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6.1.21   8:40 PM

Iterable rose from nothing to a $2 billion valuation on Justin Zhu’s watch. After that, the unicorn threw him off its back.

He co-founded the marking technology startup with Andrew Boni in 2013 and served as its CEO. Then suddenly in April, after a string of capital raises, the 31-year-old Zhu was ousted. 

The company, now led by Boni, said the firing was over a violation of company policy — which Zhu said amounted to him "microdosing" the illegal drug LSD to try to improve his focus before a corporate meeting. Then an article published in Bloomberg Businessweek revealed a more detailed picture of a culture clash between Zhu and Iterable's investors.

For 10 months, Zhu had been in contact with a reporter at the news organization to discuss pressures and difficulties he had experienced as an Asian American corporate founder. Zhu felt at times his perspective and management style didn't fit with what investors and board members seemed to want in a top executive.

Despite his success, he also suspected he was being pushed out because of his Chinese values and heritage. Investors seemed to suggest they would rather see the company go public with a more traditional, and possibly Caucasian, business person at the helm, Zhu told to Bloomberg. (Boni is also of East Asian descent, although his surname makes that less obvious.) A representative for marketing tech company didn't respond to a request for comment.

After the messy end to Zhu’s time at Iterable, he has found his footing. He embraced social advocacy, leaning into a role as co-organizer for Stand with Asian Americans, which partners with corporate leaders to fight racially-based violence and discrimination. He has big ambitions for his pivot into activism, and also contemplates possibly trying to return to the company he helped build.

We caught up with Zhu and he explained to us what he is doing now, what he learned from his past experiences, his plans for the future, and why he thinks psychedelics may have actually improved his performance as a CEO.

This transcript has been edited and condensed for clarity.

  • On forming Stand with Asian Americans


    Business of Business: How did you experiences as a founder, and all of the things you went through and what you observed, propel this move toward advocacy for Asian Americans? 

    Justin Zhu: The group we started called Stand with Asian Americans, it's this historic, uniting of Asian American business leaders to speak up, many for the first time. For me, it was personally the first time speaking up on social issues. And being a founder CEO, where every day you have to ask for customers or ask for potential employees or investors, it really trains you to speak up, and really understand how to get the public to hear your message. And so for me, it's it's been the founder journey has been a training to become an activist, and to speak up.

    And  I think that's why it's so important to have Asian Americans in leadership roles so that they do have the opportunity to present, to speak in meetings, because those are the training grounds to actually speak up in a more public sphere.

    Can you explain waht your role is exactly with Stand with Asian Americans and talk about some of the specific things you've been doing recently? 

    Yeah, I'm one of the co-organizers. So [the group] started as just a letter that my friend Dave Lu, who also founder himself, wrote, surely after the Atlanta massacre [mass shooting in March targeting Asian workers at massage parlors]. So we've been in touch with Asian American issues 

    "What could we do to at least get Asian Americans speaking up? I think this is a muscle that we really haven't exercised."

    After the shooting, we stopped all the marketing at our company, and switched to, "Hey, this needs to stop we need to find healing or unity." I did an "all hands" at my company, and both of us, Dave Lu and I, we found disappointing the lack of media and corporate messaging around this issue, given that eight people were killed, six of which were Asian American woman. And so we thought, what could we do to at least get the Asian Americans speaking up? I think this is a muscle that we really haven't exercised.

    And so from that letter, I recruited some friends, including Wendy Nguyen, who is one of the core organizers. Her day job is an SVP of marketing. So she's great at getting attention for this. And we got a bunch of volunteers. And it really became a organization and a movement around this. Now we've become the largest coalition of [Asian Pacific Islander] nonprofits, and also the largest group of active folks who are really building a platform for the Asian American community in terms of bringing organizations together, funding, and also a technology platform.  Because really, you have amazing people who are putting their hearts and souls into education and into justice. But they don't [necessarily think about] having a website that's updated, or having a "donate" button, right? So these are all the things that are low-hanging fruit that we're starting with. And so this is what it's become.

  • Feeling the impact of cultural discrimination and "pattern-matching"


    We know from the news there are hate crimes against Asian Americans. There's a lot of prejudice and violence and terrifying stuff. But you also experienced as a founder, I think you've described in the press some kind of cultural issues, maybe some things that were not quite so overt. Can you kind of talk about about that, like the sort of pressures you felt and what didn't feel right to you?

    About a month after we launched Stand with Asian Americans, I was terminated as CEO of Iterable, the company I co-founded. And this was just after raising close to $200 million as part of our Series E which valued us at $2 billion. So the company really was at a record high in terms of our performance.

    I was terminated not because of my performance, but really the style of how I ran the company. Why I speak up about the injustices that I've faced as founder especially over the past June, my investors tried to force a vote force my co-founder to kick me out as CEO. And the rationale was, that they said to me, I was averse to conflict.

    "Being averse to conflict does not mean I'm not equipped to be CEO. It actually takes some empathy to talk to more people and build a sense of consensus."

    I said to them, being averse to conflict does not mean I'm not equipped to be CEO. It actually takes some empathy to talk to more people and build a sense of consensus, and actually get paid, versus kind of running the company in a more militant fashion. And so this gets into some of the values I have. And these are also more Eastern values that's subtle for I think, investors for people who don't, who haven't lived with Eastern values.

    But for someone from East Asia, this is 5,000 plus years of culture. It's in the body, it's in kind of everything we do. And so one of the core differences is seeing the company as an organism that you grow, and that can they can have disease that you can heal, versus a machine I operate.

    The other other part of it is you see the yin yang symbol in Taoism, it's seeing the world and polarities. If we only had darkness, if we only had light, that imbalance actually is not so great. So it's about really balancing. And that's actually one of our core values is balance. And so fundamentally,  I mentioned that we have differences in values, and that's okay. But if you look at my performance as the leader, even through the pandemic, last June, we had record high employee engagement, employee belonging score, which is very correlated with overall happiness.

    So it was hard to convince me and my co-founder [by saying], "Hey, I'm not doing a good job." And really, that, I think, feeds into another dimension where investors, these are early stage investors, who invested many years ago, five or six years ago...and our company's on the path to IPO. They're typical VC funds, some in for nearly eight years.

    So they're nearing the end of it and looking to get it resolved to get, you know, cashing out to them. This is this something that would make their career. This is where you also see a conflict of interest between the timelines of the investors in terms of the founders. For me, this is a 20, 30-year journey that that that, you know, I'm building the company for.

    You mentioned something in your previous interviews about "pattern matching," and people expecting to see a certain kind of thing as a CEO. I mean, the kind of the pattern that we go to is like, you know, a tall white man, usually. Um, but that's an interesting observation. How do we break that? How do we stop this pattern matching thing where we, you know, expect certain results to come from what someone looks like, which is ridiculous? 

    For these early stage investors, when you're just getting started, they're looking for unique, essentially people who are disrupting the status quo, right? Sort of the classic David versus Goliath. As you get to some point, and really the pressures right after we raise the Series D at $500 million valuation, then it became, "Okay, we want a professional. We want to, you know, have a steady hand to actually take it to the IPO."

    And this gets into where the calculus changes. And I think there are good investors, of course, in [Silicon] Valley -- I think just part of the incentives aren't quite lined up with the other part. For me, personally, it's just the power of the board of directors. There's too much power that they can exert that negatively influences the company.

    And so I think, I think there are structural changes that could be made in the Valley, so that, you know, especially if the company is doing well, investors shouldn't be able to push out a co-founder.

    And I think, as part of telling my story -- so my story, I've worked on for 10 months, with a journalist. I wanted to tell it to show people how this can happen to me, co-founder and CEO of a $2 billion company at 31 years old. I'm also an immigrant, Asian American, and they terminated me for speaking up, right? Imagine how hard it is for others who are feeling injustice as a minority, whether you're a woman or you belong to any of these groups, right?

    Because it's really, really hard to speak up. You want to keep your job when you want to. And so I think it's raising more awareness, and I hope my story helps other people to speak up, too. There's someone out there, people out there, who care. And I've been fortunate to, as the story broke, many people wrote in, founders and friends and family who haven't heard from for a very long time, showing support.

    I think as an industry, this needs to change. Because you end up having less people wanting to go found a company. So many entrepreneurs tell me, you know, "I love building a startup." But if you get into the public company sphere, it becomes a different game. And so really, it's a cultural change, and there used to be a view that the purpose of the company is to maximize shareholder value at all costs. And surely, this leads to a lot of destruction we see today. And we shifted towards having a purpose that is to benefit society. Right? And if you do that, well, you're going to get valuation, profits, all these great things.

  • A "life-changing" experience with LSD


    If you don't mind me touching on the the clickbait aspect of the story, just very briefly: Part of this issue, and what was in the headlines, of course, was you were microdosing LSD. And people have lots of reactions to that. Did you feel that there was certain pressure that sort of pushed you in that direction? And then did it actually help? 

    That experience came out of on-the-job trauma. So in 2018, the year before that microdosing event, we got rejected by every investor in the Valley. And we were months away from running out of cash and I was faced with, "we may have to fire employees and this dream of Iterable may or may not be fulfilled." And it took everything out of me and my heart and soul to be able to raise funding.

    After that point, I resolved to be as strong as possible. And one of the things I was getting feedback on was was I wasn't passionate enough. And maybe I wasn't able to resonate with investors. And part of the thing was, I wasn't passionate about just a pure ethos of making money, but I was passionate about solving this problem to benefit society.

    And so I went on a whole journey of really strengthening myself. Then the next year in 2019, is where I learned from an entrepreneur who shared a story with me, where she was actually given LSD by the FDA. She was recruited by UC Berkeley to microdose LSD to prevent Alzheimer's. I was interested in seeing how, when she takes it, her fear goes away. Anything you should do, she does right away.

    "I couldn't get this deep anxiety out of my heart. I just knew that, like, I needed to be stronger. And that's what ultimately led me to find LSD."

    And I thought this, you know, this seems very interesting. I've heard about Steve Jobs. And, you know, Bill Gates and others. There's a book I read during the time called How to Change Your Mind by Michael Pollan. So  things are converging. I was doing meditation, you know, I do tai chi, and I love philosophy. But I couldn't get this deep anxiety out of my heart. I just knew that, like, I need to be stronger. And that's what ultimately led me to find LSD.

    By time I found it, it took me many months, it wasn't easy. I was really just reading online. By the time I got it, it was in the middle of the fund raise. And so I took it before a small investor meeting, I have many of these meetings. And I was pretty sensitive to it.

    It was life changing. I was able to process why my parents left everything in China, for us to be here for the American Dream, for democracy. I was able to tell my mother that I loved her for the first time. I told her, I understood, she did not get the love from her parents. "And as your only child, I'll give you all the love you need."

    And I understood really the vision for Iterable. We have this saying Silicon Valley: "The future is already here." But it's an evenly distributed. What that also means is that it's left many people behind. And that's not okay. So how do we bring these people along. And the other revelation I had was AI, which was this kind of the hot thing these days. It's already used to control our lives, via social media, via the e commerce platforms recommending what we see, or work or buy. Many who to date.

    Really this powerful tool, like with any tool, like like your cell phone, computer, it can be used for good. It can be used to actually, instead of having your phone be the purpose of your life, you're scrolling through your phone, you can use it to talk to your loved ones and get maybe get a deal done sooner. And so for AI, it's the same thing. And AI really should be used for human values of connection, well-being, belonging and love. And I actually means "love" in Mandarin.

    So this is really where I had this awakening, I thought, wow, this is really what Iterable can be and should be. And so that led to the transformation of my openness to truly connect with so many more people. And since taking that LSD in 2019, [the valuation has increased]. It was transformative for the company and for me. It changed my life. And it is part of the journey.

    The reason it's out in the stories is because I disclosed that back in about two months ago, to my co-founder and to my investors. So I'm somebody that openly shares with them because I wasn't ashamed of it. I wanted to help them to understand what I was going through. It was also a way for me to also seek empathy from them.

    Because I did want to tell the story you saw in Bloomberg and wanted to bring them into the whole process of "Hey, let us tell the story." But they kind of saw that as a weakness, as "Okay, maybe there's something wrong with Justin" versus actually saying, "Hey, this is like human being, right, who put his life and soul into building a company and this is part of the journey."

  • Is a comeback in store for Zhu?


    That's crazy. Considering the results. It sounds like [using LSD] didn't affect your performance at all. In fact, if it did, it was positive way. Do you think that was just an excuse then? 

    Yeah, it's an excuse. It's an angle that convinced my co-founder because back in June when my investors tried to kick me out the first time, he said no, because objectively there's nothing you can terminate Justin on. When I shared with with him this time, he was convinced that because LSD is a Schedule I drug, it violates our employee handbook, [the investors said] "it's your fiduciary duty to terminate Justin."  That's not the case.

    You could because the board is two investors and two co-founders. So once you convince my co-founder, I'm outvoted three to one. So you can terminate me for any reason at that point, but it's the wrong thinking that really convinced my co-founder ultimately. 

    It's unfortunate because you're seeing a lot of studies coming out right with MDMA therapy with these medicines, that's healing deep traumas. It's been used in cultures for a very long time. I think part of what I went through, and what I hope others will learn from me, is speaking about mental health issues.

    I would have loved to have someone who can actually teach me about these substances, and who can actually, you know, help me process what was going on. The founder journey in particular is also very lonely...because it's just so much, there's so many things that can go wrong.  You want to hold it all in. And I think, you know, there really needs to be more discussions around the mental health aspect of being someone in Silicon Valley or just in life. I think the pandemic has brought a lot of people into very tough times. And so mental health really has to come next.

    One last question: Would you do this again? Would you start another company? What would make you want to do that? After everything you've been through?

    Iterable is my life's work. It's the company that I built as my home, and a home for hundreds of "Iterators." So many people have told me, "this is the best company I've worked for. I want to be here for life.' And it's because the values we create and just it's a culture where you can be yourself. For instance, we have  a weekly Town Hall. And I had a section called In the Mix with J.Z. J.Z. are my initials, and I would play music of all kinds. You know, it's very different from a typical corporate company. I encourage people to cry, to express emotions, you know, recognize just their true being and be able to come to come to work with that?

    "My hope is one day I can return to the company. I am inspired by the stories of Steve Jobs and Jack Dorsey."

    My hope is that one day I can return to the company. I am inspired by the stories of Steve Jobs and Jack Dorsey. Right now, I'm able to shift a lot more of my energy towards my family and friends, which for years, I didn't see my parents or talk to them. For instance, like now my mom actually just got work from home authorization. So she's gonna be moving here in the Bay Area, which is great. And then the other core focus right now is getting Stand with Asian Americans off the ground.

    You have a group of people who are builders of unicorns. we actually have Eric Kim, who is also an investor in unicorns himself, and Wendy, who's been growing unicorns who have amazing talent. Now I'm putting our minds, hearts and souls into building this movement, which is very much needed with the Asians entering the Civil Rights movement, right? We starting with started in the 60s and making Dr. [Martin Luther] King's dream of a country where we can all belong come true.

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