ADAM MILLER: In 2005, the company had a near death experience. I had hired a boutique investment bank in LA. I got called into a meeting with them, and I went to the office, and the main guy there says, “Adam, you know what? It hasn’t worked out as planned, and we’re not going to be able to do this anymore.” And I thought, ‘Oh shit, we are screwed.’

JEFF BERMAN: This was back when Adam Miller was CEO of Cornerstone. That’s the educational technology company he founded in 1999. They’d already weathered one dotcom burst. Now, after years of growth, they were running out of money. Again. 

MILLER: I got one of our existing investors to put up some money, but he said he’ll only do it if we raise a million dollars. And then I went to every single person we knew. I had raised 350. I was 150 short. And then I got 50. And then I was 100 short. And I just could not get the last hundred. 

BERMAN: The gravity of the situation really hit Adam when he got a call from his co-founder and CFO, Perry Wallack. 

MILLER: Perry said, “It’s over. We’re done. Payroll is due tomorrow, and we missed payroll.” And I’m like, ‘oh, crap.’ And I was sitting at lunch, I was totally depressed, my friends were like, “What is wrong with you?” I told them, and they were like, “How badly do you need this money?” I’m like, “I need, I really need the money.” And they said, “Alright, you can call this guy, but only call him if you really need the money. You have no other alternative.” These guys had a little bit of a gambling problem, and I call him up, and he has me come to his office. This was a Midtown Manhattan, one room office. He wasn’t at a company. This was definitively not a bank. And this guy was a loan shark. He didn’t give a crap about the company, but he was asking all these questions about me. And he said, “Yeah, you know what? I think you’re good for it.”

BERMAN: And we often talk about investing in the person, but this was really, this is different.

MILLER: This was a different version of investing in the person. 

BERMAN: Right, right. Is this guy going to head out of town, or is he going to show back up, and do I have to break his kneecaps to get what I need? 

MILLER: So I go to this guy, sign the deal. It was the highest interest rate you would ever pay on money. He wires some money, we paid payroll, and then like three days later, we paid the guy back.

BERMAN: Thankfully, Adam Miller never had to borrow money from a loan shark again. 

This wasn’t the only time his company faced a near death experience. It took a lot of scrappy solutions to build Cornerstone into a multi-billion dollar business.

Adam’s story is a masterclass on how to not only survive, but to scale in the face of near disaster. He shows that persistence, combined with calculated risk-taking, builds a resilient business that can weather the myriad unexpected challenges every company inevitably faces.

I’m Jeff Berman, your host. 

Adam Miller founded Cornerstone in 1999. The initial idea was to provide busy people with remote learning options that could further their careers. At first, they did that by mailing out discs that customers would load into their computers. Netflix 1.0 but for education. Sounds like ancient history, right?

But Cornerstone evolved alongside the Internet, as pretty much everyone got online. They became a global leader in on-demand education and training, with huge clients such as Dell, Walgreens, and thousands more. Today, Cornerstone has roughly 125 million users across over 180 countries.

After more than two decades leading the company, Adam sold Cornerstone for $5.2 billion dollars in 2021.

He has since turned to philanthropy, focused on solutions to the world’s most intractable problems, from gun safety to climate change. 

Copy LinkThe original idea behind Cornerstone

And that work relates back to the problem-solving roots of his company, Cornerstone. 

Let’s return to the 1990s, when Adam Miller was a business student and law student,  with an idea to make adult education more accessible, through home computers.

MILLER: Interestingly, adults have the least access to education because they often are working nine to five or more. And training can be really expensive. A lot of people can’t afford it. 

The original name of the company was CyberU. This is back in the day of cyber everything. The idea was really premised on leveraging the technology to help people learn things. It was self paced. It was easy to access, and it wasn’t expensive.

BERMAN: And you started as a direct-to-consumer business, right? You were doing a B2C company.

MILLER: CyberU was intended to be, at the time, what they called a mid immediary. We’re going to sit between the sellers of education, like universities, or universities. And the buyers of education who would be adults. The idea we came up with was using CD ROMs to train adults at concepts that were difficult for adults to understand, like Wall Street.

BERMAN: Gotcha. So this is almost like the origins of Netflix where it’s like, “we’ll send you—”

MILLER: Exactly. This was pre streaming, really pre web. By ‘99, the consumer internet had exploded. And there was a lot of opportunity out there, but bandwidth still was not very good. So I was watching what was happening with the cable modems and DSL and thought, I’ll start the company when we’re about two years away from full broadband in the home. That seemed to be the right time to start a company, get it going, build the business. And over a two year period, you would have product that could be delivered over the—

BERMAN: Right. You’re basically looking for the wave that’s coming, and you wanna catch that wave that’s coming in.

Copy LinkHow Adam Miller raised money for Cornerstone

MILLER: So, I was working at an investment bank at the time. So I went to tell my boss that I was starting this company. And I had seen that anybody who had left the firm was immediately escorted by security guards out of the building because investment banks have confidential information. And so they’re very concerned about people having access to the information and taking it with them.

BERMAN: So it’s like being perp walked basically out of the building.

MILLER: The second you resign.

BERMAN: Yeah.

MILLER: So I’m fully prepared for it. And I go to my boss, and I say, “I’m leaving.” “Why are you leaving?” “I’m going to start a company.” He says, “Oh, we all knew you were going to do that. How much time do you need, and how much money are you trying to raise?”

BERMAN: Wow.

MILLER: And so I tell him, “I probably need a couple of months to do the business plan, and I probably need a few hundred thousand dollars to get this going.” He said, “Okay great, we’ll give it to you.”

BERMAN: Wow.

MILLER: So no security guard showed up. I never left the office. I wrote the business plan while finishing up work, and my initial capital came from everybody I worked for. Every single person in my chain of command invested in the company.

BERMAN: Personally — this wasn’t, yeah.

MILLER: And the analysts who work for me also put in 5,000 bucks.

BERMAN: Wow. That’s quite a vote of confidence.

MILLER: It was incredibleIe. But it was very, very misleading for me. Because that start was so incredibly easy. And that was the end of it being easy. 

Copy LinkThe early days of Cornerstone

BERMAN: Adam left day-to-day office life to build his company. He had financial backing, but no staff working alongside him. 

I was literally home alone in this one bedroom apartment trying to get this company off the ground.

And so I came up with this pattern where every day I would go to Staples and buy something. I’d usually only buy one thing.

It made me feel like I was starting a company. Like I was doing something business-related. You ever go into Staples?

BERMAN: Uh, sure, yeah. It’s like a business store. 

MILLER: Yeah. So, I went there to buy business stuff. I didn’t even know what I was supposed to be buying.

BERMAN: It didn’t matter.

MILLER: It didn’t matter. It gave me purpose. It gave me something to do every day.

BERMAN: But it didn’t take long for Adam to realize he needed more than a daily dose of Post-It notes and binder clips to build his business. It was time to start hiring a team.

MILLER: We were hiring predominantly for potential, not for experience. Because nobody had experience doing B2B software. So we had to hire for potential. And that, I think, served us very well. We had people that were able to scale with the company because they were curious. They kept learning. These were high potential people that  were ambitious and willing to take chances and take feedback.

We hired web developers to build a website. We hired a team of students from UCLA and USC who sat at these folding tables with folding chairs in this one-bedroom office on Ocean Park, and they would surf the web looking for any online training that was out there with the goal that we would tabulate and simplify the ability to search for online courses. That was the original idea.

BERMAN: Marketplace for education

MILLER: For education; today it’d be like Udemy or Coursera. But back then, nothing like that existed. 

BERMAN: As a pioneer in online education, Adam’s company soon piqued the interest of AOL.

This was the year 2000, and AOL was still the biggest fish in the internet service provider pond. Imagine the clout of Google and Amazon combined. 

AOL invited Adam to enter a competition. They could become a partner in a new AOL learning center. It was an opportunity to reach millions of new customers. But there was a catch. If they won, Adam would have to pay AOL to seal the deal.

MILLER: Our general counsel at the time, Steve Simon, and I were sitting in a room in San Francisco with a great view of the bridge. We were in this big conference room, and the people from AOL came in the room, threw down the contract, and said, “We’ve been talking about this long enough.”

You have two hours to sign and walked out of the room. Now they had already been notorious for doing things like this. But it’s one thing to hear about it. It’s another thing to be in the room.

BERMAN: Well, especially when it could be the make or break for the company.

MILLER: It was absolutely the make or break for the company. And I remember pacing the room, looking out of the bridge, and I turned to Steve and I said, “You know what? This just doesn’t feel right.”

BERMAN: What didn’t feel right?

MILLER: It was too expensive. The way they were treating us, risking the entire company on this one deal. I thought this is just not the right move. And we left. We never said goodbye to anybody because nobody was in the room. We don’t know where they were. We just left. Two weeks after we walked out of that conference room, the bubble started to crumble. And about a month later, it burst. And had we signed that deal, that would have been the end of the company. So I remember we went to Big Dean’s, which is a bar on the beach by the Santa Monica Pier. And we sat there all day thinking about, okay, what do we do now?

The AOL deal was off the table. And we didn’t really have any business customers at the time. And we didn’t have any capital. We had the same few hundred thousand dollars that we started with, but we were burning it. And there was very little money left. So we started begging for money. And this was the beginning of seven years of begging for money — friends, family, VCs, strategics, corporations, anybody that I would meet with.

So I went back and forth, flying back and forth, maxing out credit cards, any way to get money. There were an enormous number of no’s. And it does impact your confidence, right? You’re rejected over and over and over and over again.

BERMAN: While slogging through years of constantly seeking and failing to land investment, Adam found success on another front. He was building great relationships with a few large organizations. They wanted a better way to train and develop their workforces. 

These weren’t their paying customers – yet.  But they were providing invaluable insights as Adam’s team refined its offerings. 

MILLER: These were the big banks, the big insurance companies. They’d tell us something, and two weeks later, we had built it. 

BERMAN: Here you go. 

MILLER: Here It is. We would go to these meetings in New York. I’d fly back to LA. I would draw on cocktail napkins what the screen should look like.I’d hand it to the developers, and they would build it.

BERMAN: I mean I’m struck that your customers were really defining your product roadmap for you. They were handing it to you. 

MILLER: They were designing the product. We’re thinking — we have like 20 people, and they have 20,000 people — they’re never gonna buy from us. But actually, what started to happen after many months of doing this is we’d go to these meetings, and they would say, “Wow, you guys really listen.” And then they would start to say, “We could really use this.” And they would say, “Can we get this?” And we were terrible at sales. We didn’t understand. That they were literally saying that they would potentially buy it.

BERMAN: Please let us, let us pay you for it. 

MILLER: I remember the first time somebody said, “We’re doing an RFP. Can you fill it out and come back to us.” We had no idea what an RFP was. It’s a request for proposal that a business will give to a different business to solicit products and services. We didn’t understand how that worked. There was no ChatGPT to ask. You had to figure it out yourself.

BERMAN: In 2001, Adam’s business was gaining serious momentum. They brought e-learning and efficient HR management to the corporate world, attracting big-name Fortune 500 clients, including Wall Street banks.  

Copy LinkNavigating crisis #1: How 9/11 impacted Cornerstone

MILLER: We had developed this great pipeline of financial services firms on the East Coast, mostly in New York that were going to be the turning point for our company. And then 9/11 happened.

And our entire pipeline went away. I got frantic calls from our investors and advisors who were all in New York. They all said, “You gotta go into hibernation mode. Cut the staff.” I mean we had barely any staff.

“Cut the staff. You don’t have enough money to keep going. You’re gonna go out of business.”

On September 14th, I watched the West Wing that night. So the West Wing was this old show. Martin Sheen was a president. This was one of these shows where he had a huge decision to make. He was in a church trying to figure out what to do and he made this big decision that went against what everybody had advised him to do. 

BERMAN: I know the episode he’s talking about. And it does have one of the greatest pep talks ever, where one the president’s oldest friends convinces him not to shy away from hard problems. 

Adam was inspired. He still believed fiercely in Cornerstone’s mission. Even if the world had been turned upside down, he refused to give up.

MILLER: On the 15th, I walked into the office, and I said, “We’re hiring.” I thought, ‘Look, there’s only two scenarios here. There’s a scenario where the world comes to an end; these markets don’t come back. We’re not going to win any of these deals, and we’re going to go out of business.’

BERMAN: No matter what whether we whether we hibernate or not

MILLER: Whether we hibernate or not, yeah. Or actually we’re going to close some of these deals, and if we don’t have the staff, we’re not going to be able to perform on the deals. And they’ll fire us, and we’ll go out of business. So I’d rather go out of business trying than not trying.

BERMAN: Let’s burn the boats.

MILLER: We’re going to do this.

BERMAN: We’re going ahead.

MILLER: We had four deals that we were working on at the time that were all close to signature. We ended up closing three of those deals.

BERMAN: Adam’s decision to hire during crises, defying the urge to hibernate, paid off.

Coming up, I talk with Adam about surviving market crashes, IPOs, and pandemics. Plus, the recurring dream he could not shake.

[Ad timing]

BERMAN: Welcome back to Masters of Scale. We’re exploring the story of how Adam Miller built Cornerstone into a billion dollar business.  You can find this full interview and more at the Masters of Scale YouTube channel.

By 2005, Adam was taking a slow and steady approach to scale.

MILLER: We were doing 60 percent growth a year. So every two years, you’re almost tripling.

BERMAN: Pretty good.

MILLER: Was pretty good. But,we were growing very linearly at first. Because we couldn’t forward invest. We had no capital. So the business became very efficient. We were essentially operating a break even from the very beginning. And we basically were building the company off of sales.

BERMAN: Gotcha.

MILLER: So every time we sold, we’d hire another person. Every deal we did, we’d hire more people.

BERMAN: If the revenue became working capital, why did you end up raising venture?

MILLER: We were able to continue to build the business, simply by hiring where we absolutely had to hire. But it was also inefficient.

We knew we could grow faster. We knew we could sell more. And ultimately we were in an arms race with some pretty big companies. And so we needed the money, not to mention the corporate viability issue that we had perpetually, right? We had no capital. Our balance sheet was terrible. We finally raised venture capital. Bessemer led the round, Byron Dieter led the round. It was his first true cloud deal, and we ultimately became his first unicorn.

Copy LinkNavigating crisis #2: The 2007–2008 financial crisis

BERMAN: Fueled by that infusion of money, things started to scale in a huge way. Six-figure deals turned into seven-figure deals. Adam kept costs in check. Retention of clients was high. Everything was moving up and to the right. But then, in spring 2008 …

MILLER: Bear Stearns goes under. 

BERMAN: Yeah.

MILLER: And then, a little bit after that, Lehman Brothers goes down, and you have the financial crisis. 

BERMAN: Like the world’s ending again.

MILLER: Looks like the world’s going to end now. We still had capital, so we weren’t running out of money, but we had a board meeting. At the board meeting, we go over our projections, our forecasts. And they’re like, “No, no, no, no. Do you understand what’s going on with the world? We want to see a financial forecast, assuming zero sales.” Like, “What are you talking about? We’re selling every day.” They said, “We don’t care. We don’t care. We want the worst case scenario, assuming zero sales.”

BERMAN: Responsible board inquiry.

MILLER: So we have another board meeting a few days later, and they say, “Okay, this is the forecast we want to use. You’re running out of money.” We said, “We’re not running out of money. We’re doing fine.”

BERMAN: But if the world’s ending, we aren’t.

MILLER: And they said, “You need to go raise money.” “Okay, you’re telling me I have to go do it from other VC firms even though you guys could invest.” And they said yes. I said, “Explain to me how that makes sense.” They said, “You’re a best performing portfolio company, so you’re the only one that could raise money from other people. We need to save our money for the other companies.”

I’m like, “Alright, now I know why people don’t like VC sometimes.” You might remember this, Sequoia had put out this very famous brief; it was one of these early social media posts that went viral, talking about what to do in a downturn.

BERMAN: Winter is coming.

MILLER: Winter is coming, how to manage a recession, and it was: cut your people, prepare for the worst, take action early, do it in full, don’t do it piecemeal. 

BERMAN: If you weren’t in the business world then, you may not appreciate how dire everything felt during the crash in 2008. Sequoia – a venture capital firm – was not alone in warning that the sky was falling. 

That viral brief Adam mentioned from Sequoia was called “R.I.P. Good Times” — you can still find it online, and we’re linking to it in the show notes. It is full of ominous predictions and gruesome bar graphs. There’s literally a slide that just says “Death Spiral” and has a skull and crossbones on it. 

This is the mood of the market when Adam’s being told by his board that he has to go raise more money. So, who is he supposed to ask for money? If you can believe it, Sequoia, the very firm that is proclaiming: “Winter isn’t coming. It’s already here.” 

MILLER: And I thought, ‘Well, they’re definitely going to cancel the meeting.’ And the meeting never got canceled. I went to the meeting and I said, “Why are we even having this meeting? You just put out this manifesto about how to cut everything. Why would you possibly invest right now?” And they said, “In our experience, the best companies grow in good times and bad.”

BERMAN: Sequoia was right. And it was a critical learning experience for Adam. 

MILLER: We ended up growing 60 percent that year. And we never used a dollar of the money.

BERMAN: But you had it. 

MILLER: And we had it.

BERMAN: The first job of a CEO is make sure you don’t run out of money. You had a board that was really protecting you there and believing in you, notwithstanding they’re not investing in that moment.

MILLER: Yeah. It proved the point: raise money when you can, not when you need it.

Copy LinkInside Cornerstone’s IPO

BERMAN: So, take us through going public, and then what happens from there?

MILLER: I had always wanted to go public. Because when I was a kid, my dad taught me how to read the stock charts. Back then it was in the newspaper.

BERMAN: It’s the breakfast table in Jersey with dad looking at the newspaper. 

MILLER: This was New Jersey, working. And he would teach me, like, how to invest and how the stock market worked. And I always wanted a four-letter chart symbol on the NASDAQ because Microsoft, and all the other companies that were on the NASDAQ all had four letters. And that was always my dream. And so when the time came to be able to take the company public, I was super excited. This was kind of a dream that was about to be fulfilled. But we were in a race at the time. There had already been a couple of public companies in our space.

We were on the smaller side of those four. And I knew that only one of them was going to be able to go public. And the rest of them would probably get acquired or merged. 

I also believe that you had to have a top-tier offering. So you need a top bank. And we got Goldman Sachs to lead the round to lead the IPO. And we ended up going public in March of 2011. 

BERMAN: Adam finally got his four stock exchange letters: C-S-O-D. A lifelong dream checked off the bucket list.

After going public, Cornerstone OnDemand expanded into the HR space. They broke into the public sector, selling to federal and local governments, schools, and hospitals. 

All the while, Adam approached his own job as CEO like a Cornerstone client. He was constantly trying to learn new things. 

MILLER: I didn’t stop learning after grad school. I kept going, I kept reading, I kept trying to learn from people. Even after we were a public company, we got to go to these conferences with other public company CEOs. And I would be taking extensive notes, and sometimes the bankers would come up to me and say, “Adam, you’re the only one taking notes.” But I was really paying attention to what was going on, trying to learn from my peers, trying to learn from experts that were out there, always thinking about how we can do better.

BERMAN: By 2017, Adam started to have a recurring dream. One that might sound familiar to any world-weary CEOs out there. It was a dream about his own retirement party. 

MILLER: I would get on stage, we would have my favorite band come out and play.

BERMAN: Which is? 

MILLER: ACDC. Okay. And I would do a guitar solo. Now, keep in mind, I don’t know how to play guitar,

BERMAN: It was a dream.

Copy LinkNavigating crisis #3: Finding success during the pandemic

MILLER: So, I play a solo with Angus, drop the mic, and leave. And that was it. I was done. I was thinking about this dream that kept happening over and over again.

And I started to also believe I’m 20 years in. If I’m ever going to do anything else, 20 years is going to be the right time to step off. So I realized by 2020 I was gonna be done. And for my swan song, I thought I’m going to say that we have truly dominated the industry by acquiring our biggest competitor. Our biggest competitor was a company called Saba software. But this was yet another example of really bad timing.

We announced an all-cash deal where we had taken on a lot of debt to make an acquisition pre-market. When the market opens, COVID hit Wall Street. This was February of 2020. And literally, we opened way down because, overnight, Wall Street had become obsessed with financial viability and how much leverage a company had. Specifically, what was their debt to equity ratio?

BERMAN: And it didn’t matter that you were in a business that should thrive in a pandemic.

MILLER: Did not matter. So, we got crushed that day. And then I became convinced that we needed to prep for what could happen with a pandemic. And so I did this three day test at the beginning of March. We were going to shut the office down worldwide for three days just to see what would happen. Did people need monitors? Did people get locked out of their accounts?

And the whole management team thought I was crazy. Like, “What are you doing? You’re closing the office for three days?” We had offices in 25 countries. And we did it. Wednesday, there were some issues. On Thursday, we fixed those issues.

And Friday, everybody was still home. And on Sunday, there was a government-announced work-from-home order.

BERMAN: I think we’re going to call this episode “The World Might Be Ending But Cornerstone Isn’t.” Something like that. Yeah, this is every single time.

MILLER: Every time. 

BERMAN: As the world shut down and more and more companies shifted toward remote work, Adam’s ed-tech products were ready to serve new customers. And amid the chaos of the early pandemic, Adam, who had navigated crises in 1999, 2001, and 2008, found his most significant success yet. Cornerstone acquired Saba Software in April 2020.

Then, in 2021, he decided to sell the company for more than 5.2 billion dollars. The only disappointing news? Well, AC/DC did not play his retirement party.

MILLER: Our tagline was educating the world. When we started the company, that was completely absurd. But when I sold the company, we had delivered 2 billion courses. So we kind of did educate the world.

BERMAN: It’s an incredible journey. When you reflect on it, what’s the biggest takeaway for you?

MILLER: Perseverance. You gotta persevere. If you’re passionate about something and really believe it, it’s not always going to be easy. When we went public, it looked like we were an overnight success, but we had been at it for many, many, many years. But the other piece of that is you better really be passionate about what you’re doing

Because it’s not all going to be good days. And you have to remember why you’re there.

BERMAN: Thanks for being here.

MILLER: Thank you for having me.

BERMAN: From a lonely entrepreneur whose daily highlight was a trip to Staples, to the CEO of a multi-billion dollar business, Adam Miller scaled his company by making decisive moves, and bucking conventional wisdom in Cornerstone’s existential moments.

Whether it was the dotcom crash, a country shaken by a terrorist attack, or a global financial crisis, Adam faced some of the most dire external challenges a CEO could imagine encountering. His story shows that, sometimes, you have to throw out your best-laid plans and make bold, counter-intuitive pivots to scale.

I’m Jeff Berman. Thank you for listening.