David Cancel is Co-Founder and CEO at Drift. He shares his expertise on SaaS and running product-centric companies. Follow his reading list on Quibb.
David has been working in SaaS since he was on the founding team of Bolt in 1996. Since then, he’s founded five companies. HubSpot acquired one of those companies, and then he left to start his current company, Drift, a product for better communication with your customers. In his spare time, he’s an advisor to nearly a dozen funds and startups.
Along the way, he’s seen many angles of the SaaS world and the transformation of an industry. We talked to him about what it takes to be a founder, how SaaS has captured his imagination, and why he doesn’t want Drift to be acquired.
Starting a company is a crazy thing to do
As a the founder of 5 companies (and an early employee of many more), David has seen every stage of a company, giving him great insight into what it takes to found and sustain a growing startup. One of the biggest lessons he’s learned?
You’re crazy if you want to start a company.
“I think starting a company is a crazy thing to do, and I think it’s forgivable if you do it once, because you didn’t know any better. But once you do it several times, then I think, “Oh wow, you’re really crazy,” because it’s like creating anything else, it’s way too hard. Whether you are a writer, or a painter, whatever it is that you create, constantly testing yourself, and constantly resetting the clock. Doing it over again is crazy.”
Founding a company is not for everyone, David says. Most people don’t understand exactly how hard it is to build a successful business, and that can be a problem. They approach the entire process with an almost analytical mindset, thinking rationally about how their time and effort will unfold. Being pragmatic is a valued skill in many facets of life — but it’s an impossible thought experiment to win when you’re thinking through starting a company.
“I want to scream to them: ‘This is not rational, this is not logical, and when this seems like the logical choice, something’s off.’”
Over his many years of experience, David has noticed a couple of trends with respect to the people who he believes make good founders. The people who succeed usually have one similarity: grit. Grit is the ability to persevere when everything is wrong. There’s also a very strong internal drive in these people, to accomplish something for it’s own sake. This characteristic coupled with grit can be a compelling combination. David says,
“I think someone has to have something that they’re trying to prove to themselves, and they are determined to prove that about themselves, or discover about themselves. I think that’s because otherwise, it’s too easy to give up. It’s too easy to fold. I even think about this when we’re trying to build our team. Some people call it grit, some people call it having a chip on your shoulder.”
Focus on your strengths, not your weaknesses
Much has changed since David started his first company in 2000, in particular, our model of what a founder looks like. These days, it’s not uncommon to see an introverted, Zuckerberg-type at the helm. But back when David was starting companies, CEOs were supposed to be extroverted, business-guy types.
“A lot of my companies I started at a time where everyone thought that you needed the extroverted, X, big company, sales guy CEO, and that wasn’t me. For a lot of that time I was trying to fit myself into that mold, and push myself in areas where I was naturally weak, and trying to work on my weaknesses, and try to become more well-rounded. Then at one point I decided, ‘Well this is silly, why am I wasting all my time doing this? There are people who are fantastic at that, and I just need to partner with them on the areas that I’m weak, and I need to lean into my strengths.’”
This is a concept that comes up often — do you focus on improving your weaknesses or do you leverage your strengths? For a role like CEO, where every minute of your time is high value, it’s arguable that trying to improve your weaknesses is a waste of time. Bringing in someone to fill that gap goes much further.
“It sounds so simple, and silly now, but really the market and the expectations shifted wildly throughout that time. So I felt like it was fine to lean more into my strengths, and that wasn’t seen as odd or weakness, or different.”
Building a company that lasts
When reflecting on his career, David muses that while he’s tried to jump around to different types of products, but he always comes back to SaaS.
“Maybe it’s what I’m most comfortable with,” he says, “or maybe it’s the people, or the customer type that I identify with the most, and I understand their pain, and so I default back into that.”
Perhaps because he has tried to jump around, the companies David has founded and worked for explore every angle of the SaaS world.
“I’ve jumped from social networks to marketing software, to analytic systems, all different types of buyers. But really at the core of it was trying to take this data that’s never been accessible before, organize it and make it useful to people.”
Through working on a narrow niche of products, David’s level of intuition about the space and in-depth experiences means that he’s world-class when it comes to building these types of companies. While most of his previous companies were acquired, with Drift, David is aiming for something more: a company that lasts.
“I’ve been able to see different experiences and different stages of businesses. I had started companies that were from 0 to 200 people. Then at Hubspot I saw 200 to 1000 right before we went public. I felt like I’d seen the entire spectrum, and I understood the different stages better, and so if I was going to start another company at that point, then I wanted it to be meaningful.”
Since starting Drift a couple years ago, he’s remained focused on his plan to build a company that lasts — with an idea big enough to tackle for years to come.
“Drift was probably going to be my last company, and so I wanted to go all in on building a company that could go through all those stages and become a lasting company. Obviously a big aspiration, obviously it could end in a giant crater, which most companies do, but I was going to go all out on this company. I thought the opportunity and what we’re doing is so massive that I could see myself doing this 10 years from now.”…”I’m able to look back at all of the experiences that I have, and I’ve seen the ebb and flow, and I feel we’re in the middle of another change. I’m so excited to be part of that change.”
Listen to our entire conversation with David Cancel on the What I Know Best podcast.
image url:
https://cdn-images-1.medium.com/max/800/1*69QmfpJtZaUJAY4icYLJ3Q.png