How to Pick Your Next Job (or How I Chose Behavox)

Today, I’m writing to formally announce I’ve joined Behavox as the new Chief Revenue Officer. 

I wrote the post below to articulate how I made this decision, in the hopes that it provides an effective framework for evaluating your next opportunity, not in the spirit of self-important grandstanding, although I fault no one for interpreting that way regardless. 

So if you’re thinking about how to select your next gig, here’s some (unsolicited) advice.

Develop a Point of View

So many of the sales executives I meet, don’t have a point-of-view about what drives good businesses. As Tomasz Tunguz has written and underscored, there is no one path to market, there are many. But you have to figure out what you prefer. You’re allowed to have a point of view; in fact, I implore you to develop one.

Here’s mine:

• There are two theories of business - build something people love and sell it for as little as possible or as much as possible. I prefer the latter. Large deals are more fun. They tend to be more complicated, more interesting, and more mission critical. There are plenty of great companies in the SMB and Mid-Market space. I simply don’t prefer them. They require vast numbers of humans to drive growth and require large headcount to hit revenue targets. I prefer driving growth through deal size and price.
• I like Financial Services. I’ve sold to many different personas, industries, and many different market segments. I prefer Financial Services. Perhaps because of the first point, namely that financial institutions tend to have larger budgets. The ROI of a potential solution can more easily justify the price.
• There must be true technology at the heart of the business. Too many businesses have non-technical founding teams. Non-technical founders have difficulty recruiting and retaining great engineers. The consequence is a business that fails to develop differentiated technology and drifts towards professional services. So, from years of experience, I now require great technology, led by a great technical co-founder (or founders), to sit at the heart of my employer. 

Reference the Order of Operations

In The Order of Operations, I laid out the sequence of competencies a company must develop in order. The thrust of the post was to articulate that sales and marketing are irrelevant if the market is small or the product is bad.

First criteria of company evaluation: the market must be big and the product must be amazing. 

A big market is a function of P x Q where P is price and Q is quantity. The point is that if you have the right deal size, a market with a small N number of customers can be big. But one way or the other, the amount of money you can make in your market must be big. Which is another way of saying that you must solve a problem that people with budget find important.

Second, we want to see a product that delights said market. We are not looking for “good enough”. As I wrote before, you can easily raise money on “good enough”. But you can’t scale “good enough”. You are looking for great. Great product-market fit where your solution truly delights your customers.

Third, as a consequence of the first two, we are seeking tangible demand. I want to understand that, one way or the other, the company can translate product-market fit into pipeline. Meetings. Interest. I want to carefully evaluate pipeline to understand if prospects are interested, even if only at an early stage. 

With pipeline, I can help change the slope of the growth curve. Without it, I’ll likely get fired sooner or later.

Do Your Due Diligence

Figuring out whether the company meets your criteria isn’t quite as simple as it sounds. You must perform extensive due diligence.

As many have pointed out, operators don’t have the luxury of a portfolio in the same way investors do. At any given time, we are investors with a portfolio of one - the investment is our time, our energy, our life.

To that end, like any good investor, you are entitled to do your due diligence. The more senior you are, the more important this step. Diligence includes meetings with:

• Current members of the executive team (beyond the CEO)
• Current customers
• Churned customers
• Former employees
• Investors in the business
• Personal relationships of the founders (eg childhood friends, old workmates, etc)

Diligence also includes analysis of the following information:

• Historical revenue and sales performance vs. targets
• Historical revenue retention and churn
• Rough financial operating performance including cash on hand and monthly cash burn
• Current pipeline and demand generation efforts
• Recent performance of sales team including quota attainment, attrition, and average deal size

For any role that is VP or above, you have an absolute right to this information. You are making a one-time life decision. You must do your homework and understand exactly what you’re getting into.

Run the Numbers

Part of your financial review should be a review of the unit economics of the business. You are trying to understand, even at an early stage, whether the business has enough delight in the product such that 1 dollar spent on customer acquisition returns 1 dollar in revenue within 1 sales cycle. 

If you’re seeing strong payback, odds are you’ve got something good on your hands. If you’re seeing something terrible (greater than 18 months), there’s something underlying that’s impacting business performance. Be concerned.

Are You A Cultural Fit?

Not every culture is the same. And cultures can be different in ways that are not per se good or bad but just … different. The same way people are different.

Ultimately, to a degree that will always surprise you no matter how big the organization is, the culture will tend to flow from the personalities of the founders. 

Culture tends to clump around a few key often unspoken behavioral norms. Ask some of these questions to determine if you think you’re a fit:

• How much intensity does the organization muster to pursue its goals?
• How are decisions made?
• How do people communicate?
• What are the values the company states as important and how does that align with reviews and feedback (eg Glassdoor reviews)?

Red Flags

The process of interviewing and selecting a job will itself give you information on the company, the executive team, and your likelihood of success. Here are some red flags:

• They are pushing for a quick process and a quick decision

At the executive level, this is a bad thing. Executive hires are important. They shouldn’t be rushed. Almost all executives have ongoing situations to wind down graciously. If a CEO is pushing a very quick process for a critical senior hire, your antenna should go up. An aggressive CEO pushing rushed process demonstrates a level of selfishness that will likely manifest itself in the ongoing day-to-day. It also demonstrates suboptimal decision-making. They may also be hiding something.

• They won’t give you the information you’re asking for

If the company is not willing to share critical data points like recent financial performance, be concerned. As a senior executive, you’ll have access to this information sooner or later any way. They are going to need to extend themselves to build trust and part of trust building is a willingness to tell you the real story about how the business is performing. If they won’t share data like monthly burn, there’s probably a reason, and it’s probably not good.

• They are negotiating for its own sake

The difference between an A player and a B player is 10x. To that end, I find quibbling about small amounts of salary in the spirit of negotiation compulsion distasteful. My favorite negotiations are simple, straightforward, and decisive. Asking for X in base salary and having your future boss come back with X - $10K simply to not give you what you want sucks. And it’s typically a sign this person does not fully appreciate the difference between good and great.

Which Leads Us To Behavox

Back in December, I was approached by my good friends at Daversa Partners to meet a Founder/CEO of a promising young company. I took the meeting largely because, as a consultant, I felt it my obligation to meet as many start-up executives as I could. All of them could turn out to be leads at one point or the other.

I had no intention of pursuing any kind of full-time opportunity. 

Consulting was going well and I was having a great time. Make your own schedule. Well compensated. Spend time with a number of different interesting companies.

I met Erkin Adylov for dinner and immediately hit it off. Despite how great everything was going, I was intrigued. He had a big vision. One that was both creative and practical at the time same time.

I spent the next 3 months doing extensive due diligence on the company.

Over the course of my due diligence, I did as much homework as I could. I spoke with current employees, former employees, investors, customers, and even old managers and mentors of Erkin, the founder. 

Despite the fact that I’d never heard of them, most of the VCs I spoke to had. That’s because the core founding team had built one of the most sophisticated big data platforms in existence. 

The company describes itself as “people analytics” but at its core is simply a platform that uses modern distributed file systems (eg HDFS) to ingest any kind of (structured or unstructured) data, process that data in real time, and use machine learning and natural language processing to analyze and discover relationships between that data.

Sounds simple, right?

Put to practical use, that fundamental architecture is deployed to ingest human behavioral data (ie communications) and discover relationships or patterns.

The first use case is compliance. 

Behavox sells a communications compliance platform to the most sophisticated financial institutions in the world. 

Although the company is relatively young, they’d already won very large deals with some of the world’s biggest banks, mostly in competitive Proofs of Concept (POC) trials.

The result of that demand showed up in every metric I investigated - from pipeline to unit economics to burn rate. In fact, the company isn’t going to burn any cash at all this year and, if we hit the numbers (now my job) we'll generate significant positive cash flow.

The market for compliance is very large. These are mission critical systems for the financial community and their installation is often mandated by law and regulation. 

And beyond market and product dynamics, the culture was a perfect fit. The team is a small group of incredibly hard working, hard charging talented folks -- all genders, races, creeds -- with one thing in common: the mission of building the next great technology company.

Throughout the recruitment process, the team was patient, understanding, and transparent. In fact, Erkin held absolutely nothing back and gave me insights into the business with a degree of honesty I haven’t experienced in professional life. Even stranger, everything he told me during the recruitment process turned out to be true.

Behavox compares incredibly favorably to the criteria I’ve outlined. 

Evaluation Criteria

• The market for behavioral big data, particularly in compliance, is massive.
• The company has demonstrated product-market fit as evidenced by victory in every single competitive POC, including with some of the largest and most discerning financial institutions in the world.
• It’s the best technology I’ve ever been associated with or worked on. Two of the co-founders are world class engineers - literally the best in their field.
• Behavox is only investing in sales and marketing after it’s achieved product-market fit.
• Despite an under-developed marketing presence, the company has the largest pipeline I’ve seen since I started measuring.
• Pipeline is driven by the market begging for the product and by word-of-mouth from happy customers.
• The corresponding unit economics are best-in-class with 6 month payback periods on large 7 figure deals.
• The agreements are typically 3-5 years long so don’t even get me started on LTV.
• I’m completely aligned with the culture - they get me, my sense of humor, my pros and cons - enabling us to focus on the work alone.
• I personally relate to and greatly respect the Founder/CEO.
• The Founder/CEO comes from humble beginnings and is completely self-made which gives me comfort around work ethic and commitment.
• The negotiating process was quick, efficient, transparent, and demonstrated the company understood the importance of value creation.

When all was said and done, it was an opportunity I simply could not pass up. Better stated, it was an opportunity I feel honored to have been considered for.

There’s a lot of work to do but it’s the best kind of work. Building process and infrastructure around a foundation of exceptional technology, great product-market fit, and incredibly talented hard working people. 

For the first time, there is a clear but difficult path to a billion dollar company. And clear but difficult is the very best path to pursue.

Hope this was helpful.

PS Of course we’re hiring. Ping me if you like what you’ve heard and are interested in learning more.