This is a story about the future impact that Waterloo can have on the country and maybe even the world. But it’s NOT about Blackberry. Crazy, you say?
Today, on a beautiful Friday afternoon in late September – what could be one of the last great summer-like days of the year we did somethign crazy. We said “to heck with that” and headed indoors to a crowded lecture theatre in the Engineering building at the University of Waterloo. It was worth every minute.
Standing in front of a wall of chalkboards in that lecture theatre was Terry Cunningham. Today, Terry is the President and General Manager of EVault (a Seagate Company). You might know him as the founder of Crystal Reports. He’s also a University of Waterloo alumni.
Despite the gorgeous day outside, the fact that it was Friday afternoon and that this was not a required session – it was quite a contingent that turned up to hear Terry speak. It might have been a tough audience. Half the audience was engineering undergrads — the Waterloo program that has some of the toughest entry requirements of any school anywhere. The other half were students from Waterloo’s Conrad MBET program – the Master’s program in Business Entrepreneurship and Technology. A lot of business leaders come to this campus – you have to be exceptional to stand out.
But stand out he did. In a few short minutes, Terry had us captivated. On this beautiful day we all sat attentively listening to Terry’s journey through business. We heard his candid, honest and compelling stories of both success and setbacks. Authentic, unvarnished and compelling – the stories that he “wished people would have told him 30 years ago”.
Terry describes himself as the “Chief Story Officer” of his company. He tells stories to help people discover for themselves the directions they and the company need to take.
Entertaining? Yes. Compelling? You bet. But was it an easy ride? Not on your life. Terry is a great speaker, but you have to listen attentively. He refuses to spoon feed the audience – he’ll tell you a story, but you have to find the message yourself. “You should be smart enough to do that” he says.
Without pandering, he tells the students why. “You are the smartest people on the planet.” But before that can even sink in he drops the bombshell – “and that is your greatest liability”.
Terry should know. He was one of this elite group – a UW Engineering student. When he graduated, by his own admission, “he knew everything”.
Understandable. He started Crystal Reports, a fantastic success story. He took a strong knowledge of DOS based report writing and parlayed that into a company that he sold for 25 million dollars. How? He used a strategy that many are trying to master to this day. He gave it away.
Long before anyone had coined the term “freemium” Terry had bundled his software and included it as a free offering with Microsoft’s Visual Basic program. How did he make money giving away the software for free? Funny. That was the same question Microsoft asked him.
But make money he did. To Terry the answer was simple. Give away the free version and charge for an upgrade to the “professional version”. After all, he said, “our customers saw themselves as professionals – of course they’d want the professional version”.
Could it really be that simple? Hundreds, maybe thousands of companies today have been trying to convert users from free offerings to paid offerings. Few companies have anywhere near the level of success that Terry did.
How did he do it? Was it a unique insight into the customer? Was it timing? Was it pure, blind luck? Only one thing was certain. Terry knew it would work.
In fact, at that time, he was certain about everything.
Today, however, he’s not so sure. After 30 years, he’s come to a much richer understanding of how little he knows, how much he doesn’t know – and most importantly – how little it matters. After all, he says “everyone in business knows a lot”.
Over the years, Terry says to our group, “I’ve met a lot of smarter guys”. And I’ve learned that “I don’t know what I don’t know”.
But, he tells the group, you don’t need to know everything. In fact – it gets in the way. What really counts is how open and curious you are.
Not surprisingly, he illustrated this point with a story. He told us about pitching an idea to a new product manager at a large software vendor. The product manager was two years out of university. He paid no attention to Terry’s presentation. He seemed to be doing email through the important parts of the pitch. For the rest, he appeared uninterested. At the end, he finally came to life. Gratuitously – he berated Terry for “not doing his homework”. If he’d done a tiny bit of research, the product manager said, Terry should have known “this company would never bundle someone else’s product”. He continued to chastise Terry because he “obviously didn’t understand the company he was pitching to”.
Many of us would have ended this story differently. We might have told the young upstart that we had done a number of successful deals with this company – all of them bundling products. We might have mentioned the millions we had helped this company make. We might say that we he had researched the product manager – did he know we were alumni at the same university? The less generous or controlled among us might have simply proposed something that was anatomically impossible and stormed out of the room.
Terry didn’t do any of that. He lives what he says — you welcome criticism and learn from it. But at that moment there was something else keeping him calm. He had a flash of insight. He realized what this product manager was trying to say with his rude and condescending behaviour. He was saying “do you know who I am?”
So Terry didn’t get angry. Not because he’s incapable of it. Instead, he realized something. He was looking in a mirror. As he said, “that arrogant little (expletive deleted) was just like me”.
Another story to illustrate the point – Terry took up flying after selling his company. He planned a trip down the west coast. He could do it. He could do anything. His brother – a commercial pilot – tried everything to convince him not to do it. Terry would not listen. After all had 250 hours of flying experience, which seemed like an amazing amount to him. He failed to think that his brother had thousands of hours on a variety of aircraft. When his brother couldn’t convince Terry not to take the trip, his brother booked off sick – the only time in 30 years – and insisted on flying with him.
It was on that trip that Terry came to the realization that “he didn’t know what he didn’t know”.
He realized how dangerous it was to think that you know everything, especially as a pilot. “There are old pilots and there are bold pilots”, says Terry, quoting the old axiom, “but there are no old, bold pilots”.
“If you run into trouble in the air, you have few options – you just fly to the ground.” It’s not a technical limitation. In fact, Terry told us, “there are planes with built in parachutes. All you have to do if you get into trouble is pull the ripcord and float to the ground”. But many pilots don’t. Why? The problem, he said, “is that you have to explain to everyone else why you pulled the ripcord”.
Ego. Pride. Arrogance. It’s our greatest liability. Whether piloting an aircraft or leading a business, these are our greatest liabilities. They place us in real and present danger in the air and in business. We don’t know what we don’t know but we insist that others defer to our knowledge and power. Instead of listening and learning we ask, “who do you think I am?”
Standing in front of us today – telling captivating stories was a man who had answered that question. Warts, flaws and all – he didn’t have to ask. He knew who he was – and is.
He’d come back to share that wisdom and to tell us the stories he wished someone would have told him. He talked of the need for courage and determination. You have to believe in yourself. You have the determination to pitch your idea passionately – not once, not five times, but a hundred or more times. You have to continue even if you fail every time.
In fact, he told us, we should make it as difficult as possible. “Make a list of all the people you could pitch to”, he says, “starting with the one who is impossible to win, and moving up to Aunt Mabel, who’d buy anything from you. Then turn that list on its head. Start with the impossible – and pitch your heart out”.
“When you lose – and you will – only ask one thing, but ask it tenaciously. Ask why. They’ll try to brush you off. They’ll lie. Don’t let them get away easily. Be curious.”
That’s how you learn.
“Love objections. Find people who are tough on your ideas. Let them beat the crap out of an idea. Keep asking them only one thing – why it won’t work. And thank them for each objection they raise.”
He drew a huge curve on the chalkboard that plotted the trajectory of an entrepreneurial company. He showed how the initial euphoria rapidly gave way to the reality of hard, difficult work. He pointed to the bottom of the curve that he calls the “valley of despair”. You have to be tenacious to get through this “valley of despair”. You can’t get to end point – success -without a long and protracted struggle.
But he pointed out that tenacity alone is not enough. You can’t make every idea work. Which is the entrepreneur’s dilemma. How do you distinguish between tenacity and beating a dead horse? How do you know when to dig in and when walk away? That, said Terry, takes something else – curiousity.
“Curiousity is the real quality that students should develop.”
Curiousity balances the determination to hold on with an openness that lets you understand the real barriers you confront.
Curiousity is compelling. It attracts people to you. If you sincerely want to learn, there are incredible opportunities to learn from real experience. “Us old guys love to teach” he said. “Take advantage of that.”
And how do you do that? Mastering curiousity starts with the simplest of phrases – “In your opinion”. You lead with that phrase followed by a question and then – “watch what they do”.
How do you know the right question? Simple. “Ask what you sincerely want to know. If you can’t think of a question you need an answer to, you aren’t that smart after all.”
But avoid the arrogance and ego. “Do not ask questions to show how smart you are.
In fact, you do not have to know all the answers even when you go into the lion’s den and pitch the dreaded venture capitalists. They are looking for a clear direction and vision. They want a strong point of view. But they aren’t looking for you to have all the answers. Pitch the strategy. Pitch the direction.
In fact, knowing all the answers (or thinking you do) doesn’t buy you much at all. “They don’t believe your numbers no matter how hard you crank that excel spreadsheet.” Instead of worrying, Terry says to “make that your advantage”. How? If they understand the concept, the vision – they will do the work for you on the numbers. This only happens if you stay engaged but open – that you embrace their objections time after time. Make them part of your team, really learn from them. Then on pitch number five, number fifty or number one hundred and fifty – if you really have a great concept – the penny will drop.
If there are things that you don’t know or talents that you might not have – or choose to use – surround yourself with others who have those different talents that you need to succeed.
You know a whole lot less than you think. You can’t know what will work and what will not. You can’t always know when to bail and when not to. “Zuckerberg didn’t sell. Today, he’s thought of as a smart guy. But what about a company like Groupon? It wasn’t that it didn’t have interested suitors. Billions were offered . Should they have sold?” Even in hindsight, we’re not really sure. But at the time when you are deciding – you don’t ever really know. After Terry sold his first company the value kept climbing. For years it made him question his timing.
Years later, he realized that you can’t know what will succeed and what will not. Quoting from the book, Crossing the Chasm, he compared success to the tornado that is mentioned in the book. When an idea takes off – it is out of your control. It’s a tornado. You can’t control it. You have to be able to ride it. “You have to be able to let yourself get out of the way.”
Does it make you less tough? Not at all. In front of us was a man who knew when he was in charge. When he heard a question from a student who “knew it all”, his facial expressions gave him away. Nor was he shy. When he thought a student in the audience was texting, he called him out. “Stop texting while you are talking to me” he said. It was friendly, but it was not a request.
But when that same student said that he wasn’t texting, he was making notes, you could see the gears shift in Terry’s mind. He had learned something. You could almost see his brain working as he learned something new and mentally filed it away in “lessons learned”.
Once he’d made the leap you could see him welcome this new behaviour. “Good”, he said.
Terry is still curious. He is still able to say those three words that (to quote Red Green) the brightest people can’t seem to say – “I don’t know”. That curiousity has kept him open to novelty and creativity.
When Hurricane Sandy hit, Terry’s new company – EVault managed to do the impossible. It kept the Manhattan Transit up and running. Manhattan Transit could be up and running despite the storm damage because processing failed over to EVault’s data centre. This was more than a case study. This was a triumph.
So when his marketing people instead chose a company that makes wedding dresses as their iconic example of EVault’s customer stories, Terry was perplexed. “Who cares about a wedding dress over the a transit company?” was his question.
Instead of folding up, his marketing staff pushed back. “Have you ever thought what happens if a bride can’t get her dress on time?” they asked him. With that question, Terry’s eyes opened. It was obvious. This was the message that the company needed to amplify. A company was interesting. This was visceral. This story was universal and personal.
Who cares about a wedding dress? Everyone.
Without a challenge to his ideas, would Terry have realized the thought of the wedding dress and what that entailed? Unlikely. He would have gone for the obvious – and incorrect answer.
In a world where we more and more we need reach our customers on a personal and visceral level — we need to be challenged by others and by our own unquenchable curiousity. We need to search diligently for the tornadoes and realize they don’t come along every day. When find one and it starts to catch us up, we need to be be prepared to let it take us. We need, in Terry’s words, that great business skill, the ability to know how “to get out of the way”.
To ride the tornado, you have to let go and embrace uncertainty. You can’t do that if you have all the answers.
Curiousity, passion and uncertainty are the qualities we need. We must be continually testing – seeking out those who are tough enough to question and even reject our ideas. That’s how you know which ideas will survive. You put them – and yourself – to the test. You do the tough work of killing the weak ideas and strengthening the strong ones.
Tenacity keeps you in the game, but the real returns come from curiousity.
Tenacity that drives you to do that hundred or more presentations. It keeps you moving and improving. It makes you strong.
But curiousity makes us resilient. Curiously is the magnet that draws others to us.. Curiousity attracts the diverse and talented people we need. Curiousity turns the “pit of despair” into a time of learning and not defeat. Curiousity sustains you through rejection, through setbacks and when your friends are much more stable if not successful. It – and not simply stubbornness, is what can sustain you through each rejection. Tenacity makes you strong, but curiousity drives you to listen and learn – to not just endure, but to benefit from each setback, each objection. It gives you the courage to step into that vortex.
Curiousity not only leads you to the tornado – it compels you to find out what it would be like to ride it.