Words and pictures by Kevin Kline award winning American Journalist.
With hundreds of entrepreneurs and venture capitalists looking for the next big thing, there were certain themes that came out of the SaaStock 2016 conference in Dublin on Thursday. Here are the five lessons I took away from the event.
1. Hire smart and manage smarter
This will always be the message from any experienced business leader. However, it is more than just hiring the best and the brightest (paying them along the way). For businesses expanding into new markets like the United States, getting great employees isn’t enough.
Founders need to take the leap with the company. Will Pendergast of Frontline Ventures put it simply to business leaders: you need to personally hire the first twenty employees when expanding. In the session about scaling into the United States panelists Ray Smith, CEO of DataHug.com, and Dimitris Glezos, CEO of Athens-based Transifex, each admitted they outsourced hiring in America at first. They depended on recruitment firms to make the hires. Without oversight, the strong individuals hired did not work out. Millions of dollars were wasted.
Smith, the Irish founder of DataHug, decided to move to New York and then San Francisco. That was the best way to bring his corporate culture to the office in America.
In a moment of humor, Smith recalled what one of the American hires told him.
“Ray,” the employee said. “You can’t shoot moose from the lodge.”
I am American. That is not a phrase we use, but it’s point is there. Founders cannot phone in hiring and managing abroad. It will come back to haunt them in the end.
2. Be willing to let go of baggage
So what happens when you make those bad hires? They cost you. In multiple sessions, the lesson was clear: fire low performing employees.
Siraj Khaliq, the co-founder of the Climate Corporation, admitted he fired his chief financial officer not long after hiring him. The CFO, Khaliq said, was good but not great. Firing for the first time was difficult. After that, it was easier. In the end, it made his company stronger.
Key Moves That Got a $Billion Dollar Exit – Siraj Khaliq and Tom Lyons
3. Trust your gut
At every moment, a startup faces choices. The direction those CEOs go will have long-term implications, and cheap advice can cost a lot.
Khaliq mentioned that he chose an investor at one stage who may not have made the best offer financially. However, that investor brought insight that helped elevate the product.
“I typically go to people who have no agenda for advice,” said Boston-based Price Intelligently CEO Patrick Campbell. “Normally, everyone has agenda.”
Campbell said he seeks out advice that comes with hard data over personal examples.
He told Irish Tech News, “I don’t necessarily value as highly someone who [says], ‘I just did this, therefore you should do this.’ I really value advice from people who look at the market and really logically think through the market or a problem.”
While trusting your gut is important, sometimes you need to admit you lack product-market fit. At that point, you need to look at “adjacent opportunities” as Khaliq suggested.
He told the audience how Climate Corporation made two major pivots. His company, before being bought out by Monsanto, used weather data to provide advice to farmers. That came after two pivots: first toward agriculture (it focused on everything else at first) and later away from providing just insurance. The second pivot was difficult, because the insurance work was profitable. It made the company stronger and more desirable for a corporation like Monsanto.
Peter Reinhardt, CEO and Co-Founder of Segment, admitted he opposed the pivot that saved his company at first. By that point the company burned through more than half a million dollars with nothing to show for it except a few false signs of hope. Getting over that failure allowed the company to change.
Reinhardt explained how the pivot to a product that people actually needed felt like a mine going off. That was true success.
5. Grow smart like a cupcake baker
In one of the best analogies of the conference, co-founder of Intercom Des Traynor encouraged entrepreneurs to take the cupcake approach to building a product.
Sure, he said, you could make a wedding cake by focusing on the cake for a week, the frosting for a week, and the icing for a week. However, when you taste the final product, you will realize chocolate cake doesn’t go well with vinegar frosting and carrot icing.
Traynor suggested taking a different approach by making a cupcake perfectly first. There’s less to lose from the cupcake going wrong. Work out the kinks create a perfect cupcake. After that, scale up to a birthday-sized cake. Then, when the time is right, do a wedding cake.
Companies always have to figure out how to grow.
Duncan Lennox of Qstream, a Boston-based startup with an office in Dublin, acknowledged his business is in a transitional point. By the end of the year, QStream will have about 115 employees, nearly doubling in 2016.
“We want to focus on building great software,” he told Irish Tech News.
However, as the company grows, he has to spend more time thinking about facilities planning.
In the end, what will help growing SaaS businesses? What always helped: hiring the right people, soliciting the best advice, pivoting when the time is right, and planning for smart growth.