By Glenn Solomon and Jeff Richards
Yesterday, we concluded our third annual Evolving Enterprise, a conference bringing together 100+ founders and leaders in the enterprise community that was co-hosted by GGV Capital and Silicon Valley Bank.
We believe that there has never been a better time to build and scale enterprise software companies. The aggregate market capitalization of SaaS companies has nearly grown by nearly 5X in the last 5 years, outperforming both S&P 500 and traditional enterprise software. The number of public SaaS companies and their valuation have also skyrocketed, as shown in the graph below.
At Evolving Enterprise, we heard from some of the movers and shakers of the enterprise software community, who shared candid stories and tips on running SaaS companies. Below are the most memorable lessons:
Self-awareness is the №1 job of the leader. Some people think that “COO = silver bullet.” It doesn’t work that way. John and Patrick took the time to understand who I am and what I’m good at. — Claire Hughes Johnson, COO of Stripe
I was struck by the self-awareness that they (cofounders Mitchell Hashimoto and Armon Dadgar) had. The wizard doesn’t choose the wand; the wand chooses the wizard. You need to ask yourself, are you the best person in the world to do that job? Is this the best company to do this job at? — Dave McJannet, CEO of HashiCorp
If you have outsized influence on the rest of your network, you’re a leader by default, whatever you job title is. Your action is creating an effect on everyone else’s action. At Jive, we went through the network effect of those people with outsized influence and did some specific development and feedback programs because if you have an outsized influence, let’s use it! — Elisa Steele, CEO of Namely
On internal communication:
At any time, we have top 10 projects that the executive team tracks weekly, which everyone is aware of. We write an annual shareholder letter which is circulated to employees. We even post our board slides to all employees. You don’t need to do a lot, but the few things you do should be done well and consistently. — Claire Hughes Johnson, COO of Stripe
When I first joined, Josh (CEO of Domo) made sure that we sat down and talked about how we will communicate when things break. You need to plan on things being broken. — Catherine Wong, CPO and EVP of Engineering at Domo
Generally, when faced with the same data, most people come to the same conclusion. So it’s important to make sure everybody is in the same information flow. — Dave McJannet, CEO of HashiCorp
There’s a lot of inefficiency in high-growth companies where everyone is just doing the same thing, because we’re trying to move fast. This actually slows the team down. Determining accountability and how the team should work together early on is super important. — Elisa Steele, CEO of Namely
Spend more time on hiring talent than you think you should. Make hiring your №1 priority. — Allan Leinwand, SVP of Engineering at Slack
We had a lot of remote employees early on. There was an extremely talented engineer who wanted to work remotely from Canada. We let him do it and he was able to bring in many other talented engineers. You need to take some risk where the talent is. — Claire Hughes Johnson, COO of Stripe
If you’re recruiting people from a senior team, you should decide after 30 days if they should be fired or not. If you have any doubt at all, fire them. Don’t wait around. — Laszlo Bock, CEO of Humu and former SVP of People Operations at Google
Hiring too fast is a problem. You tend to unknowingly lower the bar, and then you set a different standard for the company that is hard to recover from. — Elisa Steele, CEO of Namely
On retaining talent:
We assign “reverse mentors” for the executive team: We assign younger employees as mentors to more senior employees. This has worked really well. — Elisa Steele, CEO of Namely
At Google, we introduced a “death benefit”: if you die while working at Google, your surviving significant other will get half your salary for a decade. It speaks volumes about how you feel about your people and doesn’t cost a lot. — Laszlo Bock, CEO of Humu and former SVP of People Operations at Google
The power of a phone call is amazing. Spend a Friday afternoon making some calls and you would be surprised; people appreciate it. — Elisa Steele, CEO of Namely
In the 0 to $10M revenue phase, it was largely about testing out the market thesis, and I spent a lot of time doing customer engagement myself. In the $25M-$40M revenue phase, everything changes. You must force everyone to step back and recognize that their jobs have changed. We needed to be more systematic about customer service and create content that can be consumed.— Dave McJannet, CEO of HashiCorp
Our engineering team follows these three priorities, in this specific order:
Step 1: Wake up and fix customer issues first
Step 2: Make sure that they don’t happen again by removing technical debt
Step 3: Innovate like hell
If you skip Step 2 and go straight to working on the next feature, your issues will happen again and you will get stuck in technical debt. If you do the first two right, all you do is Step 3. — Allan Leinwand, SVP of Engineering at Slack
Enterprise software is about trust at the end of the day. There’s no faking it. You have to look them in the eye and bridge that credibility: I recognize that you’re taking a bet on me and I need to show that I’m taking the responsibility seriously. — Dave McJannet, CEO of HashiCorp
On listening to customers:
We have a “customer advisory board” which is led by our product team and CRO. They meet with strategic customers in person twice a year and conduct quarterly calls with them. These customers also get early beta access to our new products. It’s a rigorous program that really helps us understand the customer. — Catherine Wong, CPO and EVP of Engineering at Domo
Early on, the most important thing is to listen to the customer. Give them your business card so that they can call you directly. Also, try calling customers when they’re not upset. You’d be surprised what they tell you. I make it a point to reach out to customers who are perfectly happy. — Allan Leinwand, SVP of Engineering at Slack
We had a HashiConf (an annual conference held by HashiCorp) for 300 people when the company had only 20 people. HashiConf helps project this image that “this is real”. It has a real effect on the sentiment that people feel: that they are a part of something and they are not alone. — Dave McJannet, CEO of HashiCorp
We would like to thank our partners Silicon Valley Bank and Google Launchpad for helping make this event possible. If you’re an entrepreneur in the enterprise SaaS space, please feel free to reach out to our investment team members Oren Yunger and Tiffany Luck.
To hear the live recordings of the fireside chats, check out our podcast Founder Real Talk, where we will release the interviews with Dave McJannet, CEO of HashiCorp, and Claire Hughes Johnson, COO of Stripe. Past guests from Evolving Enterprise include Stewart Butterfield, founder and CEO of Slack, and Sarah Friar, former CFO of Square.
GGV Capital is a global venture capital firm that invests in local founders. As a multi-stage, sector-focused firm, GGV focuses on seed-to-growth stage investments across Consumer/New Retail, Social/Digital & Internet, Enterprise/Cloud and Frontier Tech sectors. The firm was founded in 2000 and manages $6.2 billion in capital across 13 funds. Past and present portfolio companies include Affirm, Airbnb, Alibaba, BitSight, ByteDance (Toutiao), Ctrip, Didi Chuxing, Grab, Gladly, Hello Chuxing, HashiCorp, Houzz, Keep, LingoChamp, Namely, Niu, Nozomi Networks, Opendoor, Peloton, Poshmark, Slack, Square, Wish, Xauto, Xiaohongshu, Yellow, YY, Zhaoyou and more. The firm has offices in Beijing, San Francisco, Shanghai and Silicon Valley. Learn more at ggvc.com, @GGVCapital or GGVCapital on WeChat.