← Making It with Jon Davids
Making It with Jon Davids
158 - “It Started In My Apartment, And We Grew It To $5B+” | Adam Miller, Cornerstone on Demand
00:47:52
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- [00:00]
John Davids
What's up, my friends? JD Here. And on today's show, I am talking to Adam Miller, the godfather of LA Tech. The Los Angeles tech scene. Back in the early 2000s, this man was maybe the first to build a very, very big company in Los Angeles. Ended up selling it for $5.2 billion just a few years ago. And we're going to hear about the whole story of Cornerstone On Demand, the learning management company he started back before online learning was even a thing. Now he built it, grew it, and eventually sold that company. And what he's doing now with One Planet One P.org, literally fighting the biggest challenges in the world. Homelessness, gun violence, climate change. So this man knows how to take on a big challenge and get the job done. That's coming up in just a sec. If you're a fan of the podcast, you know what to do. Smash the subscribe button on Spotify, Apple, YouTube, wherever you're listening or watching. If you like my stuff, get my best stuff to your inbox@johndavids.com and now my conversation with Adam Miller.
- [01:09]
Adam Miller
You're listening to Making it with John Davids.
- [01:17]
John Davids
So, Adam, you started what became a pretty big company, Cornerstone On Demand, out of a one bedroom apartment in New York City. Can you kind of take me back and tell us the story?
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Adam Miller
Yeah. Started literally in a small apartment in the Murray Hill Manor, 34th and third in Manhattan, with nothing more than really a whiteboard and an idea. Convinced a few of my friends to join. I convinced the people I had been working with at an investment bank to be the initial investors and was really focused on this idea that someday the Internet could be used to educate people. And we decided to focus on adults because the thinking was kids were already in school and a lot of our content was likely going to come from universities at that time. And we didn't want to compete with our partners. So we're going to focus on adults who, even though they have more money and more flexibility, actually have the least access to education. Because depending on where you live, there might not be a school or college near you, depending on your work schedule. You might not be available when classes are being held. And financially, it might be cost prohibitive for you to be taking classes, depending on what you were doing and what your job is.
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John Davids
And are these classes of any sort or was this professional development? Was it cooking classes? What kind of classes were you talking about?
- [02:42]
Adam Miller
Early on it was mostly professional development, but it was a little bit of everything. And most of the content you have to remember this is a long time ago. This was 1999, 2000. Most of the online classes were being done by innovative professors at some universities. It was not widespread. There were very few people that were learning online. In fact, I remember when I started the company, every time we had an onboarding class of new people working at the company, I would ask how many people have ever taken an online class? And for probably the first seven or eight years of the company, the answer was nobody. Nobody had ever taken an online class. And as the company got more mature and the market got more mature, by the end we would have new higher classes of 30, 40 people and everybody had taken an online class. So over the course of 20 years, this went from a crazy idea that people would actually use the Internet, use the web to get trained and to learn things, to something that had become so commonplace, was completely obvious and everybody had done it.
- [03:48]
John Davids
But back in 1999, when you were starting the company, did you already have a full fledged idea that on online based training education is going to be a thing, or did it start with a different vision and then pivot?
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Adam Miller
Yeah. So as you know, all successful companies have that inevitable pivot somewhere along the way. In our case, we knew that kind of the thesis from the beginning was that the Internet was going to be a way for people to access things from anywhere in the world, including training, including ideas. And so we did think the Internet, the web specifically, would be used to deliver training. In fact, the reason I started the company in November of 99 was because I thought broadband was about two years away from being widespread. I was wrong. I was off by a few years. It probably was five years later that you really had broadband connections and people were able to actually download a class. But the thesis was that people would use the Internet to train. And on that little whiteboard that I had was one picture. And on the picture were the three places that training might come from. Universities, corporate training providers, and potentially these new E learning companies that would be focused on online training. And that the user of those, the student, would be either at home as an individual. Today we call those consumers, or somebody in a smaller company. We call that SMB now. And it could be somebody who was working a large corporation, call that enterprise. And so literally this picture had the three boxes on top, the three boxes on the bottom. And then what we called the original name of the company was Cyber U, and Cyber U was in the middle.
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John Davids
And so that's a very 1999 name.
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Adam Miller
Cyber U, 1999 name. And it's funny how we got rid of the name. But the idea was we were going to be back then, this was a 1999 word. We were going to be a metamidiary that sat between the buyers and sellers of, in this case, education. And so our first approach here was consumer. And so we started with web developers. We scoured the Internet for anything we could find that looked like a class. So by this point I had moved to la. It was probably three months into the company. It was a rainy day in New York City. I was at Staples buying some stuff to make me feel like I was doing something useful for the company. And as I walked out of Staples, there was a downpour, pouring rain. This is pre Uber. And couldn't get a cab. And I didn't have anything for. For the weather. It was, you know, nice when I went out to the store and pouring when I came back. And I thought, wow, this is just really too hard here. It's very expensive. It's hard to hire people here for a startup salary. And why don't I do this somewhere nice? I could do this anywhere. So what brought you to New York.
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John Davids
In the first place? Were you born there?
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Adam Miller
I was born in New York, grew up in New Jersey, had a lot of friends there, had worked in New York. That was kind of where I thought I was going to stay. And I thought, you know what, you could start a company anywhere. So I packed up my whiteboard, my clothes and moved out to la. And that's where the company really took shape.
- [07:12]
John Davids
And was the product just to kind of nail down this. Yeah, we're talking 1999 Cyber U. Was the product, the software underlying the classes, or were you actually going to create the curriculum, the material, the video content, the whole stack?
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Adam Miller
Great question. So early on we had seen what happened to the CD ROM business. So this is how long ago it was, you know, and CD ROMs kind of came and went really quickly. But what you saw in that short period of time in that space was that initially it was the developers of the content people that were making the games or making the educational content. The Edutainment were the popular, successful businesses. But by the end of that space, the winners were the distributors, the publishers. Electronic Arts, Blizzard, Activision. Right. They weren't initially, they weren't developing the content, they were publishing or distributing the content. And so I thought the same thing's going to happen in this space. So we don't want to create the content, we want to distribute it. And that's what we did. We started out as a distributor. But our thought was we would sell the classes and take a cut. And the Internet bubble burst probably nine months into the company, maybe even less six months. And so that was when we had to make our first pivot and we realized we're not going to be able to sell to consumers. We had these web developers we'd created product over the web to. We'd created basically a website for people to go and find the classes. And we realized, hey, it's going to be easier if we sell the companies. Why don't we sell to small businesses? We'll talk to people at big companies that we know, get their feedback to build a product that works for small companies. And two things were true at that time which make it interesting. So one was all of our developers at that time were everybody we had on the development team were web developers. So when we started building the software, we built it over the Internet. Today you call that software as a service, cloud computing. That wasn't such a thing. There was no such thing. It just happened to be the kind of developers we had and how we built it. And the other thing that became true was our friends, or friends of friends that we could talk to in HR that, that were responsible for training or got us introduced to somebody who ran training around employee development. We're all working at big companies. We thought we're this tiny little company in la nobody's ever heard of. There's no way we could sell the big companies. But let's talk to them, figure out what to build, and then we'll sell to the little companies. And so literally every two weeks we, we go to New York, talk to people at these big companies, get their feedback, fly back to la, I draw on cocktail napkins what the screen should look like. We would build it and two weeks later come back. Now, it just so happens, coincidentally, that sprints today in software development are two weeks long. But that just happened to be our travel schedule. So every two weeks we were going back and forth.
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John Davids
Lucky coincidence.
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Adam Miller
We were, we were kind of doing best practice before it was such a thing. And what happened was that the, after doing this for months and months and months, the big company people started to say things like, oh, you know what? We could really use this because we'd show them what we built every couple of weeks and they'd say, you know, this is great, we could use this. And we would say, well, of course you like it. We built what you told us to build. We built exactly what you suggested. And they said, no, really, we we want to use this. And we're like, well, but you can't because this is for small companies. They're like, no, really, we want it. We were terrible at sales.
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John Davids
And so you were saying no to.
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Adam Miller
A buyer, that they literally wanted to buy the stuff. And it turned out that our very first clients were huge enterprises. They were these big banks and insurance companies.
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John Davids
What was the first deal? Do you remember that first sale?
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Adam Miller
Oh, I remember the first three. Yeah. Our first three clients were Solomon Smith Barney. So Smith Barney, specifically Aon, which is a huge insurance company. Aon in Washington Mutual, which is no longer in business, but at the time was the hottest bank out there.
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John Davids
Oh, it was huge. And so, and the dollar figure, these are six figure deals.
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Adam Miller
So our very first deals ended up being seven figure deals.
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John Davids
Wow. Wow. You accidentally found your way into a seven figure deal.
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Adam Miller
Yeah.
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John Davids
And you did it.
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Adam Miller
It sounds like I just talked about seven figure deals. They were kind of per user per month at the time, but they got very big, very fast because they wanted to roll it out to every employee. Because it turns out in big company, everybody needs to be trained, everybody's got to take compliance training, everybody has development needs, everybody needs to be onboarded. So it really ends up being not some people in the company, like most software, but every person in the company that was part of it. And so these deals got very big, very fast.
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John Davids
And so did you ever hit the SMB market or you never needed to. It was just always big companies from the start.
- [12:04]
Adam Miller
Eventually. At first we were doing all these New York financial service firms and companies that had a big presence in the city. And when September 11th hit, we were super exposed because our entire portfolio of our entire pipeline were New York based or New York concentrated financial service firms. And so the first thing we did is we diversified our portfolio. I remember the next deal we did was Saab and then we did a deal with Honda and we just kept going from there. And so we went to other big companies. So at the very beginning, I remember one of our early board members said, oh, you really a financial services company? And I'm like, we don't want to be a financial services company. That's a bad idea. We're going to diversify. And so we started doing manufacturing and other industries. And then people would say, oh, you're really an enterprise company. You just deal with big companies. I thought, well, there's a lot of other companies that aren't all big companies. And so we started a mid market team and over the years we ended up building A small business team. We built a team just selling to the government, just selling to schools, just selling to nonprofits. We ended up with a really big sales team that was broken up into every vertical and every geography you could think of.
- [13:20]
John Davids
So there's two things that struck me about the story you just told, and I've got some experience with this myself, is you came into a market too early and like all entrepreneurs, you maybe felt like you were right on time or too late. Turns out you were five years early. Which happens. How do you survive? Because when you are on time or late, truly it's way too late. You've totally missed the opportunity. But then how do you survive five years before the market is really ready? Did it take five years for this thing to take off?
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Adam Miller
I'd say it took seven years.
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John Davids
And how did you last seven years we were doing?
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Adam Miller
I'd say we had a couple of different disadvantages early on. One was at the time we were one of the only tech companies in Los Angeles. So it was really hard to find people to work with us that had any sort of experience that was relevant. So we would have to find high potential people that we would train and they became relevant. That turned out to be really good for us and we ended up with very loyal employees and had great retention and great culture at the company. But it was also challenging because people didn't come in with experience knowing what they were doing. The other disadvantage we had was all the money was in Silicon Valley or New York. So our kind of early investors were all in New York and all the VCs were in Silicon Valley. And at the time, so this was back in 2005, tried to raise money and just completely failed because there weren't enough deep pocketed VC firms in LA at the time. And the VCs in Silicon Valley had the luxury of never having to get on a plane or drive to go anywhere. They'd be able to go to board meetings that were really close to them. They had no commute. And so it was a different bar to be able to get investment where somebody would have to get on a plane to go to a board meeting. And that made it harder for us, but it also made us super disciplined. So we were really scrappy. We were really good at conserving money. We were really good at living kind of paycheck to paycheck. Almost during those early years it made it harder to grow because we couldn't kind of advance capital to grow faster. But we built all the right systems and discipline. Retention was super important because we couldn't afford to lose any clients. And it made us, I think, ultimately a much stronger company because of all the disadvantages.
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John Davids
How, how early on did you raise money? Was it pretty much at the beginning.
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Adam Miller
So the very first money came the day I went to quit my job. So when I quit my job to start the business, typically an investment bank, at the time I was working in corporate finance and the standard was, and I had seen this over and over again, that if somebody left the firm, they were immediately escorted out by security. And the reason was there's a lot of inside information and so people don't want anybody taking any of that confidential data. The day I left, I had already cleared out my desk, I was ready to be escorted out and I went to my boss, tell him I was resigning and he said, oh yeah, we all knew you were going to start a company. How much do you need and how much time do you need? And my seed money came from everybody I worked for. So I was an associate. So it was the director, the vp, the managing director, even the vice chair, all invested in the company. And even my analysts who work for me invested in the company. And all of them did extraordinarily well. I think they all made about 150 times on their money from that investment.
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John Davids
That's a lot of faith and a lot of pressure. So, so you raised that money. The dot com bust happens pretty early in your journey.
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Adam Miller
You have to wait and then scraps.
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John Davids
That. That was a challenge too, I'm sure. Was that a big headache, a huge problem?
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Adam Miller
I mean, obviously the dot com bus was huge problem and so very hard to raise money at that time. And when September 11th happened, also really hard for us because it was a huge risk. Everybody in my sphere of influence told me to cut the company. Right? Cut it down to the bone. You're only gonna be able to survive if you hibernate right now. It's gonna be really hard to keep going. We had about 15 people, it's already pretty small. And I thought if we cut the company in half and we win these deals that are in the pipeline, we're going to go out of business because we'll never be able to support these companies. These were big companies, they needed a lot of servicing. And so in the very beginning we said, I remember on September 12, September 13, September 14, everybody was saying, you got to cut, you got to cut down the whole company. You got to just try to survive. And I watched an episode of west wing on the 14th and on the 15th, I came into the office and I said, we hiring because I thought if, if we cut right now and we win these deals, we're never going to be able to service them when we're going to go out of business. And I would much rather go out fighting. And we ended up closing three of the four deals we were working on, and we needed that team to service them, and that's how the company succeeded, because of that. So it was a big decision back then, but there was a lot of discipline early on because of the lack.
- [18:34]
John Davids
Of capital, of course, and it's a great training round. People completely underestimate what turns out to be a luxury of not having the money, because you develop a muscle that you never would have developed if you were flush with cash. So I think you raised, if I'm not wrong, about 130 million before IPO, or was that.
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Adam Miller
No, 20 million.
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John Davids
20 million. And then you IPO'd in 2011?
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Adam Miller
That's right.
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John Davids
And was the IPO, were you guys sailing? And everything was great. And so time to IPO or what?
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Adam Miller
First venture capital, Bessemer. Byron Dieter of Bessemer led the round. We were his first real cloud deal, and he ultimately became the king of cloud as, as an investor and had an incredible run. That was our, our first money in 2008. The board said after the financial crash and when the housing market collapsed, they said, you got to go out and raise some money. I said, why? We're. We're growing. Things are going well. At this point, we were growing at 60% a year, and the business was doing really well, super capital, efficient. And they said, look, you got to raise money because we don't know how long this downturn is going to last. It's going to be really hard to raise capital right now, and we have to assume that you're not going to be able to sell anymore, that you won't have any more sales. I thought, well, that's kind of dumb assumption. We're selling every day. They said, this market is terrible. You got to assume the worst. And so I actually had to go out and raise venture capital in January of 2009, which was an incredibly difficult time, and actually pulled it off. So I spent the back half of 2008 trying to raise money again. Closed around early 2009. We were one of the first deals that, that got funded and that helped us keep growing the business, but we never spent a dollar of that money we raised in 2009, so sales didn't dry up. Our first round of venture capital. We never spent the second one.
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John Davids
Wow. And then 2011, the IPO happens, and you IPO. Because things were going well.
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Adam Miller
I assume the business was going well. We. We became part of a. Part of the economy called. Well, we were an enterprise software company doing software as a service, but we're competing in the learning market. So we have what was called a learning management system. And there were several of them. And it was a very competitive market. We were not the biggest. And the broader talent management market, which is kind of everything you do with your employee, recruiting, training, performance management. Right. Goal setting, performance reviews, succession planning, onboarding. All those things are part of how you manage an employee. All the companies competing in that space were kind of clumped together. There was a lot of companies in the space. There were a few winners, but two companies had already gone public, and I was convinced that there would be a third, and that was it. And that if we weren't the next one to go public, we would probably never be able to go public. And so I had this epiphany in 2009, and it became a bit of a race between 2009 and 2011 who would go public first. We won. And within six months of us going public, all of the other private companies either got acquired or merged together or shut down, but they didn't go public.
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John Davids
And the day you went public was also kind of a rocky day, because there was a big news event that day, huh?
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Adam Miller
Well, that week.
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John Davids
That week.
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Adam Miller
The week we went public. You know, when. When things are going well during an ipo, people will joke around and say, look, the only thing that's going to stop this thing is a nuclear meltdown. And on Sunday night, we were on the road. When you go public, you do this roadshow. You go meet investors all around the world. We had already been to Europe. Things were going really well. We came back to the US we were already touring in kind of the big finales in New York. And we. I remember we were in the hotel, it was Sunday night, and the investment banker called, the guy running equity capital markets called and said, look, I got bad news for you. I said what I was planning on talking to about raising our price, like the price per share for the opening price. And he said, turn on your tv. And there had been a tsunami in Japan and the nuclear reactors were melting. And so there literally was a nuclear meltdown that was happening. The Nikkei was way down. The Dow was going to collapse the next day. He said, almost everybody has pulled their ipo, and I Said, because there were multiple companies that were trying to go public that same week. And I said, you know what? We're having fun. It's going well. We're just going to keep going, screw it. And that's what we did. So we kept having meetings Monday and Tuesday and Wednesday, and we ended up pricing the deal, I think on Thursday. We ended up pricing the deal on St. Patty's Day, which was incredible because we went public on the Nasdaq, which is in Midtown Manhattan, on St. Patrick's Day, which was just an incredible experience. So we flew out and this was part of the culture of the company. We flew out anybody who had been with the company for more than 10 years, or had been an employee of the year, or who was one of the first investors, like our angel investors early on and just had an incredible experience taking the company public. We ended up successfully pricing. We didn't get to raise the price, but we priced it at $13 a share and ended up opening an $18 a share. So it was considered very successful. And the rest is history. So we were then a public company for 10 years after that.
- [24:15]
John Davids
So this whole journey, I mean, just what you've spoken about so far, you had to deal with a whole lot of bruises and punches and unexpected events and you kind of kept pushing through it. Were there ever times where you felt like throwing in the towel or where maybe the team wasn't, you know, willing to come with you, or were you.
- [24:35]
Adam Miller
Just pushing through the whole time? Many times. There are lots and lots of arguments along the way. One of the big arguments we had a lot in that interim period right between when we started the company, when we started growing and when we went public was, remember, these were the very early days of cloud computing and software as a service. And so a lot of the, the companies that we were trying to sell to would say to us, we love what you have. Give us the software and we'll install it on our mainframes, we'll install it behind the firewall. And we would say no. And the head of sales, basically my partner in sales, Stephen, and I would have these arguments every single day because he would say, look, we need this deal to keep the company going because we were essentially running the company off of the revenue that we had from these deals. Because people, by then, people weren't paying per user per month, they were paying per enterprise per year. And they would pay up front. There were three year deals where they would pay up front, so we'd be able to use that money from the Deal to kind of fund operations for the year. And he said, look, we really need this next deal, whatever the next deal happened to be. The only way they're going to sign the deal is if we give them the software. And I had become convinced that we were onto something with this idea of leasing the software and delivering it only over the web. And I said, if we ever do it even one time, we're going to ruin the business because that one time is going to become 100 times. And we're going to end up being this behind the firewall company, kind of the old way of doing enterprise software. And so we never did it. So that was very tough, kind of holding off that idea. It turned out to be really good not to do that, but it was very risky not doing that because we needed those deals early on and we. We did, in fact, lose a lot of those deals. It wasn't theoretical like those companies said in the early days of SaaS. They said, we don't want it. We're not comfortable having our data out there on the Internet, so we're not going to do it.
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John Davids
Yeah, big transition. And a lot of companies would have folded and bended the knee there because they would have said, listen, the cash is more important and this customer is asking for this. But you really had a vision, and as you said, it was the linchpin to the whole business.
- [26:52]
Adam Miller
Ultimately, it became a huge competitive advantage, was that it was 100% cloud, 96% recurring. It was this kind of cash machine once it really got going. And it became a huge advantage for the business. And one of the reasons we were a successful public company. But at the time, looking at that million dollar deal and knowing that we're going to either win or lose based on this decision, and we lost a lot of those deals. So it was tough, painful. We persevered. You know, I always say that to be a successful entrepreneur, you need to have three things. You got to have passion, you got to care about what you're doing. You got to have persistence, and you got to have perseverance. And there's a fourth P2. You got to be persuasive because you got to convince a lot of people along the way to come on the journey with you.
- [27:42]
John Davids
Mm. I'm hungry. You guys hungry? I could go over some fried chicken right now from Jollibee. And no, this is not a commercial for Jollibee. This is a commercial for Influicity. That's my marketing agency. And Jollibee is one of our amazing clients. You can see how we help drive more foot traffic to their restaurants across America. @influicity.com Check out the case study. And hey, while you're there, check out all the other case studies from the amazing clients we work with. Influencer marketing, podcasts, social media, content, AI and so much more. And if you want to work with us, just hit the let's Talk button over at the top of the website. That's influicity.com and I'll see you there. So you're in LA during these last 20 plus years, when I'd imagine the whole ecosystem. I'm not even sure if there was a tech ecosystem in LA in 2000, but certainly there is one now. What's that evolution been like? You've been kind of in the center of it the whole time.
- [28:40]
Adam Miller
Yeah. So, you know, in some ways we helped shape it because early on we knew that we were one of the first tech companies. We saw the tech industry kind of explode in LA and all the, all the companies starting. Some of those people came from Cornerstone and started other companies and we helped shape it. We created an accelerator in our office. We had a venture fund that was supporting some of these companies. We put on events. So we would host this LA Tech Summit every year to bring together the whole tech community. And ultimately, kind of later on, towards the end of Cornerstone, even today, I started something called latech.org to have the tech community give back to the city. And that's been very effective as well. So we've been helping underprivileged kids in LA get jobs in the tech industry with an internship program. And we've done over a thousand internships for people that would never have access to those kind of jobs by opening up this, this way, this path for them to get into the industry and be successful.
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John Davids
So what, how would you characterize it today? Obviously everyone talks about, you know, being in Silicon Valley, New York, and there's Austin and there's Miami now, but where does LA sit now? I feel like especially throughout Covid and after Covid, there was a real renaissance.
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Adam Miller
Definitely top five, arguably top three in the country for a city around technology and has been really successful from that standpoint. The industry has just completely blossomed and so we have a lot of expertise here. One of the big challenges early on, Louisiana has a number of universities with very strong computer science departments. But what was happening is the people with the students would graduate and would move to either San Francisco or Seattle. Now we're much better keeping the people here. So we're keeping the talent here, we're keeping the companies here. Because of the success of companies like Cornerstone, there are a lot of dollars here now. So VCs either have formed here or, you know, even Valley VCs or New York VCs. Boston VCs have investments in LA. A lot of times they'll have a partner based in LA to keep track of what's going on here. There's more press about companies in la. There's Dot la, which is a tech publication about Los Angeles. So the whole industry has just completely blossomed and that's been great because what I used to say is, when, when I started the company, it was not socially acceptable to be in tech in la. Like, everybody was either in entertainment or real estate.
- [31:26]
John Davids
And I would think it was pretty.
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Adam Miller
Weird, considered a really weird thing. Like it was uncool to be in tech. And now everybody wants to be in tech. It's the hot industry to be in.
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John Davids
Right. I remember Transition. I think it was 2007. I think the first LA tech company I heard of was Shoedazzle.
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Adam Miller
Right.
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John Davids
And I remember hearing that they were in la and there were a few, a few names early, but it was not a place where you would think about going to.
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Adam Miller
Exactly.
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John Davids
And now it is. So what's the next chapter? Let's just put a bow on this. What's the end of the Cornerstone saga for you?
- [32:01]
Adam Miller
Yeah. So I had been doing Cornerstone at the time for 17 years. And I started to have this recurring dream. We would have these big anniversary parties every year on the anniversary of the company, which is November 8th every year. And we would do really big ones every fifth year. So the 10 year, the 15 year. And I knew we would have a big 20th anniversary celebration. So I started having this recurring dream of what I would do with the 20th anniversary. Be on stage. I had this dream. ACDC is my favorite band. I had this dream that I was going to come out with an electric guitar, start playing. By the way, I have no musical talent whatsoever. Start playing. And then I would have Angus come out and start playing with me. And then the mic would drop and that would be it. That was the end of the dream. And I was done. I would never. I'd never come back. Now, keep in mind, it's my dream, so I get to decide who's there and who's doing what. But I started to think about, look, if I'm ever going to have a second act, I got to be done around 20 years in. And so I did my swan song which was to acquire what at our, at the time was our largest competitor. We had already become three times their size and turned Cornerstone into the definitive victor of the space. So when I started out back in the early days, I told you it was very competitive market. There was a research analyst for the industry that put out these publications about the companies in the space. And he listed 150 companies in the space. And we weren't even listed. So we were like at minimum 151 in the space. And at the end, we were definitively number one. We had totally dominated the space. And I felt like we had accomplished our mission. The mission was to improve access to education for adults. We had delivered about 2 billion courses to people, 2 billion classes to people all over the world in 53 different languages in 192 countries. And I thought, look, did that really well. If I'm going to have a second act, I got to do it now and transition to chairman, executive chairman. And then, you know, shortly thereafter, we sold the company. We took it private in an all cash deal with Clearlake Capital and sold the company. And so that was October of 2001. 2020 was the 20th year. In 2020, I did the acquisition of SABA. But 2020, as we all know, also was when Covid hit, at least in the states. And so it wasn't so easy to leave the next day. So it was a bit of a transition. But we managed to sell the company October 21st, and it was a great transaction for everybody involved. And I was, I was done and ready to start the second act.
- [34:53]
John Davids
Wow, what, what was that next day like? Were you already onto something new or did you have a day where you said, I got nothing to do this morning?
- [35:00]
Adam Miller
There were a couple months where I had started to transition. I had started thinking about that second act as soon as I moved to chairman. I started thinking about what am I doing next and how am I doing it. But that period, for me, the biggest difference was Covid. So the transition was different because it happened during COVID during the lockdown. And you may know that LA was particularly strict about the lockdown.
- [35:26]
John Davids
I know.
- [35:26]
Adam Miller
And so we were home, literally. And for me, kind of leading up to that moment of COVID my travel had gone up to about 70%. So most people don't realize what that means. 70% means you're on a plane two to four times a week minimum, and you are maybe at home Friday to Sunday, but you're probably not home the rest of the week. And I was traveling nonstop all over the world. We had offices in 25 countries with 3000 people all over the world. And there were investor conferences and industry events, and, you know, seeing the employees and dealing with customer meetings all over the world created this need for intense travel. And then it just went to zero. So it went from 70% to zero. And that, for me, was the biggest transition. It happened to almost perfectly coincide with when I transitioned out, but that was the big difference. And so there was definitely a couple months where my family was like, who is this guy and why is he always here? What's he doing in the house all the time?
- [36:36]
John Davids
Wow. And so what is act two? I mean, this. This part of your life is pretty different. It's. It's philanthropic. It's charitable. You're trying to solve some pretty big problems. What's the mission today?
- [36:48]
Adam Miller
Yeah. So Act 2 for me has always been about giving back to the community. And I tried to be really proactive and thoughtful about what that meant. So my wife and I started one p dot org, which is a foundation focused on solving intractable problems. And we thought a lot about what problems are intractable, what should we be trying to solve? And so we thought about it as concentric circles. In our city in Los Angeles, the biggest problem by far is homelessness. In our state, California, there's definitely issues around education and workforce development, which was a big focus with Cornerstone in the country, there's lots of issues, but one of the biggest ones we. We chose to tackle was gun violence. And in the world, obviously, the biggest intractable problem is climate change. And so we started thinking about how can we have impact in all those different areas at the same time. I still love startups. I love tech. I was doing a little bit of investing. I had been doing investing, really. After Cornerstone went public, I started doing some side investing, mostly in other software companies. And I continued that, but that alone I found a little bit boring, candidly. And I thought, there's a lot of money out there, but there's just not enough operators. And so decided to spend a little time operating as well, but still focusing on giving back to the community. So Help Co found a couple of companies, one of them, and still is building modern software for nonprofits. Because I had spent a lot of time with nonprofits all throughout the time with Cornerstone, because early on I decided that I didn't want to be on corporate boards, but I would be on nonprofit boards. And so got very involved with some pretty successful nonprofits and help them grow and scale, but also saw the challenge that challenges they had with technology and tools to help them do their jobs better. And so thought, if nobody else is going to do it, I'm going to do it. And still it's really meant to give nonprofits a holistic, purpose built solution to maximize their impact. And then another company I helped co found was with the CEO of Team Rubicon where I had been chairman for a decade, he had been CEO. And that company is called Groundswell. And Groundswell in some ways is like the Robin Hood of charity, where we're helping to democratize philanthropy by enabling corporations in the same way. They set up a 401k plan to set up a private foundation for each of their employees. It's really a micro donor advised fund to help empower the employees to not only save, but also give back to the community and be philanthropic.
- [39:34]
John Davids
Yeah. So I mean, you just listed off the biggest problems in the world, from homelessness to gun violence to climate change. Let's just take homelessness for a second because I know a thing or two about this. I mean, lots and lots of friends in Los Angeles and I've driven the streets many, many times. And so I've seen it up close. What do you do about that? And are there transferable skills that you learned in 20 years as an entrepreneur that you can take to fight homelessness?
- [40:01]
Adam Miller
Absolutely. So we spent about 18 months doing research on why is the homeless problem so bad? Why is LA so much worse than other cities? What, what are the organizations doing? What works in other cities or even countries that's been successful to fight homelessness? Why is it such an epidemic? Louisiana just throw out some numbers. Spent $10 billion over the last decade on fighting homelessness and the problem got 72% worse. There's now about 75,000 unhoused individuals in LA. And unlike most cities, 80% of those people are also unsheltered, which means they're living either on the street or in their car. They're not housed or even sheltered. And so we spent a lot of time trying to understand how did, how did we get here. This is an epidemic, how this happened. And what we found, unfortunately, is that there's no silver bullet. There's no one problem, there's no one solution. That it really is a series of different issues that need to be resolved that are conflated together to create the mess of a problem that it is. And so that if you're going to solve the problem, it has to be a comprehensive solution. You can't solve a really complicated problem with a simple Solution, it's got to also be a little bit complicated. It's got to be holistic.
- [41:28]
John Davids
But if you spend $10 billion and you're telling me the problem gets a lot worse, I mean, fundamentally, there's probably one or two things that are going very wrong there. The money's not going to the right place, or it's definitely.
- [41:38]
Adam Miller
So we create an organization called Better Angels, where I'm the CEO, we treat it like a high growth hypergrowth startup, and the organization is leveraging innovation and pragmatism and just bold thinking to actually change the game. We're focused on five pillars, Prevention. Because even if you were to somehow magically solve the problem tomorrow, if you don't deal with prevention, it's just gonna happen again next week. And so we started with Prevention. We have a micro loan program that's proven to be very effective. We're dealing with services and shelter in housing. We're starting an affordable housing fund to prove that the private sector actually can make money in this part of the market and that this idea that it has to be solved with public money doesn't make sense. The public, you know, the government's not that good at housing development. The private sector is way better at it. And so leveraging the private sector, leveraging private capital to show that people can make money in this part of the market and still be successful, while also helping solve the problem. And then lastly, technology. There's about 3,000 outreach workers in Los Angeles county and close to 10,000 people in LA that deal with homelessness, either directly or indirectly. And the technology they have today is terrible. So we're building state of the art technology to make them effective at what they do to deliver results.
- [43:06]
John Davids
Yeah. And so I'll just preface this by saying I'm not an expert on this at all, but I believe that capitalism is a wonderful tool to get a lot of stuff done. And when you can put a profit motive in place, you can align incentives. So I thoroughly believe that if you can actually turn this into a business objective and people can build businesses and make money around this, absolutely. This, you know, you can build houses, $10 billion, and the problem gets 70% worse if there was a profit motive there. And when you have the government trying to solve this problem, the motive is often, let's get reelected, let's stay in office, let's let our constituents think that we're doing something when maybe we're not doing anything at all or it's counterproductive. So, I mean, is your general ethos that this needs to move to more of a private sector solution. Or do you think the government can fix this, but they just need to maybe realign their incentives?
- [44:01]
Adam Miller
Housing specifically, and the creation of affordable housing needs to be a private sector solution the way the government's doing it. An individual unit, just think about taking a homeless person off the street into an individual permanent housing unit is costing about $750,000 for one unit in L. A. It is taking five to seven years to build. The private sector, we believe, can do that same unit for $250,000 and have it done in 18 to 24 months. So it's completely different. It's day and night. And so if we can get the private sector to do that, they should. But when you think about something like prevention, that ultimately should be the government solving prevention. We're showing them how. We're creating a model that works, that can be replicated, and we're proving out that it works. But given the scale, it really should be the government that's solving it.
- [44:56]
John Davids
And a couple years into this new journey for you, how are you seeing what's the reception? Are people listening? Are you encountering a lot of big challenges? Again, you know, the challenges are different.
- [45:05]
Adam Miller
Challenges are different. I thought there was gonna be with better angels in particular, I thought there was gonna be a lot of opposition from the nonprofit sector. Like, who's this guy? Who does he think he is? And why is he coming into our playground? And that's not been true. They've been super receptive. We've been very inclusive about how we've approached this to really bring everybody together to help solve this problem. And that's worked really well. Where we've had a little bit of resistance is the government itself, or really the legislative bureaucracies that are out there because they want the credit for fixing the problem. And so they don't. Or they just want to keep doing what they're doing. And so they don't love the idea of a disruptor coming and messing up their. Their day job. But that's exactly what needs to happen.
- [45:53]
John Davids
I think you're. You're very generous in that description. But. But this comes down. I mean, really, you know, this comes down to very simple. You show me the incentives, and I'll tell you what's going to happen. When the incentive is, I want to get reelected, it's totally logical that you would have a lot of lip service, but you don't actually want to solve the problem, because then, then what are you getting elected to do next time? So I hear you. Well, this is. Listen, this is amazing. And it's amazing that someone like yourself is, you know, rather than just hanging up the shingles and hitting the beach, you're going to do this all over again. And maybe it's because you're maybe glutton for a punishment, but you also love the adventure of it.
- [46:31]
Adam Miller
Yeah, look, it's exciting, it's fun. It's mentally challenging and super interesting, right? All these things we're doing. Also building another company today, knowing all the mistakes I made at Cornerstone and being able to replicate the good things and eliminate the bad things is super helpful. Leveraging all the new tools that are out there, leveraging AI in a way that you couldn't do before. So all of that is fun. It's really interesting. But I also try to leave some time for friends, family, and fun.
- [47:03]
John Davids
I think you've earned it. Adam, where can people learn more about all this stuff right now?
- [47:08]
Adam Miller
So they could go to 1P.org, the letter, the number one letter. P.org talks about everything I'm doing philanthropically, and 1P Ventures is everything I'm doing for profit. And 1P stands for One Planet because we only have one planet that we're off to share and just trying to.
- [47:30]
John Davids
Make it better one day at a time. Adam, thanks so much. This was great.
- [47:33]
Adam Miller
Thank you. Appreciate it.
- [47:35]
John Davids
Thanks for listening. Hope you enjoyed this episode. If you did leave a rating or review on Apple or Spotify, wherever you listen to podcasts, it helps other people find the show and it lets us know that we're doing something right. We'll talk to you guys next time.