CEO and COO Roles in a Startup

One of the questions I’ve heard several times over the years is how we divided responsibilities between CEO and COO at Pardot. We tried several different approaches over the years before settling into a routine that felt right for our size and stage. Here’s how we divided things:

Some startups have an approach where the COO manages the functional areas and then reports to the CEO, but I’ve found this divide-and-conquer approach to be more common. Every startup is different, so it’s important to figure out what works best for your organization.

What else? What are some more thoughts on the CEO and COO roles in a startup?

The Importance of Customer Success

At Pardot, one of the areas where we really excelled was customer success. Back then, we referred to customer success as client advocacy, but the idea was the same: proactively help our customers have a great experience. Customer success is one of the most important functions, yet not as well understood as other functions.

Here are a few thoughts on customer success:

  • Implement a customer success platform to ensure consistent and efficient customer interaction as well as customer analytics (Need a product? Check out Trustfuel)
  • Develop a cadence around on-boarding, regular outreach, and renewal period
  • Build a pipeline for the customer success team through sales development reps that are a great culture fit but choose not to go in sales as well as support reps that want to proactively help customers
  • Decide who’s going to handle up-selling and cross-selling as it’s not usually the same skill set as a customer success manager
  • Scale the customer success team as the number of customers grows (depending on the type of customer, one benchmark is one customer success manager (CSM) for every $1 million in annual recurring revenue)

Remember that with Software-as-a-Service, the “service” is just as important as the “software.” Customer success is critically important.

What else? What are some more thoughts on the importance of customer success?

2016 TechStars Atlanta

Last night I had the opportunity to hear the 10 2016 TechStars Atlanta startups give their mid-program pitches. With only 39 days left (90 days total), the program is going by fast and the teams are making great progress. Here’s the class of 10 startups:

  • Bark Technologies (Savannah, GA): Bark protects children by detecting messages that contain cyberbullying, sexting and signs of depression or suicidal thoughts using NLP and machine learning techniques to maintain a child’s privacy and preventing parents from having to spend hours reading their activity.
  • Drizzle (Los Angeles, CA): Drizzle gives website owners an incredibly easy way to let their visitors pay for premium content. You can choose to charge a-la-carte for your content, or offer your visitors a subscription to access all of your content.
  • Fitspot (Los Angeles, CA): Trying to cram a workout into your busy schedule? Fitspot lets you book one-on-one sessions with certified fitness trainers when and where you want. Plan ahead – or start in as little as 30 minutes.
  • Joonko (Tel Aviv, Israel): Identify and solve gender bias in your workplace, as it happens!
  • LaaSer (Atlanta, GA): Thousands of lives are lost each year due to incorrect location information being sent to 911 operators over existing mobile phone network technology. Calls are often routed to the wrong jurisdiction, address and latitude and longitude information are often wrong or not provided at all, and people lose their lives or suffer more than they had to as a result. Our company and our products were created for the sole purpose of solving this problem.
  • Preesale (Brussels, Belgium): Multiply your sales channels by increasing your tickets sales on Facebook. Easily connect your Facebook app to your Facebook page, create your tickets in less than 5 minutes and sell to targeted customers, and promote your events on Facebook – the best platform to target your attendees.
  • Real Meal Delivery (Atlanta, GA): Skip the stress of meal planning and grocery shopping! Fresh, made-from-scratch meals are prepared daily by our chef. Just order by 4PM and let your family enjoy the hot, fresh food delivered to your door.
  • Sequr (Atlanta, GA): Sequr provides modern access control and visitor management for commercial buildings and multi-family communities (use your phone as the access key; no more access cards).
  • Splitty (Tel Aviv, Israel): Split your way to a better hotel deal! Choose your destination and dates, and Splitty’s “split and match” technology combines different reservation types to find the cheapest hotel stays for the dates that you want to travel.
  • UCIC (Waterloo, Canada): Ask and see live photo or video from anywhere in the world, right now.

Want to see the finale? Attend the free TechStars Demo Day November 1st from 5 – 7pm.

The Startup’s Arch Enemy

Earlier today I was talking to an entrepreneur and we were debating the value of having an arch enemy in a startup (that is, another startup that’s the main competition and deeply disliked). In the college sports world, Duke and Carolina are arch enemies, resulting in both schools raising the quality of their game and level of competition (both schools have 5 national titles).

Here are a few thoughts on having an arch enemy in a startup:

  • Having an arch enemy is a good thing as that means someone else believes strongly in the same market (competition is important as it helps validate the market)
  • Remember to stay close to the customer and don’t get caught up in a feature arms-race with the arch enemy
  • Build a program where you celebrate victories over the arch enemy in head-to-head deals (at Pardot, we gave out kill stickers, like football players have on their helmets, every time a sales rep won a head-to-head deal, to be displayed at their desk)
  • Don’t make an arch enemy just to say you have one (it should be your main competitor that you see in a meaningful percentage of competitive opportunities)
  • If you don’t have an arch enemy, that might mean you’re too early to the market, or aren’t getting in front of enough prospects

Competition is healthy. An arch enemy can be healthy, but don’t lose sight of the most important thing: the customer.

What else? What are some more thoughts on an arch enemy of a startup?

Agile vs. Burndown Software Development

Matt Bilotti has a great post titled How We Build Products at Drift. The crux of the article is that there’s a new, and better, way to do software development: burndown. Today, in the startup world, agile is the most common software development methodology. Only, it’s centered around the two week sprint, and the reality is that the customer feedback loop is much faster than two weeks.

Here’s the breakdown on agile vs. burndown from the post:

  • Measure of success
    • Agile – Thoroughness of story, agile points and velocity
    • Burndown – End user feature adoption & retention
  • Means of determining prioritization
    • Agile – Product backlogs and sprint planning
    • Burndown – End user validated design mockups and prototypes.
  • Speed
    • Agile – Story-based sprints (weeks)
    • Burndown – Micro-sprints (days)
  • Release focus
    • Agile – Multiple features grouped into a single release version
    • Burndown – A single version of a single feature per release
  • Flexibility
    • Agile – 2-week sprints are planned, executed & generally inflexible once agreed upon
    • Burndown – Every day priorities change and so do the current and upcoming sprints

Feel like the agile software development methodology isn’t quite right for your team? Consider trying out some of these burndown concepts.

What else? What are some more thoughts on agile vs. burndown methodologies?

Quarterly Employee Check-in Process

With it being near the end of the quarter, it’s a good time to revisit the idea of a quarterly employee check-in or lightweight quarterly performance review. When the startup is small, this can be overkill, but as it grows, this is critical. At Pardot, we kept things simple and answered these four questions every quarter in a Google Doc:

  1. What did you accomplish this quarter? (List top 5-10 accomplishments)
  2. What 3-5 goals will you focus on next quarter?
  3. How can you improve?
  4. How are you embracing the company values? (Please provide specific examples.)

Pretty easy, right? Once the doc was done, the manager and direct report met for 30 – 45 minutes to talk through it, and the manager provided any coaching or feedback.

Entrepreneurs would do well to implement a quarterly employee check-in process as the startup grows.

What else? What are some more thoughts on a quarterly employee check-in process?

Raising Venture Money While Still Keeping Options Open

Continuing with yesterday’s post 99% of Entrepreneurs Shouldn’t Raise Venture Capital, there is a case that I left out: entrepreneurs should consider raising money when VCs offer simple terms that keep future options open. But first, a story.

Earlier this year I was talking to an entrepreneur that was growing a nice seven figure SaaS business. There was a desire to raise money and grow faster, but the current market opportunity wasn’t large enough to warrant institutional capital (remember: the size of the VC fund necessitates the size of the minimum exit), coupled with the desire to keep options open in the event an opportunity arose for a < $50 million exit. After talking to a number of VCs, it was clear there was interest to raise money at a fair valuation and do so with a term sheet that didn’t have blocking rights (meaning, the entrepreneur could choose to sell the business and not have to have the VC’s permission).

The entrepreneur chose to raise money on simple terms while keeping options open.

So, 99% of entrepreneurs shouldn’t raise venture capital, but a tiny percentage of entrepreneurs that might not otherwise raise money, should consider it if they can do so on their own terms.

What else? What are some more thoughts on raising venture money while still keeping options open?