Diane Greene (Google SVP Google Cloud) – VMware Cofounder Diane Greene with Jessica Livingston at the Female Founders Conference (Aug 2017)

Chapters

Abstract

The Birth and Evolution of VMware: Diane Greene’s Visionary Journey in Silicon Valley

Amidst the fervor of Silicon Valley’s dot-com boom, Diane Greene, a Stanford University professor, stood at the forefront of a technological revolution. Her husband’s groundbreaking virtualization technology served as the catalyst for VMware’s inception. Greene, recognizing its transformative potential, championed the pursuit of a patent and commercialization, heralding a new era in business operations.

The Revolutionary Inception of VMware in the Dot-Com Boom

In the late 1990s, VMware’s co-founder, Diane Greene, recalls the early days of the company, a time of excitement and innovation in Silicon Valley. Greene’s husband’s research on virtualization sparked the idea for VMware, but they struggled to gain traction in the market due to the prevailing belief that their concept was impractical. Despite the skepticism, Greene and her team persisted, bootstrapping the company with friends and family funding. They eventually secured investments from prominent figures in the tech industry, including Andy Bechtolsheim and John Hennessy, who recognized the potential of VMware’s technology.

VMware’s Inception Amidst the Dot-com Era

Greene’s husband’s research on virtualization sparked the idea for VMware. However, they faced an uphill battle gaining traction due to skepticism about the practicality of their concept. Despite this, Greene and her team bootstrapped the company with friends and family funding, later securing investments from industry giants like Andy Bechtolsheim and John Hennessy.

Overcoming the Challenges of the Dot-Com Era

VMware’s journey was fraught with challenges unique to the dot-com landscape. Attracting business-minded talent was a steep uphill battle in an environment intoxicated by grand ideas and rapid growth, often at the expense of sound business strategy. Despite skepticism and resistance from potential investors and PR firms, Greene’s unwavering belief in VMware’s potential drove her to persevere, envisioning a transformation in the IT industry.

Overcoming Challenges and Achieving Success

Greene highlights the challenges faced by VMware in securing funding and attracting business professionals, given the prevailing focus on “thinking big” and the rapid rise of dot-com companies. With limited resources, VMware’s early team worked diligently in a modest office, where Greene brought her newborn baby to work due to the lack of customers. Despite the initial skepticism, VMware’s technology gained recognition and support, enabling the company to establish itself as a leader in virtualization.

Bootstrap and Early Funding: A Testament to Vision and Persistence

Limited funding options led Greene and her team to rely on personal resources and support from friends and family. Emphasizing the importance of investors with a deep understanding of their technology, Greene approached Andy Bechtolsheim, a renowned engineer and early Google investor. His investment, along with support from other visionaries like John Hennessy, became crucial in VMware’s ascent.

Investment Strategy and Securing Funding

Greene emphasizes the importance of finding investors who deeply understand a company’s technology and vision. VMware’s initial funding strategy involved raising seed capital from friends and immediate family, followed by an outside round from investors with a deep understanding of the company’s technology. The company secured investments from Andy Bechtolsheim and John Hennessy, who were impressed by VMware’s potential and recognized its value.

The Legendary Investment of Andy Bechtolsheim

In a quintessential Silicon Valley moment, Bechtolsheim’s immediate $300,000 investment after hearing Greene’s pitch marked a significant turning point. This act of faith underscored the potential seen in VMware, propelling it towards becoming a global tech leader.

The Famous $300,000 Check from Andy Bechtolsheim

Greene recounts the story of Andy Bechtolsheim, a co-founder of Sun Microsystems, who invested $300,000 in VMware in 2000. The investment, which was made in the form of a check left in Bechtolsheim’s driveway, is regarded as one of the most famous funding stories in Silicon Valley.

VMware’s Humble Origins: A Unique Corporate Culture

VMware’s early days were characterized by modest beginnings and a nurturing environment, symbolized by Greene bringing her newborn baby to their unassuming office. This blend of family and startup culture was rare in Silicon Valley, setting VMware apart in its foundational years.

VMware and the Importance of Family

Diane Greene stayed at VMware after her daughter’s birth and brought her along on business trips, ensuring her care with high-end nannies.

The Impact of VMware and Diane Greene’s Continued Journey

Greene’s determination, supported by visionary investors, laid the groundwork for VMware’s success, transforming the business and IT landscapes. After VMware, Greene’s journey continued with significant roles in Intuit and Google, where she underscored the importance of diverse perspectives, especially from multiple women on boards. In 2012, Greene launched Bebop, focusing on enterprise applications, driven by a vision for simplified, machine-learning-powered software.

Lessons from Mistakes

Greene admits her biggest mistake at VMware was feeling pressured to sell based on others’ wishes. In hindsight, she values the time she spent with her family after leaving VMware, which she might not have had if she had sold.

Control and Funding

Unlike many startups, VMware didn’t have VCs and maintained complete control, avoiding 10-to-1 voting rights. After leaving VMware, Greene joined the boards of Intuit and Google.

Commonalities among Successful Companies

Greene emphasizes that people are the common thread in successful companies like Google and Intuit.

Gender Diversity on Boards

Greene highlights the importance of having more women on boards, as she was the third woman to join Google’s board, making a significant difference.

Bebop and the Stealth Approach

In 2012, Greene started Bebop, a stealth-mode company aiming to address the complex layer of the stack for building enterprise applications. She recognized the need for attention to this area due to its complexities.

The Evolution of Enterprise Software Under Greene’s Guidance

Greene identified a gap in enterprise software: the need for streamlined, intuitive interfaces, anticipating user intent and automating tasks. This vision paralleled the rising trend of user-friendly software, exemplified by solutions like Google G Suite, which embraced intelligent features and intuitive designs.

Founding Vision

Diane Greene had a vision for a simpler and more user-friendly enterprise software experience. She saw a need for software that could understand user intent and provide intelligent assistance. She shared her vision with colleagues and friends, encouraging them to join her in pursuing this goal.

Co-founder Bailout

Greene’s initial co-founder, a professor at Stanford, backed out of the venture. Undeterred, Greene approached friends from her previous company, VMware, and convinced them to join her as co-founders.

Pain Points of Enterprise Software

Greene criticized the complexity and tediousness of enterprise software at the time. She emphasized the need for a more intuitive and user-centric approach, utilizing machine learning and AI to predict user intent.

User Experience Revolution

Greene envisioned software that seamlessly anticipates user needs and automates tasks, creating a seamless and efficient user experience. She acknowledged that other companies, including Google’s G Suite, were beginning to adopt similar approaches, driven by the growing demand for mobile-friendly and user-friendly software applications.

Diane Greene’s Leadership at Google Cloud

Greene’s involvement with Google Cloud stemmed from her role at Alphabet, where she observed the synergies between AI, machine learning, and cloud infrastructure. Initially hesitant, she eventually led Google Cloud, influenced by her belief in Bebop’s potential and the transformative power of cloud technology.

Inspiration from Google Cloud:

Greene’s involvement with Google Cloud as part of the Alphabet board led to her admiration for the company’s technology, particularly the fusion of AI, machine learning, maps, and knowledge graphs. She realized that combining these features with Bebop’s capabilities could result in something exceptional.

Influential Friendship with Urs Hölzle:

The friendship between Diane Greene and Urs Hölzle, Google’s employee number eight, developed through their shared love of dog walking. This friendship provided Greene with valuable insights into Google’s technology and culture.

Helping Google Find a Cloud Leader:

Greene diligently assisted Google in finding a suitable leader for their Cloud division, but the last candidate they considered did not fit the company’s culture.

Deciding to Lead Google Cloud:

Greene agreed to lead Google Cloud after ensuring that Bebop’s stakeholders were on board and that the move would benefit the company. Andreessen Horowitz, one of Bebop’s investors, supported her decision.

The Significance of the Cloud:

Greene believed that the cloud, with its mobile data integration, security, and continuous updates, would revolutionize the enterprise. She saw the potential for cloud-based services to enhance security and efficiency significantly.

Vital Insights for First-Time Founders

Greene’s experience provided invaluable lessons for first-time founders. She emphasized the critical role of a collaborative board of directors, the importance of selecting members with relevant expertise, and the value of understanding the unique contributions each member brings to a company’s journey.

Board of Directors as a Partner

Greene emphasized the importance of a supportive board of directors, one that serves as a partner rather than a burden. She shared her approach to selecting board members, focusing on unique expertise relevant to the company’s needs.

Board of Directors as a Partner:

Greene emphasized the importance of a supportive board of directors, one that serves as a partner rather than a burden. She shared her approach to selecting board members, focusing on unique expertise relevant to the company’s needs.

Larry Sonsini as a Strategic Board Member:

Greene chose Larry Sonsini for her board due to his extensive experience in deal structuring and partnerships, essential in navigating the hardware and software monopolies that Bebop faced. She convinced him to join by explaining the unique fit of his expertise with the company’s challenges.

Closing the Deal with Sonsini:

Sonsini initially hesitated but eventually agreed to join the board after understanding the significance of his contribution. His decision was a testament to Greene’s ability to recognize and articulate the value of specialized knowledge.

Conclusion

Diane Greene’s story is a testament to visionary leadership, technological innovation, and the power of perseverance. From VMware’s inception during the dot-com era to her influential roles at Google and beyond, Greene’s journey is a blueprint for aspiring entrepreneurs, highlighting the importance of embracing technological advancements, fostering collaborative dynamics, and carefully selecting board members to navigate the challenging yet rewarding path of entrepreneurship.

Notes by: OracleOfEntropy