Presentation I gave to a high-growth startup with my perspectives on high-growth companies and how to manage the challenges that come with high growth.
1. My Perspectives on
Growth
Dave Kellogg
EIR, Balderton Capital
Principal, Dave Kellogg Consulting
Author, Kellblog
October 2021
2. Your Growth Guide Today is Dave
10+ Years a CMO
● Versant ($1-15M)
● Business Objects
($30M-1B)
● Alation (gig)
10+ Years a CEO
● MarkLogic ($0-80M)
● Host Analytics ($8-50M)
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10+ Years a Director
● Alation, Scoro, SMA
● Past: Aster, Granular,
Nuxeo, Profisee
10+ Years a Blogger And a Brand-New EIR
4. Did Someone
Say Growth?
-
200
400
600
800
1,000
1,200
Company 1 Company 2 Company 3
Revenue by Year for my First 19 Working Years
Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9
Great success
and great failure,
simultaneously
Treetop-
scraping
turnaround
Growth smoothed via CAGRS
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5. My Reaction at
#3?
• I watched numerous (largely
younger) friends leave an
amazing situation because of
relatively minor issues
• My prior two, more difficult, runs
helped me recognize a wave that
you wanted to ride to the beach
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6. Five Challenges That Accompany Growth
1. Next-levelitis: an obsessive focus on taking everything to the next level
2. “FBI guys” and cultural divides between new and existing people
3. Conflation of regional culture and opinion
4. Missing an opportunity that you want
5. Getting things wrong to get other things right
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7. Next-Levelitis
• Disease: an obsessive focus on scaling everything to the next level
• Endemic: in venture-backed startups
• Cause: a popular cliché -- “the people who brought you here aren’t
the ones who are going to get you to the next level.”
• Cure: revision → “the people who brought you here aren’t the ones
who are going to get you to the next level.”
systems, and processes necessarily
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See: https://kellblog.com/2020/11/07/unlearning-as-you-scale-presentation-from-a-vc-portfolio-ceo-summit/
8. Scaling for the Next Level is
a Goldilocks Problem Too little
• You hit the scaling wall
Too much
• We can’t close the
books because we hired
the CFO we need three
years from now
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9. Change Is Good. You Go First.
A certain amount of change resistance is both normal and good 9
10. Handling Next-Levelitis
• Avoid change for change’s sake
• Avoid operational narcissism
• Think: “But I loved that spreadsheet.”
• Avoid false causality
• We used that spreadsheet. We were
successful. Ergo, we were successful because
of that spreadsheet.
• Consider group exercise: we were successful
( ) because of, ( ) in spite of, or ( ) completely
independent of that system or process
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15. Avoiding “FBI Guy” Problems
New People
• Foster bidirectional respect
• Encourage respect
• Use mission and values for
cultural compatibility
• Screen out lather / rinse / repeat
executives
• Focus on the future
Old People
• Foster bidirectional respect
• Encourage humility
• Reinforce success of mission
accomplished via the values
• Screen out those who can’t
disagree and commit*
• Focus on the future
* Effectively a no-subterfuge rule, see: https://kellblog.com/tag/disagree-and-commit/
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16. Conflating Culture and Opinion, I
UK Leadership
“Senior UK buyers want to buy
from peers.
The right sales model has senior
salesreps, high quotas, and a lot of
support resources.”
France Leadership
“Senior French buyers want to buy
from the next generation.
The right sales model has junior
salesreps, low quotas, and few
support resources.”
Reality: both models produced similar gross margin and growth profiles
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17. Conflating Culture and Opinion, II
USA Leadership
“We need to strongly position as
#1 because IT B2B buyers want to
buy from a leader.”
France Leadership
“In France, we love an underdog,
cannot possibility position as #1 in
the market.”
Reality: France may root for underdogs, but French B2B buyers still value safety
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18. Conflating Culture and Opinion, III
USA Leadership
“We need to put marketing
programs that we design in a box
and our European teammates will
execute them. It’s all about scale
economies and buyers aren’t that
different.”
German Leadership
“We have 3.0x relative market
share in France, 1.5x relative
market share in the USA and 0.1x
relative market share in Germany.
Should our marketing strategy
really be the same?”
Reality: Germany’s right and it’s about situation, not culture
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19. Disentangling Culture and Opinion
• Awareness of the tendency
• Critical thinking
• Regional or opinion difference? Could
two Brits have the same argument?
• If regional difference, driven by situation
or culture?
• Turn opinion into data
• Hypothesis test using market research
• Lose any religious attitudes
• It’s not about “right” or “wrong”
• View everything as an experiment
• I am only a Petri dish*
Think: “I am only an egg” in Stranger in a Strange Land
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20. Missing an Opportunity That You Want
• One day, you’re likely to miss out on an
opportunity that you want
• Maybe someone else gets it
• Maybe nobody gets it (e.g., reorg)
• Worse yet, maybe it’s compounded
• Ignominy: you have to report to the
person who did get the job
• Hypersensitivity: hard work makes
for thin skin
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21. Tips on Handling Missed Opportunities
Individual
• Accept the change
• Patience is the best strategy
• If you don’t like something, wait
• Scenario analysis -- if you think the
boss is a bad choice then:
• You are right and others will figure it out
• You are wrong and will learn something
• Just had a friend leave a big job 2
months before major reorg
Organization
• Value individuals
• Show it through up-front
consideration, where possible
• Show it through redeployment
• Even if into sometimes odd jobs
• Salesforce is exemplary at this
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22. The Biggest Lesson I Learned in Business
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Me: “I’m so excited, I’m finally going to work at the perfect company!”
23. Success in Business is About
Getting What Matters Right • Not about getting everything
right
• Opportunity cost of
unneeded perfection
• No, we can’t get shit wrong
• Professionalism bar
• There’s a reason for GSD
• Begs the critical strategic
question:
• What matters?
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24. Summary:
Managing The Five
Challenges That
Accompany Growth
1. Next-level scaling: take a pragmatic,
balanced view
2. FBI guys: screen them out, culture
them in, mutual respect
3. Conflation of culture and opinion:
awareness, critical thinking, Petri dishes
4. Not getting the opportunity you want:
patience, learning
5. Getting things wrong to get other things
right: perspective
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