Like so many before us, we went West in pursuit of a gold rush—this modern day one fueled by the Internet and a severe case of being bitten by the TechCrunch bug. After so many visits to the West Coast, we were sure San Francisco was the right place: being part of a startup industry, the early adopter first-mover customers, the investors, the talent (and talent with actual relevant experience), the sheer density of startups and startup people, and of course the sunshine. And then came the less obvious part—we had to decide where exactly to set up shop. As usual, there was a difference of opinion.
I flew out to San Francisco, toured a few office spaces, and selected what I thought to be a solid choice, 410 Townsend Street, in the South of Market (SoMa) neighborhood, which was home to so many software companies including Airbnb, Dropbox, salesforce.com, Twitter, and many more.
The four-story building I found was a true SoMa building. It looked like it was previously an industrial warehouse or something and consisted of lots of brick and wooden beams. Later we found out it had previously been home to a Buddhist center! It was seismically retrofitted, and the previous tenant was Razorfish, which had been acquired by Microsoft in the dot-com days. It was as if these guys had cleaned it up and left it overnight. It was very ready for us to move in immediately. The building was situated in front of a painting studio at the Academy of Art, and often they would bring a pony into the studio (to model), which could be heard clomping around in the back alley. But despite these unusual details, the neighborhood was really startup central—two brand new internet companies, Eventbrite and Yammer, had just moved in and shared an office.
I wanted to move us right in. It would be so easy: the office was a block from the Caltrain station. It was built out, furnished with Aeron chairs and cubicles, cabled and ready for business. And it had an okay vibe. There were the aforementioned exposed brick walls and beams—it was everything a growing American startup needed.
“We could just move in and start working here tomorrow!” I gleefully told Alex and Morten in an email, attaching some photos. “Let's do it!”
They quickly quelled my enthusiasm. Unlike me, they did not think that the space was perfect; they didn't even think it was okay.
“This is not how we saw it,” they explained.
Both of them envisioned something that they could have more influence over. They wanted to work with designers and create their own space—they did not want to take something finished. Cubicles and corporate-colored carpet are not very Danish. And although I fully understood that, I was completely focused on just getting it done and moving on.
I told them that the pictures I had sent didn't do the space justice, so Morten and Alex flew out to see the office for themselves. I was convinced that would turn things in my favor, but they only reconfirmed that they didn't like it. Back in Boston, there was more yelling and storming out. There was no consensus. They flew to Copenhagen with us still sparring over selecting a space.
Unlike other times when we did not have a unanimous decision and I had acquiesced, this time I did not. This was an easy and fast solution, and an obvious one. We could customize the office later; right now we just needed a place to set up shop. Sometimes finding perfection is finding the perfect middle ground.
To that end, Rick helped play mediator and ensured that Morten and Alex could live with the decision. We made some concessions; we decided to rip out some of the cubicles and put in some benches for the engineering team. Having Rick on the team forced Alex, Morten, and me to have more constructive grown-up conversations, although he probably also heard us argue like an old married couple a few times.
One of the great things about building a smart team is that it forces you to grow yourself. It's like having a marriage counselor: it forces the conversation to be more civil, it forces everybody to be more grown-up, and it dissuades you from being snarky or cruel.
It wasn't until years later, when we moved into the historic “Furniture and Carpets” building on 1019 Market Street, that we actually built out and spent real money on an office space that we designed. And wow, what a distraction that was! The amount of money and resources spent on setting up and maintaining offices and the layer of complexity that adds to our business makes the old days of just moving into an outfitted space seem so attractive.
I've learned that when you're a startup you spend a disproportional amount of time talking about office space and building out office space. This is partly because you spend so much time there and partly because you want to relay your values as a startup. It also becomes a recruiting factor.
It is complex because it is so hard to balance ego and humility, to balance a desire for quality with a desire for simplicity, and balance modesty with the needs for attracting talent. It can become so consuming, and so emotional.
Interestingly, a lot of startups also break their necks on overinvesting in office space. In San Francisco currently some startups have ten-year, $100M commitments for office space on their balance sheet. And everyone thinks space is important—TechCrunch has a “cribs” show showcasing the digs of new startups.
We signed a lease on an office at 410 Townsend in August, and by September 2009 all of us had officially moved to San Francisco. After a beastly summer in Boston, we were looking forward to a cool fall in the Fog City, but of course we soon learned that in San Francisco the summers are chilly with fog, but the fall days are warm. When we first flew into SFO there was an unusual heat wave, which made the first couple of nights in San Francisco—again, with no air conditioning—warm and sticky.
Before moving over, I had found a nice little house for my family. Unlike in Boston, in San Francisco we could actually find a house that we could afford and that wasn't hours outside of the city. We rented a small house in Noe Valley right off 24th Street for only $4,000 a month. Although not cheap compared to other U.S. cities, it pales in comparison to 2014 prices: the same house would rent for at least twice that. It was a small house, and technically only two bedrooms, although it had extra playrooms and an office, as well as a cozy kitchen and a nice little backyard. It came unfurnished, save for a giant old upright piano and a small couch left in the basement that all three kids fit onto together. Again, it was IKEA to the rescue for the beginner-family-in-a-box basics.
We were in the house for only a few nights when the kids were playing on the second floor prior to going to bed, and somehow they managed to lock us all out of the bathroom. I had already had a pretty long day and needed to prepare my very first board meeting with the new investors the next morning, so this was the last thing I needed. Although we had another bathroom, we had all our stuff in the locked one, so we had to figure out how to get it open.
Mie had bigger problems; she was sick as a dog and had almost fainted. She was completely overwhelmed by everything. We had health insurance, but no family doctor, and we didn't even know where to go for the care she needed. So solving the lock problem was all on me.
Unlocking a bathroom lock from the outside may be a trivial task for somebody who's grown up in the United States and knows how bathroom locks work in this country. But I had no clue whatsoever. I could only see the doorknob from the outside, and there was no keyhole or any hint of what was happening on the other side. I had no idea where to start. After almost two hours of improvised jerry-rigging with whatever scraps from the nearly empty house I could use for tools, I finally got it open. Now I could get back to my work preparing for my board meeting.
But I was exhausted! When you're alone in a foreign country, you have to learn so many basic things all over from the beginning. That evening I felt so stressed and spent that having to deal with that stupid door lock almost made me sit down and cry. It should have been so simple, but I simply couldn't figure it out, and I had a million other things I had to get done.
Mie could feel how stressed and preoccupied I was, and I was the only one she had to lean on. We had no nearby family. No network. She was tasked with setting up a new life so far from home and taking care of our three children. At the time I was pretending everything was cool, but it was a crazy period. The company was growing like weeds, and we were starting all over for the second time in three months. We were in a whole new place and dealing with situations that would be so simple to deal with at home, but here were complex and confusing. We really were starting over and it was the most stressful time in my life. Effing bathroom lock!
I wasn't the only one who was finding the move to the Land of Opportunity challenging. Things were especially rough for Morten. Traffic to the website spiked just when we moved to San Francisco, and the infrastructure wasn't ready. That weight was carried on his shoulders.
In April of 2009, Evan Williams, the cofounder and then CEO of Twitter (a Zendesk customer), went on Oprah, and over the next couple of months Twitter quickly became a household name. Traffic to its site grew a hundred-fold, and its support team got overrun. We had one server at the time, and Twitter consumed all the resources—we could see from the inside how it was growing exponentially. And from the outside everyone else could see that our infrastructure couldn't handle it. Things were close to breaking apart.
Morten was holding things together almost physically. His days and nights were super intense. Twitter was just the first of a series of high-volume, high-profile startups that started to use Zendesk. For six months, he had his head down; he did nothing other than work. He barely knew he was in a new city, as he saw only his home and the office. He had moved into a new place, but he didn't have anything more than a mattress on his floor.
But during this very intense time we figured out many things we needed to understand—things that would serve us very well later. For example, the problems led us to adopt solid-state drives in all our data centers very early on, which enabled us to scale much faster. Of course, that did introduce another issue. It turned out that the MySQL database distribution we were using carried a bug when running on solid-state drives.
One night our databases started crashing, one after the other. The underlying issue was super technical, and we had a hard time figuring out what was happening. As we let database slaves take over for their masters, they also started crashing, until at some point we had only a single slave database left. If that crashed, it would have taken us hours, almost days, to warm up a new database. We wouldn't have survived that as a company.
In all of this chaos, Morten isolated the root cause and without really understanding why we were seeing the bug, he changed the code live in the production system. All of this happened in the middle of the night, and our solution broke every rule for how to commit code changes. But there was no way around it. It was a matter of survival—and as he had in so many previous instances, Morten saved our asses.
Alex—ironically the one who would have still favored New York and still fought for it—turned out to be the happiest of all of us on the West Coast. He just arrived with a small suitcase and found a tiny place with no light and spent his first days in complete darkness on a mattress on the floor because he became ill. (His landlord brought him two cans of Campbell's soup; San Franciscans are nice.) He found all of it to be a great change and “exciting.”
“We were onto something,” he later told us. “It's a fantastic thing when things are going like this. You are a very ungrateful person if you don't feel good and happy.”
Alex's attitude was right. We gained some battle scars from dealing with the sudden Twitter success. But the experience later came in handy for us when massively fast-growing companies like Airbnb, Uber, Dropbox, and Groupon became Zendesk customers.
As we grew, the product was making greater demands on the hardware. It was hard to keep it up. Luckily, our move West attracted some of the people who previously worked with us and knew exactly what we needed—like Mick, a great engineer who had worked in Copenhagen as a contractor three days a week. He had wanted to come to the United States to pursue his American dream, but he had had no interest in moving to Boston, complaining that it was “boring and colder than Denmark.”
Now Morten and Alex Skyped him from San Francisco: “Guess where we are,” they taunted. And then, “Want to come?”
“Absolutely,” Mick replied. He sold his house—none of us had done that—packed up his family in time for the kids to start school at the beginning of the year, and was in our office ready to take on our scaling challenges.
But we constantly needed more people. There was so much pressure on Morten, and he couldn't onboard people fast enough. All of us had a lot to learn about hiring.
Truthfully, there was a very steep learning curve. There was so much we didn't know: How do you do salary negotiation? How come salaries are so much more in San Francisco than in Boston? How is it that recruiters take 25 percent of the first year of an engineer's salary? What the hell is going on?!
There was also something else we were up against. We suffered from the “Law of Jante,” a Scandinavian mentality that urges people to be modest. From a young age, Danes are taught, “Don't be more than you are; don't think you are better than anyone.” Unlike American culture, Danish culture does not prize being exceptional—instead, it promotes a mindset that it's better to be like everyone else and not to stick out. With this pervasive message, no one is incented to be boastful; that attitude is discouraged.
Coming to America and experiencing the American bravado, especially during the hiring process, was quite the culture shock. We were not used to people touting their skills and abilities, so when this happened during interviews, we took these grand statements very literally. We thought everyone sounded absolutely amazing! Upon seeing one candidate's stellar resume, Morten said he should quit and give the candidate his job.
The reality, which we learned after some experience, is that Americans are just much better at selling themselves. In fact, we learned that some of them oversold themselves. This doesn't really happen in Denmark, where people understate their abilities, but here it was a routine practice. We had to learn to expect it—and to determine other ways to measure skills and screen for talent. It took us a while, and basically we had to hire people who could help us hire people and put the right processes in place.
We grew the staff quickly. Michael Hansen, who had moved to San Francisco with us and was now in charge of the customer advocates and sales, developed some new hiring strategies to build the San Francisco office. He took recruits on a walk to Philz Coffee shop or The Creamery. He walked very, very fast to see if they could keep up with him. (He also wanted to make sure they were physically fit—maybe a remnant of his army training.) He would see if they let him order first, and who paid. The whole way, he used foul language and swore, just to see how they would react—and that reaction would help him determine if they were right for a startup culture. (There's a lot of cursing at startups, or at least at Zendesk.) On the way back from a walk, he asked their salary requirements.
Michael ignored other more traditional methods of screening candidates, like asking where they went to school or what they studied. He didn't care where they went to school or what they studied, finding it irrelevant. To him, relevant information included details of how they liked to travel and how they responded to difficult situations.
Weirdly, his unconventional practices worked. Somehow he was able to find what we were looking for: people who could interact in a semi-crazy environment and have fun. We didn't want new hires to come with lots of demands because we didn't know if we could meet them. We never had the mentality that we were going to make it and things were going to be easy—simply because they never had been.
Today “Hire for Attitude, Train the Skills” has become a Silicon Valley practice, and Michael was having a field day with it back then in 2009.
After several months in Startupland, things were—finally—going well. Customer acquisition grew: in early 2009 we reached our first one thousand customers, and the number was growing quickly. (Morten did not deliver on his promise to run naked down the street.) Our building on Townsend had created an early debate, but now it turned out to be a great choice.
Both Yammer and Eventbrite quickly became hot Silicon Valley companies, growing through the roof. Another promising company, OpenDNS, moved into the building. Another tenant, Playdom, a new-generation gaming company, was still in the building when it got acquired by Disney. And TechCrunch, the company that had influenced a large part of our early development, moved in on the first floor. We were suddenly at the epicenter of Startupland.
We also built networks and made friends—something that was much easier in San Francisco, where there were many more foreigners and out-of-towners than there had been in Boston. When Michael Arrington sold TechCrunch to AOL, we bought him a bottle of whisky. Adam Pisoni, the cofounder and CTO of Yammer, turned forty around the same time that Michael Hansen was leaving California to go back to Australia. We brought our keg upstairs to the building's rooftop and celebrated together. We shared a similar perspective with these companies and felt an instant kinship and acceptance.
Customers were very loyal and dedicated to us. It was like a movement. We were a breath of fresh air for a lot of customers who had been trapped in terrible software. And the world of customer service turned in our direction too. Customer service had within a few years become a very public experience due to the Internet and social media. Customer service no longer happened in a vacuum; it was something customers shared online, with the whole world. That worked well for businesses when the experience was great, but when an awful customer service experience suddenly began making noise all over the Internet, it hurt their brand and their reputation. More and more, companies started to realize how a great product and service experience helped turn customers into their greatest promoters and ultimately into an extension of the sales and marketing activities. In a few years, what we had experienced ourselves had become a world trend.
Soon San Francisco became my entire world. It was a fantastic place to build a tech startup—the best place in the world. And it was a beautiful place to live, too. Within six months our kids were speaking English with heavy American accents and were blissfully happy with the California sunshine.
Things at home were getting easier for me. I traveled a lot less. Literally, I did not step into an airport for almost two years. With San Francisco as the center of the tech scene, everybody was coming here anyway. My life was about staying close to home. I dropped the kids off at school and came home in time for dinner at 6 p.m. I didn't go to a single networking event or dinner for a very long time. It was all about building the product, building the team, and investing in the family. Startupland had become home.