On March 26, I spoke with an investor and two company founders who have turned ideas into companies that employ as many as 1,000 people. At the core of their success is their ability to turn an idea into a large company.
If you are trying to do that - or have dreams of the same - read on.
Brynne Kennedy: MOVE Guides
I was particularly impressed by the growth strategy of MOVE Guides, a service that helps companies relocate employees. Its CEO Brynne Kennedy hails from Pittsfield, Mass. She studied history at Yale, worked in investment banking in Hong Kong, Singapore, and Delhi and earned an MBA from London Business School (LBS). As a banker, Ms. Kennedy found it frustrating to move around and saw herself as part of a new trend towards an agile workforce.
Kennedy developed the idea for MOVE Guides while at LBS - studying the market and identifying which problems potential customers needed to solve. By the time she graduated in 2012, she had raised angel capital to start building the product. As of March 2018, the company employed 350 people in 17 offices around the world and had raised a total of $100 million in capital - most recently a $48 million Series C round in July 2017.
MOVE Guides has been growing rapidly - at a 100 percent annual rate for the last five years - with even faster 170 percent growth in 2017. As she explained, "MOVE Guides has had to change as it reached specific growth tiers. From $0 to $1 million in revenue, it was about mission and passion, everyone did everything. From $1 million to $10 million, the company was still scrappy but roles were becoming more defined and we recruited great people. From $10 to $30 million, we needed to get more specific about processes and early employees who did not fit left the company. And from $30 million to $100 million, we focus on making people accountable for measurable outcomes."
Kennedy has remained in charge throughout the company's growth over the last six years. She explained, "I was able to remain CEO because I have immense tenacity in pursuit of success and in solving problems; I have self-awareness about my strengths and weaknesses and those of my team; and I can look at the data and make hard decisions about people and where they should be in the company. My strengths are in strategy, acquisition analysis, hiring and evangelizing the market. I recruited people who are great managers who run effective processes and execute on our objectives."
Eric Yuan: Zoom
Eric Yuan is CEO of a rapidly growing video conferencing and collaboration service called Zoom. Yuan helped start WebEx which was sold to Cisco Systems in 2007 for $3.2 billion. He stayed there for four years but got frustrated and left in 2011 to start Zoom. 35 to 40 engineers left with him and by 2017 Zoom had 750,000 customers [up 67 percent from 450,000 in January 2017]. By March 2018 Zoom had over 1,000 employees. As he said, "We are growing at 300 percent annually and have raised over $145 million in capital thanks to our simplicity, quality, features and price and we have a very high net promoter score (NPS) [-- a measure of how likely a customer is to recommend the service to others --] of 72."
Yuan has a far less structured idea about how to grow - believing that culture is the most important element. As he said, "We are focused on having a high NPS. We want happy employees who are passionate about giving customers the best service. We hire people who can grow into positions of greater responsibility. Each department has specific goals that contribute to a high NPS - sales tries to get more productive; engineers focus on code quality and introducing cutting edge technology; and marketing monitors brand awareness. If you can do that at $100 million in revenues, you can do it at $1 billion."
Cack Wilhelm: Partner, Accomplice
Cack Wilhelm is a Minneapolis native who earned a history degree from Princeton and was such a great cross-country runner that she "ran for Nike for two years." She spent time as a banker at Montgomery & Co. in San Francisco and worked in sales at database-makers Oracle and Cloudera before earning her MBA at the University of Chicago. After that she spent three years at Scale Venture Capital before joining Cambridge-based early-stage investor, Accomplice in July 2017 - heading its San Francisco office.
Wilhelm has observed the growth strategies of many startups and subscribes to a model used by Battery Ventures, a Boston-based venture capital firm.
As she explained, "They have a 3x, 3x, 2x, 2x, and IPO model [meaning that after the company reaches $2 million in sales, it triples the first and second years, doubles the third and fourth years, and goes public in year five]. To get to $2 million, it's founder-led sales. Tripling to $6 million it's about sales and marketing execution with little to R&D. Getting to $20 million is about international expansion and channel opportunities. And reaching $40 million requires hiring a CFO, a general counsel, a controller and managing a distributed team. As you grow beyond that, you hire a chief revenue officer, a chief marketing officer who manages analysts, public relations, and demand generation and a head of people who is concerned with recruiting and motivating talent."
It should be clear whether a CEO is keeping up with the demands of growth. As she said, "How is employee retention and morale? Can the CEO hire exceptional talent - such as a Google executive? Does the CEO have the charisma and respect for the process needed to raise capital before it's needed?"
These successful leaders show that there are many ways to scale a business. The keys are to boost revenue by offering great service so existing customers buy more and recommend you to others -- while getting the right employees on the bus and keeping them happy.