Category Archives: Venture Capital

How to Know if You Have the Right Executives on Your Leadership Team

Is your leadership team world-class?  Are some of your executives holding your company back?  Could you grow faster if you replaced your head of sales?

Does your board think you have the right leadership team?  Heck, does your leadership team think you have the right leadership team?  Do your rank-and-file employees?

When you stick with a VP who helped build the company but who seems to be past their sell-by date, are you demonstrating loyalty as a strength or conflict-aversion as a weakness?

These are some of the questions that keep founder/CEOs up at night.  While founders who’ve spent time at larger companies have some experience with SVPs and CXOs at different scale, for many founders this is entirely greenfield territory.  Think:  I’ve built this great $10M ARR company but I have never run (or been a C-level executive at) a $50M ARR company, ergo I really have no idea what the proverbial “next-level” team looks like.

Or, simply put, how do you know if you have the right people around executive staff table?  To determine the answer, do these 5 things:

  • Evaluate performance.  An obvious sign that someone is in over their head is a lack of performance, missing targets (e.g., new ARR), OKRs, or hiring goals — either in terms of number or quality (particularly when staffing their own leadership team).  Someone who’s not performing is definitionally already in over their head today; we don’t need to wonder about tomorrow.
  • Get 360 degree feedback.  From your team’s leadership coach (if you have one), from the e-staff peer group, from a formal 360 degree feedback program, from employee satisfaction surveys (e.g., CultureAmp), and from the board.  This informs you with a holistic view of how the executive is seen within the organization.
  • Do calibration meetings.  Always be calibrating — always seek out next-level or next-next-level executives and have a coffee with them.  The only way I know to develop your own sense of “seniority” is to meet lots of senior people.  Use your board and your network to get access.  Ask questions about current issues you’re facing and the road ahead.  You’ll build your network, have people you can rely on for future advice, and — who knows — maybe one day you’ll come back and hire some of them.  The next time one of your board members says, “your CXO isn’t world-class,” ask them for three introductions to people who are.
  • Listen to your gutDo you look forward to meeting with them?  Do they bring or take energy?  Are meetings more productive when they come or when don’t?  Do they suck the air out of the room?  Are they Eeyore or Pooh?  If you consistently don’t look forward to meeting with one of your direct reports, it’s an important tell of a major problem.  The e-staff is helping you build your company; you should be excited to meet with each and every one of them, every time.  If you’re not, you need to ask yourself why.
  • Ask.  Sit down and ask the executive how they’re doing, how they feel about the organization and the road ahead, if they’re still having fun and enjoying their job, and if they feel like they are up to (and up for) the challenges ahead.  Sometimes, they’ll share their concerns and you can build a program to support them.  Sometimes, they won’t be candid, effectively denying themselves help or redeployment.  Sometimes, as once happened to me, they’ll say they’ve been thinking about going into real estate with their brother.  You won’t find out if you don’t ask.

The most important part of this process is realizing that you have options and using them.  Unless you want to create an up-or-out culture of disposable people, you need to consider all your options for an executive who has run out of runway:

  • Redeployment.  Moving them to a different, senior post (e.g., taking your old VP of Marketing and having them go to London to help open Europe).
  • Layering up.  Restructuring so as to add an additional layer above the executive.  People generally don’t like this but will try and/or tolerate it if they understand why you’re making the change and believe that they can potentially learn something.  (Unvested in-the-money options don’t hurt, either.)
  • Benching.  Given them an important job but one below their capabilities until such time as you find something you really need them to do.  Think:  you’re still on the team but not playing this period while I figure out what to do with you.  Too few executives do this because it’s nominally expensive, but the cost of not doing it is a loss of talent and organizational knowledge.
  • Leave of absence.  In some cases, rather than carry the player on the bench, both the company and the executive could benefit from a leave of absence for a few months where, in a good scenario, the executive returns into a needed role, refreshed and ready for a new challenge.

The more fluid and flexible your culture — e.g., defining jobs more as tours of duty while building the company than as functional empire building — the more options you will have.  But it all starts with answering the question:  do I have the right executives around the table?

Do the 5 actions above to figure it out.

My Perspectives on Growth (Presentation)

In my new capacity as an EIR at Balderton Capital, I recently gave a presentation to a leadership meeting at a high-growth, Balderton-backed startup offering my perspectives on growth and the challenges that come with it.

I discussed these five challenges:

  1. Next-levelitis, an obsessive focus on scaling everything to the next level.  (Which is great if not overdone.)
  2. Absorbing new leaders, (aka, “FBI guys”) and the challenges that come when hiring the wrong next-level people and they blow themselves up at the start.
  3. Conflation of regional culture and opinion, a common problem in international expansion.  (What’s a bona fide regional difference vs. a difference of opinion masked as one?)
  4. Missing an opportunity that you want (aka, getting “passed over” for a promotion) and what to do about it.
  5. Getting things wrong to get other things right.  Startups are 100% about getting what matters right.  Which begs the question, what matters?

The slide deck is below.


By the way, you have to watch the referenced Die Hard videos; they do a superb job of portraying what it feels like in these situations:

“I’m Dwayne Robinson … and I’m in charge here.”

“Not any more.”

Are We Growing Fast Enough?

Say you’re a $40M SaaS business growing at 40%.  Is that good?  Is that bad?  How do you know?

In this post, we’ll take a quick look at three lenses you should look through in considering this question.

  • The plan lens
  • The benchmark lens
  • The market lens

The Plan Lens
Every startup has an operating plan that is used to set targets for the company and manage the cash runway.   The first question is always, “what were new bookings as a percent of plan?” and only then do you get the second, “what does that represent in terms of year-over-year growth?” [1] [2]

That order is not accidental and it subtly reveals something important:  plan-relative performance is more important to most boards than absolute performance.  That’s shocking when you think about it because plan-relative performance is at least in part about game theory (i.e., plan negotiation skills) whereas growth is a better measure of raw performance [3].  But it’s true.  When I started as CEO of MarkLogic the seven words the legendary Mike Moritz said to me were not, “grow more quickly than your primary competition,” but instead, “make a plan that you can beat” [4].

Why is this?  I think plan-relative performance gets top billing because it ultimately measures whether you are in control of your business.  If no, get in control of your business.  If yes, are you growing fast enough?  If no, make a faster growth plan.

The trouble with the plan lens is you can literally go out of business beating plan.  Consider this example:

Your company beats plan every year, performing in the 105% to 110% of plan range and growing at a respectable 40%.  The problem is you’ve lost the market.  You had a competitor who was more aggressive, grew faster — who knows maybe even missing their plan every now and then — and in year 7, they end up 3+ times your size, are seen as the clear market leader, win more deals because of that, command a market leadership premium in their fundraising, and can raise vast sums of money to keep outgrowing you with only modest dilution [5] [6].

Game over.  Startup markets are not won by the timid.

The Benchmark Lens
Now that it’s clear that plan-relative performance is only one lens, you may decide to get some benchmark data to see what kind of growth is normal or good at your scale.  So you grab a copy of OpenView’s benchmarks or the the KeyBanc SaaS survey.  Looking at KeyBanc, you’ll find this chart.

While I’m a big believer in gathering such data and using it for context, benchmarks alone are not enough.  In our example, we look at the $30-50M size column, see 38% as the 75th percentile cut-off, and feel even better about our 39% growth.  Yes, relative to the universe of private SaaS companies 39% growth at $30-50M scale is top quartile (you can pick up your participation trophy on the way out), but what actually matters is your size and relative market share in your target market.

While on a quick glance bankers may tell you, “your numbers look pretty solid,” when they dig into the market and realize that you are only 1/3rd the size of your archrival, they’ll take a sudden and deep interest in positioning — specifically how you position relative to the market leader and whether that story paints you as the market leader in a defensible niche or simply downstream roadkill.

The Market Lens
The most impactful chart I ever made is the one below, which I’d present at QBRs back in the day Business Objects.  Every quarter I’d divide ours and our key competitors’ quarterly revenues by our quarterly revenues, creating a relative size factor where we were definitionally always at 1.0 (the blue line, below).

In this format you can see relative market changes very easily.  Anyone moving up is gaining relative share, anyone moving down is losing it.  Above the blue 1.0 line means they’re bigger than we are, below it means they’re smaller.  The data is fictitious, but you can see that Cognos (COGN) started out bigger than we were but we overtook them.  MicroStrategy (MSTR) posed a real threat for a while and then mostly leveled out.  Brio had some momentum but then lost it.  Because the data was largely available, I could even cut it by major geographic regions.

If I only had one chart to answer the question, “are we growing fast enough?” it would be this one.

Nowadays, with companies going public late in their life cycles, this data usually isn’t available during the first 10-12 years of evolution.  Lacking public data, I’d have my competitive analyst make and maintain a spreadsheet that triangulates revenue using scraps and tidbits from VCs and other sources (e.g., Nathan Latka is remarkably effective at getting spokespeople to spill revenue information) and I’d make a separate sheet that uses headcount from LinkedIn as a proxy for ARR, using the method in this great post by SaaStr’s Jason Lemkin.

To answer the question, “are we growing fast enough?” you need to look through three lenses:

  • Plan performance, which primarily measures whether you’re in control of your business.
  • Benchmarks, which tell you how you stack up across the universe of private SaaS companies, remembering the vast majority of which operate outside your target market.
  •  The market, where you need to assess whether and to what extent you are succeeding in becoming (or remaining) the leader in some space against the competition.

# # #


[1]  So much so that you should proactively include them in any quarterly results summary slide or email.  They shouldn’t have to ask.

[2]  YoY as opposed to sequential (i.e., QoQ) growth because enterprise SaaS is a seasonal business so the YoY comparisons are more meaningful.

[3]  In fact, I believe the best metric would be relative market share (i.e., how are you doing relative to your competition) but that’s hard to get data on (particularly in the private SaaS world) and managers would resist it like the plague.

[4]  I recently found a 642-page collection of his awesome wisdom here.

[5]  To really rub it in — in year 7, they added 1.25x your company in net new ARR.

[6]  The only potential winner at YourCo is the VP of Sales who presumably was a great target negotiator, always kept the bar low, and always beat it — but even they lose when it comes to the value of their equity.

Join me at SaaStock EMEA for “How to Make a Marketing Machine”

Please join me on October 13th at SaaStock EMEA, a free European SaaS event, for my presentation entitled “How to Make a Marketing Machine” on October 13th at 9:05 am PT (6:05 pm CET).

While west coasters will have to wake-up early to attend some of this event, the overall agenda looks great with a strong speaker line-up including:

  • Founders of companies including Aircall, Amplifyi, Capchase, Chargebee, Clumio, Gainsight, Pitch, Panintelligence, Personio, Productboard, Profitwell, Slack, and Talkdesk.
  • Executives from companies including Algolia, AWS, Celigo, Contentful, Freshworks, Intercom, Yellowfin, Zephr, and Zoominfo.
  • VCs from partnerships including Accel, Index, Point Nine, Seedcamp, Sequoia, and of course, Balderton.

The event runs for 3 days (Oct 12 – 14), about 4 hours every day starting at 5:30 am PT (2:30 pm CET).  Check out the full schedule here.

With a 20-minute slot, I had one of two angles to take on my topic, How To Build a Marketing Machine.

  • I could emphasize “marketing,” and attempt a warp-speed, how-to session that in reality should take 60-90 minutes at any normal pace.
  • I could emphasize “machine,” and focus on what people mean why they say “marketing machine” and how to build one.  This is the angle I decided to take.

As such, we’ll discuss the following topics in the sure-to-be still, fast-paced session.

  • What is a marketing machine?
  • How do we model it?
  • How do we measure it?
  • What are its key attributes?
  • How should it function?
  • Why it should be built in layers

It should be a fun and informative session.  Look forward to seeing you there!

Why I’m Joining Balderton as an Executive-in-Residence (EIR)

I’m thrilled to announce that I’ll be joining Balderton Capital on a part-time  basis to work with the firm and its portfolio companies on topics related to enterprise software, strategy, go-to-market, marketing, and SaaS metrics.  You know, my usual stuff.  In addition, I expect to do some more VC-style work such as helping with diligence, sourcing, best practice sharing, thought leadership, portfolio-company events, and maybe even expressing the odd opinion on how to best message and position the (already well positioned) firm.  Once a marketer, always a marketer.

The Why Behind the Move
So why did I decide to do this?

  • The people.  I’ve been highly impressed with everyone I’ve met at Balderton and believe they have built one of the top VC firms in Europe.  In particular, this opportunity gives me the chance to work again with my old boss, Business Objects founder and Balderton managing partner, Bernard Liautaud. Without singing his praises to excess, let’s just say that there aren’t many people in the world who have founded an enterprise software company, took it to $1B+ in revenues, then co-founded a second company (Dashlane), turned that company into a unicorn, and followed all that with a highly successful second career in venture capital. It’s enough to make you feel like an underachiever.
  • The work.  I very much enjoy doing all the things that Balderton wants (see below) and relish the opportunity to do my two absolutely favorite things:  teaching and learning.  I’ll spend time sharing what I’ve learned over the past 30 years in enterprise software all while simultaneously learning a ton from the Balderton team and their portfolio company executives.  As Steve Jobs said:  “learn continuously, there’s always one more thing to learn.”  The best way to learn is to surround yourself with great people and challenge each other.
  • The chance to help European companies.  With nine years experience at Business Objects (five of those based in Paris), nearly five years serving on the board of Paris-based Nuxeo, and my fairly recent appointment to the board of Tallinn-based (Estonia) Scoro, I have significant experience in both Silicon Valley and in Europe, enjoy bridging between the two, and have always been interested in the challenges faced by European companies launching and growing in the US and other global markets.  And if helping those companies involves the occasional trip to a farmhouse in Oxfordshire or the Luberon, well that’s just a sacrifice that I’m prepared to make.

What is an EIR Anyway?  Typically, Entrepreneur-in-Residence
EIR typically stands for entrepreneur-in-residence, a pretty varied role itself, but one whose core is this:  the entrepreneur-in-residence wants to return to an operating role and works on a mid-term basis at a VC firm, helping with what needs to be done while watching the deal flow and hoping to find an appropriate company (possibly in formation) that they can either join as a co-founder or as an executive, often CEO.   Sometimes startup CEOs (particularly non-founders) think of this type of EIR as “CEOs-in-waiting” and approach them cautiously as a result.  This is not the kind of EIR role that I’ll be doing.

The Other Kind of EIR:  Executive-in-Residence 
The less common use of EIR is as an acronym for executive-in-residence.  This is what I’ll be doing and the premise is different. An executive in residence typically is an experienced C-level executive who is looking to “stay in the game” but who is not seeking a full-time operational or venture capital role.  They’re typically looking:

  • To keep working, but not with heavy demands of a startup C-level executive
  • To get exposure to the inside of venture capital (often after having worked at VC-backed startups for decades)
  • To give back to entrepreneurs and startup executives by sharing their hard-won lessons
  • To find prospective companies for ongoing advisory or board roles
  • To find investment opportunities either through the VC funds themselves and/or through co-investment opportunities alongside them.

Basically, if the entrepreneur-in-residence is looking for their next gig and wants to spend 6-18 months looking at high-quality deal flow to find it, the executive-in-residence is looking to stay active, give back to the startup community, and find a few high-quality board or advisory roles in the process.  I have several friends, including Max Schireson at Battery, who do executive-in-residence roles and quite enjoy the depth and variety of the assignment.

What, Where, and How Much?
I expect the work to fall into two buckets, composed of the following:

  • Advising portfolio companies on strategy, go-to-market, marketing, planning, and SaaS metrics as well as on more CEO-specific subjects like board management and organizational development.
  • Supporting Balderton on diligence, sourcing, best practice sharing, thought leadership, portfolio-company events, and marketing.

In terms of location, part of the point is to bridge between Silicon Valley and Europe, so I will continue to be based here in Silicon Valley, but I do expect — as Covid hopefully gets back in control — to build up to periodic trips to Europe.

Regarding time and commitment, this is a part-time engagement.  While I expect it to be my largest single engagement, I also expect to have more than enough time to keep working with my existing advisory and board companies, and even take on a few more as those invariably ebb and flow over time.

I am very excited to be starting this new role.  My only regret is joining after the Patagonia branded vest ban.  Hopefully, Balderton has an XXL left over.

See you on the blockchain.