Scaling Up:
VMware grew rapidly, from 5 individuals to over 7,000 employees, with $2 billion plus in revenue and an IPO.

Culture When Scaling Up:
Maintaining a strong culture is crucial for successful scaling.

Hiring Standards:
Hiring the right people is essential, even as the company grows.

Creating a Strong Culture:
Establishing a strong culture attracts talent and makes it easier to hire.

People Culture at VMware:
VMware’s culture appealed to individuals with diverse interests and backgrounds.

Competition with Google:
VMware competed with Google for talent.

Google’s Work Culture:
Google offered a 24 by 7 work experience, appealing to those who wanted a more intense work environment.

VMware’s Work Culture:
VMware had shorter working hours, attracting those who wanted a better work-life balance.

Self-selecting Teams:
VMware’s cultural system allows low-performing employees to identify their unsuitability for the organization and leave voluntarily, ensuring a high standard of talent.

Hiring Exceptional Talent:
Diane Greene prioritized talent over seniority, seeking individuals with exceptional drive and skills, promoting from within whenever possible.

Promoting from Within:
Jason Martin, who headed professional services, was promoted from an individual contributor role due to his dedication and abilities, contributing significantly to the company’s growth.

Hiring Military Professionals:
Diane Greene valued hiring military personnel for their discipline and aptitude in sales roles.

Communication Channels:
During VMware’s early days, weekly all-hands meetings in a small lunchroom facilitated open communication. As the company grew, regular emails, all-hands meetings, and staff reports were used to maintain transparency and information sharing.

Weekly Staff Reports:
Every Monday, staff members submitted reports highlighting team developments, collaboration opportunities, and important issues, ensuring alignment within the organization. The staff reports were shared with everyone, promoting transparency and fostering a collaborative culture.

Company-wide Understanding:
Diane Greene emphasizes the significance of having all employees understand the company’s operations and goals.

Importance of Centralized Communication:
A centralized platform, like Slack, was used to facilitate efficient and comprehensive communication across different teams.

Benefits of Efficient Communication:
Centralized communication allows employees to grasp complex information quickly and efficiently, saving time and effort.

Effective Onboarding with Centralized Communication:
New employees can gain valuable insights into the company’s history, culture, and operations by reading past discussions and documents.

Promoting a Shared Language and Culture:
Centralized communication helps foster a shared language, mindset, and sense of common purpose among diverse teams.

Facilitating Alignment in Larger Organizations:
In larger organizations, centralized communication enables new hires to quickly understand the company’s context and align with its objectives.

Product Expansion Strategy:
VMware’s initial product, Workstation, was a success, reaching $100 million in revenue. Recognizing the potential of server virtualization, Diane Greene and her team had the vision to create a server product, but their vision did not immediately resonate with the market.

The Birth of GSX Server:
The team repurposed the successful Workstation product as a server product, renaming it GSX Server with minimal modifications. This resonated better with customers, and GSX Server gained traction.

Challenges with ESX Server and the Preferred Hardware Vendor Program:
The initial launch of ESX Server, the bare-metal hypervisor, faced initial resistance in the market. VMware introduced the Preferred Hardware Vendor Program, collaborating with hardware vendors like HP, Compaq, Dell, and IBM to provide support and market the ESX Server, which led to its eventual success.

Linux and the Role of Binary Translation:
Linux was gaining popularity when VMware was developing their virtualization technology. To test their bare-metal hypervisor, the team created a tool to run Windows applications on Linux using binary translation. This helped them refine the system and gain feedback from the market.

Success and Industry Impact:
VMware’s virtualization technology revolutionized the server landscape, enabling efficient utilization of resources and addressing scalability challenges. The company’s vision and ability to adapt their product to market demand contributed to its success and impact on the industry.

Early success and partnership with IBM, HP, and Dell:
VMware experienced rapid growth as the fastest-growing enterprise software company in tech history during its first 11 years. Diane Greene and the founders’ technology played a crucial role in VMware’s early growth. Key channel partners like IBM, HP, and Dell helped scale VMware’s success.

Remaining neutral to hardware vendors:
VMware prioritized neutrality among hardware vendors to ensure compatibility with various platforms. Diane Greene adopted a “Switzerland” approach, ensuring equal treatment and confidential account sharing with all vendors. They shared proprietary developments with all vendors but ensured cross-platform compatibility for non-proprietary developments. This neutral stance allowed VMware to maintain trust and maintain a strong relationship with all hardware vendors, leading to their success.

Neutrality and Customer Focus:
VMware maintained neutrality even after AMC’s acquisition, treating all storage companies equally.

Challenges with Microsoft:
Microsoft wouldn’t support its operating systems running on VMware’s virtual machines. VMware partnered with hardware vendors (IBM, HP, Dell) who had support contracts with Microsoft. This allowed VMware to provide support to customers running Microsoft on its virtual machines.

Confidentiality with Partners:
VMware ensured that partners would not share information about customer accounts with other partners. This was important to maintain trust and prevent partners from competing against each other.

Profitability for Partners:
For every dollar of VMware sales, partners could generate $8 to $10 in storage, servers, and add-on services. This made the partnership highly profitable for companies selling VMware-compatible products.

Forming a Sales Team:
Initially, VMware hired a diverse group of salespeople with different roles, such as channel sales, phone sales, and direct sales. They experimented with different approaches to find the right fit for their market. After gaining traction, they developed a successful sales model consisting of a technical salesperson, a sales engineer, and a direct salesperson. This team structure, with a shared performance metric, proved to be effective.

Partnering with Resellers:
VMware incentivized their sales team to work with partners like IBM, Dell, and HP. The sales team received the same commission regardless of whether the sale was made directly or through a partner, ensuring compensation neutrality. This strategy led to increased collaboration and revenue generation through the channel.

Compensation Structure:
During VMware’s early stages, it was possible to attract talent with lower salaries. However, as the market changed, startups needed to offer higher salaries to compete with established companies like Google and Facebook. VMware adjusted its compensation structure to attract and retain top talent.

Product-Market Fit:
VMware found a successful product-market fit within the virtualization industry, which allowed them to scale up and become a major player.

Encouraging R&D Innovation:
The presentation asks how VMware enabled its R&D teams to continuously create disruptive technologies like vMotion, live migration, HA, and fault tolerance, even after the core virtualization technology was established.

Culture of Innovation:
VMware fostered a culture of innovation by hiring self-driven individuals who were passionate about setting high standards for themselves. High expectations were set for everyone in the company, and employees were encouraged to push themselves beyond their perceived limits.

Slack in Scheduling:
Diane Greene emphasized the importance of leaving some slack in the engineering team’s schedule to allow for experimentation and creative exploration.

Poster Sessions and Conferences:
VMware organized poster sessions and internal conferences where employees could present new technology ideas and compete for the opportunity to build and implement them.

Steve Jobs and VMware for Mac:
There was an anecdote about Steve Jobs’ reluctance to partner with VMware for a Mac version of their virtualization software.

Hiring Practices:
VMware focused on hiring talented individuals from top universities, including MIT, Brown, and Princeton. They emphasized diversity, aiming to bring in a diverse range of employees from different backgrounds. Internships played a crucial role in attracting and hiring talented individuals. The company made a conscious effort to hire women, despite the limited pipeline of female candidates in the field of computer science at the time.

Establishing a Culture of Innovation:
VMware encouraged a culture of innovation and experimentation. The company rewarded employees who showed initiative and took risks, without fear of failure. When things went wrong, the emphasis was on learning from mistakes and implementing preventive measures, rather than blaming individuals. This culture fostered a positive environment where employees felt empowered to contribute and drive innovation.

Scaling Up and Maintaining the Culture:
As VMware grew, it faced the challenge of maintaining its culture of innovation and experimentation while scaling up. The company remained committed to its core values and principles, ensuring that they continued to guide its hiring and management practices. By focusing on hiring great people and fostering a culture of empowerment and accountability, VMware was able to successfully scale up while preserving its unique culture.

Hiring for the New Company:
Greene’s approach to hiring for her new company was similar to her strategy at VMware. She leveraged her personal network and sought referrals from trusted individuals to find talented candidates. In addition, she reached out to specific individuals with strong skills and experience, such as in design, and eventually found a suitable candidate. This approach allowed Greene to build a strong team with a diverse range of skills and backgrounds.

Challenges in the User Experience Layer:
The user experience (UX) layer, which includes HTML, CSS, iOS, and Android, is often overlooked by software developers, who traditionally focus on systems and back-end development. HTML, in particular, was not designed for its current uses, making it difficult to use and test.

Complexity of Modern Interfaces:
Modern software interfaces are complex, involving multiple roles, workflows, communications, collaboration, and access controls. Creating simple, easy-to-use interfaces requires rapid iteration and extensive testing.

Building a Talented Design Team:
Founders and early hires should seek out individuals skilled in design and user experience to join their team. Different types of designers, such as product designers, user researchers, and front-end developers, each bring unique skills to the team. Integrating the work of these diverse team members into a cohesive product is a complex process that requires effective agile development practices.

Ongoing Research and Development:
The speaker’s husband is teaching a course on software design, reflecting the growing interest in improving development processes. Ongoing research in this area is exploring new approaches to user experience and design.

Founding Principles:
VMware aimed to create a platform for IT infrastructure that would run on every piece of hardware, regardless of vendor. The goal was to make virtualization technology accessible and valuable to as many people as possible, focusing on ease of use and compatibility. VMware’s initial focus was on spreading the technology virally within organizations, rather than targeting decision-makers directly.

Strategy for Growth:
VMware focused on building trust and delivering a high-quality product, rather than over-promising and under-delivering. The company avoided disruptive marketing tactics and instead relied on word-of-mouth and the value of the product itself to drive growth. VMware hosted the VMworld conference, an industry event that brought together experts and enthusiasts in the field of virtualization, promoting the technology and creating a community around it.

Marketing Approach:
VMware’s marketing efforts began modestly but grew significantly with the launch of VMworld in 2004. The conference was conceived as an industry event, open to anyone interested in virtualization, fostering collaboration and innovation. The event’s focus on virtualization as a whole, rather than solely on VMware, helped attract a wide audience and create a sense of community.

Impact and Legacy:
VMware’s approach to virtualization, emphasizing compatibility and accessibility, laid the foundation for the container technology that followed, such as Docker and Kubernetes. The company’s platform became a standard in IT infrastructure, with many large organizations relying on it for their operations. VMware’s success demonstrated that a generous and open approach to building an industry could benefit all participants, including partners and competitors.

Acquisitions:
VMware didn’t do big acquisitions in its early days due to the lack of suitable targets. Greene acknowledges that VMware’s early acquisitions weren’t very successful due to a lack of experience. Greene cautions against startups attempting acquisitions, emphasizing the difficulty in making them successful. She highlights Domo as an example of a successful acquisition-led company.

Scaling Sales and Marketing:
Greene stresses the importance of upgrading executives when necessary, citing examples from her time at VMware. She emphasizes the need to address underperformers promptly to avoid distractions.

Leadership and Culture:
Greene shares examples of how she handled leadership issues at VMware, such as replacing a sales executive who lacked ambition and firing a VP of marketing for sending confidential information to Intel. She emphasizes the importance of treating employees with respect and helping them find a better fit if they’re not performing well.

Innovation at VMware and Google:
Greene praises Google’s boldness and willingness to take risks, which she believes VMware lacked. She admires Google’s cultural focus on doing the right thing and helping the world. While VMware also shared these values, Greene believes Google’s culture was stronger in this regard.

Diane Greene’s Best Advice:
The best advice Greene received was to never over-communicate. She encountered a disagreement in a previous startup, leading her to leave the company. Despite a board member’s advice to stay, Greene pursued her own vision.

Greene’s Startup Experience:
Greene’s path to VMware was not as a fresh undergraduate, she had more experience. VMware was her third startup venture. Her husband, Mendel, invented the technology that would become VMware.

VMware’s Early Development:
The technology was initially developed by Mendel and his graduate students. A paper published by the group attracted the attention of Microsoft researchers. Greene encouraged Mendel to file a patent before further development.

Deciding to Commercialize VMware:
Greene saw the potential for commercializing the technology and discussed it with Mendel. She believed in the technology’s various applications and wanted to bring it to market. After discussions with the graduate students, they decided to pursue commercialization.

Entrepreneurship Beyond Company Creation:
* Diane Greene reflects on her journey as an entrepreneur, recognizing that starting a company is not the sole definition of entrepreneurship. She emphasizes the importance of building and creating in any environment, whether it’s within a startup or an established organization.

Challenges of Scaling VMware:
* VMware’s rapid growth during the dot-com bubble presented unique challenges, particularly in securing adequate office space. Greene recalls the difficulty in accommodating the company’s expanding workforce and the financial strain of long-term leases during a volatile market.

Space and Culture in the Startup Environment:
* Greene highlights the cultural significance of physical space in startups, enabling collaboration and teamwork. She describes the challenges of managing multiple offices and the humorous mix-ups that can occur during frequent office reconfigurations.

Advice for Scaling Up:
* Greene acknowledges the importance of focusing on personal interests and passions when embarking on an entrepreneurial journey. She emphasizes the need for a supportive team and a clear understanding of the goals and values behind the venture.

Building and Creating Beyond Startups:
* Greene encourages students and aspiring entrepreneurs to consider the broader landscape of entrepreneurship beyond starting a company. She believes that building and creating can be fulfilling in various settings, including within established organizations.

Finding the Right Environment for Innovation:
* Greene advises entrepreneurs to carefully consider the most suitable environment for their ideas and goals. This may involve starting a company, but it can also involve contributing to innovation within a larger organization.

Importance of Collaboration and Shared Values:
* Greene stresses the significance of surrounding oneself with the right team and aligning with shared values. She believes that the success of any venture lies in the quality of the people involved and the shared vision that drives the team forward.