Topic: Management

Padmasree shares insights on the arc of her career from engineer, manager, CTO, and CEO to startup founder. 

In one of our Female Founder Circles, we sat down with Padmasree Warrior, founder and CEO of Fable, the social reading platform for online book clubs. Previously, she served as CEO of NIO USA and CTO of Cisco and Motorola. Padmasree also serves on the Board of Directors for Spotify and Microsoft and was featured in Forbes’s Top 50 Women in Tech.

P.S. We’re launching our next batch of Female Founder Circles soon where we’ll have more amazing speakers like Padmasree share their inspiring stories — stay tuned for the applications here!

We were lucky enough to hear her incredible insights on effective leadership, being a woman in tech, and building a distributed company— here were a few key lessons:

Note: Answers have been edited for clarity and brevity. 

On working in tech

1. Stay humble— there’s always more to learn.

I went to IIT, Indian Institute of Technology, in New Delhi. India has so many different languages that from one part of the country to another, people speak a completely different language with different script, different spoken word, different culture, different food. When I left home to go to IIT, I didn’t speak the language, and it was like going into another country.

IIT is a very competitive technical school. I recently spoke at their convocation, which was a surreal experience, but when I went to IIT at 16, like most teenagers, I was a know-it-all and maybe a bit arrogant. On the first day of school, I realized, oh my god, there are just so many smart people here. Humility was a gut punch lesson I learned immediately, which was ultimately a very important leadership lesson. In tech especially, we have to be super humble because no one knows everything and you need the capability to constantly learn new things.

2. Own who you are.

After I graduated from Cornell, I started working at Motorola Semiconductor. There weren’t many female engineers in the tech industry in general, but there were even fewer in hard tech and the semiconductor industry. 

In the beginning, I tried to fit in and force myself to fit the mold, which was a big mistake in retrospect. There were all these stereotypes and expectations of what you were and weren’t supposed to do, all these unwritten rules of how we had to dress and how we had to look. It was like wearing somebody else’s skin to go to work every day. It was weird for me to wear black or white or gray and show up to work; I grew up in a culture where we put color in our hair and on our clothes and color was everything. My name was changed without people asking me. People could not say Padma or Padmasree, so it was made into Paddy, and I drew the line there. 

After six months or so, I realized that I needed to speak up. The first thing I did was change my name back to my real name and insist that everybody learn how to pronounce Padma at least, if not Padmasree. I started to dress the way I wanted to and really started to speak up in meetings.

The first lesson I learned working in tech was to own who you are. This is the me that’s coming to work and being a part of this professional circle, and people have to accept you for you. Sometimes we think fitting in is the easy path of least resistance, but it’s not. If you’re not comfortable, you’re experiencing resistance, and therefore you cannot perform.

On changing roles

3. Great leaders trust their teams.

Being a great leader is different from being a great engineer. When I first became a manager, I would tell people everything they had to do. Instead of figuring out how to harness their creativity, I would be problem solving for them. I suddenly realized people weren’t coming to me with solutions because they assumed I would tell them what to do anyway, so why bother? I learned that in my first experience as a young manager in my 20s and that taught me how to lead larger and larger groups.

Even when I was CTO at Cisco, I would say, “as CTO, my job is not to know all the answers, but to ask the right questions.” If you ask the right questions, you rely on your team to get you the answers and that’s what makes you a great leader. 

4. To thrive in a C-suite role, you need to find working with people energizing. 

When you become a leader, it doesn’t matter whether your team is 10 people or 26,000 people, you have to really figure out how to bring people together. How do you bring people with different experiences to work together towards a common goal? How do you motivate them? How do you develop them? How do you make them feel like they’re contributing? To be in the C-suite of any size company, you have to enjoy that.

It’s not easy, and it’s not always fun. It can wear you down— people come to you with all kinds of problems, big or small, and it takes a lot of your time, but they’re talking to you because this is important to them. You have to put what’s important to other people on your agenda; as CTO at Cisco, the majority of my job was meeting with customers to understand their pain points.

The biggest transition is going from problem solving for technical problems to helping people solve problems, and people who enjoy the latter eventually flourish in C-suite roles. It’s not that one is better than the other; you can be an amazing individual contributor or engineering leader inventing new things. It really depends on what your personality is and what you like. I’m more the latter— I get a lot of energy if I see other people motivated, so that’s the reason I made that transition.

5. Don’t worry about the title of the role so much as the domain you want to contribute to.

I was CTO for twelve years of my career and at a massive scale at Cisco with a team of 26,000 engineers. If I stayed in large corporations, my next move would have been to be CEO for a large cap company, and I started to ask myself if that was really what I wanted to do as a product person at heart. 

I was also investing on behalf of Cisco, and I would meet amazing founders and see their energy that they had for their companies. That was something I wanted to experience, so I left Cisco thinking I would start something on my own. Then I met the founder of NIO. When we met, he hardly spoke a word of English and we were communicating with each other through an interpreter, but we clicked.

I left Cisco to join his startup and people thought I was crazy. It was a big risk. I had never built a car before. It was a cross continent startup with half the team in China, half the team in San Jose. We didn’t know if it was gonna work or not, but I felt right about it. I wanted to do something about climate change, building an electric car sounded fun, and there’s so much AI and ML in the autonomous vehicle field. That’s really what drove me to go to NIO, not the CEO role. You have to choose the domain you want to contribute to and not worry so much about the title.

6. For every new role you take on, 70% of the role should be content you’ve mastered and 30% should be brand new.

When I left Cisco, I was looking for verticals where technology was always on the periphery, but not central to that industry. I felt like that was transportation and education, so I wanted to do something in one of those fields. The automotive industry is 125 years old and they’re very set in the ways that cars are built. It’s such old architecture that you literally have to rewrite how cars are built, and I got fascinated by being able to solve that problem.

My advice to anyone thinking of making a change from one domain to another, or even transitioning within engineering: 70% of the role should be content you’ve mastered and 30% should be brand new. When I went to NIO, I didn’t know how to build the mechanical part of the car, but the stuff inside the car was data-centered, cloud and security, things that I knew. 

On productivity and wellness

7. Keep a to-do list to prioritize your time. 

I’m very organized, and I still write things down in a notebook. Every day, I make a list of everything I want to get done on that day and I make sure I get at least 70% of that list done. We’re all busy getting pulled into many different things, so you have to prioritize where you spend your time. 

8. Don’t get burnt out— build breaks into your schedule. 

I take one day a week completely off of work. I call it my digital detox day, and I’m totally unplugged that day. 

I go for walks. I paint. I spend time with my community. For some people, it may be running, it may be yoga, whatever it is that is analog for you.

When I was leading a team of 26,000 engineers, I announced that I was taking a digital detox day at an all hands meeting and I could literally hear a physical sigh of relief from 26,000 people. When the boss says it’s okay, everyone thinks, yeah, it’s okay to have a day off. I strongly advise you to do that and do whatever brings you energy. 

Something else I started doing, especially during COVID, is building microbreaks into my agenda. I build 10 minute breaks in between Zoom calls, but I don’t use that 10 minutes to check my inbox. Take 10 minutes to get up and walk, go to the window and look outside. Anything that keeps you moving helps refresh your brain.

On building a distributed company

9. Hire motivated self-starters. 

We purposely call ourselves a distributed company at Fable because when everyone is remote, no one feels remote. There are a few key elements to making it work. When we hire, we look for people that have a high work ethic, are very, very self motivated and take initiative. You have to trust them to get their work done, which means they have to be also somewhat independent. When you’re distributed, it’s hard to give employees constant positive feedback, so people should be comfortable working without continuous communication. 

10. Create fun rituals to bring the team together. 

We built very specific rituals in the company that can happen digitally. We do something called fika, the Swedish word for a coffee break. 

When we first started doing fika on Zoom every Friday afternoon, people weren’t showing up, so we started asking each person to rotate being the host. The host picks a random topic that isn’t work-related. If you could have one amazing skill, what skill would you want? If you were to be a character in a fictional world, what character would you be? Each host asks a question and people come either to a Zoom call or send a message in a Slack channel. 

11. Sync all together more frequently.

Company meetings probably happened monthly at my previous company because we had a physical office, so we didn’t need to have that constant communication. As a distributed company, we have to check in more often, so I now do company meetings every week at Fable. 

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Find Padmasree on Twitter and LinkedIn and download Fable on iOS or Android. If you’re a female founder, join Padma’s Fierce Females book club on Fable!

This is a recap of our March 24th panel discussion with Heidi Roizen (Partner at Threshold Ventures), Bob Tinker (former CEO of MobileIron and Co-Author of Survival to Thrival), and Mahesh Ram (Founding CEO of Solvvy).

Watch the full talk at pear.vc/speakers.

If you haven’t gotten it into your head by now, you really need to: the world has changed since the outbreak of COVID-19, and the changes are here to stay.

At the end of this month, we’ll finally have the Q2 data we need to get a better sense of exactly how much things have changed, but we expect that the main takeaway from our discussions with Heidi, Bob, and Mahesh will still ring true: we are going to have to unlearn some of the lessons that we’ve learned over the last 7–8 years.

You’ll need to get over what Heidi calls “valuation nostalgia.” That is, looking back at the good times and thinking about the valuation that you could have raised at then. Heidi is blunt about this one:

“‘Okay, but you didn’t, so forget about that,’” Heidi says. “What’s in your control? Well, the only thing you have in control is the cash you already have.”

You’ll need to take a good hard look at that cash and seriously rethink through your operating plan, your sales and customer acquisition strategy, and your team priorities.

Getting yourself ready as the CEO
The growth vs. breakeven ‘slider’ is the founder test of the new decade
Prove yourself a partner to your customers, not just a vendor
Ask your team what you should be doing differently
The power of positivity blends beautifully with the power of urgency

Getting yourself ready as the CEO

Before you dive in and get to work, we at Pear always recommend understanding first principles and getting into the right mindset.

First things first, as a founder, you’ll need to come to terms with the fact that this downturn is not going to be a short run, so you’ll want to make sure you can manage yourself first. Steel your health, attitude, and outlook.

The second key principle to remember, especially in a downturn that has forced everyone to work remotely, is to over-communicate, especially to your three constituencies: your employees, your customers, and your investors.

Finally, remember that the number one job of an early stage CEO is survival.

“It’s not optimization. It’s actually just don’t die,” Bob Tinker reminds us.

The growth vs. breakeven ‘slider’ is the founder test of the new decade

The first question you’ll need to answer is: What’s the impact on my operating plan, and what needs to happen to make sure my business can survive?

“There’s ‘never raise any capital ever again and make money on what you got’ to ‘do nothing and keep doing the same thing you’ve been doing,’ and there’s this infinite slider in between,” says Bob Tinker. “The big question that I was struggling with was: where on this slider do I want to be?”

This is the question where leaders earn their chops. There is usually a tradeoff between growth and being able to break even. Founders who can figure where on the slider to land and avoid burning cash will be able to control their own destinies and make it through the downturn with stronger companies.

No one can give you a precise answer on where you should land. The answer will differ for every company. If you’re a 10 person company, for example, with some seed capital but no revenue, you will probably want to keep your burn rate low, get some product work done, and go find some early customers. But the specifics matter.

Strategies for Modeling

As always, you’ll have to think ahead, work backwards, and play out all the different scenarios to get an understanding of your possible range of outcomes. Make sure the model is dynamic and be conservative with your projections.

“In good times, what you do is think ahead to your next step of milestones to justify raising capital, like x ARR, y customers, z pipeline, b GTM — and you’d say ‘Okay, I’m gonna get there in 6–9 months.’ I think you have to now put that milestone 18 months out,’” says Bob.

For SaaS companies, Bob recommends thinking about your business in two chunks: fixed and variable. The fixed chunk of your business consists of your renewals pool, the cost of serving those renewals, and R&D and G&A. The variable side is your sales and marketing.

“If you look at your renewals times your gross margin, minus R&D and G&A, it tells you: is your core engine generating cash? Then you’ve got this other part, where you can decide how to turn the dial: how much do I want to put in sales and marketing, and what do I get out in terms of new ARR? Which then flows into the renewals bucket next year.”

Mahesh adds that you’ll need to think of your new ARR in two chunks as well: from new logos vs. upsells in your existing customer base. Each category tends to have different operating costs and are served by different parts of the business.

If modeling is not your strong suit, Mahesh recommends you hire a freelancer to help (which wasn’t as easy in ’01 and ’08) — “that’s a better use of $1500 than trying to do it yourself and beating your head against the wall and coming up with something that your investors look at and laugh at.”

Prove yourself a partner to your customers, not just a vendor

After you’ve rethought your plan and have a good sense of what the new world is like for your company, you’ll have to think about the impact of the new world on your customers and prospects.

You will need to go through your customer base and run through a risk categorization process by segment. You will need to convince your customers you’re not just another vendor to slash.

Who are your new stakeholders?

In 2008, Mahesh’s company, LearnBIG, was serving two large industrial customers who were ready with the axe.

“I’m flying to Brussels and Switzerland to meet not with my buyer, but with heads of procurement, who are telling me ‘I don’t care how good you are, how valuable you are. You’re selling HR and talent services. I don’t need that, I’m going to cut that.”

Mahesh knew that he was selling a potentially dispensable item, so it was time to turn the problem around on its head. The team came up with a survey for the procurement teams to discover exactly what each country division was spending on local vendors. They found 260 vendors, who were spending at least 20x what they were spending with Mahesh’s service.

The team then went back and cut a deal with those procurement heads: Mahesh and his team would change their product’s licensing model to an enterprise model so anyone in the company could access the product at the same price — including the procurement teams — as long as they cut the vendors they’d discovered through the survey by 50%. This would save them more money than Mahesh’s program would cost over the next 10 years.

“In a minute, the procurement person who was our enemy suddenly said, ‘Wait a minute, I’m going to go to my boss and I’m going to be able to say how we eliminated 130 vendors with a single stroke of a pen, and I can tell all my countries what to do — a year ago, I couldn’t tell my countries what to do.’”

The point is, in new times, you will need to understand who the new stakeholders are in your customer base — they are likely not your original points of contact or advocates. You’ll need to figure out what you can do to make it easier or less problematic to do business with you.

Go back to the drawing board and cut new deals.

“Negotiations is the art of finding the maximal intersection of mutual need,” says Heidi.

In the 90’s, Heidi’s company had been working on international expansion right when the dotcom crisis hit. They had been negotiating with large computer OEMs at the time, like Acer in Taiwan and another in Korea. It quickly became clear that the company was not going to be able to expand into the Asian countries because of the crisis and a new plan was needed.

“Let’s say our software was selling for $100 a license at that time. We went to them and said, ‘We’re going to give you a country wide license, but you’re going to have to do the translations and the tech support yourself, but you only have to pay us $10/license or $5/license,’’ says Heidi.

“It was a crazy low number, but in the context of the idea, it was sound money. We weren’t going to be able to address those markets in a 1 or 2 year period. For those companies it was a win for them: they had a need for this software. We couldn’t support those markets and we were dealing with big enough companies that could, and so we just cut them the deal of the century.”

The beauty of software businesses is that the cost to produce another software product is pretty much free or near free, and so a short term sweet deal is completely doable. You might be able to reach a setup that allows you to grow in the future and brings cash in the door now, which can be a lifesaver for your business.

The most up to date information is in your pipeline.

When it comes to new logo hunting, you’ll have to go back to the drawing board for your go to market playbook.

“The way customers decide to buy changes. If you keep doing your go-to-market the way you were doing it before, you’re not going to have great results and your economics are going to get even worse,” says Bob.

It’s important to talk to your current customers, but it’s perhaps more important to remember to talk to your prospects, because they can tell you more about the customer mindset shifts that are happening.

“There is a shift in how the customer decides to buy. There are going to be some things that used to work but don’t work anymore, and there are some things that may now work that didn’t work before. So, go look for those value props, those things that drive urgency that weren’t there before.”

Don’t wait until you see an impact to your sales to change your strategy. It will be too late.

“Stay all over our prospects and your pipeline because that’s going to be your early warning indicators in a downturn about what the future holds for you. You gotta get in front of it and be able to see what’s happening inside your pipeline.”

Ask your team what you should be doing differently

While all the planning and fundraising work is important, remember that the true mark of a leader lies in how they bring their team through rough times.

“We can talk about fundraising a lot, but frankly the team and dealing with the team is what everyone is actually doing every day,” Bob reminds us.

You as the founder will need to get your team to a crisis footing, and that comes with helping everyone to ruthlessly prioritize. You are responsible for helping your team get into their heads that the world has changed, and you will need to take near and obvious actions right away.

Don’t lock yourself in a room.

Sometimes, CEO’s think that it is their responsibility to lock themselves in a room and come up with a grand master plan that will save everyone. Don’t do this. Get your team involved. They need to hear from you, and they probably have great ideas.

Ask your team what they think you should be doing differently. What should stay the same? What are you going to do more of? Less of? Work together to come up with your new, revised goals.

“One of the really powerful exercises is to put the new and old set of goals next to each other and say ‘here are our old goals’ and ‘here are our new goals,’ so everyone knows the before and after,” says Bob.

At Solvvy, Mahesh created a Slack ideas channel that has been a wonderful source of new ideas.

“It’s amazing to see, and I gotta tell you, I’m going to look at that channel in two months and I think it’s going to be the best R&D thing I could ever look at!”

On the flip side, you may come to the realization that you’re going to have to make cuts. If you must do this, the advice is unanimous — only do it once. The “drip drip drip” approach is the worst thing you can do. It creates extra anxiety for your team in an already uncertain time and is a serious blow to team morale. Do it once, and do it right.

The power of positivity blends beautifully with the power of urgency

We got this one from Mahesh, but it rings true. All of this advice might sound a little doom and gloom, but we recommend still staying positive! You can understand the urgency while remaining positive.

“If you’ve got an innovative breakthrough thing, chances are your big competitor is not doing a lot of work to beat you. You might have the chance to use this window effectively to create a market and not have someone bigger muscle in!” Mahesh points out.

Bob recounts his years at MobileIron in ’08 and ‘09:

“We put our heads down during the ‘08-‘09 downturn, kept burn rate low, focused on winning product and customers, and one of the great upsides was that there weren’t a bunch of ‘me too’ competitors funded right after us. So when the market turned, we were ready to capitalize on it,” says Bob.

“It was kind of a scary dark 18 months, but man, once when things turned, it was spectacular, and that’s my wish for all of you. This is your chance to really lead, hunker down and be ready when things turn.”