As part of my series about the “How Business Leaders Plan To Rebuild In The Post COVID Economy,” I had the pleasure of interviewing Pat Calhoun.
Pat Calhoun is a visionary leader with an intense focus on user experience and customer adoption. He has founded two companies — Airespace and Espressive. As CEO at Espressive, Pat is set to transform the enterprise self-service experience to a consumer-like approach that drives employee adoption and significantly reduces help desk calls. Pat’s first startup, Airespace, grew revenues to over $80M in two years before being sold to Cisco for $450M.
Most recently, Pat served as senior vice president of product at ServiceNow where he was responsible for ServiceNow applications. Prior to that, he was general manager of the McAfee network security business. Pat also served as both CTO for the Cisco $14B switching, routing, wireless, and security access business and GM of the Cisco identity business. Pat holds 35 patents and has been published in more than 16 publications.
Thank you for joining us Pat! Can you tell us a bit about your ‘backstory’ and how you got started?
Espressive is my second start up, and after the first one, I told myself I would never do it again, as startups are both emotionally and physically taxing. However, after leaving ServiceNow and trying to determine what my next gig was going to be, all I could do is remember all the conversations I had with CIOs during my time there. Every one of those conversations sounded exactly the same. ServiceNow had helped organizations digitize their back-office processes, but when it came to the employee experience, it was like we were teleported back to 1995. Employees were largely calling and emailing for help. The help desk was a very manual process — there was virtually no automation for the resolution of employee issues.
While I was looking for my next gig, the need for automation of the resolution of employee issues kept going through my head. It was all I could think about, and was ultimately my main motivator. And just like my first startup, I came to realize that I had a mission and I would never forgive myself if I did not take on the challenge. Somehow, all of the reasons I had told myself over the years to not start a new company had vanished and were replaced with the exhilaration of what was to come.
I put together a very basic demo of what an employee experience could look like and a few slides describing the problem space in the opportunity. I decided to do a mini VC roadshow to see if I was simply fooling myself or not. I started with one of the VCs that had originally funded my first startup. While I was really only looking for some guidance, imagine my surprise when they offered to give me funding!
I tried another VC and got the exact same reaction. At this point, this was enough to convince me that this was my future. I now had two VCs willing to take a bet on my idea. Exciting doesn’t even begin to describe what I was feeling. I was shocked again when I started to receive unsolicited inbound inquiries from other VCs that had heard I was looking for funding and wanted to meet.
Three weeks later, I was talking to five VCs and I closed our Series A funding round.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
Well, this funny story has little to do with the mistake that I made, although I’ve made plenty. My first startup, Airespace, was funded a month before September 11 — a very difficult time to be looking for money as you can imagine. At the time, we were building the next generation enterprise class Wi-Fi infrastructure. Now keep in mind, this was before enterprises were actually using Wi-Fi. This was early days.
I met with a VC and gave them my pitch. The feedback I received from the lead VC was “there was an abundance of ethernet in the world, and Wi-Fi would never be used inside an enterprise”.
Now, clearly VCs take risks and their willingness to take bets depends on a number of factors. Clearly, the economic climate was not working in my favor. However, looking back at the comments, it’s pretty clear the person had no vision whatsoever. Of course, such a response from a well-known VC can be quite disheartening and certainly got me questioning my priorities in life.
We ended up raising 15 million and had a phenomenal exit through an acquisition with Cisco.
My biggest lesson with this experience is to always trust my gut. Don’t ignore external advice; if you believe in something, do not let some external force bring you down.
Is there a particular book that you read, or podcast you listened to, that really helped you in your career? Can you explain?
There are a number of books that have really helped me with my career, but probably the most important one is “The Innovator’s Dilemma” by Clayton Christensen. Across my career, I have competed against the “800 pound gorillas” and it is important to understand the constraints that they are up against. They cannot simply drop everything and risk their existing business to take a bet.
This lesson was important for me at my first startup, where we competed against Cisco (before becoming a part of Cisco), and now at Espressive, where our competitors are also very large and established companies.
Extensive research suggests that “purpose driven business” are more successful in many areas. When you started your company what was your vision, your purpose?
I absolutely believe in that. Funding an interesting idea, or some applied research is a very risky bet. When I started Espressive, I had a very clear mission and target customer. I knew precisely that our mission was to transform how employees received help across enterprises and this could be done with some of the most recent advances in AI and natural language processing (NLP).
Do you have a “number one principle” that guides you through the ups and downs of running a business?
The customer. Running a startup is a pretty intense job and it’s kind of like living on a roller coaster. One day you are up, then the next not so much. It can be pretty hard to not let this distract you, but for me, I do that by focusing on the customer. The first thing I do when I wake up in the morning is check on our customers. I find it is a good distraction and keeps my mind from worrying about things I sometimes cannot control.
The Covid-19 pandemic has affected nearly every aspect of our lives today. For the benefit of empowering our readers, can you share with our readers a few of the personal and family related challenges you faced during this crisis? Can you share what you’ve done to address those challenges?
My wife’s family is in China, so I got first-hand perspective into how Covid-19 affected people there, and the measures that the government undertook to control the pandemic. These were very drastic measures, much more so than what we have experienced in the US. While Covid-19 has been and continues to be very impactful to all of us, what we have experienced is a fraction of what was done in China to control the spread.
Now, don’t get me wrong. Covid-19 has not been easy on me or my family. But I know people in other parts of the world have faced much different experiences in combating the virus.
My motto has always been not to worry about things out of our control. Focus on where you can make a difference. This belief has really helped me get through the past few months.
Can you share a few of the biggest work related challenges you are facing during this pandemic? Can you share what you’ve done to address those challenges?
There have been challenges abound as a result of Covid-19. The good news is that as a true digital native, the shift to work from home had little to no impact on product development. All of the Espressive family members were already equipped with everything they needed to work from home, and we had absolutely zero infrastructure at the office. Now that is the good news.
Personally, I am a social animal. I thrive on the energy at the office. The hustle and bustle of people collaborating, etc. While I love my family dearly, the interactions with them are drastically different than what I experience with my co-workers. I miss that every day
Now, don’t get me wrong. I am not sitting home working by myself. On the contrary, I find myself on 10–12 hours of Zoom meetings every day. I certainly interact a lot, but the point is these are meetings with a specific purpose. Their purpose is to maintain order and ensure productivity of the team.
Given that I was certain I was not the only one feeling this “work isolation”, we set up a number of events to re-establish the feeling of “togetherness”. First, we created what I call the “community hour,” which is a virtual event that occurs once a week where anyone can drop in and just share what they are experiencing. This is a place where people can commiserate about the current situation, and I have personally felt it has helped.
We have also set up a virtual happy hour, where on Friday’s people can simply drop into a virtual room with their favorite beverage in hand and just “hang with the team.” We have also created what we call the “virtual cooler”, where people can just drop in at any time and see who is there — kind of the experience we all had when we went to grab a coffee and found ourselves talking about what we did over the weekend. We built a great integration with our virtual agent technology, so any employee can ask who is at the water cooler at any given time.
Many people have become anxious from the dramatic jolts of the news cycle. The fears related to the coronavirus pandemic have understandably heightened a sense of uncertainty, fear, and loneliness. What are a few ideas that you have used to offer support to your family and loved ones who were feeling anxious? Can you explain?
While the world around us continues to change and experience pain, I continue to remind my family that we need to focus on what we can control. The actions of others, at times, can be quite frustrating to see, but it’s important to not let that affect our mood or attitudes as it can be the beginning of a slippery slope. While difficult at times, it is important to keep your mind focused on the things that you can have an impact on versus what you cannot change.
Obviously, we can’t know for certain what the Post-Covid economy will look like. But we can of course try our best to be prepared. We can reasonably assume that the Post-Covid economy will be a trying time for many people across the globe. Yet at the same time the Post-Covid growth can be a time of opportunity. Can you share a few of the opportunities that you anticipate in the Post-Covid economy?
There is a constant in every conversation that I have had with IT leaders in the past couple of months, and it is that cost containment will be a driving factor. Gone are the days of long term digital transformation projects; they’re being replaced with short term value projects that can automate and reduce an organization’s operational costs.
Any startup or vendor that can help organizations lower their cost while improving employee productivity will see benefits in this next normal.
10. How do you think the COVID pandemic might permanently change the way we behave, act or live?
Our world will be forever changed as a result of Covid-19. The stay-at-home orders have forced leaders to accept “work from home” and hopefully found ways to maximize productivity in doing so.
At Espressive, we were always a “remote work” friendly company. Everyone was equipped with whatever was necessary to work from home and everything we relied on was “in the cloud.” This required us to think hard about how to create a secure environment when there are no physical boundaries.
But being able to work from home, and mandatory work from home, are two different things. Now that every employee is working from home each and every day, we have seen a dramatic increase in productivity. Further, while people are missing the “office feeling,” the general consensus across our employees is they want the ability to keep working mostly from home.
I have most recently been talking to other CEOs that are asking the question of what to do when their leases are up for renewal. I still believe we need an “office” — a physical location for us to occasionally get together to brainstorm. However, I do not know whether that is of the scale we’ve had in the past.
Considering the potential challenges and opportunities in the Post-Covid economy, what do you personally plan to do to rebuild and grow your business or organization in the Post-Covid Economy?
For Espressive, Covid-19 has certainly created a short-term challenge, but at the same time has created an opportunity. Covid-19 and the work from home mandates have created an environment where employees can no longer tap their neighbor’s shoulder for help, which has in turn significantly increased the calls into the help desk. For most organizations, cost containment is a priority, so adding more people to the help desk is difficult to justify.
At the same time, CIOs have always cared about employee satisfaction and have come to the conclusion that simply relying on humans to help employees is a thing of the past. Automation, if done right, is crucial to ensuring employees can get immediately productive when they face a challenge.
Similarly, what would you encourage others to do?
Don’t focus on what you cannot control. Focus your efforts on how the next normal will impact your markets and embrace it.
Can you please give us your favorite “Life Lesson Quote”? Can you share how and why that was relevant to you in your life?
Control what you can, don’t dwell, but adapt to what you cannot predict. I believe what we are currently going through is a great example of how important resiliency is. Worrying about current events would not change Espressive’s outcome. Instead, let’s figure out how we can tap into the current situation to be more successful.
How can our readers further follow your work?
You can find me on LinkedIn and I do occasionally answer founder/CEO related questions on Quora.