Lightspeed Enterprise Scale Summit: Q&A with Christa Quarles
At Lightspeed’s recent Enterprise Scale Summit, we had the opportunity to hear from some of the tech industry’s most visionary leaders on the topic of scale.
The questions they tackled were fundamental to every ambitious enterprise startup that hopes to one day become a MuleSoft or Nutanix. What do leaders need to do differently as their company gets bigger? When is the right time to plan for global expansion? How do you preserve culture as you grow from 4 employees to 4,000?
At the summit I had the great pleasure of interviewing Christa Quarles, former CEO of OpenTable, the online reservation service that seats 26 million diners per month. Today she’s on the board of Lightspeed portfolio company Affirm, as well as Kimberly Clark.
Among other things, we talked about what it’s like to take the reins at a company with huge US market penetration but no real strategy for how to scale into a global enterprise.
Here’s some of what Christa had to say. For the full interview, check out the latest episode of Lightspeed’s podcast, “Tomorrow, built today.” And be sure to visit Lightspeed’s blog for additional insight from featured Enterprise Scale Summit speakers including Chuck Robbins (CEO of Cisco), Henry Ward (Founder and CEO of Carta) and Jay Simons (President of Atlassian), coming soon.
Let’s start by talking about your experience building go-to-market teams for Open Table. What was it like when you arrived? How did it evolve?
OpenTable was largely a sales-driven culture, so the sales team just kept going at it and going at it. But the world around us was changing, so the product and the strategy needed to change. To get to the scale we needed we had to redefine what these people were doing every day.
I think the most important thing I did when I first got there was to meet with 120 restaurateurs and build deep empathy for them.
Turns out there’s a huge spectrum of restaurants. There’s the base layer that are like, ‘Just get some butts in seats’. We were effectively driving their marketing automation, even if we didn’t really behave like a marketing partner. That was a signal we needed to evolve our product around that layer.
The next layer was, ‘OK, now we need operational help. We need the software that helps us figure out how to put more butts in seats.’ Internally we called that Tetris — moving tables around to increase throughput.
But there are also large-scale enterprise restaurants with very different needs. They need different kinds of reporting and controls over who can see what. They need help creating magical, beautiful experiences.
A big decision for us was, should we go after the enterprise? If so, how do we do it when our team doesn’t act, speak, or understand enterprise? So that became almost a startup inside Open Table.
When you joined OpenTable, it had high market penetration but low growth. How did you turn that around?
This is a challenge you see in a lot of companies where the original product served a very specific total addressable market. And when they hit a roadblock they go sideways. That’s when you need to figure out which assets you have that no one else has. For example, nobody has better data than Google at the discovery layer. But we know which butts sat in which seats at which times.
We started listing restaurants we did not have a commercial relationship with. That allowed our sales teams to go into those restaurants and say ‘Did you know that 2000 people came into your restaurant last month, but 500 booked somewhere else? Don’t you want those people in your place?’ It’s not simply using data to make the sale; data is the foundational level of who and what we are.
How did you expand Open Table internationally?
When I joined, our international business was not super healthy. There was a different app in every market; if you lived in New York and searched for restaurants in London, you 404'd. Our sales teams tried to take an approach that had worked in the US and replicate it internationally, but it wasn’t working. There’s a lot more competition overseas, the markets are different, it’s not the same rule book.
We learned that what got us to scale here wasn’t going be effective there. I would always push my teams to come up with the crazy, unscalable thing we needed to do in order to get to scale. That kind of thinking requires people with an entrepreneurial mindset, which we did not have a lot of at the time. So we had to find them.
What causes you to re-evaluate how a company is structured?
There’s something I call the ‘exponential scale of breakage,’ where at 50, or 150, or 500, or 2000, or 10,000 people, the organization breaks. It’s actually a great thing you’re breaking because it means you’re still growing. So how do you use these moments of breakage as organizational leverage? Breakage is a sign that something isn’t working the way that it needs to, so it’s an opportunity to lean into it, feel the pain, understand it, and then benefit from it.
What was the culture like at OpenTable, and how did it change?
When I came to OpenTable it was a culture based on fear. It was like ‘Oh my God, what if I do something and it doesn’t work?’ The fear of being super innovative was embedded in the culture. As CEO, I could choose what to reward and what to not reward. I decided to make it unsafe not to take risks. People who were always trying new things had the spotlight on them. But if you were just standing still, that was not a safe place to be.
Today’s summit is all about scale. What’s the number one thing entrepreneurs, founders, and CEOs can do to scale their companies?
Really pay attention to the anatomy of the team. A+ talent not functioning well with the rest of the team will drag the whole team structure down. When I was in the gaming industry, people on the same team could tell each other to piss off, go have a beer, and get back to work in eight minutes. They were the best teams because they could speak honestly to each other. If you have high functioning teams with high functioning leaders you can go anywhere.