Joe Grover: [00:01] Welcome to The Real F Word. 

Joe Grover: [00:07] I’m so delighted to have Kristi Muir here on the podcast today, and Kristi has an incredible story. She has incredible experience. She’s a venture capital investor with Pelion, which is an amazing early stage and growth investor that I’ve known for many years. And so we’re delighted to hear her perspective on her entrepreneurial journey and as an investor. So, Kristi, great to have you on the podcast.

Kristy Muir: [00:31] Thanks for having me. I’m really happy to be here, and it’s a really cool setup.

Joe Grover: [00:35] Sometimes you meet people, and you hear their stories. and you’re just inspired, and you’re really impacted. And that happened when, in fact, I think we’ve met once or twice. At least I’ve heard you speak once or twice. But the second time was in your office just a handful of weeks ago. And you shared your journey, and there was two, three hundred, maybe two hundred people in the room.

Kristy Muir: [00:57] There was a lot of people there. I wasn’t expecting that.

Joe Grover: [01:00] And I sat there, and I was like, “Kristi is going to be the next guest on The F Word podcast.” That’s how impactful it was. And so I am so grateful you’re willing to share that with our audience.

Kristy Muir: [01:09] Well, thank you. I think it’s always a vulnerable thing to share your story, especially when a little bit of it is personal—or a lot of a bit of it, I should say. But I think what makes it worth it is knowing that it resonates with people and that it is helpful. So thank you so much for having me.

Joe Grover: [01:26] Thank you. Tell me a little bit about what defines you. We were chatting before we started, and you said, “I don’t want to be known for my failures.” And I don’t think any of us do. And I said, “What do you want to be known for?”

Kristy Muir: [01:40] That’s a great question. I turned 40 this month, and I think I am going through that classic midlife—reflecting on the first half of my life and thinking about the next half of my life. And I think that the things that I want to be known for—I care most about what my girls think about me. I care most about what my family thinks about me. I care that I have authentic relationships with colleagues and peers and community. And I think that if there was anything that I hope I’m known for that I would like to be known for is probably just being a hardworking, smart, authentic, sincere person. I think, at the end of the day, that’s great.

Joe Grover: [02:27] I’ve had a bunch of loss in my life this year. And there’s been some business leaders who have tragically passed. And I’ve reflected on this. The same question is, “At the end, what do I want people to say at my funeral?” And you’re only 40, so you’ve got four years to go. But I think it’s a great question. Tell me a little bit about your journey. And you had definitely—especially early on—there was a failure that defined you: a personal and professional failure. And I want to hear that story from you in your own words.

Kristy Muir: [03:01] Yeah, and first, I would preface it: I believe that if you’re not failing at least once a day, you’re doing life wrong. So maybe there was one failure early on that defined me, but I could probably sit and talk about many failures. But most people, when they ask me this question about my failures or life or career, I always start by saying that so much of my personal life has predicated my professional life. And so before I talk about my professional life and some of the wins, I actually have to talk about the failures and some of the really hard things I’ve been through personally, because that really is what’s determined my outcome really. 

[03:40] And I think that people always ask me, “How did you do it?” And when people ask me, “How did you do it?” what they mean is, “How did you go from being a full-time single mom with full financial, physical responsibility of your girls on welfare?” My girls were sleeping on the bed next to—they were sleeping on the ground next to the bed, dad little pull-out mats next to the bed. And I was—man, I was in a really tough spot. “And how did you go from that to exiting your startup?” Which I do consider myself a failed startup, but I did exit, I did sail. “How did you become an executive? And then how did you get recruited by a top-tier venture capital fund?” And it’s been a journey. 

Joe Grover: [04:22] It’s an incredible journey. And it’s right around the holidays, and you shared a story that was pretty personal, when you went to—I think you were buying gifts, and you found a tree at Target. Can you reshare that? 

Kristy Muir: [04:38] I was trying to buy gifts, and it was Walmart. I didn’t have money enough for Target, actually. That was—anyways, okay. So, yeah, so there was something that happened in my personal life that I realized very quickly—overnight—that I needed to remove my girls and I from a pretty tough situation. And I had a few hundred dollars in my bank account. I was in the middle of trying to build my startup, so equity doesn’t put food on the table. And I very quickly had to figure out some hard things. And as I was navigating that, Christmas was upcoming, and I really didn’t have money for the girls for Christmas. At that point, I was trying to sign up for welfare, which, if anybody’s been through that process, there is a little bit of time in between everything until it kicks in. And, yeah, Christmas is upcoming. And if you’re a parent, and if you’ve ever tried to provide for your kids or Christmas or the holidays tradition, it feels pretty bad to know that you’re not going to be able to provide that. And especially our first Christmas alone, and with some traumatic things that had happened, it was just a really hard time. 

[05:50] And I think it was either the day or two before Christmas, but the week of Christmas, when everything’s on clearance, right. And I just decided that I had to figure something out for the girls. And so I put them in the car—my youngest was just a baby at that point—and we went to Walmart, downtown Salt Lake City. And we’re trying to look for little trinkets or things we could find. And we went to the clearance section, and we found the coolest find of all time. We found a pink tinsel Christmas tree, six feet, on sale for about $30. And I knew that I could probably spend about $50 and be okay to make it to the following week. And so we got that pink tinsel Christmas tree. We went to the dollar section and got little bobble plastic ornaments. And right as we walked out, my oldest daughter, she saw this LED light-up star for the top of the tree. And I knew when I saw the look on her face that I had to get it. It was 20 dollars. It was as much as the tree, practically. Anyways, we ended up getting that. We had a beautiful Christmas. I still have that tree. It’s set up in my house right now. I think my girls would be very mad if I tried to get rid of it, because it’s so symbolic of something so beautiful, which is you don’t need a lot to be happy. And I think it’s a good reminder to me that there’s light on the other side of really hard things. I love that tree.

Joe Grover: [07:25] Yeah, I’ve thought about that pink tinsel tree since I first heard you share that story. It was really impactful. And I appreciate you sharing it today. You said that first startup was a failure even though you did exit. Why do you consider it a failure?

Kristy Muir: [07:39] I think that my world is venture capital. And venture capital has phenomenal PR. And typically, the exits that we see in venture—and that is, I think, for many people, what we perceive to be successful is a venture exit, which—that’s another can of worms we could get into. Because there’s lots of different ways to build a business.

[08:02] And so I think that, in my mind, I was really hoping for a bigger exit. I was hoping to revolutionize STEM and STEAM for kids and make it really mainstream. This is back before coding and computer science. And that wasn’t anything that was really common or mainstream. And so I didn’t have the impact I think that I hoped I would have. And also, it was not a life-changing wealth sort of outcome. And I think for a lot of people, when we think about building a startup and exiting a startup, I think that that’s what we think of. And so, while I did build it, it’s still being used in the wild today, which is incredible—I have an issued patent, and I did sell it—it wasn’t the kind of exit that you would have maybe expected. And while I maybe failed, it honestly changed my life and put me on the trajectory that gave me everything I have today.

Joe Grover: [08:58] How did that experience unlock the next opportunity and prepare you to really—I mean, it was pretty meteoric, right? Your rise through the ranks at some really esteemed tech companies here in Utah is impressive and is a credit to your resilience, your hard work, and your acumen and intelligence. But how did that experience set you up for the next 10 years?

Kristy Muir: [09:22] Yeah, oh, that’s a great question. I would actually have to go even prior to the startup. So I’m a classically trained concert pianist. And so my brain thinks in a very, very programmatic way, almost like an engineer, even though I’m not an engineer. I get how engineers think. And my brain thinks in a very similar way. And so I think, when I was building my startup, I realized that how my brain thinks and processes information lends very well to building a business. I also, I think, with the music, learned discipline at a really young age. And so learning how to sit with something, figure something out, build something with an end goal in mind, and working your way backwards, it all just clicked for me. And I think that my startup was like the playground, the practice. It was the opportunity for me to exercise and further develop that skill set that, I think, really set the tone for the rest of my career.

Joe Grover: [10:21] Do you think that’s a pattern you’ve seen with other successful entrepreneurs? Does it take a lap around the track before you hit your rhythm? Do you need to have this playground and try your hand at something? Maybe it has a negative outcome or a positive outcome, but maybe it’s not the home run. Do you feel like it takes a little bit of practice before you’re really dialed in for the big swing?

Kristy Muir: [10:43] Oh, that’s—I have so many—I have a few different thoughts. First, nobody—most people (I shouldn’t say nobody), I think, most people—it’s not like a meteoric rise for most people. I think we just don’t see all of the work and failures that are behind that rise, or the perceived rise. And so I do think that for most people it takes a lap around. I think it takes the playground. I mean, everybody has to learn, and some people are just, I guess, born brilliant or born with it. But I think most people do have to—they have to put in the hours.

Joe Grover: [11:21] Yeah, I was having a conversation yesterday. In the very early days, I was in an incubator, and one of my partners was Brock Blake, who’s the CEO of Lendio, and he’s still the CEO. And I’ve been through three or four startups since Brock took over FundingUniverse. And then it became Lendio. And every time I meet Brock, it’s just stunning to see that was his first entrepreneurial endeavor. And he’s still at it, right? And that staying power is unusual. Because I look at all the other partners, all the other entrepreneurs we worked with in this incubator, and we’ve all been through two, three, four different startups and careers since that moment when we launched our first business.

Kristy Muir: [12:00] I don’t know why one person’s journey is like that where it was the origin company, and you grow it, and it’s the longevity and the staying power. I don’t know why that is one person’s journey and another person’s journey is not that. But I really do believe that we all have our unique path and our unique journey. And what I do know is that I’m very grateful, and I would not trade my experiences or my failures or my hard things for anybody else’s if it meant a different outcome. I feel very, very grateful for the hard things and the failures because I feel grateful for my life and what it is today. 

Joe Grover: [12:39] What are some other principles of music that you apply daily as a venture capitalist, and maybe you apply it as an operator?

Kristy Muir: [12:45] How do you eat an elephant?

Joe Grover: [12:48] That’s a principle of music?

Kristy Muir: [12:50] It is. It’s actually probably one of the best ones that my music teachers taught me.

Joe Grover: [12:54] Wow. Tell me about that.

Kristy Muir: [12:55] Well, how do you eat an elephant? How would you eat an elephant? 

Joe Grover: [12:57] One bite at a time.

Kristy Muir: [12:57] One bite at a time. Imagine being 14 years old and needing to learn two to three hours of memorized repertoire for a performance. You have a 30-page concerto. How do you learn that? And I think so often in life we get so overwhelmed by whatever daunting thing is in front of us. And I learned at a really young age that you just take it one bite at a time. And you start literally one note of one measure, two notes of one measure, one hand. And you do one measure, one hand, all the notes. And then you learn the other hand, all of that. And then you put it together, and then you memorize it, and then you move on to the next measure. And so, if you can imagine hundreds and hundreds and hundreds of measures, that’s what you’re doing for hours. How do you eat an elephant? And that’s how I face, honestly, most daunting things in my life is just one step at a time.

Joe Grover: [13:57] So that is so interesting. I started playing guitar again after 22 years, and I had a list of 20 songs that I wanted to learn. And I sat down, and of course I started with the most difficult classic rock song I could find. I was like, “This is never going to happen.” And I definitely felt like, “Okay, I’m just going to play that first measure over and over and over again until it sounds good.” And then I moved to the next measure, and it took me about a year, and I learned my first 20 songs. And then I bought a Fender Stratocaster—my dream guitar from my childhood.

[14:29] So I am not a very good musician, but I can understand that principle and how it would apply to entrepreneurship and venture capital. 

Kristy Muir: [14:38] And life. 

Joe Grover: [14:38] Yeah, and life. Tell me about—you said there’s been many failures along the way. First of all, as you exited your first startup, tell me about the transition into a larger tech company.

Kristy Muir: [14:50] Yeah. So I did know that I needed to have something more substantial to provide for my girls and I. And I had met—I mean, I knew many of the founders in the community just from building. And I had always really liked Kat Kennedy, and she’s a GP at Kickstart. And Kat actually gave me my first job after my startup at Degreed, and it was in product operations. I also knew Dave Blake, the CEO there, and I was doing some special projects for him. And I think the transition for me—“There’s nothing that”—there’s a quote: “There’s nothing that quickens the mind like being dead in the morning.” And I think for me, the transition was great because I didn’t really have a choice. And also, hindsight, when I look back, I had very generous mentors in Kat and Dave in how they helped me and supported me in some of the personal stuff—and really gave me a place to unravel some of that and start building my career. And so I feel really grateful for that.

[15:57] And it was exciting. I think I was 90-something employee. By the time I left, they were, I want to say, 650. So it was really cool to work with different teams and see product operations and product development and go to market. And I really was exposed to a lot of different things. And I was allowed to wear a lot of different hats, which lent well to the startup entrepreneur in myself. And so it was an incredible, incredible experience.

Joe Grover: [16:29] There was failures along the way, or at least challenges. What was the most difficult situation you found yourself in at Degreed?

Kristy Muir: [16:39] That’s a great question. I think that—and this is just a very honest answer; this is the first thing that comes to my mind: I think that I had a little bit of hubris.

Joe Grover: [16:52] Because you were a founder.

Kristy Muir: [16:52] And so I think that—and hindsight’s always 20-20. I think there were some things that maybe I was right about. And then with my manager, I think there were some things that I could have approached differently. But because I didn’t have previous professional experience, I maybe didn’t know how to best approach those situations. So I think just learning how to navigate an org in a very professional way, that was an incredible learning experience for me at Degreed.

Joe Grover: [17:28] You left Degreed, and you head over to Instructure.

Kristy Muir: [17:31] Yeah, so I was actually on a steering committee for Dave. And on that steering committee, I met Jared Stein, who was the senior vice president of strategy at Instructure. And he’s a brilliant, very kind human if you’ve ever met him. And he was sharing some of what was going on at Instructure and told me I should check it out. And so I did. And I ended up getting hired at Instructure to run global strategy and operations, which, I told you before this, I was probably not qualified to do. And they hired me. And I feel so grateful because I crushed it. And it totally changed—I think I credit that to really changing the trajectory of my career. And it was an incredible experience, incredible team, opportunity, the learning. It was really fun.

Joe Grover: [18:16] Tell me—that was a tough situation, and share what you can.

Kristy Muir: [18:20] Yeah.

Joe Grover: [18:21] We had another entrepreneur on this podcast talking about the same business—the Bridge business and Instructure—but it was not doing well.

Kristy Muir: [18:29] It was not doing well. 

Joe Grover: [18:30] Most of this is public, but—

Kristy Muir: [18:31] And I think it was not doing as well as even what people thought it was doing. So I was part of the executive team that was brought in under the management of Toma to turn things around and to get Bridge, in particular, in a position where it could be acquired by a private equity company or receive investment. We weren’t quite sure of the outcome. And so, while I was—

Joe Grover: [18:53] Because they had plowed tons of money— 

Kristy Muir: [18:56] Tons of money into Bridge. And at that point, it was generating revenue, but not what you would expect it to be generating. And while I was in this diligence process, I was—for the operations and strategy role, I was managing relationships with the banker, the buyer. I was working with the finance teams. I was working with every department head and really working to turn around some of the operations. And as I was doing this, I discovered that some of the data that was being reported for revenue for Bridge was being reported inaccurately. And that was really scary.

[19:33] And I had a mentor tell me—and we were in the middle of acquisition and meeting with these potential buyers, and to go say that something had been misreported and then change the management deck, it changes the models. It was a very scary position to be in. I had a mentor say, “Truth tellers are rewarded, and maybe it’s not now but later, but it’s really important to tell the truth.” And so I had to go to the president, CEO, and the board, and I had to report what I had found. And they looked at me, and there was one word—two words—that were said to me: “Fix it.” And—

Joe Grover: [20:09] Wow. Fix it. 

Kristy Muir: [20:10] Fix it. That was it. And then—

Joe Grover: [20:11] With no direction. No playbook.

Kristy Muir: [20:13] I did. So I went and I did a gap analysis. And two days later, I called my boss, crying at nine o’clock at night. And I was like, “Look, I know what’s wrong with this part of the business and the revenue. I have no clue how to fix it.” And they ended up—Instructure ended up hiring an executive coach. She’s one of my dear friends to this day. She was a CMO, led sales teams, revenue teams—just an incredible woman who’s had a really successful career. And she coached me for months and helped me turn around the organization. And we did sell it. We exited that PE firm, brought me on full time to manage a group of portfolio companies where I was doing the same thing that I ultimately turned around for Instructure Bridge. And it was just—I worked probably 80 to 100 hours a week, and it was exhausting and trying and probably one of the most taxing periods of my career. And I wouldn’t trade it for the world.

Joe Grover: [21:10] Yeah, that’s how I feel too. I was in a turnaround for the better part of a year as a CEO, and it was the most painful. I’ve talked about that a lot on the podcast. In fact, that’s the reason this podcast exists, because at the end of that, I had to shut down the division and lay off all the employees. And it was incredibly painful. But it defined me. It taught me more than any single success could teach me.

Kristy Muir: [21:33] Agreed. There’s a debate if you learn more working at a growth startup that’s just experiencing seismic growth and incredible product market fit or if working in turnaround you would learn more. Most people, I think, would say growth. I don’t think you can actually compare them, but I’m curious what you think.

Joe Grover: [21:56] I thought about it a ton yeah, and have been in both.

Kristy Muir: [21:59] Yeah, you’ve experienced both.

Joe Grover: [22:00] Both scenarios. Certainly, there’s, I think, growth obfuscates just some bad decision-making or bad process. When you’re—sometimes, growth, there’s a tailwind, and it’s a perfect product market fit, and the management team, they look like heroes. And I’ve also been in companies where I think the management team was very skilled and experienced, well advised, great investors, great board members, great mentors, and we lost product market fit. Maybe we never had it. And we do all that we can, right? We apply the same playbooks we’ve applied in previous startups in our careers, and it doesn’t work. And then we, the management team, look like failures, right? And we get fired.

Kristy Muir: [22:47] Yeah.

Joe Grover: [22:47] And so I’ve seen both outcomes: great management teams with maybe a market shift, maybe a competitive dynamic or a bad product market fit, and a company fail. I’ve also seen really amazing companies where, when you’re on the inside, you think, “Well, this is a hardworking management team, but they’re not the most sophisticated.” Maybe they’re not the most experienced, and there’s tons of dysfunctionality.

Kristy Muir: [23:12] Totally.

Joe Grover: [23:13] And then the company goes public.

Kristy Muir: [23:14] Yeah, totally.

Joe Grover: [23:15] And no one sees that. 

Kristy Muir: [23:16] It’s so funny. So true.

Joe Grover: [23:17] All they see is the IPO. So for me, I’ve learned probably more in those difficult moments and the turnaround than I have in the growth stage. Because it’s challenged us to be more creative and pressure test our assumptions even more and make really difficult decisions.

Kristy Muir: [23:34] There’s not room for—there’s really not room for the mistake.

Joe Grover: [23:38] There’s not. And listen: When things are going amazing and you’re growing, or you have tons of capital on the balance sheet, you can make some mistakes. I make a wrong marketing investment. Guess what? It doesn’t really matter. But if I have 50 grand to spend, and I spend 30 on the wrong channel—

Kristy Muir: [23:56] And you don’t deliver the results? You’re done. Yeah, totally.

Joe Grover: [23:57] So what do you think? 

Kristy Muir: [23:59] I actually tend to agree with you. Yeah, I tend to agree. I will say that I think both offer different experiences. For me personally, where I really learned how to be an exceptional operator was doing the hard turnaround stuff.

Joe Grover: [24:18] Yeah. I believe that. You also have had amazing mentors that have believed in you and invested in you. You’ve mentioned three of them. I oftentime think that the way to avoid the pitfalls and make the mistakes that lead to some failure is to lean on those that have experience, who have already walked the path. They can advise us and direct us and say, “Hey, look over here. Be aware.” What role do you think mentors play in avoiding failure?

Kristy Muir: [24:48] Yeah, that’s a great question. And I would say, first, I think often that when we talk about mentors, we always think of people that are bigger and better than ourselves, who have experienced it, just like you described, that have learned these lessons already. I think one thing that I really believe is that we don’t give enough credit to the people we’re growing up with. Does that make sense? People who are at similar stages in their career and relying on them and talking with them and hashing things out. I would say some of those people that I grew up with and have been growing up with in my career to this day have become my best friends and are actually some of the most valuable mentors with what they’ve experienced at this point. So I just want to make sure—I don’t think people should ever underestimate the power of who’s working alongside them.

Joe Grover: [25:33] Yeah. Your peers can be your mentors.

Kristy Muir: [25:35] Absolutely, yeah. And we don’t always need to be trying to find somebody.

Joe Grover: [25:41] The 40-year-old venture capitalist to be your mentor.

Kristy Muir: [25:43] That’s it. There you go. Man, I got years left. I’m a newbie, but I do think that it’s incredibly valuable. Lori, who was the coach that I hired at Instructure, she taught me everything I knew about turnaround, and without that, you don’t learn it in school. It’s not a skillset that you would learn any other way other than doing it and having somebody help you and correct you along the way. And so I do think mentorship is absolutely vital. It can be hard to find that match, though, where it is a two-way reciprocal relationship.

Joe Grover: [26:22] For sure. I do think that the skills that you learn when things are really bad in a startup, when you’re forced to make the most difficult decision—layoffs and rifts and pivots and disposition of assets and liquidations—those are not skills that we learn in school. And honestly, it was the thing that was most difficult is when you’re—I mean, when you’re looking at getting for—if a lender comes and forecloses on a business, what does that look like? How do you navigate that? 

Kristy Muir: [26:55] Yeah. 

Joe Grover: [26:55] How do you deal with creditors? 

Kristy Muir: [26:56] Yeah. 

Joe Grover: [26:57] And so that’s when experience matters a lot. And those mentors, like Lori, are so valuable when things get really, really tough. And hopefully, entrepreneurs listening to the podcast will never be in that position. That’s what we hope. 

Kristy Muir: [27:08] We hope. 

Joe Grover: [27:09] And likely they will be.

Kristy Muir: [27:10] Yeah, I think that—yeah, very likely.

Joe Grover: [27:13] What’s up, fail fans? As we’ve listened to so many guests on this podcast, that the road to success is often paved with failure, with a lot of challenges, and even full-on face-plants. But there’s a thing that you could do to help skip some of those bumps and bruises, and that’s really where the consultants at Amplēo come in. See, Amplēo offers fractional executives in finance, marketing, and HR. And these are people who’ve experienced a lot. They’ve been in the trenches. They’ve built businesses. They’ve failed. But here’s the kicker: They’ve learned from those failures, and now they’re applying all that wisdom to your business to support you so you don’t have to learn the hard way. I mean, think about it: Instead of stumbling around in the dark and hoping you don’t hit the wall, you could bring someone in who’s already mapped out that room, right? Amplēo consultants and experts have worked with and for numerous companies of all sizes, and they’ve gathered insights on what works and where to focus and how to actually grow your business efficiently.

[28:12] So while we embrace failure on this podcast, there is no rule that says you have to fail at everything yourself. So check out Amplēo and see how their fractional executives can help your business move forward and avoid those painful learning curves. Sometimes the smartest move is learning from someone else’s failure. Visit Amplēo.com to learn more.

Joe Grover: [28:35] So when we first launched the podcast, the thesis was that these are the stories that entrepreneurs never talk about. They don’t want to talk about them. And there’s reasons for that. Why do you think entrepreneurs and founders really don’t want to unpack failures publicly?

Kristy Muir: [28:50] I think it probably goes back to my response to you initially, which is I don’t want to—when people hear my name or I’m talked about, I don’t want the thing that people talk about me to be about my failures, about my hard life, or a victim. I want it to be about, I don’t know, the things that have a more positive tone, I guess. And I think it’s hard to—unless you really have time to sit with somebody and talk through some of those failures, it’s a highly personal, vulnerable thing. And I don’t think that there’s always situations that feel—I think there’s so many nuances that have to be in place for somebody to feel really comfortable to sit down and share their story, and that even includes where they’re at in their life at that moment being on the other side of it and maybe feeling okay about things.

Joe Grover: [29:49] Yeah, time. I mean, it took me seven years to publicly read my journal entry about my colossal failure. So I think that’s all true. Do you think that investors—because this is the other question. In fact, I have another investor on this afternoon, and the other part of my trailer, I talk about—entrepreneurs rarely talk about these stories, and investors hide them. And that’s a little—and again, I was in venture capital for a while, and I’ve written those limited partner reports and investor reports. I’ve built the decks for our limited partner meetings. And certainly that’s not how we lead out. Hey, we know what the batting average is for venture capital, especially at the early stage. But how do investors—do you feel like we have a pretty good system in venture capital and private equity to obscure the failures? Because, honestly, the goal is to return investor money and drive returns and raise subsequent funds. And showcasing failures in any way doesn’t accomplish that goal.

Kristy Muir: [30:55] Yeah, it’s an interesting thought. I do think that the best investors, at least in their personal relationships with their founders, it would not be good if there was not honesty there. And so I think, at the very least, the best investors I’ve seen, there is a lot of honesty with the founder. You’re an armchair therapist, and you know all of the failures, and hopefully you’re the first person that that founder calls when they’re going through something hard. But I think what you’re speaking to is a little bit different, which is the external in the community—whether it’s to LPs, to stakeholders—why we don’t air the dirty laundry. And I think that’s more what you’re asking. Am I right?

Joe Grover: [31:40] It is. 

Kristy Muir: [31:41] I mean, I think that you could ask the same—and you did—as to why humans don’t feel comfortable airing the dirty laundry. I think that some of it is to protect the founder and to give them space and time to figure it out. I think there’s a lot of different reasons why people do that. And then I also think that there is the cosmetic. You don’t want a tarnished reputation or the perception of that. 

Joe Grover: [32:14] Do you think it should change? Do you think there’s a way that, as an investment community, we can destigmatize failure for other entrepreneurs by—and again, not by throwing founders under the bus? Because oftentimes it’s not just decisions of founders that drive to a negative outcome for an investor. But is there something we could change, that we could learn about the patterns of failure and the things to avoid to derisk the journey for other founders?

Kristy Muir: [32:45] Well, yeah, that’s a great question, and I think you spoke earlier to mentorship. And I do hope—and I would believe and I have seen it where founders mentoring founders, in that relationship, they can be honest with each other. 

[32:58] Do I think it should change, though? That’s the question that sticks out that you asked me. Thinking back to my own personal crucible, where I was trying to navigate exiting my startup—welfare, the whole Christmas story—that time in my life, it would have been, and it was already public because I was starting to meet with investors. And so I had to explain some things that were happening. And that felt really uncomfortable because I myself was still trying to process and figure out and navigate what was happening. 

[33:31] And so, do I think it should change for founders and investors when there’s failures talking about it? I think that we should always be authentic. I think we should be sincere. I think we should be always open to sharing our learnings and our failures. I also think that there’s a time and a place to do that. And when I think about a founder—and I can only imagine what somebody, if they were going through something similar to myself or shutting down their business or going through their own crucible—I would hope that they would have the time and space to at least navigate that until they got to a place where they could openly talk about it and be honest about it. And I guess another thought I have is I think that so much of building trust and investing is that relationship with the founder. And I serve the founder. And so I think that, from my own personal perspective, I would want to respect their privacy and make sure that things were presented in the right time and place that they also were comfortable with. 

Joe Grover: [34:31] Can I just say thank you to that comment? It’s such a—and it’s probably not true for all investors, but I do think it’s true for you, and I know it’s true for Pelion, that maybe the reason, as VCs and private equity investors, we don’t talk about the failures as publicly is not to protect our own reputation but maybe to protect the reputation of those founders who really gave their all, who made great sacrifices to try to win.

Kristy Muir: [34:58] Because nobody sees that.

Joe Grover: [34:59] And then they lost. And so I think it’s a really astute observation, and I hope that’s the case. And I think it is. And you’re right that “the right time, the right place” is probably the reason why we don’t hear a lot of those stories publicly. I hope, as I invite more and more investors, that they’ll share at least stories, maybe anonymized—and I’m going to invite you to do this—of some companies that they invested in that didn’t work out, and that we can extract some of the learning. The advantage you have is you see a whole portfolio of companies across stages, across industries and geographies. And so I think investors are in a very unique position to start to identify those patterns, and pattern recognition is what makes a great VC. And so if you can identify what to look for early enough, you can absolutely improve the outcomes for those companies and the investment returns for your investors.

Kristy Muir: [35:57] Yeah.

Joe Grover: [35:58] So what are—and maybe you have a story you want to share—but what are some of the patterns you’re seeing now in terms of companies when it doesn’t work out? Are there two or three things that you’re seeing consistently that are driving towards an outcome where they exit at one X or lose all of it?

Kristy Muir: [36:13] Yeah, I do think that there’s some common things that contribute to failure or just not as big of an exit as we hoped—like a company sells for 200 million and that’s a phenomenal exit.

Joe Grover: [36:28] Unless they raised it a billion. 

Kristy Muir: [36:29] Yeah, exactly.

Joe Grover: [36:30] it’s all relative. 

Kristy Muir: [36:31] Yeah, it is relative. This might sound cliche, and I do think it’s psychological, but the lack of product market fit and the belief that you have product market fit, I think, oftentimes, especially when I’m first meeting with founders—a first, second pitch—there’s a lot of confidence. And you have to have that. That’s the irony is that a founder has to be crazy confident. You want that, actually.

Joe Grover: [36:58] You want a little hubris.

Kristy Muir: [36:59] You want the hubris. That’s the irony. At the same time, to the point that that hubris blinds a founder from seeing that they actually don’t have product market fit, that the market isn’t desperate for what they’re trying to sell, that something isn’t working, even talent, that a hire that they made just isn’t working for the team. I think those are some of the biggest failures: our founders consistently pushing things forward when it’s clearly not working. 

Joe Grover: [37:31] What are those signs that something’s clearly not working? Because that’s the magic question. We have to balance this perseverance, running through walls, and this realism and pragmatism that says, “I’ve tried this, I’ve done this, and it’s not driving the result. I need to pivot, I need to stop, I need to pause.”

Kristy Muir: [37:56] Yeah, and I should preface this by saying that I’m probably wrong. I am not the founder building a company, and so it’s easy for me to sit here and say this, but I could probably go find inverse examples that prove myself wrong in saying this. So, for what it’s worth, a grain of salt, throw it out the window. I think a lot of it comes down to when things really work, it usually works from the beginning. And that means revenue growth, getting a dollar in the door, the product adoption. And so usually, the best companies that I’ve seen, and even the more successful companies I work with, they had that early on.

[38:41] There are some examples where founders really persevered through it. They didn’t have that early. They pivoted. They figured it out. But I think the best companies, they really do have that from an early stage. They’re seeing a triple-triple, double-double-double revenue growth, or you could say a 20 percent month-over-month revenue growth. They’re seeing the adoption within a company just very quickly expand. They have so much demand for the product that they can’t even keep up with it. And you do see that. It happens.

Joe Grover: [39:15] Do you think most companies at the early stage fell because they never figure out a way to efficiently acquire customers, tell the story, articulate the pain, bring customers in the door? Or do you think they fell because they’ve over-promised and under-delivered on the service or product side?

Kristy Muir: [39:35] I might take this a little bit of a different direction than what you’re thinking. Smartest product does not always win at the end of the day. I think that’s been really fascinating to see where I’ve met with founders where the product is brilliant, and it’s solving a real problem, but for whatever reason, it just isn’t landing. And, as I’ve thought about this, I really do believe, and I’ve learned a lot about this from Tyler Hogue—he’s one of the partners at our firm. He’s really passionate about the power of storytelling. And the best founders, they can sell you dog food, and you want to eat it. And it’s not just selling me, the investor: It’s selling customers where they’ve identified a problem and they have positioned it in such an intelligent, simple way that people can’t get enough. And so I really do think that a lot of it—maybe not all of it—but, especially early on, I really do think it comes back to a strong skillset in storytelling, and positioning the problem and solution and vision to customers and different audiences in a way that resonates.

Joe Grover: [40:38] Well, I’m a chief marketing officer, so I totally buy into this, right? I’ve always said the person, the company, the founder that can articulate the problem that you’re solving for the ICP or the customer in the most compelling and provocative and clear way and simple way is always the company that that customer believes will solve the problem. It’s that articulation, that storytelling of, “You have a pain, and this is how we’re going to solve it,” that earns that early trust. And it’s not always true that they have the product or the solution that actually solves the problem in the way that they’re describing—at least, not in the first two or three or four or five years when they’re still building it, because they’re selling it while they’re building it. And eventually they get there if they can acquire those early customers and there’s an efficient enough acquisition engine to drive that business forward. So I think that’s a really astute observation.

[41:29] Is storytelling—there’s risk there as an investor, because the founders that are the most articulate and charismatic and are the best storytellers are great externally. They pitch a great story to the investors as well. So how do you decipher what’s storytelling and what’s reality?

Kristy Muir: [41:47] Yeah, that’s a great question, and I do think this is where having the operational background, I probably am able to pick up on this.

Joe Grover: [41:58] The BS. 

Kristy Muir: [41:58] Yeah, especially even digging around in a data room, or you can pick up on when something doesn’t make sense or it doesn’t pass a sniff test where things they say maybe about how much revenue they’re going to do the next quarter. And you’re looking at historicals, and you’re looking at the pipeline, or maybe a founder misses—he or she doesn’t know his exact number, or it’s their ability to honestly and precisely be a master of their numbers, know when they answer you it makes tons of sense with the exact numbers that you already know, and it doesn’t ebb and flow. Whenever I get yellow flags or red flags, it’s when numbers—yeah, it’s squirrely—numbers start sliding, and it starts to feel a little slick.

Joe Grover: [42:52] For sure. So the question, I think—we started around this question: What are those signs that we should look for if we’re a founder or an operator? What are the signs we should look for when there could be a failure on the horizon? And what are those yellow lights or red lights that we should be looking for to basically determine whether or not we should stop or just keep pushing forward?

Kristy Muir: [43:17] Oh, that’s a great question. First and foremost, I would say, feedback from your team, especially the people who are working on the frontline. Usually the frontline workers, whether they’re in technical support or customer success, people who are talking to customers all the time, they usually have a pretty good pulse on what’s working and what’s not. And if there’s something that is repeatedly coming across from a voice of customer or technical support or bugs where things just aren’t clicking, I think that those are some of the first qualitative signs that come across. And then I do think there are some quantitative things where stuff starts to slow down—whether your pipeline, you’re not able to fill it, maybe stuff isn’t converting. And you always look first operationally. Are there things we’re doing operationally that are impacting this? But I think once you’ve confirmed that, operationally, things are sound and it’s just things are slowing and sluggish, I think that’s when I start to look at product market fit, audience, ICP, is my original thesis about this correct? And having those thoughts. 

Joe Grover: [44:31] I was in a company where we lost product market fit.

Kristy Muir: [44:34] Yeah.

Joe Grover: [44:34] We had it for a time. Market dynamics shifted, and we didn’t shift quick enough. We didn’t adapt our service offering to the market as well as we could have, and it was painful.

Kristy Muir: [44:45] Yeah.

Joe Grover: [44:46] So I’ve seen—I totally agree with your recommendations in terms of looking at, yes, operationally, we can look at customer satisfaction.

Kristy Muir: [44:53] Yeah.

Joe Grover: [44:53] And product delivery. But from an acquisition, and as a CMO, I’m always thinking about is the acquisition engine working? Is it efficient? Are we driving efficient leads or awareness? Are we converting those at an appropriate rate? Is CAC appropriate? And if your CAC and your LTV to CAC is an appropriate place, then you can usually solve operational and product issues. 

Kristy Muir: [45:20] Yeah, agreed. I think one of the biggest mistakes a founder can make—and I don’t know if it’s a mistake or just a skill, and it is a skill I believe you can learn—but I really do believe that the best leaders of any company—not just a startup, but if you were in a public company, it doesn’t matter—the best leaders that I have ever worked with are a master of numbers for every department. They know. And it’s not that they’re micromanaging. It’s not that they’re trying to do somebody’s job, but they understand the metrics, and they understand what it means. They understand how they work together, and they can often speak to those metrics just as well as the CMO, as a CPO, as the CTO. And that’s really powerful. I think that when somebody turns a blind eye because maybe they don’t understand it as well or they just don’t have capacity to deal with it. I think that that can create some precarious situations.

Joe Grover: [46:10] This is why it’s so tough to be a great founder, because you have to be a storyteller. 

Kristy Muir: [46:12] It’s so hard. You have to be everything. It’s a unicorn.

Joe Grover: [46:14] Yeah. And build and be persuasive and connect with people and have that really strong EQ. And then you have to be analytical, and you have to be in the numbers, because that’s really the language that tells you whether or not the business is performing or not performing. And I have seen founders who are really strong on one side, and they just outsource to the rest of their management team the operational KPIs and the efficiency and NPS. And that’s a dangerous place to be as a founder because if something starts to slip and you don’t see it early enough, then things can get hairy fast.

[46:50] As you sit down with entrepreneurs that are facing adversity or maybe even facing a potential failure, what counsel would you give those entrepreneurs that are struggling to keep their companies alive and who are facing a potential failure?

Kristy Muir: [47:04] Yeah, I think—first, I would encourage them to really make sure that they’re getting honest and direct feedback from their counselors. I think everybody has a different style of giving feedback. Personally, I tend to be more direct, and that’s typically how I also like to receive feedback. But I do think that just honesty really matters, and hearing really honest opinions and perceptions so that you can synthesize all of those data points and make the most intelligent next step. 

[47:37] I think the other thing—and I was just talking to a founder this week, and it’s not profound advice or business advice, but I think it’s more comfort that you’re doing great. You’ve done more than 99 percent of anybody else, and nobody’s walking in your shoes. And what you’ve done matters to this point, and it matters after this. And you’ve already won. And I know that that’s maybe not profound business advice. But I think sometimes, when we’re in that crucible, it’s not the tactical advice we necessarily need. I think sometimes it’s just the reassurance that—because they’re already doing everything they can. They don’t need me to sit there and tell them. I’m not walking in their shoes. I think it’s more just the reassurance that you’re doing great.

Joe Grover: [48:34] I can’t tell you how—that is, in the moments that have been the most difficult in my career, there were a few investors that showed up, and they knew we were underperforming. I was doing everything that I could to try to solve really difficult problems. And I remember there were some investors that did exactly what you’ve done with some of your founders. And it meant the world, especially because they had so much at stake, to look me in the eye and say, “Thank you,” to say, “You’re doing all that you can.” Sometimes in those moments, founders understand. They’re often more critical of themselves than any of their advisors or investors. And so to have investors show up and say, “You’re doing okay. You’ve already accomplished a lot. Keep at it.” That gave me fuel. That gave me motivation. Alternatively, I’ve had investors that just show up and critique and be like, “You guys are making all the wrong decisions.” And that doesn’t motivate anyone to work harder.

Kristy Muir: [49:39] Well, especially the psychology of most entrepreneurs. We’re—there’s something fundamentally wrong with us. 

Joe Grover: [49:46] For sure. 

Kristy Muir: [49:46] We already are very hard on ourselves. We already are probably overachievers. We are probably perfectionists. 

Joe Grover: [49:53] People pleasers. 

Kristy Muir: [49:53] People pleasers. All of that wrapped into one, intense human. And the last thing a human like that needs when they’re already busting ass to do everything they can to make it work is somebody to be critical. Because, to your point, they already are doing that to themselves, probably 10 times worse. And unless a founder asks for very tactical advice—and I try not to give advice unless I’m able to give tactical advice, but I don’t feel—it’s not my job to give that unless it’s asked for or really desired.

Joe Grover: [50:31] But it makes you a really effective investor. I love investors that were also operators, because you have been in their shoes. You may not know how to solve the specific problem that they’re facing in their industry at this time, but you have been in their shoes, and not all investors have that background and experience. And so I found that so valuable to have investors that also were operators and founders and entrepreneurs, because they understand in a different way what is required: the sacrifice, the grit, the long hours, the intensity of the work over such a long period of time to really build something that is valuable.

[51:06] So what’s one moment in your career where you made a decision that you look back on and say, “I wish I would have made a different decision”? Because part of failure is not repeating the same mistakes. That’s why we talk about it is so then investor entrepreneurs can listen to this podcast and say, “Oh, I see what Kristy did. Let me avoid that mistake.” So what’s a decision that if you could go back, you would make a different one?

Kristy Muir: [51:32] So I don’t like that question, because I feel— 

Joe Grover: [51:34] Thank you. I love that. “Great question, great question, not great question.”

Kristy Muir: [51:38] I don’t like that question. And I don’t like that question, because all of my decisions, bad and good, have led me to where I am today, and I love my life.

Joe Grover: [51:52] And I didn’t ask, “Do you regret it?” Because you don’t have to regret it. But we can learn from it, right?

Kristy Muir: [51:56] Yeah, I think that—

Joe Grover: [51:58] Does that save the question?

Kristy Muir: [52:00] “Does that save the question?” No. Yeah. I think that one of—I would say that this has been a pattern throughout my life operating/building my startup, operating venture capital: I am an intense human, and I really like difficult things. I love solving difficult problems, and I think it’s really fun. I also think that that can complicate things, and we don’t always need things to be difficult. Or, like I said, smartest tech doesn’t win at the end of the day. And I think, going back to even when I was a founder, I picked ed tech. I picked hardware. I literally picked all of the things that probably were the worst things to choose if you wanted to be an entrepreneur, but I was passionate about it. So there was that. And I think I think that—you asked for a specific moment—but I think that there’s been many moments throughout my career where I’ve chosen the more difficult or complicated path, and I sometimes reflect on do I wish that I would have chosen a more simple path? And sometimes I would say, “Yes.” Sometimes I think I’ve gotten in my own way, and I should just simplify things a little bit.

Joe Grover: [53:20] I love that, because that’s what I would say too is I don’t regret decisions, but there’s a lot of learning. And I think there were times where I just made choices, whether it’s what companies to start or to join, or even decisions when I was at those companies that were the more difficult path.

Kristy Muir: [53:40] Okay, I’ve got a specific one—

Joe Grover: [53:41] And there’s probably easier paths. Great.

Kristy Muir: [53:43] Okay, I’ve got a specific one. If I were younger, and this would be—I’ve given this advice to my girls—

Joe Grover: [53:50] You would have invested in Bitcoin.

Kristy Muir: [53:50] I would have invested in Bitcoin. If I were starting my career over as an operator or a founder—if I were a founder, I would do a lot of diligence on what the most successful SaaS businesses look like and what makes them successful. And I would try to formulate a thesis and start figuring out what to build from there. But if I were starting over in my career—and I’ve thought a lot about this, and again, I didn’t have many options. I took the next-best step that was in front of me. But I think having a legitimate go-to-market experience, starting at the bottom of the rung in sales—and I did do door-to-door summer sales for a long time. 

Joe Grover: [54:31] Firstline security.

Kristy Muir: [54:32] Firstline security. I sure did.

Joe Grover: [54:33] They were one of my clients. 

Kristy Muir: [54:35] Oh gee, are you serious? 

Joe Grover: [54:35] Many years ago.

Kristy Muir: [54:36] Wow. 

Joe Grover: [54:36] When I was running an agency.

Kristy Muir: [54:37] That’s incredible. That’s a long—

Joe Grover: [54:49] We haven’t talked about—

Kristy Muir: [54:40] OK, we’ll have to talk about that. Yeah, yeah, yeah. And that’s how I met Ty also. But specifically software sales. And I think that that is one of the most invaluable experiences, and I have often regretted that I didn’t get more exposure to some of that earlier on in my career, because I’ve had to learn it later in my career. But it is just so critical. And so I think that that’s one very—I mean, I’m trying to give you specifics here, and I feel like that’s one specific example.

Joe Grover: [55:12] Sales.

Kristy Muir: [55:13] Sales 

Joe Grover: [55:14] Software sales specifically.

Kristy Muir: [55:15] Go to market.

Joe Grover: [55:16] Go to market. Why is software sales such an important skill set that could be applied even if you’re not going to be a salesperson for your whole career? Why do you think that could be so valuable to an entrepreneur?

Kristy Muir: [55:26] I think that go to market—and we can call it that, and it really could be for any industry. I think software is just a really good use case. I think that the skills that you learn in go to market are honestly applicable to so much in life. And very quickly recognizing—you talked about that pattern recognition we talked about earlier—pattern recognition and skillset for making things happen, especially in business. At the end of the day, it’s about bringing a dollar in the door. And I think the people who are able to do that are often the most successful. Even product leaders, they understand or are coin operated where they understand the importance of that and driving their vision in line with that, I think that those are some of the most powerful leaders, because it is economy. It’s economics. It’s how the world works. And if you can learn that fundamentally, I think it’s very helpful.

Joe Grover: [56:24] So I had an early sales experience. The way I got involved in venture capital was I was invited by a couple of founders of this new venture capital firm—this was back in the early 2000s—to come up and sit in a call center and call institutional investors on the East Coast. 

Kristy Muir: [56:42] Wow.

Joe Grover: [56:43] And I probably have never told this story publicly. And so I remember they gave me a list. I didn’t even really know about venture capital. They shared with me their pitch deck, and I asked a few questions, and then they just gave me a list. And I literally sat in a cubicle up in Ogden at MarketStar.

Kristy Muir: [56:59] Nice.

Joe Grover: [57:00] And I literally started calling investors. And I was the first call. I pitched the best I could. I’m like, “Yes, we’re a growth equity fund.” And the question that the limited partner asked—this institutional investor asked—was, “Are you small cap or large cap?” And that, for those of you that know, I obviously did a terrible job establishing that we were a venture capital fund, because they wouldn’t probably have asked that question. And I did that for three months. 

Kristy Muir: [57:30] And did you love it?

Joe Grover: [57:31] it was so hard. I did not love it. We were actually using inside sales as a CRM even, and I was using a power dial. I mean, this was—and I was just learning as I went. But, honestly, that’s how I punched my ticket to get a job in venture capital. At the end of three months, they offered me a full-time position at the venture capital firm. And a lot of people don’t know that. I mean, I did not come through a traditional investment banking path.

Kristy Muir: [57:54] Call center.

Joe Grover: [57:55] But a call center. Can you believe that? 

Kristy Muir: [57:57] That’s incredible. 

Joe Grover: [57:57] And it was really, really valuable. But it’s how I—that’s literally just picking up the phone, being willing to learn and sell and persuade. And one day, I picked up the phone, and it was a portfolio manager at JPMorgan in New York City. I was catching her right as she was jumping on a flight to Paris, France, and I said, “We’re going to be in New York in two weeks, would love to come by and meet you.” And she said, “Okay, I’ll put you in contact with my assistant.” And we were in the JPMorgan Chase office, and they were our anchor investor in fund one.

Kristy Muir: [58:29] That’s incredible. 

Joe Grover: [58:29] And it was a cold call.

Kristy Muir: [58:30] That’s incredible. 

Joe Grover: [58:30] Anyway, there you go. 

Kristy Muir: [58:31] Go to market.

Joe Grover: [58:32] Sales. Go to market. Whether it’s a product, software, or—

Kristy Muir: [58:35] Life. Even launching your life. It’s a great skill.

Joe Grover: [58:41] So parting words. There’s a pink tinsel tree. 

Kristy Muir: [58:46] There is.

Joe Grover: [58:46] That still is sitting in your home?

Kristy Muir: [58:47] Yep. With an LED star on the top.

Joe Grover: [58:49] With an LED star on the top. It’s probably not your only tree.

Kristy Muir: [58:52] It is my only tree.

Joe Grover: [58:53] I love it. So that still is your only Christmas tree.

Kristy Muir: [58:55] It’s our only tree. Like I said, it’s a reminder that you don’t need a lot to be happy. And that tree has some of the best, warmest, most beautiful memories. And I don’t see a need until it breaks—which it is starting to break; there’s some duct tape—I don’t need another tree. 

Joe Grover: [59:16] How many years has it been?

Kristy Muir: [59:18] It’s been, I want to say, 10.

Joe Grover: [59:21] Ten years. So for a decade, this tree is standing as a symbol that you don’t need a lot to be happy. Also as a symbol of extraordinary resilience and hard work and ingenuity.

Kristy Muir: [59:31] There’s light on the other side.

Joe Grover: [59:32] And there’s light on the other side. What parting thoughts do you have for entrepreneurs that are facing difficulty building their businesses, scaling their businesses, raising capital, maybe trying to survive in a different market? What counsel do you have for them?

Kristy Muir: [59:47] It matters. I think that I just got back from YC Demo Day. It was my first demo day. It was really cool. And there was sort of the VC hoopla. I was like, “Ah, I don’t know about this.” But then the founders got up there and started pitching. And it matters. That was my thought even at the demo day. And whether—some of those founders might not go on to raise a round. Some of them, their companies might be shut down in six months. Some of them will probably go on an IPO. But every single one of them matters, and it will all lead to good things. And I think you just got to have hope and faith that, come what may, it’s all going to work out and it matters.

Joe Grover: [1:00:34] Thank you, Kristi, appreciate you being on today.

Kristy Muir: [1:00:36] I appreciate it. Thanks, Joe.

Joe Grover: [1:00:37] Thanks for tuning in to The Real F Word. The real F word is failure, and remember that failure is a stepping stone; it’s not just a stumbling block. Join us next time as we continue to explore the journey of resilience and growth, without ignoring the true costs personally, professionally, and financially that comes with failure. Keep learning, keep growing, and keep embracing the real stories of entrepreneurship. See you next time.