Welcome back to our podcast: Tales from the Trenches, which has returned after a six-month hiatus. On today’s episode, Remus VP of Communications Molly Donovan chats with Krishna about his tenure as CEO of Presto Automation, the first Remus portfolio company to go public. Krishna shares his insights about being in the trenches as CEO, his thoughts on how his approach to investing prepared him for the role, and the lessons he learned that apply to founders and CEOs more broadly.
Listen by clicking play above and/or read the transcript of the conversation.
MD: Welcome back, listeners, to Tales from the Trenches. It’s been a while, because Krishna has literally been in the trenches. In March, he took over as CEO of Presto Automation, which is the first company in the Remus portfolio to go public. And now, about 6 months later, his tenure as CEO has ended, but he remains Chairman of the Board at Presto. So today, we’re going to chat with Krishna to get an inside perspective on the experience, what he learned, and why Remus’ building, not betting approached enabled him to do a better job when he was in the trenches as CEO.
So hi, Krishna, and welcome to your own show.
KKG: Hey Molly, it’s great to be back. It’s great to have our show back, and I’m excited about this conversation.
MD: Great. So let’s jump right in. It’s pretty much unheard of for a venture capitalist to become a public company CEO of one of his own portfolio companies. So, how did this happen?
KKG: Yeah. Well, it was not something I expected. You know Raj, the founder and CEO of the company, who did a great job taking the company public, he just — unexpectedly to be honest — resigned. He was burnt out. He wanted to spend more time with his family, and I think that’s totally respectable, but it’s not something that we as a board were expecting, and not something that we had necessarily planned for. And so we had to find someone within 24 hours, and the board asked me to step in. I decided that I was going to be the best choice for shareholders, and since I’m the largest shareholder across all of our vehicles, that mattered a lot to me. And so I stepped in. And it was a whirlwind couple of days for me to do that, but I found myself as CEO of a public company, which was a new experience for me, and it was a new experience for our firm. But that’s kind of how it went down.
MD: So what do you think are some of the advantages of having the CEO and the largest shareholder, because you are the largest shareholder across a couple entities at Presto, what do you think are some of the advantages of having those two roles be the same?
KKG: KKYou know, I think it’s actually amazing. It doesn’t happen all the time, because usually the largest shareholders are investors, as we are in this case. But it was such an amazing alignment of interests, and it was such an incredible feeling. Because everything I said and did, I could do so authentically and really mean what I was saying, whether that was to our LPs or to the board or to shareholders. The alignment across board, shareholder, and management team was nearly perfect. And that’s a CEO’s job: it’s to create value for shareholders. My fiduciary duty to our LPs is the same — it’s to create value for them. So I could be much more authentic, and I felt like as CEO I could be really impactful in terms of what I was doing.
MD: Yeah, that makes sense. And I’m guessing it took a little while to get into that good groove. What was your reaction after immediately stepping in, and how did other people react?
KKG: It was wild at first, right? Imagine being an investor — who, granted, is very involved in our companies — who for almost 15 years had been an investor and a board member, and always one step away from actually being able to make decisions and drive the business in certain ways. And you know, that’s a role that we’ve accepted over time.
And so suddenly 24 hours in I held controls and I was on the management team. I was on the other side. You know, when the board would meet with us…I’m used to sort of caucusing with the board afterward, and here I was caucusing with management. It was a huge flipping of the tables in some ways, and it was a learning experience for me.
Now the other side of that coin is that now you have to answer to a board. And candidly, I haven’t answered to someone in a day to day way in that way frankly for more than a decade. And I went from being chairman and largest shareholder to suddenly answering to the board. And that wasn’t an easy transition for me, candidly. It taught me a lot for sure, and I think I’ve learned a lot about everything — how to empathize with the CEO and how to manage a board and also how to communicate with a board, but that was the other side of that coin.
MD: In your role as an investor, you give advice to CEOs and to high-level management a lot about interacting and interfacing with the board. Would you change the advice you give to CEOs in your portfolio now that you’ve had this experience, vis a vis talking to the board and interacting with the board?
KKG: Yeah, it’s a great question. Like I said, there’s a greater sense of empathy that I have having been CEO in a high pressure situation of a public company.
You know, I start with the principles we have at Remus, some of our values. And I would say two of the values that continue to stand out to me are authenticity and audacity. I think it’s really important to be very authentic in how you communicate to the board. And that doesn’t just mean sharing with the board what’s going wrong, which is obviously where it starts. But also being clear about what you think is the right path to create shareholder value, which may not always be the easy path. And so I think in part because I had a pre-existing relationship with the board, which was more of a peer-level relationship, I felt compelled and more comfortable to be able to tell them, hey I think we should do this differently, or I think we need to go pursue this crazy idea. Now, my style is much more…frankly, I’m a little brash. I’m very direct.
MD: You’re kidding.
KKG: Everyone who’s worked with me will agree with that. So I can’t say I’m the most politically savvy operator of the board, but I think authenticity is an important trait for a CEO. Because at the end of the day, what you really want to ensure is the right decisions get made, and if the CEO is not being very clear about where he or she thinks the company should go, by definition you know the right decisions almost certainly won’t be made.
So even when boards push back…I’ve seen plenty of situations as a VC where boards have pushed the company into making bad decisions for shareholders. And the CEOs don’t agree sometimes with those decisions, and they know in their heart of hearts that that’s the wrong decision for shareholders, but they get pushed into doing that because of the board. They need to speak out in those situations in a respectful way, in a collaborative way, but they need to speak out.
The other side of that is audacity. So, I think especially on public company boards, there’s a tendency to sort of gravitate toward the path of least resistance, the path of least risk, a reversion to the mean, almost a reversion to mediocrity. I think it’s really important as CEO to be audacious in how you think about what the company should be doing. Should we think about it expanding or increasing sales faster? Could we be much more iterative or much more agile in our product development? Could we think creatively about the kinds of partnerships we can strike? One of the things that I always embrace and always tell our founders to embrace when I’m on the board as an investor, and something that I absolutely embraced as CEO, was go to the customer. Get on a plane. Go meet the customers face-to-face, and explain to them what’s going on. These are things that I think a lot of CEOs think they should be doing but don’t always do. And I think the approach I took from day one, partially because of the circumstances I found myself in where I wasn’t expecting to be CEO, was let me take an audacious approach to what we can change about this company to set it up for shareholder value accretion.
MD: So speaking of shareholder value, I know that was something that was really front of mind for you while you were CEO. And you had a great run. When you started in the position, I think the stock price was somewhere around $1.50, and at the peak during your time as CEO, it was almost $6. So, how did that happen? What do you think factored into that success?
Yeah. Look, I think there were a couple things. First of all, I had a great team. I stepped into a little bit of a chaotic situation, but that doesn’t change the fact that we have an incredible executive team. It’s the same executive team that’s effectively running the company today. And so that helped a lot.
But the second thing is I believed firmly that the company was undervalued by the markets, and the simple reason for that I believe was we hadn’t framed our strategy and our company well enough for the markets, and we had not made sure that enough people were aware that we existed. It’s as simple as that. And so I spent a good amount of time when I came in thinking ok, how do we ensure that people don’t just think of as a restaurant company, when in fact I know that inside the company we think of ourselves more broadly as a labor automation play or a labor augmentation play or an AI company. And so we thought of ourselves and think of ourselves as an enterprise AI business. Making sure that we could communicate that effectively to the market was important.
I think the other part that was important was that a lot of people just didn’t know that we existed, because we’re a very small cap company. And so ensuring that I got out on the road and met people, shook hands whether that’s virtually online or offline was important. And I think the optimism, the energy all translated to more people wanting to be shareholders in the company. And so I think the stock price was just an output of that in that sense. If you have more people who want to buy your stock or be a part of your company, the stock goes up, and it reflects enthusiasm and optimism around the company.
And so it was a wild ride. You’re right — it nearly quadrupled in price, and I think most importantly to me, the volume nearly probably 10X’d or more. And I think that shows that there are a lot more people who are interested in what we’re doing, understand that we are a very actionable application of applied AI right now. The labor problem is real: restaurants need a lower-cost system to be able to resolve those problems, and it turns out that an intelligent automation system and an AI-enabled system will ultimately drive more revenue and more value to the customers to. And I think that was the message I was trying to get across.
MD: Yeah, and I think you did. And to back up a little bit: when you stepped in, it was the first time you had held this position as CEO, but you had been working with Presto for over a decade. You’ve been really in the weeds with this company since its inception. So it might not have been the biggest jump, as it might have been for someone who was not as familiar with the company. So looking back, what do you think prepared you most for the role, and how do you think your approach to investing — namely, building not betting and getting so involved with the founding team and with the company from the earliest stages — how do you think that shaped what you did as CEO?
KKG: Yeah, great question, Molly. I think building not betting is at the center of everything we do at my universe, in the Remus universe. And so I think [it was a] testament to our ability to help our companies that I was even able to step in as CEO. I think if we weren’t more hands-on, you’re right — it would not have even been a question. The board would not have asked me to step in. And so I think our involvement in companies from the beginning and understanding the evolution of companies, helping drive the evolution of companies…you know, several of the executives that we have on our team, I had been directly involved in helping Raj hire. And so I had a natural rapport or understanding with many of them that played a big role. And in fact one of them I ended up elevating with the board as my successor.
So I think continuity, involvement, and then understanding of context. Context ends up being so important in company-building. If you understand why a company is where it’s at today, and why it’s doing certain things — whether that’s positive or negative — it dramatically increases your ability to make changes and understand the pushes and pulls. Now, that all being said, it can be very valuable to have people come in from the outside and present recommendations, etc., and in some ways that’s what the board is able to do.
So I found myself in this interesting position where, yes, we have been very involved in companies to date, but we’re able to maintain that perspective of the insider coming in and say hey, we’re not involved in the day-to-day, and so here are the things we believe you should be doing. And then suddenly, I was able to take the role that actually allowed me to carry out some of those things. I think there’s a natural continuity there.
That all being said: I don’t really want myself or others on our team to be having to do this on a more frequent basis. I don’t think we have any aspiration of ultimately becoming CEOs of our companies. But I think it’s nice that we were able to.
MD: Yeah, for sure. And one thing that we talk a lot about at Remus is that you’re there — you and the investing team are in the trenches with companies when it’s good during boom times, but also you’re there doubling down with them, helping them figure out how to pivot when they need to when the going gets tough, and you were definitely able to do that here. And so what do you think was one of the unexpectedly, maybe, hardest things about serving in this role?
KKG: I think…you know, it’s hard being an operator. And it’s not that we had any illusion that it was hard before. But I think the part that I found most challenging was the day to day, in the weeds stuff. I’m very much someone who likes to gravitate toward 80/20. And on the 20% that I think can make 80% of impact, I throw myself fully into that, into the weeds. But I have a very tough time, just as a person, spending 80% of my time on the 20% of impact stuff. But as a CEO, you don’t have a choice necessarily. Oftentimes, you get dragged into the bucket that you know is low-value and low-impact, but you have to do as CEO.
And so it’s not that it was wholly unexpected, but you really don’t know what you’re getting into until you get into that. And that kind of minutiae was a little bit surprising to me.
Now that all being said, like I said earlier on in this episode, you know — this all gives me a greater sense of empathy and understanding for the CEOs that we do work with. Perhaps most directly, we’ve had another company go public, Allurion, and we’ve had the founder and CEO of Allurion on this show before. And it allows me to be a greater advisor and partner to him in my role as co-chairman of Allurion, because I’ve been in his shoes as CEO, and in particular in this case, as a public company CEO before.
So yeah, it was not easy, but it was a great learning experience.
MD: Yeah. Speaking of Allurion and being the Chair there, you’re still Chairman of the Board at Presto. And so now you have that distinction, which I don’t know if I know of anyone else at your age who is the Chairman of two public companies, but we can talk about that more later. But I’d love to know, what are some of the differences between being the Chair of the Board and being the CEO of a public company specifically?
Yeah I mean I would say whether it’s public or private, I think the role of the Chairman of the Board, at least the way I view it, is a) to help guide the board in holding management accountable. B) You’re stewards of shareholder value, and so it’s helpful to determine the right strategy for the company and ensure the company is pointed toward the right direction in a way that can be most accretive to shareholders.
And then I think there’s c), which is that the board needs to protect the company and protect the shareholders as well.
That’s very different from the CEO, which is a role where operationally you are working day to day to make sure the company operates in a way that is aligned with how the Board wants it to operate. The alignment between the Board and the CEO should be around the fact that both ultimately work, or should be working, to increase shareholder value. And so in that sense, my role as Chairman allows me to be a partner to the CEO of a company in a variety of operational matters as well. Typically I get most involved in the commercial side as well as maybe product strategy or company strategy, etc. So it allows me as Chairman to sometimes be a proxy for the company when it faces the public.
Now again, when I’m Chairman, there’s only so much you know and there’s only so much you can do. But I think when we look at our involvement at companies across the board, across our portfolio, we end up playing that first phone call, first source of partnership or collaboration that the CEO goes to. And I think that effectively should be the role of the Chairman.
MD: And I know you’ve talked a little bit already about how this experience changed your perspective as an investor and how it made you more empathetic to other CEOs in the portfolio. Is there anything else that it changed? In terms of your strategy, in terms of the investment thesis, in terms of just kind of how you would interact with CEOs going forward? Anything else that changed as a result of your time as CEO?
KKG: Well, I think you know…certainly when we look at new founders that we are looking at investing in, I’m able to speak to them in a certain way and with a certain experience that I did not have before. It’s not something that I really expected when I took the role on, but when I stepped away, and now when I speak to an entrepreneur who’s building a company, let’s say an applied AI company in some vertical or the other, I’m able to speak to them much more fluently about how we can help them. Even if it’s simply perception. Their perception of us as a partner who has sat in their shoes and who can help them has changed in a meaningful way, especially since I’ve been CEO.
I think in terms of our understanding of the sector or the space, I don’t think it’s dramatically changed in that sense. But I will add one point to that, which is interacting with customers having been the CEO of a company…I think there’s a learning there too. I’ve interacted with lots of customers on behalf of our companies over the years, many customers we’ve brought to companies. But talking CEO to CEO is definitely a little different than investor to CEO. And so there’s certain quality of conversation, there are certain learnings that I’ve picked up on how to interact with potential customers that I think will add more value to our ability to be able to do that going forward.
MD: Like what? What have you learned?
Well, for example, I think because I had to manage my own board, it gave me immediate empathy for the customer CEO having to manage his or her board. And it’s not that I was previously unaware that they had a board, but I viewed that relationship as, oh: there’s a board, and there’s a CEO, and the board interacts with the CEO.
But no: the CEO oftentimes is tiptoeing to ensure that he or she is managing the board the right way, and everything that he or she communicates to the board or vice versa goes through a filter of that relationship between board and management. And so understanding that relationship and the dynamics of that relationship in a much better way allows me to navigate my conversations and I think will allow me to navigate my conversations with customer CEOs in a much better way.
MD: Yeah, I think you’re right. You were in the CEO role for a relatively short time, but I know that while you were there, there were a couple of things that you focused on culturally at the company. So how about culture? How did you focus on building a unique culture at Presto while you were CEO?
KKG: So, I think, look, culture is everything. Everything starts and ends with culture. And I know that CEOs and boards like to talk about it, but I really believe in that. And so the day that the board officially appointed me CEO, I sat down and scribbled my three mantras into my notebook that I intended to employ across the notebook on day one.
And those three mantras were move at lightning speed, power of positivity, and then create magic.
And in moving at lightning speed, it was how do we up the metronome, how do we up the pace of everything we do, every single action. If we can do it today, let’s do it today. If we can do it this minute, let’s do it this minute. That sort of urgency, I think, was really valuable to us as an organization during the time that I was there.
The power of positivity is just who I am. I believe everything should be viewed through a glass half full. And I think when you take that approach, you end up being able to find solutions to every problem in front of you, and I believe that every problem can be solved. So that was really important, and I think it helped everybody get on the same page.
And third was create magic. You know, our name is Presto. And when we went public, I actually bought a bunch of magic wands for everyone to be part of the stage at the Nasdaq. And so I really wanted us to lean into our brand and embrace that everything we do — whether that’s how we talk about it, how we produce our product, every line of code we make — we should think about it as being magical. How can we make it so customers are delighted with the results and investors are delighted with the results?
And so those were the three mantras. And I actually had our EA print out the three mantras, put them all over the office. Every email ended with that, and I think it made a radical difference and got my tenure as CEO off to a very good start.
MD: I was going to say, how did people react to it? Do you think it affected how the rest of the company received you in a time when…I mean, it was a quick switch from having Raj, who had been there forever, as CEO to you.
KKG: Yeah. And especially because everyone really admired Raj, and everyone was very sad to see him go. And so I think I came in there not knowing a very large portion of our hundreds of employees, and I remember the first town hall we did when I introduced myself, people had no clue who I was. So I had to follow up with an email to the team saying these are going to be our three mantras.
And it definitely helped for people to appreciate that things were changing, but also that there was a playbook under which I would operate.
And you read about this, but the best proof that a cultural change is working is when you start seeing other team members and leaders use your language. And that’s what I started hearing, right? I started hearing people say, oh, yeah, we’re moving at lightning speed, or let’s do this faster because we have to move at lightning speed.
MD: That’s great.
KKG: Or when we ran into a problem, you know, people would say let’s treat it with the power of positivity. And then create magic. Everyone was sort of thinking, ok, well, we can’t do this, but let’s think outside the box — how can we create magic to solve this problem?
That made me very happy, and that started happening within the first three, four weeks. So that really set the tone for yes, a warm embrace across the company. I’m sure some people remained skeptical of my tenure as CEO, having been an investor, but for the whole I think people embraced it. And I think provided us for a good few months.
And it’s important to note that everyone knew going in that I was going to be a temporary CEO. I was not intending to stay on forever. I had made that clear to the board, I had made that clear to the markets. My title officially was “Interim CEO.” And so the goal was during my time there, how could we make sure that we did the best we could?
MD: That’s great. And so, you know, this was always going to be temporary, and it was — you’re no longer the CEO. But do you have a few words to say about Xavier, who is your successor?
KKG: Yeah, I mean, look — I was involved in hiring Xavier when Raj and I were working on finding a head of product. I have always involved my conversations with Xavier, because he’s an out-of-the-box thinker who would always chat about product ideas. He became COO under me when I was CEO, he managed a very large portion of the org. He’s been a very successful founder and CEO in the past. So for me, I’m very enthusiastic about the company under his leadership, and I remain here to support him in any way I can.
It’s been fun, and it’s a bonus that he’s French, and I’m a bit of a francophile, and so we share that as well.
MD: Does he love Napoleon as much as you do?
KKG: You know, I don’t think so. I think he probably thinks I’m a weirdo.
MD: Well, you know, he’s not alone. So this was perhaps a once in a lifetime opportunity for you. So at the close of it, looking back: is there anything else you would say about your experience as CEO? Is there any advice you would offer to other CEOs, especially those who are just getting started in the early stages of starting companies?
KKG: No, you know, what I said earlier about board management, etc. really doesn’t apply to founders going zero to one. Zero to one, it just comes back to very simple things. Make sure you have product-market fit. Make sure you are building something people want and need and are willing to pay for. And so spending a lot of time with customers…I couldn’t stress that enough. It’s something I did as CEO, and it’s something I do even now. If the company needs me, I get on a plane and I fly to wherever to go meet customers.
And so I think that’s it — it comes down to product and customers, and can you build a product for your customers.
MD: Great. Well, thanks Krishna for taking the time to chat about this experience. It was a unique one, so hopefully people got to learn a little bit about what it was like to actually be in the trenches in this specific role. It’s a little different from what you’ve typically done.
KKG: Yeah, no, I mean look again — as you opened the interview with, it is sort of wild for a VC to end up as CEO of a publicly traded company that’s a portfolio company. And so I hope that there were some learnings here that apply broadly to all founders and CEOs, and looking forward to having more exciting guests on next time.
MD: Great. Thanks for listening, and we’ll see you next time.
KKG: Take care.