Zack Urlocker, Scaling to a Billion and Beyond, BoS USA 2016
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Zack Urlocker is the COO of Duo Security, a venture-backed security software company. He has experience advising and investing in startups including DataStax, Hubspot, and PagerDuty. In this presentation, he discusses key ideas for scaling a startup such as finding repeatable patterns, optimizing for velocity, and being aware of disruption. He also provides tips for knowing when a company is ready to scale and signs that it may be scaling too fast.
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Zack Urlocker, Scaling to a Billion and Beyond, BoS USA 2016
- 1. Scaling To A Billion With the power of disruption Zack Urlocker COO, Duo Security ZUrlocker@duo.com Twitter: @Zurlocker
- 2. 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
- 3. 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
- 5. Duo Security • Venture-backed SaaS security • Protect users, devices, applications • 75% of customers self-deploy in 24 hrs
- 6. Four Key Ideas • Scaling requires repeatable patterns • Scale after you have market fit • Disruption changes the game • Optimize for velocity
- 7. 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+
- 8. Most Companies Scale too Fast • Find a repeatable model • Make it efficient, then scale $0-$2m $2m-$5m $5m-$15m $15m-$50m $50m-$100m+
- 9. Find Repeatable Patterns • What is driving adoption? • What are the common problems? • What are the common traits? • Industry, title, demographics • Context, competition • Lead sources
- 10. 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
- 11. Continuously Experiment • Create a learning culture • Don’t worry if experiments fail • Bad news is good news!
- 12. 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
- 13. 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
- 14. Disruption Changes The Game • An inferior solution • For an unattractive market • That changes the game
- 15. 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
- 16. Relational Database Market • $30b oligopoly market • Oracle, IBM DB2, SQL Server • Ingres, Sybase, Informix…
- 17. Disrupting the Database Market MySQL • 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
- 18. 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
- 19. 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
- 20. What Increases Efficiency? Efficiency Levers Increased deal size Higher value markets Higher value products Increased win rate Better segmentation Marketing tools, Sales skills Lower acquisition cost More inbound marketing More A/B testing Better targeting Lower service costs Better product quality More one-to-many services Increased velocity More automation Less human friction More transparency
- 21. 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
- 22. Find Your Own Path • Focus on customers • Don’t obsess over competition • Don’t worry about categories • Listen to the market
- 23. 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
- 24. What Else? • Be positive • Make a difference • Perfect is the enemy of Good • Most problems are people problems
- 25. Resources • The Innovator’s Dilemma, Christensen • HBR What Makes an Effective Executive, Drucker • Art of the Start, Kawasaki • Company, Barry
- 26. Questions? Zack Urlocker COO, Duo Security ZUrlocker@duo.com Twitter: @Zurlocker www.rock-opera.com
Notes de l'éditeur
- Scaling To A Billion Zack Urlocker Business of Software – Sept 2016
- Waiting to see if the rock opera gets traction It’s kind of a side bet
- www.startupgenome.com – 74% fail due to “premature” scaling
- Companies that scale too fast are spending too fast, hiring too fast
- In the early stage, some of these items are not bad. But they suggest you are not ready to scale
- From “The Innovator’s Dilemma” Clayton Christensen
- Many people confuse disruption with “new, faster, better, cool technology” Most of the time, disruption means an inferior product, at least based on traditional criteria
- Relational dbms market dominated by Oracle in early 2000s No innovation in years Not considered a viable area of investment
- Very few people cared about what we did. But those who did, cared a lot! By conventional criteria, MySQL was a toy
- Big companies optimize for the past, what has worked must continue to work. They will continue to protect their high $$$ high margin customers. And sometimes they focus on the wrong thing, like acquisitions, or designing a new logo
- The higher the velocity business, the more valuable Better to have many small customers than a few large ones
- Guy Kawasaki “Shopping Center Test” -- if you see your candidate 50 feet away, how you you respond?
- Bonus slide