a ceo survival guide for managing growth
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Varsity CEO Summit: Keynote CEO Landmines I Have Stepped On:
A CEO Survival Guide for Managing Growth
Bob Brennan, CEO, Veracode
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CEO landmines
• Be increasingly precise • Drive clarity, including Board
– The Pitch – Functional Capabilities – The Board
• Replace bad actors and poor performers • Get the company into a routine
• Expect more from the team
• Confirm the “big deals” first hand • Take more risk
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Growth Enterprises go from Conservative to Aggressive
Start-up Growth
Search for Product/Market Fit
Search for Repeatable & Scalable Sales Model
Scale the business
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Typical Time to Build a Company to IPO is 8-10yrs
1997$ 1998$ 1999$ 2000$ 2001$ 2002$ 2003$ 2004$ 2005$ 2006$ 2007$ 2008$ 2009$ 2010$ 2011$ 1H12$Med$Age$2$Yrs$ 6.49$ 4.86$ 4.29$ 5.22$ 6.84$ 8.38$ 7.58$ 7.06$ 6.44$ 8.26$ 8.82$ 9.59$ 10.3$ 9.18$ 8.51$ 11.07$
0"
2"
4"
6"
8"
10"
12"
Med
ian$Ag
e$2$Y
rs$
Source: Thomson Reuters/National Venture Capital Association
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Characteristics of Success Change with Time
Start-up
Vision
Kinetic Energy
Creative Product/Service Design
Fungible Talent
Growth
Strategy
Execution
Fine-tuning Product/Market Fit
Human Capital Mgmt
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How Veracode’s complexity increased in 2013
• Pick a growth number… in all cases, operating the enterprise gets exponentially more complex during rapid growth – Products/Development
– People – Selling/Customers
– Finance
– Governance
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“Make or Break” Years are the Growth Years not Start-up
Start-up
Growth
Maturity
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
At 3 years
At 8-‐10 Years
At 15+ Years
Alive (Private) Dead (or Bad Outcome) PosiEve Exit (or Public)
Sources: US Bureau Labor Statistics, Kauffman Foundation, NVCA, Shikhar Ghosh/HBS Research, RCK Analysis Notes: “Positive Exit” is returning 1.0x Investor money or better, Dead/Bad Outcome is 0-1x
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Growth Phase – Highest Point of Value Creation Leverage
Metrics of Success Get Easier to Measure and More Difficult to Achieve:
• Recurring Customers
• Revenue
• Profit
Capital Structure
Entering New Geographic
Markets
Formalizing Strategy and
Execution
Board
Professional Management
Functional Expertise
Early Adopter Customers
Initial Product / Market Fit
Aspirations for Greatness
P
rofi
t
$10M+
<$0M
Start-up Phase
Mergers and Acquisitions
R
even
ue
$100M+
$5M?
C
ust
omer
s
Many
Few
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Board & Investor Stages
Self Funded
Friends, Family & Fools
Advisory Board
Early Stage VC
VC’s and Independent Director
Later Stage Investors and Independents
Late Stage VC and Private Equity
Time
IPO
Governance Skills
People Who Need a Life
Activist Investors
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Per
form
ance
Behavior
High
Low
Bad Good
Term ASAP
Move to good behavior quickly or term
Take time to develop
Increase reasonability and rewards
People
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CEO Landmines
• Be increasingly precise • Drive clarity, including Board
– The Pitch – Functional Capabilities – The Board
• Replace bad actors and poor performers • Get the company into a routine
• Expect more from the team
• Confirm the “big deals” first hand • Take more risk
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