“Don’t listen to the Silicon Valley archetypes,” and other priceless advice I heard at the Operator Summit
Usually when I attend events, I try to tweet key quotes and learnings to share them.
But by the end of Stripe COO Claire Hughes’ “Ask Me Anything” session, I realized there was way too much great information to rely on tweets. I busted out my notebook to write down as many golden nuggets as possible, and here they are:
How to grow from $50 to $400 million
New Relic CRO Erica Schultz shared how New Relic transitioned their go-to-market from SMB to enterprise growing revenue from $50M to more than $400M.
No one has “the” playbook
You have to retain your learning mindset and ask ‘how quickly can we learn and make adjustments?’ When I got there we were at $50 million, focused on developer-led acquisition that was primarily digital marketing led. We went public on the promise that we were going to cross-the-chasm and expand into more strategic deployments and really build out into the enterprise.
Enterprise is a whole-company sport.
We needed to completely build out an enterprise practice — adding customer success, introduce the concept of account management, ensure not just that we were deployed but that we were actually used. We had to focus on our customers being successful with our product.
Enterprise means being in a relationship with a customer,
and that’s a big shift that the entire company needed to make. Our marketing mix had to shift as well with much more emphasis on product marketing and field marketing. We had to bring in subject matter expertise. Our product teams needed to engage directly with our customers and learn how to curate feedback and get signal from customer advisory boards.
You need to show up as a partner to your customers.
You also need your company to understand this shift isn’t an “or” it is an “and” to your original market and customers. You are doing both.
Shifting to enterprise meant focusing less on the product’s features and more on the business impact.
We had to get our customers to talk about the impact on their businesses’ success. For example, Hulu streamed the Super Bowl, and they were willing to talk about how New Relic was crucial in their ability to do it. It was important to connect with customer stories. Focus on what you are enabling for your customers’ enterprise.
How do you get more high powered women in leadership positions at your company?
- Require diverse slates
- Be open minded on styles and sets of experiences you believe will work
- Be deliberate about developing internal talent
Don’t listen to Silicon Valley Archetypes
Dan Scheinman, early stage investor, shared his pro-tips on how he spots companies that created over $40B in value.
The archetype of the ‘young founder’ is flawed.
Traditional VCs focus on the same type and it’s just too limiting. I look for 1) older founders especially when it comes to enterprise/infrastructure 2) founders who reduce risk by having done it before. Eric at Zoom was technical, great at product and loved customers. What more did you need?
How do you know what to look for in an outlier founder?
- Their story must be excellent
- Team — who is in this with you?
- Product — do you have line of sight to how your MVP will scale. Have you thought all this through?
- GTM — show that you’ve thought this through with your initial ICP — even if you get the market wrong, showing you know how to tackle your envisioned market is valuable
- Sequencing of product / features / customers — do you have a thesis for this? Focus on where you start then how you grow.
2. Capital efficiency. Have a plan to use your business as a growth vehicle vs. just other funding. Think and prepare ‘how would this work if you didn’t get more money?’
3. Technical excellence. Customers don’t know what they want but they do see and recognize technical excellence. Make sure people can see it in what you’re building.
4. Know your competition cold. Explain your market dynamics, for example “There are 25 endpoint players. In 3 years, here is where the gap is and here is where we’ll be.”
5. Repeatable sales. This is important when you approach your Series A/B “We know what we’re doing, just add $ to grow.”
What are the killers?
- Founder drama. If you have multiple founders, is there a conflict resolver?
2. Poor thinking on GTM. Pivots are expensive. Make sure there is evidence time is being spent on GTM.
How to do Boards Better
I was lucky enough to have a table-side seat with one of the Alpha Girls, Magdalena Yesil and Elena Gomez, CFO of Zendesk who gave advice on how to be great on boards and what works well — on both sides of the board table.
Board relationships last ten years.
With later stage boards, it works well to make sure each person on the exec team has a buddy to learn from. You want your board to have a compliment of skills that your team can benefit from. Remember board members aren’t team members — you can’t rely on them to do the work but rather advise and coach. Find people who share your vision and support you.
Always have odd numbers.
Makes it easier for voting.
How to be a great board member at each stage?
It’s always evolving.
- Early stage. You advise on PMF, the business model and fund raising.
2. Growth stage. Its more about competitive threat, increasing ASP and customer numbers.
3. Later stage. You’re preparing for true governance, committees, for example you want a CFO-type to chair your audit committee. Nominating committees should be checking in with board members annually on whether or not it makes sense for them to stay.
How to get the most out of your board members?
- Build relationships with them upfront and establish expectations on what you want from them on the board. It should be a two-way dialog.
- Remember there are many ways to get to liquidity. Find ways to work with your board, not against them. You can get really creative on what ‘ownership’ means and what you do with different classes of shares.
What should I ask of my board?
- View your board time as growth time for you. Present a strategy or material decision or problem you want their input on for discussion. Don’t recap numbers or reporting. Board members should do that in advance of the meeting itself. Ex: roadmap and product strategy. Don’t just present it — make it a dialog about the problems you’re trying to address in the market. You want your board to poke holes.
- The most productive boards are those that migrate away from reporting and toward a discussion format. Strategize on top 3 priority issues. Don’t review slides. There are many studies on this.
- Have a roadmap on what topics you want covered by quarter. Ex: Q2 product strategy, Q3 GTM Q4 long-term strategy Q4 talent. This anchors conversations and expectations.
Adventures in Taking the CEO Seat
CEO of PagerDuty, Jennifer Tejada, ended the day telling her story that led to the CEO job and what worked well for PagerDuty as it was growing toward its recent IPO.
How did you know it was time to be CEO?
I was a COO and got pushed into it by a mentor and advocate who was my CEO at the time. He said “you’re making a mistake. You’re doing all the work, and I’m getting all the credit. Go out there and get a CEO job yourself.”
You have to evolve your brand as the company evolves.
We have a really engaged community, so evolving the brand was a year-long journey where we made sure to pay homage to our history as we moved to more of a platform.
No region or gender has exclusivity on talent.
The diversity of my experience is what has been my strength. If you’re the only woman in the room, you stand-out. Say something intelligent. Active listening is really important to customers. It’s crucial to understand how customers and people work in other regions.
There is a real shift when you move from private to public CEO.
It’s not the same. I was really nervous before my first earnings call. The macro is so uncontrollable but it is linked to you.
I realize that every place I suck is an opportunity for someone to help me.
I’m not the best at asking for help, and I was putting a lot of stress on myself by trying to manage and handle it all. I’ve started sharing more, I changed how I eat and sleep.
Invest in great swag that your board and supporters want to wear!
We had a board member who loved wearing our swag — it’s not an accident that we chose bright green as our color — who happened to have court-side seats at the Warriors. That’s how we accidentally got all this great exposure at Warriors games. They made him stop doing it, but for a while, it was great.
We decided to make the 1% pledge when we took our last big round.
We told our funders right away that we felt it was important to be giving back. It also set a tone for our culture and what we wanted to be about as a company.
On culture — happy employees make customers happy.
Its hard to keep everyone happy when you’re at 2000 people but culture is our #1 focus. We focus on inclusion for impact and operationalizing it looks like this:
- Articulate what demonstrating it looks like
- Measure it — engagement, NPS, pulse, outside POV like Glassdoor — what are people not saying to us directly?
- Structure teams to be able to have hard conversations — have balanced slates, train people on biases.
One of my biggest lessons for high growth companies — you never get to norming.
You always shift from storming to forming then back again. That said 1) you never fire someone too early 2) you can never think of hiring the next great person too early. You are never done hiring great people and constantly leveling them
Work-life balance is a perpetual issue, one particularly hard for women executives, so it was asked of everyone who took the stage: how do you maintain work-life balance?
- I work on it all the time and constantly check-in with my family. I try to practice mindfulness and am in full-on mom mode on weekends (Erica Schultz).
- I keep myself busy with other stuff to stay grounded. Choose what you want to do every day (Claire Hughes).
- I don’t think of it is balance — which I just always fail at — but I think of it as integrating my personal life with my work life. Everyone at the office knows my husband and daughter. I just bring them into my work life and have more of a flow between the two. (Jennifer Tejada)
It is a rare treat that the content of an entire day is so filled with helpful insights and stories, so thank you to all the amazing people who shared their journeys. Likewise, this sort of gathering only happened because mallun and Leyla Seka decided to do something different and meaningful for the operators who make Silicon Valley such a special place.
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