'I Think It's the Perfect Time for Me to Start My Second Act.' Cornerstone CEO Adam Miller Steps Down

Ben Bergman

Ben Bergman is the newsroom's senior finance reporter. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks.

'I Think It's the Perfect Time for Me to Start My Second Act.' Cornerstone CEO Adam Miller Steps Down

After two decades building Cornerstone OnDemand into one of the largest cloud-based learning and talent management software vendors in the world with a market capitalization of more than $2 billion, CEO and founder Adam Miller is finally ready to walk away.

"This year I celebrated the company's 20th anniversary, I celebrated my 50th birthday, and we acquired our biggest original competitor," Miller told dot.LA. "I think it's the perfect time for me to start my second act."


Santa Monica-based Cornerstone closed its acquisition of Saba Software, headquartered in the East Bay, April 22nd and the company's former CEO, Phil Saunders, will replace Miller June 15th while he becomes co-chair of Cornerstone's board.

The world has changed dramatically since the deal was first announced at the end of February, which is reflected in a lower closing price. Saunders acknowledges it will be no easy task integrating the two companies when their 3,000 employees are working remotely and he is quarantining with family on the East Coast.

"It is a bizarro time," Saunders said. "I guess if you could have a few wishes granted to you, one of them would not be taking over a CEO role in the midst of COVID."

Saunders and Miller spoke to dot.LA's Ben Bergman how the deal got done in such a challenging environment, how they will integrate the companies, and Miller's views about L.A. tech, which he has seen grow up alongside Cornerstone.

Former Saba Software CEO Phil Saunders will become CEO of Cornerstone OnDemand on June 15, 2020.

Adam, you've been CEO for so long. Why step away now?

I started the company 20 years ago with the idea that we would help improve access to education on a global basis, and we have been able to do that. We now have the company clearly on track to a billion in sales and we have delivered over 800 million online courses in the last year. So I'm feeling really good about where we are. We are about to kick off the next chapter in the company with integration with Saba to become a larger scale player. And I think it's the perfect time for me to start my second act, which is really about philanthropy and public service.

CEO and founder Adam Miller is finally ready to walk away from Cornerstone OnDemand

Was it always the plan to step aside when you acquired Saba?

It wasn't definitive when we first started talking two years ago. I've been thinking about this for a couple of years and what transition might look like. As I got to know Phil better and the board got to know him better, it became clear it was the right time to do it.

Phil, this is a challenging environment to come into. You're not even in the office right now. What is it like?

It's sort of like a marriage. When things are going well marriage is pretty easy. It's when things get dicey you test the balance of that personal relationship. Adam and I have been through a lot.

This deal could not have gotten done at a more complicated time. We had very emotional and agitated boards and stakeholders because of COVID-19. And I would say to Adam, "If we just put everyone out of the way, what would you want to do? Do you think this is still a good bet?" And when we both talked it over and said "hell, yeah!" then you know you have something special and it's worth fighting for. I'm really proud of the fact that we fought our way through to the other side because it would have been easy to quit.

Did you ever think about not going through with the deal in light of the coronavirus?

(Saunders) It's public knowledge that when the deal got signed it was at a certain value and when it closed, it was another. [The price fell from $1.395 billion to $1.295 billion at closing.] So there was definitely a bit of a OMG there. But I think it just shows where perseverance and belief and conviction really come through. You know ultimately Adam and I looked at each other - virtually at some point - and made sure that we both believe that the thesis is still rock solid and we both knew it was. There were definitely people all around us that had questions. But I think the belief in the conviction won.

How does the coronavirus change what you will do at Cornerstone?

(Miller) What we do is very applicable to this environment. We help companies recruit online, onboard their people, train them, manage them, and improve communication between managers and employees using digital tools. We're even using our own tools to make this integration happen.

Phil, how does this acquisition change Cornerstone?

If I just kept doing what Adam did for 20 years, then you really would not need me. So part of what I'm here to do is help extend Adam's success. Adam is a founder with an idea he had 20 years ago in his New York City apartment. I never had an original idea in my entire life. I'm just a really good operator. I always like to get my arms around things and make them better. And so it doesn't sound like it, but it's a really good fit between me and Adam. People need to understand that we take combining the companies very seriously. If you do well, you build a really awesome company. If you do it really poorly, you have a mess on your hands. We believe we will get this integration right and we're taking the care and time to do it right. We also have to acknowledge with our employees and with our customers that there's going to be some change. It's undeniable. For example, Cornerstone was running the company like it was the Golitah in talent management. Saba was the David of David and Goliath. Now we're one company and we have to get our minds around the fact that there is a new competitor out there and it's not each other.

Adam you are really one of the forefathers of the L.A. tech scene. Can you reflect on what has changed in the last 20 years as you've built up Cornerstone?

It couldn't have been more different back then than it is today. When I started the only acceptable jobs in L.A. were in entertainment, real estate or perhaps finance. There was no tech community to speak of. I had a very hard time convincing our earliest investors – who were quite frankly friends and family – that it made sense for me to move what was really just me from New York to L.A. to build the technology company there. About 10 years in, we started to see the real development of L.A. tech. I used to say that we were forced by necessity to hire based on potential and not experience because it was impossible to find people with experience. We were a B2B software company in Los Angeles at a time when there weren't even tech companies, much less enterprise software companies. Today it's been an amazing transformation in Los Angeles. I feel like we've accomplished a dual mission. On the one hand, we built Cornerstone from scratch into one of the largest cloud computing companies in the world and simultaneously took L.A. from obscurity to one of the top tech centers in the world.

Could you have imagined 20 or even 10 years ago that the L.A. tech scene would look like it does today?

Not at all. I knew it was becoming legit when people started proactively saying they were going into tech and I knew we had first made it when I started to hear engineers who were at L.A. colleges start talking about staying in L.A. I think the next problem to solve in L.A. is dealing with that seed stage gap, which has to do with companies getting seed funded and maybe even getting their A-round funded, but not being able to get to that B and C round. I think that's the next evolution of L.A. tech and I'm absolutely going to be one of the people helping solve that problem.

This interview has been edited and condensed for clarity

https://twitter.com/thebenbergman
ben@dot.la

🏰 Disney's Epic Investment Stands Out Amidst Gaming Industry Layoffs

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

🔦 Spotlight

In the midst of widespread gaming industry layoffs, a glimmer of positive news emerges as Disney announces a significant move: a $1.5 billion investment in Epic Games. 🏰💰🐭

Image Source: Disney

Disney's $1.5 billion investment in Epic Games, disclosed late Wednesday, signals a strategic alignment aimed at expanding the success of "Fortnite." The deal enhances Epic's growth prospects after financial setbacks, including layoffs, and strengthens the partnership between the two companies. With Disney gaining a larger equity stake in Epic, the collaboration will broaden the integration of beloved Disney franchises like Marvel, Star Wars, Pixar, and Avatar into the game, potentially boosting its appeal and longevity. This significant investment underscores Disney's commitment to interactive entertainment and signifies a shift towards games as a primary revenue stream, aligning with the growing trend of digital engagement among younger demographics. Moreover, the potential for crossover sales of physical Disney products within "Fortnite" and the exploration of new content distribution channels are just some of the opportunities arising from this partnership.

For LA tech, the Disney-Epic Games partnership represents a validation of the region's burgeoning tech and gaming ecosystem. The substantial investment in Epic, who maintains a large Los Angeles office with 1,000+ employees (according to LinkedIn), reflects confidence in the LA’s talent pool and innovation potential. Additionally, this partnership between two industry giants fosters an environment for further collaboration, investment, and growth within LA's tech sector. As Disney and Epic Games deepen their ties and explore new avenues for content integration and distribution, it not only elevates the prominence of LA as a tech hub but also stimulates economic growth and job creation in the region. This partnership highlights LA's unique position as a hub where technology and entertainment converge. With its ability to integrate diverse industries, LA is driving innovation and expansion in digital entertainment. 🚀💸🎮

🤝 Venture Deals

LA Companies

  • ProducePay, a financing and marketplace platform for the fresh produce market, raised a $38M Series D led by Syngenta Group Ventures joined by Commonfund, Highgate Private Equity, G2 Venture Partners, Anterra Capital, Astanor Ventures, Endeavor8, Avenue Venture Opportunities, Avenue Sustainable Solutions, and Red Bear Angels. - learn more
  • Blush, an invite-only dating app that drives users to local businesses on dates, raised a $7M Seed Round from individuals like Naval Ravikant. - learn more
  • Mogul, a startup founded last year that provides an overview of an artist's royalty earnings and identifies areas where money is owed but has not yet been collected, raised a $1.9 million seed round from Wonder Ventures, United Talent Agency, AmplifyLA, and Creator Partners. - learn more
  • Avnos, a hybrid direct air capture startup, raised a $36M Series A led by NextEra Energy and joined by Safran Corporate Ventures, Shell Ventures, Envisioning Partners, and Rusheen Capital Management. - learn more
  • AI.fashion, startup whose mission is to help retailers enhance the online shopping experience by providing consumers with virtual try-ons and personalized fashion recommendations, raised a $3.6M Seed Round led by Neo. - learn more
  • Suma Wealth, startup that aims to demystify financial topics and provide culturally relevant content, virtual experiences, and resources to help Latino users navigate financial challenges and opportunities, raised a $2.2M Seed Round . Radicle Impact led, and was joined by Vamos Ventures, OVO fund and the American Heart Association Impact Fund. - learn more
  • 222, a startup that helps users discover their city and meet new people through unique social experiences, raised a $2.5M Seed Round. Investors included 1517 Fund, General Catalyst, Best Nights VC, Scrum Ventures, and Upfront Ventures. - learn more
  • LimaCharlie, a security operations cloud platform, raised a $10.2M Series A led by Sands Capital. - learn more
  • Polycam, an app that uses a smartphone’s sensors to capture 3D scans of objects, raised an $18M Series A co-led by Left Lane Capital and Adjacent, and joined by Adobe Ventures and individuals like Chad Hurley and Shaun Maguire. -learn more.

LA Venture Funds

Actively Raising

  • ReelCall, Inc., an entertainment technology company focused on powerful apps and platforms that help build and maintain the professional network of connections vital to career growth, is raising a $850K Pre-Seed Round. - learn more
  • CZero, a startup building software to decarbonize logistics for logistics businesses and goods business through a vetted marketplace and optimization software. - learn more
  • Couri, a technology startup addressing last-mile delivery issues, is raising a $450K Pre-Seed Round at a $2.2M post money valuation. - learn more
  • Sweetie, a marketplace to help people plan date nights, is raising a $1.5M Pre Seed Round. - learn more
  • StartupStarter, an investment platform that provides real-time data and analytics on startups, is raising an $850K Angel Round. - learn more

If you’re a founder raising money in Los Angeles, give us a shout, and we’d love to include you in the newsletter!

Venture Waves, Climate Tech Wins, and Silicon Beach's Ongoing Evolution

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Anduril Seeks $1.5B in VC Funds

Defense company Anduril Industries Inc., based in Costa Mesa and founded by Palmer Luckey, is seeking to raise $1.5 billion in fresh funds to boost its valuation to $12.5 billion or more, according to sources quoted by The Information. This fundraising effort, if successful, would mark one of the largest venture capital rounds of the year.

Image Source: Anduril

Anduril recently secured a contract to develop and test small unmanned fighter jet prototypes under the Air Force’s Collaborative Combat Aircraft (CCA) program, beating out major defense companies like Boeing, Lockheed Martin, and Northrop Grumman. Alongside General Atomics, Anduril will design, manufacture, and test these aircraft, with a final multibillion-dollar production decision expected in fiscal year 2026. This program aims to deliver at least 1,000 combat aircraft to fly in concert with manned platforms and is part of the Air Force’s Next Generation Air Dominance initiative. Central to Anduril’s success in this contract is the Fury autonomous air vehicle, acquired through the purchase of Blue Force Technologies. This victory underscores Anduril's rapid advancement in the defense sector, aligning with Luckey's vision of building faster and more cost-effective defense assets. - learn more

Los Angeles Ranks Number 1 in Emerging Climate Tech Hub

The 2024 Emerging Climate Tech Hubs Report by Revolution highlights Los Angeles as a burgeoning center for climate tech innovation. LA's growth in this sector is driven by its diverse talent pool, strong research institutions, and a culture of environmental consciousness. The city's unique mix of legacy industries, such as entertainment and aerospace, alongside emerging tech companies, positions it as a pivotal player in the climate tech landscape. This shift reflects a broader trend of decentralized climate tech funding across the U.S., reducing the historical dominance of California's traditional hubs. - learn more

Silicon Beach: Looking Back, Moving Forward

Assessing the overall health of the startup market is challenging, especially as venture capital funding has decreased by an average of 61% from 2021 to 2023 across the top VC markets in the US. Markets with robust ecosystems in AI, SaaS, Biotech, Healthtech, and Fintech appear to be weathering the downturn better than those focused on Consumer and Gaming industries, areas where Los Angeles traditionally excels.

Percent Change In VC Funding By Region

CB Insights

LA Times paints a rather bleak outlook on the Los Angeles tech scene noting venture capital funding in Greater Los Angeles plummeted 73% from 2021 to 2022. Silicon Beach, once a vibrant tech corridor, currently faces high vacancy rates and lacks late-stage financiers, especially in the AI sector. However, there are positive signs, including growth in aerospace startups and increased venture capital investment in early 2024, suggesting a potential rebound for LA's tech ecosystem.

While LA may not be exceeding expectations during this period, its tech ecosystem warrants a nuanced evaluation, given the broader market dynamics and its strong performance in specific sectors. Reach out to us with your thoughts.

🚀 SpaceX gears up for another stellar year, active raises, and more

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Happy Friday Los Angeles! You made it through the first week of 2024!

🔦 Spotlight

Elon Musk may be a divisive (albeit entertaining) figure, but the continued success of SpaceX is pivotal for the aerospace industry in Los Angeles and more broadly around the world.

Image Source: SpaceX webcast

What happened with SpaceX in 2023?

  • Elon Musk challenged Facebook founder, Mark Zuckerberg to a cage fight.
  • SpaceX launched 96 successful missions with its Falcon series of rockets, a 57% increase over its previous annual record.
  • SpaceX conducted two test flights of the largest and most powerful rocket ever built, Starship.
  • Roughly two-thirds of SpaceX's launches in 2023 were devoted to building out Starlink, the company's satellite-internet megaconstellation.
  • Isaacson’s Elon Musk biography was published in September including everything from Musk’s tumultuous relationship with his father to his work ethic and “demon mode”.

Moving forward what can we expect from SpaceX and its controversial founder? Continued innovation pushing the aerospace industry to new limits? Yes. More drama? Without a doubt.

Here is some of what is to come in 2024:

🤝 Venture Deals

Just Announced

Check back next week!

LA Exits

  • CG Oncology, an Irvine, CA-based developer of immunotherapies for bladder cancer, filed for a $100M IPO. It plans to list on the Nasdaq (CGON) with Morgan Stanley as left lead underwriter, and has raised around $317m in VC funding. - learn more
  • McNally Capital agreed to sell Advanced Micro Instruments, a Costa Mesa, CA-based maker of gas analyzers and sensing technologies, to Enpro (NYSE: NPO). - learn more

Actively Raising

  • ReelCall, Inc., an entertainment technology company focused on powerful apps and platforms that help build and maintain the professional network of connections vital to career growth, is raising a $850K Pre-Seed Round. - learn more
  • CZero, a hard-tech startup that is developing a technology for decarbonizing natural gas, is raising a $1.5M Seed Round. - learn more
  • Couri, a technology startup addressing last-mile delivery issues, is raising a $450K Pre-Seed Round at a $2.2M post money valuation. - learn more
  • Sweetie, a marketplace to help people plan date nights, is raising a $250K Angel Round. - learn more
  • StartupStarter, an investment platform that provides real-time data and analytics on startups, is raising an $850K Angel Round. - learn more

If you’re a founder raising money in Los Angeles, give us a shout, and we’d love to include you in the newsletter!

📅 LA Tech Calendar

Sunday, January 7th

Wednesday, January 10th

  • Startup Cafe: Networking with a Kick - Entrepreneurs, Startups, and Tech Enthusiasts join together to meet and connect with like-minded people, industry professionals and investors, while enjoying a nice cup of coffee in Venice at The KINN. This week’s interactive discussion about AI’s evolution in entertainment will feature Dr. Sam Khoze and Rachel Joy Victor.
  • Venice Tech Happy Hour- Join Startup Coil and FoundrHaus Wednesday evening and enjoy the sunset from the rooftop, grab a bite overlooking Abbot Kinney, and mingle with other tech enthusiasts and entrepreneurs by the bar on the patio.

Have an awesome event coming up? Reach out to be featured on next week’s Newsletter!

📙 What We’re Reading

RELATEDEDITOR'S PICKS
Trending