$100M in funding…the day after
This article is the first of a 6-part series that addresses common growing pains and challenges that startups encounter, and offers advice on how to bypass these hurdles while keeping your team and customers top of mind.
When companies achieve a big milestone, it’s human nature to think about change. When we raised $100M dollars in our last funding round, we got a lot of questions. People wanted to know what we would do next and how we would grow. How was all this money going to change things? What sorts of changes would we make first?
The short answer? Almost nothing. At 8:00 am the day after our funding round, we collectively went back to work with the same clarity of purpose we’ve had for the last few years. We had the same customers, the same employees, and the same partners. It was the same company as the day before with the same challenges and the same opportunities. Most importantly, how we were planning to grow and execute our vision was the same. The only difference is that we just have more money in the bank and an additional vote of confidence for our vision and strong execution.
To make radical changes at that point would have betrayed the integrity of this vision to our team, our customers, and our investors. This type of deviation can kill a company. After funding, the internal and external pressures to change are significant. But, if you can remain focused on the pillars of your core vision, you’ll maximize the positive impact of the investment. In our case, I have narrowed down our vision to the following four attributes that we’ve fought so hard to protect.
Your market: Don’t change your DNA
At Anaplan, we haven’t played it safe. We built from scratch a patented technology platform that is capable of solving the planning and execution problems of large, hyper-growth companies in the world. To execute on the enormity of this vision is both a curse and a blessing. We have to challenge ourselves to think disruptively about nearly everything to build an organization ready to support some of the world’s largest, most complex companies.
This means that we’ve made a number of choices that either pushed the envelope or simply broke the status quo. For example, most companies start out in one country, establish a foothold, and then try to replicate what they are doing in other countries. Many struggle or even fail in the process. We did the opposite. Knowing that we wanted to resolve a global problem for global companies, we started Anaplan in multiple locations around the world and have grown to 13 offices in the UK, France, Southeast Asia, Australia, and the US. We’ve had global DNA from the get go. As your company grows, you’ll be exposed to a lot of smart people who will give you free advice. Listen but don’t break the DNA that got you to that point.
Your product: Don’t get distracted
With huge market opportunity comes the potential for huge distraction. As Jeff Weiner, Linkedin’s CEO says, “Hyper-growth companies often get so caught up with innovation and the adrenaline rush that they chase the next bright shiny thing at the expense of getting their launch trajectory right.” With our last round of funding, we are now in the position to grow our team and cover some holes that came about with our fast growth. With this new influx of talents and resources comes the need to reinforce governance, methods, and tools–to keep the focus on investment in our core product and value proposition before thinking about doing other things. A practice that I have found valuable is to make it your personal mission to build a visual representation of your product strategy and share it internally with the same passion that you used to connect with investors.
Your people: Core values matter
Oftentimes, establishing core values is a bit of an afterthought for startups–a “to do item” that gets checked off well past their founding. In our case, defining our core values was an early exercise. We were only 25 employees at the time. I’ve found that these values have been our North Star no matter what new stage we are in as a company. “Disruption, Speed, Accountability and Integrity” aren’t relegated to new employee documentation or a plaque on my wall. With hundreds of employees around the world, these values set the standard for our culture, our customer interaction, our product strategy, and the people we hire (yes, our recruiters actively evaluate candidates against the list). As a CEO, this is the one thing you can’t let go of no matter how fast you’re running.
Your customers: Don’t lose them
When you are an early stage company, your customers are taking a leap of faith on you. They also know they have your attention 24/7. They can call you on the weekends and get a response in five minutes. You’ve created a special bond and you have a lot of responsibility with that early buy-in. As a result, when you go through a big event, funding or otherwise, customers have a lot of fear that they will be forgotten. If you break that bond once your company gains success, you will not be easily forgiven. Like any good relationship, communication with customers needs to be ongoing, authentic, and transparent.
We were excited to have the opportunity to celebrate the latest funding round with our customers. It was their success too. We purposely timed it to coincide with our user conference here in San Francisco. Immediately after, I got on a plane and traveled around the world to meet with our other customers–to talk to them and answer their questions. We had worked hard to build a strong community and wanted to demonstrate our ongoing commitment–and to reassure them that this milestone wasn’t changing our approach and engagement level with them.
Raising a significant round of funding can be a profoundly disruptive exercise. You will be under pressure from your team, investors, and outsiders to change. Listen carefully but stick to your instincts and your vision. That’s what got you there in the first place.