Alumni

Peter Zaballos, SM ’90

Peter Zaballos, SM ’90, joins Christopher Reichert, MOT ’04, to share insights he gained during his time at MIT Sloan and career journey through various startups in Boston, the Midwest, and Silicon Valley. Peter also shares lessons from his personal “user manual” and how that helps guide his leadership decisions.

Christopher Reichert: Welcome to Sloanies Talking with Sloanies, a candid conversation with alumni and faculty about the MIT Sloan experience and how it influences what they're doing today. So, what does it mean to be a Sloanie? Over the course of this podcast, you'll hear from guests who are making a difference in their community, including our own very important one here at MIT Sloan.

Hi, I'm your host, Christopher Reichert, and welcome to Sloanies Talking with Sloanies. My guest today is Peters Zaballos, a 1990 graduate of Sloan's MBA program.

Peter is a second generation American like me, also from Spain. His parents emigrated from Macotera in Spain, near Salamanca, Ávila, and one of my favorite places, Segovia. Have you been back at all?

Peter Zaballos: No. And actually, just to be clear, it's my grandparents that emigrated from Spain.

Christopher Reichert: Oh, okay.

Peter Zaballos: I took Spanish at the local community college last fall and I'm slowly trying to acquire it but I speak French.

Christopher Reichert: Muy bien. My mother came over, left Spain in 1929, in the Spanish Civil War. Sorry, in ’39. Anyway, back to Peter. He first attended Diablo Valley College and then transferred to Cal Berkeley, where he earned a BS in electrical engineering and computer science. He earned his MBA at MIT Sloan School of Management in 1990. He spent his subsequent career in high-growth technology startups as a senior marketing executive and venture capitalist, spanning Silicon Valley, Boston, Seattle, and the Midwest.

So, I want to be sure to cover some of your ethos of giving back that I read about in your bio and things we discussed but before we get to your career tell us more about your upbringing. You said you had poor grades and test scores in high school and college and what changed for you?

Peter Zaballos: Well, I was privileged in that my parents put a lot of value on education and they put us in private schools but you know back then, I just don't think learning disabilities were a thing. And it was only through the experience we had with one of our children who had some learning disabilities that I realized I probably had some combination of learning disabilities. So from the moment I was getting grades, they were not good ones, which was a struggle because I think my teacher saw potential in me—some of them did—and I felt like I had it, but middle school, high school, my grades were horrible. We joked at my high school that I think I got the lowest grade in math that they’d ever given.

Back then, just going to college was just not the way it is today. I heard a great interview with Michael Lewis, the author of Moneyball, and he went to Princeton, and they asked him, “would you go to Princeton today?” And he said, “There's no way I could go to Princeton today, I literally applied over the weekend, no plan and I got in.” You know to do that today, it's a career.

I left high school knowing I liked some subjects. I like to write. I loved my English classes. And then I had a job bagging grocery at the Safeway, didn't have a car, and enrolled at Diablo Valley College mostly out of default. And I took the subway, you know the mass transit to get there. I think that was where I discovered I really liked math. I really liked sort of the conceptual challenge of math and that led me to Berkeley and engineering, computer science.

Christopher Reichert: I read a light went off in your head when you were trying to figure out how the temperature of a bar of metal changes as it heats up?

Peter Zaballos: Well, that's one of the classic differential equations problems that you tackle, because it’s all about the flow of something through something and measuring that on an incremental basis. Differential equations was my “aha moment.” It was hard, but I totally loved it and I ended up, when I majored at Berkeley, ended up majoring in digital signal processing and that was all basically applied math and I totally loved it. But yeah, differential equations and linear algebra, both those classes, it was so much fun but that really helped me

Christopher Reichert: So, after college, you started, what I would consider to be Silicon Valley's ground zero at Fairchild Semiconductor and then working at LSI Logic. Those are huge names in the industry. Did it seem like a huge moment when you were there?

Peter Zaballos: Sort of. So, I’ve joked that I’m a fundamentally lazy person and I got the job at Fairchild because they were one of two companies that gave me on campus interviews. And I got a job in marketing at Fairchild Semiconductor for one of their high-performance semiconductor product families and I was a total Bay Area snob in that I used to joke about how I’d had never been south of San Jose more than twice. I would tell my friends in college there's no way I'm working Silicon Valley and I got a job at Fairchild, and that's where I'm working.

Fairchild was interesting because it really was on a downward slope of its influence, but the former CEO of Fairchild left with three other Fairchild people to go start LSI Logic and I got into LSI Logic with the wave of people that were recruited out of Fairchild and that really did feel like I was in a special place. We created the class of semiconductors that virtually everything we use today is based on and we were just blowing up the market. These are all old names, but I was in the room when Silicon Graphics fired up their very first workstation, because we had just hand delivered the semiconductors to them to make it work. Same thing with Sun Microsystems and Seagate, Apple, like all of these companies. We were there when they were really little, and we helped them become really big.

So, in seven years at LSI Logic, it was just a whirlwind. And I really did feel like we were changing the world.

Christopher Reichert: It's like being present at the Big Bang, right?

Peter Zaballos: Yeah.

Christopher Reichert: But write in your in your user manual that a career is mapped in hindsight. But at the same time, I'm curious how these experiences influenced you as you moved forward? Was it after LSI that you decided to go to Sloan, or how did that come about?

Peter Zaballos: Yeah, at LSI Logic I had a whole bunch of different roles. I was the head of marketing for Northern California, my first role. And when you think about the companies that were in Northern California then, that was just totally overwhelmingly awesome. And then I went into sales and I went into distribution sales and I felt like I was kind of starting to repeat myself. So that was when I thought I really want to go to business school and MIT was at the top of my list because I felt like I needed to go to someplace where they really understood the power and the potential of technology, but also where I could learn something about how do you build and scale businesses.

And I tell this story a lot. I got waitlisted and I hopped on a plane and flew out and met with the Director of Admissions and asked her why didn't you just let me in? And she said, “You know, you wrote a compelling story for why you wanted to go to business school, but you didn't tell us why you wanted to go to Sloan.”

Christopher Reichert: Interesting.

Peter Zaballos: So, I went back, put a lot of thought into that, wrote a supplemental essay, had a few more people write recommendations that spoke specifically to why I thought Sloan was going to be the best place where I could contribute and get something back and I moved in off the waitlist.

Christopher Reichert: That's great. I wonder how often that happens? So how did your time at Sloan change you from Diablo and Cal Berkeley and then working in Silicon Valley, so coming out of that?

Peter Zaballos: Well in two big ways. One was my classmates and my professors. I am still super close to so many people I went to school with at Sloan. I was in a peer group of people that were super bright, super curious. We all had our quirks, but we were all there trying to get the most out of what we were being taught. But a big part of that is being taught how to appreciate somebody else. How to work with somebody else, and in undergrad, you really don't have that same level of intimacy and potential. So, I learned a ton from working with all my classmates. But at the time, I don't think I intentionally understood it, but with hindsight. My career trajectory after Sloan was a lot different from before, because I discovered corporate strategy. I discovered how do you think about building a company. Sloan was a place where I could find within me that I really had a knack for thinking about what's the big picture? How is this business going to be successful, what do you need to do to think about planning and executing it? I also learned that I have no attention to detail so classes like accounting and finance were just torture for me because I did okay in them, but it was more the big picture stuff that really captivated me. I went straight from Sloan into a management consulting firm. I think it gave me the frame of reference to then start saying, actually I think I can contribute to helping a company figure out why it should exist in and how it should grow.

Christopher Reichert: It's interesting you say that because years ago I did this, you know, Myers Briggs is very famous for personality types. I did a test at the Johnson O'Connor Foundation and it was a bizarre day spent in an old Upper East Side townhouse in New York City, just on Fifth Avenue. And they give you all sorts of crazy tests that, you couldn't game it because you didn't really know where this was all intending to go. And at the end of it they gave you a report and the report said look, you can do whatever you want, but here's the things that we think will make you happy. You know, you could do accounting, but we don't think that's going to be where you're going to find your joy in life and it was an interesting way of looking at how to guide someone in career choices, go where you enjoy being, right?

Peter Zaballos: Yeah, actually, on the other end of that, what I learned at Sloan sort of formed where I went. When I was a CMO at a company called SPS Commerce, which is a public cloud-based supply chain platform, the senior management team all got executive coaches and I got this really awesome guy who spent most time coaching Apple execs. And he gave me a pretty exhaustive personality test and it's called the Hogan, and one of the questions in the test is your ability to tolerate ambiguity. A zero meant that you had no discomfort with ambiguity at all and 100 meant that you were curled up in a fetal position, paralyzed by it.

Christopher Reichert: I think we've seen people in both conditions, right?

Peter Zaballos: Yes, and I scored a seven.

Christopher Reichert: So, you can wade into muddy waters?

Peter Zaballos: Well, it provoked a good conversation about it, So that must mean why I am so comfortable in technology startups and high growth companies because that was nothing but ambiguity. But from a coaching perspective, he was great. He said, you need to understand that the people the teams that you manage and lead are probably 60s and 70s and 80s and you might have some 90s. And while you're walking around completely calm, you have to remember that all those people are probably freaked out and you need to understand how do you support and connect to them. I think at Sloan I learned that I had this interest in looking at a business and understanding, there's 1000 reasons why it's going to fail and there’s two why it will succeed and being comfortable wading into that and just only seeing the two.

Christopher Reichert: That’s interesting. I think there is also an art of persuading others to be patient as well, right?

Peter Zaballos: Exactly, yeah.

Christopher Reichert: So that leads me to you leading the A round for DocuSign. That's a well-known company now but when you first encountered them, obviously they were unknown and it took a long time for it to pay dividends, right?

Peter Zaballos: Yeah. And just to be clear, my partner Gary Gigot led that round. We were small firm, there were four of us. Three of us had all worked together at RealNetworks and Gary was a new guy, he was known to some of us. I had met him before, we spent two years raising our fund and got to know him really well then.

But you're right, the super addicting fun part about early stage investing is that Series A, there's generally not a product. And Gary had known the founder. Actually, the founder was close to taking a term sheet, really close to taking a term sheet, and Gary fought his way into that. And this was in most of the companies we invested in were successful. We led the B round for Control4, which is a public home automation company now. They also didn't have a product then.

It's super exciting to see the vision and the potential that sitting in the heads of those founders and then making a bet on that and seeing it all come true. Like when DocuSign was getting off the ground, there were all sorts of people telling them why in the world is somebody going to trust a digital signature?

Christopher Reichert: It all seems so clear now, right?

Peter Zaballos: Yeah, and they pretty much become the standard in that category. They created the category and its super fun to see when those kinds of things happen and to be there at the beginning.

Christopher Reichert: You talked about RealNetworks and we talked about Ian Fried, and I know he's known for RealNetworks, but also for being the person behind the hugely unsuccessful Amazon phone. But you know him well and I know that it is a famous story about Jeff Bezos telling him to not be embarrassed about the failure of it. But tell us more about what you know about that and him.

Peter Zaballos: Well Ian was the last boss I had a RealNetworks and he's just a super, complete human being. He had started a company in Russia and ran that before he came to RealNetworks and he had a lot of experience in broadcast media, like the technology of it. And then, we all left r RealNetworks and he went to Amazon, but he had told me the story. And actually, there's a New Yorker article that tells this as well, he was the guy that helped bring the Kindle to market and he led that initiative. And then he was the guy that did the Fire phone, which is the first time Alexa got used. I have a lot of friends that work at Amazon and I was speaking with one of them and I was asking her, what's it like to work for Rob Glazer, who was a visionary at RealNetworks. Now you're working in an organization, led by Jeff Bezos, who is also a visionary. What's the difference in the experience?

And she said, the day that she came into work and found out that to shut the Fire Phone down and just washed all the money down. And she said, it just took her breath away, like this company is serious about learning. In the New Yorker article, they do a good job explaining how at the end of that, that was where Alexa was first implemented. That Jeff spoke with Ian and said, “Forget everything about the Fire Phone and what just happened. Forget all of that and only remember the potential behind Alexa and focus 100% on that.”

Christopher Reichert: I'm going to get that New Yorker article link and stick it in the show notes.

What’s your definition of failure? I guess your personal ethos, you have what you call your “user manual.” I noticed this up to version 4.3 by the way. But one of the points in there, you cover things like your outlook on life and how you work with people and how you want to work with people. And also, you cover your lack of fear of failure. And in fact, you own meaningfulfailure.com, which leads to your blog. But you also once specifically say “if there's a lesson there learn it and move on.” And that sounds like what happened with the Fire Phone and the future of Alexa.

Peter Zaballos: Absolutely and that's so easy to say, and really hard to do. Part of what I did with that user manual was put an obligation on myself to explain what do I expect of me and then what do I expect of all the people around me. And I had put this into a training for all the departments I led. And at the end of the training I say, “I'm human, and I'm not going to live up to this all the time. So, I want you to call me out on it. And when you do, I'll listen and I'll recalibrate.” But learning how to accept failure is closely tied to your sense of ego. And another thing inside the user manual is the less you can involve your ego in what you're doing, the easier you are going to be able to change and the easier you are going to be able to take feedback and not take it personally. The more you do things because they're yours, the less sure you're going to be. Are you actually being the best person you can be? Failure and feedback are super important elements of becoming the best person you can be

Christopher Reichert: In your experience, you talk also about intellectual curiosity being one of the most important qualities that you prize and you become impatient with people who are lazy. Which is ironic because you called yourself lazy, but I think that's probably you being harsh on yourself. So, do you think that's something that is inherent? I think about young leaders, particularly young successful leaders. Let’s Steve Jobs is an obvious case or even Bill Gates or even [Mark] Zuckerberg or, there are probably many others that are that are very young. I guess what I'm getting at here is do you think that those elements are something that can be learned with maturity, or are there elements that are just part of a person's personality and you have to weed that out as part of your venture capital work?

Peter Zaballos: Yes, I think there's certain aspects of people. There’s that great book, Mindset, two ends of the spectrum: fixed mindset open mindset. But I've seen people that have worked for me that began expecting a lot to be provided for them in terms of direction. And one of the things in my user manuals, since I don't have attention to detail, what I will do is say, let's go there and point everybody in their direction and then pretty much get out of the way. For the people that needed a lot of specific direction, I've seen many of them question themselves and realize, “Wait a second. I have the power my own to figure this out,” and become curious. I don't have patience with people who aren't curious, not because they might be lazy, but because they're not willing to change their mind.

Another great Amazon anecdote. There’s a term at Amazon—I'm hearing this from my friends, I haven't experienced it myself—where they value people called “right a lots.” And they are right a lot about a domain that they have authority in. And one of my close friends was in a meeting with Jeff and with a bunch of other people. And he said, “so what makes somebody right a lot?” And Jeff said they change their mind a lot because they are always curious and they may believe something, but if they if they're curious and they find out that they should change their mind, they're going to change their mind. And that’s what makes them right a lot.

So I get impatient with people who aren’t curious because it's just going to prevent them from getting to the right answer. But on the flip side, I've had people two just brilliant world class creative directors work for me at different points in my career. Neither of them had art degrees. Both of them just had a passion for design, got degrees in other subjects, and then taught themselves to be brilliant creative directors and product design leaders. And same thing. Some of the best digital marketing people that I had on my teams were people that didn't know anything about it and just voraciously consumed all the information there was about it.

Christopher Reichert: And asked the right questions, right?

Peter Zaballos: Yeah. I used to joke with people about when I was hiring people, especially the digital side of the marketing groups I ran, like I really don't care what you did two years ago because it's not relevant anymore. It’s like, what did you do in the last 18 months that you can show me that you’re on top of your game, you're on top of the market because it's all going to be different 18 months from now and you have to be able to learn.

Christopher Reichert: So, let's talk about giving back. I think one of the things that I've gleaned from your user manual and also from your background and the work that you're doing now, that giving back is a huge element of your personal ambitions right now. So, you've retired, a few years ago, from the day-to-day work, but you're not obviously retired from life and a big part of that is giving back to the to the to your undergraduate through some initiatives that they have at their end but also you talked about your Sloan reunion and how it was really powerful to reengage and stay connected with your classmates in the school. You mentioned websites that were created and memories and things like that. Tell us more about that?

Peter Zaballos: We just had our 30^th Reunion virtually a couple weekends ago and I think the Sloan team did a phenomenal job of bringing us together, even though we weren't physically together. And one of the resources they gave us was a build it yourself website, a private website, it was just accessible by our class. And they just ask a couple questions like, “what was your favorite Sloan memory?” and “what are you doing now?” And my favorite Sloan memory, it’s funny because I had to think about what was that, because there were a ton of experiential things there. But I was trying to think about classes and we had an ethics class. In 1989 and 90 there were some pretty serious ethical issues out in the business world and most business schools that were paying attention, were introducing ethics classes to the curriculum. On the first day of the lecture, the professor said, first of all, I can't teach you what ethical is, you all know that, you already know that right now. And the problem some of you're going to get into is you're going to have a conversation with yourself about what you can get away with. And that's the ethical dilemma and he goes “but you always know what the right thing to do is, every one of you.”

That was significant because later when I got into senior leadership positions, that little voice inside me was the one saying, “I don't think that the women on this team are being paid the same as the man. What can I do about that?” That little voice inside me was saying you have to do something about that. So that ethics class actually paid back tremendously later in my career when I felt a very personal obligation when I got into the C-suite, that I had to do the right thing for all those people that work for me, specifically around equality. It helped me hopefully improve the environment and the careers of the people on my team, but that was very much something I learned at Sloan that stayed with me.

Christopher Reichert: And it reminds me of the first sentence of your user manual, which is “my purpose is to create the conditions where you feel safe to voice your honest opinions and the conditions where you feel you can take risks and do the best you can do.” Did you feel like you were taking a huge risk in voicing that concern or observation?

Peter Zaballos: Well, yeah. I used to commute by train for five hours from the little town we lived in Wisconsin to Minneapolis. I did that for six years, and I leave on Sunday, come back on Friday. And while I was on the train on one of the Sundays, my wife sent me a link to this guy who created a user manual. And it just was like a light went off in my head like, oh my god, this is just such a phenomenal vehicle for like me personally. So, by the time I got off the train. I had version one done. It was interesting when I would circulate it. I circulated it to all of my peers on the management team and all the people who work for me, everybody in my department, and I would get really interesting reactions like “Are you sure you want to do this? You're stating some pretty specific priorities and beliefs” and I lost count of the number of people that told me “Yeah, this is great. I'm going to do one and nobody ever did one.”

Later when we decided to relocate from the Midwest back to Seattle, and I was talking to different companies about working for them, I’d meet with the CEO, we'd have a great conversation and I talked about the user manual then I emailed it afterwards. And it was a great filtering mechanism because some of the CEOs would reply back and go, “Uou give this to everyone? Isn’t that dangerous?” I thought, I don't think we got the same…

Christopher Reichert: Values.

Peter Zaballos: There's not a good culture fit here.

For the ones that said, “this is awesome, you're vulnerable and you own it.” That's eventually how I found my way to the role at Qumulo in Seattle.

Actually, I know one person who did this because they read about my user manual and he's the CEO of a successful technology company here in Seattle. At one of the RealNetworks events he came up he said, “Thank you for doing this. I wrote my own and expressing that vulnerability to the entire company was one of the best growth moments for me as a professional.” It’s very intentionally vulnerable.

Christopher Reichert: Do you think the practice of writing it down is an important aspect to it?

Peter Zaballos: Yes, because it gives you a frame of reference and then when you get called out on things or when you learn something, now you have a chance to update it. Like when Sheryl Sandberg wrote Lean In, that totally resonated with me, not her specifics, but the idea that this woman is being brave enough to talk about something that is really uncomfortable.

So, I went to the general counsel at the company. I was at and said, “hey, I want to add something by user manual to make it clear that if you are considering to have a family, that I am here to talk to you about what that might mean for your career” because, as everyone knows, women professionals who have children take on the disproportionate amount of the caregiving and take a disproportionate hit on their career trajectories and that's a hard decision to make.

And the general counsel's like, “No, you're fine. Go.” He was super, but that was the first big iteration I made it was to put a clause in there saying, “if you want to talk about families and careers, I’m here.”

Christopher Reichert: That's great. And talking about giving back, you work with a delta V project. In case listeners aren't familiar, MIT delta V is MIT’s student venture accelerator and it provides an educational opportunity for student entrepreneurs and it's run out of the Martin Trust Center for MIT Entrepreneurship. Tell us about your work with that.

Peter Zaballos: Well, I was introduced to the Trust Center and delta V through one of the members of the MIT Foundation program managers and got to spend an hour or so with Bill Aulet, which was just phenomenal, and then got invited to be one of the advisors on the delta V startups last summer and was involved with a company called Abound Parenting and this phenomenal first time CEO named Joan Kelley. That was just a great experience because it helped me pass along what I've learned growing tech companies, what I've learned running a VC fund. I am still in close touch with Joan, we talk probably every two to three weeks. She just sent me an update last week where the company is at, and it was just phenomenal. Like the official program ended at the end of the summer, but she and I had a weekly call for quite a while and then that's gone to every couple of weeks, but so that's been fun.

I'm super excited about being involved this summer with a startup called Contact. Actually, on Friday. I'm going to meet the whole team together via Zoom to get to know each other, and then the more formal meetings start after that. But it's just super exciting to get together with these people who are doing things I've done before, but doing it for the first time, and be able to pass along whatever I can to help make it easier for them.

Christopher Reichert: That’s great. So, as we kind of wind up here. I just want to ask you a couple more questions. What's your definition of success?

Peter Zaballos: Well I think it's the first sentence in the user manual, “creating the conditions where the people around me can feel safe to take risks and be their best self,” and it has nothing to do with metrics and it's all about people.

Christopher Reichert: And what's the last thing that you really geeked out about?

Peter Zaballos: Well, actually the thing I geek out about the most is every Tuesday and Saturday my three boys and I, and some of their friends, for the last five years, I've been playing a game called Seven Days to Die, which is the zombie apocalypse game and I wrote a whole blog post about this. Multiplayer video games are just a phenomenal way to prepare for life, but the zombie horde arrives every seven days. We got seven days to prepare for it. And it is like running a company, who is in charge of resources, who's in charge of construction, who's in charge of defense? So, it's like having a team and everybody's got a role and you're all trying to survive. It’s totally fun and it's preparing al of them very well for successful careers.

Christopher Reichert: You mentioned in your life lesson that you own the domain meaningfulfailre.com, I think I mentioned it earlier, but it leads to openambition.com, which is your blog for posting all sorts of updates. Is that where we can find the Seven Ways to Die [post]?

Peter Zaballos: Yes, yes, you can find that video game post there, and you can also find, just to add one other thing, something I've been really focused on in the last year is a scholarship program that my wife and I started at Diablo Valley College. We've got 30 students in it and we went to the local high schools and found 30 kids who didn't think college was an option for them, who were overlooked, and we're helping them find a path to college and what I told them was the cruel trick of education is that when you get a job, nobody cares where you went to college. Nobody cares what your class or your grades were. But they do care about how you solve problems and how they work together. So, we're we put a bunch of supplemental programming together to help kids these kids learn how to be curious and good problem solvers, and good team members and there's also a post about that on my blog. But that's something that I'm spending a lot of time on really enjoying.

Christopher Reichert: Well thanks very much for joining us today, Peter Zaballos, a 1990 graduate of Sloan's MBA program. This is Christopher Reichert with another episode of Sloanies Talking with Sloanies. Thanks for joining us.

Peter Zaballos: Thank you. Sloanies talking with Sloanies is produced by the Office of External Relations at MIT Sloan School ofManagement. You can subscribe to this podcast by visiting our website, mitsloan.mit.edu/alumni, orwherever you find your favorite podcasts. Support for this podcast comes in part from the Sloan Annual Fund, which provides essential, flexible funding to ensure that our community can pursue excellence.Make your gift today by visiting giving.mit.edu/sloan. To support this show, or if you have an idea for atopic or a guest, you think we should feature drop us a note at sloanalumni@mit.edu.

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Peter Zaballos, SM ’90