“Students Always” — 2016 Commencement Haas UG Graduation, Kevin Chou
<The following is the transcript of the Commencement speech I delivered on May 17, 2016 to the Haas Graduating UG Class>
Dean Lyons, members of the faculty, proud parents, and, above all, class of 2016. Today is your day! Congratulations!
Well, if your parents are here and they’ve been writing checks the past four years, it’s their day, too. Parents, congratulations on saving a ton of money!
In 2002, I remember sitting in these very chairs at my own Haas graduation.
I thought I was on top of the world. It was 8 months past the tragedies of September 11, 2001, and while the global economy was falling apart, I had scored a coveted investment banking job. I could see it in my mind — killing it at some complex financial model, closing big deals, and never being poor again.
Fast forward another 12 months, I had been laid off along with ~20% of the banking division. Not only that but that 12 months had been some of the most miserable of my life. Where I had expected to work on challenging financial models, I instead spent all my sleepless days and nights changing font sizes and colors on Powerpoint. For those of you going into banking, I hear it’s different these days, and I wish for you a much better experience than I had.
Unemployed, I spent my days in my pajamas playing video games and online poker to pay my rent. Thankfully my roommates were still gainfully employed at their banking jobs. They were kind enough to spend their dinner stipends buying me extra food. [as an aside] The friends you make at Haas are truly special, keep them close. Needless to say though, I felt like a total failure.
6 months into my unemployment, there were few jobs and I was beginning to seriously consider a career in online poker. But then I stumbled across a job posting for an account management role at a start-up called Telephia. The company was not well known but it was a technology start-up in an area that I wanted to learn about — mobile data — so I interviewed despite not being particularly interested in account management — or knowing what that job even meant. During the interview, I immediately hit it off with my hiring manager Jesse Goranson, who would go on to be a tremendous mentor to me for my time at Telephia and well beyond.
Little did I know that this would be a turning point in my career. I had previously gone into investment banking, not because I cared much about the firm’s mission, the values, or the people there, but because it was prestigious and competitive to get in. It’s what I thought I was supposed to do coming out of Haas. Instead, I went to a no-name startup because I knew I could learn from the amazing people there, and be given real responsibility. It was at that point that I truly began to grow. I learned tremendously from my mentor and followed him across two promotions until a college friend introduced me to an amazing partner, Maha Ibrahim, at the Silicon Valley VC firm, Canaan Partners. I joined this partner, where I spent two years learning like crazy, before she seed funded a company called Watercooler.
You’ve almost certainly not heard of the company Watercooler until this very moment.
I started Watercooler in 2006 with two Cal friends (and a 4th non-Cal grad). I was 26 years old, working with my best friends late into the night. I loved it. We built our first product in 30 days. It was a social network for employees, think Yammer, but looking back, not nearly as well done. When we launched the product we switched our focus to getting users. We followed the startup playbook and did “non-scaleable things” which is really a fancy term for begging your friends to use your crappy product. We tried “growth hacking”, which is also known as spamming your address book. We hit up all the press outlets, as well as did community marketing through Craigslist, Digg, Reddit every online distribution channel we could think of. Six months later we found ourselves with a mere two thousand users — if you can call them users if they sign up once but never use your product again.
We went back to the drawing board with a lot of learnings and rebooted the product. The numbers started looking better and we began to be hopeful. Then suddenly we got a phone call from a laywer at Ernst and Young, one of our largest communities where we had over 500 users. The IT department discovered Watercooler and blocked our service in their workplace. Shortly thereafter, two other major companies followed suit. At this point, we had just five months of money left. I couldn’t sleep at night. I anguished, “Should I shut down the company and return the money to our investors?”
But we weren’t ready to give up. My cofounders and I took our learnings and brainstormed new ideas…and with the clock ticking, we built a minimum viable product for a sports app on Facebook. Grinding it out 7 days a week, we got a new product out with just a few months of runway left.
We released it to Facebook and it absolutely took off. Whereas it had taken us 6 months to get 2000 users for our first product, we got 2000 users in the first day.We hit a million users in the first month. This was back in the day before cloud computing, so the servers in our closet melted under the user load, and we were working around the clock to keep the service turned on and borrowing more servers from friends. Whereas a month earlier, we were about to go bankrupt, suddenly VCs were coming out of the woodwork, and within 2 weeks we had raised a Series A. Instead of having to lay off the entire company; we started hiring like crazy, did deals with the NBA, NHL, and several NFL teams, and revenue grew to ~$3 MM / year. We were nicely profitable, and started to invest in new business lines such as lightweight games driven by big sponsors for fantasy football and March Madness.
Over the next year, we continued to grow our user base rapidly. However little did I realize that the financial world was about to collapse. As our revenues grew, so did our spending so in mid 2008, I began to raise our Series B. We signed a high valuation termsheet with a great VC, along with all the longform legal documents. The deal was done, or so I thought. Then, the week before the wire was to be issued, a bank called Bear Stearns and another financial firm called AIG announced they had been bailed out by the Fed. Not good. The week the wire was supposed to arrive, Lehman brothers collapsed. You’ve probably studied some of these events here at Haas. The day we were supposed to close our financing came and passed. No wire. No email. I called, then called again, no response. Finally two weeks later I received a brief email saying “Sorry the money isn’t coming anymore.”
It ultimately took me 9 months to raise our Series B. I was turned down by every single venture fund in Silicon Valley. Eventually I found a UK sports company that was trying to expand to the United States who put in a little bit of money. While this was our life line, in the process of being told “no” 90 plus times — in 90 very creative ways — I learned to realize that the business in its current state of advertising supported apps on Facebook wasn’t going to work. Once again, we had to go back to the drawing board. It was an incredibly painful decision, and the next day, I executed the first layoff in my career. It was a really, really tough day.
While learning everything we could about making apps, we saw early signs that the gaming category on Facebook was doing incredibly well especially from a monetization standpoint. I decided to go all in on games. Putting 3 years of hard work, 20 peoples’ jobs, and our last few million of cash on the line, I decided to divide our team into two, and bet the whole company on two games — a sports game and a strategy game.
We launched the sports game first, the product everyone thought would be a better business because of our history in sports. The response was OK, but not good enough to save the company. Eight weeks later we were ready to launch the strategy game, which we passionately loved making, but had no idea how the business would turn out. Prior to going live, we invited a focus group of 20 friends to play the game. The feedback was a disaster. Every single person told us the game looked terrible and that they didn’t see a reason to play it. At this point we had no other options, so as a Hail Mary, we polished up the art and published the game on Facebook anyways.
That game, called Kingdoms of Camelot, became a huge success. Within 30 minutes of flicking the switch on, a customer paid us our first $50. Within 12 months we went from zero to $30 MM in revenue. We raised our Series C, and changed the name from Watercooler to Kabam. You might recognize the name Kabam if you go to football games at Memorial Stadium, which was our way of giving back to the university that made Kabam possible.
Thinking back to my college self, 14 years ago, I had no idea I would face so many setbacks, as well as experience the rocketship of Kabam. Looking back, I wouldn’t change anything in my path as I learned so much from every step, though there are a number of things I wish someone had told me on my Commencement. I hope these 4 points will be helpful to you, as you begin your career:
- First — Honesty with yourself. At this critical moment in your life, have you asked yourself — “Are you honestly figuring out your own path, or are you following a path others have pointed out for you?” While I never thought at Haas that I would pursue a career in gaming, if you were to ask my 10 year old self it would have been obvious I would have either become an astronaut or a professional video game player. To this day, passion for games continues to be a key ingredient to Kabam’s success in building products.
- Second — Your First Job As A Learning Experience: You may find your first job out of college just…really…sucks. Or you might fail at it. I did both. Rise above it. Much like you didn’t let low marks on your first big exam at Cal define your whole experience here, neither will your first job be the end-all-be-all for your career.
- Third — Learn with Every Step: As you navigate your career after your first couple of jobs, learn about what makes you thrive… and what doesn’t. From this day forward, your primary learning is not going to come from people whose titles are “professor” or “teacher”.
- Fourth — Beyond Yourself: Take a moment to look around at the friends you’ve made at Cal — — You will be the biggest enablers in each other’s careers and life’s many pursuits. Three of Kabam’s founders are from Cal, and all three of us believe in giving back to the people and communities that helped us get to where we are. Also if you have a meal stipend, remember to feed others when they are hitting a rough patch.
Every one of you, Haas class of 2016, has gone through one of the most rigorous selection processes in the world to get into this highly regarded, globally ranked program. BTW — Wharton has nothing on us, I can tell you from experience!!
You have had the benefit of the best educators in the world.
<Let’s give this faculty and leadership a big hand!>
All of them are on a mission to create the next generation of leaders that redefine how the world does business. I guarantee you, that because you’ve been through the gauntlet here at Cal and then Haas, that you are ready to make a big impact in whatever you put your mind to.
I shared with you the story of Watercooler today because it is my own personal journey of trying to live the Haas Defining Principle of “Students Always”. To me, being a “Student Always” is about never taking any apparent success or failure at face value. Rather, it’s about learning from each and every one of your experiences, and using that learning to develop yourself for whatever lies ahead.
The great leaders amongst us are not those that have vastly different experiences, but instead extract more learning from the same experiences than others.
I wish for you that type of success, and I believe that path is summarized by:
- Honesty with Yourself
- First Job As a Learning Experience
- Learn with Every Step and
- Beyond Yourself
I’ll leave you with one last thought, from Mark Twain:
“Anyone who stops learning is old, whether twenty or eighty. Anyone who keeps learning stays young. The greatest thing you can do is keep your mind young.”
I wish for you each and every one of you, Class of 2016, a brilliant life full of achievement, contribution, and forever a young mind.
Thank-you very much, and congratulations again!