I originally envisioned this blog as a way to discuss our recent $30 million funding, led by our latest investor, Sequoia Capital, with full participation from Greylock, Sutter Hill and Accel. I’ve been incredibly impressed with the whole Sequoia team and look forward to our partnership with Pat. Yet despite 300 enterprise customers (9 of the Global 500), lots of recent success against our large competitor, Splunk, and other interesting momentum metrics, I’d rather talk about the ride and lessons learned from my first two years as a CEO.
- It’s Lonely. Accept It and Move On. My mentor, former boss and CEO of my previous company told me this, years ago. But at the time, it applied to him and not me (in hindsight I realize I did not offer much help). But, like being a first time parent, you really can’t fathom it until you face it yourself. I’m sure there’s some psychology about how certain people deal with it and others don’t. I’m constantly thinking about the implications of tactical and strategic decisions. I’ve learned that if you’re too comfortable, you’re not pushing hard enough. The best advice I can give is to find a Board member you can trust, and use him or her as a sounding board early and often.
- Trust Your Gut. There have been many occasions when I have been given good advice on key decisions. One problem with good advice, is you can get too much of it, and it isn’t always aligned. The best leader I ever met, and another long-time mentor, would always ask, ‘what is your gut telling you?’ More often than not, your gut is right. The nice thing about following your instincts, the only person to blame if it goes awry is yourself.
- Act Like It’s Your Money. I grew up in Maine, where $100,000 can still buy a pretty nice house. When I first moved to California from Boston it took me some time to get accustomed to the labor costs and other expenses. The mentality in most of the top startups in Silicon Valley is “don’t worry, you can always raise OPM (other people’s money)”. Though I understand the need to invest ahead of the curve, especially in a SaaS-based business like ours, I also believe too much funding can cause a lack of discipline. People just expect they can hire or spend their way around a problem.
- Don’t Be Arrogant. Just saying it almost disqualifies you. Trust me, I have come across all kinds. Backed by arguably the four best Venture Capital firms in the business, I have had plenty of opportunities to meet other CEOs, founders and execs. Some are incredible people and leaders. Some, however, act like they and their company are way too valuable and important to treat everyone with respect. Life is too short not to believe in karma.
- Listen Carefully. If a sales rep is having trouble closing deals, put yourself in his shoes and figure out what help he needs. If the engineering team is not meeting objectives fast enough, find out if they really understand the customer requirements. Often the smallest tweaks in communication or expectations can drastically change the results. Lastly, listen to your customer(s). It is very easy to write off a loss or a stalled relationship to some process breakdown, but customers buy from people they trust. Customers trust people who listen.
- It’s a People Business. Software will eat the world, but humans still make the decisions. We’re building a culture that values openness and rapid decision-making while aligning our corporate mission with individual responsibilities. This balance is a constant work in process and I understand that getting this balance right is a key to successfully scaling the Sumo Logic business.
- Find the Right VCs at the Right Time. I can’t take any credit for getting Greylock or Sutter Hill to invest in our A and B rounds, respectively. But I do have them to thank for hiring me and helping me. We partnered with Accel in November of 2012 and now Sequoia has led this recent investment. Do not underestimate the value of getting high quality VCs. Their access to customers, top talent, and strategic partners is invaluable. Not to mention the guidance they give in Board meetings and at times of key decisions. The only advice I can give here is: 1) know your business cold, 2) execute your plan and 3) raise money when you have wind at your back. Venture Capitalists make a living on picking the right markets with the right teams with the right momentum. Markets can swing (check Splunk’s stock price in last 3 months) and momentum can swing (watch the Bruins in the Stanley Cup – never mind they lost to the Canadiens).
- Believe. It may be cliché, but you have to believe in the mission. If you haven’t watched Twelve O’Clock High, watch it. It’s not politically correct, but it speaks volumes about how to lead and manage. You may choose the wrong strategy or tactics at times. But you’ll never know if you don’t have conviction about the goals.
OK, so I’m no Jack Welch or Steve Jobs, and many of these lessons are common sense. But no matter how much you think you know, there is way more that you don’t. Hopefully one person will be a little better informed or prepared by my own experience.