There’s a saying in the technology industry that it’s harder to split from your venture capitalist than it is to get a divorce from your spouse. In some ways, it’s true. But what happens when you and your VC are actually friends before he or she makes an investment—and all the hard years of company-building are still to come?
That was the situation facing Roger Lee, an investor at Battery Ventures, and Nick Mehta, a seasoned CEO who was recruited in early 2013 to be the CEO of Battery-backed software startup Gainsight*. The two had met previously through a local executive networking group and were friendly with each other. At the time, they also lived in the same Silicon Valley town.
Powered by Battery sat down with Lee and Mehta to learn more about how they first approached, and set up, their close business partnership, but also how it’s evolved since then—specifically, how the two work collaboratively through tactical and strategic challenges and how Mehta structures and uses his entire board of directors to help grow and shape Gainsight’s business. Lee is the founding investor and a board member at Gainsight, which makes software focused on the nascent but fast-growing “customer success” market.
In this first video, the two describe how Lee first convinced Mehta to take the Gainsight job, when the company was very tiny and still called JBara. Lee recalls that he first reached Mehta on his cellphone as his friend was leaving the gym one night.
Initially Mehta was hesitant, because he was looking for a position at a later-stage company. But he said he immediately understood Gainsight’s business proposition once Lee explained it: As more and more technology businesses have started selling through subscriptions, instead of regular, packaged software, companies have to focus more on “keeping and growing customers over time, and not just acquiring new ones,” Mehta said. Hearing Gainsight’s business plan was a “light-bulb moment,” he said, since he had faced that same problem at his previous company. At that point, “I was sold,” he admitted.
The first segment of the conversation between Lee and Mehta can be accessed above. Later segments go into more detail about how Mehta structures and interacts with his board; how he manages through adversity and involves Lee and other board members in the process; and Mehta’s overall management style, which Lee describes as exhibiting “radical transparency.” Specifically, Mehta is not afraid to be vulnerable or talk openly about difficult challenges, according to Lee, which makes Mehta a better leader. You can access all four segments of the video in the links referenced above.
*For a full list of all Battery investments and exits, please click here.