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FULL TRANSCRIPTION OF THE INTERVIEW:

Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we have a really amazing founder. I think that you’re going to be blown away with his story. It’s going to be super inspiring and not the typical founder that starts in his 20s, but nevertheless, an incredible journey that he had when he decided that it was his time to bring his baby to life. So without further ado, let’s welcome our guest today. Sridhar Ramaswamy, welcome to the show.

Sridhar Ramaswamy: Alejandro, I’m thrilled to be here and looking forward to this conversation.

Alejandro: Originally born in India and born in a middle-class and sharing a one-bedroom apartment with your four siblings. How was life growing up?

Sridhar Ramaswamy: There were four of us; I had one sibling. It was a lower-middle-class life. There was nothing to complain about. There was no issue with food. Neither of my parents went to college, so there was always a lot of pressure on education. Do well in college. Get to a great college. Get a degree. There was palpable pressure, but it was good. It was the right dose of medicine for that time.

Alejandro: I think that’s kind of spread across because I’ve got to tell you that most of the entrepreneurs from India that I come across have a background in engineering. So at one point, I was not asking anyone that was an entrepreneur coming from India if they had a computer science degree. Why does everyone have a computer science degree? In Spain, for example, you are either a lawyer or a banker, but in India, it’s either you are an engineer or an engineer. Why is that the case?

Sridhar Ramaswamy: First, there’s selection bias in who you meet in the Valley. [Laughter] Sometimes, people will ask me questions like, “All the Indians I meet in Palo Alto are well educated and quite lucky. I tell them, “Well, those are the only people that can afford houses in Palo Alto. But there’s a little bit of that. But the first-year story is how the entire nation decides that something is a priority. I think in India, for example, right on independence, what did you do if you were someone really bright? You became a lawyer. It has become more into insurance and things like medicine. But now, I think you’re also seeing more entrepreneurship flourish within the country. These are all natural progressions. I grew up in a time when to achieve something in India was to become a doctor or an engineer, so I became an engineer.

Alejandro: That’s amazing. Let’s talk about that because you did your computer science degree, and you moved from where you were. You ended up in Bangalore. It’s a very interesting progression there on how you do your studies around engineering and how you end up in the U.S. Tell us about that transition. I’m sure it was quite a culture shock for you too.

Sridhar Ramaswamy: Yeah. Even getting into engineering at the right school was a little bit of a struggle for me. I’m sure you’ve heard of these ridiculously difficult examinations societies have to figure out which 2,000 people, roughly speaking, get in a year; 2,000 out of 100,000 people that took the exam got into the Indian Institute of Technology. The first year I tried it, I did so badly, and I was really unhappy, so I sat at home for an entire year afterward just getting ready for the exam. My parents were horrified that I would spend a whole year instead of going to some local college, but I was both stubborn and lucky. I made it into the Indian Institute of Technology, Madras. That’s where I got a great computer science degree. We were also very lucky that my friend Robbie and I were at Brown University. We were literally the first kids from the Indian Institute of Technology, Madras that were admitted to Brown. Brown was such a liberating experience. It has an amazing computer science program, but as you know, it also has an amazing liberal arts program, so I learned a lot about literature and music. All the things I didn’t learn when I was growing up, I learned in those five years at Brown and got a Ph.D. I owe a lot of who I am to the education that I got both at IIT, Madras and then at Brown. Brown made me a real person because I realized there is also a lot more than computer science and engineering.

Alejandro: This was your segue into research, so why research, out of all things?

Sridhar Ramaswamy: I didn’t think very hard about it. A Ph.D. program, it’s kind of silly, but the Ph.D. program is typically the one that will give you a scholarship. You don’t have to come up with money to support yourself. There was zero chance that my parents would be able to do it. They just could not afford to fund my education in the U.S., so a European Ph.D. because of the likelihood that you got a scholarship was just that much higher. I liked doing research. I liked the exploratory nature of doing research. I had a wonderful, wonderful advisor. He was from Greece. His name is [6:37]. He was passionate about science. A lot of that stuff rubbed off. I liked doing research early on and getting a Ph.D. It took me a while to realize that was not my passion. That is an important topic that I talk to a lot of people about. You want to find something that is both going to give you a living to support yourself but also something that you’re passionate about. I’m grateful that I was able to get a living getting a Ph.D. and then joining research, but this was not the thing that was going to keep me up until 3:00 am in the morning and make me get up at 4:00 am. I’ve done both of those in my life, and that’s when I started research. Research was a great way to literally come to the U.S. without doing a Ph.D. I doubt I would have even been able to come to the U.S.

Alejandro: Wow. Then, let’s talk about that moment where you made a decision that research was not for you. But I’m sure that research gave you a really nice base and something that you use even today for certain things about analysis or how you’re viewing things. What kind of base would you say that research gave you, and at what point did you decide that research was not for you?

Sridhar Ramaswamy: The profoundness of academic research comes from an obsession about ideas. Researchers, as you know, until recently, don’t get paid a lot. There is a lot of pride in the quality of the ideas that you generate and in peer recognition of that quality of ideas. There is relentless focus on what is that distillation? That is a lesson that I use to this day. Ask me about A Google career, or what is Neeva about? I’m able to distill things down into the bare essence of what the truth is, and research teaches you that discipline—just writing the abstract. You’re taking the work that you did for six months and creating something with six sentences in it, and whether you get accepted or not into a big conference is going to depend very much on what the person reading the abstract does. It forces a discipline in thinking that is incredibly powerful, and they use that every single day. In this conversation, for example, what is the essence that I want coming?

Alejandro: Eventually, you ended up landing in Google. That was a pivotal moment in your career. How did you come across the Google opportunity because, at that point, It was not the Google that we know today? It was still a startup to a certain degree that was coming out strong, but certainly a startup. So how did that land in your radar?

Sridhar Ramaswamy: I decided to move out of research because, at some level, I decided that it was not broadly applicable. There’s enjoying ideas, but at some point, I came to the conclusion that maybe ten people read the papers that I wrote. Ironically, it was right around the time that four papers that I wrote with my co-authors got into one of the most prestigious conferences that I also decided that I was done with research, and I needed to restart my life. We moved out to the Valley. I joined a startup. I had the perfect dot-com experience, which means that I joined the company six months later. It went public. It zoomed up to the stratosphere and then crashed down to real life. I joke to people that I sold stock in that company to put a down payment on my house. I also sold stock in the company to let me buy pizza for the evening, so it was quite the dot-come experience. I joined Google because, honestly, I didn’t have a lot of insight into how amazing Google was going to be. I had some friends who were there. I was looking for a place where I could join as an engineer. I wanted a right hook. At the end of the day, I’m passionate about creating things. I also felt like it was really important to learn, and you see this. Reset is a constant phenomenon in my life. It happens over time. Google was a reset. I went from being a director of a team with over 100 people back to being an individual contributor. There were elements of greatness. I was also exceptionally lucky that I landed in one of the two teams that were going to be so impactful for Google. I joined the search ads team. That team has, person-per-person, made more money than any other team on the planet, literally, that we can imagine. It was also a complete pressure cooker that every line of code that you wrote could cause the entirety of the ad system to come crashing down, and you would literally lose like $1,000 a second if you messed things up.

Alejandro: Wow.

Sridhar Ramaswamy: It was a great place to get going, but that’s how I came to Google, and I grew with the search ads team.

Alejandro: How many people were in Google when you joined?

Sridhar Ramaswamy: I think it was about 500-600 people.

Alejandro: Wow.

Sridhar Ramaswamy: It was a reasonably-sized company. It was going to make $1.6 billion in revenue in 2003. Those are still remarkable numbers. There are some sets of people that knew that this was going to be an amazing company, but I don’t think anyone realized, at the time, that this was going to be a trillion-dollar company. I have a funny story about the first $100 billion plan that we wrote if you’re interested.

Alejandro: Go for it.

Sridhar Ramaswamy: Eric Schmidt asked me and several other folks, Bruce, who is at Twitter now, to write a plan to make $100 billion. This was in 2007. We all thought this was a joke because which company makes $100 billion in revenue? We wrote this plan, and much to our surprise, the conclusion of the plan was roughly that if Google were to make $100 billion, it would make it with search ads, not with one of the new-fangled businesses that it was trying to create. At the time, people didn’t really want to believe this plan, but that is actually the thing that turned out to be true. Roughly in 2018 was when Google crossed $100 billion in revenue, and much of that came, indeed, from the search ads team.

Alejandro: Wow. That’s amazing. That’s incredible, but one thing that is even more incredible is that team, and also the revenue that you guys were generating, it was like 36 times the compounding annual growth rate. What was the rate, the speed of growth of that?

Sridhar Ramaswamy: Google revenue had grown by 36%.

Alejandro: Wow!!

Sridhar Ramaswamy: Every year since the time that I was there. One of my friends calculated this number for me as I was leaving. These are publicly available numbers. That is something that is truly remarkable. Outside of the pandemic and the recession back in 2008, Google has not had a down quarter. It’s hard for people to realize what a straight-lined arch that has been, and the entirety of the success has been driven by the success of the search ads team.

Alejandro: One thing that our listeners are probably wondering right now is what does it look like when you have a team, like the search ads team, that is generating this level of output? What is the culture? What does it look like being in a rocket ship like that?

Sridhar Ramaswamy: It’s an amazing team. First of all, you have some of the most amazing engineers, data scientists, and UX designers on the team. I think one of the truths is that Google is able to assemble the team without any reasonable [14:40]. It was an amazing team that came together. But there are also cultural principles that we put on top of it. This was a team much more so than any other team at Google that was data-focused. Because we were running at such scale, we always were able to get additional data about what we should do. You know how it is. People say it’s the opinion of the boss that goes, or it’s the truth from the data. This was a team that was relentlessly focused on data. I used to tell my team, “Neither you nor I can kid about the mighty dollar. Once you’re able to measure things at that scale, you become focused on that.” It was a team that took a lot of risks, and that moved very, very quickly. Some of the largest changes in business, whether it was switching shopping completely over from a mixture of an organic and paid model to an entirely paid model, are something that we call enhanced campaigns where we merged how advertisers thought of mobile campaigns and desktop campaigns. There’s only one campaign. This is a massive change on a $60 billion revenue stream at that time. This is a team that took a lot of risks and executed them because of the quality of the talent that was there. It was quite the experience.

Alejandro: That’s incredible. At Google, you were there for 15 years, and I’m sure the company that you joined was a different company when you were leaving. What did that company look like, and also, what prompted you to make that incredible decision of understanding that it was your time right now to launch your own thing and bringing Neeva to life?

Sridhar Ramaswamy: It happened in phases. The first was a disillusion with the ads model, which came because of a series of problems in 2017. Already by that time, it was becoming clear that systems like Facebook, YouTube, and even search were operating at the scale that literally nobody on the planet had imagined that these systems would be operating at. The impact that they had on people. I would say the 2016 election and the Russian interference in the election was a wake-up call for all of us in terms of how this power could be misused. Obviously, it became a scandal. Google came later. But over 2017, we had a series of problems with, you can just call it bad content on YouTube, which made me more and more reluctant about whether the ads model, whether the ads ecosystem was indirectly contributing to that kind of content. Of course, we had a lot of very painful conversations with advertisers where we had to tell them we had the problem under control only to discover that there was some other aspect offered that we did not really have under control. It was in this situation that I decided that I didn’t want to work on ads anymore. I’m an accidental ads person. As I told you and on research, I’m a computer scientist. If you would ask me, what am I? I would say I’m a software engineer. I’m a computer scientist. So ads were an accidental part of my life, and I decided that I needed out. Once you’ve been the SVP of Ads at Google, there are not that many jobs that can compare. So I also decided that I also needed a complete reset, and I needed to start over and leave Google. I didn’t know what I was going to do. I was lucky to join Greylock as a venture partner. I continue to be there. I do a small number of investments for Greylock, but essentially that period after I left Google was when I thought long and hard about what I wanted to do with my time and what innovation meant. Neeva started on a simple but profoundly core principle, which is that tech needed to go back to creating products that had loyalty to its users, to its customers. The core piece of Neeva is that creating a subscription product is going to lead to a superior product for you. Neeva is a subscription search engine, which means the entirety of my team is focused on creating a better search experience for you. Things like being ads-free and private, which is how we describe Neeva, to the average citizen in our country, if they were to say, “What’s Neeva?” I would say, “It’s an ads-free private search engine.” But it’s important to understand that ads-free private is a consequence of the subscription model. I think that technology needs to go back to simpler foundational aspects of capitalism and start serving people. One of the profound truths of the last 20 years is that the benefits of scale have gone to the creators of technology, not to you and me. The simplest example that I can give for you here is that Google roughly spent a billion dollars on search in 2010 and made, say, $40 billion, roughly. These are approximations, but they are reasonable approximations. In 2020, let’s say Google still spent only $1 billion on search and made over $100 billion in revenue. Why? That ad model is designed to channel all revenue and all profit to the creators of the product because if the product is free, how is it going to get better for you as it scales. To me, this is a problem with the ad-supported model. We reset a lot of these principles. We said, “Neeva is going to be customer-first. Neeva is going to be subscription. Of course, we are going to be ads-free and private and focused on delivering a superior experience for you, but the larger thinking here is that software should serve people.” I’ve said this before; I’ll say it again: I aspire for Neeva to be like the drinking water that comes out of our tap: cheap, reliable, and affordable to everybody on the planet and operate easily.

Alejandro: I love this. In terms of Vivek your co-founder for Neeva, Vivek’s background is at YouTube, as well, so it seems that you guys were both, to a certain degree, under the umbrella of Google. How did you guys build that meaningful connection, and what was that process like where one day, as they say, ideas take time to incubate. They are there on the backburner. Even though we can’t even realize that they are there, they are actually there incubating. What was that day where you and Vivek looked at each other in the eyes, and you said, “Let’s do this.”?

Sridhar Ramaswamy: Vivek and I have worked together for over ten years. He was a hotshot Ph.D. that came to the search ads team that I used around 2007. He had a huge impact on the team. Many of our most celebrated launches, our toughest servers, these were things that he built. He spent some years and worked on what is now called the Google Assistant. He was one of the early techs leads in that team. I convinced him to join the YouTube ads team roughly around 2014, and he worked on that team for five years. Again, there were lots of profound changes made within the context of how YouTube ads work. He and I went through the trenches, so to say, of all the brands that had issues with YouTube. These were some of the most stressful experiences in our entire lives. Once you have been through things like that, you really see what people are made of. We knew that we had a relationship where we trusted each other implicitly, and we could rely on each other. After I left Google, we brainstormed about things that we could work on. He was open to the idea of starting a company. We settled on Neeva because we loved search. He said, “We can think of this product very differently if we have different principles.” Our aha moment was, subscription search was going to be a game changer because it let you think about the product in a dramatically different fashion. That’s how Neeva came to be. There were many locks at this time and additional other places in this area, but it was really after one of those locks that we reset. We had the conviction, “Let’s go do this.”

Alejandro: What happened next?

Sridhar Ramaswamy: We started putting together a team. This was early 2019. We had a third co-founder at the time, Cosmos Nicolaou, so it was the three of us. We assembled a great team. We got the privilege of having many early Google engineers join our team. These are the people that built some of the hardest systems both in search quality as well as infrastructure. They’re all with our team. About a year later, Cos decided to leave Neeva for a set of reasons. Cos and I and Vivek are good friends. We stay in touch. Vivek and I continued on with this journey. We got our first round of funding from Greylock and from Sequoia. Sequoia was one of the original funders of Google, and there’s a certain irony in that. Bill Coren, from Sequoia, who used to run Google search for ten years, is one of our investors. He is on our board. What has happened over the last two to two-and-a-half years is that the idea is gaining momentum. More and more people are open to the idea that important products in their lives, software products in their lives, should be paid for. They want great quality. Everybody loves the experience that they get from a Netflix or from an HBO, or honestly from a Spotify. People are warming up to the idea. Where we are currently is in the journey of creating a great product that works ads-free.

Alejandro: I love it. In that sense, for the people that are listening to get it, what is the business model of Neeva. How do you guys make money?

Sridhar Ramaswamy: First of all, you can check us out on Neeva.com. That’s Neeva.com. We are a subscription search engine. We have not quite figured out the final price, but we’re confident that for a full-featured consumer account will be somewhere between $5 and $10 a month. What you get out of the box is an ads-free private search engine that does everything that you expect, a [25:57] search engine like Google or Bing are about to do. There are never any ads. There are never any uplink links, and there is a relentless focus on what is right for you. That’s the product out of the box, so to say. We can do a lot more because we think of this as your search engine because you are paying for it. You can count your personal data. If you have data sitting in Google Drive and Dropbox, like I do, you can attach it to Neeva. You can search over all of that from the same search box. You can express your preferences. If you like certain news providers but not others, that’s fine. We do that. We’re also able to say things like you want certain kinds of retailers, small ones but not big ones. You can curate what you’re searching for and what you’re consuming, and you can share it with your spouse; you can share it with a friend, and you can even collaborate. That’s the point of the product. It is very much your own search engine that wraps itself to your needs. It’s early. We are at 5,000 users, and that number is growing by the day, and we’re hoping to be in GA some time next month, and that number will shoot up. But we’re excited about this idea of creating a search engine that you’re firmly in charge of. It’s our subscription model that guarantees that all of my team is focused on creating that product for you. People are very surprised when they hear that the ads team, just the ads and engineering and product team is larger than the search team. If you put the ads product team and the ads sales team together, they’re much larger than the search team. In Neeva, all of my team is focused on creating a great product for you. That’s what we are: an ads-free private search engine paid for by customers.

Alejandro: I love it. You were alluding to it with Sequoia and with Greylock, as well. How much have you guys raised to date for Neeva?

Sridhar Ramaswamy: Building search is expensive. You have to crawl the content of the planet. You have to build very large-scale systems. We have raised $77.5 million so far for Neeva. It came in two batches. Our Series A was $37.5 million, and it was split equally between Sequoia, Greylock, and me. I invested 12.5 million alongside Sequoia and Greylock. I wanted to put my money where my mouth was. The second round was a $40 million Series B that was split between Greylock, Sequoia, and another firm called Inovia, where my friend and former Google CFO, Patrick Pichette works. Those have been our two rounds.

Alejandro: Why did you choose these investors?

Sridhar Ramaswamy: These investors, at one level, understood search, understood scale, understood what it took to create great companies. I’m very fortunate that in addition to Bill, we have Reid Hoffman and [29:03] on our board. Reed does not need an introduction. He’s one of the smartest thinkers and smartest technologies on the planet. Overall, our investors bring a wealth of practical knowledge about how to build a company. One of the things that I’m very clear about is to know my strengths and to know my areas of weaknesses. I know, for example, that I’m a late founder; I’m over 50, and I still started a company. There are strengths that come with the ability to see far, the ability to enunciate, the ability to motivate people to join the team, the relentless drive to get stuff done. I am open about the fact that I work every single day. All of that is great, but I did not have as much practical experience while I was marketing and working on a small scale. What are the latest and greatest technologies outside of Google that we know? This is where the venture network comes in, and they’ve been wonderful partners for us.

Alejandro: That’s incredible. In your case, imagine if you go to sleep tonight, and you wake up in a world five years later, and it’s a beautiful world where the vision of Neeva is fully realized. Imagine: incredible! What does that world look like when that vision of Neeva is fully realized?

Sridhar Ramaswamy: In that world, a meaningful fraction of citizens across the world, but definitely starting with countries like the U.S., Western Europe, are subscribers to Neeva. They get a great product. They feel as much passion about how the product works for them as people feel about their Spotify accounts. I don’t know if you like it. My young kids have Spotify. They’re super passionate about the product. That is part one, which is, we have created a product that people truly love, but much more importantly, I want to show that there are ways in which technology can truly just work for people. No one should be surprised by anything that Neeva, as a company, does because we want to be what we say we are with this worry-free product. To me, this idea that technology needs to serve humanity rather than technology serving itself or its owners is an important social concept, so I stress that. Just as importantly, I think the myth that quality content can be supported entirely using ads has been firmly broken. No one believes that anymore. We think of it as a core mission of Neeva to support content creation. We’re going to be announcing that we’ll share meaningful portions of our subscription revenue when we start making it, obviously, with content creators. I want companies like Neeva to demonstrate that quality content can be supported by means that are not just by asking. Of course, the New York Times now has 5 million subscribers, and it can say, “Yes. We are paid by subscribers,” but what about the longtail of other content. What about the person that is passionate about some pet topic of theirs, whether it’s like Bonsai trees or something else that is a hobby? I play the [32:34] which is a South Indian instrument. How do people like that who create great information also feel like there is a way for that to get rewarded? We really want to think of customer aggregator, which is a search engine, the platform, and how content is created in a new life, and that’s the reason we want to bring to life because the ads vision benefits the large companies and no one else.

Alejandro: Imagine that I put you into a time machine, and I’m able to bring you back in time. Obviously, when you got started with the business in 2019, the experience that you already had was remarkable. But I’m sure that you had your fair amount of lessons already with building Neeva. But if I’m able to give you the chance to have a chat with that younger Sridhar that is thinking about building Neeva, what would be that one piece of business advice that you would give to your younger self and why before launching Neeva?

Sridhar Ramaswamy: I guess the biggest piece of advice would be to think harder about time scales, what needs to be done quickly versus what needs to be talked through. It’s a challenge for every startup. At one level, it is important to focus on the here and the now because you want to create a product. You want to make sure that people like it. You want to make sure that people are going to pay for it. That pressure is relentless. But on the other hand, you are going to be there six months from now, so you have to carefully separate out what are the medium-term investments? What are the longer-term investments? What is the short-term focus? I pride myself on my ability to think about a long-arch story that is compelling but still figure out what to do today. I would say that is an area where I can still get better, but I need to [34:36]. I need to have priorities of: what do we do this month? What do we do in the next three months? What do we do in the next six months and the long-term vision? I would say just balancing that better would be one of my biggest pieces of advice. The other one would be to create a network with all kinds of other people for the whole thing from day one. Just like I need a network of other CEOs that can support me, other founders, where we can learn from each other, the engineers also need this network of people that have learned. The marketing person at Neeva needs that network of other great marketers, so having that ecosystem at every level is especially important when you’re a 40% company. There’s only so much that you’re simply going to know. I would say thinking about time scales and then thinking about effective networking for each function in the company would be the two things that I think we definitely could have done better.

Alejandro: Lastly, and while we are speaking along those lines, what is one book that you wish you would have read sooner?

Sridhar Ramaswamy: The [35:39] has actually been amazing in terms of reading. I’ve probably read 25 books in the last two years over the course of the pandemic that have been profoundly life-changing. I read Gandhi’s autobiography, an amazing book about the years 1913 through Independence by an author called [36:04]. Learning about Gandhi was profound. Learning about Nelson Mandela in his autobiography was a profound experience, as well as reading about MLK. My biggest takeaway from all of these is that there are greats among us that are truly able to see the larger need, the larger good of the people. It was very moving, very humbling, and very inspiring to understand that people like that existed and the impact that they’ve had on very large segments of society. I would say I am a better human being because I read about these amazing people.

Alejandro: Wow. Sridhar, for the people that are listening, what is the best way for them to reach out and say hi?

Sridhar Ramaswamy: They can drop me a line: [email protected]. You can also find me on Twitter: #SridharRamaswam. Unfortunately, it’s missing a letter because Twitter only allows 15 letters, and my name is very long. Or on LinkedIn, but do check us out on our website, neeva.com, or on Twitter, where our handle is @neeva.

Alejandro: Amazing. Sridhar, thank you so much for being on the DealMakers show today.

Sridhar Ramaswamy: Thank you so much. It’s been such a privilege to talk to you.

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The post Sridhar Ramaswamy On Becoming Google Ads Boss And Then Raising $77 Million To Create An Ad-Free Search Engine appeared first on Alejandro Cremades.