silicon valley is home to pioneers of the possible. from bill hewlett and david packard to mark zuckerberg, history, media, and pop culture secretly showcased the transformational stories of silicon valley. but what about women? while tech companies and venture capital firms today are starting to actively support rising female stars, women entrepreneurs often go unheralded. female founders raising series a capital jumped from 10% to 15% in 2015, but still they are too rare. fortunately for us, we have two remarkable women entrepreneurs here tonight. what can we learn from them, who have forged their own paths for innovation and impact? make no mistake, they are noteworthy for their innovation and impact by any measure. they also both happen to be women. to introduce tonight's speakers, let me share five numbers with

you. she is a venture capitalist, stanford lecturer in entrepreneurship, and self-proclaimed "recovering entrepreneur." [laughter] marguerite: in 1983, she cofounded software company t/maker, 14 years as cofounder and ceo. she served as vp of worldwide andloper relations at apple became a venture capitalist, now at dsj. she now serves as operating partner. she is also sought after as an advisor to entrepreneurs and companies -- 37 private companies that she has served as a board member, including five currently, everything from dmgt to zoox. six public companies. she has been named to numerous top lists, including top 50 women in tech by corporate board

members magazine. she is also active in education of next-generation entrepreneurs. 450 students taught at stanford, where she received both her undergraduate and mba degrees. and on a personal note, there are two other significant numbers she shared with me. two plus two, the number of kids and rescue dogs in her life. [laughter] marguerite: join me in welcoming the remarkable heidi roizin. [laughter] marguerite: our next featured speaker is a serial entrepreneur, world economic forum, young global leader, and cofounder of the leading web performance and security company. educated in chemistry at mcgill university and graduate of harvard business school in 2007, she worked with google and toshiba. three entrepreneurial ventures

founded, including cloudflare, where she is cofounder and head of user experience today. 5 million internet properties use cloudflare, 12,000 added daily. 8% to 10% of all internet traffic uses cloudflare, which was selected by "wall street journal" for two years in a row as the most innovative technology company. others include her company in unicorns, club of $1 billion plus of private valuation. recipient of many awards, 2012 is the year she was selected as one of the top 15 women to watch inc. magazine. we are very pleased that she is an alum of our next gen board here at the computer history museum. she mentioned to me that 36 and five are the number of months

old of her two children. join me in welcoming to the stage the amazing michelle zatlyn. [applause] marguerite: heidi and michelle, so excited to have you here to kick off the series. you are remarkable in so many ways. >> i want to start with, my father was an entrepreneur. not reticular early successful. it i went to him and he said, why would you do that? him the idea was if you could create your own opportunities you could control your life and

contribute in ways that were meaningful to you and things you could not do when you are part of a company. -- fortunate to be part of companies where i could do that. even though i was his female child, he used to say to my brothers much to their dismay, they are -- she is going to be the one like me. and i was. post: how about you, michelle? grew up in canada in cisco watch on, north of north dakota. it is quite amazing. i see people nodding their heads. a+ in geography. i participated in a lot of programs.

a lot of sports teams. my parents were big believers in getting involved. when i went to high school, my program me about this called junior achievement. no nelson high school was doing it.ut i fell in love with it was exposure to entree warship. exposure to different kids. we had business ideas. on them.execute we ended up making games. what i mean by making, we sawed the pieces and sold them around the city. we actually won the provincial junior achievement entrepreneurship award for this. i loved being part of it a team, coming up with different ideas. i loved the idea of making something and selling it to people who wanted it.

so it was really fun and that was my first exposure to both business and entrepreneurship, and i looked it. marguerite: horse racing. michelle: horse race games. saskatchewan, we played a lot of cards and board games because it is very cold in the winter. very cold. an important part of the museum -- marguerite: an important part of the museum is educating and inspiring the next generation. you to have both had special education experiences. could you tell about how your schooling has impacted your career and life? michelle: my dad is here tonight visiting from canada. hi, dad. my parents were very strict on -- they really believed in education. they said, you can do anything in your life, but you have to do well in school. so i did well at school so i could do anything i wanted, which was great. i remember that where i grew up, a lot of people stayed. it was very common to go to the university of saskatchewan. i got scholarships to go there,

and i remember my parents say, you can go anywhere you cannot stay here. [laughter] michelle: they worked very hard to tell me the world was much bigger than where we are from. i'm lucky i had parents who pushed all of us -- i have two sisters, and we have all moved outside of saskatchewan, which means my parents travel a lot. but i was lucky i had parents who pushed me to do that. but i remember, so i got into mcgill, a great school in canada. a lot of people said it is the harvard of the north. who knows if it is, but it is a good school. i remember telling everyone, i'm going to mcgill in montreal. what are you going to study? i'm going to study science. they said to me, doesn't

university of saskatchewan have a science program? that was the most common reaction i got because it was so strange that people would leave. for the budding entrepreneur, this idea of going against the grain -- in a way, i have always had to go against the grain because i have always had to do things that were different than people around me and do it without being ridiculed for it. i ended up to mcgill, studying science. i ended up working for many years. i really thought i was going to go to med school, and for a bunch of reasons, i realized i did not want to and i fell in love with business. i had a science degree but found myself working in business. i was good at it, but i lacked the foundations of how to read a p&l or some of the common terms, so i wanted to go to the best business school i could get

into. i ended up getting into harvard, a great business school, and that is what brought me to the u.s. nine years ago. marguerite: a great pass from mcgill to harvard -- a great path from mcgill to harvard. heidi: our parents were both focus on education. by parents were both immigrants, i'm the first u.s. born citizen in my family. my father did not graduate from college my mother had an eighth grade education. they both thought education was critically important. unlike your situation, my parents moved here from montreal. before that, they were from russia and germany, but they met in montreal and moved here. my dad got a job back in the 1950's and he used to say to me, i have been all over the world and i have picked the best place to live. [laughter] heidi: so you don't have to do that because we are already here.

when you think about it, you think about that company in the 1950's, that was really innovative. i get a kick out of driving down 101 and seeing the neon sign is still there, a national landmark now. i get such a kick out of it that that was such an entrepreneurial company in its day. i was super lucky, i was pretty driven and in some ways, driven by the fact that i did not want to -- my mother was working a minimum wage job in a high school cafeteria and i did not want that, and neither did they. i got into stanford and went there. i had to pay my own way and all of that, had to work while i was in school. i got my first job since i was here at the birth of the computer revolution.

i got my first job in december 1979. my major is creative writing, ok/ i have a creative writing degree. the idea of what you do after school was not big in my mind. it was, i love to write, i'm a good writer, i will be a creative writing person. and i had to find a job, and it turned out in the want ads, the highly sought creative writing major was -- said no one ever. [laughter] heidi: interestingly, i got this job as the editor of the company newspaper for tandem computers before it went public. i ended up going to tandem, and my job was to write about all the people there who were doing interesting things. after about a year, i said, i don't want to write about other people doing interesting things, i want to write about -- i want to do the interesting things. this is not going to motivate me. i looked around tandem and i saw everybody getting ahead was either an mba or engineer.

i felt like it was too late to be an engineer. so i applied to stanford business school. i joked that i was a diversity candidate, which i truly was -- there were not a lot of me at the business school, but it turned out that was a good thing. i had the amazing good fortune to have a computer science-related column that back then, a programmer who was my older sibling. he and i started a company together in business school. i was very fortunate. he said, i want to start this company with you in spite of the mba. so much for that degree. [laughter] marguerite: apologies for those associated with the business goals of stanford or harvard. heidi: i'm glad i did it. my mother did not value it, but that is ok.

marguerite: let's fast-forward to silicon valley. you could have stayed on the east coast. why come here to start your company? michelle: i was at business school and we started to work on what is now cloudflare as a school project. i graduated in 2009. i was actually going to work at linkedin, which in june of 2009 would have been a great job. 300 people. fast-forward to today, it is grown tremendously, gone public. i would have worked for a great boss, who is still there. a perfectly wonderful outcome. we had this business idea that kept gaining steam. it was just an idea, and we had a lot of conviction. when we decided that we were going to keep working on it, a lot of people in boston said, you should stay here or go to atlanta. and there is a huge security environment in atlanta. we said, we have to be in the bay area. we knew we required a lot of venture capital, and this is the place to be because this is

where the venture capitalists are. we needed a lot of capital to start. since then, we have raised $182 million. our assumption proved to be true. the second reason we wanted to be here is that -- what cloud -- what cloudflare does is we help computers connect faster and safer for a percent of internet traffic today and growing quickly -- 48% of internet traffic today. everyone who has seen internet scale works here. we knew that the talent either already live here or was very motivated to come here because it was the mecca for people who wanted to work on big things. either already live here or was very motivated to come here because it was the mecca for people who wanted to work on big things. that is why we came here, even though people trying to convince us otherwise. that is why we started our company here.

if i look back, it was absolutely the right choice. the question is, going forward, is this the place to keep the company? that is a different company -- a different question. but back then -- well, in 2009, this was the place for us. >> way back then. michelle: when i walked uphill to school both ways, backwards in the snow. heidi: 2009, oh my god. [laughter] heidi: i don't even want to say the year that i started. the point of is this the right place to start a company today, i know i am preaching to the choir, but if you look at these statistics of the national venture capital association, last year, there was $54 billion of venture capital invested in the u.s., 27 billion in the bay area. are you in the right place? yes.

19--, in [laughter] heidi: the funny thing is, i was here but my brother was not. he was working for the world bank as a programmer. he found -- my brother is a brilliant guy, and people would come to him all the time with data they wanted to crunch. he would sit there and write programs to crunch the data. and he realized -- and i am sure this is -- some of you are going to say, really, it used to not work this way? he had this brilliant idea to fast-track the calculations from the data so that once he wrote the calculations -- he was working for the world bank, and if you are doing something for one country and needed to do it for another company -- country, it was probably going to be the same formula -- he thought, i

can extract these and do it on a personal computer. he wrote this thing called t/maker, short for table maker, an early spreadsheet program. he wrote it in 1979. he wanted to be the ceo and for me to be the vp of everything else. he wanted to program and for me to do everything else. i had an interesting experience, goes for the first couple of years -- we started the company out here and i ran it here, but he was in washington, d.c. during the programming. we had an interesting thing, which i'm going to talk about, because i think for women -- i hope this is an empowering story. i told somebody that i was in tandem and i was going to start this company with my brother. she was the head of pr at tandem. she said, what is your title? i said, the vp of whatever. she said, you should be the ceo. i thought, my brother wrote the

program, came up with the idea. why should i get to be the ceo? she said, your brother wants to code and you are going to be the person out there selling. meeting with people, trying to get contracts and distribution and selling. people always want to talk to the highest level person when they are buying. if you are ceo, that is going to be way more powerful. second of all, in silicon valley, let's count the number of female ceos. i think we stopped at sandy. i think at that point, there was one or maybe two. no money for have marketing, but a woman ceo will get attention. i thought, interesting ideas, i will run this by my brother, what the hell. i sat him down and said, i need to be the ceo and here are the reasons. my brother, being super logical, said, those are great reasons, ok. [laughter] heidi: that is how i became the

ceo. it turned out that those were very valid reasons, and so i remained the ceo through 14 years. interesting that he agreed with me. thanks to my brother peter for agreeing with me. marguerite: great advice, and kudos for your brother. thank you for telling the stories of the founding of cloudflare and t/maker. there are always highs and lows in the early years. could you pick out one height and one low for the first year after founding? there is the euphoria and roller coaster. michelle: that is like hour-by-hour. [laughter] michelle: if you are an entrepreneur who just started or thinking about starting, those first couple years, the highs and lows are so compressed in

such a short period of time, it is physically demanding. you come home at the end of the day or week and are exhausted because this amazing thing happens, followed by a terrible thing and then five more times during the day. , there are still a lot of highs and lows, they are just more stretched out. if i think about some examples early on, when you are really small and no one knows who you are -- no one knew who we were when we moved out here. think that is the beauty, you can come here and not know anybody. it is definitely the best place to do that, silicon valley. you have to hire people, but no one knew who we were. i remember we reached out to people on linkedin and found

somebody who had a systems engineer background. he was employed as a web developer out of a big company, and we messaged him on lincoln -- on linkedin second 2009 -- back in 2009. we met with him, and the reason he was employed as a web developer was that he was a french developer. up deciding to work with us, and that was such a high because he believed in the vision. marguerite: he believed you? michelle: he believed in it and was so excited, and he stayed for four years and we are still very good friends. the fact that someone we did not know wanted to join us -- as an entrepreneur, you are in the trenches -- it was such a validating thing that i'm sure we gave each other high-fives, like, awesome, we are not crazy

or we got another crazy person to join us. that was a high point. i have had many low points. i will share one, mainly so you can learn if you are an entrepreneur. no one starts the business thinking they are going to be huge. you are solving problems about something you care about. it turns out there are some important things you should do upfront, because if you are huge, things can happen. early on, we registered everything to my business partner matthew's house, his home address. that was a big mistake. that to do ae used lot of filing because we did not want to pay for a po box, which is not very expensive -- $400 a year, but when you are a startup with no money, that is like -- $400 a year. it ended up haunting us because some hackers used his address and got his social security number, and i promise you all of your social security numbers can

be bought in russia as well. he ended up getting seriously hacked and the company got seriously hacked, and that was really a very bad day. there was a security flaw in both at&t's system and googles email system, and we were the unfortunate -- we discovered these books and had to do with ,t -- we discovered these bugs and had to deal with it, and we have since moved on. it was unfortunate that somebody hacked into corporate email because we originally used his home address. michellezatht lyn.com, which was a very big mistake. if you go there now, there is now michelle zatlyn fan club, which i have nothing to do with.

they could do something else with it, which causes me great stress. by your personal domain name, $10 a year, just do it, and don't use your home personal address for anything. marguerite: good advice. heidiraisen.com. ceo, every being a day is drama and,. them,ere to characterize i would say for me the highs and lows are product related. it is shipping a product, it is seeing it. i remember walking down the street in paris, back in the day when you put products in boxes and shift them around the world, crazy thing you used to do. being in hong kong and singapore product in the windows was super exciting. we won some awards, we would see our user numbers go up.

we would get thankful, grateful customers. they would send us things. the personal computer in the 80's was very personal. people would name them and love them. they were not that many products, and if your product and up doing something great for them, they would ship you things. and avocado farmers sent us a box full of avocados one time as a thank you. to me, a lot of the highest were -- a lot of the highs work feeling like we had made people's lives better. there were two forms of low. one was running out of money. that sucks. and doing anything to keep that company alive. that company is more important than anything, and you would be use your credit cards and sleep on couches and go without pay. my cofounder went without pay for six months one-time, not like we could afford it, it was just that we had to.

that pressure to get to the next level and be able to find ourselves. we always -- be able to fund ourselves. we always survived, but those were the lows. the other lows had to do with people, when things are not working and when people cannot get along. i would say also some of the greatest things were people. two years ago, we had the 20th anniversary of the sale of our company. at the time we sold the company, we had i think 100 employees. i had a barbecue at my house and 32 people came. out, andeople pouring many of us still keep in constant touch. the idea that we forge these close relationships, we are like family. to me, that really is one of the highest is the people -- one of the highs, the relationships

with people you work with. because you go through the tough times, that is the strongest way to forge a relationship with somebody. day to this day remains of my closest friends. marguerite: thank you. i would like to talk now about technology and innovation. -- webe, red security security, innovation is the lifeblood of technology companies. i would like to hear a story that gives a window into how you are able to not only have the first innovative idea or business model but the next one. what is behind being able to have sustained innovation? i have been in cloudflare for seven and a half years. we are about to turn six years old, but we worked on it for a year and a half first. this was not an overnight success by any means.

i have seen so many people start companies, cell companies, leave companies. people have changed jobs in seven and a half years, just think about yourself. i also get asked, how do you do it? this is just my personal perspective, and heidi may have a different one. whoe are a lot of people want to start a company because they want to be a founder. i think that is the worst reason. being employee number 500 at facebook would have been a wonderful choice, because look at where facebook has gone. they need smart entrepreneurial people to make that happen. we have just scratched the service of what is possible. we need great people to come and execute. everyone on our team plays a huge role. there are people who just want to start a company because they want to be the founder.

being the founder of a company that does not have any impact really sucks, and no one talks about that. i have seen people who have said, it really sucks to build a company that no one uses. you get stuck in what you call the rut is no one talks about it. the things that do work -- the questions i do think you should ask and we ask ourselves -- our are you solving a meaningful problem? and can you assemble the right group of people to really execute on that idea? that is where it starts. a lot of people solve problems that are not meaningful. or they do not do the right things to attract the people you need to execute. you need a big idea and the right people to execute it. there are people who have the big egos and cannot execute or people who are working on things that do not matter. what we think about all the time is, are we solving the problem?

what are you going to do to make a dent in the universe? when we started cloudflare, we were starting to rebuild the way internetworks. people laughed at us. that we are doing that and we are on our way. be big, audacious, crazy ideas, but if we were right, it would impact a lot. that is what we think about a lot. if you aren't intrapreneurial, a really easy question to ask yourself, and be very honest. if the answer is no, i cannot attract the right people were my idea is not big, you should go do something else or work at one of the companies that have big ideas, learn a lot, and meet amazing people, and there will be another opportunity. marguerite: great advice, looking for that double yes. michelle: just one perspective. heidi: i think it is a great

perspective, and i resonate with the idea of solving a problem. most of the great entrepreneurs i have worked with have been people who recognize the problem and go out to solve it. under the reasons why our company survived for 14 years -- we started as a spreadsheet company, so we would not have survived if that is all he ever did. that we went from there. i saw a prerelease version of the mac and thought, this is the future. we ended up being the fifth product is shipped for macintosh. when that was no longer the big product, we thought internet was going to be big and we started working on ideas we could do with that. we came up with ideas for remote ordering and printing and did that and ultimately sold the company. to things. one is we were looking for problems to solve. thatarted with a problem my brother was solving over and over again for customers, but we also have the advantage of being here.

when of the advantages of being in the valley is we get to see the uneven distribution of the future. we get to see things like prerelease versions of things. we get to understand and live in the world where people are walking around with ever more powerful devices and internet connectivity. except if you live in woodside -- the internet and cell phone coverage sucks there. [laughter] heidi: for the most part, we get to understand what is coming down the line, and i think the creativity is, what problems can we solve, knowing where the technology is going to be in a year or two? being able to time it against that. the one difference i will beg to is, i with you on actually work for a firm whose motto is think big. one of the things about venture

capital is that it is a funding mechanism to find really big things. i won't go into it. if you want to learn about that, there is a book called venture deals -- everything you want to know. go by the book and read it and you will know everything that would take me a few hours to tell you and i probably would not cover it all. anyway, venture is not for everyone. the vast majority of companies should not be venture-backed companies because they are not intending to have multi-hundred million dollar outcomes and be ipo'ed and that sort of things. there are fantastic numbers of companies that are solving what some people might say is a small problem. i can't tell you how many people go out and say, i have a problem, i'm going to create an app for my problem. though my god, other people may have this problem, too. it might be a really niche

problem, but if you are the person with that problem, it is awesome. if you go out and do that and write an app and you can sell 250,000 a year and charge a dollar, you are going to have an amazing life. if you raised the million dollars to do that, your life is going to sell. -- stock. -- your life is going to suck. i don't think that just because your idea is not the biggest, it is not worthwhile. the number one idea is, are you passionate about it? another entrepreneur i adore says, is it important enough that it is worthy of all your time to do it? if it is not worthy of all your time, don't do it. it might be worthy of all your time even if it is not going to make venture capitalist a lot of money.

it might solve a really important problem for a really important problem for really important set of people that you care about, including maybe your own problems. that i think is worthy. but just understand what it is, why you are doing it, how big is the market opportunity, how much money can you afford to put into it, are you suitable for venture investing? don't have unrealistic expectations if it is not going to be a venture-back of all idea -- a venture-backable idea. it is sort of a poisonous idea in silicon valley. first thing you do is print the t-shirt, then look for investors. my brother and i bootstrapped our company before we ever took in ventures, and we were profitable before we took in our first time a venture capital. it took us six years to get there -- ancient times.

sometimes i will say to an entrepreneur, imagine venture does not exist. how would you get the company going? that is how most of the world starts companies. i sound like the anti-venture capitalist. but my favorite kind of funding is customer funding, because here is why. it is non-diluted. you can sell stock to customers and still owns 100% of your company. that is super awesome. it is also validating. product market fit -- we all talk about trying to find it -- the best way is to make a product and convince someone to pay for it. that proves you have got product market fit. to me, the idea of going out and finding customers who are willing to pay for the product you create is the purest form of venture financing. i strongly encourage everyone to think about that as your first way to make money, not to last way. marguerite: thought-provoking,

good. innovation and entrepreneurship clearly is not for the faint of heart. , but maybee success don't often enough talk about failures. could you talk a little bit -- you both talked about lowe's, but could you give an example of a time where things to not go as planned? and where things have stopped at that moment, it would have been failure? what was it, what did you learn, how did you recover? heidi, either with t/maker or what you have seen at other companies. the statistics used to be that more than half of venture investments never return to the capital invested. make upe outliers that for the difference, which is why people keep investing. unfortunately, that means that half the entrepreneurs who get

venture capital will not have a successful outcome. for me, a lot of it is understanding the risks of the game, knowing you are going to offhandwork your ass this is not easy, you will live and die and breathe it. it is hard to find a work/life balance. as much as i have respect for people who start companies and have families, i did not have any of those until way late in my entrepreneurial career. i don't know how people do that, it is hard. does that mean you can't do it, but it is hard -- does not mean you can't, but it is hard. you have to have tenacity. since we have a lot of women in the audience, i would say that there is subtle gender bias. you will have more doors slammed in your face, honest truth.

my answer is, you are not going to change who you are, and i believe that being a woman can be an advantage. but if somebody slams the door, you have to be willing to wipe the blood off your nose and knock on the next door. people who don't have that drive to not fail and not take it personally will just be beaten into submission. -- whichhat tenacity is my word, i love the word tenacity -- i really believe those days are really dark and you have to get up the next day and say, i'm going to make it through. that was my life as an entrepreneur. my life as a venture capitalist is when things do not always work out, the thing i think that is important to do is recognize reality and redefine what success is in that reality. for example, there are a lot of companies in silicon valley that -- here is my joke. i will meet an entrepreneur and

say, the great news is that you have built a $10 million company. the bad news is that you blew through $50 million doing it. there are those, trust me. they are out there. vc's are unhappy because they are not going to make money , the ceo is coming into work knowing that they have an overhang they are not going to be able to overcome. there is still money in the bank and customers are buying, so let's make sure that is not a problem -- so let's pretend that is not a problem. the good news is, if you are profitable, you can live forever. one of the things i try to do when i get involved in situations like this is go to all the stakeholders and say let's redefine what success looks like. moneywe don't get all a back. but maybe eventually we get half our money back. let's think about employees and customers and other stakeholders. let's try to figure out if there

is a win here that we can affect, even if it isn't the win we all hoped it would be. and sometimes people are relieved to hear some a document that. sometimes people are insulted. sometimes there is in a win. for whatever reason, the structure in place, it buckles under the weight of its own structure. fundamentally, i would say and advise all of you, at the end of the day, structure and money and all of that aside, we are all people. i know that sounds super hallmark cardy, but we all come in with our hopes and aspirations and our investors feel that way and our customers that way and if you can peel the onion of a situation and get to the root of it, you can find a solution. but you have to give up your fantasy that you are going to be that person on the forbes list

or something. forcefully, that is a hard fantasy for people to give up. >> thank you. >> fear of failure, the thing the people of to talk about. our job is to make internet faster and safer around the world. we have a lot of customers, a lot of internet companies that use software for that. in 2012, one of our customers had a large attack and our network engineer went to fix the attack. there was a bug in our vendor's software. and i only took that system off-line, but took our whole network off-line. so for 45 minutes, add 2:00 the morning on a saturday night, all were off-line.s,

--ch is the office of the which is the opposite of making it safer and faster. [laughter] that was really not a fun time. and very stressful. network engineer immediately realize something was wrong. through ouror help escalation service and the g-8 -- the team jumped on. team got a flood of inquiries. twitter blew up. people noticed. and everybody got on. some people who live close to the office went into the office and say people called and so i'm going to answer the phones. snowbirda speech or to with my husband. i was online doing support from

2:00 in a mind to 6:00 a.m. that morning we all chipped in and rallied. fortify minutes later, on our network had been reset and all -- 40 five minutes later, all of our network had been reset and everyone was back online. it was really a stressful situation. nothing to be proud of. we were so embarrassed. the question is how much do you share? and we are very transparent. we showed them the exact rule that we push to the router. it was a juniper piece of software that had a bug in it. it doesn't matter. it was still our problem. we put safeguards in so this wouldn't happen again. and we refunded all the paying customers and we really do the right thing.

we definitely lost customers during this situation parent i think we gain more customers because of the way we handled it. this is -- we gained more customers because of the way we handled it. leader making these decisions, and end of the day, your customers are people and your employees are people. we didn't throw them under the bus. they were try to do the right thing and they asked for help right away and whatnot. it was a whole team effort. that's just one of many stories . have of where we failed justin life, what can you learn from this and make sure it doesn't happen again? and if you are always getting better, then you are in a good spot and that is how we think about it. >> great story. i want to read a quote from president obama. he said starting a business is

not easy. you have to have access to capital. you have to meet the right people. yet a have mentors and that can be especially difficult for women and young people and minorities. and others who have no is had access to the same networks and opportunities. we've got to make sure that everybody has a fair shot to reach their potential. you can't leave more than half the team on the bench. reaction or comment? gee, that's a pretty true statement [laughter] warren buffett always says it's silly to ignore women because you give up half of the brain trust. and then he says, actually, it's more than half of the brain trust. [laughter] i do think -- i think things are changing and i think the rooms like this are helping that happened.

i think we are seeing more and more female entrepreneurs. we have more women on the venture side. i think we are evening that. it's women, people of color, diversity at every level. i believe in diversity. creates stronger systems. it's true in biology. i am a big believer in it. , silicon valley has been a place that kicks out entrepreneurs. to m.i.t. and then i worked at google as an engineer pick one, went to -- harvard, you know, whatever -- you get your mba and then you started tech company. we have to break the mold. one of the things the has been

powerful about the valley is a lot of the entrepreneurship was building the infrastructure, right? it was building the guts on which all of these great, for example, consumer-facing apps get to live. most people get on a website youy day don't know that exist. ? nor do you want them to, right? they are know when shopping on the gaming side or whatever it is that they are on. one of the amazing things about why think there is a reason entrepreneurship was dominated by a particular class of a certain education and a certain job trajectory. but if you look at today, you build, there are many entrepreneurs who don't have to know how the technology works in order to start really

interesting companies that do really interesting things. as they can rely on sort of the awf and mechanical perks and whatever it is they can go rely on and various levels of abstraction that takes technology farther and farther away from the application usage. you have people who have brilliant ideas -- i said this even back in that teenager days. i don't have to know how to how to use ao know car. i consider in a car. it's useful to me even if i don't have a drivers license. entrepreneurship today, we see people looking at the technology and saying i can use this technology to solve a problem, but i don't have to be the technologist. that's why we are say more diversity in the entrepreneurial pool. on greatgot a lock problems to solve.

that is not the domain of purely engineers. i think we all can think of gray problems that we need to solve and more and more now people are going out and feeling empowered to tackle those problems. so i do see the tide shifting. it's going to take a while and i think we'll have to support each other in so doing, but i deftly see a shift. marguerite: thank you for being a part of that tonight. if i can do it, so can you. [laughter] time, i really did not want to participate in the women in technology conversation. i didn't want to get put into a box, oh, you are a woman founder. really hard. i didn't want to be part of the conversation or do any interviews about it. this was a big topic back in 2011-2012, too. i did not want to be part of the conversation. my personal opinion has changed

a little bit more. generationthe next of women coming up, i want them to. see lots of different pounds for careers and i really do think -- i want them to see a lot of different paths for careers. you get to work with really smart people and on problems that impact people around the world. and that's pretty awesome. and so i want the next girlstion, like, boys and to say this is great. i want to be a part of this. this is growing because industry is not going away. and we want people to be part of it. it's not just technology. finance needs more diversity. there's lots of different industries and also need it. if you are a woman, you should acidly stay and take the path you want to do. if you are a man, you should make sure that your team is

diverse. are you encouraging women around you to take chances? i have got reasons to where i am is because i have a business partner who think simi is michelle and -- who thinks of me as michelle and because he believes in me so much, i can get up every day and do the work. i'm so happy about that. ventured a lot of capitalists and our investors think i am a big asset to the company. and now they say i need to find more michelles for my the companies. i'm just one data point. this is a proof point that you can also do this. but again, it's lots of different roots of things. that i absolutely think that diversity is the key to be a strong team. you get better outcomes, as long as you are seeing a lot of trust and a shared vision and diversity is really powerful. marguerite: my time has gone

quickly. we have in the audience a lot of people who are mentors come entrepreneurs are aspiring entrepreneurs. so they've asked you to pick a word or a couple of words for a device. let's see what you have. tell us your word and a short expiration why. heidi: tenacity. [laughter] we rode an event here many months ago. i really do believe, what people say to me, if there is a word that you can apply to entrepreneurs, what is that word? and the thing i love about this word -- anybody can develop this. i don't think you're actually necessarily born with tenacity, right? i mean, i do believe that anybody can actually teach themselves to have tenacity. for me, what it really means is what i said earlier, that idea that somebody tells you you are ass find youa dumb

-- i had so many venture capitalists wanting to raise money. we tried to raise it and nobody gave it to us. [laughter] which was actually a blessing in disguise. if they had given us the money, they probably would have fired me in the first year for being an inexperienced ceo. but i got to learn for six years and then they actually liked me. i really believe that you have to learn to just keep getting back up again and getting back up again and getting back up again. and if you do that, one of those times, somebody actually won't keep pushing you down. so that's my word. marguerite: good word. michelle:. the big reveal. is sweat the details.

at a company, you scale things up front so they are scalable tomorrow. did he our first hundred customers was so hard. i had a cardboard that looked like this and i would color it in every day. said, when we get to an hundred, i'm going to take everyone to vegas. this five of us. [laughter] i took calls whenever anybody signed up. how did they learn, why did they sign up, what do they like about it. doing today, we are not it everyday. but we did it for a long time because you learn. a survey is not the same as physically talking to somebody. today, our marketer was trying something new. and i said did you look at the customers who signed up last week. 12,000 signed up yesterday. by 12,000 is not that much. that's not scalable.

to get to scalable things, you have to sweat the details and do on scalable things at first. you do things that are unprofitable to make them profitable. no, you can't write programs until you get to the details. for a long time, i did customer support for software. i don't anymore. you want to be there in the details. and again, that's what i love most about my job. sweat the details. it matters. marguerite: let's get the audience into the conversation. a terrific group of questions here. lots of people asked to this. returning to the question about being a female entrepreneur, if you don't mind. what specific areas do you feel being a female entrepreneur is an advantage or disadvantage? and how do women overcome those disadvantages together?

so i definitely look different than other people on our team. on our management team, we have a couple of women. we bring in different points of view. we are approach things devoutly. we are collaborative. some of these generalizations. meetings, they are better when i'm there than when i'm not. i pull strings and i like doing those sorts of things. early on, people said things to me like women don't believe in it for structure. [laughter] that didn't feel so good. behind a want to hide wall and throw a rock at them. [laughter] i don't walk around all day thinking i'm a woman. otherwise, i would never get my job done. that's exactly right.

running a business. i'm an operator. i think it's good to be surrounded by good people. am -- if i am in a position to stand up for myself, i will. otherwise, you have to spend less time with that person. it's much healthier and way more fun than just talking about all the things i wish were different. that's kind of how i think about it. there are great people out there. find them. heidi: yes. i would lean on that and underscore it. i found in my life that easiest thing to do is be myself because it's easier to remember, right? [laughter] if you go and try to be someone else all their long, the amount of time you spend doing that is really hard. if you're just yourself, it is a lot easier. but what i came to learn, and i

think this is a female thing, women in particular want to be like. -- to be liked. but if you spend all they try to be liked, you will be very effective. that doesn't always make you popular, but i believe in the end, it does make you respected. nearly especially in days, i would literally go to a meeting like this. there would be a hundred people in the room and i would be the only woman. the interesting thing about that is i got really used to it because i was the only woman lots of times. so i didn't think of myself as being different. i was looking at a sea of men. joke that, if you are in a sea of people and you are the only one that is different, they pretend that you're the same.

that's why my dog thinks it's people. [laughter] on the other hand, i never saw myself as being different. but when it was to my advantage, i was different. i went to stanford business school in the early to get a revolution days. people like steve jobs and bill gates or whatever would come and speak to our class. at the end, there would be 20 students gathered to ask questions. i was in only woman. i always got to ask my question. [laughter] so that was good, right? i was gender blind, i was one of those women things, i hired a lot of women. -- in our% female and company upon his career at one point. we were at macworld and we were doing a demo's. at some point, two guys were standing there and one of them said, well, i'm just here because this is the booth with

all the babes or this is the booth with all the women. [laughter] and then we looked around and there were nine of us in the booth, nine employees, and we were all women. and we were, like, oh, my god. that we hadalize all women in the booth. they thought we had done it as a ploy [laughter] . i do think that you can use it to your damage. but i would say, trust your gut. if you are in an environment where you think you are not being supported, you are probably not being supported. because if you feel that way, it is probably troop your you need to find an environment where you are supported. luckily, there are lots of those environments today. culture isuld say really hard to change and there are certain cultures that are not evolved in this way. and if i were a woman today and i went to work for one of those cultures and i felt it, i would

probably go and find another are othercause there cultures that realize it and empower women. if you are already that woman that understands that, you are going to do better anyways. so if you are voting with your precious time to go work somewhere, go work somewhere that has artie figured that out because i bet they are going to that hasuccessful -- already figured that out because i bet they are going to be more successful. marguerite: what is the most exciting thing you are working on right now? [laughter] gosh, when you work for about a dozen companies, you can't pick one to be a favorite. thus like fate -- like naming your favorite child. michelle: and your daughter is here. heidi: yeah. joke.e a long running i have two children. we have a long-running joke about that. but i will check that here. not going to answer with a

specific company. whatoing to answer with i'm most excited about about my work. the cool thing about being a venture capitalist is you don't actually have to have any good ideas. you just have to smell it when you see it. and you have to get people with really good ideas to want to come talk to you about them. use of a big number, right? -- you saw that big number, right? road, table stakes, right? [laughter] the problem is lots of people have that many in silicon valley. money is a commodity. what we have to do is get entrepreneurs to want to come to us because of verification is being thoughtful people and entrepreneur really -- entrepreneurly friendly. that stuff i really love to do. and i have a partnership where we all of to do that. so for me, every day, i get to

meet with people who are genuinely try to change the world. and sometimes, i get to work with some of those people. some of those people are in the room tonight. that just makes you want to get up early every day. am -- t tgim. [laughter] it'serite: thank goodness monday. i'm probably talking to somebody who works all weekend. heidi: what else would i do? [laughter] marguerite: so, michelle, how about you? -- i: michelle: things that you see hard, you make easy. these whole threads --

let's say there's a new exploit that comes out. we can basically patch that in real time for all of our customers and they can go and update their server so we are basically acting like a shield in the interim. we are doing that all the time. some of the things we've been ,orking on this week is traffic encryption traffic. this is a huge trend. back in 2014, only half a percent of all internet traffic went over hd gps -- https. that's nothing. we have helped make that easier. we make it simple and cheaper. today, we play a big role in it. 10% of the internet goes over encrypted traffic. if you remember back the apple-fbi, encryption was a very hot topic.

scenes are a lot of very smart people, people who are part of the crypto community , cryptography, a lot of the underneath math and science to make sure all the standards behind making sure encryption works are off to snuff. it's like the next standard. we made that available to all our customers this week and we are the first on the market to do that. so now every single customer is now over the most secure encrypted -- to make sure you have confidence around this encryption. it is amazing that we are first to market. we are a six-year-old company. and we are able to come to market. we are patching in a real-time. that's just one example.

things a lot of other coming in and next several weeks that are these examples of pushing new standards. hard, weat you see so make so simple and we patch it in real-time. that's what we are excited about. marguerite: very exciting. the next question is about talent. what qualities do you look for when you hire? and what qualities do you look for when you invest? definitely people are curious. we are changing all the time. if you want -- we love people who are curious and you want to learn. what are yousk working on, i love that. i always say start middle end, people who get things done.

there is something to getting to is useless.e you have to get over the finish line and that is such a scale. not everyone can do it. you have to start the project and and the project. some people love that environment and some people don't. so star, middle, and. just momentum. those are the qualities we look for. marguerite: fantastic. heidi: i wish there was a perfect answer to the qualities and you could people fill out a form and know who you are going to back. it doesn't work that way. everyone is different. but i would say the things that typify the entrepreneurs that we gravitate towards and the ones who have been successful is a voracious willingness to learn, a voracious curiosity and willingness to learn. they listen to your comments. they come back the next day with more questions. they will challenge you. if they don't agree, they will

be thoughtful about it. so people who are constantly in learning mode, the one thing about entrepreneurship, very often, you are making something out of nothing and you are making something new, which means there isn't a playbook for what you're doing. therefore, you have to be a voracious learner. , in somether thing is cases, it is really awesome to have subject matter expert. most things are built on the shoulders of the things it came before them. and so the kind of entrepreneur who has this curiosity and is willing to try to start a company but also has deep domain and strategic the feel that they are trying to disrupt, it's really powerful. what's interesting about that is it isn't always that way. i can think about a hundred examples where that is not true, but i really believe that. that's why entrepreneurship is a team sport. that's the other thing.

is no -- with rare exception -- there is no single entrepreneur you invest in. least always looking at two, usually three people. and team dynamic is one of the most of the things. and team risk is one of the most abortive problems. so for us, it's not only looking at the individual. but when you are to entrepreneurs and you're in a meeting and you are pitching us, we are watching the dynamic. arere watching if you finishing each other sentences are talking over each other. we are watching how the interplay goes and have a dynamic goes. one of the reasons why venture capitalists choose a team over time -- when i was an entrepreneur, i would walk in and say here's my plan, give me the check. [laughter] capitalistsventure like they are the ogre under the bridge and the money is on the other side of the bridge. so you get them out of the way and go get the pilot money. [laughter] from the venture capitalist

perspective, we are in the room with you thinking can i spend the next seven or nine years with you and i'm not on to be driving print i will be in the back and you are going to be driving and i have to trust you. i am the minority owner. you are the founder and ceo. the reason why we want to have multiple meetings is we are trying to figure out cannot work with you for many, many years. and i find that entrepreneurs that come in are very self-serving. to entrepreneurs who come in the vc meeting also understanding that it is going to be a pressure-filled, , that is relationship what it's about. not justot -- it's about saying the secret word to get the money. [laughter] talk aite: can you each bit about how are you adopted networks? how about advice for new

entrepreneurs who have not yet established networks. michelle: i came here with no network. so it's possible. there's a couple of things. early on, there's so much a -- it's so much easier to get information than it used to be. follow people on twitter come all these different folks are blogging about their experience. you can feel like you know people without ever meeting them. [laughter] like i can do all of that. bed, i'm reading tech news, tech blogs, tick everything. it's part of my job. there are people who have gone out and made things and made mistakes and blogging aboutt. it's my job to be consuming this so you can build a network without ever meeting anybody. you start to make progress, again, i think people are vy

open and willing to teach you in the valley. even if you don't live here, you come out for a week and have one meeting, meet people at the coffee shops, just being physically here, as long as you n communicate, you will start to meet people it is up to you to nurture that. and whether you follow up with those people or add them on linkedin and say, i was thinking about you. would you like to do ts or that? once you start to gain traction you canr business, if find a way for people to come to you, it's really, really powerful. so everyone does that in different ways when you start a company like a y c. you don't have to have a network. that's a great way to do it today.

other incubators. we saw a competition called tech crunch disrupt. .o one knew who we were we were so new the radar. afterwards, everybody wanted to know who we are. data, customers, i've never heard of you. the job of every venture capitalist is to find out what is going on. so all these associates are, like, i don't know you. i need to find you. all he said in they are rushing to meet us. partners and users of people who cloudflare. at the biggest thing is following up with people. it is shocking how many people just don't do that. and when you see someone, oh, we met a year ago at the natural

history museum. for some people, i just make it easy for them and, oh, yeah, now i know who you are. very simple, but easy. marguerite: great tips. michelle: i like your comment, at the end of every meeting, what's the one person you think i should meet? who's that one person? who's willing to make the intro? this is such a cultural melting pot. how many of you were worn here in the valley? not a whole lot, right? so most of the people here had to come here and build their networks from nothing. so i think we are an open and generally hopeful society. i think we are that way because entrepreneurship is not a zero-sum game. there's a lot of where, if i win, you lose. example, ifa living two people were together, both of them can succeed. you make the pie bigger.

i do believe we are very open to that. me, the recommendation i would make for people is, if you're going to ask some buddy for a favor, make it as explicit and easy to -- somebody for a favor, make it as explicit and easy to do as possible. they did it in a way that was easy for them to ask instead of an easy way for me to do it. students will say this to me. i would love to pick your brain. can we be for coffee. and, by the way, i don't have a car. can you pick me up and bring me to stamford. [laughter] otherwise, i have someone who i'm at stanford, i could

join google or join my friend's startup. i would love to pick your brain. can i talk with you for five minutes. i would love to talk to that person just to find a how that story ends up. to me, be really explicit in your request. and the other thing i tell people, particularly those people starting out, is put a linkedin profile in your signature or put something there that in one click i can find out something about you. don't send me five pages about you, starting with where you are born and stuff like that. people will ask you for something and they will send me three-page email. the first thing i do is look at the very last sentence because that is where the ask is. don't make me read three pages to get to the ask. there are some anyways to find out about people and their so -- there are some anyways to present yourself in a nice shorthand way.

we are all used looking at linkedin profiles. that's a me is a no-brainer. if you don't have a url with a website where it's your website or you are one of very few people on it, put a linkedin profile. that is an easy way for people to get you. marguerite: what a fantastic way to end? we will always remember this night. details, tenacity, and along the way many details in the conversation. thank you. [applause] >> coming up on washington journal, we talked to the american federation for children about president elect trump's selection for education secretary.

carol anderson on her book wide rage. she argues for out history, black progress has been met by what she calls white rage. >> join us on tuesday, january 3, for live coverage of the opening day of the new congress. newh this wearing in of the and reelected members of the house and the senate, and the election of the speaker of the house. day live coverage begins at 7:00 a.m. eastern on c-span and c-span.org, or you can listen to it on the free c-span radio app. now intelligence and security officials talk about surveillance and privacy concerns. the discussion includes computer hacking by foreign governments.

the cato institute hosted this conference. mr. sanchez: welcome back to the morning session of the cato institute's 2016 surveillance conference. we heard a lot on our first panel about hacking by the russian government, but our

government too increasingly finds it necessary in an era where crimes may take place entirely in cyberspace to engage in computer network exploitation, hacking as a mechanism of conducting searches, ideally searches authorized by the fourth amendment. this raises a welter of questions. is searching via hack different from conventional physical search or indeed from wiretap? is the recent change to grow 41 of criminal procedure bending the authority and using hacking techniques as an appropriate mechanism, or is this something that congress should develop its own framework for? what should the posture of the intelligence committee toward vulnerabilities that were discovered, vulnerabilities that were not disclosed leaving routers manufactured by many companies vulnerable? to address these and the difficult questions of how to regulate hacking by the government for for law enforcement or intelligence purposes, we have a fantastic panel that will be introduced by one of the best national security people out there. we have relied on her excellent

work over many years. ellen nakashima of the washington post. ellen: thank you very much. thank you to cato for sponsoring this conference and panel. i'm going to introduce the panelists now. to my immediate right is kevin bankston, director of the open technology institute at new america think tank for the digital age. to his right is amy stepanovich, a surveillance and cyber security expert at access now. to my left is we have matt blaze from the university of pennsylvania. to his left is richard downing, acting assistant ag in charge of cybercrime investigations. so, julian gave a good and concise introduction to the issues, so i think we will dive right in.