Thinking of Stepping Down as Founder-CEO?

So this is the time of the year when founders step down. Often quietly. Folks recover a bit from the end-of-year push, reflect, and sometimes … decide it’s time to bring in someone new. A CEO to take things to the next level. Etc.  And even more of us think about it. Heck, I’ve thought about it several times over the years.

I always try to talk founders out it handing over the reigns. I always try to tell them that 95 times out of 100, a better answer is to find a strong COO or similar to help carry the load. You know so much, after all.

But sometimes, it’s just time.

When it is, then I just have one more bit of advice — You May Be Asked Back. They often shake their head No, but trust me.

Some recent-ish examples of founders coming back as CEO:

* Therese Tucker, back as CEO of Blackline
* Josh James, back as CEO of Domo
* Eoghan McCabe, back as CEO of Intercom

There are many others. CEOs will come and go. But as a founder — you are a founder forever. That title, that knowledge, that passion, and that connection can’t be taken away. And the team may need you again.

It’s OK — if it’s not too much. As long as the founders did everything they possibly could to make it work.  Everything.  And were honest.

There are two types of losses for VCs and professional investors:

• losses than fit into your “expected loss rate” … and
• unexpected, and often, abnormally high losses.

The first is OK.  The second can be Game Over, especially for a newer partner without some big wins under their belt.

Statistically, every early-stage investor is going to see some % of her investment fail, and a large other % not really make much money.  As a true angel, your effective failure rate could be as high as 90%.  As long as there is one Uber in there — you’re doing fine.  By contrast, late0stage investors can’t really afford too many large losses at all.  Because the upside is also more bounded.

But net-net in all this … investors know what they are doing.  They know the risks they are taking.  At least, when there isn’t fraud or misleading metrics and disclosure.

A little while back on LinkedIn and Twitter we put together a list of things that later, once you are successful, even very successful, you’ll regret. It got a lot of engagement from the SaaS veterans out there, so I thought it would be worth digging in more on each point.

Regrets are different than mistakes. You will make so many mistakes. We all do. You learn, you move on.

No, regrets are things that especially in recurring revenue companies, you’ll look back and say … well, I knew I should have done that at the time, and it wasn’t crazy hard, and it would have helped a lot … but I still didn’t do it. The flip side of recurring revenue is you will later regret things that you could have done earlier to help, that were sort of obvious, that would have helped more of it recur. Because later you’ll see just having gotten on one more jet, made one more key hire, and then a few years down the road, you might be $1m, $2m, $5m further along in ARR. It Compounds.

If it’s very early, hire 1 or ideally 2 sales reps who you’d personally buy from. You’ll all learn from each other how to close better, and faster.

If you are past $1m ARR or so: hire an “stretch” but experienced VP of Sales that has managed at least a small team at your price point.

It may sound like a non-answer, but it isn’t. Because most founders are good at the “middle” of the sales process. We are great at talking to customers. We know the product cold, and can tailor a solution to meet the prospect’s needs better than anyone.  But we don’t really know how to do demand gen, or outbound, or create urgency, or ask for the money, or any of that at all or all that well.  90%+ of founders just aren’t great closers. Sometimes, we’re even pretty bad closers. Because we don’t want to blow the deal. We get worried if we push too hard, we break the relationship.

So the #1 OG vertical SaaS leader is Veeva. A core CRM, data and Cloud platform for the life sciences industry, it started off as a “Salesforce for Pharma” and expanded from there.

It raised less than $10m before it IPO’d, and fast forward to day, it’s at $2.5 Billion in ARR, and is very profitable (almost $1B in non-GAAP net income), but growth has slowed to a mature 12%.  Still, Wall Street is good with the combo.  It trades at a stunning $32 Billion market cap.

Databricks had an incredible scale-up from $400M to $1.5B+ during former VP of Product Nadim Hossain’s time there. The company has gone from 1600 employees to over 5500 and most recently crossed the $2B ARR mark.

Now, he shares his top five learnings during his time at Databricks. His role covered about 40% of the engineering roadmap, which was all things Enterprise-focused.

HubSpot and Zapier’s CMO had us on their “Marketing Against the Grain” pod / videocast. We went pretty deep on:

• The real role of AI in marketing today
• Does everyone just want to be a strategist now?
• Will AI let ICs do more, with fewer managers?

And so much more! Give it a listen / watch!

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