Varsity CEO Summit: Keynote CEO Landmines I Have Stepped On:
A CEO Survival Guide for Managing Growth
Bob Brennan, CEO, Veracode
1
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
2
Growth Enterprises go from Conservative to Aggressive
Start-up Growth
Search for Product/Market Fit
Search for Repeatable & Scalable Sales Model
Scale the business
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
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
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
“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
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
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
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
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
11
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