The CEOs of Penumbra, Adam Elsesser and Surbhi Sarna, share their journey into entrepreneurship and the challenges they faced. They emphasize the importance of embracing uncertainty, making risk-adjusted decisions, and focusing on the core aspects of the product or service. They funded their first and second companies through personal connections and friends, avoiding distractions from venture capitalists. Not raising funds from VCs allowed them to remain focused and committed to their goals. Taking the company public gave Penumbra more influence and credibility in the medical field. The culture of Penumbra is characterized by a cohesive and motivated team, fostering cooperation and valuing everyone's input. The CEOs do not label the company as a family or a team, but focus on how people interact with each other. They discuss the challenges of firing underperforming employees and the importance of honesty in these situations. Penumbra has a high percentage of women in leadership positions, emphasizing the need for a conducive work environment. Going public does not change the company's focus on their mission. Embracing uncertainty requires embracing failure and being comfortable with the unknown. Obtaining regulatory clearances and securing capital require attention to detail, honesty, and building a good reputation. Building a successful sales team involves hiring the right people who fit the company's culture. Traits of a leader include IQ, EQ, humility, and work ethic. Prioritizing the product and making decisions based on pure intentions are key.
Intro
The most profound aspect of the text is the journey of Adam Elsesser and Surbhi Sarna into entrepreneurship.
- Adam Elsesser started Penumbra from scratch and took it to a market cap of $10 billion.
- He initially worked in politics and became a lawyer before starting his first company.
- The idea for the company came about during a dinner with his best friend.
- Surbhi Sarna started a company called Smart Therapeutics and developed the first stent for the brain.
- She eventually sold her company to Boston Scientific.
Exploring the Uncertainty of Starting a Business
The uncertainty of starting a business is explored in this summary. The key points include:
- Understanding and embracing uncertainty as an entrepreneur
- Thriving in uncertainty by making risk-adjusted decisions
- Focusing on the core aspects of the product or service
- Starting a business despite challenges and lack of interest from others
- Determining the value of what you want to do
- Listening to customers but not solely relying on their feedback
- Overcoming lifestyle changes and adapting to new circumstances
- Finding core supporters who believe in the business to drive it forward.
Investment and Funding experience
Raising venture capital is not always necessary for funding a business. Personal connections and friends can provide the necessary funds. Institutional venture capital and other forms of institutional money can be obtained closer to going public. Access to personal connections for funding is not available to everyone.
- Speakers funded their first and second companies through personal connections and friends
- They sold their first company and used the same funding method for their second company
- Institutional venture capital and other forms of institutional money were obtained less than a year before going public
- A crossover round led by Fidelity was done in anticipation of going public
- Not everyone has access to personal connections for funding
Without VC funds - Did it held you back?
Not raising funds from venture capitalists enabled the CEOs of Penumbra to succeed by avoiding distractions and remaining focused on their goals. They were more committed to succeed because their investors were friends, and they didn't want to fail and lose their friendships. They made a deal with their investors to only call them as friends, not as investors, for 20 years, allowing for a long-term perspective and informed investment decisions. Overall, not raising funds from VCs was critical in building their business.
- Avoided spending time dealing with the views of VCs
- Committed to succeed to maintain friendships with investors
- Made a deal with investors to have a long-term perspective
- Not raising funds from VCs was critical in building their business
Did you Think of Taking the Company Public
The decision to take the company public allowed Penumbra to have more influence and credibility in the medical field. It also helped emphasize the importance of their treatment through the power of Wall Street. Despite some caution from investors, the decision was ultimately seen as a good idea.
- The CEO initially did not have the ambition to run a public company, but the goal was to make products.
- The company went public in 2014 due to the effectiveness of their treatment proven in clinical trials.
- Structural impediments in getting patients treated existed due to state and local laws.
- The CEO was worried about the company's impact getting lost without going public.
The Culture of Penumbra
The culture of Penumbra is characterized by a cohesive and motivated team, fostered through team building and open discussion. The CEO emphasizes the importance of cooperation and values everyone's input. The culture has scaled as the company has grown and is now embodied by everyone, creating a self-sustaining culture referred to as "La Familia."
Family vs Sports Team
The comparison between a company being a family or a sports team is explored in this video. The CEO of Penumbra, Adam Elsesser, does not believe in labeling the company as either a family or a team. Instead, he focuses on how people interact with each other and emphasizes assuming the best intentions of others and living with grace. He believes that calling a company a family can be tricky, especially in situations like layoffs or firing someone for performance issues. Overall, he does not frequently use the terms "team" or "family" to describe his company.
- CEO of Penumbra, Adam Elsesser, does not believe in labeling the company as a family or a team
- He focuses on how people interact with each other
- Emphasizes assuming the best intentions of others and living with grace
- Calling a company a family can be tricky in situations like layoffs or firing someone for performance issues
Have You Had to Fire Someone?
Firing someone is a common struggle for first-time founders, but it is important to base the decision on valid reasons rather than personal biases. Determining whether it is a cultural issue or a coaching matter depends on the individual situation. However, abusive or inappropriate behavior should not be tolerated. The video discusses the challenges of letting go of underperforming employees and the importance of high-performing individuals in the company. Coaching can help some employees improve, but there is a difference between someone who can grow and someone who cannot. Honesty is crucial in these situations.
Apple's Fight for Women in Engineering
Apple's fight for women in engineering is highlighted in a conversation between Surbhi Sarna and Adam Elsesser. Adam discusses how his company, Penumbra, has a high percentage of women in leadership positions and throughout their workforce. He explains that this was not intentional, but rather a result of a call he received from an organization investigating companies' demographics. The organization found that Penumbra had a significantly higher representation of women compared to other public companies in the Bay Area. Adam emphasizes that there are plenty of qualified women for engineering roles, and the issue lies in creating a conducive work environment that encourages their applications.
- Penumbra, a company led by Adam Elsesser, has a high percentage of women in leadership positions and throughout their workforce.
- The company's gender diversity was not intentional, but rather a result of an investigation by an organization.
- Penumbra had a significantly higher representation of women compared to other public companies in the Bay Area.
- Adam believes that there are plenty of qualified women for engineering roles, and the issue lies in creating a conducive work environment that encourages their applications.
Ringing the Bell Moment
The "Ringing the Bell Moment" is when a company goes public and rings the bell at the stock exchange. It signifies the impact of their product and their mission. However, going public does not change much for the company and their focus remains on their mission rather than the public listing. The speakers discuss their experiences and thoughts on going public, mentioning the pros and cons, and emphasize the importance of doing what they do for the right reasons, particularly in the medical field.
Q&A - How to Train Yourself to Love Uncertainty
- The video discusses how to train oneself to love uncertainty.
- The speakers highlight the natural desire for certainty and the need to embrace failure when trying something new.
- They emphasize the importance of embracing the unknown and being comfortable with the worst-case scenario.
How Did You Get Through the Regulatory Clearances and Capital Needed
Obtaining regulatory clearances and securing capital are crucial challenges for companies. The CEO of Penumbra, Surbhi Sarna, shares insights on how they navigated these hurdles. Here are the key points:
- Being obsessed with details and worrying about everything is essential in obtaining regulatory clearances and capital.
- Penumbra raised money from friends and kept expenses low to achieve profitability.
- Being honest, open, and building a good reputation with regulatory agencies can make the process more manageable.
- Frugality with money, regardless of its source, sets the culture for the company.
- Penumbra does not have departmental budgets to prevent wasteful spending.
Building Sales Teams
Building a successful sales team involves hiring the right salespeople who fit the company's culture and style. It is important to recruit experienced sales leaders who know how to hire the right people.
Describing the Traits of a Leader
A leader's traits that inspire and motivate a team are IQ, EQ, humility, and work ethic. IQ is the least important, as being smart does not guarantee success. Decisiveness is crucial, but should be based on input from others. Managing oneself requires prioritizing family and work, often sacrificing personal time and hobbies.
Parting Advice
- Start a company for the right reasons and make decisions based on pure intentions
- Prioritize what the product does for customers and avoid cutting corners
- Money should not be the main motivation, but rather a byproduct of doing something that matters