The Big Exit
The Big Exit

Episode 6 · 1 year ago

Brett Jurgens Talks About Building and Selling Notion to Comcast

ABOUT THIS EPISODE

In this episode, Brett Jurgens talks to Dan Daugherty about being a first-time founder and selling his company, Notion to Comcast in early 2020.

Sample Transcript

Dan Daugherty

Welcome to this episode of The Big Exit. Today I have Brett Jurgens, who sold his company to Comcast early this year in February. Brett, thank you for coming on the show. 

Brett Jurgens

Hey, Dan, what's going on? Thanks for having me. 

Dan Daugherty

So I actually wanted to start out with my own little story of how we met. I was looking at old emails all the way back to 2014 and you and I were communicating and you said, "Hey, I want to show you a prototype of what I've been working on. Can I show it to you?" I said, absolutely. Come on in. And I remember you walked in with, was probably almost the size of a brick, but it was close to it for your your sensors for homes. And if you remember that, I wanted you to start the story there of what you guys were working on. What problems you were trying to solve all the way, you know, six years ago and then how that morphed into what you are today, even pre and post acquisition with Comcast? 

Brett Jurgen

Yeah, I'm happy to. It was it was slightly smaller than a Brick. You're right. So good. Good memory on that one. Um, look. So my co founder, Ryan and I are both from town here in Colorado, Longmont and we grew up together. We've known each other since we were four years old. Onda. We had a really unique relationship.

Snippets

"A lot of the time as a founder and a CEO, it's kind of like a taboo subject to bring up that being an entrepreneur is hard, like you're supposed to put on a smiley face every day." - Brett Jurgens 

""My definition of an entrepreneur is: anybody that can creatively solve problems and just doesn't take no for an answer." - Brett Jurgens

What is the definition of an entrepreneur?

Brett Jurgens: Yeah, my definition of an entrepreneur is anybody that can creatively solve problems and just doesn’t take no for an answer. I tell all of my employees, all the time, that they are entrepreneurs. I think some people take that title and say you have to be a founder, you have to be a CEO to qualify as an entrepreneur. And I think a lot of people like, want to be an entrepreneur. It’s kind of like a badge of honor to some people, I think, and to me, you know, it’s anybody who just has a tenacity and a view of the world that can, you know, things can be different. Things can be better and I can go do that. You don’t have to start a company, in my mind, to be an entrepreneur and to have, you know, that just thing in your gut and that thing in your heart and that thing in your head that all tie together to say, I’m going to go, you know, make a difference and, have the guts and have the tenacity to go do it. So that’s my kind of simple definition.

Dan Daugherty: I love that you can actually use that in all facets of your life. Whether it’s just being a CEO, the founder of your X right, of your division.

Brett Jurgens: Absolutely.

Dan Daugherty: Of whatever you’re doing at home or whatever it might be, just take that initiative. I really like your definition.

Brett Jurgens: Awesome. Well, it’s a good question and I think a lot of people should push harder. A lot of people should create more. And a lot of people aren’t willing to sort of jump into starting a company full time. A lot of people can’t afford to not have a salary for 12 months, like I said earlier in the call. But I also think a lot of people can make it work and you can do it in different ways. And so thinking creatively about how to make it happen is what it’s about.

Welcome to the big exit where wediscussed startup acquisitions with the founders who lived it. Here's your host,Dan Dougherty. We had a really good understanding ofwhere we were both that financially and are comfortable ity of How long couldwe go without a salary? You know, I always tell people my wifewas our first investor. She didn't write the check, so to speak, but thatwas the pitch. And so, from a personal level in a relationship level, she wasbought in the 12 month agreement. Wasn't just between Ryan and I wasbetween our spouses and us and each other. What I always saw my job as a CEO is tobuild out that network and then utilize it as best as possible. You really aren't alone, but you dofeel alone. A lot of the time as a founder is a CEO. It's kind of like ataboo subject to bring up that being an entrepreneur is hard, like you'resupposed to put on a smiley face every day. Yeah, my my definition of anentrepreneur is, um, anybody that can creatively solve problems and justdoesn't take no for an answer. Welcome to this episode of the big exittoday I have Brett Juergens, who sold his company to Comcast early this yearin February. Brett, thank you for coming on the show. Hey, Dan, what'sgoing on? Thanks for having me. So I actually wanted to start out with myown little story of how we met. I was I was looking at old emails all the wayback to 2014 and you and I were communicating and you said, Hey, I wantto show you a prototype of what I've been working on. Can I show it to you?I said, absolutely. Come on in. And I remember you walked in with it. Wasn'tprobably the size of a brick, but it was close to it of of your your sensorsfor homes. And if you remember that I wanted you. I wanted you to start thestory there of what you guys were working on. What problems you weretrying to solve all the way, you know, six years ago and then how that morphedinto what you are today Even pre and post acquisition with Comcast? Yeah, I'm happy to. It was it wasslightly smaller than a Brick. You're right. So good. Good memory on that one.Um, look. So my co founder, Ryan and I are both from town here in Colorado,Longmont and we grew up together. We've known each other since we were fouryears old. Onda. We had a really unique relationship. He's our CTO, I'm CEO.And so we didn't really step on each other's toes in terms of kind ofbackgrounds and skill sets. And he had a smoke alarm going off in his house.One day. We thought we were gonna make the world's best smoke alarm beforenest. Protect came out with their product and we talked to a whole bunchof people. This is why we have day jobs, by the way, just to give people a frameof reference. And so we started to just interview people on home security onhome insurance on things that were supposed to protect their home, Um on,you know, things that started to become more home automation. We looked atmulti family. We looked at all kinds of things and we really thought there wasa need for really, really easy to install, kind of all in one device andthe iPhone came up a lot. It's, ah, you know, heavily used the example of greattechnology that combined a bunch of things. If you remember Steve Jobs kindof initial launch of the iPhone combining, you know, multiple productstogether, we kind of had that same thought. So we iterated, and six monthsbefore we quit our jobs, we ended up hiring our first employees. And we said,If you can build a prototype of this multi function device and make it work,uh, in the next six months and our...

...research and our customer research andthose kinds of things continue to go, well, we'll put our day jobs will dothis full time and we'll go from there. He built the prototype in five monthsinstead of six. We quit our day jobs, um, you know, kind of with with quite abit of time, um, kind of quite a bit of warning for our current employers. And,uh, we found ourselves four months later in techstars, we had a team offour. We raised our first round of $500,000 when we were in techstars. And,um, that's kind of where the, you know the prototype story. You know, thebackground of that story came from on, and from there we did a bunch of coolthings that we can we can talk more about. But, uh, that's about that time.Probably before we got into techstars. In about 2015. I came. I probablywalked into to meet you with that weird looking prototype, and now it lookssexy as hell. But it was not that. Yeah. No, I love that story. And were youscared? Were you in your co founder Scared of leaving your full time job?Or did you have enough interest in investing that you felt comfortableleaving your full time job? Um, well, Cem. So for for maybe morebackground, Ryan, was it a couple of big companies in the golf industrydoing R and D and product development using sensor technologies, big datasets and then also running manufacturing minds? Eso very relatedto what we're doing now, but different industry. So he was. He was in a littlebit more of kind of the big company. A little bit more secure job. I wasactually the first employed. Another start up before this. So in a way Iwent through something similar in terms of joining a startup, and I was abletokind of do start up on training wheels. And so for me, the risk factor wasn'tthere as much. And I think it wasn't there for a couple reasons. One we hadsix months of you know who became our head of hardware building a prototype.We've done a lot of research with customers. I started to talk to a lotof investors. Andi. I knew that I wanted to start my own company, and soI was just really excited. I think the second thing that Ryan and I were ableto do really well, partially just because we were friends. But I will dothis with any other co founders that I partner with. We had a really goodunderstanding of where we were both that financially and are comfortableity of How long could we go without a salary? When would we need to raisemoney? What kind of salary would we need to make for our lifestyle at thetime? We're just really transparent about it. So we knew, you know, we kindof had a handshake agreement that after 12 months if we weren't starting to, ifwe didn't raise some money and didn't start to have a little bit of a salary,we both would need to shut down notion and we would need to go get jobs again.So we dearest it through transparency, I suppose, in a way. And then we alsokind of the rest through, um or comfortable way to do customer researchand product development, which was we both had full time jobs while that washappening. Eso if you can swing it and you can work at nights and on weekendsand kind of make it work. Uh, it really didn't feel scary to us at all. We werejust excited. We're just really hopeful that this guy could make a greatprototype that would allow us toe to quit our day jobs. So we didn't thinkabout it as a risk or something. That's scary. That's so great how you youactually looked at it in a different way. Where here's here's our individualcash flow. We have 12 months. If it's not successful, it's not successful. Welearned and we move on and that was your line in the sand and I can onlyimagine that that helped motivate you...

...getting partnership deals, getting intotechstars, raising that initial seed seed round and then understanding whereyou would need to be for another convertible note round or an equityround to hire and grow out. Notion. Is that Is that pretty much right ontarget? Yeah, I think so. And I think the the interesting piece that you'rekind of touching on here is we did it initially as just a a way to make surethat we were comfortable and not putting kind of that unnecessaryfinancial stress on each other on the business. I think what you know,Looking back in hindsight, it it was a forcing function and like you got to gomake this happen. And that kind of stress to some people is a stress. Thatkind of stress tow us was like exciting because it did force us to say we gotto go make this happen or we have to go get jobs again. We don't want to go getjobs again. We want to do this. And so it really did serve two purposes,though at the time we probably don't really understand that it was servingthat second purpose. And I think the other thing for me personally that itdid is like, you know, I always tell people my wife was our first investor.She didn't write the check, so to speak. But that was the pitch. And so, from apersonal level in a relationship level, she was bought in the 12 monthagreement. Wasn't just between Ryan and I was between our spouses and us andeach other, and we just had a relationship that allowed for that tohappen in a comfortable way, which is great. But I think it was imperativebecause I could come home every day knowing that I was in, You know, I hadroom to run. I had room to operate. I had room to explore, super lucky tohave my wife support me in that way. But I knew I wasn't coming home withher every day saying, Hey, where you at with making a paycheck again? It waslike, You know what? We don't have to talk about it for 12 months, like gofigure out how to make a paycheck again, and if you don't do it, that's fine.But so I think it helped on a personal level for me a lot, too. That is so important. And, um, sameSame for for my situation as well, with my my wife and then having additionalkids throughout starting various companies. You're right. You have Youhave an agreement, Andi. It's best to be transparent and open with even yoursignificant other, because without their support, it doesn't happen. It isvery, very hard. Well, it's hard enough. And if you come home to that level ofadditional stress because you weren't able to be open or because they don'tunderstand what's going on, man, it just it adds so much additionalpressure. So, yeah, you know, pitch pitcher, pitch your significant otherfirst. And if you if they're, if they invest, then you'll be happy. In thevery beginning, how did you guys? Structure ownership was a 50 50. Yeah, we did 50 50. Just the nature ofthe way the company was started. You know, Ryan kind of had the initial ideaand we just started talking about if there could be a business around it.And the two of us were the two co founders and there was no riel rhyme orreason to make it anything but 50 50. Um, you know, I think a lot of peopleget co founders further along where, you know, maybe they were an individualand they did six months or a year and kind of really built things up. And Ithink in those situations, it's, you know, it Z potentially rightto look atother breakdowns. But we were good with just 50 50 and created an option poolearly on for that first employees and all those kinds of things as well mybackground being investment banking and doing investing in private companiesand then working at other startups. I...

...was somewhat familiar with the need forsome of those kinds of things, but Ryan and I early on just split it down themiddle. And at that time, what was the If youremember, what was the employee option pool percentage? Well, when we firstwhen we first founded the company, we were just we did it kind of a simpleLLC that I ended up putting together and way didn't incorporate kind ofuntil I'd say, seven months in sort of leading into techstars and leading intoour first round. At that point, we really set up the official pool, whichwas we did about 15%. Um, initially. And that's pretty standard from whatI've seen as well as you raised additional funding. How many rounds youguys that end up doing that? We're equity rounds. So we did. We did two official equityrounds. We did a seed round Onda Siri's a round in total. We raised, um, justshy of 20 million. 20 million. And was that within a timeperiod of two years about, um no, it was about So we started the company about 6.5 yearsago. We were in techstars in 20 about 2015. Um and we raised our first. Weraised our seed round. I want to say in 2016 and are Siri's a in 2018 2016 2018. And then that gave youenough. How did you structure that? Orinternally? How did how did you guys think about that? You said hey, for ourmost recent round. This will get us through x time and then we'll have toraise another round. Or did you always have an exit in mind. Um, or was itjust the right time? Right moment, right, partner, to make those decisions.Yeah, Yeah, it was the latter. We didn't have, you know, a super cleareridea of kind of the exit strategy. If that was eventually going to be an I po. If that was going to be an acquisition, a merger, what have you Wedidn't really set it out like that, I would say, sounding somewhat altruistic.But it was more about building the business in the product and trying tomake sure we had a good understanding of the next round's investor criteria.I talked to a lot of entrepreneurs. Now I'm doing, you know, a lot morementorship in angel investing in those kinds of things now, which is super fun.But I hear a lot of entrepreneurs say, Well, this is gonna get me 12 or 18months of runway, and I always kind of think of it differently. I e I thinkthe amount of time is important to some degree. I think you need 18 months atleast for each round to, like, really ensure you can make progress. But, um,what is that? Syriza or Siri's B investor going to be looking at interms of your metrics or in terms of what you've accomplished. If youaccomplish that in six months, that's great. But it might take you longer,and to me it's less about the amount of time and more about what they're gonnalook for. And so I talked to a lot of entrepreneurs were sort of scared totalk to that syriza investor too soon. Um and man, you're you're missing outon some education, Andi. I think a lot of SYRIZA investors are open tointroductions early on. Lines, not dots, is something that I learned a lot aboutin Techstars, where you can't just send them somebody a deck and have him getexcited. Like if they have known you for a year, year and a half and seniorprogress and get to know you much better chance of them investing likethere's nothing wrong with going in and feeling a little bit embarrassed aboutwhere you are as a startup. They've seen it all. They guarantee they'veseen worse, and I guarantee they've...

...seen better, so we were always lookingat it like, What do we need to get to. Where do we need to get in terms ofusers in terms of, you know, revenue etcetera to raise the next round, andthen we kind of pare it into a timeline a second. Did your metrics change forwhat you really want the to prove at Siri's? They did the metrics change forSiri's be or was it always? Hey, this is the amount of revenue and the amountof users, and maybe, maybe not in your case, but the, you know, monthlyrecurring revenue, whatever it might be. Did you notice that those metricschanged, or did they stay the same? But it just got bigger for your Sirius B. That's an interesting question. Um, I think that for us, one of the metricsthat got added on or became mawr important over time is therepeatability of what we were doing. Um, I think as with a lot of startups, wehad some early success with some big partners. A lot of our strategy or goto market strategy was B two b two C through insurance companies and homeservices companies, and we got a couple of big wins early, and so then laterstage investors started to say, Okay, can you do that with you know, 50 morecompanies is what is what you've done early on, kind of a fluke, or is itmore important? Earlier investors were more about kind of the active users andsome of those more trackable metrics in that sense. But I think just given theway we structure our business model, um, that was one thing that did become ormore important is if we could kind of repeat some of the big deals and thenif we could expand beyond and the whole in a small business started to becomepart of the discussion not necessary requirement. But really, can you startto take this more? You know, horizontal, um, and continue to get these bigpartners started to become a much more important piece of the puzzle for us. How important waas your network bothyour pre launch network and then your post launch network, both in terms ofinvestors and potential partners and maybe even ceos of potential featureacquirers. How important was that in your mind as it relates to success? E mean, critically important, I guess.Um, you know, we relied so heavily on a lot of our networks. Techstars beingkind of our first Ryan, my co founder, and I didn't really have great, um,networks kind of in the tech space, especially here in Colorado. Definitelynot in the angel investing space or in the seed investing space. And so for us,like we looked at techstars as a way to quickly ramp our network aan den fromthere. You know, I think part of what I always saw my job as a CEO is to buildout that network and then utilize it as best as possible. So, um, it was it wasimperative. I mean, everything I could tell you utilizing our network gave uspretty much everything we had. The first employee that we ever hired. He he reached out to a guy that I wasworking with at the time who had worked with him 10 years prior. And hisLinkedIn message was, Hey, I haven't talked to you in 10 years. Just wantedto check in and say hi, Hope you're doing well. And once the guy I wasworking with found out about what I was doing, he said, Look, this guy Sean isthe best hardware firmware engineer I've ever met my life. He just randomlyreached out on LinkedIn. I don't know what he's doing. He's a great guy. Youshould just talk to him to see if he has any ideas for you. And he was theguy that we hired as the guy who built...

...our prototype and like, it's justserendipitous. So I think if if you're if you work hard and build out thatnetwork, it's going to pay off and you just don't quite know how, Um, but it'sIt was huge for us, and I think, especially when it came to hiringpeople. Andi, When it came Thio kind of understanding how to grow the business.I leaned heavily on my network. I'm in a group of CEOs. There's seven of ustotal. It's just a private group. Um, I would highly recommend anybody who's afounder of a business to get a peer group that isn't too big, but it isreally, really integrated into what you're doing. And you could be reallyopen with and you can talk to on a monthly basis is, well, one of thethings I struggled with with mentors generally is. If I talked to him once aquarter or something like that, they just didn't know enough. They weren'tkind of intimately involved enough. And this CEO peer group, as part of abroader network has been huge for me from a, um, emotional standpoint ofpersonal standpoint and also just like a business and strategy standpoint. Sothat's been a That's been a big piece. I just add to kind of the networkquestion because I used to look at it when I was employed. Another start uphere in Denver was the first employee, and I would always want a network. Ididn't really know what I meant by that. I just could tell it was going to beimportant. It takes time, and it takes a lot of effort, but it's Zbynekeverything for us. Yeah, that's I think that's the commontheme of successful entrepreneurs is surroundingyourself with a players both in terms of hiring but also growing out yournetwork. One introduction leads to another introduction, which may lead tosomething you have even thought about before, and I've seen that with thecompanies that I've started and that I'm running now is you use the wordserendipitous and it is absolutely serendipitous. Yeah, it's just cool tobe around people that air, trying to change the world and trying to createnew things and hearing their stories and hearing their ideas and opinionslike it's just fun on it's It's a lucky position to be in Thio interact withthese people in my mind, and hopefully I can pay it forward, you know, pay itback and and and be helpful impactful for other people. But, you know, wejust we continue to get so much help along the way. And, um, it's just acool, cool community be a part of, especially would say in Denver andBoulder. It's such kind of a giving community. Um, it's just a fun, funposition being well, and it helps at least me. Um, it helps with mentalhealth because you you think the sky is falling every day or you think, Wow,this is amazing. Every day you have these ups and downs and, um, eventalking to Chris own in on the last episode who, for those listeners thatdon't know was a co founder of Galvanized that sold for roughly 160million in cash. I had no idea that it was such a grind for them where theywere, you know, three or four months away at any given time within the firstfive years of running out of cash. And that actually made me feel a little bitbetter about the previous companies and even existing company that I have isWow, you're you're in the same boat, right? Yeah, you really aren't alone.But you do feel alone. A lot of the time as a founder is a CEO. Um, it'sabsolutely true. And I think for me that that's why the network piece isimportant. But the the kind of close knit peer network that I talked aboutthe CEO group has been critical, I think, for everyone in the groupspeaking for all of them whether they...

...want me to or not. But, you know, wejust we've been able to share everything. Onda Lot of it is personalstuff, you know, it's kids and relationships and just, you know,things that really are impacted by being entrepreneurs. Um and so it zagrind for everybody, and I think it's such a it's kind of like a taboosubject to bring up that being an entrepreneur is hard, like you'resupposed to put on a smiley face every day. Your employees need you to put onthe smiley face every day. Your investors want that. You got to do itin public when you stand up at stage on stage at a conference and you know alot of people struggle with it. You know, Brad Feld and others have writtenOnda talked a lot about kind of the very serious and negative side of thepressures that people have on them. And so you need an outlet. Andi, this thesepeople, these friends thes, thes, thes friends that are also CEOs because myother friends don't get what what it's like. You know, it's you could talk tothem, but you need other. You need other CEOs and founders to be able ttalk to, even if it's just one other. Um, it's been really important for mefor the mental health perspective and from an energy perspective and anunderstanding of what's going on in the world. So it's critical knowing what you know now, what is one thing that you would dodifferently or would have done differently. We've been lucky and have had reallygood retention at notion. But the people side of of building a companyand making sure you really understand who you need at what point in time? Um,we mess that up a few times and nothing blew up. You know, nothing terriblehappened, but we tried to hire really great candidates at every at every stepof the way. And I think that what I didn't really understand at some pointin time was who would be great right now versus who We absolutely have tohave a year or two from now and and understanding if that person we hiretoday can develop into that person or become that person we need two yearsfrom now or if we actually need to hire somebody today and then start planningfor somebody else in the future. This was my first company. This is my firsttime being a founder, and I didn't have good kind of instinct on what thatlooked like. Um, it's not just, you know, about hiring slow and firing fast.It's more about knowing who to hire for the point of kind of the point of time,the progression point that your company is in. Um, we got a lot better alongthe way, understanding the needs our team had kind of where our team was wasstrong and weak. But there's definitely a difference in somebody, you know,bringing somebody on it. A 10 person versus a 50 person versus 100 personcompany that I just them I just hadn't really experienced before. And I thinkI could I could do a better job of now. I hope I can dio Ah, better job of, youknow, in the future. But that was that's something I look back on a lotand can now look at it and say, Oh, man, that was a great person. A great hire,but not the right time. That kind of thing comes up in my mind a lot. Thishas been very insightful. Thank you for that. And I have one last question foryou that I like toe. Ask other entrepreneurs and founders. What is your definition of anentrepreneur? Yeah, my definition of an entrepreneur is, um, anybody that can creatively solve problems and andjust doesn't take no for an answer. I tell all of my employees all the timethat they are entrepreneurs. I think some people take that title and say Youhave to be a founder. You have to be a...

CEO to qualify as an entrepreneur. AndI think a lot of people like, want to be an entrepreneur. It's kind of like abadge of honor to some people, I think, and to me, you know, it's anybody whojust has a tenacity and a view of the world that can, you know, things couldbe different. Things could be better. And I can go do that. You don't have tostart a company in my mind to be on entrepreneur and toe have you know thatjust being in your gut and that thing in your heart, that thing in your headthat all tied together to say, I'm going to go, you know, make adifference and, um, have the guts and have the tenacity to go do it. Sothat's my my kind of simple definition. I love that you can actually use thatin all facets of of your life, whether it's just being the CEO. The founder ofyour of your ex right of your division of whatever you're doing at home orwhatever it might be. Um, just take that initiative. I really like yourdefinition. Awesome. Well, it's It's a goodquestion. And I think a lot of people should, um, should push harder. Ah, lotshould create more. And a lot of people aren't willing to sort of jump intostarting a company full time. A lot of people can't afford to not have asalary for 12 months, like I said earlier in the call, but I also think alot of people can make it work and you couldn't do it in different ways. Andso thinking creatively about how to make it happen is is, um what it'sabout? I love it. Brett, Thank you so much for taking the time. I wanna haveyou on again. We'll dive deeper into specific things, But again, thank youfor the for the for the great insights. Awesome. Thanks, Dan. Appreciate havingthis is fun. Yeah,.

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