So we're now going to move to the area of planning and

thinking through companies. And it would be helpful I thknk, for our

students, if you could just briefly take us through some of the early stages of

cascade from you know, very early to maybe IPO, just.

>> OK.

>> At a high level, yeah. >> OK.

So, when I started

my first company, Cascade Communications you know,

the first part was actually raising money.

That's the first milestone.

And then I think, I think when you do

a company, everything is about just raising money, really.

It, it's like going from.

You know, it's traveling through the desert.

And you're going from gas station to gas station to gas station.

And if you run out of gas halfway through, you're dead.

You know, the tow truck will come and game's over, right?

So, how do you make sure that the gas that you

have, you use it properly to get to the next gas station?

So you, first raising the first round of finances that net you a big deal.

Once you raise a finance, it's a question of immediately start thinking about.

What is it that you have to do to reach the second round?

Obviously it's some customers, some customer

trials and somebody says yeah that works.

And I'm

going to buy a lot of these.

So you have to get focused on that and work on that part of it.

Once you get the second round, then it's a

question of not just having one, but having ten customers.

So you have to focus on that.

And then if you want to raise money, then you really have to have a process.

You have to have a good plan to scale that thing.

And then it's a, it's a, it's a different kind of planning.

See it's almost like you have to use.

Run the company differently depending on which phase of the company you are in.

And, and there's slightly different scales.

And too many times the entrepreneurs.

You know at the beginning obviously you are trying to do everything.

And you are a control freak.

And you have to be because if you are not.

You just can't get there with the limited resources.

But a lot of times a lot of the entrepreneurs

get their companies up to a million, two million, five million.

But they just

can't grow beyond that because they are so fascinated by one

idea that they just cling on to that part of it.

And so learning how to delegate, how to empower other people, and,

and bring all the other team members, and everything else that becomes important.

So, you need slightly different skills at different stages in the company.

And, and you just have to learn and

it's it's tremendous growth opportunity for any entrepreneur.

>> So, you obviously can't do any of this by yourself

and we talked about team, but there also are suppliers and channel

partners and other people that you have to have relationships with

how did at Cascade how did you begin to think about those issues?

>> Well you know, I think when you.

Number one you have to have a vision that you're going to be very big.

and,

and that means you have to be able to tell the story as to why you'll be so big.

>> And that's so these people will want to do business with you?

>> Oh, absolutely.

Because it's just not worth their time to do business with you when you're so small.

For example, when we started Cascade Communications, that was just about the

time when, you know, before that people always built an all-men factory.

You built your own production

line and everything else. You manufactured your own product.

When we started Cascade, we moved away

from that, and we used contract manufacturing.

But the contract manufacturing, they were used

to doing things for big companies, you know?

A million units. You know, we don't have a million units.

We have ten units.

But how do you convince those people that if they did

ten today that they actually will get to a million units, and,

and getting them to buy into it, and getting

them to pay the attention to actually serve you

and accept you as a customer is a, is a, is a big part of building a company.

>> And as the company grew did the relationships

change and grow as well, I mean, you got

these early relationships and then the company grew like

wildfire, did you have to manage and grow and

change those relationships as well, or.

>> yes, I think, I think what happens is when the company gets large

you'll always have multiple relationships because you

don't want to have a single point of

failure and then I think it, it becomes, it becomes a little bit more of running a

business because at that point you can hedge, you can have contingency plans.

You'd never have a single supplier for anything.

You'd want to have multiple suppliers and, and

we can trade off one against the other.

And, and, and you have a more stable business relationship.

And, and a lot of them grow, you know.

When you, you build a successful company you

build a lot of other companies along with you.

And, and, and you can see them being successful and they're thankful to

you, and, and you just build a [INAUDIBLE] cost system and that's very satisfying.

>> So we talked about this with customers, but with suppliers, there's one

question you think that entrepreneurs ought to make sure they

ask and understand from the supplier, or the channel partner, what might that be?

>> Well, number one the entrepreneurs have to be realistic

about how much they can get their suppliers to invest.

So if they are making something, they're are

making hundreds of those, and you just want

a couple of those, or, or make them

slight modifications, I think that's a realistic ask.

But if you go to a supplier and say hey you know someday I'll be big.

But I want you to stop your whole

production line and do this new thing for me.

It's not going to happen.

So, I think you sort of have to understand the, what's in it for

whom and really understand that game well and be asking for things

that has a huge value for you but it's something that the other people can give.

But even to give what they have you still

have to do a lot of selling because you're nobody.

Desh Deshpande: Planning Cascade Communications

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