How did Diane Greene co-found VMware?

Diane Greene co-founded VMware with her husband, a Stanford professor, based on his research. They leveraged their grad students and started the company during the dot-com era, facing initial skepticism about their 'multiplexing' software idea.

What was fundraising like for early VMware?

VMware initially used a friends-and-family seed fund. For outside investment, they sought 'rich people that deeply understand what you're doing,' successfully securing funding from engineers like Andy Bechtolsheim and David Cheriton.

Did Diane Greene face challenges balancing family and startup life at VMware?

Yes, Diane Greene brought her baby to work in the early days, with her mother helping to care for her. As the company grew, she utilized high-end hotels and nannies to manage travel with her daughter.

What was Diane Greene's biggest mistake at VMware?

Greene felt it was a mistake 'not to sell' when other founders wanted to, although in hindsight she values the years with her children she gained by leaving. She believes investors would have thanked her had she not stayed.

What problem did Bebop aim to solve?

Bebop aimed to address the complexity and convolution of traditional enterprise software. Greene envisioned a more intuitive layer where applications could use machine learning to anticipate user needs and automate tasks, similar to modern conversational interfaces.

Why did Diane Greene sell Bebop to Google?

As a Google board member, Greene became friends with key people like 'Or Huzzle' and learned about Google's advanced technologies. She realized combining Bebop's vision with Google's capabilities would be 'pretty special'.

What is the significance of cloud computing in the enterprise?

The cloud represents a giant revolution for enterprise, offering enhanced security against threats like ransomware, constant updates, and the ability to leverage advanced technologies. Greene believes most enterprises will move to a few major cloud providers due to scale and security.

What is key advice for first-time founders regarding their board?

Greene advises founders to build a board that helps rather than needs to be managed. She selected board members for unique expertise and fostered an environment of trust where she could openly discuss her worries and challenges.

Key Moments

VMware Cofounder Diane Greene with Jessica Livingston at the Female Founders Conference

Y Combinator

Science & Technology4 min read25 min video

Aug 4, 2017|7,274 views|2,530

YC Y Combinator Jessica Livingston Diane Greene Google Cloud VMware Female Founders Conference Female Founder

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Key Moments

TL;DR

Diane Greene shares insights on founding VMware, navigating Silicon Valley's dot-com boom, and the evolution of cloud computing.

Key Insights

VMware's founding amidst the late 90s dot-com boom presented challenges in gaining business credibility despite strong engineering interest.

Early fundraising for VMware involved friends-and-family rounds followed by strategic investment from individuals with deep technical understanding.

Greene balanced motherhood with co-founding VMware, bringing her infant daughter to work and later traveling with her as the company grew.

A key mistake identified was feeling pressured to sell the company when others wanted to, although it ultimately led to valuable time with her children.

The evolution of enterprise software, driven by mobile and cloud technologies, has focused on simplifying complex user experiences with AI and machine learning.

The acquisition of Bebop by Google was influenced by the potential to combine Bebop's enterprise software innovations with Google's vast AI and ML resources.

Effective board management is crucial for founders; selecting the right members with relevant expertise can transform a board from a management task into a valuable asset.

THE CHALLENGES OF STARTING UP IN THE DOT-COM ERA

Diane Greene recounted the beginnings of VMware in the late 1990s, a period characterized by the frenetic dot-com boom. Despite possessing strong, innovative technology, securing business-side talent and convincing people of the idea's viability proved difficult. Many companies were rapidly going public with less substantiated business models, making VMware's deep-tech approach seem 'hopeless' to some outsiders.

EARLY FUNDRAISING AND BUILDING CREDIBILITY

VMware's initial funding strategy involved a friends-and-family seed round, allowing Greene to maintain control and fairness among founders. She emphasizes the importance of attracting investors who deeply understand the technology. For VMware, this led to early investments from notable figures like Andy Bechtolsheim and David Cheriton, who recognized the technical merit of their virtualisation software.

BALANCING MOTHERHOOD AND ENTREPRENEURSHIP

Greene shared her experience of co-founding VMware while pregnant with her second child. She brought her infant daughter to their early office, which was located in a modest building. As VMware grew and customer meetings became international, her daughter often accompanied her, staying in high-end hotels with hired nannies, highlighting a unique approach to integrating family life with demanding startup growth.

REFLECTING ON MISTAKES AND GROWTH OPPORTUNITIES

Looking back, Greene identified a significant mistake as feeling obligated to sell VMware when other co-founders desired it. In hindsight, she cherishes the time she took away from the company to be with her children. This period of stepping back, though potentially foregoing a lucrative exit at that moment, provided invaluable personal experiences she might have otherwise missed.

THE EVOLUTION OF ENTERPRISE SOFTWARE AND BEBOP'S VISION

Greene pivoted to discussing her next venture, Bebop, which aimed to revolutionize enterprise software. Recognizing the complexity and often convoluted user interfaces of existing systems, Bebop focused on creating intuitive applications. Leveraging AI and machine learning, the goal was to anticipate user needs, automate tasks, fill in information, and create a seamless experience, much like modern consumer apps.

THE STRATEGIC ACQUISITION BY GOOGLE AND THE CLOUD REVOLUTION

The acquisition of Bebop by Google was motivated by the synergistic potential of combining Bebop's cutting-edge enterprise software with Google's vast AI, machine learning, and data infrastructure. This move positioned Greene to lead Google Cloud, recognizing the cloud as a major revolution where enterprises are rapidly consolidating onto a few major providers due to the scale, security, and advanced capabilities it offers.

THE MISSION AND POTENTIAL OF GOOGLE CLOUD

Greene views the cloud as a transformative force, enabling unprecedented innovation and security for businesses. She contrasts the advanced, constantly updated, and monitored cloud infrastructure with the limitations faced by individual companies. Google Cloud, with its global scale and vast data insights, is positioned to offer a level of security and technological advancement that is practically unattainable for most enterprises independently.

ADVICE ON BUILDING AND MANAGING EFFECTIVE BOARDS

A crucial piece of advice for founders concerns the strategic management of their board of directors. Greene advocates for assembling a board composed of individuals with unique expertise who can actively contribute and guide, rather than merely requiring management. She emphasizes building trust and fostering an environment where open discussion of challenges and concerns is prioritized, turning the board into a potent asset for the company.

SELECTING BOARD MEMBERS WITH SPECIFIC EXPERTISE

Greene highlighted the importance of deliberate board selection, using her experience at VMware as an example. Recognizing the need to navigate complex partnerships with dominant tech players like Intel and Microsoft, she sought out board members with deep expertise in deal structuring and strategic partnerships, such as Larry Sonsini. This targeted approach ensured the board provided precisely the guidance needed for the company's specific challenges.

Mentioned in This Episode

●Software & Apps

●Companies

●People Referenced

Common Questions

Silicon Valley in the late 90s was characterized by immense fundraising for startups, with an emphasis on 'thinking big'. It was easier to attract engineers due to deep technology, but difficult to find business-side talent.

Topics

Technology & Innovation Business & Entrepreneurship Cloud Computing Venture Capital Startup Founding Enterprise Software Company Acquisition Career & Skills Founder Mistakes Board Of Directors Tech Industry History

Mentioned in this video

Companies

Microsoft

Mentioned in relation to a paper under blind review that spurred Michael Greene's research for VMware, and later as one of the 'monopolies' VMware had to deal with.

Intel

Mentioned as a monopoly that VMware had to navigate, and as sitting between hardware and Microsoft's operating system in the tech stack.

Intuit

A company on whose board Diane Greene served after leaving VMware. It was noted for having Bill Campbell in common with Google.

Bebop

The stealth-mode company Diane Greene started in 2012, focusing on enterprise software solutions. It was later sold to Google.

Wilson Sonsini

The law firm where Larry Sonsini was managing partner, relevant for his expertise in deal structuring which Diane Greene sought for her board.

VMware

Company co-founded by Diane Greene, which specialized in virtualization software. It was started in the late 90s during the dot-com era.

Dell

A company from which VMware raised money after its initial seed funding.

Google

Diane Greene later joined the board of Google and eventually sold her startup Bebop to Google. Google's technology, AI, and machine learning were appealing.

People

Larry Sonsini

Managing partner at Wilson Sonsini, described as an 'ultimate power broker', whom Diane Greene sought to join her board due to his deal-making expertise.

Bill Campbell

Mentioned as someone who was in common between the boards of Intuit and Google, known for his role in Silicon Valley.

Andy Rubin

Not explicitly named, but referred to as 'or huzzle', employee number 8 at Google, who built all their employees and became friends with Diane Greene. This is likely a mishearing for Andy Rubin, though the transcript doesn't confirm it.

Andy Bechtolsheim

A key early investor in VMware, described as a phenomenal engineer. He provided $100,000 in seed funding.

Shirley Tilghman

Former President of Princeton and one of the early female board members at Google when Diane Greene joined.

David Cheriton

A Stanford professor and partner to Andy Bechtolsheim, who was also an early seed investor in VMware and Google.

Software & Apps

Gmail

Used as an example of Google's scale and ability to monitor and respond to user activity, highlighting the security benefits of cloud services.

Google Cloud

The platform Diane Greene was involved in running after Bebop's acquisition. She sees it as a major revolution in enterprise technology.

Locations

Silicon Valley

The region where many tech companies, including VMware, were founded. Diane Greene describes it as a place where people focused on engineers and deep technology.

Organizations

Andreessen Horowitz

A venture capital firm that invested a significant amount of money in Bebop. Mark [Andreessen] joined the board.