Scaling To A BillionWith the power of disruption

Zack UrlockerCOO, Duo SecurityZUrlocker@duo.comTwitter: @Zurlocker

Who Am I ?• Software exec, advisor, investor

• Chief Operating Officer, Duo Security• DataStax, Hubspot, PagerDuty, Puppet Labs, PubNub…

• Three billion dollar exits• Zendesk, MySQL, Active Software

• Reformed marathoner

Who Am I ?• Software exec, advisor, investor

• Chief Operating Officer, Duo Security• DataStax, Hubspot, PagerDuty, Puppet Labs, PubNub…

• Three billion dollar exits• Zendesk, MySQL, Active Software

• Reformed marathoner• Bass Player

• Best open source rock opera of 2016

Duo Security• Venture-backed SaaS security• Protect users, devices, applications• 75% of customers self-deploy in 24 hrs

Four Key Ideas• Scaling requires repeatable patterns• Scale after you have market fit• Disruption changes the game• Optimize for velocity

Yes, you need a product roadmap…

90% of Startups Self-Destruct• Validation takes 2-3x longer • Wrong-phase errors burn cash, time

$0-$2m$2m-$5m

$5m-$15m

$15m-$50m

$50m-$100m+

Most Companies Scale too Fast• Find a repeatable model• Make it efficient, then scale

$0-$2m$2m-$5m

$5m-$15m

$15m-$50m

$50m-$100m+

Find Repeatable Patterns• What is driving adoption?• What are the common problems?• What are the common traits?

• Industry, title, demographics• Context, competition• Lead sources

Optimize for Specific Patterns• Don’t scale until it’s working:

Marketing, sales efforts have a predictable yield

• Look to continuously improve performance around patterns

Continuously Experiment• Create a learning culture• Don’t worry if experiments fail• Bad news is good news!

Beware The False Dawn• Not every success is repeatable• Don’t compromise scalability for

one-off successes• Headcount growth should be

slower than revenue growth

Signs You’re Not Scaling• Every deal is customized• All decisions made at C-level• Some reps hit quota, many do not• Everyone working 60+ hours/week• More marketing spend has little impact

Disruption Changes The Game• An inferior solution• For an unattractive market• That changes the game

Are You a Disruptor?• There is an existing market• There are underserved users• You compete on different criteria• The new business is inherently

unattractive to the incumbents

Relational Database Market• $30b oligopoly market• Oracle, IBM DB2, SQL Server• Ingres, Sybase,

Informix…

Disrupting the Database MarketMySQL

• Web applications• Commodity x86• Free Open Source• Widespread distribution• Small footprint• Fast read-access

Incumbents• Mission critical• Expensive hardware• High prices• Direct sales model• Complex features• TCP benchmarks

Are You Being Disrupted?• Price becomes key• Trusted plays no longer work• New products fail to catch on• Inferior entrants are winning• Management needs a miracle

Velocity Trumps Everything• Make your product easy to

understand, easy to buy, easy to use• Every decision has impact on speed• The faster you get customers to buy,

the more robust your business

When in doubt, simplify

What Increases Efficiency?Efficiency Levers

Increased deal size Higher value marketsHigher value products

Increased win rate Better segmentationMarketing tools, Sales skills

Lower acquisition cost More inbound marketingMore A/B testingBetter targeting

Lower service costs Better product qualityMore one-to-many services

Increased velocity More automationLess human frictionMore transparency

Build a Culture That Scales• Hire people who can scale as you grow• Hire consciously competent managers with

a track record of growth & learning• Push decision making down• Diversity breeds creativity

Find Your Own Path• Focus on customers• Don’t obsess over competition• Don’t worry about categories• Listen to the market

Know More Than Your Board• Understand your market, customers

and competition• Don’t worry about how things look;

focus on how things are• Get input on strategy• Own the decisions

What Else?• Be positive• Make a difference• Perfect is the enemy of Good• Most problems are people problems

Resources• The Innovator’s Dilemma, Christensen• HBR What Makes an Effective Executive, Drucker• Art of the Start, Kawasaki• Company, Barry

Questions?

Zack UrlockerCOO, Duo SecurityZUrlocker@duo.comTwitter: @Zurlockerwww.rock-opera.com