Edo Segal, Napster CTO on AI, Creativity, and Human-AI Systems

**Grace Gong** (0:00)
I made a Notebook out of...
Oh, okay, we're live. Never mind. Okay. Hi, Edo. Welcome to Venture with Grace.

**Edo Segal** (0:09)
Hello. How's it going?

**Grace Gong** (0:11)
Great. And I'm so excited for our episode. I was about to tell you, I actually, yeah, I was listening to the Notebook I made about you and Napster. But okay, we'll dive into the conversation. So I'll throw in some details that I heard.
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I want to start with your journey. Obviously, in our conversation prayer that you have sold a company for $500 million, and you are the CTO of Napster right now, and maybe you are a multi-time entrepreneur. Maybe we could start with what were some core lessons that you've learned early on in your career, shaping into who you are today.

**Edo Segal** (1:26)
Okay. For any aspiring entrepreneur, maybe the most important lesson is you never end up where you thought you will.
I've not been on one journey where the original plan was how it played out. So I think the main attribute apart from grit is pragmatism. And most things fail because people don't stick to it long enough. And that's something that's very important to know going in and kind of develop that muscle and be a person that can take 15 no's a day and still keep going.

**Grace Gong** (2:08)
Oh, I love that. What about since you sold multiple different companies? So the first company acquired by OL when it was the peak days, and you sold another company called Acquired by Livestream, and then you sold another company, Acquired by answer.com. What is the whole acquiring thing? So obviously, no one is getting, oh, hi, hi, Andrew Rock. I want to say hi to the audience who comments. So obviously, you have a track record of successfully selling company. Obviously, I don't think the people who are selling company are the one that wants to sell the company. It's more of like the buyer wants to buy the company. Maybe we could talk about what were the core things that you have done right, and then what are some stuff that you have learned along the way each time that you were selling a company?
Maybe that was a goal, because I'm sure that's kind of profitable.

**Edo Segal** (2:59)
Oh, sure.
I think whenever anyone asked me this question as I was operating one of these companies, my answer has always been that I'm always doing three things as an entrepreneur. I'm always first and foremost trying to operate the company to the best of my abilities, so it's successful. That's the foundation of everything. Then second, I'm always financing the company. It's not something that ever stops. That's one of the mistakes people make, because they think they kind of rest in their laurels after they close around the financing, and then suddenly they realize they're about to hit a wall, and it becomes a big crisis. And the third is I'm always selling the company. So these three might sound like they're different or serial, but in fact, they need to be thought of in concert for you to be successful. So you're always operating, you're always financing, and you're always selling. That's been my mantra, and maybe that's why I've had five exits.

**Grace Gong** (4:03)
For sure.
Think about the exits. So at what point do you actually have conversation with the different companies, or maybe the conversation is throughout the day? And how do you, I guess, what was it, let's say, the main case of being acquired? So sometimes it's aqua hiring, sometimes it's people acquiring for a certain type of technology, and then sometimes it's literally just a lot of synergies between your product and the other products. So I guess when do you actually have a conversation with the people who acquire you and, yeah, maybe we'll start there.

**Edo Segal** (4:37)
Well, the best way to get acquired is for someone to reach out to you to want to acquire you as opposed to you selling to them.
And depending on where your initiative falls in the food chain, sometimes you might find yourself as a piece that accelerates something bigger, in which case you might need, they might not even know you exist, so you do need to do some of that. But I think generally empathy, anything to do with sales, whether it's you're selling your service, offering service or selling your company, it starts and ends with empathy and putting yourself in the shoes of the buyer. And in many cases, what that means when you're running a technology company with a proprietary capability is that you want to contextualize it for the buyer. So we want to reduce the amount of hoops they have to jump through in terms of their imagination and kind of manifest something that is closer to what the end state looks like when, for example, whatever you've done is integrated into their world. And that is really the dance. Now, in some cases, if it's like, if it's a buyer's market, it's one situation. If it's a seller's market, it's a different situation. So by what I mean by that, if you're Noam Shazar, the person who took part in venting the transformer, and you're in Google, and you're a seller, like there's no, you don't need to court anyone. People will chase you. You're very, I would say, scarce. There's a lot of scarcity around what you do. If you're an entrepreneur that's developed something really valuable in technology, and it might be innovative in that the customer or the potential buyer doesn't know about it, you obviously need to do some education and you need to communicate what the impact would be of that capability integrated into this other entity.