“Leaders of Growth” is an epic compilation of interviews from top leaders in the startup industry. It is a book about business founders who grew their startups from $1 million to $25 million and beyond.

2. L e a d e r s o f G r o w t h
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Introduction
The T2D3 (triple, triple, double, double, double) acronym has become a well-
known goal in the startup scene to achieve the infamous unicorn status.1
Even
though formulating such a goal may be easy, realizing such tremendous revenue
growth is notoriously difficult.
As founders turned investors, we are in the fortunate position of helping other
founders and operators realize their ambitious goals. For investors, one of the most
important jobs is to get out of the way of talented founders and let them run their
own businesses. But when and where our advice is welcome, we often notice that
the most useful learnings stem either from one’s own experience or from that of a
founder in our network who has been in a similar situation.
Although great content is available on the start-up phase (getting to product–
market fit) or success stories (raising hundreds of millions of dollars, multibillion
dollar exits),less content is available on growing a company from $1 million to $25
million annual revenues (broadly defined as the Series A, B, and C stages).
With this book we aim to provide founders, operators, and enthusiasts with
firsthand learnings from forty-seven experienced experts on scaling rapidly-
growing companies. We touch upon the following topics:
• Founders ... the changing role of a founder (Micha Breakstone); how to en-
force culture (Felix Eichler, Braydan Young); learnings along the entrepre-
neurial Journey (e.g., Alex Theuma,Tom Brady).
• Marketing … when to hire a chief marketing officer (CMO) (Jen Grant);
build a new category (Tami); and know the importance of branding in the
enterprise company segment (Bill Macaitis). In addition, Wes Bush shares
his product-led-growth perspective and Sean Ellis his growth-hacking
viewpoint.
• Sales … how to grow internationally and launch another vertical (Matt
Chappell, Cory Munchbach); how to align the customer journey with the
sales process (Adam Tesan); how to structure your sales team (Mads Foss-
elius); and hiring trailblazing salespeople and selling to small and midsize
enterprises (Maria McMenahim).
1 T2D3 is a business tactic invented by Neeraj Agrawal: software investor and general partner
with Battery Ventures. According to this tactic, to reach a $1 billion valuation, software
companies should increase their revenue growth threefold over two years, then double it for
three years.

3. viii
L E A D E R S O F G R O W T H
• Go-to-market … building a revenue function (Sterling Snow) and how to
build a replicable go-to-market model (Mark Roberge, Jacco van der Koo-
ij).
• Tooling & Processes … which categories of tools do you need (Frederick
Becker)?
• Finance … know which type of CFO you need (Herbert Sablotony); how
to set up a reporting structure (Ben Murray); and which tools to use (e.g.,
Kasper Sommer).
• Fundraising … the differences between Series A, B, and C (Joyce MacKen-
zie Liu); managing your board and acquiring companies as a start-up (Brian
Requarth); and selecting your investors (Richard Valtr).
• HR … what people do you need in which stage (Richard Brooks), best
practices in hiring (Jonno Southam); incorporating tests in your hiring
process (Mads Faurholt); and goal setting (Daniel Gebler).
• Tech & Product … how to set up a product function (Jiří Helmich); scaling
a tech team (João Graça); and setting up a data stack (Yaniv Leven).
• Other topics … valuations (Nathan Latka); metrics (Ray Rike); venture debt
(Andrew Parker); competition (Alex Iskold); dealing with strategic inves-
tors (Sampo Hietanen); setting your pricing (Patrick Campbell); and how
to run a customer success department (Katie Christian).
It is supposed to be a light read and should feel as though you are in conversations
with them yourself. We continue the conversation via our podcast: Leaders of
Growth! (open.spotify.com/show/0tnVrn5bnbFBniVOa7Ay9T)
Arthur, Diederik & Paul

4. L e a d e r s o f G r o w t h
ix
About the authors
Arthur:
Arthur is an entrepreneur turned investor.He works as Principal at Knight Capital.
Arthur started his career at Rocket Internet before joining several venture capital
funds in the Seed and Series B+ stages. Afterward, he cofounded Flexpat, where
he went through both the hype and disillusionment of running a start-up. Arthur
specializes in scaling companies and has expertise in growth, go-to-market, and
strategy. He is the host of the Leaders of Growth podcast and is passionate about
enabling entrepreneurs to realize their visions.
Diederik:
Diederik is an entrepreneur turned investor. He is the Founder and Managing
Partner of Knight Capital, a venture capital fund that invests in entrepreneurs
building the next generation of leading software companies.Previously,he invested
in start-ups as an angel investor and through a start-up studio with Paul. He
started his career working for an international law firm, and then cofounded his
own law firm at the age of twenty-eight, specializing in mergers and acquisitions
for technology companies and venture capital firms. Diederik is passionate about
changing the world through technology and helping mission-driven founders
realize their ambitious goals.
Paul:
Paul is a serial entrepreneur turned investor. At twenty-three, he cofounded
the first event- ticketing marketplace in Europe, named GetMeIn. After three
years of bootstrapping, the business raised VC funding, and two years later they
sold the company to Ticketmaster / Live Nation (NYSE: LYV). Paul then
cofounded two other companies in the e-commerce space, which he sold five and
seven years later. Before cofounding Knight Capital, he invested in numerous
start-ups as an angel investor and through a start-up studio. Paul loves to work
with talented entrepreneurs and support them in building great companies.

5. NATHAN LATKA
Founder at Founderpath and GetLatka.com
#1 WSJ Best-Selling Author of How to Be a Capitalist without Any
Capital) with over 30k copies sold, launched first SaaS company
at 19, grew to $5m revenue, exited 2016 (Heyo.com), founder
at The Top Entrepreneurs podcast (13.5m downloads)
Funding Raised: €3.3m (Roanoke-Blacksburg
Innovation Network), €1.8m (Heyo)
Topics Discussed: Finance, Metrics
“THE ONLY THING THAT MATTERS IN
BUILDING WEALTH IS OWNERSHIP”

6. 2
L E A D E R S O F G R O W T H
Can you briefly introduce yourself?
When I was nineteen,I built Heyo,my first software-as-a-service (SaaS) company.
The company grew to a couple of million in revenue, and I sold it in 2015. I have
documented the story in my bestselling business book, How to Be a Capitalist
without Any Capital.
When I sold the business, I was frustrated that there was not much information
about SaaS companies in general. This is why I started a podcast: to pull critical
data points such as valuation, revenue, churn, customer acquisition cost, and
growth strategies. I put that up on GetLatka.com. Since 2016, I have personally
interviewed about 3,000 business-to-business SaaS CEOs and have become one
of the world’s leading SaaS content creators.
The podcast still goes out every day. It is called The Top Entrepreneurs podcast. I
sometimes joke about being the most-sued podcast, because what happens is that
I get these large VC-backed founders on the podcast. They will say things such
as, “We are growing the fastest, we are winning, we are killing everyone.” And I’ll
say, “Well, quantify that. How much money are you burning every month? What
is your ARR-to-funding ratio? What is your revenue per employee?” Because as a
matter of fact, their butts are often kicked by bootstrappers who rank much better
at these critical metrics relating to wealth generation.
The podcast has done pretty well over time, and eventually founders started asking
me to help them raise both debt and equity. In 2018, I started helping founders
when it came to closing deals with all these venture debt providers. Eventually I
decided to launch my own debt fund. So I started founderpath.com and raised a
$10 million fund.This enables me to help founders from bootstrapped companies
and convert their monthly recurring revenue (MRR) into upfront cash. We are
currently putting out about a million dollars of capital per week, specifically across
business-to-business, bootstrapped SaaS companies.
In your eyes, how is the SaaS business model going to develop?
I actually think SaaS as a business model is going to get phased out over the next
couple of years in favor of utility-based pricing. This is a different model-to-flat-
fee subscription pricing. An example is Snowflake. They do not charge SaaS fees.
They charge a usage-based fee tied to your server usage or your warehouse usage.
Amazon AWS works like this as well. I think that is the future, because customers
are sick of paying for SaaS tools they do not use. If you just tie your pricing to a

7. N at h a n L at k a
3
usage-based driver, it becomes much easier for them to conclude that they are
getting value from this software tool because they are using it.
For predictability reasons, VCs and founders want the lock-in. However, it is way
more powerful to build a tool that people use every day and that they use more
and more day after day. Your usage-based revenue is actually as predictable as how
valuable your tool is. It is interesting to compare this to so many SaaS companies
with, for example, 1,000 customers that pay $5,000 a month, from which nine
hundred have not logged in to your system in the past thirty days. The growth of
these SaaS companies might look great, but when you dig deeper into the usage
model,it is a Trojan horse.It is not real.I see a lot of Y Combinator companies that
sell their software tool to all the other Y Combinator companies. In my opinion, it
is like a fake user base, because there is no usage happening.
So I believe you are going to see a trend toward this usage-based selling, and I
think, over time, these will be the more valuable companies. We saw this with the
Snowflake IPO. Currently, I am most bullish on the companies that have a blend
of pure SaaS revenue and fixed monthly subscriptions, plus a utility-based upsell
tied to something such as number of API calls, number of contacts collected, or
amount of gigabytes storage in a warehouse.
What do you view as an important metric and how
does it evolve as companies scale?
For very early-stage companies, things such as valuation multiples are less
interesting to track because the valuation is totally dependent on the founder’s
ability to tell a great story. Net dollar retention rates are an interesting metric.The
definition of net dollar retention is that you are upselling your historical customers.
You do not see many companies with under $5 million in annual revenue and net
dollar retention rates of 130 percent or 140 percent. I do not see many founders
thinking about driving upsell by adding more product lines, adding utility-based
pricing, feature-based upselling, or seat-based upselling until they are in the $5 to
$10 million annual recurring revenue (ARR) range.Therefore, you will not see the
net dollar retention rate above 100 percent until you get to that range. However,
as companies scale and you start looking at companies with $10 to $30 million in
ARR and the need to drive real value, you have got to get net dollar retention of
above 120 percent or 130 percent.
When you look at publicly traded SaaS companies, you are obviously looking at
metrics such as the Rule of 40. So, does your cash flow margin plus your growth
over the past twelve months exceed 40 percent?

8. 4
L E A D E R S O F G R O W T H
How is the net dollar retention rate influenced
by your annual contract value (ACV)?
When your ACV (annual contract value) is low,your churn levels will look entirely
different from a business with high ACVs. It is much easier to invent an upsell
motion if you are already pricing at an ACV of 100 grand a year, as opposed to
starting smaller and trying to upsell from there.
When you have an ACV between $0 and $100 a year, it is going to be hard to
break through a 100 percent net dollar retention, and it is going to be hard not
to churn anybody. Companies with that level of ACV are probably going to have
10-15 percent revenue churn. As you go from $100 to $10,000 ACV, you start
being able to flirt with the 100 percent net dollar retention mark.This means that,
if you are churning 5 percent of your revenue, you are able to take those customers
who do stick with you and upsell 5 percent to get back to 100 percent net dollar
retention. Once ACVs are above $25,000, net dollar retention is often way above
100 percent.
Having seen lots of company failures, what are the main drivers for
valuation, and which are some underestimated drivers for valuation?
The key drivers for valuation are year-over-year growth rate and net dollar retention.
If you are growing your revenue by more than 100 percent year over year, and you
have between $10 and $40 million in annual revenue, you can get a very high
premium valuation.
A good example of that might be OutSystems, who are doing $145 million in
annual revenue. They do $90,000 in revenue per employee. The valuation on the
$145 million in revenue was $9.5 billion, which is a 65-times revenue multiple.
Another example is from Databricks. With $425 million in annual revenue, they
got a $28 billion valuation,which translates into a 66-times revenue multiple.Then
there is UiPath.They are a 33.3-times revenue multiple.
Be aware that when you are looking to fully sell your company, you are not going
to get valuations in this range.The reason is that buyers are acquiring your business
for today’s value. By contrast, VCs are buying the business on what it could be
worth in four to ten years.So this is a completely different situation.I generally put
a discount of almost 60 percent or 70 percent on what a buyer is going to value a
company at compared to what a VC is going to value the company at.

9. N at h a n L at k a
5
In your eyes, how important is valuation?
For any founder I work with, I think on how I can help them build the life they
want. This usually means making money, having more freedom, or both. So, the
only thing that matters in building wealth is ownership. Every point of equity you
give up is extremely costly.
It is interesting that the most diluting event is actually your cofounders. Usually,
the next most dilution you experience is your Seed round, unless you end up in a
really bad down round.
I bring this up for two reasons. First, consider your cofounders. I have had three
companies and all had cofounders. We moved rather slowly. Actually, we moved
slower than if it had just been me dying on the sword myself, as 100 percent owner
making yes-or-no decisions.Generally speaking,having a cofounder is a very weak
place to be in terms of them owning equity. You can pay someone a crap load of
money to intellectually be your cofounding sounding board, but you want to keep
as much equity as possible. Therefore, be careful with how you divide up equity
with your cofounding team.
Second, there is dilution from funding rounds. If you raise $1 million from a VC,
you have got to show them a way you can generate, for example, a 100-times
return. From the moment you raise money, you are on this VC track. So it is a
binary decision. If you go for the VC track, I always recommend to getting as high
as you possibly can so that you keep a higher equity stake. However, the challenge
is that the higher the valuation you raise at, the less buyers you have for your
company, and so there are less liquidity options.
So the trick for a founder to build wealth is to try and get enough leverage in your
B, C, and D rounds. If you can, you might be able to take some chips off the table,
via secondary transactions, and generate personal wealth early on.
What trends do you see regarding secondary
transactions in early stage rounds?
I am definitely seeing more secondary transactions in early stages. There is no
question about it: the trend is clear. Because there is more capital in the market,
it is fairly logical that this trend is there. Post-Covid, the US Treasury printed
trillions of dollars of capital. So in terms of purchasing power, every US dollar we
hold in our wallets is theoretically worth half of what it was a year ago.

10. 6
L E A D E R S O F G R O W T H
The reason this ties back to secondaries is because there is more cash in the
marketplace. That cash eventually finds itself into VC funds or debt funds that
support SaaS founders.As a result,SaaS founders are able to drive more competitive
terms and create larger bidding wars earlier on. Additionally, they can command a
secondary if there are multiple term sheets on the table. They would not have the
ability to do that if there were less capital in the marketplace.
How do you see the valuation premium develop?
When talking about valuations, the biggest gap I see is not one that is metrics
driven. It is usually how good of a hype woman or hype man is leading the
company. Every bootstrap founder I interview who is doing $6, $7, or $8 million
in revenue, is just focused on building. When I talk to a VC-backed founder, they
are talking about how they are going to change the world.They are,too! So actually
the biggest difference between folks getting valuation premiums and those who do
not is actually just founder DNA and whether they are great storytellers.
Now let’s go to the next step. If you are VC backed and you are telling a huge
story, what sorts of things do you have to make it true from a metrics perspective:
to start actually putting your money where your mouth is? Net dollar retention is
obviously a massive one.
Gong has a net dollar retention rate of 163 percent, which is world-class. They
have got an average-revenue-per-user of about $2,500 per month, and they are
doing over $60 million in revenue.They just raised at a $2.2 billion valuation for a
thirty-seven-times revenue multiple.
The same thing applies to ClickUp and Zeb. These are basically bootstrapped
companies who have $30 million in annual revenue. When you look at what they
were doing in terms of net dollar retention, they are at around 150 percent. There
is a little bit of a different mix here though, because their average revenue per user
is only 10 bucks a month. They are selling lots of seats into each business, but
their feature-based upselling enables them to get to that 150 percent mark. The
founder basically bootstrapped, but then went out and raised a lot of money. And
just recently they raised a round at a 33.3-times revenue multiple, with an implied
valuation of a billion dollars.
So those are some real examples of how net dollar retention correlates to the actual
valuation multiple premium.

11. N at h a n L at k a
7
Can you share some thoughts on alternative fundraising options?
There are a lot of alternative options. First, so you know my bias, I will share what
I am building. I am in the factoring business. Factoring is where I buy your SaaS
receivables, and you pay back a fixed monthly price every single month. This is
all about unlocking capital for founders very early on by factoring their monthly
contract.
This factoring business I am building is very different from revenue-based
financing, which is what you see Shopify, Money, and Stripe Capital doing. This
means you get $50,000 from Stripe Capital and you pay it back as a percentage of
revenue. When you grow very fast, you still pay this fixed percentage of revenue.
The effective interest rate on this can get up to 400 percent.This is a great business
model for Stripe, but not so great for a very quickly scaling SaaS company.
Third, you have all the term loan players. Term loan players generally want to see
more than a million in revenue. SaaS Capital, for example, wants to see more than
$3 million in revenues, and Espresso Capital in Canada wants to see at least $5
million in ARR.These parties will give you funding up to 1 times your ARR, and
then you pay it back over a four-year period. If you are good, you can negotiate a
twelve-month interest-only period.This enables you to invest the principal amount
to drive your SaaS ARR growth before you have to start paying it back.Sometimes
term loans will take warrant coverage.
These, along with really cheap bank debt at 4-6 percent, are the big options I see
right now that usually do not take any equity.Of course,there are also VC-funding
options.
Is there anything you would like to share that I did not ask about?
I would encourage founders not to get lost in the noise of chasing a Techcrunch
headline. Build something that makes you really happy. If it ends up being
something that has venture scale, great.There is nothing wrong with growing a $5
million annual top line business that provides a million bucks a year of cash flows
and you are the sole owner. In fact, you are doing better than 99 percent of VC-
backed founders.

12. 8
L E A D E R S O F G R O W T H
What content can you recommend?
I really like studying great capital allocators over time. One book that I think is
particularly interesting here is Storming the Magic Kingdom,by J.Taylor.It is a great
story about how Walt Disney fought off private equity firms in the late eighties,
when the private equity firms were trying to take over the company.That is a great
creative approach to capital allocation.
If you like pure capital allocation, read The Outsiders, by William N. Thorndike. It
has a black-and-teal cover. It is about the eight best capital allocators in history, as
measured by stock price gains. And then last, I am reading a book called The Match
King, by Frank Partnoy. It is basically a real version of Peter Thiel’s Zero to One. It
explains how the Match King built a monopoly in Europe, back in the 1800s, and
then used that monopoly to build himself a financial fortune that rivals many of
today’s fortunes.
How can people find you online?
People can find me through my newsletter (Latka SaaS Newsletter), podcast (The
Top Entrepreneurs) or websites (http://book.nathanlatka.com/). They can also
access my database with private SaaS companies through https://getlatka.com/.

13. MIKE DIAS
Founder and CEO of ScaleUpValley, Host of ScaleUpValley podcast
Scaleup Advisor to over 10+ start-ups, including unicorn Talk Desk
Topics Discussed: Scaling Framework
“NOT ALL PEOPLE FIT IN WITH ALL
STAGES: AS I SAID, AT LEAST A YEAR
BEFORE YOU NEED HIM OR HER, YOU NEED
TO LOOK FOR THE PERSON YOU MIGHT
NEED IN THE NEXT PHASE OF GROWTH”

14. 10
L E A D E R S O F G R O W T H
Can you briefly introduce yourself?
I help companies scale, typically from $1 million to $100 million in annual
revenues. My sweet spot is advising CEOs and leadership teams about scaling
up. I have had the opportunity to work worldwide with scale-ups across the US,
Europe, and Asia.
Currently—with a scale-up in the cybersecurity space called Smart Protection—I
am more hands-on. I am also involved with LEAPWORK, a scale-up in
Copenhagen. Some other companies I have worked with include the Portuguese
unicorn Talkdesk, and Unbabel, which is a Series C signatory.
When scaling, what are some of the typical traits
and challenges facing companies?
I see three patterns in all the companies successfully going, post-Series A, from $1
million annual recurring revenue, to $100 million. Number one is a radical focus,
number two is a world-class team, and number three is the culture of execution.
One lesson I have learned with the teams I have worked with is that, when you
are scaling, you go through the start-up stage again, in specific segments. Suppose
you are attacking a new geography, or a new vertical, or moving upmarket or
downstream. In that case, you need to validate your value proposition and your
go-to-market strategy all over again.
Can you elaborate on each?
First, you need radical focus—and a narrative. After all, you want to be the leader
in that segment. You want to be the leader leveraging that opportunity, but you
need to create a narrative. You need to kind of go from region to region, and from
vertical to vertical. It depends on your particular case, but go niche by niche. The
riches are in the niches.
Leaders need to discover the trends and markets that will be expanding quickly in
the next decade. That is why the VC industry is interested in backing start-ups to
leverage such opportunities. At the same time, the total potential market needs to
be large enough to create a billion-dollar company. Simultaneously, until you have
cornered a large chunk of that enormous market,you still need to proceed niche by
niche. Doing so is amazingly complicated, because it goes against the natural fear
of saying no to a certain niche or prioritizing certain niches over others.You should

15. M i k e D i a s
11
double down on what is working. Just focus on execution, putting more resources
there, and expanding it.
The second thing every VC, founder, and CEO needs is a world-class team,
leadership, and culture. It is about going from a founding team to the first version
of the leadership team, where you are kind of completing those revenue seats: the
sales seat, the customer service seat, the product seat, and so on.
Then, going through Series B and Series C, you will reach version 2.0 and 3.0
of that leadership team. At least twelve months before he or she is required, you
will need to start looking for the person you will need in the next stage. It is
almost impossible to get someone in a VP role. Failing to do so will increase the
probability of making mistakes.
Something I have not mentioned yet is the team component.They need to be stars
in their roles, but also need to be able to work in a team and behave appropriately.
This is the art component of the equation: how to make the team play as a team.
That is part of my passion for being a kind of coach to the team. I help them to
create the rituals and the culture,to perform together,to learn their differences,and
to communicate better. The most important thing is to execute goals: achieving a
vision involves having a fantastic team, one that can help us get there together.
The third topic is the culture of education, which is all about the rhythms: the
dailies,the weeklies,the monthlies,the quarterlies,the annuals,and all the internal
events. It is essential to make those rhythms sacred. For instance, you need the
rhythm of reviewing the objectives and key results, and for asking ourselves these
fundamental questions: How are we progressing? Are we measuring the right
firewalls? What should we be measuring? What will we do about moving this
metric from poor to lagging, or from lagging to on-track?
So, how can we own the quarterlies, how can we prepare for the quarter that
will start in eighteen months? If you want to go from Series A to B, from $1
million to $5 million annual recurring revenue in twelve to eighteen months, you
already need to be working on the next stage, from B to C, from $5 million to $10
million annual recurring revenue. If you start working on that when you are in the
fundraising process, it is already too late because it will be almost impossible to
execute when you get there.
A lot of companies lose two years going from one stage to another. Some go into
zombie mode and are not able to attract some of the best investors. It is also
exceedingly important to be able to grow at a certain rate and to get the timing

16. 12
L E A D E R S O F G R O W T H
right, because if you are not able to prove those kinds of growth rates, you cannot
attract the best investors.
Last, do not underestimate the importance of doubling down on the culture and
being sure you have the right people in the right seats. Always focus on the next
stage. Do not neglect those rituals. Dedicate the same amount of time to meeting
the VPs of the future as you did to leading the present VPs. Align the team with
your vision and execute with a clear focus.
What are the common pitfalls amongst those traits,
and how can you overcome them as you scale?
One of the most challenging transitions I see from Series A to Series B is going
from a founding team to the first couple of versions of the leadership team. Not all
people fit in with all stages.As I said,at least a year before you need him or her,you
need to look for the person you might need in the next phase of growth.
Another part of this is that when the team grows to over fifty to seventy people,
it will need restructuring. You need to transition from a functional mode to a
cross-functional mode. That is when you need to open new markets, open new
verticals, create enterprise boards, and so on. So you cannot play in a functional
mode anymore. The way to go is create a matrix or cross-functional, or a squad-
oriented organization, which is usually an intensive process.
Another common mistake we see leadership teams repeatedly make is trying
to simultaneously attack the entire market and not prioritize the combination
of geographical and company size verticals. If you focus on different company
sizes, verticals, and geographies all at the same time, this is an immensely complex
problem to solve. After all, you have come from a start-up background, where you
have been dealing with product–market fit and frugal resources. Now you have $5
million or $10 million in the bank, and you are ready to expand into more markets.
Often the teams do not have any criteria or segmentation in the way they think
about the verticals. They are simultaneously trying to go to enterprises, small
businesses, midsized businesses, and everything else. It is really complicated for
them to become aware that because we cannot be everything to everyone, we need
to proceed niche by niche.

17. M i k e D i a s
13
At a deeper level, how do you organize and run those meetings
you think are important to get into execution mode?
A fundamental rule is to separate execution from strategy. Dailies, weeklies, and
monthlies are all about execution. So we do not discuss strategy until we conclude
the twelve- or thirteen-week periods of the quarter. We just discuss execution.
When there is constant change in direction, it burns out a lot of teams and creates
a lot of confusion in the organization. It affects scale-ups even more, because every
single quarter, they are evolving into different companies. It will never normally be
perfect: in fact it will always be chaotic. But we need to calibrate the level of chaos.
What are your thoughts on assigning a specific
squad toward launching something new?
One lesson comes from my work with teams. Even when scaling, in certain
segments and niches, you will go through the start-up stage again: meaning you
need to again validate your value proposition and go-to-market strategy. I have
learned that when you open a huge deal, you really need to enable squads in a
small team that wields significant decision-making power as well as autonomous
behavior and mind-set. If possible, you also need the CEO to be deeply involved
in that project, and you need to get to product–market fit as quickly as possible,
just as in a start-up.
You can start with a core team, and then it usually needs someone from the
business side and someone from the technical side or product side. In addition,
you need someone from marketing and customer success.It requires the same kind
of philosophy as applied in start-ups: you have that initial sales-oriented squad,
and as you move forward,you want to adapt the products to that specific vertical or
niche.Then, on the squad, you will start including people from products and from
engineering. You do not need to have all the functions in the squad from day one,
but I really recommend that you at least need the support functions—finance and
people—and that they join the rituals, even if they are working on the corporate
functions of the scale-up.
Is there anything you would like to share that I did not ask for?
One of the common struggles I have noticed in companies going from Series
A to B and sometimes even from B to C is team related. In the beginning, the
company’s goal is to build a revenue machine that needs to be repeatable,profitable,

18. 14
L E A D E R S O F G R O W T H
and scalable. The issue is that this process is not linear, and there are lots of ups
and downs.
When that happens, there is a huge temptation to start finger-pointing. I like
approaching that problem as a revenue problem, rather than blaming someone
or a department. It is our problem. We are not trying to find who is at fault. We
are finding out what is not working, and we are correcting it together. It does not
matter if it is in sales, customer success, or product. Usually, it is not a functional
problem.
That is one difference between Series A and Series B. When you want to go from
Series B to Series C, it is usually a system problem going from $5 million to $10
million annual recurring revenue. You need an upgrade of the revenue engine, and
you are able to have this upgrade only when working as a revenue team.It is a cross-
functional problem, and that is why we see the emergence of the chief revenue
officer: this is the person who has a role of creating this revenue machine and
ensuring that customer success, marketing, products, and sales are really working
together.
Instead of having silos trying to solve functional problems, chief revenue officers
view this as a closed, end-to-end system. I think that we make this mistake again
and again: approaching cross-functional problems as a functional problem.
That often happens with scale-ups if the system and pieces of the revenue engine
are not communicating with each other. If the system is not able to work together
and produce the result it was designed for, it does not matter whether you have the
perfect piece in each of the components of the system.
Do you have some content recommendations for the readers of this book?
A great inspiration is the Scaling Up book, by Verne Harnish. On team building,
The Five Dysfunctions of a Team, by Patrick Lencioni, is a massive inspiration on
the subject of how to build leadership teams and make them collaboratively. It will
give you a better understanding of some of the biases you might have as a CEO
and a leader.
The Five Temptations of a CEO, also by Patrick, is something I also recommend.
Those five temptations apply not only to the CEO but also to any single leader
who leads the team. I recommend you check them out.

19. M i k e D i a s
15
An excellent resource is the Software as a Service napkin from Point Nine Capital.
It explains what needs to be checked as you go from Series A to B and C. In the
most recent versions, the series C column was removed from the Software as a
Service napkin, but you still can look into the previous napkins. That is a perfect
source and an excellent reference for founders and CEOs, or for leadership teams
who want to ensure they have the boxes in place to raise the next round.
Also, check out our podcast, Scaleup Valley.We have had interviews with the CEO
of Gainsight; with Nick Mehta, Chief Product Officer of Box; and with some of
the best CEOs around the world. We have over 170 podcast episodes so far.
Last, I recommend Saastr, another good podcast.
How can people find you online?
The most convenient and helpful places people can get ahold of me are at Scaleup
Valley scaleupvalley.com or at linkedin.com/in/mikescaleup/.