Q&A: Next Coast Ventures’ Mike Smerklo Channels Early Beginnings With Andreessen, Horowitz Into Advice For Entrepreneurs

Mike Smerklo is an entrepreneur, investor and author, applying the decades worth of knowledge he has gained into helping other entrepreneurs reach their goals.

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He’s had a lot of practice: The co-founder and managing director of Next Coast Ventures was recruited by Marc Andreessen and Ben Horowitz as one of the first employees of their startup, LoudCloud Systems.

In 2003, Smerklo went to serve as CEO at ServiceSource, a cloud-based apps startup in San Francisco. Over the next 12 years, he grew the business from a 30-person operation into a successful 3,000-person publicly traded company with close to $300 million in revenue. In 2015, he co-founded another cloud-based company, NucleusGrowth.

He also just came out with a book, “Mr. Monkey And Me,” which provides a look at the mental toughness and grit it takes to start, grow and operate a successful business.

Smerklo spoke with Crunchbase News about his journey, what his children really think he does for a living, and how he pays his knowledge forward to the next generation of entrepreneurs.

Note: This interview has been edited for length and clarity.

What was it like working with Marc Andreessen and Ben Horowitz?

Smerklo: In my book, “Mr. Monkey And Me,” I talk about my time working with them. I learned so many lessons, but the most salient one was that life is too short to make small plans. The first step in working with the entrepreneurs was the most amazing part. We talked about building something big and meaningful. Marc talked to me about coming aboard. I wanted every advantage I could get, going from the board to hiring people. The experience is like meeting an NFL player. I thought, “Wow, this is what the big leagues look like.”

What are some lessons you learned that you carried with you into your own company and then into investing?

Smerklo: Ben said to me early on that a company’s first 25 employees are the most important. I didn’t understand it at the time—I thought that was pretty dismissive to Employee 26. However, the first 25 people are going to set the culture of the organization. After that, those first 25 in the organization are the ones hiring employees, and the founders are not involved in the process as much. Our ability to scale and have the same type of folks go from there changes, so you have to look at every aspect of the business and look at how those employees bring advantages.

What do you see as the biggest mistake entrepreneurs make?

Smerklo: There is a mental aspect to being an entrepreneur. One of biggest mistakes starting off is thinking your business is going to suddenly be an Airbnb–worth $100 billion and all of the founders have stories. It’s rare to get to that level, it takes a long time, there are ups and downs, and if you don’t have the right mental stance of how long and what it takes, you won’t get there. Entrepreneurship is underestimated. I watch “Shark Tank,” and that is what my kids think I do for a living.

We are at an all-time high in the stock market, so valuations are at an all-time high, too, and getting a lot of publicity around it. All of this airtime is doing a disservice to the entrepreneur. Expectations have gotten out of whack in terms of time and valuations. Comparison is the thief of joy, if you get caught up in it.

With everything that you’ve learned yourself, what kind of wisdom do you like to pass on?

Smerklo: One of the things I am passionate about is self-care. Outside of practical business, that is a hard job because it is easy to get caught up and keep yourself sane. When people tell me they work 100 hours a week, I see some celebrate that, but not me. Self-care should be part of your routine. When someone is successful, they also have a horrific story, too–something that happened to them. Self-care and mental-care don’t get enough attention.

Illustration: Dom Guzman