Telling the truth about SME life today

Prepare to grow or become irrelevant

Lesson 2: Consider your partners

From the time of our first successes, various VCs and funding partners had been calling to offer us funds. Getting those phone calls was heady but in the early years, AtTask was brutally frugal about managing cash (although I do occasionally own up to the time we somehow ordered 220 whiteboard clips when we actually needed just 88.)

Despite our frugality, I hold a strong philosophy that the management of any entrepreneurial company should prepare to grow or plan to become irrelevant. If an executive is unwilling or unable to prepare for growth and even to prepare for his own eventual replacement it’s my strongly held belief that executive is in the wrong place, and should probably consider stepping away from management and going to work for somebody else.

It was in that spirit that we chose to partner with OpenView Partners, a VC firm based in Boston, Mass., for a $7m round of funding in early 2007. We selected OpenView in much the same way that OpenView selected us: OpenView by its own description is an expansion-stage investor,” with a strong track record of choosing and supporting portfolio companies that it can help grow.

OpenView is an extremely hands-on and participative partner. Their participation gives us a board that contains essential experts. We don’t do the classic board presentations to ?pitch” our success. Much to the contrary, I never sugarcoat anything for our board of advisers, and this is exactly what our OpenView partners expect. They are mentors and active participants in our company’s strategy for growth.

The access to this kind of counsel and guidance, from experts who have guided many high-growth companies in addition to our own, was at least as valuable to AtTask and potentially more than the funding they brought.

A general-purpose investor would have been a bad decision for us. We needed the hands-on expertise of individuals who?d walked the high-growth path with many other successful ventures before.

Lesson 3: Expect pain

Did I mention that fast growth requires pain?

By the first quarter of 2008 we began to realise (like many other companies) that the good economy had been covering a number of sins.

In particular, our sales organisation needed to make a complete transformation. Initially, we had been an ?opportunistic organisation in which every sales person participated in every variety of job. We have now developed a sales organisation that is segmented into four discrete functions, and we invited people with specific skills to fulfill those new roles.

Imagine the pain that process instilled. Already in the throes of a down economy, our employees had to adjust to an entirely new business orientation. They had new jobs, new territories, and needed to learn an entirely new set of skills. The result: a near 100 per cent turnover in our sales department. But alongside the pain we acquired dream customers and we achieved revenue records from these wildly happy customers beyond anything we d accomplished before.

Read lesson four on the next page…


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