Your Seat at the Table - Real Conversations on Leadership and Growth

Building Durable Companies with John Connors

• Mike Maddock & John Tobin • Season 2

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What turns a promising team into a durable company? John Connors—former Microsoft controller, CIO, CFO, and long-time VC—joins us to dive into the mechanics that actually move the needle: recruiting exceptional people, making clear calls under pressure, and scaling only after the signals are real. From a Montana upbringing marked by hard work on farms and railroads to high-stakes meetings with Bill Gates and Steve Ballmer, John shows how resilience and curiosity become a leader’s edge.

For decision-makers dealing with high-stakes growth and for any leader who’s ever felt alone in tough calls, John opens the door to the Microsoft engine room during hypergrowth: consolidating onto a single SAP instance, building analytics muscle, and transforming IT from a cost center into a strategic proving ground. The dogfooding era comes alive—why no enterprise release shipped without IT’s signoff—and how that cultural shift became peer-powered disruption that reduced downtime, boosted credibility, and gave sales a living case study for enterprise computing.

We also examine leadership tone in a culture obsessed with lowlights over highlights, pointing to Bob Herbold’s calm predictability as a model for keeping the room cool while standards stay high. Sometimes, the most effective call is “not your problem”—focusing leaders where they can make the greatest impact.

Then we get practical about venture and entrepreneurship. John explains why overinvesting early is a trap, how to incubate cheaply until product-market fit shows up, and why timing—catching the right wave—can outweigh raw horsepower. He breaks down the harsh math of VC, the compassion required when it’s time to stop funding the dream, and the three founder traits that matter most: recruit A players, be relentlessly optimistic, and get comfortable being unpopular.

For anyone ready to challenge their comfort zone in venture, corporate leadership, or team-building, this conversation is a masterclass in clarity, courage, and compounding judgment. Real leaders. Real stories. Real action.

If it resonates, follow the show, share it with a builder who needs it today, and leave a review to help more people find these conversations.

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John Connors:

You have to be successful at recruiting and retaining talent. If you can't recruit talent, you simply can't succeed in this because you just can't make mistakes on the team when it's early. Or if you do make a mistake, you've got to move very quickly because with the team, one plus one plus one has to equal 10. And it's very different in a larger established company. You can make a lot of mistakes when you have an installed base, and you can have a lot of bad management for a while before it even is visible.

Mike Maddock:

Welcome to the Your Seat at the Table podcast with your host, Idea Monkey Mike Mattock, and ringleader John Tobin. We're two founders, a serial entrepreneur and a billion-dollar operator, to talk to leaders about how, when, and why they made their most pivotal decisions in life. Join us as we share wisdom, mistakes, and a few laps learning from the brightest minds in business today.

John Tobin:

Welcome to your seat at the table. Thrilled to host today an amazing person, friend, uh board member at our company Slalom, John Connors. John, welcome to your seat at the table.

John Connors:

John, thanks very much. And Mike, it's great to join you as well. So, John, uh, as someone that has had a really rich history, especially in technology, I want to take the audience a little bit through kind of your career, um, eventually dive deeper into some of the big things that happened in your career as well as the decisions you had to make along the way. Um, I mean, I I think it people may know that you were one of the early CFOs in Microsoft and saw amazing, tremendous growth. Kind of want to dive into that and almost how you got into that role and some of the different roles because I saw and know from your past that, and Microsoft does a pretty good job of this, of like balancing, like moving people around and positioning them for different executive um positions. And then you got into venture capitalist uh capitalism and started two different um companies in that. So I kind of want to dive deeper into each of those um paths of your life. And overarchingly, I've always respected, you know, with you since I've known you for about seven years now as a friend, uh a friend of slalom, you're an amazing leader. Like you're an incredible leader. You're incredible, I think, leader of technology, but I think in general, more of a great leader of how to think about running big companies, small companies, even startups. So I I I hope you uh you share with the audience a lot of your leadership wisdom uh along the way. Well, thank you, John. Pleasure to pleasure to be here, as I said. So with that, John, if you don't mind, take us back to kind of early days. You grew up in Montana, and you know, what was that like? Did you did you have a big family, small family? Were you on the farm? Or like what was what were the days like that, early days? Yeah, it's you know, I I feel very blessed with the the the family I came from and uh and just sort of the period of of time I grew up and and where my family came from. My my grandparents were both Irish immigrants to Butte, Montana, and my grandfather was an underground copper miner at in Butte. And at the time Butte was known as the richest hill on earth, it was an enormous copper find that uh basically was instrumental in electrifying the United States because copper was needed for the electrical build-out. And then my father was a typical first generation. Uh he went to college, became a teacher, and a coach. And the the street he grew up on in Butte, uh there's seven or eight legendary football coaches that that came from that same neighborhood. And then my folks moved to eastern Montana, where my dad coached at a Catholic high school, and it's a it's a famous cow town called Miles City. Anybody that knows the story of Lonesome Dove, uh, the book or movie, uh, where I grew up is the end destination of Lonesome Dove. So it's big cattle, it was big cattle in the horse raising region. And anyway, he coached uh at a Catholic high school. We had a big family, seven kids. Uh he coached other big Catholic families. And, you know, very early on, that's where I really learned a great deal about leadership because he was a phenomenally successful coach. And you know, I think when he retired from coaching, the team had won 89 straight conference games without a loss. But more importantly, he was a great man and a great leader. And you know, a teacher and coach at a Catholic high school doesn't make a lot of money. And my mom stayed home until the youngest of our seven siblings went to school, and then she became a newspaper reporter in this little town. And was we weren't wealthy, but we were the wealthiest family in town, I always felt like because of the life we led and the impact that my parents had. But you know, one of the things, because we had a bunch of kids, we'd go to practice every night with dad, uh, and that was sort of babysitting for mom. And I got to be around that from the time I was a little, a little kid, and he was just phenomenal at motivating, teaching, um, very clear when things weren't done right. Uh, you know, there's a great saying that clarity is kindness, and uh I think that was uh I saw that early. But then uh because of his my folks' network, I got to grow growing up, it was so easy for me to get a job because my family had a good reputation and the my you were just expected to work. So from uh you know junior high age on, I worked on these big remote farms and ranches, and that was the first introduction really to entrepreneurs because we weren't a business family. But working on these big places that were 50 miles from the nearest town and learning how these people ran these operations and fixed everything that needed to be fixed and worked from dawn to dusk was amazing. And then in the summer, I worked on oil rigs or worked on the Burlington Northern Railroad, and so I had a great work ethic and I just learned a lot about how things worked. And then I went to college at Montana and Missoula thinking I wanted to be a lawyer, uh, started out in that field uh with study, but then added accounting. And then by the time I graduated, I thought, well, I'm just gonna go to work as an accountant and got hired by Deloitte in Seattle, and that was a fantastic experience. Uh that led to getting hired at Microsoft after a couple of other stints because Bill Gates' sister worked in the tax department at Deloitte, Seattle. And so Deloitte people got hired in this little company called Microsoft. And so I joined when it was about 200 million in revenue and uh in 89, and when I left in uh 2005, I think the forecast for the next fiscal year was gonna be somewhere around 50 billion. I can't remember exactly. So, one thing I tell every young person I meet uh if you're gonna join a company, find something that's growing because it produces just enormous opportunities. And I got very I got a large number of opportunities in in that company. And then uh in 2005, I joined a partnership in C in Bellevue, Washington, Ignition Partners, doing venture. Uh did that, uh, have been doing that since, and then helped two of the young, two young guys that I hired uh launch their own few firm called Fuse, and I'm helping it with that. And so I'm working on venture stuff and uh family stuff. So it's been an amazing journey and uh have had just a lot of fun all along the way. That's awesome. Great, great um overview recap. I want to dive into some of the different roles that you had, especially at Microsoft. And that growth is crazy. Like, think about that 200 million, which is you know not tiny by itself, but then to get to 50 billion is like you did just you were when did you go pup? When did um Microsoft go public? It went public, I think, in 86. Okay, so you guys were public already? Yeah, it was already public, yeah. Got it. And then and so maybe talk a little bit about um you were a corporate controller and then CIO, is that right? You you were um did you get moved into the CIO role? Yeah, so basically how you know I I started out in finance, and then within about uh 18 months of joining Microsoft, I got hired to be the staff person for this guy named Steve Ballmer, who was running the systems division, and uh worked with Steve for Steve and in the systems world. That was uh languages, hardware. Uh it was uh Windows, it was DOS, it was this thing Microsoft was working on with IBM called OS2. Uh so I worked with Steve on just anything he needed me to do. Then he moved over to run sales. I moved with him uh and worked on a couple big things, incubating the licensing program, incubating the channel program. Uh from there, I moved to Europe to work for the president of Europe who reported to Steve, helping him run day-to-day Europe, European operations, and then also helping to get Microsoft Ireland set up. And while I was there, it was supposed to be a two-year stint living in Paris. Uh after about a year, I got uh brought back to Redmond to be controller, and largely what had happened is the company had grown so fast that the systems and processes and people at finance hadn't hadn't built been built as quickly. And we'd just come off a very bad budget process with the tools and the process not working very well. So I became corporate controller. That was the first time I ever managed a big group. It was probably 175 people. Uh, and we did a big project to basically uh shut down all the AS400s and MacPac software. You'd know MacPac software from the Anderson uh AC days. And anyway, we we we built one instance of SAP in Redmond, and then we built all of the data warehousing and analytics around it. And there were two really talented people that led that project that were in my group. Well, it worked, it was successful, and so then uh at that time the you know the uh Bob Herbold, the chief operating officer, and uh Bill and the exec team said, Hey, well, you should move into the CIO role. Uh and I was very reluctant because I wasn't a technologist, and the prior two CIOs had gotten fired, and so the whole notion of CIO, the term career is over, everybody's familiar with that. Uh, but I took on the became the CIO in uh, I don't know, it was 94, 95, and it was actually a real advantage to not be a technologist because what I learned real quickly was that uh being a CIO is a very demanding general management job. And a big part of it is technology, but a big part of it is project management, a big part of it is is uh working with each business on what are their strategies, plans, and priorities. And you know, most divisions in a company don't have very good strategies, plans, and priorities for their technology investments. Uh finance is always pretty good. Uh but beyond, you know, finance and operations groups are usually pretty good because they understand systems and they think system uh systematically. But if you're talking sales or HR or other groups, they just don't think that way. And so you it's a big general management job. Another big challenge that Microsoft faced was uh everybody thought, oh, these IT guys are a bunch of idiots. We're spending all this money on technology and it their stuff isn't stable and blah, blah, blah. Well, it was an interesting era because Visual Basic for applications had been released, so it made it really easy to build these really cool applications with a with a great UI, but the back-end systems were SQL and NT that at that time were not very mature. And you know, even the entire client-server architecture of Unix and Oracle, while while more hardened and more mature than SAP and NT, that client-server stuff in the early days was was not very stable. Well, you could build all these apps, but keeping them up and running was very difficult and expensive. And so the the I everybody thought, oh, these guys are a bunch of idiots. They, you know, because why can it cost so much when we have so much instability? And I had that attitude when I went in, and what I realized real quickly was no, these guys aren't idiots. Uh, they're very smart. There is a lack of general management leadership in the ranks to actually fight the fight with the product groups, with sales, with finance. So we we shored up the management team with stronger leaders. And then we had this really interesting session with Bill and Steve and the product leaders, and then a group of IT leaders where we'd done a study to really determine, hey, what's driving our costs and what's driving downtime? And what we concluded was, hey, there were lots of things we could fix in our processes and whatnot. But the biggest issue was our core enterprise, Microsoft's core enterprise software products weren't mature yet. And so we had this session, and we're about the first hour, you know, we're the IT team and me are just getting yelled at the whole time. And then the last hour, you could really see that Steve and Bill were understanding what was being explained, and that these enterprise IT people actually knew more about enterprise computing and its combinatorial and permutation complexity than the individual product groups understood. And the last half hour was uh basically the product guys getting yelled at for how bad their stuff was. And so we introduced this concept called eating our own dog food, and from that point forward, for certain classes of Microsoft products, they couldn't be released and for sale to customers unless IT had signed off on them. And that really was a transformational change in how IT worked with the product organizations. Then we also made a giant investment in upgrading the worldwide network and our data center architecture. It was really transformational for how Microsoft IT worked. And it was it was really a fun period. And towards the end of that, I ended up spending a lot of my time uh in sales because the sales team started to use Microsoft IT as the largest demonstrable example of Microsoft enterprise computing. And so that that led to a stint in the sales world. Okay, that's how you ended up in the worldwide enterprise group. That makes sense. I was trying to figure out that that jump, except for, you know, again, that that concept of building sort of the ultimate executive by bouncing them around a little bit, which is Yeah, there wasn't there wasn't much design. I don't think it was designed. I think it was like, hey, this group also has a problem. Uh seems like you might be the right person to try to see if you can fix it. That's that's really cool. When you think of from a leadership standpoint, jumping into that CIO role, and then you're sitting with uh you know Bill and and um Steve with the different product teams. Describe your leadership style and how you handled that. And and were you like you come across me like just always excitable, like you're excited, but like you do have this calm to you. And so like is that calming presence is that part of it that that like you're always you're kind of in listening mode, but or or do I have that right? Or like maybe just explain a little bit your leadership style and dealing with especially those personalities and kind of people coming at you almost aggressively? Yeah, you know, it's um that's a really great question because I I think I've I've got I've I'm less volatile with more maturity and experience and age and hopefully grace. I think we all are. Yeah, and I think we're Microsoft was a was a you know it was a fast growing company that was pioneering a lot of stuff with very brilliant and hard-charging people. And it was it was a it was a um it wasn't for the faint-hearted, I'll just say that. Um but it also I learned really early that um you you couldn't let yourself be bullied at that place or you stood no chance. And actually, I was really lucky the work that I did as a kid working on farms and ranches, and you know, I can remember one you know running a swather the for the first time for a on a big 14,000-acre wheat farm up in the the What is a swather? Oh, it's a hay cutter. You you cut hay wheat. Thank you. And uh we're out in the middle of nowhere, and Alfred Jordan, it was his place, and um anyway, so I'm running it, and he pulls up and he's just fuming, and the engine in the back of the unit is starting to smoke, and he comes up and he shuts it off and he's going crazy. I said, Well, what's the matter? He goes, This thing's gonna blow up. And he looks at the the heat gauge, you know, that like you have in your car, and it's pegged to red. Well, I didn't know to look at the heat gauge, and the shaft from the from the hay cutting had covered the the exhaust of the engine, so it's about to blow up, and he he went ballistic on me. And you're you know, you're 16 and you're 50 miles from the nearest town. Well, that's good for you in some ways. And similarly, when I worked on the railroad or in the oil field with these very talented men that knew how to do extremely dangerous hard work, but you know, you're college boy and you're gonna take a lot of guff from those guys. Um, that was fantastic because then you get to Microsoft, and um physically the people there aren't very scary. Mentally, yes. But so so you learn not, you know, you learn not to be bullied, but also was so fortunate that that Bill Gates and he was just brilliant at talent. That as a CEO, he had many gifts, but he was brilliant at talent and promotion of talent and getting the teams to work. He had hired a guy named Bob Herbold as the chief operating officer, and Bob was the only silver-haired person out of the entire executive team. He'd come from Procter and Gamble, where he ran both technology and marketing, which that's a pretty interesting combination.

Mike Maddock:

It's a unicorn.

John Connors:

He's a unicorn. And Bob was from Ohio uh and and had very Midwestern values, but tough as tough as heck, but never flappable. And Bob was my boss uh about half the time I worked at Microsoft. Ballmer was probably the other majority of that time with a couple of other folks. But Bob was so good at preparing, being organized, and then never, he was never flappable. And so I saw how Bob operated, and he treated everybody with with dignity and with grace. He could be very strong when he needed to be, but he never let the temperature get high in any conversation that he ever had. And I I thought, boy, that guy is an amazing model for uh leadership and for getting things done because you know we're all the same, is the higher the temperature gets and the louder the voices get, usually the worse and fewer decisions that are that are that are good actually get made. And so Bob was just amazing for me to learn about how a dignified how does a dignified and and successful executive operate? And he was just highly predictable and highly consistent.

Mike Maddock:

His boss, I believe, is Robert McDonald, who is the CEO of PG. And Rob McDon Bob McDonald went on to be the head of the VA and Who runs the leadership academy at West Point for young students, yeah. So there's a tie-in with your uh Air Force uh side, et cetera. There's like a military tie-in. I have a question for you. Uh this is just a fun question in terms of leadership style. Uh how about three adjectives to describe yours, three words to describe yours, three adjectives to describe Steve Bomber's, and three adjectives to describe Bill Gates.

John Connors:

Okay, mine would be um I think uh hard working, uh good pattern matcher, and good at talent spotting. Um Steve Steve, uh brilliant, uh incredibly uh effervescent in his energy and his drive. And thirdly, um amazing at learning. Amazing at learning. Uh Bill, um unicorn brilliance in terms of of business. The second, I think, would be steely incredible toughness. And the third thing would be uh perseverance. Uh you know, all three, I think anybody that that does anything, it doesn't matter if it's in business, if it's in government, if it's you're a leader of a church, you're an athlete. If you accomplish things, everybody works hard. There's nobody lazy that that so I don't you I don't use hardworking, but but those two were were two of the best examples of hardworking people I've ever seen in my life in in anything. And when I moved to Venture, not long after I joined Venture, there was a prominent Silicon Valley VC that was here, and I was meeting with him, and he just he'd he'd been at Microsoft the week before, and you know, the this was this was probably 2006, maybe early 2007, and Microsoft wasn't the the the stock market darling at that time, even though it was a very important company and doing quite well. But the big growth of the 90s was over and it was kind of you know finding its way in what it was as a stock. And um, anyway, um this VC said to me, Man, that is the most impressive company of any I've ever been around. And I said, Well, why do you say that? He goes, Well, we were there meeting with an exec on a Friday, and we left at 5 15, and the parking lot's still full. He goes, You don't ever see that in the valley, and that that comes from those two founders, how hard how hard they worked and their commitment. But uh, you know, it's just like Steve with his learning, um it just wouldn't matter what the business was, what the group was, by the end of that of any session with a company or a group, you would understand how it worked. And you know what the business model was, what the priorities were. And so, you know, that's something that's so valuable is are you always trying to learn? And do you work hard every day at it? And that you know, years ago I bought for our four kids when they were little, if you if you're a football fan, you know when Notre Dame runs out of their tunnel, there's a sign above the above the door that they all tap that play like a champion today. Is there a better message for a young person to think about giving their best effort every day than that sign? I'm not sure what it is, but they were they were people that that gave best effort every single day. And that example was was phenomenal for the organization when it was small, and it was probably even more important as it got bigger. Love that. You mentioned toughness for Bill. Um can can you maybe just dive one click further on into that? What what was how was he tough? Just like making a decision tough or um I don't know, in just what he wanted? I think it's um well first, I think the um being a C CEO is is I don't think people really understand how hard being a CEO is unless they've done it. And it's a very lonely job. And you're gonna have a lot of people mad at you all the time, and you're gonna have a bunch of people that don't like you, and there's gonna be a bunch of people that always question you. And if you're the CEO in an industry where there's already a bunch of incumbents that have power and you're disrupting them, uh boy, that's really hard. You've got to be really tough to make the decisions, for example, hey, we're gonna we're gonna bet on Windows versus this thing called OS2 that we could draft behind IBM on. That's a tough decision. Um when you think about the the effort it takes to build an organization in every country in the world, because you know that's one of the the most interesting things that existed about Microsoft. You've you've got to learn so much about every country and every industry and every company in every industry because every company is your customer. I mean, there's like there's like almost nobody that uses your stuff. Well, the complexity and myriad of problems that that creates when you're operating in every country in the world and every customer, every every company in the in the world, and almost every individual is your customer, is the trade-offs you have to make and the hard decisions you have to make, it's almost unimaginable. You know, just first of all, how do you how do you manage your time and who gets time with you and who does not? And if you give time to someone, well, that's the signal to others that, well, maybe your time's not as important, and so therefore is your company not as important. And you have all the you have a big treasure, so there's lots of projects being funded. Well, which projects are we gonna back? There's there's there's they Microsoft could fund way more projects than could be successful, and then picking which of them are we gonna back and which are we not, when each of these groups have worked incredibly hard to build something and make a case for it. Uh that's even before you get into the you know, you become successful, you become powerful, you don't build any lobbying in Washington, D.C. And kind of behind the scenes, all your competitors build this amazing force that wants to break up your company. Um and you got to weather that. Uh so just an amazing toughness of that was um, and then in meetings, how Microsoft was something I really liked was the it was all about what's not working in the lowlights, not the highlights. And if you went into a meeting. And your PowerPoint had more highlights than it had lowlights, you were going to get eviscerated because the whole culture was around what's not working, what do we need to improve, not meetings of clapping seals about how great we are. So it was just this toughness and accountability that he had on himself that other execs do. If I'm going to succeed, I've got to have a similar toughness and accountability. And so there was a high degree of accountability as the company, even when the company got fairly large. Now it gets harder and harder to maintain that as the layers get built. But they did an amazing job building uh accountability and results for a long time.

Mike Maddock:

I so I haven't I've not met uh Bill Gates or Steve Bomber, but I have watched them. Uh and and uh just check me on this. What I've noticed is that when they are challenged, and they get challenged a lot on panels and on TV and interviews, they both uh come at challenges from a spot of deep curiosity. It seems to me like the the armor, and you can tell me I'm wrong. I know that I know this is right about Bill Gates because I've seen it again and again, where someone comes at him and he kind of goes, well, and he and he's very curious about the topic that that someone's challenging with. Is that is that what you saw behind closed doors behind the curtain?

John Connors:

Yeah, they're both everything rooted in curious. They're both very curious and um and they want to get to root. You know what I mean? It's they want to get in the details. And uh it's the uh and they're both, you know, and and given the roles they have, they had a wide purview, and they they got they knew a lot and they were smart and they were hardworking. So yeah, they were very curious to get to uh to get to the bottom of well, what's what's what's what's truth, what's reality. And we we used to have a saying that was popular is um you've got to be more prepared than they are smart for the meetings because they're gonna go you don't know where they're gonna go deep, uh, but if they do, they expect you to know because that's it's your area, not theirs. And so you have a high degree of curiosity and high capacity.

unknown:

Yeah.

Mike Maddock:

What do you think keeps what do you what keeps you going? Like so at at your stay at this stage in your career, uh you could be uh, you know, I'm certain you could be cruising in a very large vessel uh off the Amalfi coast most of your time. Why do you stick with it? Why are you still why are you still in the game? What get what keeps you waking up, uh getting up in the morning going, let's go?

John Connors:

Oh, it's you know, it's a great question. Um you know, I I think there's a there's a few things. One is um the it's so fun. What what we do is so fun. And I get to work with so many young people whose world of the view is a windshield, not a rear view mirror.

unknown:

Yeah.

John Connors:

You know, they're they're they're optimistic and excited and they're building, and it's so hard. This this early stage venture, it's so hard to build to build a successful company. Um it's it's just really hard to get to 10 million of revenue. And um Amen, brother. It's really hard. And so it's just been there done that. It's it's just so fun because you get to you get to be around um young people who are builders, and it just it makes me it makes me excited for life, and it makes me excited for our country that there's all these great young people doing amazing things. Um it also I think um it's and my wife really is is uh a big influence, amazing lady, but she doesn't want me sitting around the house and you know not active. She likes it better, I think, if we kind of reconnect every night around six o'clock. And so that works well for her and what works, happy wife, happy life. Um, but I think a third thing was a few years ago, uh we were I was hitting 60, and I I couldn't couldn't do another um I could because I'll be 67 my next birthday. I couldn't, I couldn't commit to doing another venture fund because they're they're ten-year lives. And so a couple of the young uh guys that that worked for me, they then decided they would start their firm called Fuse, and I'm I'm helping them out. But it was about the same time we had to start uh we had to start, you know, hey, what are with our family, what do we do with our family stuff? And um my wife and I had had a lot of discussion and whatnot about that over the years of how involved and what if anything uh with your children uh should what should happen. Right. Well, we finally agreed on that, and so we we started to talk to our children about it, and by this point they're all adult age and uh pretty clear they're not gonna be screwed up, they're gonna have their storms in life, but they're gonna weather them, and they make really good decisions, and they've they've got they've had wonderful spouses, so you know, very thankful. But the youngest one, um, he's kind of a self-starter, and he started studying about stewardship, and he read a book uh by re uh I think it was a guy named Reverend Daniel, uh uh Rabbi Daniel Lappin called uh Thou Shalt Prosper, and it's about stewardship of wealth, and it's written in a Ten Commandment format, and Commandment Seven is never retire.

Mike Maddock:

So my thou shalt not retire is so thy spouse angry.

John Connors:

So Ross, well, son bought that book and he said, Hey, this I think this would be really, really great. You meet with a lot of young people, it's got a lot of advice, but check out commandment seven. Largely what it said is as you get to this season of life, if you have experience, you have a network, you hopefully finally have some wisdom, why would you not use it? Uh, and it isn't it isn't to make more money, that's not necessarily the goal, but you have all this treasure you've built up. Why wouldn't you why wouldn't you use what God has helped you get to this point in in this season of life when you never had it in any other prior season? And I thought, man, that is so anyway. So my goal is to keep getting invited to meetings, and when I don't get invited to meetings, I I'll know I'm done.

Mike Maddock:

It sounds like you're becoming a coach, John. Like the son is becoming the father.

John Connors:

Yeah. Well, it it reminds me of the parable with the ten coins and kind of the the talents that you have and not to waste them and as well. Um you do you get to this point where now you you you learn from your children who are now adults and married and have their families. Um it's a it's a great season of life that you know you you get to work with with the whole spectrum of of generations. And you know, we've got our uh two grand two of our granddaughters on horseback for the first time out of the ranch in Montana two weeks ago, and they were three and four and live in a city, and so you know, it's just amazing this season. I do look forward to that at some point with the grandkids, uh hopefully be blessed for with that. I want to I want to move a little bit into some of the decision making, John, that you had made throughout your career. So I'm gonna take you back and I'm gonna feed off of um one of the things you said uh with the antitrust stuff and the things that were happening in the early 2000s, when right around the time, I believe, that you took over at CFO and a lot of that stuff was all happening. Can you can you share a little bit of insight, you know, some of the hard things that were happening, and then how did that impact you as the CFO and what were maybe some of the critical decisions or critical things that you had to work through then? Yeah, so it was uh yeah, it was a because I I became CFO in early 2000s, so the you know, it was the the dot-com crash hadn't hit yet. Yep. But it was it was very clear, especially coming from enterprise sales, and Steve had become CEO. It was very clear, hey, the the heady growth days of Microsoft are are behind us, and this will still be a great company, but it's it's it's not going to grow at the rates that the world thinks and analysts think, and that people that own the stock might think. Uh, it'll still be one of the most profitable companies in the world, and it's its absolute growth will be uh phenomenal, but the but the relative growth in percentages, that that's that decade is over. Um so there was that. There was also the the company didn't really have a new strategy for developers framed, you know, that.NET hadn't been created. And uh there was also the challenge that about you know the company had grown employment really fast from kind of 98 to 2000. And so there was, you know, and then early in the decade, and there was there was about a half of the employee population that had made a bunch of money from stock options, and about half that hadn't. And um, and the salaries weren't really high or or competitive. And so there was a bunch of issues. There was a lot of senior leadership moving on because they would, you know, they'd worked really hard, they'd they were ready to do something different, and they financially they could. So it was a really difficult first couple years, and um that's probably where I really learned best to just deal with uh enormous amounts of stress and having to um just soldier through. But then we began to work on these seven different business units, um, you know, gaming, small business, uh, mobile, enterprise, windows, office, etc. Um, and and began to to kind of organize what was now a big company into more manageable missions and divisions with more autonomy. And um, you know, I think in general, that worked out really, really well in in and the fruit of it is kind of evident now in that uh Microsoft's an amazing enterprise company, uh just amazing enterprise software. The gaming business is pretty is is big. Uh the uh the the business around uh business applications is pretty big. Um mobile didn't work out. Search is you know, Microsoft I think has about a six billion dollar search business now that's highly profitable, so that did work out. What didn't work out, and in some ways I wish I had got to be like a VC for six months before I was CFO, is that um there was potential to create a lot of business value with much lower investment than Microsoft invested. Um because if you look at a lot of the winners of that space that Microsoft was competing against, um Google was a fraction of MSN size. And they that they just moved way faster and had a much clearer mission. And you know, there's this there's this point at which being small and focused is a huge advantage, and then there's a point at which scale is a big advantage for distribution and and sales and marketing once there's product market fit and there's high demand. But a lot of these businesses, you know, looking back, we just wildly overinvested in in terms of their cost, and we could have been a much higher performing stock if we'd have invested less in them and incubated them more versus investing so much thinking you can win immediately. But it was it was hard at Microsoft to get a business to get attention if it couldn't do if it couldn't be material within a year or two.

Mike Maddock:

Well, yeah, it's the same problem that PG has. That's where they acquire.

John Connors:

And so these really promising businesses that the teams do a really good job on if they if they aren't instantly a big hit, well, the the team, the company isn't is doesn't have generally the interest in continuing to fund them. And so, you know, Microsoft was early with a map, it was early with an ebooks, it was you just go through all these examples, but if it didn't get to 100 million within 18 months, according to the business plan, because you spent you spent enough to get to 100 million, well, then it was like, well, that's a loser. And so that uh I wish I had had more skill and I wish I'd have learned to reach out to successful VCs then on, hey, how do you incubate these small projects versus us just thinking we had our model and it worked for all these other businesses, therefore it'll work for this. And um, you know, one thing I think I've really hopefully learned is with life and with business, just because you were good at for some stretch of time or at some job doesn't mean at all you'll be good again and you'll be successful in the next job. You got to get up every day and and actually earn it and do it. And it's um that's a that's a hard lesson when you get successful, you get egotistical and you get you get arrogant, and you have a lot of syncophants telling you you know things that that aren't necessarily true. And so constantly trying to improve and learn from others is is just a really great habit and discipline to try to to try to adopt, even though I fall short of it regularly. On the flip side, John, is there any anything that like you really championed, you really pushed that maybe others resisted, but you you you sort of pushed it through? I'm sort of curious if Avenod was like that a little bit, because I know you were very involved with Avenod. Avenod was um Avenod was was was easy to get done in I guess relatively it seems, largely because there was a lot of respect for uh Accenture. And we had worked with Accenture a lot. We had hired a lot of Anderson Consulting people over the years. In fact, in my early days when I was controller and CIO, the partner from Anderson Consulting would come about every six months and he'd say, Hey, you guys can't hire any more of our people because stop hiring. And we'd have these agreed six-month periods, okay, no more hiring. So we had great respect for them. And secondly, it was also really clear that uh we we wouldn't and couldn't build our own fully integrated, high-quality SI. It's you just that that's a unique skill. And um and so anyway, and Steve really saw that, and he was president then and and building the enterprise business. But again, we we made the mistake with with Avenod that we repeated uh multiple times within Microsoft. We way overstaffed it early with too ambitious a plan, too many offices, before we really had the patterns and practices down of what it is, what were we going to go to market with? And fortunately for Accenture, Microsoft was eating all the losses in the early days. Um but it I think now I think net result was it was very successful. And then I was on that board for five years and got to work with Mitch and the team and Bob Frericks and others as that got built, and it was a very important organization to Microsoft's enterprise success. Yeah, interesting. Um let's let maybe jump a little bit to the VC, your VC time, starting ignition partners, and again with this with this idea of decision making. Did you guys develop a pattern of how you made decisions and which things you went into? Or yeah, was it more organic on how that and how that uh evolved, or was it just gut based on the individuals you were working with? Or what was the play that's a good idea? That's a really good question. The um yeah, it was a group of very talented and experienced execs from Microsoft and Macaw Cellular that started ignition. Yep. And so the macaw team was was really expertise in in telecom, and the Microsoft group was really expert in in both consumer and enterprise software. So that made the categories pretty straightforward. And then uh it was a collegial attitude. You know, these were these were uh experienced execs, and so it had a good collegial attitude and uh was good at at making decisions, you know, coming to agreement on what would be invested and what wouldn't be invested in. You know, picking this stuff, it's just really the earlier the company is the harder it is to to you just don't have much signal. So it's the people and the idea. And um ignition was a little bit later stage with they they would do a few, you know, not just a series seed and series A investments, but a few later stage deals. And you know, one of the things you have to get used to in in this business is you know, about a third of the things that you invest in, you won't even get your capital back. A third you'll get your capital back and maybe a little profit, but not enough that you could ever raise another fund. And a third you'll make money on, and a third you make money on, like if I remember the math right, like 13%, 10% or 90% of your profits. So it's a home run business. And it takes a couple years to see well, what's gonna what's gonna likely be a success. But in some ways, it I think it's a lot like college football in that to win in college football. Well, now you got to buy the recruits, but you know, you just have to recruit the players. If you had great players and coaches, you win. The more you win, the more recruits you get. Well, this business is like that. If you have wins, you get higher quality deal flow, and higher quality deal flow leads to more quality deal flow. But boy, you have to work really hard and look at a lot of companies relative to how many you back. And then the the really hard thing is um these teams work so hard, they're so talented, almost universally, they've given up way more guaranteed compensation and benefits than they could be making. The really tough business part of this is when you have to come to the decision, hey, we're not going to invest anymore in this idea, and we've got to sell, or or you have to go raise more money from someone else. We're not putting more money in. Because, in effect, what you're saying is, hey, we no longer believe in the dream. Usually by that time, the team is pretty tired. Um, and then the the thing you want to do is find an exit where the team gets paid and they feel like they were treated in the right way by the investors and and and got the right got a deal out of it that was fair and equitable. Uh, but that's the hardest part of the venture stuff is is when things something isn't gonna, you decide something isn't gonna work, and the the the entrepreneur doesn't agree, and you either have to convince them or you have to tell them, hey, we're not gonna put more money in, because that it's very personal. It's it's very personal. And so that that part is very difficult. Interesting. What what advice would you give entrepreneurs, I guess, John, as you have met so many, like you said, you had to rigorously go through so many different meeting different different companies. And I I get that they maybe they're a little bit later stage. Mike's Mike's sort of a serial entrepreneur himself and knows and hangs with all these entrepreneurs, and we've had a lot on the podcast. So I don't I don't consider myself an entrepreneur per se. I think that's really Brad, as we've talked about. But you know, I I have a uh definitely an idea of it. How big was Slalom when you joined, John? Well, it's pretty small, you know. Yeah, it was two degrees, right? It was two degrees, the accounting and finance staffing side. So it was about maybe eight million or so. And then I started the consulting division that became slalom. So in a way, I'm an entrepreneur, but not not in the same classic entrepreneur way. I put it that way. But you know, I do think what advice Mike Mike made a good really such a good point when we were before the podcast about the the CO profiles, the types, the arch types. Yeah. And um for a company to succeed, you have to have both vision and execution. And the you know, for the entrepreneur, it just depends so much on are they a product per are they a product person, are they a salesperson, or were they an exec coming into venture because it's all it's very different. But the the biggest advice is is really talent. You you you have to be a successful at at recruit recruiting and retaining talent. If you can't recruit talent, you simply can't succeed in this because the you just can't make mistakes on the the team when it's early. Or or if you do make a mistake, you've got to move very quickly because this magic of this venture stuff is with the team, one plus one plus one has to equal ten. And it's very different in a larger established company. You can make a lot of mistakes when you have uh an installed base, and you can have a lot of bad management for a while before it even is visible. In these early stage companies, you can't make a lot of mistakes, or if you do, you have to move fast. And the the productivity and output per person, first of all, you gotta be so focused, but then the the productivity and output is so much higher than larger companies that you just you just gotta get the talent right. I think the second thing is you have to be an unrelenting, optimistic person because it's just so darn hard. And you're you're always selling. You're selling people to join your company, you're selling people to give you money, you're selling people to buy your thing, product or service. I think the last thing you have to be is you have to be, you have to get comfortable with not being liked, because somebody's always always mad at you or disagreeing. You know, your spouse or your partner's disagreeing because you're having to work all the time, and you don't make as much money as the the friend who works at Google or Meta or Microsoft or Amazon who works half as much time. Employees are mad at you, your execs are squabbling, a customer's mad at you, investors are, you know, when things are going great, they're clapping like crazy, and then the moment it's negative, it's like, why did we hire this bozo? And so that not many people like are okay with people being mad at and not liking it.

Mike Maddock:

Sounds like a wonderful life. I think I'll try it.

John Connors:

Yeah, it's but you know what I mean? It's just a lot of people don't think about they think, oh, this is so romantic being the CEO, but there's always something that's not liking you every day.

Mike Maddock:

The crap is that.

John Connors:

And you have to have that grit, I guess. Well, the perseverance is is it's so admirable what it takes, the perseverance game.

Mike Maddock:

I think I I so I tell everyone who will listen that I'm a really good starter and a lousy finisher. Um I think that uh what what I've noticed is that founders get lucky a lot of times by picking a partner. I'll be with here's a name drop. I'll be with Jim Collins on Monday, and he's you know, get the right people on the bus. Yeah. So you're right with the people, but I think founders do stumble into choosing the right partners early. So they get, so Brad gets a John, you know, like you get a visionary guest who gets a great orchestrator operator, who gets a great rainmaker, who gets a great uh futurist, who gets a great, you know, the the the that team, yes, and they stumble into the right team and then they jump on a wave that is cresting. Yes. Oh my goodness. Yeah. But it to get to 10 million, most companies have to stumble through those partners until they figure out, oh my gosh, we've got the wrong people. We need someone different. And most companies, in my experience, never get there.

John Connors:

Yeah, and it's and I think too, it's um it, you're you're you make such a good point about catching that wave because you you can build you can have a great team and a great product, and the market just might not happen when you when you build it, or it may not happen um it in a time frame that you have money. And um it's timing.

Mike Maddock:

It's it's still you know it's funny, John. Ellen's uh uh John's wife, my sister, once said to me, like that you all moved to Seattle. Uh what, John? Yeah, yeah, I moved in. There are a lot of business, like a lot of businesses in Seattle, but just by being in Seattle, like they because think of a bit that that town was exploding. Yes. And so if you're a landscaper or a real estate developer, or that's you know, that it it's uh it's wonderful, but finding that wave, being at the right place at the right time is such so critical for entrepreneurs.

John Connors:

Well, and I think too, it's um it it's it's acknowledging that and being you know honest about it. And and it's like, hey, the the the timing was great. And but I think the other thing about really great entrepreneurs um finding and either stumbling on or finding the right talent, it's then also empowering them to succeed by by giving them a wide birth. And you know, you because there's a lot of a lot of young uh CEOs that have never managed anything before, so they don't know how you're supposed to orchestrate a team. And those that figure out real quickly how to do that and how to get the best out of out of each team member, each leader, and getting that team to work together, that's really hard to do, and it's it's art, not science, in my in my experience. Yep.

Mike Maddock:

Yeah, and talking about your coaching background, John, because I I can see it now. Um the the I love coaches who take the wide receiver and make him a quarterback, yeah. You know, or who take the there's a great story I'm an Iowa State guy. The middle linebacker or the the quarterback became the middle linebacker his senior year. Yeah, he readily said, Okay, I'm the starting quarterback, not anymore. There's this guy named Brock Purdy, who's behind me. Yeah, I'm gonna become the middle linebacker. And he set all the records in the Big 12 being the middle linebacker. But but credit the coach and the player who could say, You can do this, and you'd be really good at it. And the culture that made it so like most people would say, I'm leaving, I'm gonna go play quarterback somewhere else. But he went and played, and now he's coaching. So I think I John, I want to give you credit. I think you're very good at saying 15 people and saying this is the seat for you, not this one. And that is a huge talent that most young entrepreneurs don't have. So we agree.

John Connors:

thing that's really important is um in working with people and leading people and working with peers is it's a healthy environment if the leaders decisions even if you don't like them they're they're predictable meaning meaning or I understand them it's it's I I knew that was the decision they were gonna make what what people don't like is inauthenticity and and and decisions and unpredictability yeah you do you know what I mean it's it's and there's that whole term of one of the I use this term a lot with these young leaders is clarity is kindness. When there's a problem it's much better to talk about it up front immediately than waiting and thinking it's going to get better. It's it's be perfectly clear with what it is you're saying and and be predictable with your decisions because teams appreciate that even if they disagree with the decision that's made yeah I think that's right. Hey John I'm the son of a Navy captain so I'm looking at the time yeah we are at do you have do you have a few minutes I just want to ask you real quick toughest decision that you ever had to make and then the best decision you ever made as quickly as well best decision by far nothing even close was getting married to my wife nothing's even nothing's even in the ballpark. She's listening isn't she's podcast uh so uh Mary and Mike's sister is definitely my best decision I totally agree with you yeah yeah just um so grateful and I think um kind of the toughest decision really is um to uh to live away from you where your most of your family is for 40 years and so you know my kids didn't grow up with close I mean we we got together and they know them and whatnot but they didn't they didn't live with their cousins and grow up with their cousins and with extended family do you know what I mean and that's um that's a hard trade-off that's a hard trade-off and uh that and especially at this 20 years ago I wouldn't have said that I would have said oh it was some work related thing but you know these companies all march on uh that's just the way it works but family and and connect family connection and family multigenerational uh cohesion is so important in this in this fractured culture we have now and so that's probably the looking at it now wow that was we lived alone for a long time even though we saw each other and whatnot and I sure hope my four kids and their spouses and our grandkids have a way that somehow at least some of them live close to each other and and grow generations of children together I love that I want that too and I did the same thing in terms of moving away and and my kids again had good relationships with like Mike and Mike Mike's kids and Mike their grandparents but it's not exactly the same when they're right down the street. So uh I'm I'm hopeful I get that opportunity or my kids get get that opportunity as my kids kind of grow up a little bit more. John this has been awesome thank you so much for the time all your so great to meet hope to hope to connect to meet in person. Me too me too thank you thank you

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John Tobin

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Mike Maddock

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