I stated in a recent post that developing a core set of disciplines is critical to the success of B-2-B SaaS companies. The main point being that such disciplines are universally valuable in virtually any market, but also pragmatically flexible and tactically applicable across a wide range of highly specific situations.
Because, like many things, this sounds good when you say it fast, the purpose of this post is to tackle this idea a little more slowly. The aim here is to explain and explore some of these disciplines more deeply, with an emphasis on (a) why they matter, (b) what they tend to look like within companies, and (c) how they measurably impact business outcomes. In the end, I’ll also present them within a framework to make it easier to mentally organize and actively implement them.
When companies build this set of 8 capabilities featured below, they generally put themselves in a very good position to succeed.
1. GO-TO-MARKET RIGOR: A purposeful, structured approach to what / why / how / to whom we sell.
2. TOP-LINE TACTICS: Detailed execution from top-of-funnel all the way through to successful sales, renewals, & upsells / cross-sells:
3. CLIENT JOURNEY MAPPING: Seeing the world through clients’ eyes & orienting around that vision:
4. OPPORTUNITY-LED INVESTMENT: Developing what matters most to the market and which it will reward with spend:
5. TEAM ALIGNMENT: More than just the right pieces; rather also how they fit and work together.
6. CATALYZING CULTURE: Growth mindset as a way of life & commitment to organizational health.
7. THOUGHTFUL GOAL-SETTING: Holistic attentiveness to inputs and outputs that sustain the business.
8. LEADING CHANGE: Highly developed ability to manage the one universal constant — change.
It’s important to note that one critically important discipline may seem conspicuous in its absence from this list: the capability to efficiently and effectively create world-class software solutions. I want to be careful to stress that this is so central to any SaaS business that it is a sine qua non that underpins and is interwoven into all of the other disciplines. This topic — appropriately — gets tons of coverage on this blog, so it has not been given top-billing here.
Admittedly, there is a lot to the 8 disciplines above; and they can certainly be a bit overwhelming. I find that thinking about them within a broader framework is helpful. Specifically, I like to organize them in a balanced way around a company’s primary stakeholder groups (described further in this post), with each of these disciplines addressing particularly well some of the core needs of each stakeholder group. This is what it looks like:
I find this format to offer a shared language and view for assessing the health of a company, diagnosing its pressing needs, and agreeing on priority areas for investment.
This framework continues to be an evolving work in progress, so please share any comments, questions or experiences you’ve had with any similar or divergent approaches. Oh…and…I don’t have a particularly snappy title for this framework, so if you have any recommendations, I’d gratefully welcome them — thanks in advance!
I wrote in a previous post about defining a SaaS business’ product vision, and in another one about orienting company operations around the needs of key stakeholder groups. Each of those activities plays a role in ensuring alignment and optimization of a company’s limited resources. I’ve since read this post from Josh Schachter which beautifully ties together those and many related ideas. His article “How Teams Can Outperform Using the Startup Ops Pyramid” introduces an excellent model for establishing a shared mission and “unifying any multi-disciplinary team on a single set of goals.” For years, our teams at a wide range of SaaS businesses have been using (and consistently inspecting & adapting) a similar model for this exact purpose. And while there are certainly some distinctions between our two models in terms of terminology and emphasis, my hope today is simply to build upon Josh Schachter’s excellent work.
Specifically, at the top of his Startup Ops Pyramid is the team’s vision. The article cites the very useful metaphor (made famous by former Medtronic CEO Bill George) of vision as true north for a team. It also establishes the key criterion that a vision must be simultaneously “aspirational, yet still relevant to present day.” The article provides some additional nuggets about vision, before moving on to discuss “vision pillars” (which our model would classify as “strategic pillars” (potato, po-TAH-to, as they say)) and other elements of the pyramid. What I want to double-click on here, though, is this crucially important — but maddeningly elusive — task of setting a team’s vision.
The bottom line is: setting a vision is hard. And frustrating. And, if not actively leveraged, commonly not worth the time and energy that goes into creating it. In many people’s minds, it’s right up there with crafting the much-maligned “mission statement” in terms of incurring organizational brain damage or inciting collective eye-rolling. But that doesn’t need to be the case; and I’m hoping the following points can help alleviate some of the pain — because successfully identifying your company’s true north is totally worth the effort.
More than anything else, I’ve observed what makes vision-setting hard is the monolithic and high-stakes nature of it. After all, the whole purpose is to distill the vastness of everything we are as a company and everything we want to become in the future into one statement. One single, pithy, inspiring-but-credible, non-constraining-but-also-non-delusional, universally-relevant-but-narrowly-applicable, not-too-jargon-filled, baby-bear-just-right kind of a statement. In other words, it’s extremely difficult to do, and in many ways is set-up for failure. Why? Because we want our vision / mission to be too many things to too many people and for it to do way too much. We expect the vision to be everything from the words we see on the splash-page of our website, to the opening statement we use in every sales call, to the ethos we use to recruit team-members, to the guidance we consult to set detailed performance metrics, to the all-knowing arbiter for helping us prioritize what features to build in our solution, and countless other tasks for which it is likely ill-equipped.
To battle this, my argument is NOT to grind away at defining and concisely codifying that one, shining true north. Nor is it to better delineate between terms such as vision / mission / strategy (although there are absolutely useful distinctions). Rather, I want to try to expand upon this idea of true north from being one single point of light, and re-imagine it as a whole constellation of separate, but intimately connected and interdependent guide stars, that a company can truly use to light the path forward.
Specifically, if we allow ourselves to temporarily avoid wordsmithing (i.e. forget about the loaded terms “mission” or “vision” and stop worrying about how it sounds!), we can ask and answer a whole series of questions that help us think more holistically about who and what we want to become. The collective output, of these simple but profound exercises can then be referenced as needed by a range of stakeholders. It can also be flexibly leveraged to more precisely fulfill the kinds of organizational needs described above. I call these “existential questions,” and a below are seven of them that we like to use to help create our constellation of true north stars:
1. What impact do we want to have on the world?
2. In a very general sense, what do we want to be as a company when we grow up?
3. What business are we in?
4. What is our product offering today and in its ultimate expression? Why, how, to whom (and against whom) do we sell it?
5. What are we passionate about? What are we good at? What will people pay us for? Where do all three of these things overlap?
6. What does the market think about us? How do we want to be perceived? What stands in the way of getting from the current to desired perception?
7. How do we want to work? What kind of environment do we want to create?
Using Your Constellation:
As I write this, I realize that there are so many more exercises that could be included in the list above. And yet, this seems like plenty for now. Hopefully, I’ve expanded Josh Schacter’s truth north vision from single star into a broad-based constellation of north stars to by which to navigate. The constellation can be referenced in all the ways the variety of stakeholders need: how to present ourselves in an RFP, how to represent ourselves in creating a job description, and how to talk about the product roadmap in a sensible and compelling way, for example. That’s a lot to ask of one, thoughtful, single vision statement.
But, far more important than the series of exercises, is how your organization chooses to view and use the work that comes from them. I have found that the collective output and learning from these types of exercises can offer a “true north constellation” that is at once specific and clear, but also flexible, broadly applicable, and pragmatically actionable — often far more so than a vision statement in a traditional sense. In my experience, this work is equally valuable either as a complement to your company’s existing vision statement, or as an alternative to the challenging task of crafting one.
Still, as we often say, “The hard work starts AFTER the meeting;” and this is absolutely the case in connection to these “existential questions.” Accordingly, I hope to focus a future post on steps to ensure the organization is actualizing the ideals envisioned in these exercises and getting better at doing so every single day.
In dynamic, growing organizations, the relationship between the CEO and CTO is critically important. Unfortunately, this partnership often doesn’t get the attention it deserves. And, in some ways, it is a relationship that is set up with inherent tension. So, what are some things the CEO and CTO should be making time to talk about?
This was a topic I was invited to cover, from a CEO’s perspective, at a recent gathering of CTO’s. Below is a series of short videos that capture and share some of the main points from that session.
Introduction: What is your CEO thinking (and likely not telling you)? — 7 minutes
Part 1: Re-thinking Investment: Building a Dream Home — 3 minutes
Part 2: Bridging the Gap: From Vision to Story Points — 4 minutes
Part 3: Doing vs. Building: The Whole People Thing — 4 minutes
Part 4: Nurturing Purpose: Love Languages and Left Brainers — 3 minutes
Part 5: Surviving Communications: Avoiding Death by Meeting — 5 minutes
I frequently hear people use the term “playbook” when discussing methodologies for building businesses in a rational, replicable, and scalable way. It’s hard to argue with the concept of establishing consistent best practices and optimizing critical success factors; and some investors have leveraged and honed this strategy to deliver absolutely phenomenal returns over many years. I certainly wouldn’t question these results or the benefits of such a scientific approach. Where I get leery is when people describe this kind of a sophisticated blueprint as “having a playbook” or intimating that business-building can somehow be distilled into a straight formula. And I’m definitely not a fan of the notion that a “playbook” alone is the key to assured business success. I acknowledge that the term “playbook” may just be loose shorthand, so perhaps I should chill-out and not take it so literally. But the metaphor of a standalone “playbook” carries a number of counterproductive implications that I consider are worth flagging. These include:
Lew Moorman of Scaleworks said it better still with this 2018 quote: “There’s no playbook on how to build a business. But there is a set of disciplines that can be taught in terms of experimentation. Looking at the data, there are just some patterns.” I really respect what Scaleworks does; and I couldn’t agree more with this sentiment. These “disciplines” feel adaptable, applicable, actionable, and agile…bringing a critically valuable dynamism to the straight X’s and O’s of a static playbook.
In my mind, just a few of those teachable disciplines include:
While it certainly has a major part to play, a playbook alone cannot be expected to instill these types of disciplines in an organization. Rather, a playbook is but one part of a larger ecosystem that fosters these kinds of disciplines. It goes hand in hand with with engagement models, values that shape organizational behavior and decision-making, strategies to align initiatives, and frameworks / artifacts / systems / processes to facilitate execution. I hope to further examine and unpack all of the above in many future posts.
Many small-scale SaaS businesses struggle to manage a challenge that lies at the very core of what it means to be a software company: codifying a bold product idea into a clear and compelling vision, and then translating that vision into a manageable action plan for a team to pursue in a unified, effective, efficient way.
This issue manifests itself in countless ways, but often initially appears as an organization transitions from a single product visionary and developer (commonly one and the same person) to an expanded, multi-person team with increasingly divided responsibilities. That said, companies of all sizes can continue to grapple with this issue for years; and (arguably) every growing company experiences this at some point. I’ve “been in this movie” a number of times, and I currently meet with a lot of companies for which this issue is a consistent cause of pain.
This post explores this concern and shares a few related and tested concepts, in hopes of taking steps to demystify this common business constraint. Specifically, we’ll try to more clearly define and describe a few familiar terms (and perhaps introduce a few news ones), as follows:
Product Vision: What exactly is a Product Vision (“PV”), and why do we need one? A PV clarifies the overall goal or purpose for a product or service. More so than any feature or function ever could, the PV offers a high-level sketch that communicates the essence of a product in a clear, concise manner. It provides a “True North” for anyone entrusted with stewardship over the ongoing development of the product. Without such a still-point, such stewards will always be in danger of getting whipped around by the swirling winds of multiple stakeholders’ wants and needs. Instead, a well-defined PV helps these people make sound decisions about where / how to invest limited development funds and resources — today and in the future.
Product Roadmap: The Product Roadmap (“PR”) is an often overused and misunderstood term in technology companies; it is worth putting a stake in the ground with a brief definition. At a basic level, the PR articulates how a product’s features and capabilities will evolve. As a statement of future intent, the PR inherently contains risk and uncertainty, rather than representing a statement of fact. For future iterations of a product, the PR identifies anticipated timing of general availability, planned areas of development, and the target customers’ needs that are addressed by those initiatives. By definition, the PR represents a prioritization of backlogged ideas / ambitions for how the product should evolve. Anyone associated with a product needs to have some level of understanding of the PR. First, developers need to know what they are expected to build; and internal client champions and services personnel need to have an understanding of the product they will be expected to implement and support (and so on, across every part of the organization).
The PR also facilitates a constructive dialogue between the team and external stakeholders. Product users crave an understanding of how their current wants will be met with near-term enhancements and how well their vendor-partner will anticipate future product needs. These are addressed via a well-constructed PR. In any market, the better a company is at communicating its PR (and then faithfully executing against it), the more attractive they are as a vendor-partner. Note: Although the RM may differ in form and time-horizon when applied in different development environments (e.g. Agile), its value remains high within all of them).
Product Framework: One of the big challenges, of course, is translating the high-level PV into a streamlined PR that:
This is where the Product Framework (“PF”) comes into play. The PF is a Rosetta Stone that provides two-way translation between the Product Vision and Product Roadmap. More specifically, the PF is the lens through which we view the world. It helps us break the enormity of the Product Vision into meaningful but digestible parts. Likewise, it allows us to categorize the seemingly infinite and overwhelming number of product ideas (that are vying relentlessly for inclusion on the Product Roadmap) into a manageable set of thematic buckets.
A particularly valuable PF will be of sufficiently high-level of abstract to elevate the prioritization exercise beyond a battle over the relative value of feature / capability categories. Specifically, the PF enables thoughtful, intentional prioritization in support of agreed-upon business goals, and avoids (a) the tyranny of the “features arms-race” and (b) product development driven by “the squeaky wheel.” Thank heavens for the Product Framework.
Guiding Principles: Whereas the Product Framework (and the resulting Product Roadmap) determines “WHAT” gets built in a product, a company’s Guiding Principles govern “HOW” that occurs. This in turn influences the personality, character, or brand essence of a given product / service / solution. A few examples of well-known brands from other industries, and related guiding principles that drive the character of their offerings:
These are examples of characteristics that organizations want their solutions to embody for their valued customers, so much so that they trump considerations about individual product or services features. At companies with strong conviction and commitment to Guiding Principles, they will continuously make decisions about whether or not to build different new sets of functionality, but they will stubbornly avoid developing features that compromise or undermine the agreed-upon Guiding Principles.
Closing: With this post introducing some working definitions for the above terms, I plan to revisit these concepts in follow-up posts. The goal of those future posts will be to further examine some lessons learned in these areas, and offer some tips for producing related, usable artifacts. At the very least, I’m hoping that the above explanations / definitions can help spur productive conversations, that gets teams closer to taming this ever-present challenge.
I plan to use this blog to share my thoughts and perspective on growing SaaS businesses and on building successful organizations in general. With that in mind, I thought I’d use this inaugural post to offer a bit of background about me, beyond what can be gleaned from LinkedIn and other high-gloss media. I’ll start with just a bit of personal back-story and then fast-forward to some of what I’ve learned over the past 24 months.
Back-Story: I’ve always loved teams: playing on them, cheering them, coaching them, and always learning from them. And more recently: building, leading, and continuing to evolve through them. Over the years, I observed that the best teams consistently combine two seemingly opposing competencies: First, they clearly articulate their goals and relentlessly pursue them with unity and conviction. Great teams operate efficiently and effectively, and often simply “out-execute” their competition. They do so by leveraging shared principles, well-understood operating norms, and deep experiential understanding of the opportunities and challenges they face together. On the other hand, great teams also possess the humility, introspection, and courage to adapt and change however necessary within dynamic environments and in response to inevitable setbacks. These concepts were deeply ingrained in me by a few legendary coaches, by whom I was immensely fortunate to be mentored. These people had a profound impact on my world-view; and their ideas are foundational to Lock 8’s approach to thoughtfully and consistently building successful organizations.
Fast-Forward X Years: When BoardEffect was acquired at the end of 2016, I assumed I would take a few months to transition-out and rest-up, and then do another round somewhere as a “hired software executive.” I’d been a CEO twice and a President / Managing Director / EVP Operations twice; and I loved leading growth-stage SaaS businesses. Eighteen years had flown by, and these experiences had been transformative for me personally, professionally, and developmentally. It seemed to make complete sense just to “hit replay.”
But I didn’t end-up following that familiar path into my next operating role. Instead, I’ve been on a journey since then, exploring new ways to leverage my love of operations and organizations. This exploration has ultimately led to the founding of Lock 8 Partners, a platform for investing in and optimizing the performance of small-scale SaaS businesses. I am completely energized by this next leg of my journey; and this is a brief synopsis of how I arrived at this point.
After ninety days of amicable transition, I left employment with BoardEffect’s acquirer and promptly became immersed in a number of long-deferred pet projects. As expected, I soon missed my true passion of building teams and businesses; and by July 2017, I was itching to get back into the swing of growing companies. Without a full-time role and company for which I had the requisite level of excitement, I took on a number of part-time projects with a few private equity firms. These included strategic consulting engagements, executive coaching stints, board roles, and operating assessments in connection to prospective new investments. Although these projects were stimulating and challenging, I realized by year’s end that I wanted something with more continuity. So, I committed to spending four days a week in an Executive Chair role at one of the companies with which I had been consulting; and it was fun to be fully-engaged again. I loved helping the team think through how best to unlock the significant potential of that business; and I was completely engrossed in that effort throughout the first half of 2018 (full disclosure, I remain on a more limited basis).
It was during this time and through these collective experiences that I was struck by a number of observations; and these eventually evolved into the foundational ideas behind Lock 8 Partners. To dig into those ideas, please check out Part 2 of this post here.
As I shared in my initial post for this blog, my decision to start Lock 8 Partners was driven by some long-held views, along with a number of more recent experiences and observations. This post picks up on the latter, and attempts to lay out some of the thinking behind founding this business. Specifically, the following observations and takeaways have been central to Lock 8’s strategy and approach.
The more I investigated these and other questions, the more urgency and energy I felt around answering them. As I have sought to do so over recent months, I have gained ever-increasing conviction about this as an investment model; and I believe a unique value-generating opportunity exists at this moment and juncture.
I plan to dedicate many future posts to further outlining these ideas, describing my efforts to understand them, relating their practical application, documenting my experiences in this pursuit, and sharing lessons learned along the way. I hope these will be helpful to all readers, but most specifically for operators who are working tirelessly to build successful SaaS businesses.
Thanks for reading and please come back for future posts.
At Lock 8, we think and talk a lot about operations. Which raises a valid question: what do we actually mean when we use that word “operations?”
Like most words, operations can mean a lot of things to a lot of people. The Miriam-Webster Dictionary defines it as: “performance of a practical work or of something involving the practical application of principles or processes.” I like the pragmatism of this, although it’s a bit sterile and lacks the necessary business context for use here. Separately, BusinessDictionary.com offers the following: “Operations transform resource or data inputs into desired goods, services, or results, and create and deliver value to the customers.” Again, really helpful, but a bit too theoretical to be really valuable.
Before going any further, allow me to inject what we DO NOT intend when we talk about operations (or, at least, we do not intend in any exclusive, strict, or limiting way):
Rather, when we use “operations” in the context of small-scale B2B SaaS businesses, it encompasses all of the above, and more. In fact, it represents virtually all of the complex and interrelated activities necessary to build and grow a sustainable business. Which raises another legitimate question: how can you wrap your arms and brain around something so vast and impactful? While I think that is a great question to discuss over a coffee or beer, I’ll take a crack, by offering a framework centered around a company’s stakeholders.
Very broadly speaking, many SaaS company’s stakeholders can be broken into four categories, as follows:
For me, operations encompasses all strategies / tactics / initiatives / projects / tasks that are focused on, and fall within, any of these stakeholder buckets (Market, Client, Team, and Owners…with a few caveats and qualifiers around the last group). Before the objections rain down, I’ll try to explain:
Under this model, operations would include: identifying a company’s target customer segment, articulating its value proposition, codifying its competitive positioning, establishing its packaging and pricing, defining its go-to-market strategy, scaling its selling motion, and much, much more (Bucket 1: Market).
Operations would also include: deeply studying the problems target clients are trying to solve, designing and developing a solution to address those needs, defining and delivering against a roadmap that fulfills that solution vision, mapping the journey organizations travel as they endeavor to resolve business challenges, provisioning a set of experiences that enable and augment a given solution, and much, much more (Bucket 2: Clients).
And operations would cover all of the necessary people-related needs associated with getting the right people on the bus, into the right seats, headed in the right direction, excited for the journey, and helping to power that vehicle toward a shared destination (Bucket 3: Team).
And finally, this definition would cover establishing appropriate company goals, implementing systems to monitor performance, and fostering processes to inspect and adapt to environmental changes…all in support of reaching financial milestones (Bucket 4: Owners). That being said, I consider the Owner Bucket to be different from the others in two material ways: (1) Far more so than any of the others, this group of stakeholders is focused on outputs (results, outcomes, retrospective measurements) versus inputs (sales pipeline, product backlog, key hires, etc.). (2) The owners are arguably secondarily impacted by an organization’s operations, whereas the other stakeholders are either the producers or the immediate recipients of every operating action. More on this interrelationship in a future post.
Clearly this post only begins to scratch the surface on the Grand Canyon-esque topic of company operations. But hopefully it has provided at least enough background to demystify the general scope and scale of what we are referring to when we use the term “operations” in connection to growing SaaS businesses.
(1) https://www.merriam-webster.com/dictionary/operation
(2) http://www.businessdictionary.com/definition/operations.html
