Angel Invest Boston is sponsored by Peter Fasse, top life science patent attorney.
Thrice-exited founder Jon Hirschtick of SolidWorks and Onshape fame, talks about the promise of cloud-based technologies and how to build successful businesses in the space. Jon’s a good sport and a fun guest.
Highlights:
Sal Daher Introduces Jon Hirschtick, Founder of SolidWorks and Onshape
“...the problem we were solving with Onshape is around the use of CAD, Computer-Aided-Design tools.”
“...I had a year off and I could see the emergence of cloud technologies and I thought back to the problems I had seen users having.”
“...Onshape is the Google Docs of CAD...SolidWorks was the Microsoft Word of Onshape. What came before SolidWorks was like the Wang Word Processor of CAD.”
“...Marc Andreessen, he was an investor in Onshape”
It Was hard to Raise Money for SolidWorks but Its Success Made It Easy to Get Onshape Funded
Jon Hirschtick Was on the Famous MIT Blackjack Team
SolidWorks Was Jon’s Idea of Taking Computer-Aided Design from Specialized Work Stations to Desktop PCs
Jon Hirschtick Proved All the Naysayers Wrong on SolidWorks
Why Jon Hirschtick Thinks Boston Is a Great Place to Start a CAD Company
New York’s Unlikely Rise as a Startup Hub
“...Boston city government is not perfect but...compared to San Francisco and...New York City, we're models of efficiency, we're Singapore.”
Jon Hirschtick Thinks There’s Room for Improvement in Massachusetts’ Non-Compete Law
How Cloud-based Technologies Drive Innovation
The Way Data Is Organized Is Archaic, It’s Trying to Emulate Paper Records
The Cloud Shatters Barriers Imposed by Paper Emulation, Making Fast Iteration and Communication Possible
Saying Goodbye to Version Control
Jon Hirschtick’s Most Important Factors of Success by Founders
Jon Hirschtick: “...it's easier than ever to start a company and harder than ever to build a great business.”
Transcript of, “Innovating in the Cloud”
Guest: Repeat Founder Jon Hirschtick
Sal Daher: This podcast is brought to you by Peter Fasse, Patent Attorney at Fish and Richardson.
Sal Daher Introduces Jon Hirschtick, Founder of SolidWorks and Onshape
Welcome to Angel Invest Boston, conversations with Boston's most interesting founders and angels. I am Sal Daher, an angel investor who is very interested on how to build really, really great technology companies. Today I'm privileged to have, as my guest, Jon Hirschtick a founder. He founded Onshape, which was acquired by PTC. He's now an EVP at PTC but Onshape is a leading platform for product design collaboration online. Welcome, Jon. Good to have you on.
Jon Hirschtick: Sal, great to be here.
Sal Daher: Excellent. Excellent. Jon, what problem were you solving when you founded Onshape?
“...the problem we were solving with Onshape is around the use of CAD, Computer-Aided-Design tools.”
Jon Hirschtick: Sal, the problem we were solving with Onshape is around the use of CAD, Computer-Aided-Design tools. Traditionally, that's my career for 40 years. The problems were how to get the tools in the hands of the users was really hard and expensive then how to collaborate on the data. How to let people work together in design teams, whether in one location or spread all over the world. Those two problems I saw in our users' lots of pain there. Saw an opportunity to solve them with the new generation system.
Sal Daher: How did the company come about? Were you working in that space at the time?
“...I had a year off and I could see the emergence of cloud technologies and I thought back to the problems I had seen users having.”
Jon Hirschtick: I had a long career in CAD and I'd worked in the space a long time. Most notably I'd been in SolidWorks, which I also founded and was a long-time CEO, we sold that company to Dassault Systèmes. I was at SolidWorks for 18 years. I left SolidWorks and I had a year off and I could see the emergence of cloud technologies and I thought back to the problems I had seen users having. It was that intersection between the power and potential of cloud web and mobile technology to, properly applied, solve the problems I had seen users have using CAD systems. I said, "Hey, at that intersection, we had an opportunity to really solve these problems if we built this new generation full cloud system." That's the founding of Onshape.
Sal Daher: Basically, it was taking CAD collaboration to the cloud?
Jon Hirschtick: Yes.
Sal Daher: CAD technology had been around for a few decades.
“...Onshape is the Google Docs of CAD...SolidWorks was the Microsoft Word of Onshape. What came before SolidWorks was like the Wang Word Processor of CAD.”
Jon Hirschtick: Yes. In fact, you might think of it as Onshape is the Google Docs of CAD if you will. Where SolidWorks was the Microsoft Word of Onshape. What came before SolidWorks was like the Wang Word Processor of CAD. If you remember that stuff--
Sal Daher: I remember those. I'm actually older than you are; I remember those little green screens, and so forth.
Jon Hirschtick: Yes. Now, you know 40 years of my career I worked on the computer vision was the, a Wang generation. SolidWorks was the Word generation Onshape is the Google docs generation that's a very-- it's a little bit simplifying, but that's generally the concept.
Sal Daher: It's pretty cool when you think in a meta way. You had these really powerful workstations running computer-aided manufacturing. Then you had this additional level of having that talk to the cloud, the remote servers. It's like software development on top of software development compounding. I've been thinking about 10 years ago that Marc Andreessen wrote that article, Why Software Is Eating the World, in the Wall Street Journal. It's been part of software eating the world and very interesting. I had the recent exit from a startup that is the Google docs but for very large documents that have to be highly accountable, think FDA filings, that sort of thing. This company called doDoc.
“...Marc Andreessen, he was an investor in Onshape”
Jon Hirschtick: Oh, that's great. That's actually part of our story too is more advanced document management, maybe not to the level of your startup, but that is part of the story. Actually, back to Marc Andreessen, he was an investor in Onshape. I don't know if you knew that?
Sal Daher: Oh no, I didn't know that.
Jon Hirshtick: Andreessen Horowitz...we met Marc Andreessen. We flew to California. It was a great moment. I know the audience here are a lot of founders and angel investors so we go out. You all know about telling your story, your pitch. We went to Andreessen Horowitz and we met, Marc Andreessen and Ben Horowitz, a bunch of other people in the conference room, and we laid out the story. It's basically CAD's a big market. A multi-billion dollar a year, millions of users build almost everything in the world built up its manufactory. We founded SolidWorks in 1993, Sal that is almost 30 years ago, I founded SolidWorks and that was the last major innovation in the industry and we're going to build a cloud system. Around the table, they're like, "Well, what about all the other companies what are they doing with their cloud systems?"
I'm like, "Well they all say they have it but they don't. There is no-- well." They're like, "Oh no, they must all have cloud systems." I'm like, "No, they don't." They're like, "This is a multi-billion-dollar market?" "Yes" and we showed them a demo and they're like, "Okay, and you're the people who built SolidWorks?" "Yes." "Okay." That's how we raised what became a total, not from Andreessen, and others, we ended up raising $169 million. We had investment from local firms before we met Andreessen. Anyway, it was very cool to meet Marc Andreessen, a really interesting guy.
Sal Daher: Yes, my thought about him is that 10 years ago they were making a big fuss about software, now they're really looking very hard at the life sciences. That's a direction that I'm going in. This probably would be one of the last interviews that I'll be doing not in the life sciences.
Jon Hirschtick: Well, I'm honored to be the--
Sal Daher: I must confess that if you weren't an MIT alumnus I probably would not pursue the interview.
Jon Hirschtick: Oh, I'm honored. I'm the caboose on your IT software train so to speak.
Sal Daher: I've invested since 2010. I've invested in about 50 start-ups and I'm noticing that all the value in my portfolio is in the live science companies. The software companies I've had a five and a half X exit from one software company, but my experiences being the level of competition in that business is so intense that it's really hard for these start-ups to build a sustainable advantage. Two and a half X's been the rule but the ones that break 10x are all in the live sciences. I know enough math. Although I was a failed math major at MIT. I dropped from math to civil engineering, course 18 to course 1. Perhaps the least mathematical, but I can do that much math to realize that I want to be investing in stuff that might give me 10x or 20x or 30x and fewer zeros as well instead of being in the ones where I have a lot of zeros and a lot of 2x's, 5x's and so forth. Too bad I didn't have a chance to invest on Onshape. When is it that you started?
Jon Hirschtick: We started in 2012.
Sal Daher: If we had connected I would have written you a check.
Jon Hirschtick: Oh well, it's kind of you. Honestly, we didn't have much trouble raising money-
Sal Daher: Yes, that's because you're-
It Was hard to Raise Money for SolidWorks but Its Success Made It Easy to Get Onshape Funded
Jon Hirschtick: It's part of the story because we have had a very successful return and SolidWorks was a great success. With SolidWorks, it was very hard to raise money. I had a real hard time raising money. People thought it was a crazy idea. Ironically because we were going to compete with PTC which is where I work now. Then we were able to raise the money. When we went to start Onshape, we had quite a few investors quite interested and we were delighted to partner with Commonwealth Capital and Northbridge.
Sal Daher: Tell me a little bit about the SolidWorks founding? How did that come about? Was that your first company that you started?
Jon Hirschtick Was on the Famous MIT Blackjack Team
Jon Hirschtick: No actually it was the second company I had founded although I had been involved with some other ventures. The MIT Blackjack Team.
[laughter]
Jon Hirschtick: I know, that came up.
Sal Daher: Semyon Dukach has been on the podcast.
Jon Hirschtick: Oh yes, Semyon. Well, Semyon's a friend of mine and same team. Same kinds of things we did.
Sal Daher: By the time this podcast launches it'll be close. It'll be public, but he is buying the apartment of my former business partner from his widow. It's a funny accident. It was Semyon showing up in my life.
Jon Hirschtick: Oh.
Sal Daher: Yes, but anyway so.
SolidWorks Was Jon’s Idea of Taking Computer-Aided Design from Specialized Work Stations to Desktop PCs
Jon Hirschtick: So, SolidWorks. I've been in the CAD business a little over a decade and I had seen what was happening. My observation with SolidWorks was, "Hey, 3D CAD," which at the time people felt required a big Unix work station from Sun Microsystems or Silicon Graphics, take 3D CAD and put it on the Windows platform on a PC. That was kind of the observation. I'm simplifying it. It'll also change the business model, make it affordable. My observation was in order for 3D CAD to be more widely used to solve the problems of buying and using it or the problems we set out to solve, it ought to be more like Microsoft Word, an application that runs on a PC, it was just a Windows user interface, costs less and so we built it and everyone told me, "It's a bad idea. No one would run their CAD on a Windows PC and it would have performance problems and no one would trust it." Ironically same things they told me about Onshape. You know, "Oh, it'll never work. It's too hard an application to get working right." It's like everyone in the industry said it wasn't possible to build Onshape but it's like, "Sorry industry, it's possible. It works great."
Jon Hirschtick Proved All the Naysayers on SolidWorks Wrong
Sal Daher: I have a friend, Wan Li Zhu, who's a venture capitalist here in Boston and he says he just loves investing in people who are industry experts, and who are highly motivated to solve a problem because they know exactly how ready the technology is to go the next step. They're not too late or too early and so this is doing exactly what you've been doing, which is finding a problem in the area that you know the most and addressing it. Talk about your first startup, how did you make that step to become a founder?
Jon Hirschtick: My first startup was called Premise in 1987. Like you I've actually been part of venture financings in five different decades, the '80s, '90s, '00s, '10s and 2020s now that I've advised or been part of companies doing. Anyway, back in the '80s, I was a student at MIT and then I was on the staff at MIT, a research staff managing the Computer Aided Design Lab and I think I was always fascinated with starting companies. I felt there was a technology concept from the CAD lab that I felt would be a great product and I thought it'd be very useful. I took a class in entrepreneurship, while I was a staff member, you could take one-
Sal Daher: Which class was that?
Jon Hirchstick: -class for free and I took Entrepreneurship, I took it with Russell Olive, Professor Russell Olive, may he rest in peace, he passed away. Professor Olive taught entrepreneurship, a friend of mine had taken the class and raved about it, my friend, Bob. I signed up, took the class and ended up meeting a co-founder, Axel Bichara, who's a great investor today at Bolt, you may know Axel. Axel and I and some other people I knew we founded Premise on this concept from the MIT CAD lab. We raised money from Harvard management company, the Harvard Endowment Fund and then from Kleiner Perkins in California, in the '80s.
Sal Daher: In the '80s they would invest, it's amazing, the kinds of companies that VCs would invest back in the '70s and the '80s. I mean, it's-
Jon Hirchstick: Well, my company was a good investment.
Sal Daher: It's an excellent investment but the problem is Jon that today, a company like that, okay, at that stage that you were at, it would really be hard.
Jon Hirchstick: With Premise, we funded it through investments from Harvard Management Company, the endowment fund of the Harvard University, and Kleiner Perkins in California, this is back in the '80s. We met John Doerr and Vinod Khosla, I met Caulfield, it was Kleiner, Perkins, Caufield and Byers and I met Frank Caulfield, and Brooke Byers, who are still there, it's quite a thing.
Sal Daher: Today, I don't think Harvard Management does that anymore. [laughs]
Jon Hirchstick: As far as I know, I mean, who knows, I haven't heard of them.
Sal Daher: Yes, actually, I don't know if you've run across my mentor in angel investing is Michael Mark, also an MIT guy. He was Progress Software as well, the product software. The VCs in the '70s used to invest in stuff that's entirely different from what they invest in today. They were investing in stores that were selling computers and things like that. These are the tech VCs and they've just became specialized in the-- the whole VC world has changed a great deal in that time. Anyway, basically, you were at MIT, you took an entrepreneurship course, you saw an opportunity, and you went out and you started a company, what was the outcome?
Jon Hirchstick: We sold the company after a few years, we sold it to Computer Vision in in Bedford, Massachusetts, in Boston, which I had worked at. Ironically, I'd worked there 10 years earlier, big CAD company and stay and they acquired us, we had revenue, we didn't grow as fast as we might have hoped but Computer Vision acquired us, we became part of Computer Vision.
Sal Daher: I expected to cover one startup, and we went on to three startups. Let's talk a little bit about building the startups in Boston, why did you build these startups at Boston, other than the fact that you were at MIT?
Why Jon Hirschtick Thinks Boston Is a Great Place to Start a CAD Company
Jon Hirchstick: Boston had first the education infrastructure of MIT so I came to Boston to go to MIT. The first thing is, I was here because MIT was here. Secondly, Boston was a center for the CAD industry. Before thinking about anything else, you have to realize, it was before I was part of the CAD industry, it was headquartered here so you had Computer Vision here, you had another company called Applicon, which was here. To this day, Boston is a real center, not the only one but one of the major centers of CAD development work in the world. Those are a couple of big reasons. Also, there was investment here, that's another key thing, and MIT. Not only was MIT a great place to get an education, but we had a Computer Aided Design laboratory. A CAD lab, so that helped too.
Sal Daher: Yes, I've had Ed Roberts on the podcast and we've talked about the dynamic of people at MIT starting companies. It's very likely that they're going to have somebody else in the class that's starting a company and they might join the company or they might get the idea of investing in a startup that a classmate founded. It's very much in the water and in the air at MIT. Sometimes we like to compare a start-up environments. How does Boston stack up against New York or against Silicon Valley? What does it have to offer that these other places don't offer as much?
Jon Hirschtick: I think Boston has a lot to offer which I can just said one thing is, as an incredible university base. The fact is, New York and Silicon Valley certainly have great big university bases as well, but I think Boston is pretty--
Sal Daher: Highly saturated with universities. [laughs]
Jon Hirschtick: Yes, how that came to be, I can't quite say. That's not the topic here but the fact is that it did come to be true. There's an incredible education base that attracts people, that's one. Secondly, I think Boston had a lot of history and roots in startups and computing. A lot of computer companies, Digital Equipment, Data General. All these different companies started here. Wang Labs, many computing companies. Cullinet, which I believe was the first software IPO. I'm good friends with the attorney who took them public in 1969. He said, "John, software was a defined term."
Sal Daher: [laughs] In the documentation, it has a software.
Jon Hirschtick: Define what software it was. Well, yes, we laugh now. True generational changes are things we laugh about after the fact. In going forward they seem so crazy and in retrospect you just laugh about it. Anyway, that's another reason.
New York’s Unlikely Rise as a Startup Hub
How do we compare? Well, it seems that in one dimension, we've fallen behind a bit because Silicon Valley is the place now. Silicon Valley gets the prize for largest place for startups, and New York gets the prize for fastest moving or growing. If we had talked even 10, 15 years ago, I don't think we would have mentioned New York as a hotbed of startups, but somehow, it's become one.
Anyway, comparing them it's just clear Boston is smaller, but I think there's still all the key ingredients are here. It starts with the most important one, which is the people and the renaissance of Boston leadership is through what you were talking about a few moments ago, biotech and that world. I think we're leading the way.
Anyway, all the key ingredients are here. One other angle that's interesting is I think Boston has this almost unique juxtaposition of strength in software as well as hardware. Hardware in manufacturing and machine building. That's why you see so many robotics companies here and so many 3D-printing companies. The industrial company world has a very good presence here too.
Sal Daher: Boston, in my experience and some of the numbers that I've seen, is a big exporter of ideas and importer of capital. Something like two-thirds of Series A money in Boston is from outside of Boston startups. There are a lot of ideas here and they end up going to Silicon Valley for one reason or another. A classic tale, Dropbox. They started here.
Jon Hirschtick: Oh, and Facebook.
“...Boston city government is not perfect but...compared to San Francisco and...New York City, we're models of efficiency, we're Singapore.”
Sal Daher: They go out there because the money is there. Y-combinator started here. The founder of Techstars, Brad Feld, one of the founders, he started his whole career here. I interviewed him recently and they just migrated out because the money's there. Now, Boston has terrible traffic, Boston has this, has that. Maybe Boston city government is not perfect but let me tell you, compared to San Francisco and compared to New York City, we're models of efficiency, we're Singapore.
Jon Hirschtick: Well, yes. Actually, it's that Silicon Valley is going through this too much BS phase where people-- I know an entrepreneur who has a startup and lives around the corner from the startup in that one of the really hot areas of San Francisco and he's like, "I'm not going to live here anymore. I'm out of here." I don't know who you're focusing on social issues here and I can't. I don't want to say they're doing it wrong necessarily, but it sounds like it's just. People vote with their feet and the fact is a lot of companies move here.
Sal Daher: Here's a data point. The last time I was in San Francisco every Uber driver that I took, I made a point of asking, "Where do you live?" Invariably, they live in Sacramento or some other place. It's an hour and a half away or something. For the next several months every time that I took an Uber in Boston or a Lyft, I would ask the driver, where do you live? Revere. Where do you live? East Boston. Where do you live? Somerville. 20 minutes away versus an hour and a half. New York City is the same thing. Boston is, for all the dysfunction, Boston is a much more livable city, a much more affordable city than those two cities.
Jon Hirschtick: I think we certainly don't have headquarters in mass exodus and neither does New York, as far as I know. What's happening in Silicon Valley that's just striking when you have, what is it? When Oracle leaves their headquarters, Palantir, Tesla, are all moving out of California. It's not just Silicon Valley. That's a real worrisome sign and we don't have that happening here.
Sal Daher: Also, think about it, San Francisco. What was San Francisco before Silicon Valley really took off? It was a picturesque tourist destination and now that whole area because of the rise of computer technology, and all these other technologies put them on the map, but they didn't have the depth of industries that Boston has or New York. New York, the financial sector in New York, fashion industry, and so forth. New York and Boston have much, much bigger economy outside of the startup universe. I think that that's what allows these places to be more livable and in the long run, I think there'll be very strong.
What do you think Boston needs to do to make it a more attractive place for people to start companies?
Jon Hirschtick Thinks There’s Room for Improvement in Massachusetts’ Non-Compete Law
Jon Hirschtick: Interesting question. First of all, I'm not sure. I started the companies I've started, but I'm not an investor in general, I advise a lot of companies. One thing that might help is continuing to improve the non-compete environment. That's one edge that California has at least in terms of very startup-friendly. Again, not saying that non-competes are a terrible idea or invalid idea.
They're certainly valid in some cases. When you have blanket non-competes for people, it's really unfair to the employee. First of all, forget about the founders and all that but it restricts someone's ability to participate in free market if they're unduly constraint. Now in some cases, it's very appropriate and you have to respect the IP. If you don't respect IP, it's very hard to have a good-
Sal Daher: I agree.
Jon Hirschtick: -startup ecosystem. That's one thing that is an area to improve on, I would say. What else could Boston do? Well, if I was mayor of Boston, what would I do? Be in business, in startup-friendly, they're just obvious things to do in government to make that as easy as possible. It's hard to say. Keep nurturing the amazing universities that are here. Recognize those for the jewels that they are. Do what you can to keep them strong. Keep it a friendly environment for business. Don't go overboard on anti-business things. It's hard to say. How did Silicon Valley get to be Silicon Valley? Understand that the economic value of these companies being here is incalculable. What if Facebook had stayed in Boston?
Sal Daher: Well, that would have been a hard decision for them. Keeping companies like Moderna here, keeping some of these really big companies who are really growing. Moderna is building new factory facilities right now.
Boston has done a better job than some of these other competing cities in terms of something as simple as-- I give Marty Walsh credit for just being more transportation friendly. Uber and Lyft are being accessible than in some other places.
Now, let's talk a little bit about the impact of cloud-based technology on innovation. Do you have any thoughts that you want to address on that?
Jon Hirschtick: Oh, sure.
Sal Daher: It's your favorite topic! [laughs]
How Cloud-based Technologies Drive Innovation
Jon Hirschtick: Cloud-based technologies to me really support innovation in so many different ways. For users, that's a big part of our story at Onshape is the innovation velocity enabled by teams, sharing information real-time. Innovation is somewhat about an equation of iteration and communication. How much do you communicate and harvest with your team? How quickly do you iterate and all that cloud really-- cloud-based technologies can speed that up.
The Way Data Is Organized Is Archaic, It’s Trying to Emulate Paper Records
In our case, what you have to realize is cloud-based technologies are often enablers of new flows of information. As an example, a lot of old generation systems in my industry, all of them are based on files, essentially using C:/ as the database. File-based computing systems were really designed to emulate paperwork.
[laughter]
Even the term file, where does that come from? It comes from Manila folder. That's a file and the language of file-based systems folders, that's a paper term. Copy machine, forwarding and replying. Those are the things we did with paper-based email. Paper-based mail systems, even email is named and designed to be like paper mail, an inbox. [chuckles] The icon for Gmail I think is still an envelope.
I'm looking at it on my screen, it's to emulate a paper envelope. The point is, getting back to your thing. When you're using file-based installed software to do say, CAD, in my case, you're really emulating a paper-based workflow. If you use the cloud to do merely automated, you're still with a copy-locking store forward workflow. When you really exploit the power of the cloud like we've done with Onshape, you can have everyone-- You're not copying files.
Cloud Technology Shatters the Barriers Imposed by Paper Emulation, Making Fast Iteration and Communication Possible
We're not emulating paperwork flow. We have a master database that everyone in the world can look at in real-time. What does that do to innovation? It means people see each other's ideas. They can make changes very fearlessly, because they're not worried about who has the latest version. Who's going to override changes. They can see what's happening, the time constant for cycle time and communication is much faster. As a result, I just believe teams are much more likely to innovate.
The other thing about cloud solutions, is they make access so much easier. You get more people involved, and it's pretty hard to have someone contribute to your team's innovation if they're not involved or connected. With cloud-based solutions, you're dramatically expanding the number of people who can be involved in my case, a product design team who can see the latest data. Not the few gurus who have access to the big old CAD system, which I building 30 years ago. Absolutely no question that full cloud systems really drive higher levels of innovation. We have survey data, that we've done that supports that too, by the way.
Sal Daher: That is really fascinating. Basically, if there is a design of a certain object, it's not like you have a file of the design, you have some reference to the design and you're seeing the design in real time as people change it and so forth?
Jon Hirschtick: Yes. We have a record of every single change has been done. When you make a change you're not overriding my work. You're adding a transaction database. Say, we're designing a coffee mug. We got to start off. We're going to compete with Yeti.
Sal Daher: Goof luck! [laughter]
Saying Goodbye to Version Control
Coffee mug. You say, "Hey John, I think the, the base diameter could be an eighth of an inch larger. I think that would look better." You're going to make that change. That goes into a database that you did that, I can see exactly what you did. I could make a branch and so forth. It's not a file that is getting passed around. I said to myself, "Do I have the latest one?" I don't know, check your email. Then you have all these files with names, like final version, latest version from south. No, no, this is the latest version. Who can work that way? In our systems global team can jump in, just like you're doing a Google Doc.
Several people around the world can say, "Okay, look, I know you'd like that to be an eighth inch, but look, I'm going to adjust it to be 10,000 smaller cells so I can manufacture this for a lot less money because it'll fit on a certain machine I already own. What do you think of that?" You can look at and say, "Okay, I approve that change." That's all happening against the digital master not files strewn all over the place.
I said to someone earlier today, I said, "These file-based workflows are like the cow paths when they formed the streets in Boston, you can keep paving over them and making them a little better, but you're fundamentally stuck with these weird workflows." The cloud just changes all that we don't have to have these stupid file-based workflows anymore, so yes, definitely a big driver for innovation.
Sal Daher: For people not from Boston, Boston's streets were laid along cow paths. They're very strange shapes and very irrational. The comparison is really apt.
Jon Hirschtick: Yes, I grew up in Chicago, the streets are a grid, just like New York, it's a grid. I just thought all cities were like that, then I came to Boston, I was like what's this? Is it mess. Same in Europe, too, London's like.
Sal Daher: Jon, what do you think, from your experience, finding three companies are the most important factors for founders at succeeding?
Jon Hirschtick’s Most Important Factors of Success by Founders
Jon Hirschtick: The most important factors for success are for founders are one being a great market. If you're in a bad market, it can't innovate your way out of that. It's just as if you're in a terrible market, so one is to pick a great market. You're laughing because you probably know it to be true. I'd rather be in a great market with and I found big markets aren't necessarily harder to crack than smaller ones really.
Be a great market, that's like your market is your new business what the oil in the ground is to your oil well. It's got to be there, you're just not going to succeed. Now, sometimes you can go after a potential market, you can say, look, I have a new idea, there really isn't exactly a market for you. Fine, as long as you know that, and realize that it's a risk. The same way, the first thing is work in a great market. That's one thing.
The second thing is that you can't succeed unless you try. A lot of founders, a lot of potential founders never found anything because never try. People say to me, I'll give advice, as I'm sure you do, and at the end of the call, they'll be. Do you think I should try to start this company and you think I'll win? I say, well, I don't know, if you start the company, I don't know if you'll win, but I'll tell you what I do know if you don't start the company you will not win.
Like, if you don't start the company, you're not going to wake up one morning and go to the mailbox, and someone will put your company in the mailbox anonymously, and say, "Oh, wow, look what happened." It'll just sprout up in the yard. It doesn't work that way. You have to try, and so at some point, I think the time you found something is when the risk of inaction becomes greater than the risk of action, perhaps, and that. Anyway, you have to try to win that's my second piece of advice. Maybe that's enough, that's two pieces of advice, is being a great market, and if you don't try you can't win. Doesn't mean try every idea.
Sal Daher: Are there particular indicators of progress in a company or KPIs so to speak, that you think is good to watch?
Jon Hirschtick: Probably, people wait too long to get things in customers' hands. That's one thing. I like to see and people are what's not ready yet. We can't have a customer completely use it. Get it in their hands. Getting in front of them. Watch what they do. You might not be able to ship it, but you can get proxies, for shipping, you can get ideas. I'm going to been a believer in the agile process before it was named the agile process, this idea of always seeing what works.
Jon Hirschtick: That's a great way to do engineering. It's also a great way to do validation. I like to see people try to get buyers relatively soon, if you can, again, these aren't universal truths. If there were universal rules to founding companies, we wouldn't need podcasts about it, because everyone would just read how to do it.
Sal Daher: It's a funny thing, the advice you were giving before about you want to be in a great market. Like you'd rather have a good market rather than a really great founder. It's exactly the opposite from my mentor, Michael Mark. He says "Oh, I'd rather invest in a really great founder, and they'll figure out the right market." It's a little bit the other way around, but I can understand from your perspective, as a founder, you have to find the right market.
Jon Hirschtick: Well, you didn't ask me to give advice to angels. You asked me to give advice to founders.
Sal Daher: Founders. You're right [laughs]. That is very true.
Jon Hirschtick: One thing we know about the founder is they're the founder. They're not looking for a different founder.
Sal Daher: You can't change the founder.
Jon Hirschtick: Just you'd be like, anyway, so- where were we there. One of the things I look for, I look for people who think like a customer either because they've been a customer or they just think that way that these days we're thinking about customer success.
Sal Daher: You're looking to hire people who can put themselves in the shoes of the customer?
Jon Hirschtick: Yes. I also think you got to realize that every team is different. I always use the metaphor of a stone garden wall, no two are the same. When we try, you have to realize that a team is built for a particular mission just like a wall is built in a particular location and siting, and then no two are the same. No two stones are the same and the art is to fit them together to make a great team. Too often, a founder mistake or an angel mistake or board mistake is to look for regularized management bricks, like we need a VP of Marketing.
It was 4.7 years of experience and a master's degree in specializes in that and is if it's a regularized shape and because that's what we had in the last company. Instead, I look at team building is like the way a stonemason looks at building a garden walls sort of hold up the stones and fit them together to make something strong and highly functional.
Sal Daher: It's very good.
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Jon, as we wrap up, I want to open it up to let you just address a topic that you think founders should be pondering; things that you think are really important that don't get the sufficient hearing.
Jon Hirschtick: “...it's easier than ever to start a company and harder than ever to build a great business.”
Jon Hirschtick: I would say, parting advice I'd have for the founder is that today, I think it's easier than ever to start a company and harder than ever to build a great business.
Sal Daher: That is very true.
Jon Hirschtick: In the old days, the mere act of starting a company was hard. You needed money, you needed office space. Maybe if you needed computers, they were expensive, or other expensive equipment. If you needed people, you had to hire them, and they had to come to your office every day. You need to buy them a desk.
In these days. you don't need any of those things to start a company. It's easy to start a company. It's easy to build certain kinds of products. It's easy to build prototypes of products, computing resources, you get them in Amazon, they'll even give them to you for free for a year or something, or if you ask them anyway, just talk to folks at Amazon, I'll get you going or Azure. There's plenty of capital out there. The hard part is making it a real business.
The difference between a company and a business is all the difference these days. Business is a very special thing that involves creating essentially a financial ecosystem if it's going to be a great business. Try to understand and de-risk on the business side as early as possible and not by, like I was saying, getting customer feedback, getting buyers signal early. I like to see, again, not every venture but the earlier possible you get money changing hands, the better because then you learn things.
Sal Daher: That makes a lot of sense. As the barriers to entry gets lower and lower because of the ease of starting companies, the environment for finding purchase in a certain market gets tougher and tougher; markets are more perfected, the bar for the competition is higher and higher.
Jon, I'm very grateful to you for making time for this really fun and enlightening interview. Someone who's done so much. I expected you it found at one company I got it to three, which was just the plus. I love that. It's great. I thank you for your time.
Jon Hirschtick: My pleasure, Sal. Thanks for inviting me here.
Sal Daher: I hope you enjoyed this Angel Invest Boston interview with Jon Hirschtick, co-founder of Onshape and two other impressive startups. I am Sal Daher.
I'm glad you were able to join us. Our engineer is Raul Rosa. Our theme is composed by John McKusick. Our graphic design is by Katharine Woodman-Maynard. Our host is coached by Grace Daher.