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David Kidder: Becoming Successful and Discovering Who You Are | E69 · In Search Of Excellence

• 0:00
  David Kidder: All the joy is left lives really in the valley in the grind in the relationships and the experience and the discovery and solving.
• 0:06
  David Kidder: This just launched an incredible mindset shift to me, but also just changed my life and how I think about leading people. I started over and I went out and said, I'm gonna do 20 years of learning in one year, and I started to write the startup playbook I did 40 interviews with the best living entrepreneurs, I do friends of friends, the journey of becoming friends with your mind, which is going to take half your life so being patient with the journey.
• 0:34
  Randall Kaplan: Welcome to In Search of Excellence, which is about our quest for greatness and our desire to be the very best we can be to learn, educate and motivate ourselves to live up to our highest potential.
• 0:42
  Randall Kaplan: It's about planning for excellence and how we achieve excellence through incredibly hard work, dedication and perseverance. It's about believing in ourselves and the ability to overcome the many obstacles we all face on our way there. Achieving Excellence is our goal. And it's never easy to do. We all have different backgrounds, personalities, and surroundings. We all have different routes on how we hope and want to get there. My guest today is my good friend David kidder. David is a serial entrepreneur, active angel investor, advisor to Fortune 500 companies sought after speaker and author of four books, including two New York Times bestsellers, the startup playbook and the intellectual devotional, one of which is behind me today. And I hope you all go in and buy it. David has been a co founder and CEO of three venture backed startups, including clickable smart Ray and bionic, where he is currently at CEO and 2008. David ones prestigious erson, Young's Entrepreneur of the Year award.
• 1:36
  Randall Kaplan: David, it's a true pleasure to have you on my show. Welcome to Search of Excellence.
• 1:43
  David Kidder: I'm incredibly grateful to be here, my friend, and I look forward to the conversation.
• 1:48
  Randall Kaplan: You grew up in upstate New York and a place small town called Del Mar, in a middle class family. Tell us about your paper route your Wilson's things, your tennis racquet that you put on layaway, at Montgomery Ward and what you were like as a kid,
• 2:04
  David Kidder: you've done your homework. These are first questions. Yeah, I have a loving home. Wonderful parents, psychologist and writer and two older sisters, a younger brother and lots of memories. Not a lot of resources, but lots of love and learned if I was going to sort of experience things, first of first experiences in life, I'd probably have to go create a lot of them. And that started with a paper route. And just jobs that turned into companies that turn into a career. You mentioned the Walton stick, it's actually probably one of my greatest treasures in my life. I was started play tennis at 10 or 11 years old. And of course, I only wanted what I couldn't afford at the time. And so I put this Wilson staying on layaway for two years. And he got a paper route up at five, five in the morning in upstate New York.
• 3:00
  David Kidder: Snow rain has craziness. And eventually, after about two years, I was able to obtain it.
• 3:08
  David Kidder: And it's in my office, my other house so I treasure it.
• 3:13
  Randall Kaplan: Isn't it great to keep those first momentos? I mean, it's hard to save them as a kid. But when you have them and you looked at them every day, it's a reminder of where you were and how far you've come.
• 3:23
  David Kidder: Yeah, I mean, I feel I mean, of course, the things that create us the relationships, the people, a lot of you know, everyone experiences trauma in one form or the form or another. But just that perseverance of moving through those things, and having the courage to ask hard questions of yourself and about your life and who you're becoming as these are the artifacts along the way. And I think it's important to save artifacts I have just over my head here I have several of the last couple years of different patents and trademarks and pictures of all the co founders of companies. And it just remind you that there's so many small things that happen on the way that turned out to be big, and it's important to save them because you'll create more and it's important to create more there mile markers on the way looking forward.
• 4:08
  Randall Kaplan: A lot of our viewers and listeners have never heard of Montgomery Ward faced us a little bit. Can you please explain what Montgomery Ward is?
• 4:14
  Randall Kaplan: And if you know what happened to it and how is even relevant to what's going on today with some of the retailers that we've seen fail over the last 20 years?
• 4:25
  David Kidder: That's so funny.
• 4:25
  David Kidder: Yes, it's equivalent to a Sears or Kmart. Probably I guess maybe a little more downmarket version of Macy's 3040 years ago, but one of the original sort of like, you know, small town retailers, and not unlike most, you know, supporting you know, local communities was important and then over time the cost goes and Sam clubs and Walmart's and then eventually Amazon's just eroded that share they disappeared. We still have I guess Sears will be the most equivalent In this era of a bygone big box retail, but Montgomery Ward was one of them.
• 5:03
  David Kidder: What's left
• 5:05
  Randall Kaplan: of Sears today because Sears is definitely not the company it used to be I grew up in Michigan, suburban Michigan, Kmart was all the rage are based in Troy, Michigan, I wrote my senior paper on Kmart, which at that point was the gold standard, the platinum standard of all retailers. But you look at the financial engineering of Sears and what happened to when a hedge fund manager took it over? Can these private equity firms or hedge funds come in today and just say, Hey, I'm gonna buy this. I've never run this business, but I'm gonna cut costs and increase profitability does that model work?
• 5:40
  David Kidder: I mean, it's sort of I think the the thesis behind Eddie Lampert's play to acquire that company and then try to create value out of a dying asset was not unlike a baby Buffett, right, which was, hey, we have this asset. And, you know, we can create value where others don't see value, or there's some sort of annuity out of it. There's a very famous HBs case study where a private equity company bought Harley Davidson. And the secret was is that they had hired the two thesis is one is we're going to fire McKinsey, right, who is spending 10s of millions of dollars and fees was a way to underwrite this transaction.
• 6:15
  David Kidder: Secondly, was, is that there was just there was more value hanging in the ceiling, in the factory of Harley Davidson parts that it was the value of that company. And I think as Sears was probably similar to that in the real estate assets, so real estate assets of Sears were in a separate company over over a couple of years that our friend to actually run that business.
• 6:36
  David Kidder: And, you know, the play was was yes, we have retailing. But more importantly, we have footprint warehousing, sort of distribution systems that we could leverage and create value from where others couldn't. So I don't think that's the way it played out. As we know, the stories constant sort of restructuring and financing and recapitalisation, mostly from itself. But lots of lessons on, you know, the private equity model as a refounding model as opposed to a sort of a conviction type of investor,
• 7:09
  Randall Kaplan: you got a lot of friends who own non public private companies who do well, all the private equity firms call them on a regular basis, hey, let me buy part of your company, they usually want control, but sometimes they don't need control. And so many times they think, okay, I want to put money in my pocket, I don't want to go public, but it doesn't work out, they now have a boss, they can't even write a check over a certain threshold$10,000, whatever the case may be. And I know many companies that sold for$1,000,000,000.02 100 $50 million, where the firm's the purchasers ran into the ground, they didn't know how to run it.
• 7:46
  Randall Kaplan: And then the founders bought it back for a fraction pennies on what they sold it for, what's your advice, to the people out there who are considering that kind of move? I know, you know, tons of people that own private companies, during the spec raise, they all got phone calls, hey, let me take it public, the Spax were a disaster, I think 90% of them are going to go BK and I think something like 90% of them are below where they want, quote, unquote, public, what's the advice to all those companies out there who are getting contacted by these private equity firms, let us buy part of your company.
• 8:18
  David Kidder: I don't think there's any truth to buying or selling any part of your company, when you sell your company, whether it's 10, or 30%, or 51%, you're selling your company, you know, money is debt, it has a voice, it has control, there is no scenario where it doesn't, you know, sometimes you need a lot of capital to, to maintain a high growth rate of a company or, you know, continue to maximize the profit of a company that you own, but be of no illusion that it once you sell, you know, one or 51% or 80%, it's no longer yours. And I've had four exits, I've had two that worked to the den, most recently was to Accenture, about a year and a half, two years ago, which has worked quite successfully. But the reality is, is that is that, you know if you can bootstrap and grow a company and maintain control, you own that control until you certainly until you sell that first dollar to private equity. And to some extent that sort of second or third dollar to a venture capitalist. So that's a kind of philosophical lens to view it through. You know, I I've done both I've raised a tremendous amount of venture capital for two companies and Bootstrap two so I I feel that the job of founders really you know, this is not new information is really three things. It's to have a vision number one, and be right in on time, right. Knowing the outside forces knowing the need the world and knowing why us and having conviction that two is is to is really about just talent is you know, putting the right people in the right seats at the right time for the right amount of time. And you basically can't make a mistake, one went through 20 In two or 323 50, and maybe five people 50 through 100. And you're, it's if you make those mistakes, it's almost always fatal. Get them in the job, the wrong seat, you have to remove them, replace them, it's 12 months, and you're out of business. And the third is, is just never run out of money. So you can either raise it or earn it. And it's the same thing.
• 10:20
  David Kidder: It's oxygen, and you have a lot more control for longer when you create your own oxygen. And I'm a huge believer in that.
• 10:26
  Randall Kaplan: As you said, it's hard sometimes to hire someone, you have a structural impediment to get rid of them.
• 10:31
  Randall Kaplan: They have a big contract, they invest in full. I remember one of our portfolio companies, one of my first companies, we recruited one of the top five guys from Anderson Consulting, which was one of the biggest consulting firms very prestigious firm, had been there, I think, for 30 years was on their board, we thought oh, and he just retired, his son lived in Los Angeles. And I thought, gosh, that's the guy we should go after the head of effort, or she had just gone to a company called Web ban. And that was all the rage. And I thought, gosh, you know, if we can get this guy, that'd be incredible. And we did get them and they even made the Wall Street Journal. This was back in 99 2000. So I thought, Okay, we're done. He's gonna raise a ton of money. He had not worked at a startup did not know the culture was very corporate minded, and it didn't work.
• 11:18
  Randall Kaplan: What's your advice? To the founders out there? Who are going after to recruit somebody that big? What should they do to prevent that from happening? And when it does happen? What's the best way to get out of that and hire someone else was the right fit?
• 11:39
  David Kidder: Well, I mean, I had this model at my last two companies called the Timberlake years, and he was teased me about this, but Justin Timberlake, regardless of how we feel about his life now, he's had a really remarkable career, I guess you could call Taylor Swift. And a good example of this as well. Well, you've seen McGonagall for the Mickey Mouse years to the band years in sync years, the solo years, the SNL years, and each one of those chapters is sort of a graduation. It's a hallmark moment where the company moves forward and no longer looks back. And I think it's important to recognize that in each one of those stages, you kind of have to have cultural alignment and mindset and metrics that everyone agrees are leaving this chapter and all the hard questions that we have good enough answers for, and we're pretty behind us. So nostalgia is the enemy in a way. It's also to say that each one of those chapters on your way from a zygote to five roll to a 10 year old to an ugly teenager, it needs different talent. So it's Mr. or Mrs. Right now for 1218 24 months until they're no longer that company. So you know, if you bring someone in who only knows the SNL years, or only knows the you know, the this solo Acuras versus the Mickey Mouse or s&s insync years, it's almost, it's almost fatal, because it's, it's the wrong instincts, wrong experience, right? They're not, they're not bad people. It's that you haven't done the work to get to the SNL years, you haven't earned the right to hire them, because you don't need them. And vice versa. They're the wrong people at the wrong time for you. So context and permission alignment as an organization, from your yourself when you're bored, and your capital has to be basically perfect. Honestly, there's so many ways to fail than there are succeed. So that's one of the issues. The second issue is if you have misalignment, as in, we realized, wow, we hired this, you know, Olympian, this SNL person, and really were the insync years, it's really critical for both parties to fix that immediately. You know, whether that person goes to, you know, ses public face, so it's a good exit, they take on an executive chairman row, but that's non-compensation. They're an advisor, they stay in the board. There's lots of ways to do that, because their value will be valuable eventually, if you earn the right. But for them to stay in organization, those stages and there's misalignment is bad for everyone.
• 14:04
  Randall Kaplan: You're young, you're green, you're 25 or 30 years old, you've never started a company before. The younger you are the more prone to mistakes. I think you are we are. And I remember someone says something to me that I didn't quite get until later on. At some point when you're young, you don't know what good is.
• 14:24
  Randall Kaplan: What does that mean when someone says you don't know what good is? And who should you rely on to help you determine what good is for one example. I remember when I was young, and we were starting a company, someone had a great resume. They were CEO of this company, SVP of this company, and that person looks phenomenal on Paperboy, and you really dug in and you did the due diligence on what he was CEO of and what he was senior VP of it was fin it was hollow and it didn't really work and it came to me that I thought okay, now I understand that you don't know what good is. So can you talk about that? And how if you're a young entrepreneur, starting a company, how we get around that and figure that out as well?
• 16:06
  David Kidder: Yeah, just as setting down some ideas here, so maybe if you're listening, you might write these words down and think of them as lenses. Right?
• 16:13
  David Kidder: So one is on versus in. Another one might be two versus with. On the second, I might do versus, say, so on versus on versus in or on, you know, or, and is really how much time are you spending working in the company versus on the company, like, and so when you're thinking about what is good, and you're spending 100%, your time in the company, building the building organism, building, the sort of product and the marketing to sell it, but you actually aren't building the company, you're actually not working on the company. And the both the balance of those two and your energy and your mindset, and you're, you know, this sort of truth, you're driving two are very different things. And they're equally important, you're just going to spend less time in one than the other in the beginning. Because you're basically I like the idea of your assumption should be that you're dead, trying to become undead. Not that you're successful, that you should be out there being thought leadership, I've made those mistakes in the past as well, that the company literally is dead until it's not. And there's this, there's always this, you know, inevitability of the business where it's like a step function, like you're literally out of business, and all of a sudden, it suddenly works. And it's not like you know, how math you learn math like an algorithmically speaking is you study study, study your terrible novel, Senate CLECs. Right? It's because you're working through the hardest parts of the business. So the first thing is, is thinking like, am I working on versus in? And how much time?
• 17:38
  David Kidder: Am I thinking about those two things? Because they're equally important. Secondly, is, is the two Vs with Am I selling to the customer? Or am I solving with them? And so like, the question of like, what is good is really, the evidence. And the difference between those two tasks, selling is important, but the first stage of selling is to solve with them. And because the truth lives in this last piece, which is, it's not what they say it's what they do. Right? So we have to like, we have to look at the evidence, because the one place that will lead you to the promised land and full circle back to back to your question, what is good look like? Like what good looks like is what customers do, consistently and always with you, because you solve with them. And you build a great organization that can scale both in and on. So these, again, are mindsets. It's tasks that you're doing. It's the timing of those tasks. If you're consciously thinking about their energy and how you're thinking work, you'll get lost in the success theater, you'll get lost in selling, and you'll get lost in working in when you have to you have the other part of your job, which is on solving and listening business. And that's it's a totally different way to discover that commercial truth.
• 19:00
  Randall Kaplan: The entrepreneur gene runs in your family, not with your parents, but your grandfather, your great grandfather, tell us about your Uncle Roger Franceschi. What happened to him when you were 16 years old? And what he told you seven months after he sold his last company?
• 19:17
  David Kidder: Yeah. So, Phil, I have this philosophy that I've had now since 2014, called Becoming. And it's led to all sorts of incredible deep work over the last now, I guess, you know, 810 years. He was my mom's brother. And he was a very successful entrepreneur and psychologist and advisor to some of the great CEOs of our time, you know, them, the runnings for the large media organizations that we consume. And but he was a real, just great, great philosophical leader. And when he sold his company, and he was almost 70, at the time, his last one, he got stage four GIOS stoma, and he passed away seven months later. But on the way to the end, which was a new beginning, you know, I obviously he was my metrics. And so 16 He shared some great wisdom, but the the final wisdom of his life to me was a day and a half before he passed away, I was last to see him. And I was I was holding his face and he was paralyzed on one side of his body were forehead to forehead, and he said, Don't focus on who you are to the world focus on who you're becoming. And it really changed my life because I had spent for reasons that I now now mostly based in trauma and shame, my life trying to get the top of things right and when you get to the top of something, you realize that there's nothing there. All the joy is left live.
• 20:48
  David Kidder: It's real. In the valley, in the grind in the relationships and the experience and the discovery and solving and being of this, and this just launched an incredible mindset shift to me, but also just changed my life and how I think about leading people in my own vulnerability, but also there's and what what it takes to build great teams.
• 21:16
  David Kidder: And you know, just really how to run organizations, I give an example of this. And this is one of the things that came from him as well, is if you want truth, people have to be able to take risks. And if you want people to take risks, they have to be forgiven. So how do you create a culture that believes in excellence, but as forgiveness and grace is required to get there. And so it's important not just to create rules and organization like, here's what we believe. And here's the laundry list of things. It because people really don't know when they're doing it. Well, you have to create like doctrine, they need to know when they're doing it, right. And what we created. And when I created my last company, it was 15 years is this rule called the seven to one rule, we try to do extraordinarily more good than we do bad. And that ratio, which is literally statistically impossible. And that's the point, which is no one we believe in highest standards, but no one will ever actually reach them, which means we're going to fail each other. And so the point is, we want you to take risks, we want you to try we want to take do excellence, but assume that when we make mistakes that our default state to you, is to forgive you. So we can look at the problem shoulder, not across the table, why did you fail, why we're promoting that idea, shoulder shoulder, so we can look at it and grow. And when that we do that with a cycle of trust, and goodwill, and forgive this will get people to live whole lives.
• 22:38
  David Kidder: And we'll get to the commercial truth with greater trust. And ultimately, that is the whole business is dead and dead is getting to a point where commercial truth is what leads the organization because it's discovered, it's told, and it's, it's converted into growth.
• 22:54
  Randall Kaplan: You mentioned the importance of Roger, your uncle, being your mentor. I had several mentors as well, starting with my little league baseball coach, David Paige, who really believed in me from the beginning, when I was a young kid was bullied, stuttered as a kid. And he always had my back.
• 23:10
  Randall Kaplan: How important our mentors in our success in our future, and how do you earn being a mentor today, from if you want to seek a mentor?
• 23:23
  David Kidder: I mean, a lot of mentorship is self serving, it's it's important, but I think a lot of is cheap advice, honestly, I mean, in mostly, it's a transaction of someone who's trying to get something or grow faster, get access, or something which is all important. It's there's nothing wrong with it, it just means that the mentors that really changed our life, they don't give you cheap advice. They give you their hardest truths about themselves about you. And so I think, you know, I remember reading this years ago, which is, you know, the most powerful lines you can give someone and leading them a sentence to them, is this idea, which is, I have high expectations of you. And I believe I know you can achieve them. And it's, it's an atomic idea, which is, you yourself have to have high standards, and I have them for you, which means there are expectations for yourself and your life. And especially instead of organization to put the belief in you what mentors do whether your boss or so now, is they have a belief and a conviction, you ideally they'd actually have done it before, right? So you know, and then they're doing it they'll have, you know, learning and understanding empathy for what you're going through to share how they did it, but not telling you what to do. And that's really the that's what true mentors do is they let you learn yourself. Medical Roger, in particular, was an insanely connected guy. I mean, ridiculous. I mean, and he never opened a single door for me in my life. And he could have done it. He could change my life at any point from 16 to when he passed away, he helped me learn to care about people more than anyone else. And as a result of that exchange, value and ideas and relationship impact to help build and replicate his giftedness because he knew it would change my life and he was right. So mentors do that. They let their life speak. You know, it's not cheap advice. And it comes from a place of deep humility, learning and empathy.
• 25:27
  David Kidder: I want to go back a
• 25:27
  Randall Kaplan: few years to when you were growing up, graduated high school, went to college, you attended the Rochester Institute of Technology where he got a BA in industrial design. Was college important too. And is it necessary in a world today where 65% of students who go to college graduate with an average of $37,000 of student debt, which takes 22 years to pay off?
• 25:50
  Randall Kaplan: And what's your advice to your own kids gonna be on this?
• 25:55
  David Kidder: Well, we, I have three sons aged almost 1316 18 and one going through the college application processes this summer. So this is a, this is a very active conversation in my life. Well, first is I'm I don't I don't think I'm not trying to raise excellent sheep.
• 26:15
  David Kidder: So, you know, there are to some degree a halo effect around intellect and network value at the top, let's say 20 to 50 schools in that country. And beyond that none of it matters in my view. It just, it just the diminishing returns is really about their experience and their development as a human. So I look at their college experience, not as an accreditation of their intellect, their their heart, but also just their growth in their life experience as humans, you know, my father, who's the sweet apostle, like brilliant psychologist, he didn't give me a lot of advice, but it gave me two pieces of advice in my life that were really transformative.
• 26:54
  David Kidder: But when he went, when I walked out at age 18, to go to college, he put his kind arm around me and he said, Don't come back.
• 27:01
  David Kidder: And he was kind of dead serious.
• 27:06
  David Kidder: He was like, You're you he didn't use these words, but like, you're you got this and also you own it. And I told my sons this for since they were kids, which is you own your life, like your parents are imperfect, failed humans, doing their best see us as such. And what we have is, is truly unconditional, godlike love for you. But you're on you're going to be on your own. So you realize this, and this is moments arriving. So helping them game a system that's unbelievable, especially in the world of AI and super intelligence. And, you know, we're gonna become a tool base value based solution base, really economy very soon.
• 27:48
  David Kidder: Getting that degree and perfecting, you know, a skill.
• 27:52
  David Kidder: That's, that's hireable is almost a waste of time. It's really about their ability to think and learn and solve hard problems. And hopefully, I'd add this last thing, which is I told the boys coming. I just started sending them all sorts of articles about how to what to study horizontally and orthogonal. It's become prompt engineers. And how do they how can they elevate and CO elevate their ability to solve harder and harder problems that are beyond their intellect, because they understand the tools and the way to think about solving problems. So the commoditization and accretive accreditation is going to accelerate. So that skill is going to be matters.
• 28:34
  David Kidder: And so having studied industrial design, which is sort of engineering and art and and problem solving, and storytelling, I was just It was a total gift to go to it. It was one of the best design schools in the country, actually won this idea magazine International Design Award before I left, which was sort of a rare award.
• 28:50
  David Kidder: And then the dawn of the internet happened, it was 1994 Silicon Graphics boxes and razz the impro. Engineer, were using all these tools. And I started my first internet company at age 2021. And it taught me to think and it also taught me how to work extremely hard like hosp.
• 29:11
  David Kidder: Put yourself in the hospital hard. So the life was gonna be easy by comparison. By time I got into the world relative to how hard it worked. I worked at a startup nearly part time, 23 hours a week, I was an RA, I played college lacrosse and did a full full load. Getting out and started company was like a, you know, the beginning of a breeze of heartbreak for next 20 years. So that's a lot to say.
• 29:29
  David Kidder: But I just raise your kids to think independently with the great tools of our generation.
• 29:38
  David Kidder: And it's not unlike the graduate plastics. We're in a place where AI is not unlike chatty videos like that, like Netscape and HTML for our lives.
• 29:48
  Randall Kaplan: You mentioned, you have a son going through the college application process, which is one of the most unpleasant stressful things that they've ever done in your life.
• 29:56
  Randall Kaplan: A lot of parents are stressful as well, because your kids are stressed. So you're stressed.
• 29:58
  Randall Kaplan: When you and I were growing up, David, it was all about the GPA, right? You couldn't get a job without a high GPA today. A lot of the students still function or want to strive for a high GPA, but in the real world, I think at least my perspective, it helps you get another meeting with a potential employer. But at the end of the day, are you going to hire somebody with a 3.0 or 2.6? If they have the right skills and social skills and you like them as people? And as a corollary to that question, how are you advising your own kids like I did my own kids about the mental health issues associated with school, the application process? Is it necessary, as you said, to have the mentality that you're going to put yourself in the hospital?
• 30:48
  David Kidder: Oh, god, it's a big one. So the GPA thing I'll just get out of the way I can't Remember the last time I looked at a resume for hiring and even consider the GPA? In fact, I think it's actually a false positive, to be honest, you unless it's extraordinary. I mean, a scholarship is valuable.
• 31:05
  David Kidder: But like, it's just it's I would just assume if you got a good school, you're mostly smart. And really, it's what you did with it. It's Did you hustle? Did you create value? Did you continue to learn? Were you curious? What Am I old, late friends, was the founder of Zappos wonderful guy, friends, lots of people, but a very authentic friend. And I remember he was a friend of mine as well, incredible guy, incredible guy. And he, you know, lots of journeys together.
• 31:30
  David Kidder: I remember he once told me this is about four years ago, because he had no kids. He just like, you know, what's the most powerful lesson you're trying to raise? You know, Jack, Stephen and Lucas. And, and I said, Well, you know, it was really about their grittiness, right kind of Duckworth view of the world. And suddenly he goes, Well, if I had kids, I think the most profoundly important thing to teach them is curiosity. And I kind of thought of as sort of a vitamin versus a painkiller, a software versus a hard word, right? But the more I've thought about that, one thing that he challenged me on was, I think he was completely right. The curiosity as like an atomic skill of asking why, right? Why does that work? Why does he does or why do I feel this way? Why did I do that? Why did you do that? Like, the curiosity is the entanglement of our minds with opportunity in the world. And without it, you're sort of just you're following life is happening to you, as opposed to you happening to life. And that fulcrum of curiosity, is really what I hope is embedded in my kids mind for their lives, that's going to lead them to grow, you know, grow without curiosity, it is the central sort of chemical in all growth.
• 32:46
  David Kidder: Yes, it's probably one of the most I mean, yes, character and their ethics and all these things. They don't need to be perfect, no one's perfect. But they do need it, I think that's the one gift you can give them is a very deep a committed sense of curiosity, about themselves and about the needs of the world. And how to grow.
• 33:08
  Randall Kaplan: Isn't the applicant with a 3.0 or 2.8 lazier and doesn't work as hard as the student with a 3.8 or 3.9?
• 33:18
  David Kidder: I think it's meaningless. I mean, because if you think about all the types of gifts of skills, people have the ability to test the ability to study, the advantages of you know, you know, learning how to take notes and study in class where you sit where you're oriented, you know, disease, quite frankly, you know, Lyme disease and the things that we just don't, you know, mental challenges you can barely see, it's just a single prism into the mind of a child and how they're becoming a human being an adult. So it's a signal, but it's no less important signal as all the things you could show as signals about radical curiosity, and challenging yourself. And you're becoming right that you know, you're the grit in your journey, there's, those are more important signals than a GPA.
• 34:08
  Randall Kaplan: I mentor a lot of students, high school students, college students, you know, we have a, an intern program each summer, I know you have generously said you'd love to speak to the interns. And one common theme of stress, among all of them is, I don't know what I want to do for the rest of my life. It's very competitive, either to get into college and get a job at Goldman Sachs or a tech company. How should students deal with mental stress, which has come to the forefront, thankfully, of our daily vernacular? And what's your advice to them? If they are struggling too much with a mental stress and are having very negative thoughts?
• 34:44
  David Kidder: So there's, there's a, there's an origin of those, those struggles, right?
• 34:48
  David Kidder: And I think this is, again, if you start to really unpack what I'm sort of trying to mentally create a mental model for around the idea of becoming, it's really these curiosity starts is what ignites these the answer to these questions, right about what am I gonna do with my life?
• 35:08
  David Kidder: How am I going to grow? How am I going to survive these things, but if you back up and you think about this at a very high level, and I encourage people to really go as deep as they're comfortable in getting these answers, but think about this way. Like our lives our reality, the one that's we're struggling with is really an outcome of your choices, right? So it sits on this pillar, the single pillar of our choices and, of course, you're gonna say no kidding, right? And you're gonna You can read all sorts of structural learning from the outside in on habits and mindset and some amazing authors and thinkers on this stuff. But ultimately, the fatigue or the exhaustion I'm performing in fixing yourself on the outside end will eventually run its course, right? It's the human nature, right? Because our conscious life where we're trying to fix that is really built off of what's below that.
• 36:02
  David Kidder: It's like being an iceberg in the middle of the ocean, we've lived the tip, but our whole reality sits underneath it. So it's important recognize that our choices really are just at the top place Berg, we're disconnected from the reason of the idea that choices are really just intentions. We are intentionally choosing our life, whether it be stress, or lack of stress, ownership, lack of ownership, behavior, lack of whatever those things are. So the question is, is how do you change an intention, if you can't change your choices permanently, which is we're struggling to do trying to get to the top of things because we get there we'll be happy. When you really understand that the intention is to change an intention, you have to get underneath the intention, which is the question of why why do I intentionally choose this life stressful on stressful performing non performing, anxious, anxious, happy, all the all the dimensions of that? And so part of becoming is that first stage is just knowing yourself and being curious, ask, Why do I intentionally choose this stressful, anxious life, and if you try to fix it from the outside, in, you know, there's a lots of ways to take you out of that journey, right drugs and other things, which are, I understand them, sometimes all the way through is to go through them, right, there is no escaping to get the intention, you gotta go through, not out. So once you do the work of knowing, you start to understand why then begins the the wholeness of the journey, right of learning to live.
• 37:35
  David Kidder: Because what you discover what's underneath that there's actually something underneath the y, which is one of only two states, and that is fear, or love. And so the more you get connected to the state that you're in, because you understand your why you've know yourself, and now you can heal, right, the second stage is just the receiving of healing, you get to a state of being, right being that love as a state. So knowing receiving and being that journey, really is the journey of sort of becoming friends with your mind, which is going to take half your life. So being patient with the journey, being patient with the questions that you have to live because they're so difficult to to receive when you're in Iraq, in your 20s, you're just learning is really important sort of surrendering around the, to the pressure of having the answers. But to come practically into this, and I'm happy to dive into those things, because they're all sort of the gnosis of those things are real, the question of like, what am I gonna do with my life? And I'll just tell you, the advice to get my sons was your was your second question. And that is really the dimension around being curious to understand the outside forces that are happening in our lifetime. outside forces drive almost all economic or professional success. It just does. And so we anybody who thinks they're self made, or, you know, it was their hard work, all those things being true, right? A lot of people are self made a hard work have failed radically, consistently, because they misunderstand the outside forces. Second is they understand the needs of the worlds that are either created because those forces, or the ones that have changed because those forces, so force need. And lastly, and this is the most important one is what is your proprietary gift? Not just what are your What are you? What's your, your passion, but what do you what's your gift, the proprietary impossible to replicate? Secret of your life that allows you to feel like every 10 hours is one hours, that drives your becoming in solving that problem? Well, because you have obsessed with the outside forces, when you have that concoction, that conviction going, all the questions of where you're gonna spend your time your life will be answered. You just have to, you just have to care about them very, very deeply.
• 39:54
  Randall Kaplan: What are you going to say to? Or what do you say to all of the 19 year olds or kids in college or even kids?
• 40:00
  Randall Kaplan: Or young professionals who are not kids anymore? Who don't know what their special gift is? How do they find it? And what do you say to people who say, I don't have a special gift?
• 40:12
  David Kidder: It's gonna take a half your life to figure that out? Probably reset your expectations. I mean, I don't really know. My most successful friends have been working 6080 100 hour weeks for 20 and 30 years. So the idea that you're gonna go out there and have the type of success unless you have the extraordinary good fortune of the outside forces that benefit you. The reality is, is that you're going to spend half your life if you ask the right questions, working, hopefully in peace and love those things in a relentless quest to answer that question, and you're going to learn a lot of things until that answer arrives. I've seen it because you're probably not ready to understand it. So I wouldn't I wouldn't it's the wrong question to say, I need to know the answer. I'm struggling there, sir. The question is, is, am I?
• 41:03
  David Kidder: Am I a person? Who's will become the answer? And it's a totally different energy. It's a toilet because you're, it's such you're gonna work hard no matter what the question is, is, what is the work of your mind? And your your effort that's going to produce that answer? So this this, so the first question is, is what would you tell someone who is see the question, the second one was, they don't know. A lot of the questions of proprietary gift are happen to you. They can originate in trauma that can it can go it can originate in tragedy or success, quite frankly, I'd argue that success is a very bad educator, I think of the things that have happened to me. And I've gone through total brokenness, total failure, adult back from zero. And because of that, that everything I do today was learned in that experience. And it was brutal.
• 41:58
  David Kidder: But there's no way I would have experienced the moderate success I've had are the things I've done today without going through that. And so that wasn't something I planned, I tried to avoid it like hell, it just was the inevitability of my career.
• 42:13
  David Kidder: And all the learning will happen because of it. And all the character lessons and the in the joy that's followed has happened because of being broken, quite frankly,
• 42:25
  Randall Kaplan: let's go back to college. And your first couple of you're 19 years old, what are you seeing out there? What are you motivated by and what prompted you to start your first company
• 42:39
  David Kidder: I mean, I was I got I got exposure to entrepreneurship and the freedom of time young. So running my paper route. You know, I worked for a small sports shop called Mike Rossi sports, I, you know, it was fast and loose, it was a little less, I realized what I wanted what I wanted to be managed or as a manager, leader versus you know, player, so speak teams and sports and things. In college, I had very good fortune of being joining a startup backed by called the idea group started by Bill Gillette, who really was one of a key influencer in my life.
• 43:15
  David Kidder: And, you know, he gave me a job, you know, immediately upon meeting him at alrighty, when he needs some computer specs, and I just leapt at it. And then at Rocky for a number of years, and as a result of that got exposure to the internet, which was 9095, because of that. And then as much as I love design, I'd never worked in design ever again, I became problem solving in the world of digital, which was the equivalent, same stuff, what's the difference between a physical versus a digital product, it's how you think.
• 43:45
  David Kidder: And, and then I started first company, we worked doggedly for several year, two years, three years. And we sold that for moderate amount of and with two very good friends of mine, and then went to New York did a roll up for for three years and another great experience and start my next company. And the SAS company raised 5 million bucks and sold that for a bunch and then took a bunch of years off two years off traveled 42 countries, and that came back at Meriden sort of family and start another two cup next couple of failed badly. Next couple, it's just like, it just you just keep building, and it's just all of that was, you know, really trying to continue to take very significant steps forward in my ability to build things to solve problems. You know, I, when I wrote the purpose of bionic VR I sold it was called this idea that we ignite growth revolutions. And I didn't really realize what that meant until I thought about in the context of money or success to for our partners. But the truth is, is that all of it is lives inside your mind. It's in your permission you give yourself and the greater you continue to take these risks and grow, the greater your permission, and the confidence you have to be able to go solve things, even if you don't know the answers. I mean, you're building a company today that has way more big questions in front of it than it does, you know, behind it. And every little signal is accumulative.
• 45:12
  David Kidder: It's compounding. And while it's not a nonlinear, it's a nonlinear path. You're like, I just need to do that five times, and then build a system that does it 50 and then 505,000. And it'll solve itself. If I get these five, right. Once you know how to do that, you just you start looking at all the components of the business. Each company teaches on a part of it.
• 45:31
  David Kidder: You know how to stack an organization to build to solve something important and hopefully it grows. And your timing is right, but you're sensitive to all those things that you just didn't know before. So that's where the confidence lives is, is just keep taking shots until you it's you're forced to learn it.
• 45:51
  Randall Kaplan: So There's a lot to unpack in terms of what you said, tell everyone. I mean, we got to go through these, David one by one, because they're very interesting. And each one is a little different. But tell them what a roll up is? I don't think they really, most students don't really know what it is. It's not as common today, it's a little bit common if you're a private equity firm, but what is it roll up? What happened to that company when it went public, and give us the history of your next two companies. And then I want to know how you bounce back from a failure. When you have a big success. What What prompted you to keep going,
• 46:28
  David Kidder: Oh, roll up is where you have a hypothesis or a business plan to keep it simple, you raise a bunch of money, and you say, there are many of these similar companies in the world.
• 46:40
  David Kidder: And any one of them, I'll be meaningful, is never gonna be as valuable than more of them together. So it could be technology, engineering services could be more often than not, it's not about deeper technology and SAS, it's more services businesses, which is what we were with technology enablement.
• 46:58
  David Kidder: But there was just a lot of similar companies that together could build a really big company, if you got the culture, right, and all those things. And there was we're backed by Omnicom, and I was, I joined that company was founded by some other people, and we had a ticket in public, and it's actually still around today. And it was one of their big five big plays at the beginning the internet. So there's lots of capital going towards businesses that could solve technical problems at the beginning of the digital era. Today, I'd say it's equivalent to, you know, sir, there will be preventive services companies in the AI era, people solving big digital, you know, generative digital challenges for big companies will be similar to this, I think, not unlike the internet era, which you were a, a wildly successful, founder of one of the first, you know, generations of those businesses. You know, this AI era, I think, has a similar level of gravitas around it. So the difference between that and let's say, you know, the multiverse or, you know, the metaverse, I mean, worse, even social media. To some extent, well, there's several big companies. I think this era is much more substantial than that chapter. So to talk about the failure piece, I can tell you about an experience around that, that I think I think is quite profound in terms of how to start over. But maybe just unpack that a little more, because we go to lots of directions around that one question alone, is there a particular piece of experience that you want to want to jump into that I can try to eliminate?
• 48:33
  Randall Kaplan: I think we should expand on that quite a bit. Because I think one of the great motivators in our life is fear of failure. And I think it's the primary reason why people don't start companies, even though so many people out there millions, 10s of millions of people don't start the company. So you failed, maybe you can talk about one or two of your failures, what you were thinking, how depressed you were, how tough it was. And then how you bounce back from those.
• 48:56
  David Kidder: The one that comes to mind was that was called clickable. And on paper, you know, and publicly, publicly speaking, it wasn't right people didn't really understand what had happened. And I'll just share with you what that story was. And I think it'd be it'd be, it'd be illuminating. So we had built us back in this is 2007 to 2012. We built a software company, a SAS organization was focused on day data and machine learning related to search and social advertising. So you know, lots of different API's lots of different frictions, so how you manage search and social across many platforms was difficult.
• 49:41
  David Kidder: And this will seem totally Captain Obvious. But if you could plug all that data into a single interface that taught you and told you how you're doing every day, and what you needed to do to improve without having to think about it, you could just make chip decisions. That would make your job 10 times easier. And that's effectively what we did. And we raised, you know, 30 plus million dollars over a period of like six years, a couple 100 People 250 plus people, and we build this organization, and we made one fatal mistake. And we did this at a very high profile level. We did this with Founders Fund and some of those phase VCs the world Abra Wanger USV records when it first mark, we're all thank God still friends of mine, but we ended up building. This is the story. We're building basically, a siamese twin headed kid in the world. So it turns out as a business, what that means is we were solving two marketplaces at once. And what we realized is because we had done a very big contract to white label our company, we were growing fast but not fast enough was We went label it and brought it to a one a very significant credit card company of which the President company is still good friend of mine as well. She has helped, you know, just been very kind to you over the years, but we took it to their masses. And we end up really bifurcating the vision of the company. So same promise, same patents, things.
• 51:07
  David Kidder: But we turned out we were focused on small and medium sized business. And we're focused on the enterprise side of the world. So before too long, we realized this is not one company has two companies, we lost focus. And it's it's really a fatal outcome to be honest here. So despite an incredible talented culture, and people and brand and all the things that we won, the thing that we that are fatal mistake is we lost focus. And we did that at the end of the day as a CEO that's on you, right? Like you're the buck stops here is real, it's you, there's no one to look at, you can see the smartest, most brilliant board in the world. But at the end of the day, you're you're making the decisions. And I had to take ownership of that. And we almost been acquired and two different for actually very significant numbers. twice before we end up raising a Series C. And we raised that seriously, my board basically said, We want you to sell the company immediately.
• 52:07
  David Kidder: And effectively. Take that beautiful kid and rip it into which is so heartbreaking.
• 52:16
  David Kidder: Because you love the people, you love the business, and it's what we had to do. And so we did do it very quickly. So while I was trying to do that, I It nearly killed me, I have three little kids, I was working, honestly 80 to 100 and plus hours a week, you know, night feedings everything leading this whole thing through crisis. And it I had actually had a acid reflux heart attack. I discovered years later where I got a bed one night and fell, as it was saber sore was driven to my chest like flat on the ground. And I thought I was gonna die literally die and I just muscled through the pain. I went back to bed and kept working, literally.
• 52:58
  David Kidder: And I got a body scan a couple years ago. And they're like, Oh, you have a you almost died. And here's the scar to prove it. And like, Yep, I know exactly what happened was really foolish to be honest here. But the stress was crazy. So anyways, this one night, David Smith, my chief revenue officer of the company calls me and he says, David, he said, Why are you making this so hard? And I was like, What are you talking about making it hard? I'm killing myself trying to get this company to safety?
• 53:25
  David Kidder: And he said, No, he said, Actually, you're making this hard, harder than it needs to be. And I said, What are you talking about? He goes, he goes, this company is about you, which is why it's failing. And he said, and he goes, and I as like I was getting angry. Honestly, I was very angry when he said this to me. And I said, he said he goes he said, listen, David, he goes, You are more than this company. And the sooner you realize it, the sooner the company will get to safety.
• 53:55
  David Kidder: Because we're all here to help you. And no one can help you because you can't see the company because you're seeing yourself. And he was 100%, right? I was trying to drive and control at a self interest to survive. Because I was afraid of failure. Burton beyond super naturally afraid of failure. And he and I said I was so exhausted. I said, Well, what do you what does that even mean?
• 54:24
  David Kidder: Like, how would I solve this? He goes, You need to give it over.
• 54:27
  David Kidder: And I was like, give it over to what he does to God or the universe. And I was like, what does that even mean? At this moment? You can imagine you're thinking through this in the crisis of it. He goes well, what it means is, is that you accept all of the outcomes. And I my next line, this is verbatim as I said, You mean failure. He goes That's exactly what I mean. And he and I my next line forbade him was You mean public failure?
• 54:53
  David Kidder: He says yes. And my next verbatim is I like the cover of insider. And he's like Yes. And in that moment, I literally broke and I realized like all of the possibilities are possible.
• 55:11
  David Kidder: Failure is as equally possible as success and it's not about me and I couldn't control it. And I literally surrendered I live at moment gave it over and as 30 to 50 Do I laid on the ground my adequate my last home little kids and downstairs and I sobbed like a baby like a biblically on the ground. Flat as I could get sobbed for not for a little time, like a long time. And it just broke me that I realized like this is going to happen and I finally accepted it and I I got up in this puddle. And I sat there in this kind of lotus position. And I started to like meditate and pray about this giving over part. And I realized I was this is the mental model, I'm almost done as long snapper to the port one, as I felt like I was running through these paths of thorns. The harder I ran, the more shredded me and I was bleeding out. And the mental model renew I had the miracle this moment, and probably when most courageous decisions in my life, as I imagined myself being lifted out of that road, onto a clean, brand new road of life, brand new. But I imagined that road road as if I started walking it when I was 20. I had to say, I realized, I really believed I felt foolish, but the truth was, everything was still possible. All the opportunities in the world were still available to me if I believed it and thought it and found it. But I was wiser. And humbler in that moment. And I began to walk again. And I went to sleep. I went to bed. And I slept for the first time in ages. And I got back stay and I was open, humble, honest, asking questions, and went back to that got up again next day slept and slept again and again, at about a month later, quote unquote, out of the blue. I got a phone call from an old friend said, Do you want to sell your company? I said yes, I do. Because great because I need all of it. And within a month we were acquired.
• 57:26
  David Kidder: There's no CO CEOs, as you know, I used like, there's only one boss here by Friday. He's like, you're out. I'm like, great. And then I was gone. I was out. And I and it was also where the safety. And I started over and I went out and said I'm gonna do 20 years of learning in one year. And I started to write the startup playbook. I did 40 interviews with the best living entrepreneurs. I knew friends of friends. And I listened. I said the questions how do you bet your life and I learned a generation of learning that came down to the second goal introduction called the Five lenses that began by Yannick and we bootstrapped a company next seven, eight years to 25 million revenue and sold it two years ago. No way that would have happened 10 And I got to the brokenness. So success about educator so long story, but renewal begins. Because your willingness to go through the brokenness and give it over and start again.
• 58:16
  Randall Kaplan: Thanks for listening to part one of my amazing conversation with David Kidder, an incredibly successful entrepreneur, venture capitalist, investor, author and speaker. Please be sure to tune in next week to my incredible conversation with David