Latest / Success Story with Scott Clary / Lessons - The Power of Human & Social Capital | Harpaul Sambhi - Founder & CEO of Magical

Transcript

Lessons - The Power of Human & Social Capital | Harpaul Sambhi - Founder & CEO of Magical · Success Story with Scott Clary

• 0:00
  The story arc of the thesis for why you do things, it makes a lot of sense and I know
• 0:15
  that now that helps me sort of put the pieces together as to why you choose to start
• 0:21
  certain businesses, right?
• 0:23
  I actually never knew the story behind a career fire and why you wanted to build out like
• 0:28
  an alternative.
• 0:29
  We just like a professional networking platform, but it was actually to leverage human
• 0:35
  capital and social capital to help people in your network, place them, find them jobs,
• 0:39
  help them improve their lives, same with like magical, that's what you're doing now.
• 0:43
  So as you go through your entrepreneurial journey, I think it would be interesting to
• 0:48
  walk through some of the things that you've done previously when you built your first
• 0:52
  company and some of the lessons that you've learned and some of the things that you're
• 0:56
  doing now, maybe a little bit differently.
• 0:58
  And I also want like you can, you know, speak to the success that you've had in terms
• 1:02
  of maybe the velocity of the success that you've had in the second venture versus the first
• 1:07
  venture coming from experience, was it easier, did it move quicker or is every time you
• 1:13
  start something as an entrepreneur, is it just as difficult as the first time you did
• 1:16
  it?
• 1:17
  Yeah, I think entrepreneurship is difficult no matter what age, how much experience
• 1:24
  you have no matter what.
• 1:26
  I think the gray hairs, a lack of hairs, in my case, start to speak volumes of like
• 1:31
  some of the experiences of what not to do and there's key lessons that you ultimately
• 1:36
  learn.
• 1:37
  I did a retrospect actually the day after I sold my business, took it linked in the
• 1:43
  first time around and I realized that six year journey could have been shrunken into
• 1:52
  two, two and a half years at most, from what I learned during those six years at year
• 1:57
  six to ultimately be able to kind of do the same outcome.
• 2:01
  Maybe it would have been not sold to LinkedIn, but it would have had the same amount of revenue,
• 2:05
  it would have had the same amount of traction.
• 2:07
  And I think that's just what experience gives you, right?
• 2:09
  It's the gray hairs and it gives you a lot.
• 2:13
  I was really naive when I started my business and I didn't know what to do.
• 2:18
  And I think I could chalk it up to probably ten key kind of like highlights that I changed
• 2:25
  from my first business career to my second business magical.
• 2:30
  So first and foremost, I'm a big fan of hiring and thinking about DEI, you know, diversity
• 2:39
  inclusion.
• 2:41
  And it really, the way that I think about it is not necessarily to have like an artificial
• 2:46
  number, because I think a lot of companies like slap something on and they're like, hey,
• 2:50
  we need to have a specific ratio of gender, of, you know, ethnicity and so on.
• 2:58
  I really think about it from like a thought, diversity perspective, and ultimately like
• 3:01
  who are you serving?
• 3:03
  So at magical, we serve the billions of people that use the internet.
• 3:10
  And as a result, you had to look at the composition and start to say, well, how do we kind
• 3:14
  of really reflect an act and start to articulate some of the needs and wants of our users?
• 3:21
  So for us as an example, we have an intro metric where we're shooting for 52% of our work
• 3:28
  composition to be female.
• 3:30
  And it's not necessarily to, again, create a number, but it's just from our perspective,
• 3:35
  we say the ratios of the world, there's more female than male, we have, we have, we
• 3:42
  have that inequal representation, when we look at our user base no matter what, and we
• 3:46
  should start to represent that because the more that we start to represent that and have
• 3:50
  a lot of different walks of lives, the better we can start to have some of the finer things
• 3:55
  and that an individual user wants, whether it is from a different country or maybe if it's
• 4:00
  a different age as an example as well.
• 4:04
  So that's something that, you know, we just didn't have a full touch on an appreciation
• 4:08
  on when we built our first company and hiring is exceptionally explicit here, where we're
• 4:13
  really trying to ensure that we're talking to not only, you know, different age groups
• 4:19
  in different ethnicities, but different diversity of like the perspective, like I want the
• 4:24
  best farmer to work at magical because the best farmer can teach us things that hopefully
• 4:29
  we can incorporate from a different industry.
• 4:32
  Awesome, man.
• 4:33
  This was really good.
• 4:34
  This was like the human side of entrepreneurship because this is, this is everything that
• 4:39
  I don't think people speak enough about and, and candidly, like when I have a lot of conversation
• 4:43
  with great people, it's either like very tactical advice on how to build a business or alternatively,
• 4:49
  there's a lot of negative sentiment towards start up and hustle culture and, you know,
• 4:55
  misalignment between what a founder wants and what a VC wants.
• 4:59
  So I appreciate this as well.
• 5:02
  Or a founder, are there things that they should be cognizant of or aware of so that they
• 5:09
  can maintain all the things that you mentioned if they're looking for external capital because
• 5:16
  that can heavily influence a lot of the items that you just mentioned?
• 5:20
  External capital is probably the one, the one item that could have the most negative impact
• 5:26
  on all those really good lessons learned.
• 5:29
  Because if you, if you take money from a VC that does not believe in a lot of the things
• 5:33
  that you just mentioned, I feel like that could be a really difficult relationship.
• 5:38
  So how do you find the right person?
• 5:40
  I think anyone who's gone through relationships knows this, you know, the easy and hard way,
• 5:46
  right?
• 5:47
  Personal relationships that is, right?
• 5:49
  It's, it's easy to, to hang out.
• 5:54
  It's provocative to think about long-term marriage and partnership, but it's exceptionally
• 6:01
  hard for the breakup.
• 6:04
  And one has to kind of think about that, you know, when we did our fundraising for Magical,
• 6:11
  we've done a couple of fundraising.
• 6:12
  We just raised one of the largest rounds into Silicon Valley history.
• 6:16
  We chose investors that had the same vision and mission of what we had.
• 6:23
  We stressed tested it.
• 6:25
  We said, and this is a course over eight to 10 months of just meeting with these people,
• 6:29
  not even pitching them to be like, what's your thought in the industry?
• 6:32
  Okay.
• 6:33
  How do you think about the best entrepreneurs?
• 6:35
  What do they do differently?
• 6:36
  What are the values?
• 6:37
  What are the, what are the things that that you have seen help?
• 6:41
  And this is key learnings that we're learning from as well, right?
• 6:43
  Like there, they have 1500 companies that are thousands of companies that they've invested
• 6:47
  in and you're getting this key extraction, but you're getting a better sense of like what
• 6:51
  makes them go.
• 6:52
  At the end of the day, we have to recognize that venture capitalists are trying to do their
• 6:57
  job, which is trying to 10X their investments for their investors.
• 7:03
  So one has to be mindful that if you're taking venture capital that revenue and evaluations
• 7:11
  are going to be the ones that they're going to be kind of indexing on, however, there's
• 7:14
  a human side of the business.
• 7:16
  And it's best to work with people like if you have a feel where, hey, investor one is
• 7:22
  giving you better terms, but investor two is more in sync with you, take the investor
• 7:28
  two because dilution at the end of the day is not going to, like one percent dilution
• 7:32
  difference is not going to be material at the end of the day if you're trying to make
• 7:35
  a meaningful outcome.
• 7:38
  So I think that's kind of like the key thoughts that I often provide to entrepreneurs is really
• 7:44
  think about the people he want to do business with is at the end of day, they're all going
• 7:48
  to try to focus on making their capital 10X and that's just part of doing the business.
• 7:54
  But the reality is is you want to have, you want to pick up the phone and call them.
• 7:59
  That is like the key thing.
• 8:00
  You don't want to pick up the phone or think about like you don't want to have a negative
• 8:03
  feeling or cringe where the experience to be like, I have to call Scott.
• 8:08
  What is he going to say?
• 8:09
  Like, you know, you want to be like, I guess call Scott because I have a problem and he's
• 8:12
  going to now share this problem with me and this is going to be awesome, right?
• 8:16
  That is like the type of feeling that you want.