David Ratner – CEO, Realm

David earned his Ph.D. in Computer Science and spent many years building critical messaging and related services such as Sha-Mail and @Mail in Japan and the master directory for AT&T Wireless. Over time, he began running organizations and companies. He was the SVP of Wireless at Carrier Access and helped sell the company to Turin Networks. He drove SEVEN Networks to profitability as COO. He helped sell the assets of Openwave Systems and took over one of those assets as CEO of the newly-formed Openwave Messaging (now owned by Synchronoss). He dramatically grew the enterprise business at Syniverse as president, and most recently drove revenue, market adoption, product expansion, and the sale to MongoDB as CEO of Realm. He has done business on every continent (except Antarctica) and is based in Silicon Valley.

How do you define success?
Success obviously can be defined in many ways. Depending on the goals of the project or the company, success can be defined in terms of revenue or EBITDA growth, the closing of a financial exit, or just the release of a new product solution or opening up a new market.

For me personally, I define success across three axes – people, product & market, and investors. On the people side, am I doing right by the employees and people at the company, am I working to make their lives better, recognizing their accomplishments, making sure that they have the information, priorities, and communication they need to do their job, and ensuring they are all aligned on the same goals. On the product and market axis, are we building a product that the market wants, do we see growing interest from the primary use-cases, do we see additional markets or use-cases we can expand into, and fundamentally does the product work and enable our customers to be successful. In other words, do our customers want us to succeed and can our customers rely on us. Finally, with respect to investors, am I being a good steward for their money, am I protecting their investment as best as possible, making smart choices on how to deploy capital, and making the right decisions to justify their ongoing support. At the end of the day, success means executing well on all three of these axes so that the employees, market, and investors are all satisfied.

What is the key to success?
The key to success is focus – identification of the goal state, the milestones that need to occur to get there, and relentlessly focusing on the tactics and execution along that path. Of course there needs to be an occasional strategy re-check that the end state is still the right end state, but you can’t achieve success if you are constantly changing paths and direction. Only by focusing on the tactics – what needs to happen today, this week, this month – can the team deliver on the milestones needed to ultimately deliver success for the employees, customers, and investors. I call this focus on what needs to happen today, this week, and this month process an “interlock.” All stakeholders, teams, and employees know not only what they need to accomplish for their immediate goals, but also what the other teams are working on (and what they might need to deliver to help them accomplish their goals) so that everyone is “rowing in the same direction.” In this way, everyone is helping the company achieve its short-term tactics, its long-term strategy, and ultimately its success.

What is the greatest lesson you’ve ever learned?
This may sound strange, but one of the most important lessons I learned was that “perfect is the enemy of good.” In other words, focusing on perfect is actually a hinderance to achieving success. Now obviously, one should always try and do his or her personal best – I’m not arguing that one shouldn’t care about the quality of work product or their own integrity about job and function deliverables. But most of the time, what is critical is simply getting started on the task and having a bias for action, as opposed to sitting around the table and discussing what could be done ad naseum. Only by starting can you really figure out exactly what needs to be done; for instance, it’s nearly impossible to identify the perfect product with the exact correct set of features – only by getting into market with a first version can you start to get feedback and therefore tune the product and deliverable for an incrementally better version two and version three, and getting into market with real customers provides not just amazing feedback but real revenue and market proof points to help ensure you are on the right path, or allow you to alter paths as needed.

Another way of stating this lesson is that it is better to do eight out of ten things well rather than five out of five perfectly. Having this bias for action is a critical component to ensure continual feedback, ensure that progress is being made in a timely manner, and that the tactics and milestones needed to accomplish success are constantly being tested and refined.

What are some quotes that you live by?
Some of my favorite quotes include the following:

“Creativity is more important than knowledge.” – Albert Einstein

“Hofstadter’s Law: It always takes longer than you think, even when you take into account Hofstadter’s Law.” – Godel, Escher, Bach

“It’s not whether you get knocked down, it’s whether you get up.” – Vince Lombardi

“Vision without action is daydream. Action without vision is nightmare.” – Japanese Proverb

“In any situation, the best thing you can do is the right thing; the next best thing you can do is the wrong thing; the worst thing you can do is nothing.” – Theodore Roosevelt

“Life is 10% what happens to us and 90% how we react to it.” – Dennis P. Kimbro

What are some of your favorite books?
Into Thin Air by Jon Krakauer
Born to Run by Christopher McDougall
Bad Blood by John Carreyrou
The Art of War by Sun Tzu

Tell me about one of the toughest days you’ve had as an entrepreneur.
It was my first CEO role, and I had a phone call with the board of directors. I thought I had done something great, having negotiated a huge new deal with one of our large customers. However, I didn’t realize that the board and I were operating from different playbooks, and my deal, while I thought it was great and it brought in much-needed cash, had an associated revenue recognition policy which meant I missed the quarterly target the board expected in terms of EBITDA profit. I was supposed to be talking at an upcoming conference the investors had setup to brag about my company, its growth, and help them raise a new fund from their limited partners. Instead, the hammer dropped, I endured the tongue-lashing of a lifetime, was dropped from the investor conference, and put my tail between my legs.

Hanging up the phone, I felt like I had let everyone down, including myself. I argued to myself that it wasn’t fair, the board can’t simultaneously get everything that they wanted. I complained to my friends and colleagues. I woke up the next day, determined to try and do better. When you are working 24/7 and trying your hardest, getting told that you are doing a lousy job and screwing everything hurts more than the hardest kick I ever received in my martial arts experience.

I believe we learn more from our mistakes than our successes. Years later, I realized that my real mistake was not the deal itself – it was not doing a good enough job upfront ensuring that the board of directors and I were operating on the same page. We had a different set of expectations, and I didn’t realize that my role was to set and negotiate those expectations upfront. In other words, we had different definitions of success. It was a very hard day personally, and one that I will never forget, but it also taught me a valuable lesson, and helped me tremendously in my future companies.

When faced with adversity, what pushes you to keep moving forward?
I have always had a driven personality and a strong sense of ambition and competition. I played competitive soccer (European football) and still do multiple times a week; I studied various martial arts for 15+ years, and work out daily. I’m a fighter, and when faced with adversity, my natural reaction is to push harder – I think it is difficult to be a successful entrepreneur and leader if you aren’t at least somewhat competitive.

However, when faced with adversity, I also reflect and think about my genuine desire to help others and make their lives better, whether those people are employees, customers, or the general market. I have always been attracted to markets where my products can touch and influence millions or even billions of people, and some of my proudest technical accomplishments are the ones where I can point at systems that millions of people still use today for communication. I have always made sure my organizations are focused on customer success, and that I personally spend time understanding my employees and teams as individuals. When adversity flares up, when things get tough, and the immediate path is not clear, I remind myself that employees and perhaps even their paychecks and families are counting on me, that our customers are counting on us to deliver, and that there are people all over the world who legitimately need the solutions and need them to work. In the end, I push through both for them as well as for myself. I don’t like to lose, and I don’t like to let others down.

What advice would you give to young entrepreneurs?
There is a balance between “never give up” and “know when to change paths or pivot.” An entrepreneur needs to have the drive, passion, and belief to push forward even in the face of doubt from others and setbacks. However, there comes a point where you also need to take the feedback from the market and/or ecosystem around you and accept that perhaps the current path is not optimal and is not going to lead to success. Surrounding yourself with coaches or advisors that you can freely talk to – people who are not financially invested in your success, so you are able to have open and honest conversations – can often help immensely. In other words, know when to ask for help. Asking for help is not a sign of weakness. In fact, not asking for help is a sign of weakness. All too often, I see people fail specifically because they didn’t ask for help, or refused to realize that they actually needed help to succeed.



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This interview was conducted for research purposes by author Jason Navallo for his upcoming book, Underdog.

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