Every SaaS founder dreams of their company becoming a unicorn. But what if you built not just one company valued over $1 billion, but two?
As lofty an ambition as it may seem, this double unicorn success story is no fairy tale. Jyoti Bansal, the founder of AppDynamics and Harness, shares his journey to building his second unicorn company and the critical lessons he learned along the way.
The Return to the Startup Game
In 2017, Bansal sold his unicorn company AppDynamics to Cisco for $4 billion. He thought about retiring and took around six months to travel, relax and check items off his bucket list. But as time passed, he realized just how much he missed his work.
Says Bansal, “You should be doing what you enjoy…I realized I really enjoyed the journey of building a startup.” So he decided to return to doing what he loved and started the process all over again with his new company, Harness. But you need more than a vague desire to start a business. You need a clear vision and a fundamental understanding of how to build a strong foundation. “At the core, I’m a product guy. I love building great products. But then, you know you can’t just build great products; you have to combine them with building great teams. That builds great business.”
Finally, you should also really have a passion for the problem your product solves. Bansal felt passionate about enhanced software delivery, the need that Harness meets for developers.
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The Second Unicorn Experience
There’s no question that previous experience building a successful unicorn can help for your second time around. However, it’s not all smooth sailing. There are challenges and surprises along the way.
- What Became Easier
- Fundraising: Since Bansal had a history of company success, fundraising efforts for Harness were easier since VCs approached him more enthusiastically.
- Managing Board Members: Previous experience helped him interact with the board with more confidence.
- Expectations: Based on his past as a founder, Bansal found it was much easier to plan ahead for his second run. “I didn’t know what to expect the first time. The second time, I knew much better what to expect, so that makes it much easier to plan and execute.”
- What Was Equally Challenging
- Product-Market Fit: There’s no shortcut –– finding the perfect target will always take time and hard work to get right. “Finding the product-market fit is still the same iterative process. We had to pivot at Harness as well.”
- Recruitment: Getting the right talent onboard is a critical step. You need dedicated, skilled people who have high intellect, curiosity and ambitions to grow within the company. Finding the perfect candidates willing to take a chance on a startup is tricky, but it’s worth all the work when you get them.
- Sales: You must understand how to grow your sales machine, and it isn’t easy. Bansal says, “There is always a bit of hustle that goes into sales, but in the initial years, there’s much more hustle than you would imagine…as the company got more mature, you have a sales machine…[at that point] you don’t want it to be hustle-oriented, you want it to be more systematic.” In fact, you need both to optimally grow your sales efforts. Bansal got used to the large sales machine from AppDynamics, and he tried to force that machine into Harness a bit too early. You still need to hustle at first, then scale to a more organized process.
- Surprises Along the Way
- Going back to the Beginning: From his prior experience make high-level decisions at AppDynamics, starting back at square one was a little shocking for Bansal. It was an adjustment to reset from 1,000 feet to ground level.
- The Grind: What also surprised him was the enormous willpower and effort it takes to build a new company from the start.
A Tale of Two Unicorns: Key Strategic Differences
The GTM strategy that worked for one company may not work for another. Bansal described how his sales motions differed between AppDynamics and Harness.
AppDynamics helped develop and define a market, and Harness disrupted a market. Also, the first company targeted the decision-makers only, but that type of sales motion alone often won’t cut it anymore these days. Instead, SaaS founders might be better off targeting the user and the decision-maker. It also helps to push beyond large enterprises to diversify the market pool. Harness currently targets SMBs as well as enterprise, and they focus on both the top-down and ground-up sales motion to optimize their reach.
Harness has grown exceptionally quickly, recently reaching a $1.7 billion valuation. Bansal has set his sights to even greater heights: $10 billion. With a grin, he says, “The decacorn is the new unicorn.”
- Easier With Second Startup: Fundraising, Managing the Board, Predicting the Future.
- Equally Challenging: Product-Market Fit, Recruitment, Developing Sales Treadmill.
- Surprises: Adapting from 1,000 feet to Ground Level, The Grind.
- Modern GTM: Embrace the Pincer Sales Motion.