When we began meeting with private equity firms in 2007 to help our newly-formed company obtain an initial round of funding, I was the company CEO. At 28 years old, I felt a little out of my league as it was my first time playing that role (‘playing’ might be the operative word here).
We had completely bootstrapped the first five years for our startup, DiscoverOrg, growing revenues from $110k in year one, to over $5 million by year five, yet we knew we were at a crossroads. In order to scale the business and meet customer demands and continue enhancing the product, we needed seasoned financial, executive and operational expertise to get to the next phase of growth. Or so we thought.
At 23, I started the company along with co-founder Kirk Brown and one other employee. Through sheer force of will (and a great product) we’d successfully navigated the most precarious stage of a startup’s lifecycle. But even with this early success, in my mind, I wasn’t a ‘real’ CEO…I was the ‘starter’. Somehow, I felt that eventually, someone else more experienced would have to take over and lead continued growth. I had no experience leading two people—let alone an entire company. As I soon learned, that negative mindset and self-doubt was nearly my executive undoing.
We went into the fundraising process ready to be entirely deferential to investors. After all, they were the ones who were already successful –they’d ‘been there, done that’ many times. Surely, they knew more than I about building a successful company?
In the face of their competence (and my inexperience), my confidence flagged. I remember thinking, “If they feel we should get a new CEO I’ll just agree to do that. I’ll probably be better off in a different part of the organization anyway.”
Thankfully, we ended up declining investment in that first fundraising effort (the firm we were talking to had reduced our valuation by half, so we walked). Out of sheer necessity, I retained the role of CEO, we doubled down, and from year five to six we tripled our growth to over $15M. Today, in year 10, with a staff of 350, we are posting $71M in annual recurring revenue and 41% YOY revenue growth. Those numbers speak for themselves.
I look back on that moment now, when I was ready to hand over the role of CEO, and the magnitude of what I nearly gave up really hits me.
It’s been ten years since then, and I’ve spent a lot of time recently reflecting on how hard it can be to scale as a startup CEO. How do you shift your mindset from leading three people (probably in someone’s garage) to leading 300 people (or more), and feel entirely legit doing it? Here are key lessons I’ve learned through this sometimes-tumultuous and confidence-testing process.
Believe from the beginning you can scale as a leader
If I could go back in time and change one thing, I’d start by telling my 23-year-old self that there is no ‘starter’ CEO. You lead or you don’t; you scale or you don’t. Either way, you have to believe from the beginning that you can be successful at the helm of your company in a way that no one else can; you, after all, are the only one who has the specific skill set to lead your company—literally no one else has been built for that but you. You shouldn’t assume you need to abdicate leadership just because you haven’t led a company to success before.
Constantly redefine success
The CEO that I am today wouldn’t have been effective two years ago, and likely won’t be effective two years from now. You have to constantly redefine what success looks like and scale to that. It’s an exercise in being intellectually acute and nimble. This is applicable not only to the CEO, but to every person in your company. And you have to become adept at recognizing when people can’t move forward, or when they need to become ‘individual contributors’, versus being part of what should be a constantly evolving, growing team.
View rejection as an opportunity to retrench
When we were doing that first round of fundraising, and the private equity firm we were talking to reduced our valuation by half, we decided that instead of feeling dejected we were going to retrench, dig in our heels and work harder than we’d worked before. We recommitted to the business, rearchitected the platform and put more focus on growth. As a result, about 18 months later we closed a round at a valuation 15 times what that first firm originally offered. If you believe in your value, don’t be disillusioned by people who don’t. Use it as an opportunity to show you have something to prove and give momentum to your goals.
Know that even seemingly successful entrepreneurs are still just playing ‘whack-a-mole’
The entrepreneurial dream is yachts and champagne. The entrepreneurial reality is humility and hard work. As soon as you get a win you have to say, “Ok, what’s next?” or you run the risk of becoming obsolete. It’s way too easy to believe the hype and become complacent. At the same time, it’s easy to get discouraged by other entrepreneurs who make it look like it’s all coming together easily. I’ve often met other entrepreneurs and thought, “It must be so nice to be running your company – you guys really have it all together.” Meanwhile, I’ve learned that they’re looking at me and thinking the same thing. No matter how smooth and successful things seem from the outside, remember that internally every startup is chaotic and frenzied, and as a result, every startup CEO is really just playing whack-a-mole on the current fire she’s trying put out. In other words, the grass is brown on both sides.
Know you can out-hustle people with more experience and money.
I really believe that hard work is a great equalizer. When you launch a startup, you’re going to work harder than you’ve ever imagined working, and if you’re willing to work harder than anyone else, you can carry the day – even if someone has more money or experience. The thing that’s surprised me the most about our success is that this company was built by a group of completely inexperienced people. We were first-timers building an enterprise software play with no prior enterprise software experience.
Conventional wisdom tells us that you can’t build a big business without seasoned, senior people helping you, but we were committed and passionate and willing to work harder than our competitors.