Introducing Seven Secrets of Success for SaaS CEOs

UPDATE:

I started this series in July 2023 with the intention of getting all secrets out before EOM Sept. Oh well, I am still at it.

The good news is I added another secret (Investing in your Tribe) and went down some rabbit holes in terms of instrumenting businesses, contextualizing success, and exploring what it means to be a CEO. I have added links to those blogs and articles below to make it easy to access. Thus, you can skip all the background and context and go right to the additional articles below where I break down each secret in more detail. Go ahead, you won't hurt my feelings.

TL;DR

The 7 secrets include

1. Driving Results. The CEO's number one job is creating shareholder value. The trick is figuring out which results matter most.
2. Developing a winning strategy so everyone knows what business they’re in
3. Creating Alignment (values, standards) that will guide your company over time.
4. Building your First Team because you only have one pair of hands (coming soon)
5. Managing Investors and setting their expectations for what success looks like for this year and for the inevitable transaction. (coming soon)
6. Allocating Capital to balance yield today against investments for tomorrow. (Specific M&A article is here)
7. Investing in your Tribe pays 10x dividends over time

These topics might sound straightforward, and in a way, they are. But they’re also the seven domains where CEOs have to get things right—because a significant failure in just one of these areas can be enough to sink your business and leave your career on the rocks.

Background

The inspiration for the "Six (now Seven) Secrets of Success" came after I published an article on when fast-growing SaaS companies should consider hiring a professional CEO. Ever since, people have reached out asking how they, too, can become a professional CEO and/or asking for more insight into how to ensure success as a first-time CEO.

Unfortunately,?as my mentors told me, the only way to become a CEO is to be a CEO. The long hours spent getting to know a business, diagnosing what’s working and what isn’t, building the confidence to make company-defining decisions, and rallying existing teams around a new strategy are what qualifies you to be a CEO. Even then, you’ll also need amazing mentors and a rock-solid growth mindset?in order to succeed.

So while I can’t teach people how to become a professional CEO, it is possible to define a simple playbook that captures the essence of the role. On its own, this playbook won’t make you a successful SaaS leader,?but my hope is that it will help start you off on the right foot by ensuring alignment with your board during the recruiting process and then by helping you get the best out of your team once you take the job. To that point, if you are looking for another “getting started” primer, I would recommend The First 90 days by Michael Watkins. I re-read it every time I start a new job.

Why Me?

First, let me tell you why you should care. My CEO playbook is the result of my past nine years in C-suite roles. During this time, I had the good fortune to take the reins as CEO of three amazing SaaS businesses. Each company was at a different stage of its growth, and I learned different things at each step along the way.?

My first CEO gig was at RocketFuel, a public company with 1,300 employees and revenues of almost $500M. Frankly, when I started as CEO, I was freaked out. Like many first-timers, I was overwhelmed, and had terrible imposter syndrome. That’s when I learned that becoming a successful CEO is really about becoming an apprentice, and figuring out how to learn the things you don’t already know. I call this operating at the edge of your own ignorance.

I wound up reading a ton of books, talking with countless people, and joining Alliance of CEOs, a peer group I chose because I was too old for YPO and not rich enough for G100. I also had the good fortune to work with some amazing mentors, including my chairman, the serial CEO Monte Zweban, and renowned turnaround specialist Tony Zingale. With their and the broader board’s help, I was able to figure out what I needed to learn to run a public company, create optionality, and ultimately oversee a “take private” process.?

My next CEO position was at Percolate, a Series C company backed by top-tier investors including Sequoia, Lightspeed, GGV, and First Round Capital. I was charged with transforming the company from a mid-market Social Media Platform to an enterprise–focused Content Marketing Platform. That was a HARD turn and we ultimately sold to Seismic to deliver on the broader promise of connecting marketing and sales.

I stayed on at Seismic as Chief Strategy Officer and benefited, again, from an incredible learning experience–watching Doug Winter, one of the best tech CEOs in the business, run the company. At Percolate/Seismic, I learned about how to sell to a strategic and realized that when you’re CEO your apprenticeship is never truly over.

I’ve carried all of these experiences forward at Maxio, where I am today—a company that’s majority-owned by Battery Ventures. This is a new context for me and a very different dynamic than the typical VC-backed startup. With 2,300 customers, about 240 employees, and an amazing board, we’re finishing off a merger of equals (MOE) charting a new direction for the company.

What are the right things?

Besides leading three SaaS companies, I’ve also served on several private company boards, gaining a window into how CEOs approach their job. I’ve also been in plenty of meetings where directors talk frankly about their CEOs’ performance—a pretty eye-opening experience!?

To make sure those boardroom evaluations go well, every CEO needs the ability to navigate complex situations and to master a multitude of responsibilities. They also need to get comfortable with the idea that they’ll always have more on their plate than they can handle. Some balls are going to get dropped: your job is to prioritize the things that really matter--the right things.

Given I am talking about B2B SaaS companies backed by VC and/ or PE and not bootstrapped or non-profits--then, the right things are those activities and decision that maximize shareholder return over time. This is where the playbook comes in. It’s designed to help you create alignment with your board on what success looks like. At the same time, I hope it helps you stay focused while enabling you to react better to market shifts, changing priorities, or when some crazy black-swan event (e.g., the collapse of SVB) slams into your broadside and knocks you sideways.

Additional Articles

I have actually been writing on these topics for a while so I have included links to blogs and articles that fit under each of these topics:

Overall Results.

• If your company isn’t thriving, then you’re falling short.
• 5 books that have influenced the way I think about operating a business.
• Understanding the two metrics that matter most to investors
• The shift from growth at all costs to efficient growth and the implications for how to operate your business
• Why private companies need to obsess over the Rule of 40
• How to keep your company from crashing into a mountain
• Re-framing your land and expand strategy when demand starts to contract

Winning Strategy.

• Establishing a winning strategy so everyone knows what business they’re in.
• Building a 10x Business using an operating scorecard as your Business Radar
• How to batten down the hatches to weather the short-term tech recession.
• XaaS: a primer on software as a service and its implications for how you run your business, pass your audits and ensure you get (and stay) funded).
• What is your "Monetization" Strategy? The often underappreciated strategy when in the midst of a recession.
• Is your business ready for a PLG Strategy?--Usage-based pricing--the future of SaaS. Are you ready?

Creating alignment, instilling values and instantiating standards that will guide your company over time.

• Shaping a company's values starts with understanding your own values
• Salesforce for the Start up: Achieving Agile Alignment with a V2MOM

Building your first team, because you only have one pair of hands. (coming soon)?

Managing your board and investors and setting the right kind of expectations. (coming soon)

Allocating capital to balance yield today with necessary investments in tomorrow. (coming soon)

Building your tribe.

• Carving out the time to to build your network is hard, but it pays immense dividends over time.

Share your thoughts

I am sharing the hard lessons I’ve learned, and hope they are actionable for today’s up-and-coming SaaS CEOs. At the same time, I don’t pretend to have all the answers, and I’m looking forward to hearing what you all think. After all, for CEOs, the listening and learning should never stop.

So please chip in below with your comments and questions. Let me know how you’ve navigated the challenges we’re discussing, what you’re hoping to learn next, or what you think I’ve gotten wrong.?

Finally, if you find yourself struggling with any of the secrets, please DM me directly. I would love to try to help if I can.