The seasoned entrepreneur behind Hortonworks explains how cross-company alignment is the key to thriving in tough times
The age of ZIRP is over, and a new era in the startup economy has begun. Hiring binges and acquisition sprees have been replaced by carefully managed, efficient growth, as the faucet of cheap capital turns off.
It’s all something that Rob Bearden has seen before in his decades of software company leadership, including at i2 Technologies, JBoss (acquired by Red Hat in 2006), SpringSource (acquired by VMware in 2009) and Docker (a Vertex Ventures US portfolio company, where he sits on the board). More recently, he was the co-founder and CEO of Hadoop pioneer Hortonworks, taking it public and then serving as chief executive of the combined entity after it merged with Cloudera. Now, he’s back in the entrepreneurial arena with Sema4.ai, a new open-source startup building intelligent AI agents for the enterprise.
On stage at Vertex Intersect ’24, our recent gathering of CEOs, operators, investors, and founders, Rob shared his advice for startup leaders to meet the moment in conversation with Vertex’s Sandeep Bhadra. In short, he says: Alignment is everything. To make it through to the other side of this tough time in the market, literally everyone in the company has to be on board and rowing in the same direction.
The CEO has to manage the ticking clock of runway
That alignment starts at the top. The CEO has to articulate a vision, getting buy-in from both the board and the executive leadership team. That encompasses both the market opportunity you want to go after, and the strategy for getting there. Once everybody is aligned on that big-picture vision, then it’s time to get into the brass tacks.
The reality is that every startup is operating under time pressure — there’s only so long before they’ll run out of venture capital cash, and these days, it’s harder than ever to replenish that stash. Rob says that the prudent move is to calculate out your runway and burn rate, figure out how much cash you’ll need to achieve your strategic goals, and work backwards from there to come up with an Operating Plan The leadership team then needs to communicate this vision and the Operating Plan down to their respective organizations, such that every individual in the company knows the plan and their role in it.
Then comes the hard part. Rob says that these are not the times to manage this plan yearly, or even quarterly. It falls on the CEO to check in on every leader, in every function, at least once a month to make sure that everything is operating as planned — and course-correct in real time if it’s not. It’s a delicate balance, Rob says, because the CEO needs to be involved enough that they can play air traffic control for all the disparate parts of the company, but also needs to trust functional leaders to do their job.
The art of being a CEO is about selling the vision at all times
This balancing act, in short, is the art of being a CEO, Rob says. You need to lead and direct them towards focusing on proven strategies without coming off as a micromanager, and you need to give real actionable feedback on a monthly basis without being confrontational or dramatic. And, more than anything, you have to sell the vision on an ongoing basis, so that nobody loses sight of why you do what you do.
Get it right, and you’ve created the basis of a strong, high-performing culture that can roll with the punches. Get it wrong, however, and the company is at risk for dashing itself on the rocks of ambition.
The CEO has two tools in their belt to help them on this journey, Rob says.
First, Rob says the only way it all works is with a relentless, surgical focus on knowing your customer. The details vary from company to company, and the playbooks will differ, but you won’t get anywhere without constantly updating your ideal customer persona and then executing against whatever successful strategy you’ve found to reach them and sell to them.
Second, an attribute of great CEOs is self-awareness, or the ability to honestly assess your own strengths and weaknesses. Rob himself would never describe himself as a technologist, which is why he always makes sure that his leadership ranks are stocked with strong developers and engineers that he can trust. Conversely, a more technically-minded CEO should take care that they can lean on trusted business-focused leaders in their company.
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