Best of Both Worlds:

Q&A with SendGrid’s Founder and CEO

In early 2011, SendGrid’s founder Isaac Saldana stepped aside as CEO to make way for Jim Franklin to assume the role. Since then, the two leaders have found success by working together to combine technical and business expertise. They have managed to reduce conflict, promote common values, and worked to bring out the best in their employees. Recently, they sat down to answer questions about teamwork, entrepreneurship, and leadership. To hear the complete conversation, access the webcast recording here.

Q: What made you realize you needed to bring on a CEO? Did you come tot hat realization on your own or did you have input from other trusted mentors?

A: Initially I was the developer and the CEO and when the company got over ten people it was obvious that I needed to focus on one single thing. In my case, I really wanted to focus on coding, and I relied on my mentors to help me with this decision. Luckily, a lot of mentors that I had were also a part of SendGrid’s board, so they helped with the decision. It’s one of the best decisions as CEO that I ever made to bring on another CEO.

Q: Jim, how much of a role did your impressions of Isaac make in deciding to accept the CEO role?

A: It’s hugely important when coming in as an outside CEO. Founder relations is a key part of it, so is having good cultural fit. I’ve had some experiences where there wasn’t a good cultural fit and that leads to a lot of unproductive conflict and I didn’t want to get into that situation again so I was very interested in Isaac being the primary founder, and everything that he was all about. I think a general rule in life is that everybody loves Isaac and I certainly fell under his spell and realized that I wanted to be a part of what he had created. I flew out to California to meet his co-founders, Tim and José, and they were equally awesome so that was great. But then also meeting the board members and seeing what they were like, and really between the board, the investors, and the founders making sure there was cultural consistency. Everyone in that group is what we call founder deferential: we want to defer to the founders on all the big questions, and if the founders don’t buy into a certain strategic direction then we’re not going to go there.

Q: Isaac, was it difficult to turn over reigns of the company?

A: Actually it wasn’t difficult at all. And I use an analogy: when you have a kid growing up, by the time they turn five and they have to go to school and you have two options. You have the option to teach them yourself and home school them, or you send them to school if you don’t feel confident you’re going to be able to teach them the best. In my case it was similar, where I knew bringing on a new CEO was one the best decisions I’d made. Initially I was worried like you worry the first time you send your kid to school but at them end of the day you know that’s one of the best decisions.

Q: Jim, how did you get up to speed on talking about email infrastructure and the industry in general after coming from a different background?

A: Well that was one of the trickier parts that not only did I not come from an email background, but also cloud computing in general or the SaaS business model. The first thing to do was really to focus on employees, and they were very helpful in educating me and helping me to get up to speed. Also, obviously reading all of the material that we publish, and now we certainly publish a lot more. Also, actually using our products was helpful. I’m not technical so I can’t code APIs but with out newsletter product that it something I can go through and use to get a sense of what it’s like. Traveling has been helpful too, I like getting out a lot to customers and partners and it was powerful to hear customer stories, saying how “SendGrid saved my business” because email wouldn’t flow for a key partner or a big launce date. Those are a good variety of ways to get up to speed on SaaS and email infrastructure.

Q: Isaac, when you came up with the idea for SendGrid, were you thinking mostly of solving a technical problem you had encountered, or were you driven by market potential?

A: Unfortunately, I didn't’have an idea of how big the market was for this. I started solving my own problems, and I really encourage everyone to solve their own problems initially because if you’re thinking about creating a startup, the worst case scenario is if that startup doesn’t work, you can still use that product or service that will solve your problem. In my case it was one of those things where I started solving the problems that I had and it eventually ended up turning into the company that SendGrid is today.

Q: Jim, how difficult was it to build a team to support the business side of a company that was so technically focused?

A: I think that if there’s one thing I do well, it’s teambuilding. And in this company I had the luxury of having a great start to the team not only on the technical side with the founders but also on the business side. Denise Hulce who runs sales was already here, Chad Varra who has been at Rally and ad taken a SaaS company from 10 employees to 200 was incredibly helpful in learning SaaS models in general as well as having a good grounding at SendGrid, and then Robert Phillips head of marketing was doing very well- so those key players were already in place. To add to that I recognized Joe Scharf and promoted him to the management team- he runs our worldwide support organization. As Isaac and I worked together we realized that his passion was coding and innovation, so we added Thomas Peng to run engineering and John Prall to run production ops.

Q: Isaac, what was the process you took to find the right CEO? Did you interview for the role?

A: I actually met all the candidates and it was a long process. It’s difficult to bring a CEO to your company. It was about a six-month process, and I met all the candidates. We already had an existing set of values and we wanted someone to match those values and Jim summarized them pretty well with the four H’s: humble, honest, happy, and hungry. Once I found a few candidates, the board was really helpful to help me pick the right candidate. We fell in love with Jim quickly.

Q: Jim, I’ve heard you say before that being CEO is a lonely job, why is that?

A: The short answer is that you’re a team of one. If you have any other roles in the company then you are a part of a broader team like the marketing team, the sales team, the engineering team, or one of the agile teams. I like to think of it if you can imagine being like a shark’s tooth, a pointy triangle. And there are two teeth, two triangles coming to meet at the point. The point above the CEO starts with the board- the broader shareholder community, and they sort of come down on top of your head. And then below you, that other point that’s coming up at you would be the management team, so the managers, the employees and the customers. They all kind of funnel up in your direction, and you’re in that lonely place in the middle of the two points. That’s why it’s important for CEOs to spend time with other CEOs because it’s hard to relate to some things if you’re a part of the management team, the board, or any other part of the organization.

Q: Isaac, now that you’re free from running the company, what do you focus on within SendGrid?

A: I moved to California so I currently live in Orange County. I focus on strategy so I’m still a part of the board. I get to work on things that I’m really passionate about. This is really exciting, and I get to get my hands dirty and try different things to see what is going to work best for our customers and that is where my passion lies and I get to work on that on a daily basis.

Q: Jim, we know that your brought the idea of the 4H’s to SendGrid, why are these so important to you?

A: So quickly what they are: honest, hungry, humble, and happy. Why they are important is that cultural consistency is really key to organizational effectiveness. That sounds like a lot of fancy words but really I think that it comes from my being fired many times and in the summer of 2003 I was thinking, “wow I’m a responsible adult now, I’m married with kid and I should probably stop getting fired from professional jobs: and so I though about where ever I had a conflict in an organization was where two values collide, and if you look at conflict in your life then you can deduce what your values are versus what the values you were bumping into. I don’t think I brought the 4H’s to SendGrid, they were already here and Isaac said it well that I just put a label on what already existed; it was their framework for hiring and making other decisions.

Isaac Saldana@isaldana

Jim Franklin@jimfranklin