Ep. 333: Bridget Gleason is the Head of Sales and Customer Success @ Tidelift, the company providing managed open source, backed by maintainers. Tidelift has raised over $40M from some of the best in the business including Foundry Group and General Catalyst. As for Bridget, she has the most incredible track record. Before Tidelift, Bridget was VP of Sales @ Logz.io and before that was VP of Corporate Sales @ Sumo Logic where she drove ARR up by a record 237%. Prior to SumoLogic, Bridget was VP of Sales @ YesWare where she increased MRR per rep by 450%. Finally, before YesWare, she was VP of Sales @ Engine Yard, where she tripled monthly recurring revenue, over the course of her 3+ year tenure, in 3 key leadership roles.
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In Today’s Episode We Discuss:
* How Bridget made her way into the world of SaaS and Sales and came to be Head of both Sales and Customer Success at Tidelift.
* Why does Bridget believe the best starting point for customer success is “company culture and value”? How does company culture impact the quality of customer success? In practice, what can one do to improve it? Who has done this well? How does value drive customer success forward?
* How does Bridget think Maslow’s Hierarchy of Needs drives the roadmap for customer success? What core elements does it change? Where do most teams go wrong in implementing the role out of their CS strategy? When should one hire their first CS rep? What should that hire look like from an experience perspective?
* How does Bridget advise her CS reps the best ways for them to build trust with their clients? What works? What does not work? Does Bridget believe CS teams should be involved in the upsell process? Does that endanger the element of trust?
Ep. 334: Hear from Michelle Zatlyn, co-founder and COO of Cloudflare. Michelle started the company during an economic downturn in 2009. In this talk, Michelle will share how she made her business idea come to life and some lessons learned that can help other entrepreneurs—from solving a real, meaningful problem, to communicating in a crisis, prioritizing when there’s a true lack of resources, and more.
Harry Stebbings:Hello, and welcome back to the official SaaStr podcast with me, Harry Stebbings. I always love to see behind the scenes, you can do that on Instagram at @HStebbhings1996, with two Bs.
But, time for the show today. We’ve spent a lot of time in the world of marketing lately, and so I wanted to switch it up today, and move to the sales and customer success side. So, with that, I’m delighted to welcome back to the show Bridget Gleason, Head of Sales and Customer Success at Tidelift, the company providing managed open source, backed by maintainers. Tidelift has raised over $40 million from some of the best in the business, including Foundry Group and General Catalyst.
As for Bridget, she has the most incredible track record. Before Tidelift, Bridget was VP of Sales at Logz.io, and before that was VP of Corporate Sales at Sumo Logic, where she drove ARR up by a record 237%. Before Sumo Logic, Bridget was VP of sales at Yesware, where she increased MRR per rep by 450%. And finally, before Yesware, she was VP of sales at Engine Yard, where she tripled monthly recurring revenue over the course of her three year tenure, in three key leadership roles.
But, that’s quite enough from me, so now without further ado, I’m so excited to hand over to Bridget Gleason, Head of Sales and Customer Success at Tidelift.
Harry Stebbings:Bridget, I have to say, it is such a joy to have you back on the show. Thrilled to see about your recent move to Tidelift, and such exciting times ahead there. But, thank you so much for joining me today, Bridget.
Bridget Gleason:Well, Harry, it was great. You know, the last time we did this, it was, I think, February 2019, so just a little over a year ago. Really great to connect, and get caught up.
Harry Stebbings:Absolutely it is. Listen, I loved that episode so much, when we did the first one. But, hit me, for those that maybe missed our first episode, which was so great, tell me, how did you make your way into the world of SaaS, and how did you come to be the rockstar head of sales and CS at Tidelift today?
Bridget Gleason:I love it, I love the rockstar name that you give me, whether it’s true or not. But, Harry, I like to tell people that I took the jungle gym route here, meaning that it wasn’t this straight line from rep, to manager, to VP, mine was nothing like that. I was an English business major in school, but I taught in the engineering, I was a [inaudible 00:04:08] in the engineering school.
I went into product marketing for the commercial arm of Xerox Park, which is a big computer research company here. Then, I went into sales school, Xerox sales school. Then, I started a company, which I sold in early 2000. Did a lot of consulting for high tech startups, I really love the startup space. Ended up taking VP of sales role with one of my customers, and then, gosh Harry, I did all sorts of things. I opened an office in Ireland for one of the companies, I was the first US employee for an Israeli company.
And now at Tidelift, which interestingly, the CEO reached out to me after he heard the podcast that you and I did more than a year ago.
Harry Stebbings:That is amazing to hear. I did not know that, but I’m absolutely to thrilled to hear that. He clearly has great tastes in podcasts.
Bridget Gleason:Well, he does have great taste in podcasts. And, I don’t know that I would have found Tidelift, and it’s just been a career defining role and move for me, and really, really inspiring. So, thank you, thank you Harry, for doing what you’re doing.
Harry Stebbings:I absolutely love doing it. But, I do want to start on a really interesting aspect, because when we spoke last time, you were head of sales. And now, with the new role with Tidelift, CS, customer success, has been incorporated into your purview.
With that, we have to have a starting point for the strategy and the plan, and when we spoke before you said the best starting point for customer success is company culture, and value. What did you mean by this? Maybe, is it better to take it turn by turn, and how does company culture play into the level and quality of customer success?
Bridget Gleason:There’s always been this discussion. Does customer success start after you close a sale? Should the handoff start before the customer becomes a customer? Should customer success start when reps are reaching out?
My belief, Harry, is that customer success starts with the culture of the company. I read a book, God, it was years ago, about Marriott. JW Marriott was notorious for this, and he said, “If we treat our employees right, they’ll treat the customers right.” I think Marriott started in 1927, and in the early ’30s, they were one of the earliest companies to give healthcare benefits to their employees. They really had an employee first, and by extension, a customer first orientation. I believe that 100%, that if we’re not treating each other well, and we don’t have a culture that is engaging, and respectful of the individual, it’s going to be very hard for us to extend that to the people who we’re dealing with.
When you look at, just in statistic, Harry, of it, companies that have employees who are highly engaged are 22% more profitable. So, how did we do that? You’ve got to have a culture where employees not only survive, but they have to thrive.
Harry Stebbings:Can I ask, if we take that to a practical level, because I totally agree in terms of that career development, and the thriving. We’ve seen the chastising of the foosball tables, and La Croix provisions that are deemed culture, often. What can one do, on a practical level, that you’ve seen work in terms of building that culture and company value so inherently into how we think about, also, customer orientation?
Bridget Gleason:Well, I think there’s a lot of different pieces of it.
I know, just at a manager level, one of the things that I try to do with my direct reports is, first of all, how are they doing? Just, how are they doing as humans? Especially now, around COVID-19, how we’re doing, we’re all under a lot of stress, so checking in with how people are doing. As well as their professional desires and aspirations, those are always top of mind. One thing we did as a company was … It was last Monday, our executive team said, “You know what? We need a Maintain Ourselves Monday.” Everybody just got a day off. It’s an allowing of people to bring their whole selves.
This leads to the next part, Harry, when you asked about value. I believe that values lead to value. So, values lead to more, also, value creation. Tidelift is unique in my experience, in terms of values. There is not a person in the company who couldn’t rattle off the four values, we talk about them every day, and have them integrated into their work. We don’t need to have them posted, we don’t need to have them, really, reviewed, they are so woven into our brand. So, that’s how we deal with one another internally, as well as externally.
I’ll tell you what they are really quickly, because I think they’re interesting. There’s four of them. So, optimistic, we see an amazing future. We deal in open source, we provide managed open source for large companies. We believe that open source is really awesome, and we want to be part of it. So, we’re optimistic, and as it relates to customer success, we believe that for our customers. We’re practical is value number two. We know that the words in these lofty ideals aren’t enough, so we try to be very pragmatic, and very honest, and have a really honest assessment of ourselves and our product. The third is additive. We have a growth mindset, that we’re capable of learning and doing more. Then finally, is around inclusivity and diversity, and we believe the world is a better place with diverse voices.
Those are the things that we practice internally, but also bring those to the table when we’re dealing with customers.
Harry Stebbings:I love the four values. I am really interested by one especially there, and it’s the element of open source. Now, you’ve been involved in both sales and customer success is closed source also. How does it differ, in terms of traditional enterprise software, versus open source? Specifically, when it comes to customer success, is there a core differentiator?
Bridget Gleason:Well, I’ll tell you, for us what’s a core differentiator is open source is an amazing phenomenon, of all of these people contributing with no expectation to get anything back. When we talk about additive, as it relates to open source, there’s been a history of companies harvesting the value from open source, but not, then, added back to it. So, when we think about customer success, we don’t want to just harvest the best things of open source, and not contribute back. But, we also want to be ones that are adding to the value, that’s a core, underlying mission.
So, our products and services are around how can we help companies utilize open source more effectively, more securely, more responsibly, as well as contribute. And then, it’s a two-sided marketplace, so we’ve got subscriber companies that we provide support for the open source that they use. And on the other side, we have the maintainers themselves, that we pay to keep their open source that they are responsible for secure, et cetera. We’re trying to add back in both ways, and make both parties successful.
When you have a commercial product, you don’t have this two-sided marketplace, where you’re trying to balance both. Making sure that we’re not just harvesting, but that we’re really contributing in a meaningful way back to the community, and we engage in that also with our customers, which I think is really, really powerful.
Harry Stebbings:Speaking of engaging with your customers in that way, I am really interested if we take the hat of head of sales that you have worn before, now incorporated the head of CS also. A lot of questions that I get asked from early stage founders is, “Okay, I’m always told that I need to develop a sales playbook before I can hire my first sales rep, and then I pass it onto them. With customer success, is it the same? Is there a customer success playbook that I have to develop? And, when should I hire my first rep?”
I guess, there’s three separate questions there, that are kind of integrated. How do you think about that requirement for CS playbook, and when to hire your first?
Bridget Gleason:So, I see sales and customer success as a continuum. I don’t see them as distinct, perhaps, as some might see them. When the sales team is engaging early on, what we’re trying to identify is what is the success criteria of this particular prospect, what are they trying to achieve? How might we be able to help them do that? By extension, then, that after the commercial are completed, we’re just extending what that looks like.
I think a highly functional, evolved team is one that starts the criteria really early on, and is just rolling it out, and playing it out. If you don’t do a good job on the sales side early on, and setting those expectations, it will be very difficult for you to do a good job on the customer success. So, the playbook needs to be written as you’re working this out with prospects.
In fact, Harry, I’m working right now on some big proposals. Some of the sales reps and I are working on some big proposals, and customer success is highly involved because in these proposals is the success plan. What we do is we send out, in a Google doc, a proposal. We ask that the prospect to review it with us, and tell us where we have it wrong before we submit something formal. It’s not just pricing, it goes all through the rollout, Harry, of what it’s going to look like as we rollout. Not just rollout and onboarding, but then, what does success look like? We start really, really early.
Then, to your question about when to hire, because it’s a continuum … Again, we’re an early stage company, so what we did, as you’ve probably seen before, is founder’s really involved, everybody’s involved. Founder’s really involved, then you have the sales team that’s managing it as it extends. And then, we got to a point, also … Again, we sell to very large, primarily regulated industries. Because we’re selling high, six figure deals, we just need to make sure that we’ve got enough resources on the ground to deliver a really incredible experience to them.
Harry Stebbings:How do you think about professional services, and the challenges that naturally occur in terms of delivering that in a COVID world?
Bridget Gleason:We’re all learning. We’ve had to adjust a lot of our delivery mechanisms, and these are things that we’re doing in conjunction with our customers.
It’s interesting, Harry. Because we sell a technical product to technical people, they’ve actually been distributed for quite some time because in order to get great talent, you’ve got to be distributed. You don’t have to be, but it helps if you can be, in terms of getting talent. I don’t know that we’re facing as much of a challenge, because the teams that we work with are often highly distributed anyway.
But, it’s going to continue to evolve, it’s continuing to evolve. It’s something, I think, we’re all really grappling with.
Harry Stebbings:Pulling on that thread, I’m really interested to dive in here. A lot of founders say “Hey, our professional services is growing, and it’s becoming 30, 35 percent of revenues.” At what point do you think professional services becomes too heavy weighted on the revenue front? And, how should founders think about that balance and tipping point?
Bridget Gleason:Well, I guess it’s what function is professional services performing, in terms of the sale, the implementation, and then the ongoing maintenance. And, how big a part of your business do you want that to be, do you want to be a services organization?
If delivering services is fundamental to your product, if it’s a core competency, keep it. Keep it, keep, keep, keep it. If it’s not, if it’s something that you’re delivering but it’s not really part of your core competency or differentiator, there would be an argument to bring in partners. Because there’s some benefits that you can’t achieve you’re also using partners, and letting them take on some of the professional services revenue.
I look at it, just how core is it to what you’re delivering, the value that you deliver?
Harry Stebbings:Yeah, absolutely. I love the integration there, of partnerships.
I do want to stay on CS though, so apologies for that drifting off. But, we discussed the first stating point. If we then think about enacting that, and putting a roadmap of success together, you’ve previously stated the importance of Maslow’s Hierarchy of Needs as a roadmap for customer success. A bit of a cliffhanger for me, with that one. So, talk to me about this one, Bridget. How is the Hierarchy of Needs a roadmap for customer success in your mind?
Bridget Gleason:It’s an interesting one, and our CEO Donald Fisher is the one who first started talking about this, with prospects and customers. If you think, Harry, at the very base level of the hierarchy, the basic needs, which are physiological and safety, what that translates to customer success as I look at it is implementation, onboarding, you answer my questions quickly, you handle my basic needs. And Harry, I think for too long, we’ve looked at these basic needs as, “I’m doing great customer success! They’re implemented, they’re onboarding, I answer their questions,” and we measure things by that.
If you go up a level, though, the next two levels in Maslow’s Hierarchy are belonging and esteem. Those, in the customer success world, they map to adoption and insights. Is there more that I can get? Because on the esteem side, and the belonging, and what are other people doing, that fits in there. Is there more, are a lot of people using it, do I feel good because I’ve gotten great adoption in the company? That’s better, customer success when it moves up to that, and you’re helping companies extend the adoption as well as get more insights, that’s good. I think most companies, if they get to that, they’re going to give themselves an A.
At Tidelift, we’re not stopping with those. The very tip is the self actualization, and what that looks like is a thought partner. For Tidelift specifically, how are we, together, making open source better, this community? We have an amazing community. Again, specific to Tidelift, there’s a movement, when you get to this level, of open source consumption. So, how are we, as a company, consuming open source in a way that is efficient, and secure, and responsible to an external contribution?
Harry, what is so amazing, and what’s so thrilling about being part of Tidelift is the companies who we are engaging with, they have a strong desire to move beyond the harvesting of open source, and getting whatever they can out of it because they know it’s amazing, so they want to keep using it. But, they also want to be contributors, and to give back to this community. That’s where you get this self actualization.
I think, in other companies, it’s similar, it’s not going to map in the same way that Tidelift will map. But, where do you find, at the tip of the pyramid, that you can engage with your customer to do something greater, and to be really a thought partner in whatever it is that they’re doing because they’re the star of the show.
Harry Stebbings:I totally love that positioning as the thought partner. Can I ask, in terms of check-ins, I think a lot of CS teams get this wrong. What does the right check-in structure look like to you? And, how do you think about really structuring that conversation ahead of time, without being too formulaic, and objective, and maintaining that human element of the relationship?
Bridget Gleason:I’m not a fan, Harry, of, “Hey, just calling to check in,” where there’s no structure to it.
If we go back to what we were talking about earlier, this success plan that we put in place before they become a customer, it does give you a roadmap. They often have a roadmap of what they’re trying to achieve, so we do two things. One, with good tooling, we try to understand as much as we can about what’s happening in their environment without having to ask them. Again, not being creepy, they need to know, “Hey, we’re looking at your dashboards,” or whatever it is, whatever kind of tooling makes sense. We learn as much as we can through tooling, because in SaaS you have a great opportunity for that.
Then, number two is, we really stick to and look at what they’re trying to achieve in the success roadmap, and use that as a template when we have these conversations. Has that shifted, have things changed? COVID-19 changes a lot of things for how things are going to be rolled out, how we implement things, and it’s a continual conversation.
We also let our customers guide, in terms of the frequency of check-ins, and the mode. Sometimes it’s phone, sometimes it’s Zoom, sometimes it’s Slack, sometimes it’s text, sometimes it’s email, sometimes it’s a report, sometimes it’s an in-app message. But, we work with them to develop the communication cadence and style that works for them.
Harry Stebbings:Sorry, you said there about the impact of COVID. I do just have to ask, with both hats on I’m sure you have such amazing purview, but I have so many SaaS founders who say, “Hey, Harry, so far, my sales pipe hasn’t been impacted.” I guess, how would you respond and advise that founder? How have you seen your sales pipe be impacted? And, how do you think a head of sales should be thinking now in enterprise, when looking at that pipe?
Bridget Gleason:When you’ve got founders who say the sales pipe hasn’t been impacted, that, to me, means if you think about an axis of companies that are least affected to most affected, and the financial strength, they’re selling into a quadrant that is financially strong, and not as affected. Which aren’t very many companies, by the way, not very many companies that haven’t had a supply chain disruption in some way. So, I think that’s great. I mean, that surprises me a little bit, but I think that’s great.
Harry Stebbings:But in enterprise, the contracts are long, the clients are slow moving, generally speaking.
Harry Stebbings:So with heavy enterprise, my concern is … I go, the big point here is, so far. Actually, we haven’t had the first round of renewals, and we haven’t had the first discussions on this accounting. This is going to be more painful than you think, don’t go into this thinking so far, we’ve been fine, so we can expect the same moving forward. Batten down the hatches is my advice.
Harry Stebbings:Would you agree with that?
Bridget Gleason:Yes! Yes, 100% because the plans are still evolving, the plans are still evolving. What one hears from a prospect or a customer may have been said to them with 100% integrity. “This is going to happen, in this timeframe,” 100% integrity. But, things can change because we’re not through it yet to know, nobody knows.
I agree with you, that we need to move through with a measure of caution, and realism. Again, one of our core values … Okay, I can’t get through the day without talking about one of our core values, but being practical. And just flexible, build that into the plan, that things are not going to go exactly as planned. They’re not going to.
Harry Stebbings:If we have that in mind then, a willingness to accept uncertainty, say, when we think about rollouts, the other big thing that I’m seeing is slippage, especially at the enterprise level. From the customer success perspective, what kind of core things are you seeing in terms of slippage, in terms of delayed rollouts, that you think COVID has really impacted?
Bridget Gleason:Well, COVID affects people, and people are part of these rollouts. People are getting sick, they’ve got family members who are sick, they are working in environments that they’re not used to working in. So, I think we see slippage, and time frames extended because of the very human element of what’s happening, and a lot of uncertainty.
Harry, people are more stressed, there’s more anxiety, they can handle less. Zoom fatigue is a real thing. You factor in the human element of all of it, and things are going to take a little longer. We’ve got to accommodate for the human part of the businesses that we’re selling into, that we’re not selling to robots. Again, just keeping that in mind, and having some buffer built in as we think about it. It’s a great muscle right now, that we can learn to flex as an organization, of being flexible, and resilient, and learning how to have some buffer but still keeping things going down as predictable a path as we can.
Harry Stebbings:You said there, flexible and resilient. The question that I get a lot from different founders is, “How much should we be willing to give when it comes to discounting?” When you think about discounting, and that flexibility and resilience in mind, you’ve got to meet your business objectives, but you also need to be flexible. How do you think about the right level of discounting to accept?
Bridget Gleason:God, it’s so funny, Harry, I haven’t thought about discounting at all.
Bridget Gleason:Well, I haven’t. I haven’t thought about it because we’re delivering against value. We’re really trying to look at what the value creation. I do understand how some companies would think about some discount, based on the new reality. It’s not my go-to place, it’s not my go-to place. We try to price things fairly from the outset, so we don’t get into that.
I don’t know, it’s a good question. I get it, but that’s not my go-to place.
Harry Stebbings:I mean, speaking of that pricing fairly though, it does take me something that you said to me before. Which is, the centrality of trust, for a CS team to be successful. So, I guess the biggest for me is, absolutely that makes sense, me the customer, you with Tidelift, how do we build trust in this relationship? And, what really work in building that relationship of trust?
Bridget Gleason:Well, I don’t think it’s a surprise to anyone that trust is a key factor in driving customer engagement and loyalty, it’s a key factor. Threading this pricing issue and trust, a great way to erode trust is to offer a customer a price, then when they ask for a discount, you give them one without asking for anything in return. Because what that says to them subconsciously is, “Oh, I thought you were giving me the best price, but then you give me this other one.” That sows a seed of distrust.
A way around that is a give to get. “All right, I can give you a discount, if you can close it this month because this is important for us.” Or, volume discounts are normal. Or, in exchange for a testimonial, there are things that you can do to give to get. What’s hard, also, about this give to get in this environment is if I were to tell a customer, “I’ll give you a discount if you can do it this month,” that doesn’t seem like it’s really taking into account their realities, also. I may be better off giving them extended terms, just to do it that way. Okay, that’s threading the two together.
Ways to establish this trust. I tell the team, “You have to be trustworthy in order to get trust.” Like, you have to be trustworthy, you have to tell the truth, first and foremost. Second, it’s okay, and in fact I often encourage it, Harry, to tell a prospect or a customer things that you can do and things that you can’t do, because it lets them know that you’re not just trying to sell them swampland in Florida. Also, another way to develop trust is to say, for example, “I will deliver this proposal to you by Friday at four PM,” and you put in a date and a time, and you deliver on it. That starts to say, “Oh okay, they do what they say they’re going to do.” Conversely, if you make commitments that you can’t keep, you’ll erode trust in that way.
Harry Stebbings:Totally aligned, in terms of … It sounds, I don’t mean it badly, but so people would do as you said, what they said they would do. “I’ll email you tonight,” and it comes through tomorrow. It’s like, you said tonight, build that trust in that really important way.
I guess, the biggest way that trust is often deemed to be eroded within the realm of customer success, or often a lot of people think it is, is when customer success is heavily involved in upsell processes. I’m interested to hear your thoughts here. Does being involved in an upsell process erode that element of trust? And, should customer success be involved?
Bridget Gleason:I don’t think it should erode trust at all, if a customer success person is involved in an upsell, because we shouldn’t be talking about an upsell if we don’t think that there is some value, based on that upsell. There needs to be a lot of integrity in the process. If there’s integrity in the process, I don’t see that there’s any issue with a customer success person also being involved in an upsell.
I think, sometimes where I see a separation as being helpful, is sometimes customer success people, if they’re more technical than not, they just don’t feel as comfortable, or as fluent around that process in the commercials. I don’t see that as a problem, I would rather them be clunky, and just be honest, because customers see that, and they respond well to it. But, sometimes I can see just a separation of roles, that you want one person that you just know, if it’s a highly technical product, that they just handle the technical side, and they like to have that handoff, a division of work. Because getting involved in the commercials, you’re involved in a lot of other pieces of the business.
So, I see it not as an issue of trust, as much as just a division of labor.
Harry Stebbings:Totally agreed, in terms of the division of labor. I’m glad we’re aligned on that.
I do want to dive into my favorite though, Bridget, which is a quick fire round. So, I say a short statement, and then you give me your immediate thoughts, in about 60 seconds or less. Are you ready to rock and roll?
Harry Stebbings:Okay. I love this one, actually. What motto or quote do you most frequently revert back to, and why?
Bridget Gleason:Okay. Well, I’ll tell you my most recent, and these change. So, the one that I’ve been quoting most recently is, “If you want to go fast, go alone. If you want to go far, go together.” I just finished this great book called Boys in the Boat, about this rowing team that won the 1936 Olympics in Berlin. I so believe, Harry, that we can do so much more if we do it together, I’m a big believer in teamwork. Again, at Tidelift we’ve got this opportunity to work together as a team, to work together teams within the company, to work together as teams within this larger open source community, and I just really believe that we’ve got this great opportunity if we work together. COVID-19’s another great example, let’s figure out how to do this together.
Harry Stebbings:What do you know now that you wish you’d known when you entered SaaS?
Bridget Gleason:I’m probably not giving a good answer here, but I love surprises. I love the unknowing. For me, I’m so curious, so to learn something new, so I’m glad I didn’t know any more than I knew so that I would have the privilege of discovery. Which, I think, is just a fantastic journey.
Harry Stebbings:Oh my word, it sounds wonderful. But no, I don’t enjoy the privilege of discovery, I’d much rather get to the endpoint much quicker.
Bridget Gleason:That’s funny.
Harry Stebbings:I do want to ask, biggest surprise about the move to Tidelift?
Bridget Gleason:I didn’t know that a company could be so rooted in values, and what that does to how we work together as a team and how we show up in the world, it is one of the greatest privileges of my professional career. This founding team are inspiring, they move me to tears what they’re trying to do in the world. I just feel really committed to what they’re doing, and who they are, and really wanting to bring about more diversity. Here are four individuals who don’t have to care who do, and are using their background to do it. So, just that I could be so inspired by a company.
Harry Stebbings:Building a team outside of the Bay, what’s the biggest pro, and the biggest con?
Bridget Gleason:Well, we’re 100% remote, so we’re all over the place. We’ve got a core of people in Boston, where I sit now. I think one of the pros is when you’re building all over the place, you’ve got a larger talent pool so we get great talent. Also, at this time, COVID-19, we’re all used to working remote.
The biggest con is, oh gosh, Harry, there’s nothing that can replace the in-person. We do get together as a company, several times a year. But, the camaraderie in an office, and that in-person, is probably the biggest con.
Harry Stebbings:If you could change one thing about the world of SaaS today, what would it be and why?
Bridget Gleason:It’s probably the one thing, and the one thing I hate. So, I think sometimes with SaaS, there’s the ability to leave something quickly, that you can be in and out because it’s easy to rip and replace. I think sometimes companies may not stick with a product or service long enough, and it puts a lot of pressure on quicker wins. I think we lose something if you’re not able to establish a longer term relationship, and moving to that point, like I said, of self actualization, really developing something great together.
Harry Stebbings:Do you think time to value can actually be quite an erosive, problematic principle? Essentially, you could try and gamify it to create short term value creation, to reduce the time to value pendulum. But actually, there might be more value, or an optimal situation created with just a little bit more time, and slower to value, but more value.
Bridget Gleason:Yes, plus one to that, I agree.
Harry Stebbings:Yeah, it’s something that always annoys me when people go, “Oh, it’s all about time to value.” Totally aligned there.
Final one. Who in SaaS customer success today do you think is killing it? And, why do you get inspired by them, in terms of their approach?
Bridget Gleason:A couple of companies come to mind, one is Outreach. The CEO, Manny Medina, I knew early on. What inspires me about them is they really are working with customers to try to get to that tip of Maslow’s Hierarchy, and partner to try to figure out what are sales teams trying to do. Okay, so that’s one.
Zapier, I think, is another one. I know the team there, and the woman that’s running customer success. Again, what inspires me about them is this close collaboration with their partners, and really pushing the envelope in terms of trying to help them do more, and the customers really being the star of the show.
Then finally, there’s a company, Catalyst, which is a startup. These two brothers, Edward and Kevin Chiu, that are creating a new customer success platform. I’m just really anxious to see what they’re going to come out with, but I love that they’re trying to change things up a bit.
Harry Stebbings:Totally with you, I think Catalyst are great. But Bridget, listen, as I said, I’ve wanted to do this episode for a while, since I saw about the move. Thank you so much for joining me today, and this has been so much fun.
Bridget Gleason:Likewise, Harry.
Harry Stebbings:I always so love my discussions with Bridget, and I want to say a huge thank you for her for giving up the time today to be on the show. If you’d like to see more from us, behind the scenes, then you can on Instagram at @HStebbings1996, with two Bs, it’s always so great to see you there.
As always, I so appreciate all your support, and I can’t wait to bring you a phenomenal set of episodes next week.
Transcript of Michelle’s podcast:
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Up today, CloudFlare COO Michelle Zatlyn.
Ben Dahl:Hi everybody. We are very lucky to have Michelle Zatlyn, co-founder of CloudFlare here today, to talk about starting a business in the midst of some economic headwinds. Clearly we have a little bit of a headwind at this point, and I think Michelle’s perspective as a founder during that sort of time period will be really useful. I think it would be really helpful for Michelle to just give a little bit of an overview about CloudFlare and about herself.
Michelle Zatlyn:Sure. Thanks, Ben. Thanks so much for being here everyone. I’m Michelle Zatlyn. I’m one of the founders and CEO of a company called CloudFlare. And we started CloudFlare during the economic downturn right after the financial crisis in 2008. And so we started to work on this in 2009. And while it’s different, it’s definitely a different thing going on in the world today. I do want to say that there are a lot of companies that actually started with us, that class of companies, and many of them have turned into big great companies today. So if you’re one of those entrepreneurs who are working on your ideas and thinking, “Man, is now the time to start?” it’s definitely possible. So we started CloudFlare in 2009 and today we have about 1400 people around the world. Our customers are internet properties, so websites, apps, APIs, and those customers come to CloudFlare to be fast, safer, reliable online.
So we built a service that does cybersecurity, global performance and reliability for any intranet property. And in these last 10 years, we have 26 million internet properties that use our service on any given day. So a huge scale. We stop about 50 billion cyber attacks daily on behalf of those 26 million internet properties. And we make the internet faster, safer and more reliable for a lot of people, so we’re really proud of that and our whole team is really proud of that. And so that’s some of the things we’ve done in the last 10 years.
And one thing that’s been really cool, starting the company 10 years ago in an economic downturn to today, about six months ago, Matthew and I and our team took the company public on the New York Stock Exchange. So we went from an idea that started during the economic downturn to a company that went public about six months ago. And today we’re about a 6, $7 billion market cap company.
Ben Dahl:So Michelle, as you think about starting CloudFlare in the midst of an economic downturn and you fast forward to today, do you have a sense or major tips for entrepreneurs as they’re thinking about either starting a new business, or extending their current business?
Michelle Zatlyn:Yeah. Sometimes I think it’s easier if you’re starting than extending. So I’m going to answer your question with that frame of mind. Because I think back to 2009 and it was really hard to get a job. I was doing my MBA at grad school, and so many of my classmates couldn’t get jobs. I had done my summer internship at Google. And I remember getting the call from Google, my manager at Google saying, “Hey, we’ve decided not to extend any of our summer internships a full time offer.” Because again, it was 2008. There was this huge financial crisis and people just were not hiring. And in many ways, when it’s hard to find a job, it’s actually, out of necessity it’s actually a really good time to start a company, the right company anyhow. Because I wasn’t competing with a lot of other offers. It wasn’t like you had a choice of a hundred things to go and do and you had to say no to a hundred things to go pursue this one thing.
So if I think back to our year at business school, a lot of amazing companies came out of that. And I think part of it is because the job prospects were kind of gloomy. And so for entrepreneurs who are starting to think about starting, again, I think for the right idea that you’re really passionate about and if you really think you’re solving a big meaningful problem of a big market with tailwinds to your back, it can be a really good time. That doesn’t mean it’s easy. It’s still really hard and there’s lots of things that was hard about it. You got to be really frugal and you got to innovate your way out of problems.
But I do think the mindset of, it’s almost like your option B or your other options, it’s almost easier to walk away from it because there aren’t that many other good things going on, so let me go create this thing that I just can’t stop thinking about. And so that’s for the people who are currently… And then the second thing I will say, I remember we raised, our first round of money from Ben who was one of the partners who helped us raise our series A, and then Venrock. And we raised $2 million, which, today people laugh. That’s like nothing for a series A. But back then, that was kind of the size of rounds.
And I just remember Matthew and Lee and I, and our team of the original eight people who really worked on this idea, we spent every dollar so wisely because it was a scarce resource. And when you only have a little bit of money, you really innovate your way out of problems or engineer your way out of problems. And we had this great engineering team and we really innovated our way out a lot of problems and tried to figure out ways to do things cheaper, better than we would instead of throwing at the problem. We used to have a saying, “Don’t throw money at the problem. Let’s innovate our way out of the problem.” And again, in a downturn like today, where money is still going to be hard to come by, that’s actually I think a really good, it can take you very far when you’re building your company.
Ben Dahl:I recall in the beginning that your rule used to be that the answer when someone wanted to spend additional dollars to solve a problem, was the first answer was always no. And that in the future, to the extent that you couldn’t solve it through creative programming or what have you, that potentially you’d loosen the purse strings. But the reality is, is that smart engineering was an important part of how you approached building the business.
Michelle Zatlyn:That’s exactly right.
Ben Dahl:In terms of when you were ideating on CloudFlare, how did you get to a conviction on the scale of what you were solving and the size of the market? Because largely at that point, particularly on both the content delivery, but also the web security side, this was not a problem that people were really focused on.
Michelle Zatlyn:I’m going to answer this question, but I want to make one caveat to my answer. When Matthew and Lee and I started CloudFlare, we really wanted to build a big company. That was our desire. And so a lot of my perspective is always behind building big companies. Again, a multibillion dollar public company. That’s what we wanted to do. And so I’m going to answer your question, because that was the frame of mind of what I was looking for. I was looking for a big, meaningful, hairy problem to solve that was going to turn into a big company. But there’s lots of different ways to build businesses, and there’s lots of amazing companies that never become a multibillion dollar company that are equally great and profitable, they’re just different.
So the advice that I’m going to share is really related to this swing for the fence model, and that works for some people and less for others. And so when we think back to what was happening when we started back in 2010 when we were working on this idea in 2009, we just saw there’s this huge shift going on, where we were going from a world from hardware and software that you owned, to services in the cloud that you rented. And I remember AWS was growing really quickly. And at the time there was a big debate of, will big companies ever really use AWS? Well fast forward 10 years later, that seems like such a naive thing to say today. I mean, them and Azure, they’ve just had tremendous success. But 10 years ago that wasn’t a given.
And so this huge shift was going on. There was all these software companies and then the advent of all these SAS application companies like Salesforce and Workday that were breakout successes. And we saw the same thing happening at the network layer where, yeah businesses have always wanted to be fast, safe, and reliable and I used to buy a lot of hardware boxes. And we said, can we turn that into a global service in the cloud that customers rent from us? And we knew that was a big idea. And there was just this huge shift going on. So again, kind of this idea there was a big market and there was a tailwind and there was this macroeconomic shift, which creates opportunities for new entrants. So that was the first kind of aha.
And the second thing that I was really proud of, and I think that if you’re a founder that can find both, it’s like, wow, there’s a big business here. Because the first thing you have to ask yourself, is there a business here because businesses are what sustain.
The second aha that we had was our go to market where we wanted to start with all of the startups and small businesses and nonprofits and developers out there, who today were using nothing. Because they didn’t have the budget or technical resources to buy these enterprise-grade services that existed for big companies. And so we had this big aha, like wow, we’re going to start with small businesses and small websites, and developers and startups and nonprofits who need to be fast, safe, and reliable around the world, and today they’re using nothing. So when we launched, our competitor was nothing. We were trying to get people to go from using nothing to something. And so we had to make it ridiculously easy to sign up and attractive. And if we did, it would kind of become a flywheel, knowing that our end goal is not only do we want to help startups and entrepreneurs and small businesses and developers and nonprofits, but over time, we also wanted to go help medium-sized businesses and large organizations and big enterprises and government organizations. And again, fast forward to today, we do all of that.
But early on we really started with a different go to market, and that allowed us to build our product and our technology and get momentum, so that we can then go compete more heavily with current competitors among large enterprises. And so it was those two things, it was like, “Wow, there’s a big macroeconomic shift. If we can help make the internet better for all these people around the world who currently have nothing, I’d be really proud to work on that.” And so it’s this idea of, I thought there was a big business opportunity and something that I think Matthew and Lee and I were really proud to show up every day and work really hard on.
Ben Dahl:One thing that I think it’s worth spending a brief moment on is just the distinction between good technology and a good business. And I think one thing that you and Matthew have always been focused on, is building both, really solid technology and a good business. But I think for people that are thinking about building a business in this environment, it’s not just solving a hard technological problem, but it’s also creating a real business out of it. And I think it’s worth you talking about that for a few minutes.
Michelle Zatlyn:Yeah. So again, when you start a company and then now we’ve scaled it to, in 2019 we did about we did 287 million in revenue last year. So just to give you a sense of going from 0 to 287 million in revenue last year. And some time along the way you realize as a founder, it’s all about mission and your vision, and do I have a problem here and how can I get people to come work for me? And how do I make sure that people love where they’re working? But at some point I remember having this big realization of “Wow, we’re founders and a business owner.” And it’s really hard for a company, you cannot, tech is amazing. I mean, we’re an engineering-driven company and that’s where we love and we celebrate it. But it is so hard to compare technology between one company and another. It’s way easier to compare business metrics.
And so at some point we had to keep all the great things about our technology. It is about the tech. We love that. It’s differentiation. We live that on a daily basis. But at the end of the day we also had to put our business owner hats on, and the questions we ask ourselves as business owners are different. They’re like, how fast can we acquire a customer? Do they renew our service? Do they want to adopt more of our services? How happy are they? How much does it cost us to deliver this service to them? And it turns out you really need to do both. And I think some founders forget about caring about the business metrics and I actually think that’s a real mistake. Because at the end of the day, if you have a really great business around awesome technology, that’s when magic happens.
And so I did not realize this on day one. And I wish someone had kind of come up to me in the face and told me really directly, “Michelle, at some point you got to think about the business metrics.” And for us it was around 50, 60, 70, 80 million in revenue that I really had an aha of like, “Oh wow, we are going to get compared on these KPIs and these metrics.” A, I got to know what they mean. And B, which ones are we good at today and which ones are we bad at? And the ones that we are bad at, how are we going to get better at them? And then over time we slowly moved them in a direction that we’re proud of. And even today there’s some that are better than others and we continue to work at it. But I think the faster that founders can realize that they’re also running a business, I hope that that means you’ll get to 80, 100 million in revenue faster than we did.
Ben Dahl:So as you think about that evolution as a company, how did you instill a culture that was about leveling up and continuing to evolve, and surrounding yourself with the people that you needed to build that business?
Michelle Zatlyn:Well, there’s kind of two points to that. There’s both the people you bring in to hire, to be part… Again, it doesn’t matter how great the founders are, you need a team to go really far. And I think trying to get that first team to come join you and then scaling the team. And who you need to be your first 20 teammates, who you need to be 20 to 100, who you need to go from 300 to 2000. Actually, people look different in those stages. And some things are the same, people matter. They make a huge difference. And there’s a huge difference between a great hire and a good hire at all those stages. But the types of person that we used to hire when we had 50 people in the company looked different than what we look for today.
Today it’s all about people who understand process and repetitive motion and automating things so we can do those things really efficiently so we can free up time and resources to do other things that help give us leverage in our business, versus when you’re employee number 20 or 30 or 40, you just need a lot of doers to roll up and do the actual work because you’re in build mode, build, build, build. And I think that the types of people you look for along the way are different. Once you have great people on your team, you want to make sure that they stay.
I was talking to one founder a couple of weeks ago, and they were really proud that they had 30% attrition of their team last year. And I said, “30%? That’s really high.”
And they said, “No, no, no. In a startup it’s normal for people to leave that often.”
I was like, “Well it’s true. People leave more frequently than a larger company, but 30% annual attrition, there’s something wrong. Either you’re not hiring the right people in, or you’re not a very good place to work.” I think most high-growth tech companies have annual attrition of 10 to 20%, and maybe 15 to 20% is considered average. So you want to be less than 25 and you want to be less than 20. And maybe in a nano point of time, it spikes because you’re going through some really important transition. But again, most of your peers are at 15 to 20% annually and you’re up at 25 to 30, something is wrong. Either you’re not spending enough time on the hiring side, or once they’re at your company, they feel like they can’t contribute or it’s not a good place to work, or the culture is bad or something is broken. And I really encouraged that founder to go back rethink what they thought was good there.
And at the end of the day that’s a leadership decision from founders of saying, “What kind of place do we want this to be for people to work?” And I think there’s lots of great stories. And then recently in the news, the last few years, there’s been some terrible stories. And I actually think it’s upon all of us as leaders in the tech industry to show there’s lots of ways to create a work environment, and some can be really healthy and be a place where people choose to work and want to be and have huge success stories. So that’s for the team and getting people in.
I would say one thing that we’ve done that worked really well for us that isn’t always well-appreciated or agreed upon, it just worked for us, is that hiring managers. We have a belief that people come work for their manager, and they stay if they like their manager. And so our hiring managers are heavily involved with hiring. And early on we didn’t have any managers so that meant the founders did most of the hiring. And then we hired managers and they did it. And when we were at less than 100 people, 50% of my time was hiring. So you just feel like you’re always looking for people to join. And I also had all my other things I had to do so it just meant I was working all the time.
And today of course, we have a recruiting team. We have a great recruiting team and they partner with the hiring managers. But even to this day, hiring managers are responsible for building their teams. And again, we have a much bigger organization today, and the recruiters partner with them to build great people in. And even to this day our hiring managers spends about 20% of their time hiring every week. And that might not sound like a lot, that’s like one day a week, or two hours every single day. And I just don’t believe you can outsource it. Good people, and we think there’s a big difference and a great hire and a good hire, and great people want to work for great people, and they need to know their manager.
So that’s a little bit about getting great people to come into your company. I think if you’re thinking about a founder scaling and how do you scale yourself through all these different phases, it’s slightly different. Because it’s rare to start a company and then still be running the company as a public company. And I’m really proud of that, and I know Matthew’s really proud of that. And I hope that, we have role models above us, whether it’s Marc Benioff and Parker Harris. Or whether it’s the Shopify founders or Atlassian or Jeff Lawson at Twilio. They are definitely people that we can look up to and I hope there’s a whole other class of companies coming up behind saying, “Wow, they did it. We want to do it too,” because I definitely think it’s possible.
And I guess there’s a couple of things I’d say about scaling yourself as a founder is, I remember someone said this to me once and they were totally right. They’re like, “Either you’re running your business, or your business is running you, and you got to decide which one it is.” And I mean, I’m a competitive person. Obviously I want to run the business. I don’t want the business to run me. And this is kind of going from a founder hat to a business owner hat. And so you got to do things to scale with the business because what matters at 20 million in revenue is different than a 100 million. It’s different at 300 million. And I think that if you can be a sponge, that is like, if I can only give you one piece of like advice, it’d be, be a sponge, this growth mindset, constantly learning. Read.
At SaaStr, Jason Lemkin and his team do an amazing job getting people here to help you. And if you just show up and listen for free, you will avoid making so many mistakes and grow as a leader. That’s what I did. I went to a lot of things like this and I learned from people ahead of me and we got to where we were faster. So there’s so many resources today that help you learn as a founder, way more than 10 years ago. It’s pretty phenomenal. You can read books and whatnot. I think as you hire your leadership team, sometimes people don’t want to hire people as good as them because they’re worried that they’re going to look bad. That’s rookie mistake 101. You need to hire a leadership team that’s better at you than everything you do. Because, as long as you’re confident that you’re the vision, you’re the founder, you’re going to care about this more than anyone ever does. And if you can partner with these amazing leaders who are so good, the best head of product, the best head of engineering, the best CMO and the best chief revenue officer, and you all get everyone rowing in the same direction, that’s how you build an amazing business, as a team together. And so you’ve got to really hire a leadership team better than you.
Ben Dahl:Well, Michelle, thank you for answering my questions.
Michelle Zatlyn:Yeah, likewise. And thanks to everyone who listened in and hopefully it was helpful. And I can’t wait to see everything you build and I hope you all build big companies quicker because you learned something today.
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JobHopin, a Vietnam-based startup building an automated job-recruitment platform for Southeast Asia, announced today that it has closed a $2.45 million Series A. This brings JobHopin’s total raised so far to more than $3 million, from investors including SEMA Translink, KK Fund, Mynavi Corporation, Edulab Capital Partners, NKC Asia and Canaan Capital.
Founded in 2017 by CEO Kevin Tung Nguyen, JobHopin’s matching platform, called Bunny, uses machine learning to pair candidates with jobs. The company says there are about 60 million knowledge economy workers in Southeast Asia, and about 108 million job placements a year, but many positions take more than a month to fill on average, because many companies still do pre-screening work manually.
Bunny standardizes the language used in job descriptions and resumes for better data analysis, which is then used for to find promising candidates for open positions.
JobHopin also has a database of more than 1.4 million job candidates derived from online databases and 2,000 enterprise clients in Vietnam, and provides real-time market data analysis of salaries, talent supply (or the number of people qualified to fill certain roles) and hiring demand. Those features can be integrated into services like online education platforms, testing services and third-party job portals.
In a press statement, EduLab Capital Partners Liam Pisano said, “We are excited to now be part of the JobHopin story and lend our support. This is a company that is connecting the growing Vietnamese economy to a talented workforce, while finding ways to help the jobseeker improve their profile and bridge the skills gap.”
My second boss everywhere came from a very big, very old tech company. He inherited one of their firm rules: “When you leave, if you leave … you can’t ever come back!”
I didn’t get that rule. If someone great left, wouldn’t you want them back later? Things change. Life changes.
In fact, right after that we hired a roundtrip employee as our CTO in my first start-up and it was amazing. He already had years of domain knowledge and expertise, knew exactly what to do on Day 1 … and yet left all the drama of the past behind. It was magical to have an A+ team member also be almost 100% scaled up his first day. We did amazing things.
Still, as time has gone on, I’ve tried the trick again and again, and it hasn’t always worked. The lessons may be obvious, but I thought I’d summarize them here. Especially in tougher times, folks may be knocking on your door again. Should you take them back?
First, what doesn’t work, or at least hasn’t for me, is re-hiring:
Folks that left for a company that was a better fit. This is a very logical reason to leave. And yet, there’s always another start-up out there. I don’t think most people leave a product that isn’t a fit. They leave a manager and a situation that isn’t.
Folks that left because of their manager. Yes, maybe that manager wasn’t you. Maybe you think it can be fixed. But I’ve used found there is just too much to get over. Even if their manager is gone.
Folks that left over accountability. Sometimes, folks leave because you push them too hard. That’s common in a start-up. And you’ll look back and think, he/she was great except for … getting certain things done. Never seen them get those things done better, later.
Folks that left because they got burnt out. You’d think you could fix this the second time, if they come back. Maybe you can. But I’ve never found a way to, never seen it really work. Maybe because you’ll end up creating a similar environment again.
Folks that left for a much better job. This should work, coming back here. But the thing is, couldn’t you find a way to do it at your company?
Folks that left on bad terms. No matter why they left, I’ve found leaving on bad terms is always a flag for a rehire. If they quit without notice. If they wrote a toxic note on the way out. We all make mistakes. We’ve all been young and done dumb things. You gotta forgive. I’ve just never seen a roundtrip hire that left on bad terms work out the second time.
What has worked is re-hiring:
Folks that left for a promotion you couldn’t make. These folks left for the best of reasons.
Folks that left because you topped them. If they left slowly. If you brought in a CRO or CMO over then, and they gave it a shot for 90 days, but it didn’t work … they often can work out again.
Folks that left to start their own company. Actually, this often doesn’t work. Sometimes, they just have to be the boss after this. But sometimes it can.
Folks that realize you were the best boss they ever had. This sometimes is enough. Good bosses are often taken for granted, and probably they should be. Sometimes folks just don’t realize this until later. If the loyalty is still there, sometimes coming back can work well.
Family reasons, moving away, etc. Hopefully these are obvious. Folks that have to leave for non-work reasons are often great re-hires. Sometimes, the best of all. Oftentimes, they are OK coming back in “utility infielder” roles where they help wherever help is needed. But don’t let them leave 🙂 Keep them on in some fashion if you can.
So I think my old boss was wrong. Roundtrip hires can work. But maybe only about 50% of the time.
Make sure if it’s for the right reasons. You may find different scenarios work for you. But these are the ones that have worked for me, and that haven’t.
A startup that’s hoping to be a contender in the very large and fragmented market of human resources software has captured the eye of a big investor out of the US and become its first investment in Spain.
Barcelona-based Factorial, which is building an all-in-one HR automation platform aimed at small and medium businesses that manages payroll, employee onboarding, time off and other human resource functions, has raised €15 ($16 million) in a Series A round of funding led by CRV, with participation also from existing investors Creandum, Point Nine and K Fund.
The money comes on the heels of Factorial — which has customers in 40 countries — seeing eightfold growth in revenues in 2019, with more than 60,000 customers now using its tools.
Jordi Romero, the CEO who co-founded the company with Pau Ramon (CTO) and Bernat Farrero (head of corporate), said in an interview that the investment will be used both to expand to new markets and add more customers, as well as to double down on tech development to bring on more features. These will include RPA integrations to further automate services, and to move into more back-office product areas such as handling expenses,
Factorial has now raised $18 million and is not disclosing its valuation, he added.
The funding is notable on a couple of levels that speak not just to the wider investing climate but also to the specific area of human resources.
In addition to being CRV’s first deal in Spain, the investment is being made at a time when the whole VC model is under a lot of pressure because of the global coronavirus pandemic — not least in Spain, which has a decent, fledgling technology scene but has been one of the hardest-hit countries in the world when it comes to COVID-19.
“It made the closing of the funding very, very stressful,” Romero said from Barcelona last week (via video conference). “We had a gentleman’s agreement [so to speak] before the virus broke out, but the money was still to be wired. Seeing the world collapse around you, with some accounts closing, and with the bigger business world in a very fragile state, was very nerve wracking.”
Ironically, it’s that fragile state that proved to be a saviour of sorts for Factorial.
“We target HR leaders and they are currently very distracted with furloughs and layoffs right now, so we turned around and focused on how we could provide the best value to them,” Romero said.
The company made its product free to use until lockdowns are eased up, and Factorial has found a new interest from businesses that had never used cloud-based services before but needed to get something quickly up and running to use while working from home. He noted that among new companies signing up to Factorial, most either previously kept all their records in local files or at best a “Dropbox folder, but nothing else.”
The company also put in place more materials and other tools specifically to address the most pressing needs those HR people might have right now, such as guidance on how to implement furloughs and layoffs, best practices for communication policies and more. “We had to get creative,” Romero said.
At $16 million, this is at the larger end of Series A rounds as of January 2020, and while it’s definitely not as big as some of the outsized deals we’ve seen out of the US, it happens to be the biggest funding round so far this year in Spain.
Its rise feels unlikely for another reason, too: it comes at a time when we already have dozens (maybe even hundreds) of human resources software businesses, with many an established name — they include PeopleHR, Workday, Infor, ADP, Zenefits, Gusto, IBM, Oracle, SAP, Rippling, and many others — in a market that analysts project will be worth $38.17 billion by 2027 growing at a CAGR of over 11%.
But as is often the case in tech, status quo breeds disruption, and that’s the case here. Factorial’s approach has been to build HR tools specifically for people who are not HR professionals per se: companies that are small enough not to have specialists, or if they do, they share a lot of the tasks and work with other managers who are not in HR first and foremost.
It’s a formula that Romero said could potentially see the company taking on bigger customers, but for now, investors like it for having built a platform approach for the huge but often under-served SME market.
“Factorial was built for the users, designed for the modern web and workplace,” said Reid Christian, General Partner at CRV, in a statement. “Historically the HR software market has been one of the most lucrative categories for enterprise tech companies, and today, the HR stack looks much different. As we enter the third generation of cloud HR products, with countless point solutions, there’s a strong need for an underlying platform to integrate work across these.”
In the early days of SaaStr, we wrote a bunch of posts that were controversial at the time, but later, most sales leaders eventually agreed with. That you know early. That you know even in 1 sales cycle if a VP of Sales is going to work out.
Yet, in some ways, this breaks down a bit in really tough times. If sales cycles are much longer and getting even longer, how can you know if it’s your VP of Sales … or just the economy?
Let’s take a look at our classic checklist and see which criteria apply in a downturn in your core business — and which maybe aren’t fair to use to judge your new VP of Sales. Our classic 10 point checklist of Warning Signs. That she or he just isn’t going to work out … at your start-up. Maybe at a different one, at a different time, or stage, or subject matter they might be successful. But not as your start-up:
The Blame Game – Down. STILL APPLIES. As soon as you hear a VP of Sales start to blame her/his own reports for missing a number, it’s over. These are her/his own reports, after all. When a VP of Sales has lost confidence in his ability to hit a number, it’s always easy to blame someone on their team. But a great VP of Sales never does, at least not more than once or twice. They just … take care of their mishires. They blame themselves first. In fact, they don’t even take that much blame. They just come up with a new plan that is realistic, that pushes the team, and that makes sense.
The Blame Game – Product (too much). STILL APPLIES. A little of this is OK, and fair. The product is always feature-poor and missing critical needs for customers. But that was also true before you hired the VP of Sales …
The Blame Game – Competition.STILL APPLIES. Yes, competition is brutal. But again, it was right before he started and before a global pandemic, too. A great VP of Sales gets better at competing over time. Not worse. A great VP of Sales takes advantage of fear in the competition, and of complacency, and pounces.
The Blame Game – More Time. STILL APPLIES — WITH AN ASTERISK. You can’t expect results overnight. But you can expect some improvement in 1 sales cycle. More on that here. More time does not cure sales woes. But … sales cycles are often way up, and close rates way down. You still will know in 1 sales cycle if she or he is going to work out. It’s just, that’s 1 sales cycle may be longer, and different.
An (often big) drop in quota attainment. PROBABLY DOESN’T 100% APPLY RIGHT NOW. Quota attainment should go up when you hire a great VP of Sales. But with a mediocre one, or really, a VP of Sales that is just a bad fit … you often see quota attainment plummet. Quickly. Everyone’s quota attainment may be down now. But instead, look at your top performers. If they are sort of checking out right now … that’s a sign you hire the wrong VP of Sales.
Top reps leaving. STILL APPLIES. The best VPs of Sales know how to keep their winners. They never let them leave, in fact. If you see winners leaving, you have the wrong VP of Sales. Period. This may sound obvious … yet, this is very common to see. Don’t accept excuses here. This is as clear a sign as you are going to get.
“We’ll make it up next quarter”. STILL APPLIES. Sometimes this is true. There are always better and worse quarters. But a great VP of Sales never, ever simply dismisses a bad quarter by saying they’ll make it up next quarter. Instead, she says “this was a tough quarter. Here’s what we screwed up: ____, ____ and _____. It’s mostly fixed now. So next quarter, ….” No great VP of Sales should be saying it will be easy to make-up a big gap now. Or in many cases, that it is even possible. Instead, by now, they should have a new plan. A real plan.
A crazy plan that doesn’t really make sense or tie to data. STILL APPLIES. Related to the prior point. A bold plan can be good. But no, you can’t just magically quadruple sales in Q4 when you were only growing 20% in Q1. A crazy ramp is an excuse in disguise and waiting. It’s kicking the can on having to explain that you don’t really know how to improve sales.
A drop in revenue retention.STILL APPLIES. A strong VP of Sales in a start-up is focused on the ARR goal, not just new bookings. She’ll know some of her highest leverage in hitting the ARR plan for the year is increasing upsell, increasing net revenue retention, and decreasing churn. Even if Customer Success isn’t remotely part of her nominal job description, she’ll still want to own enough of it to see flat or improved revenue retention. Of course she will. Her job is just that much harder if retention declines. A great VP of Sales still cares as much about the ARR goal as bookings in SaaS. You’ll see the great ones figuring out now what they can do to retain their customers, especially the top customers — maybe even more so.
Not understanding the business and/or key metrics.EVEN MORE IMPORTANT NOW. I see this too often 🙁 A VP of Sales that doesn’t know how the company defines an MQL. That isn’t sure how many leads sales got last month. That isn’t clear on how a new key feature works. That doesn’t know the status of a key Top 10 deal (this one is way too common).
Fear. Sales is hard. It’s hard to hear 50 “Nos”. It’s hard to lose a big deal to a competitor after you put months in a deal. It’s hard to be judged quantitatively every month and quarter. It’s hard to always have to do better. It’s just hard. And sometimes, it’s simply too hard. When you see fear in the eyes of your VP of Sales, it’s over. It’s even harder now. There are more reasons to be scared. And yet, somehow, the best VPs of Sales don’t let fear seep in. In fact, they are even better leaders now than they were 60 days ago.
So a couple of the top 10 excuses, the top 10 signs a VP of Sales just won’t work out, don’t apply as much in the Covid-19 era. Churn is going up. Sales cycles are lengthening.
But the best sales leaders are still outperforming their peers on a relative basis. I hired my real VP of Sales in a downturn. He doubled sales in 90 days. You can’t expect that. But you can expect improvement at least at a qualitative level today. And you can look for the signs she or he may just be making things worse in these crazy times.
Why We Banned Requirements from Our Job Descriptions
A Memo on Performance-Based Hiring
What follows is a memo I wrote to explain the hiring philosophy at Luminovo to our team. If your job descriptions still include a list of skills and experiences (like “X years of Python experience” or “a university degree in communication design”) you might benefit from reading this. As it was originally written for internal training purposes, there are some references to Luminovo that you can happily translate to your own company while reading. I hope this will help you put your own hiring process on a sound footing.
This document serves to explain the philosophy of performance-based hiring that our hiring process is based on and includes advice and specific suggestions on how to put that philosophy into practice. Among other things you will learn about performance profiles, the opportunity gap and the two types of questions.
It is meant to be read and discussed by everyone involved in recruiting new talent.
“Teamwork makes the dream work.” — Some person with a knack for rhyming.
We need to hire and retain top talent. It is the single most important factor underlying all of our (potential) success. To do this consistently and to avoid hiring mediocre team members is the goal of the performance-based hiring process.
As the name suggests performance-based hiring leans on assessing how an applicant’s past performance lines up with the desired performance on the job. In other words: can this candidate get done what we need them to get done?
Asking this question might sound obvious, but most hiring processes do not actually put their focus on this. Instead they often ask if a candidate has skill A or skill B, how many years of Python experience they might have or what their university degree is. But focussing on what the applicant needs to get done as opposed to what skills they have offers some key advantages:
2 — It mitigates expectation mismatch between employer and employee.
As you will probably experience for yourself writing good performance profiles is hard. It’s hard because often times you haven’t really thought that much about what a person will need to do once they start. To avoid bad surprises for either side it’s a good idea to clarify this as much as possible before a person starts rather than after they do.
3 — It leaves more breathing space for unorthodox applicants.
Sometimes we might not know exactly (or have misguided ideas of) what skills someone needs to have to achieve our performance objectives. By putting a focus on what the candidate will need to get done, we put the focus (by definition) on what matters most to succeed on the job. Another way to look at it: if someone can do what needs to get done, they probably have the skills they need to do what needs to get done. Who cares if they have an Ivy League degree.
Embarking on the journey of finding a new Luminerd always starts with writing their performance profile.
While normal job descriptions will often have a long list or requirements (like skills, experience or academic laurels), the best people don’t get excited when they see a list of skills they already possess. Instead a performance profile should focus on what the candidate needs to do to excel in their position. The challenges that our job opportunity comes with is what the best people are interested in and that is what the performance profile should focus on. A good way of thinking about the concept of a performance profile is simply to reframe the role into a “success profile”. You should ask yourself: What does a person need to do in this role in order to be considered successful?
A performance profile consists of a list of performance objectives. Each performance objective should define superior performance and clearly state what needs to get done on the job. Instead of focusing on what people need to have, it should focus on what people need to do.
A job description telling us that you are looking for a “good communicator with proficient Python programming skills and a Master’s degree in Machine Learning” distracts from what we ultimately care about (on-the-job performance), might exclude good candidates and it often is an artifact of lazy thinking demonstrating that you do not yet clearly understand what a new hire will need to do to succeed in the role you are looking to fill. A good performance profile for this role will have performance objectives describing what this “good communicator” you are looking for will need his communication skills for and what outcomes they will need to produce with their Python and Machine Learning experience. Two possible objectives could be:
“Implement and tune state-of-the-art ML models to get the best possible results given a dataset and metric to optimize”
“Effectively communicate and document your approach, progress, results and challenges both within the team and towards our clients”
After reading a finished performance profile the candidate should know exactly what will be expected of her once she joins the company. A good performance profile can serve as an on-boarding document and as the basis of future performance reviews. And it does not stop there! The logic of writing performance objectives and understanding a person’s opportunity gap can be used to continuously “rehire” people within your company and get them psyched for the next step they and your company will take.
Note: We often include some bullet points that are not proper performance objectives in our performance profiles (“attend insight hours and fun team events”). Their purpose is to illustrate that Luminovo is an awesome place to work at. Do not confuse them with proper performance objectives.
The Opportunity Gap
Remember: our goal is to retain and hire the best people. But the best performers screen differently for a job than the average performer. For the best (like you, dear reader 🤗), each new job is a strategic decision they evaluate based on what they can achieve and learn both in the short-term and the long-term.
This gap between what an applicant does now and what they could be doing in the future if they take the job is called the opportunity gap. It consists of job stretch (immediate responsibilities, tasks and challenges that are new to the applicant) and job growth (long-term growth prospects we can offer) and is the best way to motivate the best people for a new job.
Understanding an applicant’s opportunity gap is key to making sure they are right for the job and the job is right for them.
Note: The belief that the opportunity gap motivates the kind of people we want to work with is actually embedded in our operating principles (Keep Learning. Focus on Impact.).
“Interviews should be a fact-finding mission, not a popularity contest” — Lou Adler
The first thing to keep in mind when starting to interview a candidate is that there is little correlation between interviewing skills and on-the-job performance. We want to use on-the-job performance as our selection criterium not interview performance.
The second thing to realize is that the interview is there to collect information, not to make a decision. Often people tend to make a gut decision only a few minutes into the interview. Force yourself to delay the decision as long as possible! And work against your intuition. A bad first impression should be an invitation to find facts that prove you wrong (and the same goes for a good first impression).
By now we have defined what our candidates will need to do on the job (thanks to our performance objectives) and we have agreed that we ultimately care about on-the-job performance (as opposed to interview performance). Time to start the seemingly black magic process of trying to predict the future of how well a candidate will do their job.
Predictors of Success
At the core of performance-based hiring is the belief that the best predictors of success for on-the-job performance are not skills, but energy, talent and comparable past performance.
The energy a candidate brings to your company largely depends on their motivation to do the work that needs to get done and to understand a candidate’s motivation you need to understand their opportunity gap. Talent will impact how much time the candidate will need to bridge the opportunity gap and the best way to think about it is in terms of comparable past performance. The most talented applicants will have a consistent track record of exceeding expectations in the things they have committed themselves to doing.
This leaves us with comparable past performance and fortunately there are only two types of questions you need to know about to understand this predictor of success.
Two Types of Questions — The MSA
The first question is called the “Most Significant Accomplishment” question. It arises naturally from a good performance profile and goes something like this: “As a fill-in-role-title-here you will have to fill-in-performance-objective-here. Can you tell me in detail about the most significant accomplishment that you believe has prepared you to do this well?”
Instead of going broad and brushing over all the things they have ever done, you want to dig deep into their most significant accomplishment. What was the situation you faced when you started the project? What were the biggest challenges you had to overcome? What were the results obtained? What skills were needed? What skills were learned? What was your role and who did you work with? What would you do differently?
All of the follow-up questions above are examples of fact-finding. Without fact-finding asking the MSA is worthless. Doing good fact-finding lies at the heart of performance-based hiring. If you just let the interviewee tell you about their accomplishments without doing fact-finding, all you will be doing is measuring interviewing skills (the thing we set out to avoid in the first place). Fact-finding is great because it works two ways. On the one hand, it helps uncover candidates that are good at interviewing and inflating their achievements of the past. On the other hand, even candidates that are bad at interviewing (say they get very nervous in interview settings) are good at talking about things they have spent a lot of time doing and know in-depth. It lets you go past interviewing skills and helps you to truly understand their comparable past performance.
As you get better and better at fact-finding, you will realize that to conduct an insightful interview all you need is the MSA question and a very good understanding of the job the candidate will need to do (as summarized in the performance profile). As you can ask the MSA about any performance objective, it is usually a good idea that everyone involved in the hiring process coordinates before the interviews to decide which interviewer will focus on which of the performance objectives in their line of questioning.
You might have noticed the implicit tension between a candidate’s opportunity gap and their past performance. More and better examples of past performance imply a smaller opportunity gap which will negatively impact their motivation to do the job.
The key to resolving this issue lies in the word comparable. You want your candidates to have comparable past performance, not necessarily identical past performance. Comparable accomplishments can be made by doing something different in a similar setting or doing something similar in a different setting.
When we write performance profiles we try to avoid making too many assumptions about what skills are needed to do the job at hand. In the same spirit, we want to leave the choice of what a comparable accomplishment can be to the candidate when we ask the MSA question.
Don’t sell (too much)
“Recruiting is more about buying than selling. If you sell too soon, you stop evaluating. If the job is compelling, candidates will sell you as they attempt to convince you why they’re qualified.” — Lou Adler
Every interview is a two-sided affair of the applicant convincing us and us convincing the applicant that he should be working for Luminovo. The best people are interested in working with great teammates and this holds true for you (the interviewer) just as much as for the interviewee.
However, you cannot tell a person straight off the bat how great a job is. They need to learn for themselves. If a job seems too easy to get, it becomes uninteresting. So do not start selling (yourself, the job or the company) too soon, even if you are convinced of an applicant’s qualifications.
Rather spend the interview talking up the opportunity gap. Everyone is proud of their accomplishments, so the optimal interview is one where you get the candidate to see the job opportunity and he starts trying to sell you his skills and relevant experience.
You can do this by using the recruiting and challenging questions technique during the interview. It goes like this: Use your questions (and the lead-up to it) to challenge the candidate and talk up the challenges they will be facing on the new job (“Your experience with X is really impressive, but I feel you have not had the chance to do a lot of Y. Can you tell me more about related accomplishments that might qualify you for this new challenge?”). The MSA question is a natural fit for this questioning technique.
Two Types of Questions — The Jam
What is even better than asking about comparable past performance? Seeing comparable live performance, right there in the interview! In a jam you just take a problem that the person will face in their new role and ask how they would go about solving it. The closer you can approximate the real-world setting the better. A jam is meant to be a collaborative session where you hash out the solution in a back and forth between interviewer and interviewee.
Starting the Interview
It is usually a good idea to start the interview by outlining what exactly you will be doing in the interview in what order and telling them about which performance objectives you think are the most important for the role.
During the Interview
Make sure you listen more than you talk. After asking a question resist the urge to fill an awkward silence. Instead wait and give the candidate time to think and answer.
Ending the Interview
End the interview by giving the candidate 10 minutes to ask their questions. At the very end close the interview with a question like this: “Although we’re seeing some other fine candidates, I personally think you have a very strong background. We’ll get back to you in a few days, but what are your thoughts now about this position?” It creates competition (without this great candidates can quickly lose interest and you strengthen their negotiation position later on if you tell them flat out that they are one of the best candidates you have seen), demand (express sincere interest — people will think more about why they want a job when told they are well liked and qualified; with a neutral or negative ending people will go away thinking about why they are not going to get it) and surfaces concerns on the candidates side early on by asking them about their first impression.
A Note on Cultural Fit
Many recruiting processes put an active focus on “cultural fit”. Would I like to grab a beer with this person? I agree that cultural fit is a factor that is crucially important. But cultural fit in the sense of “do I like this person” does not deserve any extra attention, since we would never hire someone we do not like anyways. Interviewing is hard and needs to be learnt, but judging whether you like someone is easy and every new interviewer already comes with years of practice. Try to determine whether you like a candidate, only after you have determined his competency. There are of course some parts of cultural fit (like giving pro-active feedback and valuing psychological safety) that we should be checking for and for these we have our operating principles (or you could think about them as value objectives) that (just like performance objectives) focus on what people do as opposed to what they have.
Writing Performance Objectives
A good performance objective should:
Describe the results needed by the candidate to be successful, key process steps to achieve these results and give an understanding of the environment (like pace, resources, professionalism and decision making processes)
Specific: Include the details of what needs to be done so that others understand it. Measurable: It’s best if the objective is easy to measure by including amounts or percent changes. Action-oriented: Action verbs build, improve, change, and help understanding. Results: A definition that complements the measurable piece by clearly indicating what needs to happen. Time-bound: Include a date or state how long it will take to start and complete. environment: Describe the company culture, pace, pressure, available resources, and politics.
Convert having into doing, technical skills into results. Use active verbs not passive ones (“be responsible for” is passive!).
If you are hiring a role that is already being done in the company, the best way to go about writing a performance profile is looking at what the best people in that role at Luminovo do and what sets them apart from the average performer.
Last but not least a good question to ask yourself while writing a performance objective is the following: If you posed the MSA question about this objective could you imagine getting specific examples of what they have done in the past from your candidate (that’s good!) or would you expect it to lead to very vague answers (that’s bad!).
A legal perspective on writing performance objectives
In Germany, it is (thankfully so) illegal to discriminate against applicants based on age (also gender, ethnicity, sexual preferences, religion or disability). Thus, if you are a young and dynamic startup looking for a “young and dynamic team member” you are putting your company at risk of being sued. If you write performance objectives instead of job requirements and focus on what people do as opposed to what they have or who they are you are much less likely to end up discriminating in your job descriptions (be it by accident or not).
Thanks to Erin Bacsy and Patrick Perner for your feedback on the first draft and putting our hiring philosophy into practice every day. 🤗 Thanks to Sebastian Schaal for indulging the good and keeping in check the bad ideas I have for rethinking how we do things at Luminovo every day — and for knowing which is which.
If you have feedback, thoughts or think any of this is bad advice, I would love to hear from you.
There are no easy answers, but we do know one thing:
When things come back, you will need everyone great.
Marc Benioff said one of his top mistakes was not hiring enough salespeople in 2009, during the peak of the last downturn. But if you do have to cut — where do you start?
At almost every company, if we’re honest, the “bottom” 10% often doesn’t contribute that much if any value. If you have to cut, start there. Every VP, every manager, and probably even most employees know who isn’t contributing enough. It’s about a 20-minute discussion with your senior team to align on who the bottom 10% is. Beyond that is harder.
And then, if you have to cut more, at least think about if you can repurpose folks first (for real). Can sales help more with customer success? Can demand gen do more in customer marketing? This doesn’t always work. Not every AE can pitch in as a CSM. Not every SDR can transition overnight to doing support instead. Not every demand gen marketer can transition to a customer marketer. But you may find that when this does work, you have the resources now to focus on your existing customers and prospects in a way you didn’t seem to be able to before.
What if the deals you have in the pipeline do close — just in say 180 days instead of 30? The deals in your pipeline are prospects that are interested, and likely still will be in a few months. Even if this week isn’t the right time to buy anymore. Building pipeline and doing discovery calls with prospects does matter now, even if sales cycles have just lengthened an unpredictable amount. Building cr*p pipeline today though is a double waste of limited time and money. But building your brand, your presence, and building qualified opportunities right now is something the best are leaning in on — not walking away from. At the end of the day, if you are going long, what matters most is that you close a customer for life. It doesn’t really matter as much when.
And finally, if you do have to cut — ask yourself if you’d want them back down the road. If so, that’s a sign to somehow try to keep them if you possibly can. It is always hard to find great people, and just as hard to train people. You really don’t want to lose any strong, scaled, trained resources. This could be a short downturn, or a very long one. V-shaped or swoosh-shaped, we have no idea. But keeping your top folks is always worth it, if there is a way. Finding, hiring, training and scaling great people is just so phenomenally expensive.
“LIFO” is probably realistic as a default. It may not be fair, but the newest hires may need to be the first to go. Why? You just may not have enough data to know if they are great. If a sales rep has never closed a deal, how will you really know how good he or she is? But you’ll know for sure on anyone that’s been there for 6+ months.
If you have 24+ months of runway, the very last thing I’d cut is good people. You’ll be selling in force well before then. We know that.
There are no easy answers, but we do know one thing:
When things come back, you will need everyone great.
Marc Benioff said one of his top mistakes was not hiring enough salespeople in 2009, during the peak of the last downturn.
At almost every company, if we’re honest, the “bottom” 10% doesn’t contribute that much if any value. If you have to cut, start there. Every VP, every manager, and probably even most employees know who isn’t contributing enough. It’s about a 20-minute discussion to align on who the bottom 10% is. Beyond that is harder.
And then, if you have to cut more, at least think about if you can repurpose folks first. Can sales help more with customer success? Can demand gen do more in customer marketing?
And finally, if you do have to cut — be cognizant of if you’d want them back down the road. If so, somehow try to keep them if you can. It is always hard to find great people, and just as hard to train people. You really don’t want to lose any strong, scaled, trained resources. This could be a short downturn, or a very long one. But keeping your top folks is always worth it, if there is a way.
“LIFO” is probably realistic as a default. It may not be fair, but the newest hires may need to be the first to go. Why? You just may not have enough data to know if they are great. If a sales rep has never closed a deal, how will you really know how good he or she is? But you’ll know for sure on anyone that’s been there for 6+ months.
If you have 24+ months of runway, the very last thing I’d cut is good people. You’ll be selling in force again by then. We know that.
This may be of the simplest SaaS posts of all times, with some of the most basic advice, but it’s worth talking about anyway.
When things get better — you will need everyone great you have now:
You will need every scaled sales rep that hits quota. The leads will keep coming, and growing. Yes, sales cycles may lengthen a lot, and deals slow way down. But when they shorten, you’ll need every trained, scaled rep you have to service the leads you have now and then.
You’ll need every great engineer. You know this. The best product doesn’t always win, but the most agile teams often do. As time goes on, they produce exponentially more good features and software than less agile teams.
You’ll need every good customer success manager. Your revenue will grow, and you’re learning now that existing customers are even more important than everyone thought. Those customers-for-life need support. Now more than ever.
You’ll need to keep filling the pipeline and demand gen. Maybe deals are a lot slower to move down the pipe today. But you still need a full pipeline. Today, and in the future. Fill your pipeline today, in fact. It’s OK if the deals don’t close until December. You’ll want bookings then, too 🙂
You need everyone great, and probably everyone good. Everyone great ends up being accretive in SaaS over time. And it takes so long to find good people, to interview, to test, to train, to scale.
The bottom 10%-20%, even in the best organizations, usually don’t add much value. If you have to, start there. Ask every leader who is the worst performer on their team. Everyone knows this.
But try to find a way to keep everyone good and great.
First Round is a venture capital firm that’s laser-focused on helping seed stage companies win. Across our offices in New York, San Francisco and Philadelphia, we roll up our sleeves every day to help incredible founders build their companies from day one.
We’re looking to add a Chief of Staff to our team who will work directly with our New York City based Partner, Hayley Barna, as her trusted right hand. At First Round, individuals in this role supercharge our investment team by creating and managing processes that deliver world-class services and experiences to entrepreneurs. This role will engage across all functions of First Round, including reviewing new investment opportunities, special projects, partner branding/marketing, portfolio engagement, and management of administrative staff. This role is a balance between strategy and sharp execution.
Managing and tracking new investment opportunities
Managing and tracking relationships and communication within First Round portfolio companies, community and partner networks
Conducting research and investment diligence
Initiating and leading special projects (building internal products and programs, research deep dives, etc.)
Managing and processing email communication
Managing partner projects, brand/marketing initiatives and events
Overseeing scheduling and contact management performed by executive assistant
This position is not:
A partner-track role. Instead, it is an ideal opportunity to get involved with building incredible companies and to learn from the best of the best.
Expected to source companies or to be directly entrepreneur-facing. Rather, you will work with Hayley to help review, analyze and prioritize existing deal flow and support our portfolio.
Interested? Here’s what we’re looking for:
This is a unique opportunity in which individuals from many backgrounds could excel. Here are just a few examples of profiles we think could be great:
A project manager or operations guru with startup experience who thrives keeping the trains running on time with little oversight.
An aspiring entrepreneur who wants a rare window into the VC and fundraising side of the business.
A business generalist with a passion for technology and a penchant for learning new things fast.
We believe the strength of our team comes from diverse backgrounds and experiences. You might be a good fit if the following describes you:
You’re fascinated by technology and how today’s entrepreneurs are shaping the future. You don’t necessarily need deep knowledge of the venture capital industry, but you should be excited about the field and eager to learn the business quickly. Most importantly, you are a fast learner and laser focused on execution with the drive to get things done. You’re deeply organized, detail oriented and reliable above all else.
You’re curious and intuitive — a creative and unconventional thinker, yet also highly analytical and logical.You’re a fantastic (and prolific) writer and pride yourself on thoughtful, eloquent communication. You know the right questions to ask, as well as when to listen and learn. You have the polish and presence to regularly interact with seasoned CEOs, founders and entrepreneurs.
We hope to meet with candidates with at least 2–3 years of working experience.
Here’s what the First Round team is all about:
At First Round, we value resourcefulness, diversity, excellence and hustle. To give you a sense of what our team is all about, check out our values that guide our work:
We serve entrepreneurs.We owe them our unvarnished opinion and unwavering support.
We honor quality.The little things matter. High standards and attention to the craft are valued here.
We favor action and think long-term.We decide and execute with urgency today. We define success with the long-term in mind.
We cherish diversity and inclusion.The strongest communities around the world are diverse and inclusive. We work hard to make sure ours is, too.
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Hiring chatbot Mya Systems — which uses a conversational AI to grease the recruitment pipeline by automating sourcing for agencies and large enterprises needing to fill lots of vacancies in areas such as retail and warehouse jobs — has closed an $18.75 million Series C.
The funding round was led by Notion Capital with participation from earlier investors, Foundation Capital and Emergence Capital, along with Workday Ventures . The 2012-founded company, which was previously known as FirstJob, raised an $11.4M Series A back in 2017.
Touting growth over the past year, Mya said it saw 3x customer subscription growth in 2019.
In all it says it now has more than 460 brands using its tools — including six of the eight largest staffing agencies, and 29 of the Fortune 100 — name checking the likes of Hays, Adecco, L’Oreal, Deloitte, and Anheuser Busch.
Its chatbot approach to engaging and “deeply” screening applicants via a mobile app has led to more than 400,000 interviews being scheduled with “qualified and interested” candidates, it added.
Pointing to the COVID-19 pandemic, founder and CEO Eyal Grayevsky suggested there could be increased demand for AI job screening as companies face highly dynamic recruitment needs. “Now more than ever, organizations in healthcare, e-commerce, light industrial, transportation, logistics, retail, and other industries impacted by COVID-19 need help scaling recruitment to serve large, unexpected spikes in demand. Mya is uniquely positioned to help organizations with high volume recruitment needs and the increasing reliance on temp and contract-based work,” he said in a statement.
“While some hiring is slowing down due to COVID-19, we are seeing spikes in demand from industries such as healthcare, light industrial, call center, logistics, grocery, and supply chain. We have received multiple requests from our healthcare, light industrial and e-commerce customers seeking additional support to rapidly scale engagement with nurses, in-home care professionals, warehouse workers, call center representatives, etc. to serve rapidly growing demand for those functions,” he also told us, saying the team is prioritizing helping those dealing with spikes in demand as a result of the coronavirus public health emergency.
In addition to conversational AI, Mya has focused on integrating its platform with other tools used for recruitment, including CRM, ATS and HRIS systems — plugging into the likes of Bullhorn, Workday, and SAP SuccessFactors. Asked what the new funding will be put towards, Grayevsky told us deeper integrations with such partners is on the cards, along with expanding use-cases for the product.
“Mya will be using the funds to invest in our platform, further expanding the use cases designed to support the end-to-end recruiting and post hire engagement process, and continuing to deepen our integrations with partner ATS solutions like Bullhorn, Workday, and SAP Successfactors. In addition to deepening our integrations, we are also investing heavily in turnkey, fully-featured solutions built alongside our ATS partners that allow for even greater ease and speed to implement Mya,” he said.
“Mya will also be investing in deepening our core platform and conversational AI technology, specifically to expand our conversational capabilities across new industries. We will further enhance our self-service conversation design and configuration capabilities to make it even easier for our customers to rapidly scale the Mya conversational experience across both high volume, hourly and professional roles. Lastly, we are strengthening our infrastructure and support for global customers who are rapidly scaling internationally (e.g. L’Oreal is now live in 18 countries globally).”
At this point Mya is selling its product into more than 35 countries — predominantly in North America, EMEA and APAC — with a focus on large and mid-sized employers that operate globally, including staffing businesses and corporations across high-volume recruitment industries such as healthcare, light industrial, call center, retail, transportation and logistics, hospitality, grocery and automotive.
“We have teams in both the US and Europe to support our expanding global customer base,” Grayevsky added. “With the new funding, we will continue to invest in the distribution, infrastructure and support needed to address demand across target markets globally.”
He name-checks the likes of Olivia, AllyO, Job Pal, Roborecruiter, XOR, and TextRecruit as main competitors. In terms of differentiation, he points to Mya having processed “tens of millions” of candidate interactions thus far — amassing an “ever-growing domain specific conversational dataset” — which he said enables it to continue to enhance the experience the platform can deliver for candidates.
“We have the most robust conversational technology and platform enabling rich, dynamic, and natural conversational experiences that deliver higher engagement, conversion, and actionable insights,” he claimed “We have the most in-depth solutions that support use cases across the entire recruiting funnel (e.g. sourcing, talent pool nurturing and re-engagement, screening, scheduling, contractor redeployment, etc.).
“We have the most experience successfully delivering deeply integrated solutions that scale for the largest staffing business and corporations (e.g. our largest customer is now deployed in 600+ locations globally, across hundreds of job roles, and thousands of recruiters on the platform, engaging with millions of both passive and active candidates on an annual basis), and… we are closely partnered with the leading ATS providers such as Workday and Bullhorn, where we have differentiated integrations and channel relationships that give us a competitive advantage.”
We also asked Grayevsky how the recruitment tool is complying with different national employment and equality laws, and also avoiding introducing any discrimination/bias into its AI-aided screening.
On this he said: “Mya does not apply any advanced AI or machine learning to decision making (i.e. determining fit for a job role), we are squarely focused on developing a robust conversational experience that allows Mya to engage instantly, capture information with high response and completion rates, automate outbound sourcing and scheduling process, and provide ongoing engagement and support with both active applicants and passive candidates in our customer’s talent community.”
He also said they have put steps in place to confirm the accuracy of candidate responses through the conversation (such as by adding a confirmation step for core requirements); and by “employing processes that check for bias, both before a solution goes into production and once its launched”.
Another step it’s taken to “ensure a positive experience for all candidates”, as he put it, is to provides the user an option to reroute a question that the bot does not understand to a recruiter.
“Those queries are immediately submitted into our AI training and annotation pipeline, tested and deployed into production to continually expand our FAQ support within the platform,” he told us.
“Mya’s mission is to create a far more efficient and equitable job market powered by conversational AI, and a core principle of that mission is to level the playing field,” Grayevsky added. “Our AI, engineering and product teams (which includes individuals from highly diverse backgrounds) make all product design decisions to consciously remove bias from the hiring process and ensure that information surfaced to hiring teams is accurate and objective.”
“We are also investing extensively to ensure Mya is in full compliance with local employment laws, data protection and privacy regulations, rules around opt-in and consent, everywhere we operate in the world. Ahead of GDPR, we worked with outside counsel on a Privacy Impact Assessment. That led to our appointment of a Data Protection Officer, and informed our ‘Privacy by Default’ and ‘Privacy by Design’ philosophies. We’re continuing to keep an eye on regulations around AI in the EU, and are already in compliance with the seven key requirements identified in the European Commission’s white paper on artificial intelligence.”
Asked about the disproportionate admin burden automated hiring tools can place on candidates, as they grease up efficiencies of scale for employers — i.e. by requiring jobseekers respond individually to screening system vs just being able to submit a single CV to multiple companies — Grayevsky argued that dynamic data-capturing recruitment systems, such as Mya, offer a better experience to job seekers via increased responsiveness and through expanding potential future job-matching opportunities.
“Traditional job applications often have many steps, and can take a long time to complete, creating a negative experience and drop-off for the employer. Those questionnaires are not dynamic and often lead to no response. That time and effort invested often cannot be leveraged into other opportunities,” he argued.
“With Mya, everyone gets a response instantaneously and around the clock (24/7). They can ask questions and get answers in real-time, providing more transparency and insight into the opportunity, process, and employer. Mya can follow up and if deemed fit by the hiring team, schedule a phone call or on-site interview with the recruiter or hiring manager to help accelerate the process.
“If they are ultimately not deemed fit by the hiring team due to a missing requirement, Mya is able to re-engage to help that candidate connect to a role that is more suitable based on their profile, interests, and availability. The idea is that a candidate can build one profile and be connected to multiple jobs, quickly and efficiently. We built our solution through the lens of the candidate, making it easy to provide information about qualifications, interests, and availability, and get connected to the right opportunities.”
Ben Braverman explains how Flexport entered a competitive market with a unique model and continues to grow. Hiring senior leaders can set companies up to fail and see how sticking with a current, successful model can be the key to hypergrowth. Rely on your success, know you are doing something right and scale faster.
That was the most over the top entrance that the sales leader for a company that moves boxes around the world has ever gotten. My name is Ben Braverman. I’m Chief Revenue Officer at Flexport. We do international shipping, so I’m honored to be speaking to people like you that were smart enough to get into high margin businesses. We are in a different business. We move boxes around the world for our customers. We literally pick up their goods at factories, we put it on to trucks, we take those trucks to docs and airports around the world and we literally move their cargo from point A to point B. When they pay us to do that, we give them access to a best in class software platform. So it’s a unique model. We’ve scaled it pretty far pretty quickly. So we did about 442 million in sales last year. We founded the company five years ago.
Brendon introduces his playbook to hiring the first VP of Sales from his experiences as VP of Sales at LinkedIn, EchoSign, Talkdesk and more. Learn the dos and don’ts to make the correct hire the first time and not rush into hiring the wrong VP of Sales, which can cost the company months or even years.
Hey everybody, how you doing? So the title of my presentation is The Playbook To Hiring Your First VP Of Sales And Not Screwing It Up. I do this literally every day with a wide range of clients, sort of helping them in and around hiring a VP of Sales, maybe replacing a VP of Sales. So this is kind of what I do. I’ll toggle sort of between the founder perspective of hiring a VP of Sales, as well as a first time or somebody that wants to become a first time VP of Sales.
Ep. 311: Karl Sun is the Founder & CEO @ Lucidchart, a visual workspace that combines diagramming, data visualization, and collaboration to accelerate understanding and drive innovation. To date, Karl has raised $114M with Lucidchart from some of the best in the business including K9 Ventures, Meritech, Iconiq, GV and Kickstart in Utah. As for Karl, prior to founding the company he spent 6 years at Google in some fascinating roles including Head of Patents, Head of Business Development in China and running Google’s energy investments. As a result of his success, Karl was recently announced as EY’s Entrepreneur of the Year.
Pssst 🗣 Loving our podcast content? Listen to the start of the episode for a promo code to our upcoming events!
In Today’s Episode We Discuss:
* How Karl made his way into the world of SaaS with the founding of Lucidchart having been Head of Business Development for Google in China and Head of Patents.
* How does one know when we need to hire generalists vs specialists? How does this requirement change as the company scales? How does Karl fundamentally think about finding great talent and keeping top of funnel full? How does Karl think about working with recruiters? What works? What does not work?
* Karl has been in every interview for every new hire for the first 6 years of the business, why? How does Karl think about doing this at scale? How does Karl structure the hiring process today? Why do they have a hiring committee? What does the process look like? How do they assess and test for culture?
* How does Karl think about retaining agility and flexibility with scale? How does Karl maintain employee empowerment with the implementation of process? How does Karl think about the balance between creating accountability without a fear of failure? What are the challenges of this?
Ep. 312: Starting a company can be daunting, exhausting, and expensive, but with the right focus and idea – extremely rewarding; take it from Andrew Filev, Founder and CEO of Wrike. In this session, he will outline the do’s and dont’s that he learned bootstrapping Wrike. Where it makes sense to invest your precious resources when to outsource, and how to save yourself money without cutting corners.