Yesterday I attended Red Hat’s European analyst day at the Tate Modern art gallery. Here are some of thoughts based on what I heard.
So it turns out Red Hat is pretty good at being Red Hat. By that I mean Red Hat sticks to the knitting, carries water and chops wood, and generally just does a good job of packaging open source technology for enterprise adoption. It’s fashionable these days to decry open source – “it’s not a business”. Maybe not for you, but for Red Hat it sure is.
Enterprises trust Red Hat precisely because it makes open source boring. Exciting and cool, on the other hand, often means getting paged in the middle of the night. Enterprise people generally don’t like that kind of thing.
It’s been interesting to see the rise of OpenShift. What looked like a PaaS also ran in versions one and two has emerged as a go to Kubernetes distribution for enterprises. Red Hat now more than 400 paying customers for OpenShift Container Platform. For an enterprise today looking to establish a container strategy, with a view towards multicloud and or hybrid portability, Red Hat is becoming a default choice. At the very least it’s going to be one of the first names on a vendor selection list. There are tons of VC funded startups in the Kubernetes ecosystem – the new hotness, Heptio, for example recently took $25m – but there are very few that an enterprise is going to see as a relatively risk free investment. For a container platform discussion you’ll talk to Docker, Red Hat and a couple of other vendors. Recently, Pivotal bowed to inevitably of Kubernetes as a thing, by delivering support for Kubernetes in a BOSH world, in the shape of Kubo, co-developed with Google. Google is still very much a public cloud, rather than hybrid player, though it is partnering with Nutanix for hybrid deployments. Mesosphere blinked, and is now supporting Kubernetes. Oracle is in, working with CoreOS, and has joined the Cloud Native Computing Federation. IBM is all about Kubernetes. Amazon Web Services recently joined the CNCF, likely a harbinger of direct Kubernetes support. Microsoft is also building Kubernetes support into Azure. Red Hat’s platform story is pretty clear – unlike IBM and SAP it never made a bet on Cloud Foundry, so it could move directly to container native. That said, Red Hat is all too aware that it needs to avoids the fate of OpenStack, which grew explosively on the vendor side, before interest subsided, leaving Red Hat with customer contracts to support.
So what about customers and prospects? Saying “we want containers” is one thing. Being ready to take advantage of them however is quite another. Always start with continuous integration and deployment, with automated testing and distributed version control, the basis of everything good in modern software development.
Pivotal Labs has carved out an excellent position for itself by helping companies learn how to develop software the cloud native way – with its prescriptive diet of exposed concrete, pair programming and automated testing.
Red Hat is now emulating Pivotal with its own “Dojo” style Open Innovation Labs, initially in Boston, London and Singapore. Red Hat doesn’t have Pivotal’s pedigree in organisational transformation for application development but it plans to build capacity there. One of Red Hat’s customers at the event, Motability, was positive about the Open Innovation Lab experience in London. It said that it had also planned to carry out a training engagement with Thoughtworks. After the Red Hat engagement though, Thoughtworks was surprised how much progress it had already made. Which is to say, Thoughtworks may have lost money to Red Hat there.
So OpenShift is in good shape. But Red Hat also has another solid enterprise play in the configuration as code/DevOps space, through its Ansible acquisition, competing with Chef and Puppet. Red Hat cleaned up its story recently by finally open sourcing Ansible Tower a couple of weeks back. Red Hat said today it has nearly 500 paying customers, but is in quiet period before its next financial quarter, so that number will shortly get a boost.
Red Hat remains an anomaly – it makes money in open source. It has new revenue streams opening up. It is well positioned to keep doing the basics, but also now have a conversation with the C-suite about transformation.
disclosure: AWS, Docker, Google Cloud Platform, IBM, Pivotal, Red Hat and SAP are clients, but all opinions expressed in this analysis are RedMonk’s own.
Recent client conversations indicate a desire for designing new AI Driven Smart Services. The rush to incorporate artificial intelligence into processes often requires a deeper examination of which services should be AI enabled. Constellation’s latest framework for augmenting humanity encompasses six factors (see Figure 1):
Repetitiveness. The greater a process is repeated, the more likely the process should be AI powered. One-offs and custom processes with minimal repetition are lower priority candidates for AI.
Volume. When the volume of transactions and interactions exceed human capacity, the smart service should be AI powered. Volumes within human capacity will remain human powered.
Complexity. Good candidates for AI powered include complexity beyond human comprehension and simple tasks that can be optimized by AI.
Physical presence. Processes that require a heavy physical presence will most likely require human powered capabilities. However, processes that put lives in jeopardy serve as great candidates for AI powered and automation. In general, low physical presence requirements play well to AI powered approaches.
Time to complete. High time to market requirements favor AI powered approaches. Lower time to completion requirements will remain human powered.
Nodes of interaction. Simple interaction nodes will lean human powered. AI serves best complex and high volume nodes of interaction.
Figure 1. Constellation’s AI Powered Framework
The Bottom Line. Apply The AI Powered Framework To Smart Service Prioritization
Six factors play a significant role in identifying which AI driven smart services deliver the greatest opportunities. Early adopters have prioritized business processes using the Constellation business hierarchy of needs. Align candidates to the five categories of regulatory compliance, operational efficiency, revenue growth, strategic differentiation, and brand. Keep in mind, that AI enablement must require a strong data strategy, deep data governance, mature business process optimization, and a data driven design point.
The Equifax security breach is on everyone’s mind. Equifax has broken our trust and made clear that security is everyone’s problem — ultimately, no one is immune to the effects of poor computer security.
With Equifax in mind, it’s time to talk trust and security. To dive deep, I invited the chief trust officer of Unisys, Tom Patterson, to be a guest on episode 238 of the CXOTalk series of in-depth conversations with world’s leading innovators.
Unisys traces its history back to 1873, with typewriters and adding machines, and the company is an iconic brand in American business. Unisys brought in Tom Patterson to lead its global security business.
During our conversation, Patterson explains why effective security must go beyond technology to encompass business strategy and practice at the most senior levels in an organization. It’s a perspective that explains why organizational leaders and technologist are jointly responsible for securing data, corporate assets, and even critical infrastructure.
However, the technology itself is also fascinating. From micro-segmentation to predictive analytics, there is plenty of material for the most hardened technologist to study and enjoy.
Watch our entire conversation in the video embedded above and check out the edited excerpts below. You can also read the entire transcript of our discussion.
Is security a business or technical problem?
It used to be bits and bytes and routers and firewalls. Now, it’s boardroom decisions and what should we do about an M&A? How should we go into a merger? How should we partner in this country or that country?
These are all business decisions. And, the threats are dramatic. There’s not only the threat of being shut down or having all the information that you are entrusted with taken from you, but there’s also regulatory compliance now. New regulations coming that starts next year where the fines start at $20 million dollars and go up from there.
It’s an issue that goes well beyond the technology. That’s what the chief trust officer role works with here. We’re a coordination point for privacy, physical security, and business security issues.
Whether there’s a hierarchy, whether they’re in the same group, whether they get together informally, all their voices need to be respected and proactive. If the group is getting together for the first time after a security event has happened, that’s the wrong time. These folks should be working together on a regular basis.
A lot of time, privacy reports to the legal counsel, and the physical security reports to the COO and the chief security officer reports to the CIO, which are still different towers still. We haven’t evolved that much that quickly.
But, having them work together at the direction of the board, at the direction of the CEO and the global leadership team. Get together, work this stuff out together, that’s where they’re finding these great synergies. That’s where they’re saving money. That’s where they’re lowering risk overall; privacy risk, and security risk, and physical security risk. We can address all these things together.
Where does technical debt have an impact?
Most every company of any size that’s been around for a while has issues like technical debt. They’ve got old stuff and there’s not enough money to buy all new stuff.
So, they’ve got to work together and be realistic with each other, and say, “Well, we’ve got this privacy spin that we’ve got to do, and we’ve got this technical debt issue here, and we’re trying to go an open business in country X and country Y. Let’s design a system, maybe using a cloud provider and some micro-segmentation and we do this.”
Suddenly, we’re addressing all those issues with one spend. That opens the eyes not only of the practitioners but also of the business leaders and the governance leaders across the board. Literally around the world.
What is micro-segmentation and why is it so important?
Security people have long known that it’s better to segment their network, so, if one part gets broken into, the other parts will be safe. It’s a concept called “east-west collateral movements,” which you want to stop.
They used to do by putting a firewall between this building or that building, or between this giant network or that giant network. That’s how they segmented their networks.
Well, we have gone to clients that had over 100,000 individual rules on one firewall. No one can keep up with that! They don’t know what rules are there, who wrote them, what they’re for; so they don’t touch them. In those old days, it was so expensive to segment that people stopped doing it.
Enter a new concept, a new technology, called “micro-segmentation.” We’ve been working on it for over five years with individual clients, but it’s now a generally available commercial product called “Stealth,” which we can weave into any existing network to allow you to create little, tiny microsegments, completely transparent to the users, that don’t require any firewall rules. If you’re in accounting, you get to see the accounting resources and nothing else. If you’re in marketing, you can see the marketing resources and nothing else.
Even though all the networks are still interconnected, the packets are locked into these little, tiny microsegments, which makes it easier to protect the network and deliver the resilience that’s necessary. Someone still might click on the wrong thing, but that attack is going to be limited to their little group. The accounting people and Poughkeepsie might be affected but not the rest of the world.
We use artificial intelligence to create the whole mapping. When we roll out micro-segmentation with Stealth, it can be transparent to employee or associates. If they are not breaking the rules, they’ll never even know it’s there.
Explain the concept of resiliency?
Resiliency is a key word in 2017. They UN is focused on that. Many big, global organizations are trying to shift the focus because in security you have to be perfect to be any good at all. Resiliency and “perfect” are difficult to achieve in this day and age. Even the best systems are attacked successfully because something breaks down. So, we’re focused on resiliency.
For example, what if someone at a power company clicks the wrong thing in their email or leaves their laptop on the train with the password taped to the top. Or, they lend their laptop to their kid who clicks on the wrong website at home one night. Those things happen; it’s part of life.
The concept of resiliency, which Unisys really stresses with its clients, recognizes that’s going to happen but don’t let it shut off the lights for an entire country.
We deploy all sorts of countermeasures within an organization to make sure that when something happens, we can limit it. It starts by segmenting so if one part of the power system is corrupted, the rest will not be.
But now, we’ve implemented cool things, like predictive analytics. If we look at many data points within the organization and around the world and use artificial intelligence to analyze them, we can predict threats forming that look like they’re going to attack. At the same time, we now have machine-to-machine defenses that can automatically reconfigure themselves into a more defensive posture when they see predicted threats starting to form.
That’s the future of what critical infrastructure really needs. They need it not only in power, they need it in transportation, in banking. There are 18 critical infrastructure sectors around the world. That critical infrastructure needs protection.
Any quick thoughts on Blockchain and security?
I love Blockchain for distributed trust. It’s going to be a huge enabler, especially around the Internet of Things, where trillions of devices that are connected. There won’t be time to go to a trusted third party, so we need peer-to-peer trust. That’s what Blockchain brings us. Great place to focus on learning, and investing, and working with building into your systems.
What about security and IoT?
IoT is a privacy issue, first and foremost. Internet of Things devices are used as industrial control systems. We protect a lot of the valves that open and close gas pipelines and oil rigs, and electrical switches on towers.
All those are little, mini computers. Those have to be secured. The things like the FitBits and the health monitors need to initially be secured for privacy, but we need to design the same level of security that we’re doing in the industrial control systems into all sorts of IoT.
It’s a big issue coming out. First, you’ll see it in privacy on the consumer side. Then, you’ll see it as security, as we move from cars entertaining us to cars driving us home. That’s going to be the big change and we need to take security seriously across the board.
Finally, quick thoughts on security in cars?
Cars scare me because they have never historically taken security seriously. There’s a thing called the Can bus, which is an interconnection point for sensors that have been on cars all along. In the beginning, everything plugged into that, including turning your steering wheel to “park” and pressing the accelerator or your brake.
Now, we’re starting to have better systems, like little, tiny firewalls and microsegments in the cars themselves. You definitely are going to choose which brand of vehicle to buy based on their cybersecurity safety record, and it’s something that every manufacturer is getting very, very serious about.
CXOTalk brings together the most world’s top business and government leaders for in-depth conversations on AI and innovation. Be sure to watch our many episodes!
What can we learn from the person who ran the company that helped establish marketing automation as a category? Evidently, a whole lot. Now, Jon Miller, former CMO at Marketo, is doing it again as the CEO of Engagio. This time around, he’s using everything he’s learned the first time to help establish the account-based marketing space and build a leading company there.
Jon discusses viewing other companies as partners rather than competitors, how he thinks about the increased pressure to succeed given his prior success at Marketo, and ensuring his sales team is good at closing outbound sales, not just inbound sales. He reveals a few interesting tidbits about himself too, like the way studying physics helped him build companies.
And if you haven’t heard: SaaStr Annual will be back in 2018, bigger and better than ever! Join 10,000 fellow founders, investors and execs for 3 days of unparalleled networking and epic learnings from SaaS legends like Eric Yuan, Tomasz Tunguz, Chris O’Neill, and Mikkel Svane. If you don’t have tickets, lock in Early Bird pricing today and bring your team from just $799! (All ticket prices go up October 1st.) Get tickets here.
TRANSCRIPT
David Appel: Thank you for joining us for our second session of the day. My name is David Appel. I’m the head of the Software and SaaS Vertical at Intacct, which is the world’s largest independent peer cloud ERP firm. We got a great session for this one. This one is all about “After Marketo, What I Would Do the Second Time?”
This is going to be moderated by Doug Pepper. Doug is the managing director at Shasta Ventures, long time VC, some great companies, just two of them include Optimizely and Flurry, which was acquired by Yahoo several years ago. Then Jon Miller, who’s co-founder of Marketo. This is his second firm, Engagio.
As we were prepping, it reminded me of a story some of you guys might have heard. Sir Richard Branson wrote letters to himself, his 10 year old self, his 20 year old self, his 30 year old self. What we get the benefit of is Jon essentially writing a letter to himself about what he would do 10 years ago that everybody in this room can apply to how you build a great business.
Big fan of Engagio, a lot of Shasta Ventures companies on Intacct. I’m going to introduce Doug, and he’s going to introduce Jon.
[applause]
David: Thank you.
Doug Pepper: Appreciate it. Hey, everybody. Thanks for the intro, David. It’s great to be here. As he said, my name is Doug Pepper. I am a managing director at Shasta Ventures. We are an early stage venture capital firm. We look for category creating companies both in enterprise and consumer.
It’s a great honor to be on stage here with my friend, Jon Miller. We actually go way back. We were in business school together in 1999, but I had the real pleasure of investing in Jon when he was the founding CMO of Marketo back in 2006 with his partners, Phil Fernandez and Dave Morandi.
Jon won’t brag about himself, but he is a very unique marketer. All at the same time, he is strategic, he’s quantitative, and he’s creative. He really helped pioneer the use of content marketing and B2B marketing.
More than that, what is so special about Jon is that he doesn’t just market a specific product or even a company. What Jon does is he focuses on defining and creating categories, and then building the leading company within that category.
Obviously, at Marketo, he was very successful in doing that. Building the company from the ground up, helping establish the marketing automation category. Ultimately, they took the company public in 2013 and then sold it last year for $1.8 billion.
Now, he’s doing it again. He’s doing it again with Engagio in the account based marketing space. He’s helping to establish that category and then ultimately building a leading company there.
This time, he’s doing it as a second time founder. I just think it’s an amazing opportunity for all of us to have him share with us what he’s learned over those many years of success and how he’s applying those learnings to doing things even better the second time around in Engagio.
This is really the Jon show. He’s going to do a 20 minute presentation as you’ll see. Then, we’ll sit down and do about 10 minutes of sort of fireside chat Q&A. Jon, thanks for being here and take it away.
Jon Miller: Thank you. Thank you for the kind words.
[applause]
Jon: As you heard, I was one of the co founders of Marketo. Apparently, somebody told me the other day that I’ll know I’ve actually made it with Engagio when I no longer need to be introduced as the co-founder of Marketo first.
I have been in marketing technology my whole career. I am a marketing technologist, but I’m more than that. I’m also a father. These are my two kids. The fun fact is that my son, who’s obviously the older of the two here, he was actually born the exact same month that we incorporated Marketo, which has made it really easy for me to keep track all these years of how old Marketo is. They both turned 11 this month in case you’re following.
Another fun fact is that I was actually born here in Ethiopia or what’s marked here as Eritrea. When people hear this fact that I was born in Ethiopia, I often get the exact same question which is, “Hey, Jon, why are you born in Ethiopia?” I always give the same answer, which is that I wanted to be close to my parents.
That has nothing to do with marketing technology, or SaaS, or entrepreneurship. Of a little bit more relevance, and Doug alluded to this, is the fact that I studied physics for my undergraduate degree. I actually spent my summers doing fusion research at the Lawrence Livermore National Lab, got into MIT for a PhD program.
But I wanted to give this whole business world a try. I deferred MIT to go into management consulting and then very quickly into marketing technology from there. I haven’t looked back 23 years later, but I don’t regret the fact I studied physics. That quantitative analytical way of thinking has helped to guide my career both as a marketer and now as a CEO. You’ll see that through this presentation.
What I’m going to cover is just briefly the history of my story from Marketo now to Engagio, and then hopefully cover the key things you guys came here to see, which is the 10 things I’m doing differently. I’m excited. The best part is gonna be the conversation with Doug.
To set up, what is this new thing that I’m doing? At Marketo, we built a revenue engine where marketing was generating 80 percent of all the deals the sales team closed, which was using content, and inbound marketing techniques, and then our own lead nurturing lead scoring. It was wildly efficient and it drove a ton of growth.
What happened was, by the year before the IPO, the CFO, Fred Ball, came to me and said, “Hey, Jon, we want to invest more to grow even faster. How much faster can we grow?” He came to me in marketing because we are driving 80 percent of pipeline.
The problem that I had, or we had, was it’s not like I could just write more blog posts and suddenly generate more leads. I needed to find new ways to grow pipeline beyond this other thing that was working, but it was hitting its maximum.
We identified a list of target accounts that we really wanted to get into and we started reaching out to them proactively. I realized that there are two different styles of go to market here at play. What we had been doing at Marketo was fishing with nets. We didn’t care which company responded, we just cared did we get enough.
This new thing we were doing is much more like fishing with spears, where we were not waiting for them to swim into our net, we were reaching out to them proactively. That was the genesis of the idea I had for Engagio. Marketo and the other marketing automation tools are great for fishing with nets. I started Engagio to be the platform for fishing with spears.
After the IPO, Marketo stopped feeling like my company. You don’t leave the company you founded when it’s your own baby. But eventually, it got big enough. It stopped feeling like it was mine. It started to feeling just like it was a job. Then, that set in the motion the desire for me to leave and then actually go pursue this new thing.
I left in February of 2015 and then formally started the company on Pi Day, March 14th, 2015. We’re only a little under two years old now at this point. We’ve had an extraordinarily fast start I’m very proud of.
We’ve signed up over 100 customers and are currently at about 2.6 million of ARR, which is not a huge number compared to a lot of the other people on stage at this event, but for basically selling the product for one year, I’m very happy with that.
In order to achieve that success, we did a lot of the same things that we did at Marketo. I know this presentation is about 10 things I’m doing better, but the reality is Marketo was a success and a lot of the core things are the same.
Perhaps the most important thing that we’re doing the same is we identified a great market. Some people give me credit for creating marketing automation or creating this idea of account based marketing. That’s not true. What I did is I saw something that was existing, and then I helped to define it, and then I helped to amplify it. In so doing, yeah, a lot of the credit does go to my companies.
The key in both cases when I saw that there’s a good opportunity for a company was a category that had existing buyers with existing competitors, but the competition wasn’t so big and so strong that we couldn’t come in and ultimately win by executing well. Those are the markets that I like, because you don’t have to do all the category creation. You can instead do this category definition and bring that to you.
Great market, number one. Number two is pretty obvious, you have to build a good product. Thank you to my co founder, Brian Babcock, and the rest of the team for that. And, you have to have great sales and marketing execution.
We are eating our own dog food or, as I like to say, drinking our own champagne, driving high velocity sales deals, and growing the business. Great market, great product, great execution, those are givens. That fancy transition there is called the vortex for any PowerPoint nerds.
What are the things I’m doing differently? In a nutshell, at Marketo, we built a great product and ultimately led to a really good outcome, but I don’t believe that we built a great company. That’s a really important distinction.
Patrick Lencioni, I’m a big fan of his writing and his work. He talks about companies that are smart and companies that are healthy. I truly believe, now on my second time, that a healthy company with average smarts will beat a super smart company with only average health.
Did I get that right? I got that right.
Number one thing I’m trying to do different here is really focus my time, my energy on building a healthy company. The first thing that I’m doing there, there’s a bunch of things, is core values. It may sound like motherhood and apple pie to define your core values, but the reality is, it matters.
At Marketo, we didn’t define core values until we are about $20 million of ARR. What that results is, effectively, you have a culture, you have things that evolved, but it was actually balkanized with different groups and different teams having different sets of values. That ultimately made it hard to row in one direction as a coordinated team.
Marketo suffered, to be honest, as we got bigger because of that. Especially after the IPO, in some ways, it made it hard to retain people. Before the IPO, there’s a lot of drive towards, “Oh, we have this goal,” everybody is excited for this particular moment in time. On the other side of it, if you don’t have strong values and a strong culture, it definitely made keeping people a little bit harder.
At Engagio, my co founder and I defined our core values literally before we incorporated, just in very first stages when we’re still talking about how we’re going to split up our founder’s equity. As a sidebar, we have three couplets as you see here. For some reason, that’s a hell of a lot easier to remember than just lists of five or six values.
Second thing I’m really focusing on with my time is teaching my team how to be a good team and how to work effectively. Again, I’m relying on Patrick Lencioni here. At the core is just literally building the team trust. You need the trust. When that’s there, then what you can have is you’re going to actually start to have debate, and in some cases, healthy conflict.
If you don’t have a team willing to call each other out and push each other honestly and candidly, you’re going to be sub optimizing. Trust, and then on top of that, the ability to have conflict.
From there, you need to then have clarity and commitment. Once you’ve all decided what you’re going to do, you have to make sure it’s super clear and everybody is aligned against that. Now, you’re all moving in the same direction.
We’ve implemented an OKR process, which is a really key element for making sure that happens. You need to make sure that your team members can work on making each other accountable. It’s not just my job as the CEO to go to somebody and say, “You’re not doing well enough or you made a commitment on that OKR and you’re not achieving,” the whole team calls everybody out on that.
Then, ultimately, that works when people put the company’s needs before their department’s needs, before their own personal needs. Really trying to push that into my team and hope that they push it down to their team.
Now, once you have clarity about what you’re trying to do, once you have your core values, you need to then make sure that gets pushed into every operational process, whether that’s hiring, or onboarding, or even how do you do raises, how do you promote people.
All those processes need to reflect the way you’ve decided you want to run your business. I’ll be honest, that was overwhelming to me when we were small. How am I going to put all these processes in place as a little start up with 100 other things on my mind?
One of the smartest things I did in the history of Engagio is I pulled together what I called a culture day. We spent the morning talking about our core values and what stories share those values, what is our shared mission, what meaning do we get together from working here?
Then, we did a brainstorm around our ideas around all these topics, but then to actually put that into execution, every person had to sign up their name against one of these teams. Then, we held those teams accountable for actually putting these processes in place. As a fairly small company, we were able to build fairly mature processes around building a healthy company.
Now, the challenge I have is we’ve grown a lot since last July when we did that. We have new people, so we have to figure out a process in place for continuing to refresh that. We’re going to do it again on our second year birthday in March.
The last thing I’m really thinking about in terms of healthy companies is fairly tactical, but how do you have a good meeting? I don’t know about you guys, but whenever I’ve been in a job, Marketo or even earlier, when I fantasized about quitting, it was almost always I was in some meeting, where something is just boring.
There’s a reason why so many people check their phones and bring their laptops to meetings. Most meetings suck, right? We work really hard at teaching our company how to have good meetings. The number one thing that makes the meeting good is debate.
When there’s some conflict going, when people are like, “I don’t agree with you, you’re wrong on this,” but still based upon that trust, that’s when everybody puts their phones down and starts paying attention, because this is exciting. This is good. You want that debate and conflict going because you’re going to get a good decision on the other side.
A couple other thoughts on the things I’m doing differently. First of all, fundraising strategy. In less than 18 months, I raised $32 million at Engagio, which is almost as much as Marketo raised in four and a half years. You would think, “Wow, that’s amazing that you raised all that money.”
The problem, though, is in order to not get diluted to hell, we raised that money at fairly high valuations, which is a nice thing you can do as a second time founder, but that big money, eventually, I’m going to need to raise money based on real metrics. Not just based on the fact that I’m being a second timer.
I need to make sure that the money lasts just as long. I need to get just as far in terms of ARR, and growth, and other operational metrics on the same amount of dollars. It’s not like it’s any better to have more money. It actually means you have to have that operational discipline in order to make sure you’re still achieving the same milestones you need for the same amount of dollars.
We’ve been pretty efficient. Actually, my first raise was $10 million. We’re still spending that. We actually haven’t even started to touch the second $22 million. Right now, we have cash through the middle of 2019. It’s good to have lots of money, but you still have to have the operational efficiency.
The benefits to us of this strategy are less dilution, less risk. The world could blow up, who knows what’s going to happen. The fact that we do have a big bank account gives us strategic flexibility, and lastly, less distraction. I’m going to be able to go for two and a half years without thinking about fundraising. That’s actually a really nice thing for driving the business.
Another thing that I have as a second timer is a roadmap. Back in the days at Marketo, we didn’t know how fast should we grow, or how should the quota for a sales rep be, or what the gross margin should look like.
Fast forward to today, there’s lots of great resources out there, SaaStr included, that tell us how we should grow, what should we do and the ability to rely on that to drive our growth. Like for example, mapping to the battery triple, triple, double, double, double is a really important way for us to know that we’re on track.
Another thing I’m doing differently is in how I’m thinking about the market. This market map is something I put together to just really help to understand who all the players are in my category with these different sub pieces to it. The reality is, in Marketo, it was a hypercompetitive world. It was ugly at Marketo with our competition, especially with Eloqua going at it, if you will, both in the field, in marketing.
I’m doing it very differently here. We are taking partnerships with almost every company on this map if possible for the goal of building the category together, which has been great. That’s why account based everything has taken off so quickly because you have companies collaborating around it. Frankly, it’s just nicer. There’s no reason to be nasty out there.
A little tactically, and then we’ll get to the discussion. I am focusing on bigger deals my second time. At Marketo, we started fairly SMB, small deals, 12k. That’s a tough business. You usually have one user, they leave, there’s nobody left to use the product. They churn. They take just as long to get up and running. They have more questions. There’s less expertise.
We’re really trying to focus higher. My goal is a 40k average contract value where regularly you’re doing six figure deals. We’re getting up there. We’re currently at 26k ACV. That’s just a better, healthier place to be.
Part of that is building our enterprise muscle earlier. We’re not a full enterprise company right now, but I know we want to be there. That’s a hard muscle to build if you wait too late. We’re trying to build that as early as possible.
Then, lastly, as I said earlier, we are drinking our own champagne on driving outbound sales. Again, at Marketo, it was really hard when we tried to layer that on after six years of sales reps just being fed inbound leads. Trying to be balanced at the beginning with both marketing but also driving that outbound, it’s an important muscle to build and also to make sure that you don’t create a culture where sales forgets how to do that.
If you may notice, that was actually only nine things we’re doing differently. We’ll hit the other number 10 and a few other points with the Q&A.
Doug: That’s great.
Jon: That good?
Doug: That’s wonderful. Thanks, Jon. Great insights.
[applause]
Doug: That’s great, Jon. I want to focus on some operational aspects, but I also want to get a little bit more personal with Jon and just hear a little bit more what it’s like from a personal perspective as an executive being not only a second time founder but a first time CEO.
First question, Jon, obviously, you’ve been very successful with Marketo. That was wonderful.
Jon: Thank you.
Doug: When you were building Marketo, you hadn’t had that yet. Now that you have that success under your belt, how are your goals different at Engagio? Are you operating differently going for the bigger win or taking more risks? How are you thinking about that?
Jon: I don’t think the most successful entrepreneurs are ever just financially driven. I certainly haven’t been. For me, most of my career has been driven by a vision that I have of pursuing the one to one future, just making marketing and sales more intelligent, more meaningful through data and analytics.
That was true of what I was trying to do with Marketo. It’s true of what I’m trying to do with Epiphany before that. It’s definitely true with what I’m trying to do with Engagio. That goal of just I want to build that product is really what drives me more than anything else.
Obviously, there’s some personal stuff there, too. I’m seen out there as a very good marketer, I want to prove that I’m actually a good CEO, too. It could be, maybe Marketo was just a fluke. Obviously, if you can do it two times as a success, then that’s a line as opposed to a data point.
In terms of the financial stuff, I don’t want sound snobby about it, but once you’ve had some success, a few million dollars doesn’t make a difference. Just as you can see in our fundraising strategy, I have priced ourselves out of any kind of quick flip. Almost by definition, we’re going for something big.
Doug: For you as a second time founder that’s been very successful, is there any increase in pressure because you’ve been successful? Are there higher expectations? Do people expect you to know everything? Does it feel ever like there’s a greater weight on your shoulders?
Jon: It’s way better to be second time than not. Let’s just be clear. It’s great for fundraising, it’s great for building our market presence and awareness. I don’t get a ton of pressure externally, but I get a little bit from myself.
Partly, there is that kind of, “Oh, gosh, what if this thing doesn’t work out?” The fear of failure, particularly because I mean it’s a drug, you get addicted to it. If this thing doesn’t work out, and then I got to just go become CMO at some company after this, that’s going to suck. There is that my personal thing.
The other thing that it is different as CEO as opposed to not the CEO is I have more doubt. At Marketo, I had a lot of confidence and trust in Phil. He was an amazing CEO. That trust in Phil, it felt like, “OK, it’s going to be all right.” Phil knows what he’s doing and he’ll guide us to success, which he did.
Here at Engagio, it’s me. That doubt that you always hear CEOs have is there, of course, because there is nowhere else for that to go.
I will say one of my strengths and weaknesses is that I am a pretty confident person. I’ve always had that a lot of self confidence. It turns out that’s probably one of the most important things you need to have as a founding CEO, because that doubt is there all the time. If you’re not confident, it’s just going to chew you apart.
Doug: I can’t see anybody, but I suspect there’s a lot of…I was going to ask for a show of hands, but I suspect there’s a lot of aspiring CEOs in the room who are not CEOs today, and that’s where you were at Marketo.
What advice would you give for people in the room that would like to be a CEO someday that are not today? What should they be learning today in their current role to put themselves in a position to become a CEO? What do you wish you had even learned more of at Marketo?
Jon: On the skills side, the two things you always hear is product skills and sales skills. On the margin as a founding CEO, the product skills are really important just because at the end the day, if you’re a technologist or if you’re on the business side, you got to be able to figure out a product that’s going to have product market fit. Anything you can do there is important.
I didn’t have any sales skills before doing this, or I had never done sales before. As the CEO, you’re just always going to be a good salesperson even if you don’t actually have any formal sales training. That’s one.
Number two is, everybody here is already doing this. Learn everything you can about SaaS companies. Just those ratios and those metrics and how they work and how they grow. Assuming you want to start a SaaS company, learn that.
Then, the third, I think the most important, is start thinking about your team now, long before you’ve ever started. When I left Marketo, I left on very friendly terms and I didn’t go hire a whole bunch of people out of Marketo, but I did have my wish list of the four people I was like, “Oh, I would love to have those people come join Engagio at the right time.”
Over the last two years, I’ve managed to actually bring those four people over. It’s great because it’s so hard. Building your team is probably one of the hardest things as an executive. If you can have those people identified and nurture those relationships along the way, it makes everything a lot easier.
Doug: He alluded to this with the picture of his kids, but when he founded Marketo and I invested, we didn’t have kids yet. We were just having kids. Now, we’ve got kids and you’ve got two kids and, obviously, all the busy life that comes along with that. How are you managing work life balance the second time around? Is it different?
Jon: One of my theories is always that people are going to work…people have a set point for how hard they work. I do have my envelope of how much I work and don’t work. My co-founder at Engagio also has kids.
We don’t have a culture of people working till eight or nine o’clock at night, but we have a work culture of when you’re in the office, you work intensely which is what you tend to see from parents, especially parents with young kids.
I wish I had more time to work out, I’m trying. That’s not as much from being an entrepreneur, that’s from being a parent. It’s really hard to do both at the same time. I do take PTO, that’s the other thing that is probably even more helps.
When you have family, you go on trips, longer trips than I ever did when I wasn’t a parent. I’ve had to find ways to be able to actually take time out of the office and keep things going. By the way, that’s role modeling something nice for the company that I do want people to be able to take breaks and then come back.
Doug: Got it. You mentioned fundraising. Obviously, a very different strategy this time. Part of that’s your success, part of that’s the environment. You didn’t talk about choosing investors, constructing a board. You’ve done that two different times now with some overlap, but some new investors. What advice would you give to folks in the room about constructing a board and an investor base?
Jon: As you know, I wish we’re able to work with you this time. I’m glad you’re a personal investor, but we haven’t been able to make it work formally. The most important thing is trust. That’s again mom and apple pie to say.
I had the luxury of being able to look at a lot of different firms, especially across my rounds. Inevitably, what I chose each time is people I know and trust, even if it’s not the best terms, the best valuation, because the reality is these are the people besides my wife who are going to have the biggest impact on my happiness over the next few years. I really wanted to know I had people I trust.
In terms of board composition, I’m not super like, “Oh, I need something exactly like this,” but I tend to think about four roles of what I want from my board members. There’s the strategist who’s going to help really guide me on the big issues and make me think about things that I’m not going to think about.
There’s the operator who has been there, done it, knows, “OK, you should do this, you should do this, have you considered this” kind of technical. There is the networker, the person who just knows everybody, and can make introductions, and get us into accounts, and help me hire, and all that kind of thing.
Then there’s, I guess, what I would call the fundraising specialist. You know, somebody who just knows the investment industry really well, and can kind of guide on fundraising strategy and tactics and things like that.
Obviously, some investors like you can fill more than one of those categories, but I do try to think about, all right, how do I get all those different pieces filled?
Doug: That’s great. I think we’re just about out of time. Jon, thank you.
Jon: Thank you.
Doug: Congratulations on everything you’re doing. Good luck at Engagio, and a round of applause for Jon.
Every day, people send me self-serving marketing fluff masquerading as research reports, so you can imagine I perk up when interesting and substantive data comes across the wire.
In sharp contrast to the usual fake research, Deloitte University Press caught my attention with its excellent new report, analyzing the “transitions” (job changes to the uninitiated) of 200 Chief Information Officers. The researchers conducted extensive interviews with business and IT leaders in organizations related to these CIO transitions.
To learn more, I spoke with Khalid Kark, who is the CIO Program research director at Deloitte.
Although Deloitte’s research focuses on CIO transitions, I interpreted the data to summarize several survival lessons that are applicable to all CIOs.
Survival lesson 1: Personal credibility gets you hired
The following chart presents the reasons why business stakeholders chose their new CIO:
The criteria summarized in the graphic sheds light directly on what business leaders want and expect from the CIO. Once the CIO is in place for a while, those expectations may change, but underneath it, leadership skills and personal credibility are dramatically more than important than technology background. This conclusion is striking since the CIO role historically was all about technology infrastructure.
The CIO survival message is clear: build a strong personal brand to prove leadership and demonstrate credibility.
Survival lesson 2: Overcome the core, chronic conflict by managing expectations
One of the most instructive conclusions from the research is described in the following chart, showing top objectives during a CIO’s first year:
The top three objectives are operational excellence, vision and roadmap, and talent.
From the CIO perspective this means ensuring the technology works, creating a plan, and assembling the right talent and team. If systems don’t work as expected then the CIOs credibility will drop like a stone in the ocean, so early focus on stable operations just makes sense.
But then, compare the CIO view with the outlook of business stakeholders, as shown above in survival lesson one.
When a new CIO starts work, business leadership views talent and transformation as top priorities. This perspective also makes sense, because senior leaders want the CIO contributing quickly to innovation and strategy.
However, the gap between business expectations and CIO reality creates a core, chronic conflict. The CIO must ensure operational stability at all costs, yet other business leaders expect a new CIO to support strategic goals such as innovation almost immediately.
The conflict is worsened because IT infrastructure is mostly “invisible” to employees; for example, most users do not think about phone systems or email until those tools stop working.
Paradoxically, the best IT organizations make infrastructure look easy; everything just works, apparently by magic, with perhaps some occasional nudging or tweaking from the CIO.
During our call, Deloitte’s Khalid Kark explained that it is crucially important for CIOs to manage business expectations related to operations and strategy:
The CIO role has come to a point where either you step up or you step aside. During the first six to nine months, a new CIO must focus on operational excellence. However, within a year, the CIO must transition to being a strategist. In other words, solidify the base before moving on and set the right expectations on timing and plan.
This survival skill hinges on the need for CIOs to be strategic while building a top-notch project planning and execution team. It’s then the CIO’s responsibility to explain what IT will deliver and when.
(Incidentally, this conflict situation is hardly new and is well-documented.)
Survival lesson 3: Build a narrative and tell stories
Deloitte’s research highlights the need for CIO’s to build a narrative and tell stories that help business leaders understand the challenges, goals, and logic behind IT plans. This illustration summarizes:
A quote from the research explains:
Develop a narrative that illustrates how technology, not IT, drives value for the enterprise. Be careful to not force company experiences, examples, biases, and context from previous jobs into the new role. Walking the halls, factory floors, and retail outlets can provide stories and anecdotes that will likely help build a powerful narrative. Understand, acknowledge, and focus on the current business priorities and context.
Empathy and communication are the essential building blocks a CIO can use to build relationships at every level in the organization. The best stories make issues specific, visceral, and real to the business.
Unfortunately, many technology executives are uncomfortable building a narrative and don’t know how to tell educational and engaging stories. If that’s you, then get aid from outside the company; it’s just a no-brainer.
The CIO survival lesson: a strong narrative can communicate your goals and stories make it real. Together, they build credibility and will magnetize the business around your objectives.
Running a conference with a really strong cohort of diversity scholars this week, with a broad range of skills and backgrounds, really made me think. We had Ian Skerrett, VP of marketing at the Eclipse Foundation, and Abby Kearns, executive director of the Cloud Foundry Foundation at the event. Both are keen to improve diversity in their communities. But how are we going to create better and more welcoming pathways for a more diverse range of entrants?
I asked both Ian and Abby what other roles there were outside writing code. They both gave solid answers about different roles and opportunities. One stock answer in open source is of course Write Documentation! You don’t need to be a great coder to write excellent docs. But when you have 20 diversity scholars in the room, you kind of want answers that are going to make some of them think – blammo – that’s what I want to do! In many ways we’re making solid progress in open source, as this exchange from OSSsummit, also this week, shows:
“Open source needs more than just *code* contributions. We need designers, tech writers, project managers…” @ashleymcnamara#OSSummit
But I had a project manager there, looking for a job. How would she get a paid position to take advantage of her skills. I felt there was a disconnect between open source, as practised by folks that work at vendors already, and the wider community of prospects. I have written before about my empathy failure in understanding open source maintenance.
“But understanding the value of the maintainers means taking a broader view, touching on many of the critical social issues we face in open source. Thus for example we celebrate the coders, but not the people that made the patches, or documented the system, or helped manage the community, responded to the pull request politely. The best and most useful open source though has the best documentation, has the best architecture of participation.”
We need to do a better job of explaining the beauty of working in a welcoming open source community. We need to ensure the communities actually are welcoming. Kudos to the Go community – they’ve been doing a really great job of being welcoming, and encouraging new people to become committers and join the community.
But the missing element is perhaps getting the economics right. We need to find models to pay people doing the work, beyond “join a commercial open source vendor”. People from under-represented groups in tech are likely to be less well paid, and as such may find it hard to contribute. I helped two young black men this year to fund raise for their studies – it’s hard to spend time on things like open source code, docs or design, when you’re a kid from a single parent family trying to pay for your own education.
I don’t know what the answers are, but I do think we need to do a better job of the economics if we want to make our open source communities more diverse. We need to make the New Patronage Economy work more effectively. What do you think? I’d love to know.
Please let me know if you’re hiring for excellence. All of our scholars are amazing people. In hiring them you’ll also improve the diversity of your team. Not all of the folks in the program are looking for jobs, but some are. RedMonk is trying to get beyond just giving free tickets to our events for under-represented groups, and to start deepening our network and creating opportunities for people. Let me know if you’d like to get involved.
Once again, thanks Salesforce.com for sponsoring the program.
I tend to not listen to vendor quarterly earnings calls. I get much better value from briefings at industry analyst events and from customer feedback. I also find it irritating that executives brag and beat up on competitors on these calls knowing full well they will themselves be targeted a few days or few weeks later.
I listened to a replay of the Oracle 1Q18 earnings call, and sure enough there was bragging and bashing (like Larry Ellison saying “there is no one left to buy” ) but couple of things stood out for me.
The cloud momentum
As I wrote a few weeks ago, cloud computing is at a pivot point. In the next wave, hairy industry applications – utility billing, retail merchandising, healthcare emr – and many others need to be tackled. The easier administrative and customer facing cloud applications are maturing nicely. The operational systems, hardly at all. In the next wave, we will also need massive cloud infrastructure investments as decades of creaky on-premise and outsourcing/telco assets need replacing. The funny thing is most vendors will sell cloud to customers as replacing capex with opex then magically expect their own capex to disappear or be someone else’s responsibility.
So, I am pleased to see Oracle’s cloud momentum – Software as a Service (SaaS) revenues were up 62% from the previous year to $1.1 billion. and Platform as a Service (PaaS) plus Infrastructure as a Service (IaaS) revenues were up 28% to $400 million. To me, success encourages investments and I want Oracle to focus much more on verticals and infrastructure. With the broadest set of cloud offerings – SaaS, PaaS, IaaS and DaaS – Oracle is positioned to be the industry’s locomotive for the next wave of cloud evolution.
Autonomous database
With my recent focus on automation with Silicon Collar, I liked Larry Ellison previewing the “driverless database” on the call. He promised, using machine learning, it would reduce today’s labor (DBA and managed services) time and effort, and even more the errors they cause, while improving reliability to what he called “99.995% …while charging much less than AWS.” I want to next see what Oracle is thinking in terms of autonomous applications and how it plans to further leverage the growing world of robotics, drones, AI, wearables, sensors, 3D printing and other automation in its design of business processes.
I look forward to hearing, seeing and discussing a lot more on both topics next month at Oracle OpenWorld.
Few technology developments will ultimately have the global cultural, business, and economic impact of the Internet of Things (IoT.) While today IoT still looks like an industry largely concerning itself with factory automation, connected light bulbs, air conditioning controls and so on, the eventual objective is clear even to a casual observer: Nearly everything in the world is about to become connected and data-driven, from the most trivial object to virtually every significant item in our personal and work lives.
The implications of this shift are profound: We’re about to be able to measure and quantify just about everything that exists. While there will be the requisite debates about whether this is always a good thing, the implacable march of technology development will ensure it’s going to happen anyway. When a new enabling technology arrives and is useful, it finds its way into just about everything.
The implications alone for IoT and the healthcare, insurance, financial services, logistics, manufacturing, and energy industries — to name just the most affected — are profound: For the first time in human history, most aspects of our business will be measurable, and therefore to paraphrase the famous Peter Drucker saying, they can actually be managed in a more direct and effective way than ever before possible.
Internet of Things: The Next-Generation Customer Experience
IoT will also be critical to the next generation of customer experience, allowing us create more personalized and far more useful experiences while maintaining direct and continuous connection — and most importantly, value exchange — with our customers like never before. Customer experience is the product we must all produce in the future and IoT is how we’ll realize it. As Stuart Lonbard, CEO of Ecobee, noted last week during his appearance on DisrupTV.
As the current wave of Internet of Things emerged on a scene a few years ago, I wrote an analysis on whether IoT is truly strategic to the enterprise (short version: it is.) Though the exact growth projections continue to be debated, given the inevitably vast numbers of devices and the staggering data volumes they’ll create (large enough that it’s even driven the need to push cloud capabilities back to the edge of the network), it’s now evident that IoT will be the largest new technology industry to date, far eclipsing even mobile computing.
In other words, tens of billions of connected IoT devices, many streaming rich media and other high volume data types around the clock, are already in the process of arriving today and steadily over the next few years. In the process, they will remake the digital and business landscape as they do, as they represent enormous opportunity for new disruptive new products, services, and business models. At the same time, IoT will also pose very significant infrastructure, operational, management, governance, and security challenges for most enterprises due to scale, skill shortages, build-out, and related issues. Organizations must prepare at the highest level for this and put IoT in the middle of their digital value chain as they digitally transform. The resulting IoT strategies will determine their future as a business in profound way.
It’s evident that IoT is a core part of the future of digital and is the next customer experience mandate. We will simply have to be connected to our stakeholders in this way, holding them close across myriad digital channels, providing value in a way that only real, sustained, and live connectedness and engagement can.
Deep Digital Connectedness Requires a New Mindset
To help frame up this story, I was pleased to contribute recently to a significant new IoT strategy ebook produced by SAP, along with many of my industries colleagues. The book does an excellent job teeing up the mindset and thinking required to capitalize on the historic opportunity of the Internet of Things. Thanks to Amisha Ghandi, Jim Dever, and the SAP team for inviting me to contribute. Note: My contributions start on page 7.
The Future of IoT ebook itself is free, has a nice digital customer experience of its own, and covers the following topics:
1. Focus Forward on the IoT and Business
2. The “Intelligence of Things”
3. The evolution of smart devices and how business will leverage the IoT
4. The Customer Journey
5. How will the IoT affect the daily lives of consumers?
6. The Internet of Truth
7. Concrete data leads to better decisions
8. The Forward Focus of Business
9. Strategic advice on the IoT for business leaders
Other contributors were an all-star cast and include Ronald van Loon, Yves Mulkers, Maribel Lopez, Bob Egan, Christina “CK” Kerley, Bill McCabe, Ahmed Banafa, Joan Carbonell, Jim Harris, Daniel Newman, Evan Kristel, Chuck Martin, Dez Blanchfield, Isaac Sacolick, and Giulio Coraggio. Brian Solis also shared his thoughts about the ebook as well.
This morning I spoke to the International Payments 2017 conference with a talk about data transformation. I have written about this theme before, and they asked me to turn the ideas into a talk. It’s an interesting conference – because the payments industry is in the throes of a massive change, as new technologies approaches and entrants emerge.
For example Alipay, the payments arm of Alibaba, the Chinese ecommerce company attended, and it was pretty mind-blowing to learn that you can now buy from KFC in China using facial recognition. No phone, no dongle, just bring your face. Alipay has some really interesting new approaches to lightweight risk management, underpinning an API-driven approach to payments. In China everything is about processing stuff faster at the point of sale – with such a huge population, cash is seen as little more than friction. A major railway station can’t afford to have people messing around. It’s all about volumes of people, China scale. But back to my talk.
One idea I covered in some detail was the question of where data could or should be a balance sheet item. I borrowed heavily from our very own Rachel Stephens post on data and the balance sheet. Is data an asset or a liability or both? If the former, how does it depreciate, and what is the cost of managing it? Of course the answer is – it depends. Data is slippery and very hard to value, because it only ever has value in context. Generally fresh data is worth more, but in some contexts logs are more valuable: a geologist doesn’t generally care what happened yesterday. What does it mean to have a data savvy culture? What’s the value of search data, and maps?
When I first began to look at the data transformation question – enterprises becoming more data savvy it was from the perspective of gaining better insights from data. But of course a corollary is security, and the Equifax breach, which came to light last week, was a gift in terms of thinking through the issues of data governance with a group of payments professionals. Today information security state of the art seems like medicine in the age of the Plague. Sometimes it feels like we are wearing weird masks and hoping for the best. Apply your patches folks – Guy Podjarny of Snyk lays out issues and solutions here clearly and dispassionately.
Just as digital transformation has shifted testing left, making it the responsibility of the developer, rather than separate QA and testing teams, so we really need to get our acts together on secure development, patching and making security part of a data-savvy corporate culture. Consider that GDPR, a new Europe wide data standard, will introduce fines for serious breaches of up to 4% of global turnover (net sales generated by a business). Taking advantage of data will require managing it far more effectively.
Google and Facebook may have just as much data about us as Equifax, but at least it manages it properly.
Dave Kellogg is the CEO @ Host Analytics, the leader in cloud-based enterprise performance management (EPM). Previously, Dave was SVP/GM of Service Cloud at Salesforce and CEO at unstructured big data provider MarkLogic. Before that, Dave was CMO at Business Objects for nearly a decade as the company grew from $30M to over $1B. Dave has also worked in various capacities with the likes of Breeze, GainSight, Tableau, and MongoDB, and previously sat on the boards of ag tech leader, Granular (acq by DuPont for $300M) and big data leader Aster Data (acquired by Teradata for $325M).
In Today’s Episode You Will Learn:
* How Dave made his way into the world of SaaS with Salesforce, came to be CMO at Business Objects and now running his own SaaS company as CEO at Host Analytics?
* What does David believe is the single most important metric in SaaS? How should SaaS companies structure the first four lines of their financial statements? Why is retention and renewal not always an accurate sign of customer satisfaction?
* How does Dave look to analyze churn? What is the post-mortem? What is more important, logos or expansion? If a startup’s churn is too high, what are the top 3 things they should do? Why must you have a “standard taxonomy” for churn? How can you construct this?
* How does David think about taking existing customer and up-selling them? How does he view this in contrast to cross-sell? Does Dave agree with David Skok on the need for more than 1 variable pricing mechanism? Why does Dave not encourage usage based pricing?
* How does Dave analyze the benefits of multi-year contracts paid upfront? How does this distort TCV and inflate the figures? Does upfront payment misalign the provider and the consumer, in terms of care and support? With that in mind, how does David view billing frequency? Contract durations?
60 Second SaaStr
* What does Dave know now which he wishes he had known at the beginning?
* What is the 90 day rule? Why is it important?
* How much ARR should a good sales rep add in relation to comp?
