Entrepreneur Of The Year® 2019 - He Sold His First Startup To Yahoo, His Second One To Google And Now His Third Is Worth $500 Million

Craig Walker has pulled off an incredible string of successful startups. He has achieved multiple exits with the most prized buyers while raising funding from the who’s who of Silicon Valley— all while empowering today’s modern businesses to operate leaner and more efficiently.

Walker recently appeared on the DealMakers Podcast, where he shared thoughts on his journey up the ranks of the Valley, the patterns of success he’s seen, the toughest days you can expect to face as an entrepreneur, and many more topics.

Growing Up Next to Steve Jobs

Craig was born and raised in Cupertino. He lived on a little street, where Steve Jobs and his crew were starting Apple just eight houses down.

He attended Berkeley as an undergrad and went on to get his MBA at Georgetown. After business school, Craig spent some time working at Apple while taking the LSAT, and then returned to law school at Berkeley.

Being a lawyer provided a great view of all that was happening in Silicon Valley. He got to represent startups, big public companies that were acquiring startups, venture capitalists and investment bankers— the perfect way to see the entire growth cycle of a company over and over again

1+1 = 3

Working at one of the two dominating law firms, Brobeck, Phleger & Harrison in Palo Alto, he gained experience with top-notch clients as he handled their M&A deals.

That included Cisco Systems, Kleiner Perkins, and Sequoia Capital: he actually represented Kleiner when they made their Series A investment into Juniper Networks, and also worked on the Polycom IPO.

Whether it was an IPO, M&A, or venture financing, Craig says he found it refreshing that—unlike most other legal work—both parties to those deals wanted to get the deal done.

Craig says, “It really taught me to look for win-win solutions. Business deals that aren't win-win deals, or business deals that are totally one-sided, never really work out.” With the right kind of partnerships, you can make 1+1 = 3.”

The Hierarchy of Silicon Valley

Craig also says that the one problem with being an M&A attorney is that you are executing, but not making those high-level deal-making decisions.

In the Valley, he saw the lawyers at the bottom, and then the next rung up would be investment bankers. Above them were the venture capitalists, and then the top of the heap would be the founders. Craig always wanted to get higher up in the chain, and closer to making those decisions.

He quickly got the chance to do so with venture fund TeleSoft Partners, who invited him to come on board to do telecom internet investments. He says, “Out of our first eight investments, four got acquired, two went public, and maybe two went out of business.” Not a bad ratio at all.

The 4 Biggest Mistakes Founders Make

In all his experience, Craig says the five most common mistakes he’s recognized among startups are:

  1. Being too greedy and not creating win-win deals
  2. Scaling too fast and spending too much cash
  3. Not trusting yourself and sticking to your direction when decisions need to be made
  4. Poor interpersonal dynamics between the founders
  5. Not anticipating a competitive threat to the product or company

The Darkest Day as a CEO

There can be many tough days as an entrepreneur. Craig had one of his toughest in 2001 when he stepped in as CEO of a VoIP company that his fund had invested in—a pioneer in its space.

Unfortunately, when the dot-com bubble burst, the company’s board realized they had grown way too big and were burning way too much money to be able to survive.

The board decided they needed to make a change, to lower cost immediately to hold it together so they could sell the company before they had to turn off lights. Craig was the guy they chose to go in to spearhead it.

The company had just slashed the employee count in half, from 300 to 150. After the applause at his introduction to the crew as the new CEO, Craig had to explain that the only way to save the company was to cut that staff all the way down to 15. He had to do that before the next payroll.

Even though he didn’t know the team going in, he still recalls the experience as being the hardest day of his career.

The risk was worth the reward, slashing the $4 million a month burn rate, Craig got the company to a profitable place again, and Yahoo came knocking. Yahoo saw it as an essential addition to prevent losing the market to fast-growing Skype and paid $50 million for it.

Craig’s big takeaway: “Treat every dollar in your bank account like oxygen. Don’t waste your oxygen!”

From Zero to $100 million in Just 24 Months

Craig’s next startup was internet phone service GrandCentral, which focused on providing users with a single phone number to access all their numbers, such as mobile, home, and work numbers.

They raised $4 million in a Series A round led by Minor Ventures, built it, launched it and customers loved it. Before they could close their Series B round, Google came calling and offered them a cool $100 million for the startup, just 18 months after their Series A.

The team joined Google, instantly adding millions of users by turning GrandCentral into what we know today as Google Voice.

Dialpad, AI for Your Work Phone

Walker’s latest startup, Dialpad takes all his previous work to the next level combining cloud-based phone systems for businesses and integrating artificial intelligence to create the most efficient processes for both customers and vendors.

In essence, the goal of Dialpad is to bring simplicity to the professional phone experience. Dialpad's products span Conferencing (UberConference), Phone Systems (Dialpad) and Call Centers (Dialpad Sell and Dialpad Support).

So far Dialpad has raised $120 million from the most enviable investors. That includes Andreessen Horowitz, Google Ventures, Felicis Ventures, SoftBank, and Iconiq Capital. They probably have one of the most connected and formidable dream boards you could ever want to put together. The most recent reported valuation of the company was $500 million.

Today, Dialpad works with some of the biggest names in business—WeWork, Motorola and Uber being examples—to not only make their employees more productive but to uncover innovative ways in which AI can make them more efficient.

Most recently, Dialpad launched Dialpad Sell, which is specifically geared toward sales teams to help salespeople not just seamlessly manage calls, messaging, and video communications, but also use AI capabilities to analyze customer sentiment and receive real-time coaching from their managers.

Source: forbes.com

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