How Veeva Became the First Public Company to Convert to a Public Benefit Corporation | Peter Gassner

00:00:00.000 — 00:00:18.760 · Peter Gassner
I definitely told the first set of employees. You know, it's probably not going to work because that's the odds of startups. You have to take such a risk. You have to be trying something that most likely won't work. I saw profitability in one year. I saw. We're going to be there. I surprised myself, I thought, wow, it's going to work.

It worked.

00:00:19.240 — 00:01:25.220 · Eric Ries
My guest today is Peter Gassner, founder and CEO of Veeva Systems. Peter began his career as a software engineer working deep in database internals at IBM. Spent nearly a decade at PeopleSoft and joined Salesforce when it had fewer than 200 employees. Then, at 42, he founded Veeva and grew it into an 8000 person public company.

Power and critical work across the life sciences. He also led Veeva to become the first public company ever to convert to a public benefit corporation. In this conversation, we explore why 90% of Veeva shareholders agreed to the conversion, elevating Vivas mission to a formal seat at the table alongside shareholder value and how that decision unlocked new innovations, including free software for clinical research sites, and so much more.

We break down Vivo's unusual practice of auditing its leaders for integrity and energy, not just financial performance. Peter shares why the best response to market volatility and AI disruption is to focus relentlessly on customers values and execution. Please enjoy this conversation with Peter Gassner.

00:01:27.580 — 00:01:44.379 · Eric Ries
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00:02:30.440 — 00:02:36.800 · Eric Ries
rules and restrictions may apply. Peter, I can't tell you how much it means to me that you agreed to do this. Thanks for coming on.

00:02:36.800 — 00:02:38.160 · Peter Gassner
Oh, thank you for having me.

00:02:38.200 — 00:03:14.580 · Eric
So I want to take you back to a very specific moment, and I want you to give the audience the context for, like, how you got to this moment, like record scratch. Here's how we got there and like, what you were thinking, how it felt to you in that moment. So I want you to talk to me about the incorporation of Viva, like when you actually sign the papers and did the act.

I remember you telling me this story about, like, something struck you as interesting or odd that I think a lot of other founders overlook. So can you kind of give us the story? How did you come to be in that moment? What was the backstory of founding Viva, and what did you notice in that? In that moment.

00:03:14.740 — 00:04:07.560 · Peter Gassner
I decided, okay, I'm going to start this company and then you have to you can't just say, I started a company, you know, you have to sign some papers that says you are starting the company, you know, what's the name of the company, things like that. And so of course, lawyers drafts that and it's a form letter and you get ready to sign it.

And somehow I just thought, I will read this thing. So I read it and I still remember it had a bunch of complicated words, but what it said was very simple. You're starting a company. Its job is to make money for the shareholders and don't do anything illegal. And I thought, that's not what I want to do. That's, you know, I want to have a company like a, a company that takes care of its customers and employees and make some money and does the right thing.

But I remember feeling yuck. That's kind of sick, but oh well, it's just a form.

00:04:07.920 — 00:04:21.279 · Eric
Right? So because so many of us. Okay. And I think a lot of founders listening to this are going to relate to this. And I've done this exercise with a lot of founders. And as I'm speaking on tour with the new book and stuff. And

00:04:22.320 — 00:04:48.960 · Eric
I, I asked people like, have you actually read those documents? And people kind of like half put up their hand and they're like, not really. Okay, so but I think for those that have read it, a lot of us have been in that room. And the lawyer says, look, this is the standard. This is what it means to be a for profit company.

And I'm sure there's some people who are listening to us right now who are like, what's the problem? Like, isn't the goal of a venture back for profit company to make money for shareholders? So say a little bit about what exactly it was about that that didn't sit right with you.

00:04:49.000 — 00:05:32.420 · Peter Gassner
It's just my ethos. I grew up in a house, immigrant parents. My father had a small machine shop. My mother's father had a bakery in Switzerland, in a village. You have to take care of your employees and the people around you. Otherwise the world is not a good place. So it just seemed. It just seemed odd to me.

It seemed not. Not okay. Heartless, weird. Not anything I wanted to do in life. I had a successful career as a technology person. Before I started Veeva. I had accomplished any financial goal that was reasonable that I wanted to. So it just seemed. Gosh, is this all there is? It seemed hollow.

00:05:33.020 — 00:05:41.500 · Eric
Yeah. Oh, man, I so relate to that. I think a question a lot of people will ask is if you felt that way. Okay, but then why start a for profit company?

00:05:41.820 — 00:06:14.240 · Peter Gassner
There I thought, well, the capitalism is is is what happens here. And I'm okay with capitalism. I always, you know, constituted it with, okay, you have investors and you have customers and you have employees and you kind of have to do the best you can. But I never equated it to capitalism at all costs, which I thought it's not sustainable.

I don't think it's sustainable. And by the way, historically and like in a small village, it was not capitalism at all costs because your neighbors would rebel against you and it wouldn't work.

00:06:14.480 — 00:06:26.160 · Eric
Well, the idea that companies exist only to be financial instruments to benefit their shareholders, the so-called idea of shareholder primacy is only like 40 years old. So, yeah, it's not not some ancient pillar of capitalism by any means.

00:06:26.200 — 00:06:29.560 · Peter Gassner
Yeah. So it's not a natural. It's not natural.

00:06:29.840 — 00:06:49.560 · Eric
So, you know, Veeva is famous today for being the first public company to become a public benefit corp. And of course, I'm dying to ask you about that as the kind of like bookend to this story. But for some listeners, I think they won't know Veeva. So first, just give us the founding story. Tell us about creating the company.

What was the original thesis? What was your vision that that drove you to to build the company?

00:06:49.720 — 00:07:39.780 · Peter Gassner
Well, when you start, you know, you just got to get started. You have to you have nothing. So you have to hire employee. You have to at some point, make a product. Get your first customer. Get them happy. So it's a series of steps. So there was no grand plan when I started Viva. But in general we wanted to make industry specific software, cloud software for the life sciences industry.

We started with one very specific product. We had some success. We we went on to other products. So what we're doing now is we're helping automate the life sciences industry. So our customers are people like, you know, Pfizer and Novartis. They're making medicines to help doctors help patients. And we're doing all very specific forms of tech and things to to help them be more efficient.

Technology consulting data. So that's what we do. And we're 8000 people now. You know.

00:07:39.780 — 00:07:40.740 · Eric
That's incredible.

00:07:41.100 — 00:08:17.680 · Peter Gassner
I feel like we're actually a force for the positive in the life sciences industry, helping our customers make these medicines. But when I started, really, Eric, I was just trying to make sure. Could I get a happy customer? Could we avoid going out of business? Can we? Can we just be a profitable enterprise because.

Eric, I always thought that was important. It's a way you can measure yourself to say, are you really making anything that's valuable enough that customers will trade their money for? Because if you can't get to that point, you have to be suspicious that somehow your product is not good enough.

00:08:17.720 — 00:08:40.280 · Eric
I've always liked Tim O'Reilly's phrase that you should create more value than you capture. Absolutely. People focus on that. Of course, there's like an altruistic dimension to it. Right. To to make sure that you're actually improving the, the the raw materials that you touch, you're justifying the investments that you're making.

But it also has that connotation of making a profit, of using that as a yardstick to make sure that you are, in fact, adding value and not just wasting a lot of time.

00:08:40.320 — 00:08:57.260 · Peter Gassner
I tell the Veeva team that profit is a good thing, because if we're making profit, that means we're contributing extra value to the world, you know, and maximizing prophet. I don't believe that is a good thing, but creating profit, that's a good thing.

00:08:57.660 — 00:09:04.020 · Eric
It's such an important distinction. I'd be remiss if I didn't ask you for a little bit of your background before that moment.

00:09:04.020 — 00:09:49.020 · Peter Gassner
So I had about, you know, 20 years of work experience, and I learned from many good people. So I worked at IBM in the Silicon Valley lab and the Almaden Research Center, deep in the database internals. I'm a software engineer by training. I worked at PeopleSoft under Dave Duffield for almost ten years, and then I went to Salesforce.com at the start of cloud software when it was, you know, very small company, you know, under 200 people.

And I worked with Marc Benioff and others. So I felt like I had done my training. I had watched a lot of people do things and do things differently. I did my apprenticeship. I learned by doing so. I had the credibility. I had the whatever they call it, 10,000 hours. I knew about enterprise software.

00:09:49.060 — 00:10:03.080 · Eric
I wonder how much your preexisting ethos. Like, how much did that influence you to choose to work in the life sciences in the first place? I presume you could have made enterprise software for just about any industry if you wanted to. How did you pick life sciences?

00:10:03.160 — 00:11:01.590 · Peter Gassner
Well, it wasn't that complicated. I knew I wanted to do something industry specific, and I actually didn't know much about life sciences. I knew more about, you know, banking and hotels and things. But then I met some people just randomly, as you do in life, if you're open to conversations, you can meet people.

And I met people that were experts in life sciences, and it just became a curiosity that really fed on itself. And I realized, oh my goodness, this is an amazing industry. And then the analytical part of me said, healthcare is growing and it will be a growing industry. And I never really put two and two together that, oh, this was really helping patients until after I got started.

And then I thought, wow, on a good day, you might be preventing the death of a child or getting somebody out of a wheelchair. So I had got I got started before I really understood the depth of what this industry means.

00:11:01.630 — 00:11:16.310 · Eric
When did you first know it was going to work? I understand that, you know, you're pitching people, you're raising money, and you know, you're you're telling people it's going to work. You're trying to cast that spell. But when did you have that realization like, oh, wait a minute, this is really this is really happening.

00:11:16.630 — 00:11:56.290 · Peter Gassner
I definitely told the first set of employees, you know, ten or so that it, you know, it's probably not going to work because that's the odds of startups. You have to take such a risk. You have to be trying something that most likely won't work. Otherwise you have no chance of success. And you know, I what I told them is it most likely won't work.

But two things is we will try our best, you know, if it's if it's not going to work, it's at least going to be a good try. And I won't hold you here to the force of my will for more than two years. we will call it if it's not going to work. Yes, we have venture investors, but that's it. They they know it's a venture.

00:11:56.290 — 00:11:57.410 · Eric
They know they know the drill.

00:11:57.450 — 00:12:41.690 · Peter Gassner
They're not investing in a Treasury bond. You know. They know there's risk. They actually want risk. They want you to. So when did I know it was going to work? Was roughly about a year in when I saw a large customer was really going to pay a significant money so that I could see that we were going to be able to cover our expenses.

Very simple. Eric, if you even if your business is making money making cash, it will always have value. But if it never gets to that point, it won't have value. So that's I saw profitability. I saw it was in one year I thought we're going to be there. And that's when I, I remember thinking, I surprised myself.

I thought, wow, it's going to work.

00:12:42.890 — 00:12:57.750 · Eric
Well. People who've never been founders can't really understand that feeling where you're like, oh, I've been telling people it's going to work, but now it actually is going to like it. It's just you had the belief before, I can have belief after, but the feeling is, is something a little different when you.

Yeah.

00:12:57.790 — 00:12:59.510 · Peter Gassner
You crossed the Rubicon, right?

00:12:59.550 — 00:13:01.390 · Eric
You got you cross the river.

00:13:01.510 — 00:13:06.870 · Peter Gassner
If I try, I have a chance to. Wow. The question is, how much is it going to work?

00:13:06.950 — 00:14:03.770 · Eric
Yeah. So fast forward now. You've been public for a few years and you made the decision to become a public benefit company. Now, for those that don't know what a PBC is, I'll just I'll give a quick version. But then I really want to know, like how did you first encounter the idea? What about it appealed to you?

But for those that don't. PBC is a very simple thing. It restores to a Delaware or in 44 other states similar things exist. We'll talk about the kinds of Delaware, Delaware, a C corporation. It restores the historical norm that companies should be incorporated to pursue something specific. So they should actually, like, make a thing not just be designed to enrich shareholders.

So it codifies the idea that corporations have a public benefit, that public benefit is not more important than returns for shareholders, but it's kind of a co-equal responsibility that the board of directors has to see carried out. So it's a way of taking the ethos that Peter was talking about before and translating it into the corporate charter.

Is that a fair summary?

00:14:03.810 — 00:14:04.650 · Peter Gassner
Absolutely.

00:14:04.690 — 00:14:15.450 · Eric
Okay. So when did you first hear about the idea of being a PPC? And tell me about the first time someone told you, you obviously can't do it because you're already a public company. I'm sure you must have encountered that.

00:14:15.490 — 00:15:09.870 · Peter Gassner
We went public dozen years ago, 2013 or so, and maybe it's 2016 or 2017. I became aware of this public benefit corporation idea because it was very new and nascent. So that's when I heard it, and I just thought, oh, that's kind of interesting, but I never really thought we could convert to it or something like that.

You know, it was just sort of this nascent thing out there. So I just thought it was, you know, not possible. And then I remember Specifically where I was, where I decided we would do it. It was I ride my mountain bike for sort of exercise and meditation. I was riding on a route that I've been on many, many times, and I was riding across the bridge and I was thinking about this.

I stopped my bike, I got up, am I going to think about this forever or I'm going to do something about it? And I just decided there, I'm going to do something about it. I'm going to try my best.

00:15:09.910 — 00:15:26.990 · Eric
So walk us through the steps like, okay, you have this insight on the mountain bike. Then what happened? Who'd you talk to first? What who who who was on board with it? Who was resistant to it? Like, how did you actually go through the steps? Walk us through the timeline. Like the implementation guide, if you will.

How does one do this?

00:15:27.030 — 00:16:55.469 · Peter Gassner
Well, first, when you have an idea like that and you're talking to yourself in your mind about it, it may not be clear. You you have to verbalize it to somebody else. So to me that was very clear. It's our chairman, Gordon Ritter, who is he's my chairman, my boss, you would say, but also somebody who deeply understands me and I understand him, so I.

I called him and I said, hey, I'm thinking about this and we should talk about this. Let's go on a long hike. So we went a point, point raise, uh, you know, maybe a ten mile hike or so. And, and this was the topic and I was able to verbalize it to Gordon, something that I still felt confident in. And he's, you know, he's a super mature individual who knows a lot of things.

And he he could not poke logical holes in this. And on that hike, I think Gordon decided we should try to do this. We should start that process. And then it goes to the full board to discuss. And that process was probably more than a year because rightfully so, a full board's not going to just say, okay, let's do something unknown that nobody else has done, and let's just do that.

That would be irresponsible. So it was a process of education and discussion, sometimes heated discussions back and forth because I felt passionate about this. Yeah. And then after that, Eric, it has to go to the shareholder vote. And

00:16:56.750 — 00:17:22.350 · Peter Gassner
we did not think that was going to be. We thought maybe we would fail because we were asking the shareholders to give up their primacy. So we had many skeptical shareholders. I participated in it. And at the end of the day, the vote came out when we finally voted, which is again another year and a half down the road.

So the whole process, probably two and a half years, we got 90% of the votes.

00:17:22.709 — 00:17:50.290 · Eric
Unexpectedly, I think the fact that the vote was so lopsided, like it's such a testament to the changing norms and mores of investors. And I think this increasingly common insight that shareholder primacy has not actually been that good for shareholders. So you had this vindication, but I want to go back to point Raise.

Okay. You're sitting there with Gordon. You're taking this hike. What was your argument like? How did you say to him, tell us the argument you gave him that that you think was the strongest for why you should do that?

00:17:50.330 — 00:19:51.849 · Peter Gassner
The first was, it's the right thing to do. So our number one value in the company is do the right thing. And it just was 100% clear to me there was no there's no questioning in my mind whether this was good or bad. You know, this is obviously good. And the intuition was there and there was an actionable path we could take, whether we could succeed or not.

We don't know. But there was an actual actionable path. Our number one value is do the right thing. We have to take this path. So then the intuition has to be there. Then if you look at at the facts, is this better for our employees? Obviously because they have a seat at the table and they should. Is this better for our customers?

Obviously they have the seat of the table and it could, but the investors have to vote on it At that time, Viva was shareholder primacy, so the only way this works is if it's better for the investors. And I was convinced it was because I was convinced our customers would go more all in with Viva if they knew we were a good steward of of their interests.

And I knew that I would put more energy into it. And the energy of the CEO and the founder of that's it's not to be dismissed. It's actually I don't want to be egotistical, but it is it's important, you know, the energy of the CEO or the founders is important. And I knew I had to do this because I'd have customers ask me, well, what if we get all these things from Viva and you're just for profit?

You're going to sell to some big behemoth and raise the prices. My only defense at that time, Eric, was, trust me. No, I'm not like that. That's very hollow. And I even had executives ask me, well, you know, Veeva is going to outlive you. What's going to happen when you're not there? And I would just say, well, trust me, we'll get a new CEO who will be good.

That's very hollow. And so

00:19:52.930 — 00:20:33.810 · Peter Gassner
I was I was convinced and passionate about it. I was only troubled that people would. I did tell people the number one risk was were going into the unknown. And when you go into the unknown, you might hit a problem that you can't even foresee whatsoever. And so I told them that's I see known, I see no known risk, but I know there must be unknown risks.

But now one thing I would say is there are not unknown risks. We've done this and there are other public benefit corporates. So if anybody is thinking there's some unknown risk out there, there's not it's not there.

00:20:33.850 — 00:21:19.270 · Eric
I just take it so seriously now that like as a founder, you know, as a leader, you don't you're putting your own credibility on the line. You're saying, I really think this is the. What is the right thing? And I just I so appreciate you're willing to do that because I think for people that want to follow you, you've missed it I have.

So now if someone says like, you sure assure me that, yeah, you can look, it's worked out pretty. Me or Cheryl, there's a done pretty well I don't you know, I don't want to brag here, but for those who have not, you know, checked out the the stock charts, you might be impressed with what you find. I think it's worked out pretty well.

And more importantly, I think you tell me if you think this is right. It seems to me from the outside that that thesis that this is ultimately going to be something that wins the trust of employees and customers as well as shareholder like that really has come true.

00:21:19.390 — 00:21:35.590 · Peter Gassner
It's absolutely come true, I tell people, and I want to be a humble guy. I honestly believe this. I think Veeva is actually a generational company and there are not very many of them. And I want to just step back and thank my board, the board members that were on the board at that time.

00:21:35.790 — 00:21:36.510 · Eric
To them, absolutely.

00:21:36.510 — 00:21:53.370 · Peter Gassner
You know, they had this insight and they had this trust, and they had this discerning ability to make this decision in uncertainty. You know, even though they're not spending 80 hours a week on it like I am. So that's pretty impressive. And I. Everybody owes them a debt.

00:21:53.690 — 00:21:59.930 · Eric
100% 100%. Talk to me about how you chose the specific public benefit to put in the charter.

00:22:00.250 — 00:22:45.910 · Peter Gassner
Oh, yes. Um, well, the our benefit is to help the industries we serve be more efficient and effective and to provide high quality employment in the communities we operate. And the one decision was with our public benefit mission. Be very specific to life sciences and what we thought is. And it was a debate back and forth.

And what we thought, thought is we can't see the future. We might serve more industries. And then the so that that was one. And then the second public benefit. High quality employment in the communities where we operate meant we're not trying to fix the world overall. We're too. We're too small. We have to have to focus.

But,

00:22:46.990 — 00:23:30.230 · Peter Gassner
you know, I remember growing up. You know, you grow up around your grade school, friends, etc. and you kind of and at the time it was mainly fathers working. Not not as much as mothers, mainly fathers. And you could see that some children, their fathers really didn't like their job. And I saw the impact that that had on the children.

And I you know, that's not not good, right. So I thought high quality employment means, you know, it can be you can like your work, you can like the people around you that you work around. You can you can, you can produce your best and you can have a good experience. Bring that home to yourself and your family.

That's what I mean by high quality employment.

00:23:30.270 — 00:24:20.170 · Eric
Totally. I mean, in the new book, I have a whole section on what are called spillover effects. And for those that have never heard about this, there's a whole branch of academic research that shows that the way that people are treated at work spills over into other dimensions of their life. It affects the politics.

It affects the health of communities. It has so many. There's been so much surprising data on this. The difference between what they call the Walmart effect versus the Costco effect on local communities. Like, it's really it's really dramatic. And it's it's a way in which the company's mission is transmitted out through other channels of influence than just its product and its strategy.

So I just I really think that was a great choice to include that into the public benefit and to to be able to to put a marker down to say, look, this is core to who we are and what we stand for. So it's been like, what, five years since you did this conversion? Six years. Something like.

00:24:20.170 — 00:24:21.730 · Peter Gassner
That. Five. Six. Yeah. Five.

00:24:21.930 — 00:24:23.770 · Eric
Yeah, yeah. How's it going?

00:24:24.050 — 00:24:26.330 · Peter Gassner
Oh, I'm so glad I did it right.

00:24:27.570 — 00:25:07.910 · Peter Gassner
I it would, Eric. It would still be eating away at me. Now if I had done it, it would have been the thing that somehow I wasn't able to accomplish. I consider it that that significant. So I'm 100% glad I did it. It's doing the right thing. It's living our values. It actually, it had one unexpected thing that happened, and it turned out to be the opposite to the positive, not the negative.

It actually opened our eyes to more ideas because we we had subconsciously a little closed off, that the things we do had to directly make profit. And being a PVC kind of opened our eyes.

00:25:08.310 — 00:25:09.470 · Eric
Oh, interesting.

00:25:09.670 — 00:25:24.230 · Peter Gassner
And it opened the aperture to ideas. I'm I'm very convinced it's increased our innovation and those innovations have generally made profit. But I think the ideas would have been, yes.

00:25:24.230 — 00:26:30.930 · Eric
Oh, I'm so glad. I'm so glad to hear that. I one of my big ideas in the book, of course, is that the narrowness of our modern definitions around profit closes us off to all these business opportunities. Everyone knows famously that that makes us blind to. Negative externalities and deferred liabilities and these negative things.

But I think the much bigger loss is the loss of projects that have positive externalities, because you're just you're so focused on short term profit, you're like, you don't even realize how many people. It's like an immune disorder you have. So many people in your organization are like canceling projects before they even had the courage to propose them because they're like, oh, I don't know, that's just some open source thing or I don't know, it's just going to save some lives.

I can't see how we're going to make money from it. And there are so many examples in history of companies, whole companies that have started from that kind of impulse, that why not making billions of dollars in profit. So it is very profitable, but it's not done for the profit, the profits, more like the exhaust out of a well-run engine.

And I just I wonder if you could tell us there are certain particular projects or innovations that, that you feel like that opening of the aperture made possible for you.

00:26:31.130 — 00:26:53.310 · Peter Gassner
Well, one was when we started thinking about clinical research sites which are different than. Pharmaceutical companies and medtech companies. Right. These are generally nonprofits that are part of academic medical centers. And we thought, gosh, there's you know, traditionally we might have thought, well, there's very little opportunity to make money there.

So

00:26:54.390 — 00:27:38.730 · Peter Gassner
maybe we better not. You know, we closed off our aperture there. So we decided, hey, that be part of our public benefit mission to provide a lot of free software to these research sites around the world to start. And I think if we weren't a public benefit corporation, we probably the ideas of what we could do would have got squelched off early.

And now that's become a really important part of what we do, because we want to connect our customers out to the clinical research sites. If we have software on both sides, we can do it. And if and also by selling software and providing free software out to these clinical research sites, we also understand them better.

So that's been probably the number one place where wow, that that was a breakthrough.

00:27:38.770 — 00:27:58.570 · Eric
I have to ask, because it's such a common perception out there that if you're doing something, if you're doing the right thing, quote unquote, if you're being ethical, if you're pursuing a public benefit, you must be giving up something. There must be a loss that corresponds with it. So have you just I'll just ask you straight up, have there been trade offs involved in becoming a public benefit court for us?

00:27:58.570 — 00:28:38.510 · Peter Gassner
There was that one. We had to go of the risk of the unknown. We had to be first. So I was there was an unknown risk. And I view that as a as a trade off. Other than that, I honestly I don't see any trade off. I, I have never had any regret. I don't think there's anything we're giving up because I guess we're giving up, you know, if we really wanted to squeeze long term profit and stuff like a short term profit, I guess we would be giving that up.

But but it's nothing that we want to do. It does not align to our values, so we haven't given up anything that we would want to do.

00:28:39.470 — 00:29:36.130 · Eric
I love it. I really I admire that you did this, of course, but I also admire that you were driven in the first place before you'd ever done it, to adopt, do the right thing as a corporate value. And another principle that comes up a lot in these conversations is the principle I call harder is easier because when you adopt values like that and you you commit to them in a principled way, it does make your life more difficult.

I'm sure there's plenty of times when you've been in a meeting where it's like, if you could just squeeze, just squeeze a little. We just we could cheat a little bit or just, you know, whatever. Like that probably would make our life a little bit easier. But of course, in the long run, having those kinds of commitments makes other aspects of your business so much easier.

And the aspects it makes easier are typically the aspects that most leaders tell me are the most difficult things in business attracting the top talent, you know, customer loyalty, alignment of your people. So just talk a little bit about have you have you experienced that too? That harder is easier phenomenon?

And what are some examples you found where having these really difficult principles has benefited?

00:29:36.170 — 00:30:36.510 · Peter Gassner
We have the values. We live by these values in our company. The number one value is do the right thing. And then we have customer success, employee success and speed. And they're in that stack ranked order. And they're written down and they have a definition there, each about a paragraph I write it. We don't change it very often at all.

We talk about it on every company call, every board meeting. I spend a lot of time communicating it, and it makes my job actually easier because there are some times I struggle with the decision and it comforts me to go back to the values. Okay, well, it should be aligned to my values. I have a system. I have a framework to use.

Without that, I think I'd be not have a system and not have a framework. I'd be just sort of going gut feel. So it's really helped me there. I have not seen any time where it makes it harder. I actually think it would be Harder to not have a framework. I feel it would be ambiguous and difficult.

00:30:36.870 — 00:30:56.590 · Eric
The number of extra meanings you have to have about all that stuff. Let me tell you, from having been a consultant to companies who don't have that principle. Yeah, it consumes like a significant percentage of the total company's time is debating stuff that really should never be debated because it's so much easier to be like, no, we just know there's never a reason to do that.

We never do it. No, we don't need to debate it. Thank you very.

00:30:56.590 — 00:31:43.130 · Peter Gassner
Much. It does mean you have to put the time into two things to have values. As a company, you depend, you know, if you have a three person company, you don't need a lot of time communicating. But the bigger the company is, you have to spend time communicating repetitive communication, repetitive communication.

Because people in the companies change. Companies go to entropy unless you keep communicating. So you you definitely have to do that. And then your the, the leader and the core leadership team have to live the values, otherwise it doesn't work. So you have to talk the talk and you also have to walk the walk.

That's an investment you have to make that maybe you wouldn't have to make if you were not a value driven company.

00:31:43.370 — 00:32:09.490 · Eric
I appreciate you calling it an investment because that's really what it is. Trustworthiness is the most underrated and valuable asset in all of business, and when you do these extra things, you're making that investment that pays off in an asset that is, you know, so many companies, when they fall into scandal, when they run into trouble, they're like, oh, I really wish people trust me right now.

It's like, yeah, no kidding, but it's too late. You can't. That's not something you get. That's something you got to earn over time. You can't just no amount of crisis PR is going to win. Win back your trust once it's been lost.

00:32:09.530 — 00:32:19.770 · Peter Gassner
Trust is not over the long term. In a business like ours. It doesn't happen by accident. It actually has to be a process of communication and getting the right people. Yeah, it's a process.

00:32:19.810 — 00:32:48.560 · Eric
I'm curious to talk a little bit about the other techniques you found effective as a company to instill that sense of ethos in your employees. You mentioned communication. Of course, I'm sure there's a lot in terms of how you hire and retain people, how you allocate resources in the company. Like, just tell me if there are anything that comes to mind when you say, yeah, this is a practice we uniquely do.

We found really helpful in defending and filling that ethos and everyone we touch because, you know, at 8000 employees is not easy to create alignment at that scale. I believe me, I know.

00:32:48.560 — 00:34:20.580 · Peter Gassner
So the things we do is communication by our values and all these public meetings. That's number one consciousness of the leaders to say, hey, use this. Walk the walk. Use it to make decisions. That's another thing. Like really use it when we're making decisions. So those are probably the three main ones.

There's a small but super important one that we do that's very unusual that I don't know that any public company does. We have an internal audit group just like other companies. Most companies, if you're a public company, you will need a function called internal audit to audit management. We don't audit for competency in the company we audit for.

In the leadership team, we audit for integrity and energy. So we have a human that audits myself and the other leaders on a periodic basis for integrity, so that we can root out any integrity issues. Should we have them in the leadership team before they destroy the company. And the reason why we audit for energy, that's more for a company.

If the company's leaders lose energy, the company is is basically living on borrowed time. And sometimes the board may not know the leaders have lost energy until too late. But the people reporting to those leaders in a private, trusted one on one conversation they will know. So, for example, Eric, in your past, if you had a a boss that had lost energy, you would know it.

00:34:20.620 — 00:34:33.200 · Eric
It would be, oh, I know exactly what you're talking about. It's not it's not subtle at all. Not so. And yet who can you tell? You have to those companies. You have to keep it to yourself. You can't talk about it. It would be a major career ender.

00:34:33.240 — 00:34:56.200 · Peter Gassner
Yeah. So we have a person that reports to myself and the audit committee of the board. Uh, very trusted gentlemen, you know, military background, etc.. And he's earned the trust of Eva, and they know they can trust him. So the other thing, and when you really study this, it will be an integrity issue at the top or an energy issue at the top.

Yeah. And so why not audit for that.

00:34:56.240 — 00:35:53.740 · Eric
So I'd be remiss if I didn't ask you about the future. And, and I thought maybe because obviously everyone wants to know about AI future work that's on everybody's mind. I'm really interested in the SaaS apocalypse, because I saw that you guys kind of got caught up in the SaaS apocalypse and the stock crash.

Listen, for the record, I don't buy individual stocks. I'm privy to too much individual, and I never do that. But boy, was I really tempted when I saw that, I was like, yeah, that seems like a pretty safe bet to me. I'm not giving anyone financial advice, okay. But I just I feel like the gyrations of the stock market can be so irrational.

What was that like for you to to help your team navigate the like ups and downs of that public market volatility? And just like, what are your views? Obviously there's a lot of people going around saying on TV and whatever that there's not going to be SaaS companies, that everyone's going to make their own bespoke software.

I certainly count me as a skeptic in the life sciences anyway. But yeah, what's your what's your view about that? And what do you see as the future of, you know, of integrating these new technologies into your business, into the industry?

00:35:54.140 — 00:37:36.060 · Peter Gassner
Yeah, a couple of things. There was when we went public, you know, I write from the day when we went public, I always said to people, we can't, we can't worry about the stock price because we're not in control of what we are in control of. Are we are we doing the right things? Are we are we living by our values?

Are we producing the results? Do we have happy customers? Are we innovating? Are we executing? What are we doing this hour, this day, this week? So that's what we're in control of. And also communicating clearly and you know, in the right way about what we're doing. So that's all we can control. And stocks are going to go up and down and we shouldn't worry about it.

And so that's you know that's one thing we just we don't I don't worry about it. We can't control it. No. Used to worry about it. Now as far as the sass populous. You know I started out as a computer science engineer, right? I actually have a computer science degree. I did some serious development in my earlier days, etc. so I understand it at its core of what software is.

So I've never scared about this SaaS apocalypse over the long term. I know that you see companies need systems of record large companies. They need to coordinate their people. Otherwise enterprise without a system of record, without a clean set of data with business rules around it, it can't function.

There's no way to coordinate. We all know that with email, right? What if we didn't have email in a company or account or we can't coordinate? Those are systems of records. You need that otherwise. So they're not going to go away for sure. And I and I knew that. So I just wasn't worried about it. I just have to wait.

You just have to wait it out. Right.

00:37:36.100 — 00:37:59.700 · Eric
Okay, okay, I hear you, but you're you got employees who've had, like, half their net worth, like, vaporized in one day. Surely some of them were freaking out. I mean, right, that's a hard thing to live through. And of course, everyone says they understand stock market volatility isn't real until it punches you in the face.

You know, it's like what? What about my my stock. Well so like how did you help your team like deal with the emotions and the stress of that.

00:38:00.300 — 00:38:19.660 · Peter Gassner
You know just be calm and don't you can't just make too much of a big deal about it. This repetition, the main thing to do for for companies, for founders, etc., communicate effectively on the good days when the stock is going up and don't overhype it. So that's when the founders have to lean in.

00:38:19.700 — 00:38:21.180 · Eric
That's the hard part going up.

00:38:21.180 — 00:38:58.160 · Peter Gassner
Hey, you got to focus on. We got to produce, we got to produce, we got to produce. Right. And that's that's way when you have a bad day, the companies just hey, well we got to produce. If we produce, we'll be fine. So that's probably the key. So we didn't have that type of freaking out. Also, I feel like we do a good job communicating in the company and people are not working at Viva only because of the money.

They they have friends here. They have a good, you know, quality of work. And so, you know, and they have their salaries. So it's not it's not the only reason why they're working here.

00:38:58.160 — 00:39:11.080 · Eric
I think your point about not getting too high during the up phase is really the hardest part for most people, because most people want to brag during the up and then have people become during the down and it's you really you're really looking at, you gotta have one or the other.

00:39:12.240 — 00:39:17.160 · Peter Gassner
Right, right. That's an interesting equation, but it doesn't solve.

00:39:17.160 — 00:39:55.380 · Eric
So looking forward, like what do you hope other companies will take away from your experience as a public benefit Corp. like, have you been disappointed that other companies haven't followed you? And I certainly every time I see one of these corporate scandals, corporate settlements, I mean, obviously the meta one is in the news as we're recording this.

I always have that thought of like what could have been if the company had been had taken this different course, if it had had a more serious commitment to certain values. And I just curious. It's easy for me to say that as an outside critic, you're in the middle of it. Yeah. How does it how does it all strike you now, having had this experience and watch other companies kind of fall prey to the things you've been able to avoid?

00:39:55.460 — 00:41:14.040 · Peter Gassner
I would say a big hope of mine is, is about tech companies, and specifically the very large tech companies that control a lot of money, a lot of people, a lot of things. So you might think of the Microsoft, Google, the Apple, the Nvidia's, the Facebooks, because that is our modern world. It's it wasn't that way under our.

Yeah, it wasn't that way a hundred years ago because you couldn't affect anything beyond your physical presence. Right now you can develop tech, you can deploy software technology. It might affect millions of people the next day. Right. So this is unprecedented concentration of influence. So if you look at those big five companies, my you know, you can always dream the dream, Eric, you might not get the dream, but you can always dream it.

I hope one day all five of those CEOs and their board members realize that it would be a better thing for the world and their shareholders if they converted to public benefit corporations and live the values. I hope they realize that, but more importantly, I hope they do something about it. I hope they have that on the bike moment that I had.

And don't just keep writing. Get off the bike, Peter.

00:41:14.040 — 00:41:32.500 · Eric
I can't tell you how grateful I am that you took the time to share this. And just on behalf of all of the I don't know, is it? Thousands or millions of people that you have affected through your employees spillover effects, through the products that you make, through the work you do in the life sciences? I mean, really, I have so many people that you've had a positive impact on.

I just want to say thank you.

00:41:32.740 — 00:41:40.820 · Peter Gassner
Well, thank you, Eric, for helping me tell the story. And thanks for your trailblazing efforts around this as well. We got to get the word out together.

00:41:40.860 — 00:41:51.020 · Eric
Eric, thank you so much. Well, may many people listening to this follow in your footsteps. And obviously, if anybody needs help figuring out how to do this, we are Peter and I are committed to give you all the support that you need.

00:41:51.020 — 00:41:52.140 · Eric Ries
So please be in touch.

00:41:52.300 — 00:41:53.300 · Peter Gassner
Absolutely. Thank you.

00:41:53.340 — 00:41:54.260 · Eric
Eric. Take care.

00:41:54.660 — 00:42:14.060 · Eric Ries
You've been listening to the Eric Reese Show. The Eric Reese Show is produced by Jordan Bornstein and Kiki Garthwaite, research by Tom White and Melanie Rehak. Visual design by Reform Collective. Title theme by DB music. I'm your host, Eric Ries. Thanks for listening and watching. See you next time.