Jason Johnson shares his entrepreneurial journey, highlighting the importance of embracing failure, making tough calls like pivoting, and building.
Jason Johnson shares his entrepreneurial journey, highlighting the importance of embracing failure, making tough calls like pivoting, and building relationships for successful acquisitions. He emphasizes that perfection is not key to success and that good products ultimately win.
take more deep breaths and recognize that, hey, you don't have to get everything right. You can make some mistakes, you can make some errors, you can let your people make mistakes and it will be okay one way or another. You know, if it's a good product, if it's a good service, people are going to buy it. They're going to they're going to enjoy it. They're going to appreciate it. [Music] All righty. Hello everyone and welcome to the Dealmaker Show. So today we have an amazing founder. A founder that has done it me many many times actually. You know we're going to be talking about all the good stuff that we like to hear the building the scaling the exiting uh the you know the crazy times to different cycles you know whether it was during the com bus to even you know now you know and how things have changed over time. But again I think that you guys are all going to find this episode quite
inspiring. So without further ado let's welcome our guest today Jason Johnson. Welcome to the show. >> Thanks for having It's my pleasure. >> So, originally born in Portland, Oregon. Give us a walk through memory lane. How was life growing up over there? >> Yeah, you know, Portland's Portland's a great great town. It's uh you know, it's great growing up. Very very granola. My you know, my parents were hippies and and so um you know, it was a very nice place to grow up. Um but I'll be honest with you, I I moved to California for college and I lived in California ever since and the weather down here is a little bit better. So, I love being an Oregonian, but I also love being in California. And then in your case, you know, actually you studied business out of all things. So what what got you into into the whole business, you know, uh world? >> Yeah. So, so my my dad
my dad worked for a Japanese trading company and um he got to do business trips over to Japan and I got to see, you know, what it's like to to do big business. And so I dreamed of of someday working maybe for a a big Japanese electronics company or something. and and uh you know the business degree was sort of the the path towards that >> and obviously that first company you know had to do with Apple computer you know in 93 you know I'm sure it was a different type of Apple >> yeah for sure so so there's two companies I wanted to work for out of college it was either Apple or Sony and it's you know back then Sony was the biggest consumer electronics company in the world they made all kinds of awesome gadgets there was this there was this showroom in in Tokyo that that even to this day rivals you know the best showroom, shown the most gadgets of anything anywhere. And I I I
got to go multiple times. Um and uh yeah, so I ended up at Apple, which you know was was pretty was pretty special. Um I got to uh oversee their their distribution business, which this is before there was Apple retail stores, and that was it was quite an experience for for a young person in their 20s. >> So you did Apple, then you did tot systems. How do you how do you evolve uh all the way to let's say Inner Quest which was your first company that you you know really venture into the world of entrepreneurship. >> Yeah. So, so the the jump is I I joined Tut Systems, which was the first venture capital backed startup that I I was an employee of and and Tut made these uh these internet routers, these uh like modems for the home. And u while I was working there, I got the idea for Interquest and that was to actually take these modems and put them into people's homes and and
create one of the first broadband uh DSL services um that was really focused on apartment buildings. That was our niche. We operated in in 17 states uh doing highsp speeded internet service to apartment buildings. >> That's incredible. So then tell us how did Interquest you know come together? >> Yeah. So so Interquest was was funded by some some some some friends in fact one of my mentors from college uh from Pepperdine University the vice chancellor. He was one of the first checks in there and and we built up Interquest and and and ended up rolling it together with two other similarly sized startups doing broadband. Um one was doing hotels, one was doing office buildings. So it was it was uh later to be called a beac a building uh local exchange carrier and and that roll up those three companies was going to be the biggest IPO of 2000. Um it was called Darwin Networks. We
we wrote the S1. We had quite a squeeze at Leman Brothers as underwriters and uh and on paper uh you know Jason Johnson was going to be uh was going to be it's going to be extremely wealthy but uh we all know what happened in April of 2000 just after we filed that S1. >> Wow. Because I mean the the valuation at the peak. What was the valuation at the peak? And and obviously we know what happened. >> I mean the underwriters were expecting this, you know, to be to be one of the biggest IPOs, right? It was going to be it was going to be huge. I I can't remember what the what price they were aiming for. Um but but we were literally just getting ready to go do the road show, right? They were going to rent a jet. We were going to fly around the country. Um we hired a CEO that was had like the best pedigree you could imagine. Raised tremendous amount of capital. Um and uh and yeah,
long story short, um Darwin Darwin is dead. Darwin Networks went from being the potential biggest IPO of 2000 to probably one of the biggest failures of 2000. >> What do you think that whole experience told you about um essentially, you know, cycles, you know, and to and to weather the storm and the cycles as an entrepreneur? >> Yeah. Uh, so I I'm lucky that I was still in my 20s at the time. And so I I still felt like I had a lot of my future ahead of me. And so I didn't I I actually it's it's very strange to say this, but I I really wasn't that upset, which I know sounds crazy because um I I went from being potentially, you know, this huge successful entrepreneur to to needing to to find a job. And I literally had to go find a job. And uh fortunately one of my mentors um a famous a famous um lawyer in Silicon Valley, Craig Johnson, unrelated to my last name. Um he was a
mentor of mine and he said he said, "Jason, you're still young. You still have, you know, you still have a lot of energy behind you. What I suggest is you go get a job. Um go back to a big company like an Apple and spend a few more years kind of retooling and getting your confidence back and and thinking about what you would do next." And that's exactly what I did. I went and got a job at Dolby Labs and um and worked there for for a whole bunch of years and uh and and I did exactly that. I I learned a lot and and and I and I retoled to get ready to take another swing of the fences. >> I mean that was 12 years. So that's a quite an amount of time because I mean once an entrepreneur you're always an entrepreneur. So what do you think needed to click for you to to really feel good about the idea of um going at it again you know with August home? >> Yeah. So, so, so, so honestly,
I had I had some friends that were kind of giving me a hard time because because now I was I was an executive. I was, in fact, I was I was a candidate to be a potentially to be the CEO of Dolby Labs. It it had gone public and and they were kind of picking different people to to groom as potentially a future CEO and they they sent me to do the Harvard programs and the Stanford programs, had executive coach and all that. Um, and and I kind of was enjoying that path, right? You know, um had a giant salary, right? and big, you know, big RSU stock rant. Uh, making lots of money. Um, um, but one of my friends said to me one day, um, hey, you've been there at Dolby for a while now. I thought you were an entrepreneur. Are you ever going to take another swing at it? You going to ever start another company? And, uh, and that once the once the gear started thinking, you know, spinning on that, I
started thinking, boy, I have to I might have to do something to make myself, you know, um, take another risk. So then tell us about the sequence of events that needed to happen for you to have the exposure to hey I think that this may be a risk worth taking. >> So so this is this is a true story. This is this sounds kind of wacky but it's actually true. So um I went to went to my boss's office one day. We were we were we were working on acquisitions for Dolby and um and I and I had an acquisition I thought was very very you know should be recommended to the committee and I was going to be the champion and I presented it to my boss in his office and I said I I think this is a really good one. I want to I want to champion driving this one and he said to me and and I'll never forget he said hey Jason you know you're you're very ambitious. I love your vision. I love your energy here,
but I I…