Posted by: costanoa | May 31, 2014

The Missing Slide in a Startup Venture Pitch

We see a lot of pitches at Costanoa Venture Capital. We look to make a small handful of new investments per year.  With those odds, entrepreneurs need every advantage they can get.

Most people get the basics of a venture pitch: an overview, team information, product and customer adoption (early indications of product/market fit), market and market size (ideally built from the bottom up rather than top down) and competition — pick your favorite two-by-two matrix. As a former product manager, I’m partial to adding a Harvey Balls chart as well and then your financial plan (not optional).

However, there is one missing slide. When we come out of a meeting with an entrepreneurial company and want to learn more about its forward plan, I often ask the entrepreneur to create one more slide with the following directions:

  1. Draw a line across the top representing the next six quarters.
  2. Tell me what happens.

As an early stage investor, we do detailed analysis of product and product/market fit, extensive work on the team, and technical due diligence, but there just isn’t much financial data to analyze. Going through the pro forma financial plan in detail is important, but it doesn’t tell us very much beyond how well the team has thought through the business. It is necessary, but not sufficient.

This new missing slide tells us what the entrepreneur thinks are the most important developmental milestones for the business. Typically, they include things like:

  • critical product shipments
  • number of customers and/or average selling price
  • revenue or the annual contract value (ACV) of bookings
  • net burn (total cash flow, usually negative for well more than 18 months given the stage at which we invest)
  • number of employees
  • key hires

One of the best missing slides I’ve seen had “Revenue and Operating Burn” superimposed on a chart in the back. The innovative format combined quantitative and qualitative information in a way that conveyed a ton of information. It brought me back to the best visual display I’ve ever seen from Edward Tufte’s map of Napolean’s March to Moscow by Charles Joseph Minard. The revenue and operating burn slide put a smile on my face and I gave a huge compliment to the entrepreneurs. I’ve included a mock-up using this format below:

Image: Costanoa Venture Capital

Image: Costanoa Venture Capital

This chart gives us a sense of the planned development of the business over the next six quarters. What are the key milestones and hires? When do new products ship? What will the catalysts be for future growth and which metrics should we be looking at to decide if it is time to step on the gas?  This timeline also gives us a better sense of how the pieces of the business fit together — as well as what the company will look like the next time it needs financing.

A version of this post originally appeared on WSJ Weekend Read.

Posted by: costanoa | May 20, 2014

How to Be a CEO: The Sales Leader or the Chess Master

There are many types of successful entrepreneurs that build and lead great companies. Most that I have seen have elements of what I refer to as the “Chessmaster” and those of a “Sales Leader.” Some amount of each skill set is required, but it is interesting to observe which is the dominant or “go to” skill set for an entrepreneur. After more than 15 years in the venture business and over 40 venture investments, I have found that I prefer – and work more effectively with – entrepreneurs and CEOs where the Chessmaster is the more dominant skill set.

It’s a bit of a caricature, but the Chessmaster is someone who is data-driven, constantly trying to understand the landscape, formulate strategy, run experiments and learn quickly. The Sales Leader has a big vision, has high confidence that he (or she) is right, and is highly successful in getting others to see the world their way. Most media represent entrepreneurs as the Grand Salesman. A fellow venture investor recently stated on a panel that the qualities she looked for the most in an entrepreneur were passion and storytelling. Steve Jobs, the subject of so much Silicon Valley hagiography, was an unbelievable Salesman and got much of the world to share his worldview – but this isn’t the only route to success.

I’ve been re-reading the Lean Start Up by Eric Ries. In my opinion, the entire book describes the Chessmaster approach to launching a new product- whether a start up or as part of a bigger company. The successful companies I’ve seen and been a part of have a dedication to learning quickly and cultures where people are trained to “speak with data.” Figuring out which metrics are truly meaningful for the business, building the instrumentation to understand them, and making data driven decisions to improve product market fit and business performance are actions of a great Chessmaster.

This post was provoked by a recent blog post, “The Post Mortem,” by Return Path CEO Matt Blumberg. His main argument is that successful endeavors need post-mortems as much as failures because companies often misattribute the reasons for their success and find it hard to sustain or replicate those successes. Success has a hundred fathers – and that is just within the company. As Matt points out, some of those claimed reasons for success come from external dynamics, market phenomena or the failures of competition. And it can be damaging –or even fatal – for companies to have the wrong interpretation of successful history. The clear thinking and intellectual honesty of this argument is one of the reasons why I enjoy working with Matt and many of the other Costanoa portfolio CEOs.

It is the relationships with great entrepreneurs that make my role in the start up ecosystem so rewarding. I appreciate: entrepreneurs who call when they have an issue and don’t quite have a solution but just want someone else thinking about it as well; CEOs who value questions about a product or its strategic context instigating an appropriate discussion rather than getting defensive because it assumes the team hasn’t done its job well; long, informal conversations that meander through various perspectives of the business and how to align all of its elements into a coherent strategy and execution plan; debating challenges that can go unresolved because all the information isn’t there, but a concerted effort is being made to address them; executives and team members who will say what they think and add a perspective to the comments of the CEO in a board meeting, but respectfully sign up to execute a plan agreed by the team. These are the signs of a high function company- and the kind that I love to work with.

Matt brought this kind of data-driven honesty and transparency to a whole new level last week by having his 360 degree review conducted with the Return Path management team and board together in one room. He applied the core lesson to himself – you can’t improve performance if you don’t have the data- and then he committed to getting the data about his own performance.

It takes a special kind of entrepreneur to lead like that. I’ve noticed several common traits: a sense of humility, knowing what they know but also what they don’t, comfort with uncertainty, and a data-driven orientation. These are the people that make my job great. Thank you.

Posted by: costanoa | March 19, 2014

How to Build and Manage High Performance Start Up Teams

I’ve spent a lot of time talking to entrepreneurs and CEOs about team building, but it had been a long time since I was at Netscape (‘94-’98) building teams of my own. When I started Costanoa Venture Capital in 2012, I had to test my principles once again. They held up pretty well, but with a few modifications I was able to distill it down to these three:

1. Team first

Start ups are a team sport. Especially in business-facing companies, the product development environment, go to market infrastructure and overall business system are complicated enough that alignment matters as much as brute force or sheer brilliance. There is an old saying that “there is no I in team.” More recently, we’ve learned that there is an “I” in team, it is just hidden. You need to make sure you root out the ***holes– those that destroy chemistry, ruin alignment, and pursue their own agendas.

One of the best parts of being at Netscape in its founding days was that we really lived “All for one and one for all.” It really felt like we were on a mission together. Anyone’s victories were victories for the team. Any failure was a challenge to all. Unfortunately, that changed in early 1998 when the business stalled and we had a Reduction in Force of 12%. The change in culture was palpable as some people began to think their interests and the company’s might not be the same. It became less fun – and the company never was the same.

Products are complicated enough that they are produced by teams, not by one great engineer. Building a great product doesn’t matter if it targets the wrong market, so alignment with product management and marketing matters. Some companies are lucky enough that they build a great product and the world comes to them credit card in hand. However, most often there are actual human beings (salespeople) who talk to customers, explain the benefits, and try to close business. If these pieces aren’t working together, the business fails. As a result, finding people with the communications skills, emotional maturity and self-awareness and ability to put the team’s needs ahead of their own desire for professional advancement or empire-building is absolutely essential.

Besides, you’re going to be working long hours on a project whose material rewards come from team success, so you might as well like them (no ***hole rule) and you better think they are working for the team too.

2. Get A players in every job

Most start ups are lean by definition. Raise a chunk of capital, target a couple of key milestones, hit targets, and get to raise another chunk of capital at higher prices. Constraints on capital mean constraints on headcount, so each person needs to hyper-productive. There isn’t room for mediocrity. In fact, mediocrity reduces team morale (when it is needed most) and is poison in terms of people being able to put the Team First. Besides, when someone isn’t pulling their weight, everyone on the team knows it.

In the early days of Netscape when I was a Product Manager, there was a Director-level person in another department who wasn’t pulling his weight. It was a source of frustration to many who wondered (sometimes outloud) whether the organization was as meritocratic as we all wanted it to be. Management eventually took care of it but not before it had festered for too long. This is one of the ways Me First gets introduced into the organization.

An A Player refers to someone’s ability to do the job at hand, what Andy Grove called Task Relevant Maturity in his book High Output Management. Everybody doesn’t need to be a future CEO. You can have people who are great individual contributors and will always be great individual contributors, and you can mix in a couple of super star talents that are inexperienced but capable of high output and are willing to learn if you have some people they can learn from. BUT you cannot tolerate mediocrity in a startup or have people that are bottlenecks. Time and teamwork is too precious.

3. Everybody goes to their highest and best use

One could call this a corollary of Team First but I think it is important enough to draw it out separately. Team members absolutely need to spend most of their time and energy recognizing how they can contribute the most to the team at that moment. Typically, this means working on the things they are best at, but sometimes that means taking on an unglamorous task that no one wants to do. People with “utility player” skills – and attitudes – are extremely valuable.

Over and over again, I see people who screw up their jobs – and sometimes their careers – by wanting to be something they are not. At one of our portfolio companies, we had a terrific executive who was great at his job, highly valued and well-compensated. But he wanted more- particularly, he wanted a General Management responsibility to meet his own career objectives. In a fast growing company, he endeavored to grow and defend his “empire” rather than partnering with new executives who had joined the thriving company. In the end, it was destructive for him and for the executive team. Avoiding such a situation requires a combination of self-awareness and humility, and it isn’t easy.

There is room for professional development in start ups, but it needs to be built on the foundation of achievement in areas of strength that are important to the company. Executing on the things that a team member is great at “earns” the right to take on new roles/capacities and learn new skills.

Further, the areas of development ought to be adjacent to areas of strength, all of which requires a real understanding of both strengths and weaknesses. Some of that can be obtained by introspection, but eventually any team member needs external feedback – and s/he might need to solicit it since most companies do it poorly.


Nothing in start ups is easy. By following these general principles, one can build high performance teams while trying to achieve crazily ambitious things with limited resources – and that goes a long way towards success.

Photo: Off Center Designs

Posted by: costanoa | March 3, 2014

5 Tips for Running a Great Startup Board Meeting

A startup isn’t a public company and a startup board shouldn’t be like a public company’s board, many of which focus primarily on status updates, performance against plan, governance and compliance. Admittedly, this is a caricature, but directionally correct, as bigger companies have existing businesses to sustain and protect, and significant assets with which to pursue them.

By contrast, a startup board really needs to focus on understanding where the company is, from the perspectives of product-market fit and sales learning curve, building the right team for the stage of the company, and helping the management team think a couple of moves ahead on strategy and financing.

Here are five things you can do now that will help you use your board to your advantage:

1. Get the right people in the room – Shape your board so that both investors and independents have areas of contribution. You want input from a diversity of perspectives and experiences, but you also want people who understand their roles.

2. Define the board’s role and rules of engagement. Have a conversation about what you want the board to do – relative to management and its role. I’d typically propose input and guidance on strategy and even tough tactical decisions. Help the management team to think and navigate through complex issues, but leave the actual decisions to them. Hold the management team accountable, including compensation policies (and the ultimate responsibility to hire and fire the CEO). Be advocates and evangelists for the company and an arm for business development and recruiting. As for rules of engagement, it is great to have input and points of view – even to be able to argue vociferously during periods of debate – but board members shouldn’t forget that management necessarily has ten times more information about most subjects and that they should ultimately make the call, unless it touches on corporate development (M&A) and financing, or will require the company to raise additional capital.

3. Use meetings as a time to re­evaluate and/or re­affirm strategy and touch base on critical issues. Focus the board’s time on the critical issues – both strategy and tough operational issues. Tee those up in advance by doing the staff work and sending out memos or presentations that provide the board context for the discussion. As former Return Path board member Scott Weiss (now a partner at A16Z) used to say, “We’ll eat what you feed us, so tee up the right stuff.” One or two issues is ideal, but no more than three. Some CEOs, like Return Path’s Matt Blumberg, includes a section called “On My Mind.” While you should do the staff work, the issues don’t need to be fully processed and ready for decision. If you’ve got the right people in the room, don’t feel like you and your team already have all the answers. You won’t get as much out of the discussion.

4. In order to free up time for this more meaningful discussion, you need to limit the time dedicated to status updates and reporting . This is the part that requires more work from you. To that end, develop the right metrics for the business and design a consistent reporting template. Send out the board packet, including all the data, at least two full days before the board meeting. Give board members time to prepare – and expect them to do so. Tell the board that you’re not going to go slide by slide, but instead, will dedicate as much time as necessary to asking and answering questions. While even a startup board has a role of giving visibility to (and providing motivation for) the broader management team, you simply can’t have each VP report on their function – or you won’t have any time for the meaty discussion above. You might choose one functional review as one of your topics for the meeting – but only one.

5. Enjoy. The right board can help you dream higher than you might have thought possible, bring expertise and experience that you don’t have, and extend your company’s reach. The path to doing so is by engaging your board and treating its members like partners in building the best company you can build.

Posted by: costanoa | February 3, 2014

Welcoming a Partner!

I’m excited to introduce Neill Occhiogrosso as the newest Partner at Costanoa Venture Capital.

We’ve been really pleased with the firm’s progress to date, particularly in our ability to find and back great entrepreneurs building exciting businesses in our core sectors. It felt like the right time to double down and do more – to increase our capacity with a new partner who loves working with early stage entrepreneurs, will source fantastic opportunities, be a value-added partner to the portfolio – and help us build a great firm along the way.

Neill has the network, and the experience as an investor and a great partner to entrepreneurs, to expand both our capacity and capabilities.  His passion for what we do shows up in his work.  He has deep and abiding interest in analytic applications where he invested actively, especially around the digitization of marketing with companies like Conductor, Maxymiser, and Acquia. Neill also enhances our capabilities in data-driven infrastructure, so he is poised to find our next VictorOps or 3scale as well.    

He started as a Developer and then Product Manager before becoming a successful investor at Highland Capital Partners and, most recently, Investor Growth Capital (IGC).  Most importantly, when I spoke to Founders and CEOs at Guavus, HireVue and other companies where he was involved, they were fervent advocates and pounded the table for Neill. They were emphatic that he really worked to understand their business and focused on the most important things.  He has a strong network and wasn’t afraid to leverage it to help the company.  Most importantly, he was a trusted partner that they really enjoyed working with.

Neill and I met over a year ago and have been able to compare notes on many projects as the year evolved.  He was actively involved in helping us with the VictorOps investment. He will be a great partner of mine – and most importantly a great partner to a new crop of entrepreneurs.


Some thoughts from Costanoa Entrepreneur in Residence, Paul Melmon

Here is a subject I am passionate about, having gone through the interview process from both sides of the table more times than I care to admit : ).  You have just plunked down between $80 and $120K to do a retained search for your next (or first!) VP of Engineering.   How do you ensure that you optimize the process and get the best possible hire?  Outside of the standard interview techniques (of course, grill them with behavioral style interview questions, and definitely check off-list references), what are the 5 questions that you must include in the interview process?

The Questions:

  1. How many engineers on your current team have worked with you in the past?
  2. How many engineers on your current team have worked with you more than once in the past?
  3. How many engineers have you hired in the past 12 months? 24 months?
  4. How many engineers have you fired in the past 12 months? 24 months?
  5. What do you do for fun outside of work ? (see Peter Bregman’s  comments  from the  Harvard Business Review Blog on this)

What these 5 questions will tell you:

Questions 1 and 2: I consider the first two questions the equivalent of a personal net promoter score.  The Net Promoter Score is a metric used by many organizations to measure their customer satisfaction by asking “How likely are you to recommend our company/product/service to your friends and colleagues?  Take this concept and apply it to a leader.  A sign of a great engineering leader is the ability to grow and retain talent.   If they have the ability to continue to draw technical talent and the loyalty of skilled engineers, that says more about them than words on a resume.

Once you know you have a VPE candidate with a “following”, that is, people who want to work with him or her again, then you need to make sure they can expand that “following” which goes to questions 3 and 4.  Presumably if you are making the hire, you are trying to either a) expand the engineering team and/or b) increase the engineering horsepower which may imply trading up in some areas.

If a VPE candidate has not had to let anyone on the team go in the past two years, that is likely a sign that they avoid facing unpleasant issues or are not tough enough.  If they have been unable to make any hires in the past year, what does that say about them?  Or about the company they worked for?  Hiring and firing have costs and must be done judiciously; however they are real and undeniable derivative measures of the level of the rate of change of the organization.  Target your VPE hire with the desired rate of change you believe is needed by the organization.

The last question, focusing on activities outside of work, will tell you a lot about what makes a candidate tick.  The VPE role requires discipline, tenacity and focus.  Of all the executive roles at a start-up, the VPE must be engaged and present day in and day out, and lead by example.  They need to have the ability to create a unique relationship with each engineer on the team.  Look for outside activities that correlate well to these traits.  These activities do not need to correlate with technology at all to be indicators of the right kind of VPE for your team.

What they do for fun reveals qualities about them.  Do they like group activities?  Are they competitive?  Are they creative?  Don’t over analyze this – you are looking for passion that can ultimately be harnessed for success of the organization, and whether it comes in the form of cycling, aviation, or interpretive dance is immaterial – it is all about passion.

Posted by: costanoa | October 8, 2013

Kahuna Launches Customer Engagement Engine

After much anticipation, today Kahuna launches their Customer Engagement Engine, which brings adaptive engagement campaigns to the mobile experience. Customer engagement management enables companies, in particular mobile commerce businesses, to make use of the data they already collect to improve customer experience and boost vital business metrics such as revenue, engagement, and recurring active users.  Mobile engagement and cross-channel marketing are essential to e-commerce and consumer-focused companies who live or die by their customer engagement.

Kahuna’s marketing engine works by both creating a dynamic behavior-based engagement profile for every customer and unifying each customer’s experience across apps, devices and platforms.  Kahuna is able to customize the experience for new users and also re-engage users when they exhibit drop off signs through targeted and personalized messaging in the form of push communication and email.  Similar real-time tools have proven successful in the web channel, and Kahuna is the first to integrate the mobile environment.

Delivering a unified and consistent experience, personalizing the message, and communicating with the user when and where they want to be contacted is the key to meaningful engagement – and it shows in the numbers.  Success stories from early adopters like Gyft (a mobile gift-card service) show Kahuna’s impact.  After the very first campaign, Gyft saw a 240% increase in engaged users, a 17% growth in revenue from cards purchased, a 12% rise in cards redeemed, and a 7% boost in sharing on social media.  There is real value being generated here!

Adam and Jacob make a great team. I’ve known Adam for many years and this investment was special because Costanoa and Kahuna have shared a parallel entrepreneurial journey.  Adam was leaving Bain to start Kahuna just as we closed our Fund I and had capital to invest.  Backing him and Jacob was a no-brainer, and they have continued to prove me right.  The Kahuna team knows how to execute and is dedicated to creating value for customers first and foremost.

Congratulations to Kahuna!

Posted by: costanoa | September 27, 2013

Our Investment in VictorOps: DevOps Will Never Be The Same

VictorOps is a great example of the convergence of long-term relationship building and betting on teams that are focused on hard problems they really care about.

I met Todd Vernon when he was running Lijit and I was at Sutter Hill. Although Sutter Hill did not end up investing, I made a mental note that Todd was a Founder/CEO that I’d love to find an opportunity to work with in the future. 5 years, a new company for him, a new firm for me, and many career data points later, I’m thrilled that the timing is finally right.

The problem VictorOps is solving is one lived and breathed by the founding team in their past lives as DevOps. Today it is common for a broad swath of the engineering organization to share responsibility for the care and feeding of an in-production application that is often the lifeblood of the company’s business. In fact, the DevOps culture is rooted in the experience of being on the front lines for critical business systems while wearing the hat of both software development and IT operations. Managing these responsibilities requires context from the relevant alerts (typically sent in 140 characters or less), deep knowledge of the underlying systems, and collaboration to handle and remediate potentially critical software system alerts. And it’s not always easy to get full context and fluid communication between groups when your hair’s on fire. Our very own Entrepreneur in Residence, Paul Melmon, tells of getting an uncomfortable call back in 2000 from the Wall Street Journal’s Kara Swisher to ask, “Why is your site down?”

The DevOps market is woefully under-served. Existing solutions seem to think first about the systems rather than the people that are responsible for keeping these systems up and running. VictorOps changes that. For example, they know that more often than not DevOps folks get alerts when they are not in front of a computer screen, so VictorOps has focused from day one on making a rich experience for mobile. The current alert streams also lack critical context for how a company’s systems are organized and, most importantly, for prior incidents and solutions. The process for planning and managing DevOps teams is brittle, lacking both the flexibility and the strength to deal with the complexity of multiple, overlapping teams. As a result, the DevOps job is harder than it needs to be. We strongly believe that VictorOps can make a big contribution here.

Finally, It’s always wonderful to see a team that’s willing to roll up their sleeves and dig in. Todd built the initial iOS app himself, is a magnet for talent and can develop a team that can really get stuff done. I am ecstatic we’re working with Todd, Bryce, Dan and the team at VictorOps to make the world a better place for DevOps folks everywhere.

Today we’re excited to announce our investment in Stitch Labs.  Stitch is an integrated business and order management suite for product-based businesses.  At Costanoa our investment thesis is to work with great entrepreneurs who are building real technology to solve hard problems, and Stitch Labs has it all.   We are thrilled to partner with the team!

Founder Brandon Levey has been described as “one of the most thoughtful, open-minded and intellectually curious founders,” and we couldn’t agree more.  The whole team combines technical talent with personal experience in product-oriented companies, and “Stitch” is the perfect name to describe what they do: knit together separate platforms in a simple and scalable way to help small businesses succeed – not an easy feat.

Stitch was founded on customer empathy.  Brandon started the company when he was working at Sandia National Labs as an engineer and selling eco-friendly t-shirts in his spare time.  He couldn’t find a solution that allowed him to run his side business, particularly a tool that would let him track his inventory and sales across multiple sales channels.  And thus Stitch Labs was born – designed by a small business owner for a small business owner.

The team’s understanding and connection with customers shows.  Customers love the product (5 star rating on the Shopify app store ). Some customers have even begged to pay more because they received so much value from the product.

Partners love Stitch too.  They see the Stitch platform boosting their customer’s sales and driving even more business to their own platforms.  Stitch’s recent award as the Best Emerging Add-On Partner for Xero at Xerocon is a great example of Partner response.

While many investors run from small business solutions, we embrace these investments because they close the gap between consumers and businesses.  Small businesses need data-driven enterprise solutions to boost their revenue, but solutions have to target these businesses more like consumers as often there is only one decision-maker, the business owner.  In fact, high velocity companies that sell to individuals or individual departments within an enterprise (such as New Relic or 3scale) have increasingly adopted many of the same techniques.

With our investment in Stitch Labs, we appreciate the opportunity to join the “good guys” (and gals), grab an oar and get rowing.  You’ll certainly be hearing more from them!

Today is an exciting day.  Return Path Founder and CEO Matt Blumberg is launching his book, Startup CEO: A Field Guide to Scaling Your Business.  Matt has run the gauntlet in his journey with Return Path and I’ve been fortunate to be a part of it from the very early days. The company started with a single product that turned into a small feature, and today Return Path is a leader in Email Intelligence.  During that time, Matt has grown and developed himself as he led the company through its various stages.  His dedication to knowing and understanding his own skills (and limitations), building a culture of constant learning and his willingness to take risks and run organizational experiments are among the traits I’d encourage Startup CEOs everywhere to embrace. Image

Matt got an amazing group of entrepreneurs and venture capitalists (including my co-investors in Return Path, Brad Feld and Fred Wilson) to contribute to the book. Below is an excerpt from my contribution.  Let us know what you think (and buy the book now!).


How the Role of the CEO in Execution Changes Over Time

The role of CEO in a start up changes radically as the company grows and as the focal point of the company changes. These phases overlap so this framework is admittedly a stylized view. Running a company from start up to growth phase through these phases requires completely different skill sets, so in some ways resembles my favorite sport, the triathlon, where you swim, then bike, then run. It requires a variety of skills exercised in different proportions at different times – and a lot of learning along the way.

CEO as Product Manager: Achieving Product Market Fit

In a newly minted Startup, the CEO is typically one of the founders. In this case, she is often the person who invented the product or at least the one who first spotted the problem and brought resources together to create a solution. The first job is all about product, starting with finding Product-to-Market Fit by clearly identifying a problem and finding prospects or customers who will work with you to solve it.

CEO as Lead Sales Representative: The Sales Learning Curve

A start up CEO needs to be able to sell effectively, but the key success factor during this phase is to help the company learn how to sell in a scalable way. A common misperception is, “We’ve built the product and have a few beta customers, now all we need to do is hire a sales guy.” It’s much harder and more complicated than that.

The CEO as sales leader has some unusual characteristics that other sales people won’t have.  She knows the market exceedingly well, may have created the product, and often has a founder’s natural charisma and leadership.  She can adapt on the fly in a face to face meeting and make up new features based on customer feedback. Carrying the CEO title adds stature and she can commit company resources on the spot.  A sales rep, or even a new VP of Sales, is never going to be able to sell the way the CEO does.  Hence, understanding and mastering the Sales Learning Curve is a critical next step.

I describe the Sales Learning Curve in more detail in a sidebar Start Up CEO, but the essential steps are:

  • CEO as Craftsman: just you, your product, and a whiteboard.
  • CEO as Master Craftsman: facilitating an apprentice’s journey to develop  a more replicable selling approach.
  • CEO as Plant Manager: Building the initial sales factory, automating your approach.
  • CEO as VP of Operations: Scaling up the factory by finding the metrics that matter and optimizing for them.

CEO as Leader and Manager: Building a Learning Organization

After core product market fit has been demonstrated and the sales approach is repeatable, the CEO role shifts into another gear.  Where previously she had to be focused on product and sales – because the company’s survival depended on it – the company has evolved to where she can raise her head a bit and focus on some other areas, such as strategy, culture, and hiring. Of course, any good CEO has been doing these things all along the way, but as she gets into Scaling, they are more important than ever.

This only scratches the surface of all the elements of being a great CEO from Startup through the Scaling phase of the business. But if you master Product Market Fit, the Sales Learning Curve and Build a Learning Organization you will be ready for more challenges and open for more growth ahead.

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