When and How to Scale

Sharon Wienbar, ScaleVP

Vator Splash, Oakland April 2015

ScaleVP Knows Scaling

Before investing

After investing

When

Premature Scaling =

• Useless spending• Dilution• Death

Readiness = Spending When Your Value Will Increase

• Scaling optimally helps earn up-rounds and gets you to break even more predictably

• Easy money can leave; “RIP Good Times” could return any time

• Series A crunch can squeeze you

Measuring Leadership Readiness• Are you a magnet for talent, with a deep

pipeline of people?• Is the founding team aligned on goals,

strategy and risk tolerance?• Are you ready to give up some control for the

chance to soar?

Product (Literally) Ready to Scale?• Documented processes and procedures• Path from high touch to automation• Capacity

Measuring Revenue Readiness:

Cohort Everything• Are your metrics stable as you add fuel?– Cost per lead as leads grow– Conversion rates as volume grows– Rep productivity as sales force grows

• Do you have customer love?– NPS– Repeat purchases, low churn– High gross margin

How

Scaling Leadership

Like the Army, Maximize the “Tooth to Tail Ratio”

If Not Revenue or Product, Why Spend on It?

Tooth– Product– Engineers & designers– Sales & marketing– Talent pipeline– Investor pipeline

Tail– BackOps– DevOps– Rent, etc– Ping-pong & peanuts

Scaling Talent

• CEO has two critical roles: funding + team building• Know your dream team before you can afford them• If you can’t attract talent without dangling extra dollars,

reassess everything• Each hire is also a magnet for talent—get rid of repellers• Learn to be a great interviewer & who fits your culture• A great leader of “the tail” can accelerate everything by

providing analytics and processes

Grow Slowly at First, Then Faster

Product Investments

Amazon, Stripe, Twilio/RingCentral, PubNub, Parse, SendGrid, etc

• Features• Quality• Analytics (customer-facing and company)• Retention hooks and upsell paths

Marketing: Operate at Pareto Edge• Balance optimizing and growing with lots of experiments• Your LTV still theoretical, don’t push CAC up too high too fast• Seek scalable paid channels to grow when you are ready

Seek the Warm Blanket of Revenue

• Customer-funding is the most sustainable• Listen very carefully and ask lots of questions• Green money is better proof than reviews,

TechCrunch or any other “hotness”

Everyone Sells

Sales: Plan for Hiring Mistakes

• Reps you believe in will wash out• Don’t be left hanging dry with none

– Overhire by a little bit– Add in groups of 3, thinking that 1 will fail

• Focus a LOT on sales enablement and feedback– Scripts, pricing, packaging– Prepare reps – Be prepared to change based on market feedback

• Build sales leadership from the bottom up

Scaling Your Capital Base• Target investors as you would customers

– Sector, stage, competitive deals– Nurture, land and expand

• Friend-raise before you fund-raise• Fund beyond value-creating milestones• Attracting capital also = attracting talent

VC First Meetings

VC $$

Scaling “ABCs”

• Always be – Closing– Building– Hiring– Fundraising