Auth0 CEO & Co-Founder: Eugenio Pace

Summary

Eugenio was born & raised in Argentina in the late 1970s; a time when there was extreme political chaos including the South Atlantic War between Argentina and the British. He paints a picture of how life was like living amidst the political turmoil, life without the internet and telephones, and takes us through his earliest entrepreneurial endeavors. Eugenio always had a curiosity for building systems and machines, so he went on to study electrical engineering at a University in Buenos Aires. After college, he started his first business with a friend, sold to one customer, then realized they both knew nothing about starting or running a business. He was then approached by a recruiter and went on to work for Microsoft for almost 13 years; first in Argentina before making his way to the corporate HQ in Redmond, WA. As Eugenio describes, "When I turned 42-years-old, I realized it was time to start building the company I had always dreamed of building." Auth0 was born. Today, Auth0 is valued at over $1 billion, they've acquired over 7,000 customers, and they are expanding very rapidly.

Podcast Transcript

Note:  There may be errors to this transcript (some funny, some confusing - we used an automated transcription software!)

00:00:00 Eugenio Pace: I turned 42 and 42 is the answer for everything! [laughter] So when I turned 42, I was happy, but I wasn’t entirely fulfilled.

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00:00:21 Ash Faraj: Hey! Welcome to the ExecuTalks Podcast. It’s the show that gives you insight to the personal stories of today’s top executives.  In this episode, you will hear from Eugenio Pace, current CEO and Co-founder of Auth0, an identity management platform for application builders. Auth0 is valued at over $1 billion and has over 7,000 customers. Eugenio shares stories of his childhood in Argentina. He shares early entrepreneurial endeavors, and towards the end he shares his story about leaving Microsoft to take a risk on building the company he’s always dreamed about.

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00:01:08 Ash Faraj:Eugenio was born and raised in Argentina in the 1970s. He grew up at a time when there was heavy political chaos including the South Atlantic War between Argentina and the British in 1982. Resources were limited, so Eugenio grew up in a house with his extended family. Speaking of resources, it might be a little hard for you to believe this, telephones were actually rare in Argentina at the time Eugenio was growing up.

00:01:37 Eugenio Pace: So I was born in the seventies in Argentina. Argentina in the seventies was a difficult place. They had a lot of complicated political environment. There was a military dictatorship. There was war. Thankfully, a short war with England over a couple of islands in the South Atlantic. I remember all that very vividly because I was 13 years old when that happened. Two blocks from my house there was a house that was blown by a terrorist group. Yeah, so those things were real. People were killing each other.

00:02:26 Ash Faraj: How was Argentina different back then than it is now?

00:02:30 Eugenio Pace: In Argentina when you bought a house, you could buy a house with and without a phone. The real estate advertisement would say, “Apartment, one bedroom, two bathrooms. With phone: $100,000. Without phone: $50,000”

00:02:51 Male Voice 1: Really? It was that big of a deal?

00:02:54 Eugenio Pace: A big deal. You’d have to wait like 10 years to get a phone.

00:02:59 Male Voice 1 That’s crazy.

00:03:00 Eugenio Pace: And so those of us that were lucky to have a phone, it was this treasure of, “I have a phone. I can call people.” Which today you would think is completely absurd. I remember my mom’s family had a member living in France. We called her twice or once a year. Just the process of communicating with her was so difficult that you have to call the operator and say, “I want to call this number in France.” And they would call you back two hours later and say, “Your connection now is ready.” I remember we planned all together as a family what is it that we’re going to say? Because the call was very expensive. We didn’t have all the time in the world. We had to say, “Now, Eugenio what are you going to ask?” [laughter]

00:04:02 Male Voice 1: That’s crazy to even think about.

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00:04:08 Ash Faraj: What do you remember about your parents as a kid?

00:04:13 Eugenio Pace: We didn’t have a lot of resources, but I remember maybe two things. My father taught me to fix things. I worked with him in the house, like fixing everything. We never called a plumber. We never called somebody to paint. We never called somebody to fix our electricity or fixtures. We did it all ourselves. I felt that we could do anything. Nothing out of bounds for what we could do.

00:04:56 Ash Faraj: What was the most difficult day emotionally growing up?

00:05:00 Eugenio Pace: In Argentina, there was a draft for the army. So maybe one day that I remember as a hard, not for me specifically, but in the house, was like tension, was the day there was a lottery system. This was in the eighties. I was still in high school. Because the age was eighteen. A war just finished in the South Atlantic. I remember my mom was crying and my grandmother -- my grandmother lived with us -- she was also crying because I think in their minds I was going to war, even though there was no more war.

00:05:54 Ash Faraj: As you can imagine, growing up in the environment that Eugenio did was humbling, but it created an amazing motivational force to do stuff. Throughout his teenage years, Eugenio would pick oranges off trees to make marmalade. He would create kits for model trains, airplanes, and cars to sell to friends, and he would create a system to help read the percentage of red blood cells in a sample. Have a listen.

00:06:22 Male Voice 1: What was your earliest entrepreneurial desire?

00:06:29 Eugenio Pace: My first recollection of a business, you know, I had all around my neighborhood there were these trees; orange trees. But it wasn’t like the sweet orange, it was more like the oranges that you would use for marmalade. So it was a little bit bitter, like stronger. When it was season, I would go with my bike. I would go with this back basket behind me and I would just fill it with oranges. I forgot about that and remember it now. I would come back home, and with my grandmother, we would make marmalade for selling. We never sold it. I never sold it, but I already did manufacturing. [laughter] Then when I was in my teens, I got into models and railroads, like model trains and model airplanes. I had a fantasy of building them as a business. I even remember printing my own business cards that said, “Eugenio Pace Modeler” or something like that. Gave it to all my friends and nobody bought anything [laughter], but I made like plans, kits for other people to build their own models. That was my very, very early on.

00:08:04 Ash Faraj: What about in college?

00:08:06 Eugenio Pace: Early years in college, I built a device to measure the percentage of red blood cells in blood. You have like one millimeter of blood. If you put in a centrifuge, all the red cells go to the bottom and then the plasma goes up, so you can measure the distance, say 55% red blood cells. Everything is else is blood. So I built a system that would measure that and I sold that.

00:08:44 Male Voice 1: Really?

00:08:45 Eugenio Pace: Yeah. I sold like two. [laughter]

00:08:53 Ash Faraj: Eugenio always had a curiosity for building systems and machines. He went on to study electrical engineering in Buenos Aires. After college, his friend worked for a company that needed a better way of tracking customer information, essentially like a CRM. He and his friend built a mobile CRM for his friend’s company then thought, why don’t we sell to other companies that need mobile CRM’s too? Of course, they didn’t have any experience in starting or running a business so Eugenio shares what went wrong.

00:09:25 Male Voice 1: Now going to your college days, your young adult. You studied engineering, correct?

00:09:34 Eugenio Pace: Yes. Electrical engineer.

00:09:35 Male Voice 1: Did that stem from your curiosity as a kid working with your dad and just building things? How did you get into that career path?

00:09:44 Eugenio Pace: I remember people asking, “What do you want to be when you grow up?” I always answered, “I want to be an engineer.” I wanted the big machines and big systems. Of course, then I discovered computers. A friend of mine, he had a computer. He bought another one, so he gave me the old one. It was a Texas Instruments TI-99/4, like an old home computer; one of the first home computers. It was a computer that I didn’t have any storage. So all the programs I typed would go away when I turned it off, which was a pain. That was my first encounter with technology. I would say, “Wow, this is awesome.” I was building circuits and stuff.

00:10:44 Male Voice 1: Now you’ve graduated college, and you went on to start your first business, right? It was basically like a CRM on a phone with your friend. Can you talk about what steps you took out of college and how you got that started?

00:10:59 Eugenio Pace: A very good friend of mine he had like this idea and saw the opportunity. He was working at a company that had the need, so together we built this system. It was essentially a mobile CRM. At that time, there were no smart phones. So it was like an actual computer, but you could connect it with a modem. You could essentially connect through the modem to a server, download information, download your orders, upload your orders, update your customer information. So I wrote with him all the software, which was like everything. The computer was pretty basic. There was no database. There was no everything. We wrote everything. It was like a big, big project.

00:11:53 Male Voice 1: Was there a specific need for that?

00:11:56 Eugenio Pace: Yeah. This company that my friend was working for had the need; they were all like writing down on paper. So we had this idea, can we give them this little computer. Personal computers were big, bulky things. This was like a tiny thing. It was really advanced for its time. We wrote every software. We sold it to this company successfully. Then we said, “Hey, we can do this for other companies too.”  Our mistake, or some of the things that didn’t go well, we were work engineers. We thought that the product was the only thing. Not even the most important thing, the only thing. It was all product, product, product. It was not like everything else that goes around building a company, a sustainable company. You need sales, you need marketing, you need support, you need finance, and operations. Things like that are obvious. We were really good in product. We built an amazing product for that time, and we were unlucky that the first deal that we closed was relatively easy and successful. You see what I mean? We closed the deal with very little negotiation. There was no push back on the features. It was like, “Oh, this is awesome. We’ll pay you.” Here we’ll pay you a hundred dollars, or whatever. We were so happy. We didn’t even stop thinking whether a hundred dollars, or whatever it was at that time, was a fair price or not. It was just like --

00:13:46 Male Voice 1: -- You were just so excited to sell something that you built.

00:13:49 Eugenio Pace: -- yeah, so excited about building, and so we got the wrong feedback of what building a company is about. We thought that everything was that. We didn’t have any guidance or mentors or an adult to tell us that, “Look man, the product is great and it’s important, but it’s not the only important thing.” Here’s how you can grow the market, the requirements how you can grow that business. There was definitely a business to be built.

00:14:24 Male Voice 1: Nobody is going to buy it if they don’t know about your product.

00:14:27 Eugenio Pace: Exactly, and so the second customer didn’t go very well.

00:14:31 Male Voice 1: Really? What went wrong with the second customer?

00:14:35 Eugenio Pace: The second customer, I would say, took advantage of us. They saw these two kids, inexperienced, and so they said, “Oh, we love your product, but it will be great if it can do these other things.” And so, I’d say, “Yeah, that sounds awesome. More features. Yeah, we will add that.” We added that feature, and then, “But, yeah, that feature is not enough. We also need these other things.” So we built the second feature. Then six months later, we built like a ton of features for this customer. Essentially for the same price. Then we kind of realized, oh, maybe they’re taking advantage of us. But at that time, we were burned. We felt so good about the product and our ability to deliver that every challenge they threw at us, it was like, oh yeah, we can do that.

00:15:36 Ash Faraj: You were just excited about the work.

00:15:38 Eugenio Pace: We were just excited about it without the notion of like, oh, hold on. No, this is the product. This is what you buy. If you don’t like it, don’t buy it. Go and find it somewhere else. But that’s a business component that we have no clue. So after months of that back and forth, we burn out.

00:16:01 Ash Faraj: After his first business failed, Eugenio was approached by a recruiter to join Microsoft in their Argentina branch. Eugenio would go on to work for Microsoft in various roles for almost 13 years, eventually making his way to the corporate headquarters in Redmond, Washington. Then at 42 years old, Eugenio was working as a program manager at Microsoft, and he loved his job. He got to work with a variety of people. He got to travel a lot and he really enjoyed the company’s benefits. But there was something itching inside of him. Ever since he was a kid, he had always wanted to build his own company. He now faced a difficult decision; remain comfortable and content at Microsoft or set out to achieve his dreams.

00:16:51 Eugenio Pace: Microsoft I was there for 13 years. First in Argentina and then I moved here to Washington State. I was in Microsoft headquarters. I was part of the engineering team. I loved it so much. I traveled the world. I visited like 30 countries with Microsoft, all over the world. I learned how you build a software company and it was the best thing that happened to me. Microsoft was great in the sense that I could experience multiple things. I was in consulting, engineering, product management, in program management. I go to work with developers, with testers, with writers, with illustrators, with like a whole broad set of professionals. It was really amazing. Look, I don’t know what was the turning point. I turned 42 and 42 is the answer for everything. [laughter] So when I turned 42, I was happy, but I wasn’t entirely fulfilled. I felt like I could stay there and continue my trajectory at Microsoft forever. I would be okay. I had a good salary. Microsoft was taking care of me.

00:18:27 Male Voice 1: It was comfortable job.

00:18:30 Eugenio Pace: It was a very comfortable job. It was still challenging with things to learn. It wasn’t like terrible. It wasn’t like I was hating every minute of it. On the contrary, I was happy. If I look at it objectively, I was happy, but I was not… If I did a thought experiment, if I died, if I knew that I had one day in my life, if I look back, I ask myself would I regret anything? I like that exercise that I do often because we don’t know how much time we have in the world. Nobody has that date written anywhere. We don’t know. It could be 10 years, 20 years, or 10 minutes. The thing that I regret in life are all the things that I never did. Not the things that I did and then as I were that wasn’t a great idea. Because you know, at the end of the day, the things you do that are a failure so to say, or the not good positive outcomes, to me are never negative. They’re always information. Things that we learn from. Things I tried, I experienced, and I learned from that experience. I now know the things that I don’t like. The things that I need to avoid. The things that I don’t enjoy doing. Trying things and so-called failing is just part of life. But the things that I really regret are the things that I should have done that I’d never done. So I turned 42. I reflected on my life, and I said I should have built a company. Not I shouldn’t have. I should have built a company or tried. The worst thing that would happen is that I resign Microsoft and one year from the time I will have to go and find another job. Guess what? I learned other things. I learned how to fix [laughter] other things. I can do all things. I don’t mind. I don’t have to find a job as a program manager at Microsoft. I can go and paint houses. I was pretty confident I would find a job. The fear of leaving the comfort of a company like Microsoft and starting something new was only in my mind. It was all not real.

00:21:40 Ash Faraj: It was all your imagination?

00:21:41 Eugenio Pace: Yes, and so I did it.

00:21:47 Ash Faraj: Auth0 didn’t always have over 7,000 customers and Eugenio had to start somewhere. Eugenio says the answer is often simple. You’ve got to be relentless.

00:21:59 Eugenio Pace: So I have many, many struggles. Funding. Are we running out of money? Is this a really good idea? Nobody is buying. Getting the first customer was the most impactful milestone for us. A customer is the first entity with skin in the game, because they give you their money. That is skin in the game. That’s I’m beginning to do something that costs me. From the early days, I remember finding the first customer. Are we doing the right thing? Are we investing on the right things? The few dollars that we have are we putting them in the most impactful investment? And then over time that turns into bigger bets. One thing that people will tell you is that companies make the biggest breakthroughs are usually when you essentially make big bets.

00:23:13 Male Voice 1: So the higher the risk…

00:23:15 Eugenio Pace: The higher the risk the higher the return. Ironically, in the early days, bigger risks you kind of have to because there’s a lot of risk. All of them are big. If you buy a plane ticket to visit a customer, that’s a big risk. That’s a $1,000 that you put on a flight and a hotel, and the time that you’re spending with somebody that you’re not spending with somebody else. But ironically, as the company grows, the bets increase in size to be meaningful. So if you asked me, are you doing this still, like struggle? Yes, every day. Because now some of the risks that we take, some of the bets that we make --

00:24:05 Male Voice 1: -- You have a lot to lose now.

00:24:06 Eugenio Pace: -- are pretty significant and we have a lot to lose.

00:24:11 Male Voice 1: Just curious. What steps did you take to get your first customer?

00:24:16 Eugenio Pace: I just spent a lot of time talking to people. I took every call. Our website at the time… Like today, we have like little chats, the chat widgets. If you were on the website, something will pop up on the website and say, “Hey, do you have any questions? Do you want to know?...” Only that I was behind the chat. I was like answering any questions that appear there. I took every opportunity with everybody that listened to talk with us. I spent like literally hours and hours and hours of my day talking to potential customers. People that showed up on the website asking questions. It didn’t matter if they paid, if they didn’t pay. It was not important to me. I grabbed the time because there was a lot of value in understanding why are you landing here? What was the problem that we’re trying to solve? Are we aligning with our visions of the type of problems that we’re trying to solve? There was no silver bullet. It wasn’t this massive campaign. It was like one call after the other, relentless. Call after call after call after call.

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00:25:47 Male Voice 1: We want to switch gears just a little bit. We’re on “Finish the Sentence” Game. The first one is: in my opinion the most important life skill is…?

00:25:56 Eugenio Pace: In my opinion, the most important life skill is to master yourself.

00:26:06 Male Voice 1: I’m 24 years old and I’m struggling to find my purpose. I should…?

00:26:13 Eugenio Pace: You should try as many things as possible.

00:26:20 Male Voice 1: Being an entrepreneur means…?

00:26:20 Eugenio Pace: Being an entrepreneur means not being afraid of failures. It means actually erasing failures from your vocabulary because there’s never failures. Being an entrepreneur means that you win, or you learn. You never fail.

00:26:46 Male Voice 1: If I were to meet the 24-year-old Eugenio, I would advise him to…?

00:26:51 Eugenio Pace: I would advise myself to look for mentors and role models gradually.

00:27:05 Male Voice 1: I’m stranded on an island and have access to one meal. My meal of choice is…?

00:27:12 Eugenio Pace: [laughter] Well, I don’t need carbs.

00:27:20 Male Voice 1: At all?

00:27:21 Eugenio Pace: Well, limited carbs. In an island that one would not be a problem. There’s no bread, there’s no pasta, there’s none of that. I like fish a lot. So, probably my first meal would be fish.

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00:27:41 Ash Faraj: Thank you for tuning into this episode. If you enjoyed listening, please subscribe on Spotify or Apple Podcasts. Please leave a review so we that we can better serve you. Take care, dream big, and we’ll see you next Monday.