish to figure out is that they're I think it Techstars has the segment, which it looks like a horrible pitch. Isaac, the founder gave it because he's an engineer. I was think that the best pitches are the bad pitches and the good pitches. They might be good pitches, but you never know because if you have a polished MBA giving a pitch and always sound good and the trick is to find the good ideas that look like bad ideas.

Kevin Horek: You're that out though? Or what's the advice around trying to figure that out?

Jim Franklin: Two things to attractions and overused word, but, with SendGrid was obvious early two months before they even incorporated, they had 10,000 a month of revenue coming in the door and cash going to the founder's PayPal account. He was just giving money to friends who were able to work on it. Right. No structure love Isaac, but that 10,000, their first month grew rapidly from there. I became CEO, 18 months later, the revenue every month cash revenue in the door was going up a hundred thousand a month. Wow. Yeah. 300,000 in June 400,000 in July 500,000 August, those sorts of numbers. Right? If you have a company that is growing like that puts you at the top of the pile. The other, I think rule I have seen used by, I think you are good investors is a cup of smartest person in the room. We'll use Techstar as an example, back in the day and they're getting started, it's called the bunker.

Jim Franklin: They literally had 10 companies, all in the same physical space, one big room. They all had their little problems and were working on, and w whenever one team of, two or three people would have a hard problem, who within that bunker was like the go-to person for solving the hardest problems. That year that Isaac was in the bunker. He was that guy. That's where, like the earliest master said, we may not know why it makes any sense to invest in evil company, in 2009, even that it seemed dated and weird when it seemed like really when they keep doing email for another, and number of years. It's like, yeah, but yeah, it was really the rise of cloud computing, right. That sounded good to share infrastructure company and what was happening in oh nine and 2010 was, the rise of the cloud. If you could buy low on that trough after the oh 7 0 8 resection as the recession, then you're just had these booming companies.

Jim Franklin: Uber is pretty, money was $4 million. I was fortunate enough to be in a fund with David Cohen. That was an investor in that company. It becomes worth like nine $89 billion today, ? Yeah, pretty money is aren't what, but if you can find growth companies like Pinterest and booking, and all those people that were saying would customers is basically all those cloud companies just use SendGrid as infrastructure because frankly Amazon made the market. I think that the best growth strategy out there is to go with a growth Dennis, and, inventing growth is super hard. I would never recommend that, but Amazon basically made the cloud possible and they just left a big hole, which is that sending email from Amazon cloud, like didn't work reliably, it would go lost or missing. Amazon had no support function to follow up with people on, Hey, where'd my mail go?

Jim Franklin: Isaac and Tim, his coat and primary co-founder, they had a big business plan to go do something else, but like, oh, first let's take a couple of weeks. We'll set up this email relay, we'll pick up stuff from Amazon, basically launder the IP, addresses through our servers and send it on to recipients so they can get their mail and they set it up. Of course that turned into the big business. So they're a little pro tip. Sometimes it's the little business inside the big business. They have purported big business, which is the interesting part. I hear a pitch and someone, especially me, their big idea, and it's called that, Hey, I'm always listening for the small, that compelling, thing that might be, the real business. That seems to be a pattern that shows up from time to time. Interesting.

Kevin Horek: How did you become the SendGrid CEO.

Jim Franklin: Brad Feld? I moved to Boulder 92, Brad moved here in 95. I never worked together directly on anything, but we both knew who each other were because he's famous. I did enough stuff around Boulder that, he knew who I was. I had been a CEO before discretionary that did spreadsheet projection software stuff, which was really awesome. It was very aligned with what I like to do. We sold that to Oracle. I stayed at Oracle for almost four years and I did a self retirement back in 2010, and I didn't know what to call it. One of the people, when you do something like that and kind of quit a job like that, it was like, Hey, congratulations on quitting. And I call it a gainfully unemployed. What do you do next? I'm like, I don't know. And there's, are you retired? I'm like, Hey, I'm not comfortable with that word, but I'm not sure what I, I just don't need to work for three to five years.

Jim Franklin: My kids are young and I don't know I'm going to do what I always do, which is hanging around Boulder and Denver help people start things. In one of those meetings is I met with Brad and Brad said, oh, I have the word for it. You're on sabbatical, right? Oh yeah, that's right. Because he goes, that's just a part of the journey, right? It's like, whether your thing fails or it works, or you just need to switch directions. You can, he goes, he's just take a year. Right. I had been involved in this math software for more or less 10 years. I was known as the crystal ball guy. It's like, okay, maybe you kind of shed that persona and there'll be something cool and fun to do. So why don't you take a year? I like to run and do the triathlon as a job.

Jim Franklin: Like, just go do that and hang out with your family. When you want to do something, let's get together like a year from now and we'll find something, fun to go do. And I'm like, all right. So that sounds good. B I liked that term sabbatical. I had the rest of my, coffees and lunches and stuff through that fall, I said, oh, I'm on sabbatical. Well, let's just say 30 days later, Brad called. He said, forget what I told you. If I got do it for you. We gave these guys SendGrid 5 million bucks a year ago. They haven't spent a nickel on it. They're doing great. They're three blocks from your house and Amazon's can, now I'm going to compete with them directly. The founder super good guy, but competitive response, it was not part of his toolkit. Now he's an excellent, founder and a technical person and many other things, but yeah.

Jim Franklin: Competitive response and dealing with lawyers and accountants and just all the I'll call it, the mundane problems of scaling, it's good news. It's working like, oh s**t, right. Oh, another set of problems, right around of things. And that just was not his jam. He was happy to bring in a CEO. I just, I met with the Isaac and the two co-founders out in Riverside, and then the board members through that fall, and I was actually trading the, do the Leadville 100. That was my big project, run a hundred miles up in Leadville. I told the Sangre people. I said, well, I want to start next September, which is like nine months from now. Well, why don't you start earlier than that? We started March 1st, which was six months I had off from Oracle. But, you know, that was good enough. So, yeah, dove into dove a second, but it's just that I was a known quantity.

Jim Franklin: The SendGrid board was sitting around and thinking like, who would be a good leader that would map pair? Well, culturally with this team has the right amount of scale experience that I had. I had the afford. I had the learning experience of spending $5 million of venture money before not successively. I might add when I was a founder, we raised 5 million. We blew it in a year, literally five quarters, all gone complete, but we did it well. The people who backed us that was at Webb families of SQL ventures, primarily in Boulder, when that all kind of imploded, I stuck around us all the assets and do that kind of stuff. And they were really gracious and nice. I thought, I'd go get a job doing finance stuff and for someone else. They said, well, we just gave to that lady bucks to coming down the tech center, doing security software.

Jim Franklin: Why don't you get out there, do your thing down there. I said, well, sure, I don't have a job. I'm glad you guys aren't mad at me for losing all your money. They said, no, that's like, well, first of all, it's not hard money, right? It's, I'll be money. The name of them, it's not their money. It's widows and orphans. Right. They put money into things that help these get, hold on. Anyway. I go down there and I, I just said, well, what's my thing again. They said, the spreadsheets and the people part they're like, oh, okay, I'll go do that. It's always the CFO down at verus, which was then called PISA. And, kind of got their house in order and raise money and hired a CEO. And then that person fired me. I was in two years, I did all this stuff. Right.

Jim Franklin: And I was like, oh man. That's one of my lessons on how you become a CEO is like, don't be great at your job. No, I think we thought MBA students are mid-career people. They think I want to get promoted. I, I do well and I'll get promoted. I'll get promoted. I'll be a CEO. It's like, that's not really how it works. I think it's probably better to be fired than being promoted. A little chart that shows my career. It's like up, down, up, down, up, down, right. It generally goes up. The downs you have below the zero line, every time it's not fun, but I was finally fired. I was fired in oh three from this, from verus at the CFO. Now I'm married two young kids and my car probably shouldn't keep getting fired. That's when I kind of thought heavily about how do I interview so that I can gel with like a management team or a board as I don't end up getting fired every two or three years.

Jim Franklin: That drivers reflecting on conflict to think about, well, I had conflict with my prior CEO because he liked to play things close to the vest, just like, who knows what? Like, what's our cash balance. What's our burn rate. I like to play things wide open. I'm like, our cash balance is $400,000 or burn a hundred thousand a month. Every employee knows that and I tell them what we're going to do and how the job impacts it. And so fundamentally it's a trust issue. I trust people with that information that they will be motivated in their jobs and be smart about, their personal decisions. And a CEO was concerned. I think from his world experience is that when you give that information to certain people, they freak out and, they might leave. If they leave that puts your business in a death spiral and he doesn't want to kill the business by over disclosing certain things.

Jim Franklin: It's not irrational to do what he does or his approach. It's just, I think if I'm hiring people, I would hire people who would safe to tell those balances and what we're doing about it. And it's all part of the story. When we sold decision during we hired an investment banker to run a process. The first thing I did is I told the employees, I didn't ask for permission from the lawyers or the board or anyone else, because I knew they'd all freak out and say, don't tell people, right, we need to, you need to involve the company, right? Because people want to come through asking questions. They need schedules on customers by color or whatever, right. Just all this junk. And, and so they wanted me to tell the employees that these were OEM partnerships were working on. That's why there's all this extra work to do, which would be what it'd be not trusting your employees.

Jim Franklin: Right. I didn't trust my employees a lot. I just went in front of all hands meeting and I said, Hey, we got some news. We hired a banker to run a process to sell the company. I said, just like, and I said, look, I'm sure you guys all want to know, like, how does this affect me? Am I going to lose my job? Right. What's going to happen. Right. I said, well, let me tell you, what's going to happen. Right. That you're going to have to do your current job, sell stock, answer, support, tickets, do accounting, whatever it is. We're probably going to do some extra work along the way. Honestly, I think this won't go anywhere because we've done this three times before and the shareholders have a certain opinion about what they think their baby's worth. The world just doesn't seem to share that view.

Jim Franklin: Occasionally we need to go through this exercise to, see if that's still the case or not. If that changes, I will let you know. And that was it. People went back to their jobs, no big deal. When I told the board what I did, oh, F bombs galore, right. I just like, hold the phone to my ear or whatever, what are they going to do? They can't do anything. It's like, let me run the company. Right. I know how to manage those people and preserve the value. I mean, they were being, again, I guess, most companies maybe that doesn't work right. That sure. That company that worked and if I would have done the opposite and the people would have found out that I had broken trust to that whole employee base, that would have been very bad. And, you know, for the business value.

Jim Franklin: Right. Actually to high period, that's a good story. We sold to high period just as high period misaligned the world. I said, we're sold the Oracle, but not exactly. We sold Hyperion where Godfrey Sullivan was the CEO. He's not more famous of being the CEO of Splunk, but he was pretty famous. A CEO of hyperness sold for $2.7 billion to Oracle. Were only in Hyperion for 29 days the month of February. I asked God, I'm like, why did you buy us on the Eve of cellar door? He's like, it was like your people, right. We had this cultural fit and we ran the business or to due diligence ready. We had Arthur Anderson audits, back when they're the best audit firm in the world, Cooley, all through our cap table, it was tight. We were actually profitable paying dividends. We had to have a tight cap table.

Jim Franklin: Who's ready checks against it, at least quarterly or every so often. When, when I printed, it looked at how we ran the business. They were just astonished as a public company. They're looking at what we did and said, holy yeah, you guys, yeah, were very easy to digest. He knew that we did not have values aligned with our shareholders. That's why were, that's why I restarted the company. We got frustrated with each other anyway. Her attorney bought us and I haven't had lunch with him just before the acquisition. I said, so like from the acquisition, I'm not gonna work for you. I'm gonna work for this other guy, like one layer down. I thought I was working for you. I thought that would be cool and fun. He just said, no, he goes, I don't think that's best. And that was it. I just sat there to eat my salad or whatever.

Jim Franklin: I thought, I guess I don't get to work, but I didn't know. He knew that this whole manager team is being taken out in the acquisition. I was the last, the only business person standing. So I ended being Mr. High Korea and there were the CTO and VP of engineering went across. They ran the product side, but there wasn't anybody on the go-to-market side. I ended up being the general manager, the crystal ball business unit, which is my old my business, but the vice president for enterprise performance management, which was the high three in business. I'd only been at night period for 29 days. That was exciting to learn the criteria and script, if you will, and to, go out and talk to customers and press and whatnot is the Hyperion person. Yeah, that's why I ended up staying. I got to see what it's like being on the inside of a, a big company instead of the small company who they're competing with, they're trying to sell to.

Jim Franklin: So it's one large personal.

Kevin Horek: Very cool. I'm curious, you've learned a ton of stuff, obviously at, in traditional learning ways, like getting your MBA and going to university and whatnot, it seems like you've also learned a ton of stuff just doing it. What advice or is there like books or courses or anything that you've leveraged to help you.

Jim Franklin: Through your journey? Yeah. So I'll put it into two buckets. One is the books media side. I've always been your lifelong learner, voracious reader. People say, how do you find time to read while the good news is I had about a 45 minute commute every day for 17 years. I was in Boulder and Denver and audio books. I would just rip through book after book. And that was very helpful. I also love like a physical book that you can hold, especially I call them a plane ride book between if you live in Colorado, you're going to do work in San Francisco. I was there three weeks a month as part of the Oracle tenure, you fly back and forth, right. Mondays and Thursdays and all that stuff. It's great to be able to pick up a book, at takeoff and then put it, either put it down or put it away at landing.

Jim Franklin: Again, we've gotten these a good point. I don't know if you have like a favorite book of all time would be a good to great Jim Collins, Boulder guide. Just, I read that relatively late in my career was like, oh, that's where big companies. I was like, man, that's great stuff on so many levels, but that is not something that's easy to carry on a plane. It's a little harder to digest and be thoughtful by my favorite set of clean books, how all this stuff to do with culture by Patrick Lencioni, starting with five temptations of a CEO, which really all kind of rolls back the vulnerability. Right? If you, if you can personally handle uncomfortable point of vulnerability that enables you to trust others and to be trusted, I call that a reflexive property, right. That I feel like if I put trust out in the world, I get trust back.

Jim Franklin: If I put out distrust in the world, I get distrust back. Think about negotiating NDA with someone, right? It's like, it shouldn't even be a thing, but it's like, you can just kind of tell like, oh, we'd have to get a lawyer up here and it'd be all formal. It's just, if the other party, coming from an orientation of high trust or low trust, that's a great lens to look at the world. A similar lens is a scarcity versus plenty. Some people have a, just an orientation of scarcity and they feel like in a negotiation, there's a nickel on the table, man. They've got a, they got a sweep it into their side. If you come from an orientation of plenty, which I do, then it's like, oh, I want you to have that. Nicole was, I get joy or satisfaction. I think that the long-term relationship value of your having that nickel will eventually benefit me, I guess, are you really gonna benefit this whole ecosystem?

Jim Franklin: Like something good. It's almost chaos there. Right. It's just putting some good out there in the world that will just come back around. Sometimes I described that as round in the other's favor. Yeah, it's just so whether it's negotiating with an employee for their salary or their option package or whatever it is, it's like, don't try and frag your own team. I had a lot of conflict with the board who was putting all of these colors on a VP sales comp plan. It's like, oh, but whatever. He says, all just maintenance and not enough new license revenue of new logos, blah. Like, it's just like, rule one of sales comp, keep it simple, right? Because salespeople are going to be doing the math on their comp plan all the time and you want them selling. So make it simple. They just have to multiply seven times some number and they'll get their car and just blend it all together.

Jim Franklin: Right? Whether it's services or renewals or whatever, new license, old license, just keep it simple. If they win and we look stupid, guess what? We're making millions on the backend. These are shares who are so much money because they crushed the revenue number, right? Who gives a s**t if they make thousands more, even if it's hundreds of thousands more than they quote unquote should have. If weren't putting the screws to them on all these limiters. I also tell seatbelt sales managers, like that deal only lasts one year. Come next year, we get to renegotiate. If, if you have a tough year, you don't make your, a small town, that year too shall pass. Right. We'll adjust accordingly, but I don't want to retrade your plan every quarter or every month. That's no fun for anybody.

Kevin Horek: No, that makes sense. I'm curious in your schooling or your MBA, is there anything that you wish you learned and is there anything that you maybe took that you thought was going to be irrelevant that was very important in your career?

Jim Franklin: Yeah, we'll be finished the other half of the, your previous questions. I just like books, immediate piece, but then there's this people piece and this is what has probably been even more valuable, which is whenever I got a new role, when I became a CFO at 28 up to Rocky's venture club, volunteering, someone said, Hey, why don't you come be our CFO? We're restarting our company with the tech guy, the sales guy, the founder. We need someone to do everything else. And why don't you do that? I'm like, okay, but now I'm a CFO, but this Eric, the guy that hired me, he says, look, you have no business being a CFO, but here's what you're going to do is you're going to go meet three other CFOs. You're about 10 years older than you. You're going to take them to lunch and you buy lunch and you could ask the first question and that has been like gold.

Jim Franklin: Again, as a CFO, can I do accounting? Yeah, kind of right. Can I do spreadsheets? Yeah, pretty well. It's like, there's so much to the art of being a CFO, like how to put together a board packet when board member likes to have like the holy Bible written, there's all this stuff. The other person likes, just the facts, man, super level, high level thematic, no matter what I did, I'd get yelled at by somebody. And you know, a board veteran's CFO. He had that solved before the Steve's report at lunch. I like to go to the cheesecake factory when it was in Boulder and Denver. They have giant tables and not busy and everyone's secret used to the other. They never say that you can get wherever you want. I went by lunch and I learned so much that way. It was so helpful. What I love about our ecosystem here in Colorado is that every time I asked someone to lunch, they always said yes, but I never really asked the same people twice because your advisors or mentors eight, that word, Nope, friends, right.

Jim Franklin: We're just friends or helping each other. We, and I'm sure they learned something at that lunch too. I get to ask that first question. I was a CFO, I did that. When I became a VP of sales, having never been a sales rep, I had lots of questions, right? Like, why don't you have channel conflict and all this stuff, all these comp plans. I would, you're going to get a group of people 10 years ahead of you not too far. Right. But not too close either. Right. That's a nice sweet spot. And then, and having three, right. A table of four, that's just a nice, there's one conversation happening. It's just, it's just like magic. When I became CEO even more important because as CEO, right, you've got, if the organization like in this triangle below you, and you've got everyone like shareholders and board members and founders, that triangle above you and you have a triangle it's coming from the side, like press and analysts and vendors and other people.

Jim Franklin: You're just kind of getting creamed from all sides. The only people who can appreciate your particular brand of misery and loneliness or other CEOs. I became CEO of the same guy, Eric who hired me, the CFO also fired me, STP of sales, and then hired me to sit, yeah, life is crazy. He said, look, you got to go to this CEO training program down in Santa Monica, every 90 days, the next three years. I'm like, so you want me to go to the beach every 90 days? I'm in, I like the beach. I love Colorado, but I can, if I have to commute between Santa Monica and Boulder. I can swing it. Right. This sounds good. It was fantastic because we would, again, it would be like 30 people who were CEOs would get together on that, Thursday night or Tuesday night and have dinner then like on Wednesday, there'd be like a program we learn like good content about, how to run your life or run your company better or whatever.

Jim Franklin: Just mostly just, being there, having, three cups of tea with other people who weren't emotionally in your drama and you're doing the same for them, right. Because, oh my co-founder or my VP is there. All my shareholders are owned by whatever. Right. My big customers, my partners stealing art or whatever, it's just, you don't have a dog in a fight, so you can be like, oh, well, and they do the same thing. So, so helpful. I ended up doing that for seven years. What was the program called strategic coach, interested Dan Sullivan out of Toronto, actually his headquarters. I just liked to go into the Santa Monica chapter. I'd rather do that than go toronto, but I actually hit a few of their few of the things. It was great. Yeah. Content. Do you think that so much value is in that network of the people that, and there's other programs around town, but that have different structures.

Jim Franklin: I think you could kind of roll your own by having these like lunches. If you need tactical, advice about various things or just having some other CEOs to lean on that are in your same boat. So yeah. I get that people side and then having some structure around, reading lots of books. I worked with Michael Tonya in house counsel for a long time. He was key part of my management team through a number of companies. I brought him into SendGrid and everyone's like, why are you bringing in, counsel, just tired of answering that question, just trust me. It was, oh my God, he's amazing. Part of the role was I wanted him to be an example for just show how to manage me as the CEO, because I had some great VPs that Brian felt also put in there directly or indirectly. It's, I didn't need to come in and change house, but it's like, people need to know how to work with me.

Jim Franklin: Right. Like, and this guy had worked with me for so long, right back when I was a founder, in 2000, right. He was a Cooley as a green attorney. It was on her account. One of the things at all, it's something that Jim read books, he'll jump on a plane and read a book. When he lands, like your inbox fills up a bunch of s**t, he's like, just ignore it. People generally don't feel comfortable, a VP ignoring some CEO's email. Right. But that is exactly the right advice. Right. It's just ignore it. Right. If it doesn't make sense or you think it's a good idea, whatever, I just do what you want to with it because that's just Jim like, doing this process of learning a bunch of stuff, he always falls in love with the latest thing. Right. I'd read this book right away.

Jim Franklin: I remember just so just use time and space as a filter. If he's really serious about something, he'll circle back on it. I can just imagine Michael saying, trust me, he won't, he never does because he's onto the next thing. Right. I got a little thunder. I'll just send that. He was a great example, how you manage and what else would be like, oh, okay. We shouldn't freak out. When red box fills up, in the middle of the night it was, he landed in some point in somewhere. It just like, oh, now I've got all this junk I'm supposed to go do, is that reprioritize stuff? No, we can just do a whole call on CEO. You've got the loudest and longest horizon, loudest voice. That's something that's hard to learn because as you've kind of gone up the ranks, you want to have a loud voice.

Jim Franklin: You want make an impact. You want to go do stuff as a CEO, every time you speak, you make policy. I remember one time I was SendGrid and I'm going to California office while the technical people were, and I flew back and there was a big kerfuffle about, we just changed direction. The product management teams all upset because they had backlog grooming sessions, they set all this stuff. And some engineer said, Jim said X. I'm like, I don't know what I said. I don't know anything about technology. That's not my thing or product. I was literally, I read like USA today. Like the Anaheim angels, it's not talk sports and weather. Right. That's it's like safe territory, cultural stuff. That money know say was I get that. But like, no, she was a founder. Right. We ended up hiring a VP engineering, kind of ran that, like you can't just say something because you have so much power inside of companies is a founder status that people are like, oh, we're going to go add this feature.

Jim Franklin: Like, no. That's what product does. Right. It's like, we have people for that now. Right. It's like, we can't just do a hackathon to change something around. It's like, well, there's a process now for that. As organizations grow or your career grows, it's definitely a tough thing to realize. I used to love going to marketing meetings. This was a decision hearing. And I talk about pricing. Pricing is always hard. Never has it, you know? Right. You can't. And, and what I found was if I said anything at a pricing meeting, it stopped conversation. People would just pick up their pencils and write down the quote unquote answer. Well, Jim said, well, I don't know the answer to pricing. Right. It's just a good intellectual wrestling topic. Right. For how do you price for value and all that kind of stuff. I stopped going to marketing because I felt like I was hampering the conversation.

Jim Franklin: People like Jim doesn't care, it's like, welcome to being CEO. Right. It's like, it's just like travel, right. You kind of feel like you're always everywhere. And people think is you're never anywhere. You're probably doing it about right. If you have multiple offices or constituencies, you need to deal with, you'll be moving around a lot.

Kevin Horek: Interesting. I guess then it sounds like you wish you, would've learned a bunch of this stuff that you sat down with, people that were 10 years older than you in your MBA program, is that fair.

Jim Franklin: Learning, that particular technique would have been helpful, like it's like a life skills class would have been good. I had a, my last semester, the MBA program, we had a Wednesday night, seven to 10 seminar, basically on great books, taught by a PhD in Shakespearian literature, in the MBA program and professor Shaw and Gary Shaw. It's like, I remember him saying, he's like, look, business is all about people. If you get the people part, right. All the spreadsheets and market plans, all that stuff. Well, we'll take care of themselves. If that is probably the punchline, I wish I would have appreciated what it was told to me. The first it took me 10 years later, I'm like, oh yeah, let's get the people 11 years, let's get the people part right. By getting good on your own values, what they are, how to interview for them, how to teach them, promote them, change them, scale them, all that stuff, which is where I think I've learned from oh three forward to now is like, that has been like, oh, I've kind of figured out that piece.

Jim Franklin: I can know like who would be a good co-founder for me, who would be a good investor for me, who would be a good VP or employee? Who's a good partner. Who's a good customer. If you have this fundamental values, alignment, much like Lencioni wrote a whole, all this stuff sent around kind of something that book called organizational advantage. It's like, have they helped? The organization does a lot of good things. I thought of it way back like, oh, through it reduces friction is if you're arguing about, what should our option policy be? Or what should our option refresh policy be? That to me is not a good argument. It's just like rounding the police favor, put it on the right side of generous. Let's make sure people are out to steal this line from Godfrey, from my brain. He wants his people happy and excited.

Jim Franklin: Every time we talked about the acquisition, he wasn't super involved. He'd say, are your people happy, excited with the outcome here? And I just say yes or no. Who was no, he'd say, where are we missing you? I'd say, well, we got this going on whenever he said, oh, okay. How do we address that? Right. Because, and I've used that so many times in M and a context as a board member, just other times, it's like, I want our employees. I want the joint entity. I want them to be happy and excited. It's segment. We set up partnerships with Rackspace and IBM and Google and Microsoft. We wanted those partners to be happy and excited to be sanguine partners. We would, we would design our partnerships. So it fit their model. Right? Do they need to make a certain gross margin on their channel? Then we will fit it in.

Jim Franklin: They're making their gross margin on our sale, through their channel. Rackspace didn't care about that. Rackspace just wanted to have more servers under the management. They wanted us to run SendGrid infrastructure on Rackspace. Well, that didn't make technological sense to do, but I'm like fine. We will buy Rackspace servers. Right. And you'll have more servers. I'd imagine. You'd want to tell people. We run production on them, I'll do a hand-waving around that. Right? What does production mean? Right. I'm gonna have a listening post, some servers that picks up an email and it sends it to San Jose where our main, we had our own data center. Right. It was hard about sending SendGrid mail. Didn't port very easily to other things, but for, a reasonable amount of money, five ish, 10 K a month, we could buy a little pod of Rackspace servers and have them pick up mail and just be a relay station to the big machine that did all the work.

Jim Franklin: Right. That was sent off to the customers. But yeah. Okay. That was part of a production, but they got a fixed contract because were going to pay for those servers, even if no Rackspace customers ever use SendGrid, but we got all the revenue, from the second customers who signed up through Rackspace because we want to, we want a direct access to the customers. And so we got that. We could customize that for each partner because we wanted that to work for them. We had the luxury of a big bow balance sheet. So that was nice. I think even if you're in a tight situation, if you always have that perspective of like rounding the other person's favor, it's like, it works out well for you in the long run or even the medium run. Right. It's just like being around people that have that similar viewpoint.

Kevin Horek: No, I think that's actually really good advice, but we're sadly out of time, I'm sure we could probably go another hour or two with a bunch of stuff. How we close with mentioning where people can get more information about you and anything else you want to mention?

Jim Franklin: Yeah. Well, the best way, I pretty active on Twitter at Jim Franklin on Twitter, LinkedIn, it's linkedin.com/in/jim Franklin oh eight. Then, best way to reach me is via email Jim dot H dot Franklin at Gmail, if you want, follow up on particular topics or reading lists and that thing. I have now on the major use the R word finally, the retirement side and as an LP and venture funds around Colorado, my wife and I, especially at the back first time VCs like Natty with matchstick ventures and Matt with springtime Fletcher, Kokopelli, not kind of thing, but we'd love to meet with startups and help people put them in the right direction, either do an intro to VCs or, team members and other things that might be helpful for them.

Kevin Horek: Perfect, Jim. Well, I really appreciate you taking the time of your day to be on the show and I look forward to keeping in touch with you and have a good rest of your day. All right. Thank you very much. Thank you. Okay. Bye. Jim thought that was really good. How'd you feel about that?

Jim Franklin: Yeah, I went, well, I got my AirPods actually connected. Right. Just as you were doing the intro. So hopefully all the audio went smoothly.

Kevin Horek: No, I think it's good. The nice thing is I record my audio locally too, so I should, it should be fine. Is there shouldn't be an issue?

Jim Franklin: Yeah. Cool. Yeah. I have my this curriculum I'm working on for this spring thing over at school of mines, certain front I'm like, yeah, we hit about 10% of it. That's good. That's 10 an hour or 40 minutes or whatever.

Kevin Horek: Yeah, that's cool.

Jim Franklin: So yeah. Yeah. Wish you luck with the program.

Kevin Horek: Yeah. Sounds, sounds good. We'll, we'll post this episode on there and I'll send it out to you when it's there and you can check it out and give some thoughts of actually love your opinion on learner.

Jim Franklin: Absolutely.

Kevin Horek: All right. Cool man. Have a good rest of your day and we'll talk soon. Okay. Bye-bye bye.

Jon Larson: Oh, what a great interview Kevin. Oh, was really interesting. One thing that was addressing just that I thought of his view of the growth of the VC scene from the nineties today and how much that exploded also just his insights, his journey was sent with being the CEO of SendGrid and how he got hooked up with that was really interesting. I picked that stuff. There are some great lessons in there.

Jim Franklin: I was also really, I was kind of taken off guard, but it makes sense when he talked about, these things that you can read in a plane ride or listen to an, a plan ride, or a long drive as great learning resources and the others. There's a trick though. That's a really nice size of things to be able to digest and to share and using those times are really great. You have that bit of space where you are kind of a captive audience, what do you do with that time? I, I love that idea of, I'm using the time on a plan or time and on a car driving to be learning. That's one of the, it's actually super useful with learner for our, with our app to be able to find those kinds of resources to fit those spaces in your life. So that was pretty cool.

Jon Larson: Yeah. Also, how are you, how it's important to meet with other people and share ideas and learn from them. And so other CEOs, other managers,

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