This is an interview that ran in my high school alumni publication earlier this year. I call it my “Vanity Fair” interview because most likely my high school newsletter is the closest I’ll get to a Vanity Fair interview. It was fun to talk about all the things I’ve done since high school – the good, the bad and the ugly. Truth is, I’ve won big and at times I’ve failed even bigger. But it’s all part of doing what you love and as I said in my speech to the University of Washington, ‘doing something that scares you.’ Feel free to share your stories of winning big and failing big. I love to hear them!
Neal Dempsey graduated from Clover Park in 1959 and has gone on to great business achievements as a venture capitalist, board member and mentor to entrepreneurs. For the CP class of 1959 website, Neal sat down with Jane Gideon, one of the CEOs he advises, to give us a candid view on his successes, disappointments and the one thing he wishes everyone would try at least once.
Neal suggested we meet at a Starbucks near my house, which was generous in more ways than you might realize. First of all, as a certified grande-soy-no-water-chai-with-cinnamon Starbucks addict, I truly appreciated the gesture to feed my needs. Second, my house is located in San Francisco. Neal lives about 45 minutes outside of San Francisco. Unlike most executives of his caliber, he volunteered to come to me rather than make me drive to him. If you knew the mileage on my car, you’d understand what a treat this really is.
I knew this story was for a high school newsletter, so I started by asking him what he was like in high school.
Neal: “I was pretty average. Nothing spectacular. I ran for class president, I think, but I didn’t win. Didn’t play varsity sports. Wasn’t exceptionally smart. Just average.”
Jane: “What about college?”
Neal: “I went to the University of Washington. My mom was the first person in our family to graduate from college, so she was a great encouragement to me, the second person to graduate college. I recognized that UW wasn’t bringing someone with big talents into the school. In fact, my son always says, ‘Dad, how did someone as untalented as you become so successful?’ It’s a family joke. But I was always grateful that attending UW gave me a chance to be something more than average. Years later, when I was out of college and working in the business world, I was at a UW fundraising event. They were raising money for scholarships, and I really wanted to give back. So, I pledged some outrageous amount of money, or at least an outrageous amount for me at the time. It’s all relative. The point is, the pledge amount was so ridiculous I didn’t dare tell my wife about it, and I certainly didn’t have the money. It was an impossible leap. Took me a few years, but I finally made good on that pledge.”
I would later learn that Neal more than made good on that initial pledge. The Dempsey Foundation is a large donor to UW these days, and the new Dempsey Indoor practice facility is named in his family’s honor. Made me want to go sprinkle the non-profit world with checks I can’t cash but fully intend to. Probably not the message he was trying to send.
Jane: “Did your wife ever find out?”
Neal: “Eventually she did. She knows now.”
Or she will after this article appears.
After graduating from the University of Washington, Neal began his career in business. He worked his way up the corporate ladder until he eventually became the CEO of a technology company.
Neal: “I was a CEO twice, and both companies failed.”
I was surprised by his directness about this. Most people sugar-coat failure, and he just said it straight out. I suspect his definition of failure might be slightly different than mine, but it was clear that he truly considered his CEO stint to be the low-point in his career.
Neal: “Looking back, I realize I relied too much on what I knew well, which was sales. It looked like I was doing something hard, but really, I was sticking to what I knew and trying to apply it to a different environment. The key to being successful at anything is to do what’s hardest for you, be it finance or whatever. Tackle the one thing you don’t want to do, and figure out how to do it.”
As the CEO of a company who has wandered so close to the border of collapse that I could feel it grazing my behind, I am constantly in fear of actually crossing that line into the abyss of failure. So, I had to ask, “What happened? How did you get through it?”
Neal: “I felt defeated. I had a lot of self-doubts. I thought maybe I can’t do this.”
He paused in thought for a few seconds. Those years are far behind him, but I guess the uncertainty of that time is still easy to recall.
Neal: “Things were rough for a while. I had a family and children to support and wasn’t sure how I was going to do it.”
That’s when Neal got a call from the founder at Bay Partners, a venture capital investment firm in the San Francisco Bay area. The founder of Bay Partners had been an investor in Neal’s last company and Neal had impressed the investor with his management skills.
Neal: “I thought I had failed, but the founders at Bay admired what I had done for some reason. I think they liked people who worked on Saturdays. One day when I was still a CEO, I was having a Saturday staff meeting and one of the Bay investors happened to drop by. He stuck his head in for a moment and nodded, then went on his way. The timing was exquisite! I think he always remembered me as the guy who worked on Saturdays. But they did like how I managed people too. One thing I learned as a CEO was that developing people skills led to better results than number crunching or even astounding innovation.”
Jane: “So, the founders then brought you on as a partner?”
Neal: “Oh no. I had to start at the bottom again. I was just an associate. My peers were ‘kids’ with newly earned MBAs from prestigious universities.”
In his mid-40s, Neal Dempsey, a former CEO, took a role as an entry-level associate with Bay Partners. I think this is where true achievement and guts are found – in the humbling ability to start again, no matter where you are in life and no matter what title you think you should have.
Neal: “I have always been just a little bit insecure. Either I wasn’t an MBA graduate, or I was too young, or too old or not a rocket scientist. I always felt like I had to overcompensate for something. So, I took my insecurity, and made it work for me. I always outworked everyone in the room because I felt I was one step off.”
As a firm associate, Neal was charged with evaluating businesses that were looking for funding and identifying those that were most likely to provide a significant return on investment by either selling or going public.
Neal: “I remember cell phones had just come out and they were big, bulky things with a long antenna. And the car phones had to be installed in the car. Anyway, in one month I ran up a $1,000 phone bill, which was insane even for a corporate account back then. But the partner who had brought me in because I worked on Saturdays just said, ‘Ah, just let the kid go. He’s making deals. Let’s see what he can do.’”
Neal chuckled as he told the story. He seemed like a ‘kid’ now too – the kind of kid who was still young and precocious, but also there was a hint of another kind of kid. The ‘Billy the Kid’ who might just try something daring and surprise you at any moment.
Jane: “Ok, you’re an entry-level associate with a very large cell phone bill. How did you move up from there?”
Neal: “I started listening and learning. I met with entrepreneurs, other VCs, the partners and I just started getting to know the business. One day, I met this entrepreneur who had a small coffee company and had opened several stores, two of which were failing. Yet, there was something about this guy’s passion and determination that I really liked. I went to the founders at Bay Partners and encouraged them to invest in the company, but no one was interested. So, I made a small personal investment from my own money.”
Jane: “Was the company successful?”
Neal: “Yes. It eventually did very well. That’s when I knew I had a knack for being a VC.”
Jane: “What was the company?”
I looked around at the hallowed halls where I was gripping with complete pleasure my grande-soy-no-water-chai-with-cinnamon.
Jane: “So, one of your first investments was Starbucks? As in the place we are sitting right now?”
Neal: “Yep. The entrepreneur I met was the founder of the most popular coffee shop in the world, and I was so impressed that he had this simple idea and no matter what happened, no matter how many obstacles were put in his way, he just kept going. He found a way to overcome. That really stuck with me, and that’s what I’ve always looked for in every entrepreneur since. I look for other indicators of success as well, but that commitment to the business, the products and the people and ability to just keep trying is what makes me invest in someone. In the end, I invest in people.”
Jane: “How did I not know about this Starbucks investment of yours? I mean, Starbucks is not just a corporation. It’s an entire social culture.”
Neal: “I know. People come here to get to know more about each other, like you and I. They come here to hire people and sometimes to fire people. It’s more than a coffee shop. Starbucks changed social behaviors, which is probably greater than anyone envisioned. The company did well.”
Uh, yeah. And so did Neal Dempsey.
Jane: “Seems like being a VC was your calling.”
Neal: “I love being a VC. Every day is new. I meet smart people with wonderful ideas and smart people with terrible ideas. But I never discourage anyone. You can’t take yourself too seriously in this business. Every company I know of, from Starbucks to Google, has struggled mightily. As long as you learn something and keep working at it, things will eventually come together, whether it’s with this idea or the next.”
Jane: “Now that you’ve reached a certain level of financial and personal success, what’s next?”
Neal: “I’m very involved in a non-profit called Families First. They help emotionally and physically abused children, many of whom are raised by extended family or friends. I was particularly impressed with their ‘wrap-around’ program because it reaches the child’s entire support network and offers tools to enrich the lives of everyone involved with caring for the child. When I met the founder, he was having challenges like any other business I might work with. He had a great vision and a drive to succeed, which in this case meant making a real difference for families and children. But he was doing the same thing I did as a CEO – focusing on the social work he loved so much and often ignoring operational efficiencies. So I helped them put in some operational and financial policies and procedures. I also volunteer to mentor the kids when I can. The work is one of my great passions because it is so rewarding. The outcomes are incredible. The program helps entire families cope better and I get to watch the transformation from struggling and surviving child to functioning and contributing adult. It’s inspiring.”
If someone was interviewing me for my take on life and success, the story would end here. Financial success, a good family, community involvement, and free Starbucks for life. I’d pretty much call it a day right about there. But I’m not Neal Dempsey. I suppose every person needs a challenge. We seem to be built that way as human beings. Either we let the challenges come to us, or we go out and get them. Neal was not about to relax and wait for anything to come to him. So, he got out there…in a big way.
Neal: “A few years back, my best friend Jim was visiting the Matterhorn with his wife and got a crazy idea. He called me from Zermatt, Switzerland and said, ‘We’re going to climb the Matterhorn by the end of the year.’ I had climbed Mt. Rainier, so I at least had some notion that this was a hard thing. I’m not sure if Jim really got how difficult climbing the Matterhorn would be. But sure enough, a year later, we climbed it. And that became the first of many adventures.”
Jane: “You climbed other mountains?”
Neal: “Yes, we’ve climbed six of the 7 highest summits and we sailed around the world.”
Jane: “How long did it take you to sail around the world?”
Neal: “We did it in pieces. Maybe one to three months at a time. I had to take a break when we hit the Galapagos leg and fly home to run a marathon.”
Right. Because sailing around the world can be so trivial one must throw in a marathon here and there to keep on one’s toes.
Jane: “You stopped your ‘sail-around-the-world’ trip to run a marathon? Was that really necessary?”
Neal: “I had already committed to it. I said I would do it, so I did.”
Jane: “You couldn’t skip it, just this once? I’m sure they would understand that you are otherwise engaged and out of the country….out of every country…in the middle of the ocean. Surely there are exceptions for these kinds of things.”
Neal: “I was ready for the time off. Sailing around the world is great, but it’s like being with your family 24/7 for months at a time. You’re with the same people in cramped quarters for long periods. It’s good to get away for a bit.”
Jane: “Noted. Were there ever any really scary moments in your sailing adventure?”
Neal: “The last segment from Perth, Australia to Cape Town, South Africa was the most treacherous. There were more times than not that I thought we weren’t going to make it. It’s very rough waters – some of the roughest waters in the world and at times, I thought the boat would break.”
Jane: “Didn’t anyone say anything, like ‘hey, what do you say we go home now?’”
Neal: “No. Everyone was pretty silent the whole time. I mean, I remember thinking that I volunteered for this. No one made me do it. But I didn’t say it.”
Neal: “Because we were all too wide-eyed scared to say anything. We’re a bunch of men on a boat that I’m pretty sure was about to break in two. You don’t talk. Just sail. Finally, we made it to Mauritius, and we had to stop for a while. We ended up staying there longer than planned because we had to send off for boat parts so we could do all the proper repairs.”
Jane: “You’re pretty much shipwrecked on Mauritius. There are worse things, I suppose. So, you stopped, right?”
Neal: “Of course not. We had to finish what we started.”
Jane: “Really, Neal? Did you have to?”
Neal: “Well, we weren’t foolish about it. Jim and I had seen enough to know when to push forward and when to wait. Once, we were climbing a mountain and these other climbers were following us. We had guides, of course, but they were alone, so we let them tag along with us. A few miles up the mountain, a big storm moved in. We set up camp and decided to wait until conditions cleared. But the other climbers said they had to catch a 6:08 flight out in three days, and they pushed ahead. They didn’t make that 6:08 flight. We found their bodies a few days later lodged in the snow. Sometimes, you’ve got to be willing to miss the 6:08 and come back next year and try again when circumstances are more conducive. It’s good to reach a goal, but it’s better to be smart about it. So we waited on Mauritius. We fixed the boat and when we were ready, we moved on towards Cape Town. It was a rocky, dangerous trip. Every time we reached a shoreline on the trip, we were always happy. But when we made it to Cape Town, there was a big hallelujah.”
Neal’s experience in life has been to take the ordinary and make it extraordinary by doing the unreasonable. He started out average, but the University of Washington gave him a chance and he made the best of himself. He’s traveled the world, but not in the comfort and luxury so many choose. Instead, he sailed from island to island, continent to continent, and climbed summit to summit, getting a glimpse into parts of the Earth most people never see. Even as a business man, he takes the regular person with a good idea and guides him or her towards huge success, like Howard Shultz of Starbucks or the entrepreneurs Neal encounters every day.
Jane: “Most of us won’t be able to sail around the world and I speak for myself when I say I am not interested in climbing a vicious mountain just to say I did it, especially after that dead bodies story. However, I do admire your tenacity to make things happen. What’s the one thing you hope people will take away from all your adventures in business and life?”
Neal: “The one thing I wish everyone would do just once is get out. Get out of what you know. Do one thing that scares you. Get outside of your box and do something without fear, whether it’s related to your business, family, religion or even an adventure. Because you’ll find out you can do it, and that’s when you feel most alive.”