Inc - How Aloof Should You Be as CEO?

As a CEO, is it better to be a bit aloof from the team — or work super closely with them, hands-on?

I think about this quite a bit, and noted the new CEO of Starbucks is building his own office in Newport Beach. Not moving to Seattle to work out of the HQ.

That may well work well. But I’d call it aloof. He won’t be close to the troops on a daily basis. Starbucks is a pretty big company, but still, interesting.

I also remember in the earlier days of Box, visiting their HQ. And Aaron Levie was literally sitting in the middle of all of engineering. Right in the middle of a big open group of devs. That’s as anti-aloof as you get.

So we’ve got just an earth and jaw-dropping group of CMOs and SVPs of Marketing coming to SaaStr Annual and our VIP CMO Brunch including:

CMO Snowflake

CMO Coalition

CMO Workato

CMO ChurnZero

CMO Box

CMO CheckPoint

CMO Grammarly

CMO Reverfi

CMO Zoom

CMO New Relic

CMO Nintex

CMO NextPatient

CMO Jane

CMO Totango

CMO Celona

CMO CloudBolt

CMO Carta

CMO Birdeye

CMO Folloze

CMO G2

And more!

Perhaps the biggest downside, for folks with some success under their belt … is your likely inability to truly be in control of things in a bigger firm.

Most great founders are good at being CEO but don’t actually need to be CEO, per se. But they do need to be in control of their destiny, and the destiny of their “company.”

But as soon as a VC firm is of any size, and with say > 2-3 partners, it has a life of its own:

• The past generation of partners may control many of the go-forward economics. This may rankle you. In larger, more established firms, the “emeritus” and retiring partners often maintain large economic stakes going forward, without doing any real new investing. This will eventually bother you. Because venture takes so long (10+ year fund life), you can’t really make it up unless you do the same to the next generation.
• Divergent results are a given. VCs individually don’t make that many investments. There’s no way you can all perform even reasonably equally. In many firms, just 1 or 2 partners drive almost all the returns. In the biggest and best firms, even a single $1b+ exit on its own may not even move the needle.
• Being judged, ultimately, totally on results creates ego pressures. Everyone knows who led Wiz, Figma, Datadog, etc.  Even if they say “we’re all one firm” or “we don’t do attribution”.  Of course they do.
• You’re just a number. All VC firms are constantly either passively or actively fundraising. Your own investors (the LPs) will only see you as a number — your past and prospective results. You may be OK with that. Or you may not want to be viewed, ultimately, as a piece of meat, if you are relationship driven. But if you haven’t been a professional money manager before … well … it’s different.
• You can be a great angel and a terrible VC. Just because as an angel, you got into a few hot deals where there was plenty of room for an extra $25k check doesn’t mean you’ll be able to lead a $5m round. The skillset is more different than you would expect.
• Management of a larger firm can, and often does, diverge from short and medium term results. The guys that had hits 6-8 years ago often run established firms. This makes sense. They also are the guys the LPs (the VC firm’s own investors) are really investing in. But sometimes, their best days are behind them. It’s not 2005 or 2015 anymore, folks. The world has changed. So starting by 30 makes a lot of sense.
• Smaller firms are sort of sub-scale. Yes, you can mitigate or eliminate the above issues by doing it yourself, or doing a small firm. But small firms can’t write very large checks.

Venture can be a ton of fun. And if you do a very top fund (5x+), you can make a ton of money. And in the largest firms, the salaries can be fairly high, if that’s what you are in it for.

But it’s different in terms of how it’s run than you might think. You are committing to a 14-20+ year partnership, often working for someone else. Not running your own show.

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So Monday is just a freight train right now. It just keeps scaling and scaling.  It’s now crossed $1B in ARR, still growing a stunning 34% … with 22% Free Cash Flow margins!

That’s as good as it gets in SaaS, folks. Jaw dropped.

What are the secrets? A few, but 2 stand out:

• Going multiproduct early
• 70% of their customers are outside of tech.  So they’ve been immune from most “macro” impacts.

This edition of the SaaStr Daily is sponsored in part by Sage

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