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4 Steps That Pave the Way to Massive Growth

Sumo Logic, a data analytics firm, is growing by the minute. Here's how.
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Sumo Logic is growing larger by the minute. The data analytics firm has seen sales soar 500 percent in the year-over-year. It also secured a $30 million investment from Sequoia Capital this May.

How? It picked a fast growing market and provides its customers a Quantum Value Leap, which I detail in my eleventh book, Hungry Start-up Strategy. Sumo Logic’s QVL is to cut in half a company’s total cost of ownership for data analytics while using the cloud to meet abrupt increases in customer demand.

Vance Loiselle, CEO of Sumo, focuses on four common-sense business tactics to continue the company's massive growth.

1. Hire great talent. 

Everyone talks about how critical it is to hire great talent, how there's so much of it in Silicon Valley, and how difficult it is to attract the very best. But what is great talent? How do you find, hire, and motivate it?

Loiselle says: "We hire engineers and sales people. A great engineer has at least a Masters' degree in computer science from a top program like Stanford, Columbia, or Carnegie Mellon. These people are working a big companies like Google or Facebook and we offer them a chance to make a much bigger difference in a company that‘s growing faster."

Hiring great sales people is a different challenge. "My mentor taught me that a great sales person is competitive -- regularly making 100 percent to 150 percent of sales quotas. They're athletes with street smarts who have great references and can apply creativity to a problem thrown at them in an interview," he says.

2. Focus.

The nice thing about running a startup is that in theory you could sell any product to any customer. But since startups have very little money and lots of ambition, it makes more sense to focus the limited cash on a narrow target that is most likely to help the startup realize its ambitions.

Sumo Logic focuses on two areas that it believes are most important to its customers. According to Loiselle, "We work with corporate IT guys who care about two things: keeping their sites up and running and protecting their data and applications from security threats. Knowing that we focus on these two areas drives our strategy. For example, it helps us to train our sales force."

3. Invest in culture.

As a firm scales, it risks losing the culture that helped it succeed. After all, every new person who gets hired is not steeped in the culture. That means that the founder has to invest time in communicating the culture to everyone.

"As we grew from 20 to 40 to 70 people, we introduced a layer of management. And that means that we have to keep an eye on the culture. We do it through offsite events -- for example, we participated in a Napa Valley Tough Mudder event where people carried others on their backs for 12 miles. We have hackathons once a quarter where coders go offsite and bang out code somewhat related to what we do. For us, culture means that everyone's rowing in the same direction. We have regular management meetings and all-hands calls every couple of weeks where we can rally around big wins," explains Loiselle.

4. Build formal processes.

As a company grows, it needs more structure and process. Sumo Logic is adding both but not rushing into it. Loiselle notes: "We are hiring key people, such as VPs of engineering, sales, marketing, and finance. But we are delaying hiring a VP of HR and use outsourced payroll and sales forecasting systems. That leaves me to focus on strategy and raising capital."

Last updated: Jun 30, 2014

PETER COHAN

Strategy consultant, startup investor, teacher, corporate speaker, pundit, and author of 11 books, Peter Cohan has invested in six startups, three of which were sold for a total of $2 billion. Before founding Peter S. Cohan & Associates in 1994, he worked with HBS strategy guru Michael E. Porter.




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