We kicked off a new series that productized something we’ve been doing for 10+ years at SaaStr … getting top leaders to share their mistakes.  So the rest of us can get to $100m+ ARR faster, with less stress and more success.  We’ve done a ton of this content over the years, but never on a consistent basis.  The first was with Nick Mehta, CEO of Gainsight here, and it was very popular.  Next up was Jason Cohen, founder of $100m+ WP Engine.  Now Andy Byrne, CEO at Clari, adds his learnings!  He joined us some time ago at our 2017 Summer Social, when Clari was much smaller, you can chat out that great session together with the founder of Medallia below.– Jason, ed.

Mistakes are inevitable, in life and in business. They’re also invaluable learning opportunities. I hope sharing my top ten list helps my fellow entrepreneurs sidestep a few of these — and gives you more time to go make, and learn from, your own!

Mistake #1: Putting too much stock in customer excitement.

In our early days, we were like elves in Santa’s tech workshop. We did some serious product building.  We’d build. We’d fail. We’d build some more. We’d demo for customers, take their feedback (often, not quite) and go off and build some more.

The mistake we tended to make was a counter-intuitive one. When the customer loved the product — or told us so anyway — we thought our work was done. No further questions, no additional probing. We happily took it as a ‘win’ and moved on.

I think we had “happy ears.” I mean, who doesn’t love hearing positive, even wildly enthusiastic, customer feedback? But rose-colored glasses can sometimes prevent you from seeing the whole truth.

Lesson: Be the skeptic and interrogator. That’s when I had to learn to be my own skeptic, and to probe. Tell me more. What business outcome will this help you achieve? Does this fully address your major pain points? Let’s talk about implementation and past challenges when deploying technology. The fact of the matter is, when you’re innovating, there’s a lot that neither you, nor the customer, have fully thought through or anticipated. That’s when you’ve got to take the diligence to the next level. Be your own skeptic, and go deep on questions and inspection.

Mistake #2: Acquiescing too much.

As a young entrepreneur, I treated my relationship with investors as a hierarchy. They were above me, and I reported to them. It took me a while to see it as a partnership, and to see myself as a peer, and as the more informed market expert.

Lesson: Believe in yourself. The entrepreneur is the person “closest to the pin,” to borrow a metaphor from golf. I know more about what’s going on in Clari’s market than my investors. That’s my job, after all. But it took some time for me to learn to not take an investor’s advice. They are some of the smartest and strongest personalities you’ll ever run across. But over time, I learned how to activate their collective brainpower, take their input, and then I make my call. (Recently, I had an investor specifically thank me for not taking their advice. That felt good!)

Mistake #3: Management by “winging it” only takes you so far.

When it’s early days in the startup world, you don’t have many formal processes. So, whether you’re hiring or you’re selling or you’re running a leadership meeting, a lot of the time, you’re banking on your natural skills and experience to get you to a good result so you can move on to the next thing. It’s called winging it. And it’s part-and-parcel of startup life. But I got to a point myself where, despite plenty of successes, I was making missteps, too. I didn’t want to just keep winging it. The company was maturing, and I wanted to keep growing with it.

Lesson: Read, learn, run experiments. Improve. There is so much wisdom and practical advice out there if you go looking for it. Read the books and articles. Listen to the podcasts. Leverage others – advisors, board members. You can learn how to run a better weekly tactical or quarterly strategic meetings. You can tweak, or even overhaul, your approach to management and leadership by learning from the people who came before you. Try different approaches. Be diligent about learning and improving. Experiment. Keep moving forward.

Mistake #4: Not trusting my gut on early hires.

In the very early days of Clari, I made a hire that just didn’t feel right from the get-go. I had some investors in my ear, “They are probably good for this stage of the company.” It was one of my worst hires. They weren’t a good fit for that stage of the company, and they wouldn’t have been good for any stage. This individual came on board because I leaned on my investor’s advice. Not because we hit it off. Or because they were jazzed about our mission. And it showed in the day-to- day, from the negative body language to the passive-aggressive commentary that could sap the energy out of any room.

The epiphany for me came when I realized this individual was not remotely a true believer in our vision.

Lesson: Startups need true believers. I don’t mean pushovers, or “yes men.” I’m talking about people who are genuinely passionate about what you’re trying to do. People who find the unique energy and pace of a startup exhilarating, and are chomping to climb aboard the rocket ship and feel the Gs. These are also the people, btw, who are far more likely to fit culturally, because that kind of passion is contagious and inspires people and teams. If you’re not feeling that from a candidate, trust your gut and keep looking until you find it.

Mistake #5: Conflating individual strengths with people management skills

One of my earliest and biggest successes came when working closely with a very talented, extremely determined and aggressive leader. We were two days from closing our quarter, and we were also in the middle of a fundraise. One would-be investor offered us a term-sheet that was, let’s just say, less than inspiring. I turned it down, with a polite admonition: “Let’s chat after the quarter is over.”

And so, with 48 hours to go before quarter close, I worked with this leader to close 16 deals. Sixteen. Several, we closed while I was on a cross-country flight. It was hair-on-fire, adrenaline-fueled insanity — not to mention fun as hell — and we got it done, a blowout quarter! (Which also led to the favorable terms we wanted from the investor.)

All sounds good, right? No one could argue about how we closed and crushed that quarter. But the bigger picture mistake I made was allowing the massive strengths of this leader to overshadow our differences in management styles. Over time, I realized that fear-based management was simply incompatible with the culture we wanted at Clari. Without a people-first approach, there was no way we could scale to become the company we wanted to be. To be clear, this leader was top-notch, but not a cultural fit.

Lesson: Trust, empower, inspire. These are bedrock leadership principles at Clari that we instill throughout the company. Because this individual was so successful driving results, I rationalized the differences in management philosophy for too long. Yes, you need leaders that can knock down obstacles — but they need to incorporate into the management repertoire tools that build trust, empower others, and inspire. To get the best out of your talent over the long haul, Trust. Empower, Inspire.

Mistake #6: Not dialing back decibel-based decision-making.

I once had a leader who could be counted on to be the loudest voice in any given situation. They were passionate. Persuasive. They could pivot with ease from the technical argument to the business argument, and back it all up. And they could, and did, easily dominate the room. At first, I didn’t give it much thought. We were making decisions and getting stuff done. But over time, I began to realize that there were many really smart people in those meetings, and they weren’t getting anything close to equal airtime. More and more, people were walking out of meetings feeling uneasy. Was that really the best decision? Did we give the conversation its due? Was everyone heard?

Lesson: Be the equalizer. Eventually, I realized I needed to take control of the sound board and dial back that dominant voice so we could hear from all of the additional brain power and creativity that was
getting drowned out. It’s a fundamental job of leadership to make sure everyone has a voice. That’s how you facilitate the best debate, and get your teams harmonizing and improvising like a great jazz band.

Mistake #7: Not recognizing it’s always game-time.

Early in my career, I didn’t play chess very well. Not the board game with rooks and pawns — I’m talking about the “chess of venture fundraising.” Not only did I not play the game well, I didn’t recognize that the game is “always on.” Bump into a VC at your athletic club or coffee shop? Game on! You can’t afford to minimize or miss those moments. And how you engage them informally — versus, say, a formal pitch in a boardroom — takes a different kind of strategy with different moves. A lot of young entrepreneurs are so earnest, they wear their strategy and business model on their sleeve. Some VCs will pounce on that. Before you know it, they’ve extracted a trove of valuable information about your company, and they’ve moved on before you’ve had a chance to ask your first question.

Lesson: Master every moment. It took me a while to recognize and master the many different moments of fundraising. I liken it to a courtship. What’s the right amount of information in that situation? How do you keep them coming back for more? When’s the right time to make a proposal? A young entrepreneur should visualize those moments, and “game them out.” Like a novice chess player who gets to talk to a master, tap your network to learn from the entrepreneurs who have tons of experience playing the game.

Mistake #8: Too much heart, not enough backbone.

I get up every morning and I write on a piece of paper, “I will be heart-first in the way I live my life.” It’s a core value. The mistake I’ve tended to make is not balancing that heart with enough backbone. For example, I’ve hung on to some employees for too long, even when it’s become clear that the right decision for the business — and likely the individual — is to part ways. It’s especially tough when you’ve become close friends, or the person really embodies the company culture. But you can’t let those factors cloud your judgment. I also tended to be the type of leader who wants everyone to be happy, everyone to be excited, everyone to be achieving great things, and so I tended to spend a lot of time cheerleading, and not enough time being, well, tough. As with so many things, it’s about striking the right balance.

Lesson: Success in business takes equal parts heart and backbone. I had to learn that “tough = growth” — for individuals, and the company. Being clear on expectations, direct with critical feedback, and holding people accountable — this mindset must come from the top down. To put a finer point on it, saying goodbye to low performers, and elevating high performers, is good for your company culture — when it’s done ethically, with kindness and the genuine hope that the person affected comes out on the other side stronger and in a better place. You can be tough, and still have it come from the heart. When you achieve the right balance, it’s an amazing alchemy.

Mistake #9: Not knowing when to stop building.

Another one related to our maniacal building habits — we had to learn when to stop, so we could focus on go-to-market and scaling. We listened so damn carefully to the customer, at times we over-rotated and tried to engineer a solution to every possible request, and every customer whim. But that takes time, resources, and money — all in tight supply for an early-stage startup. Building a great product is important but so, too, is getting that product out to market, imperfect as it may be, and scaling to more and more customers. Growing, and in turn, getting even more and better customer feedback.

Lesson: Recognize when it’s time to scale. If Henry Ford had asked, “What kind of car does every person on the planet want?” the world would have never known the Model T.
There was a time at Clari when we felt stuck in a Groundhog Day of “request, build, request, build, request, build.” Fortunately, we had new leaders come in and express one of the most powerful concepts in business: stop. You don’t need to build anymore. Let’s get to market. Let’s sell. Let’s scale. And then let’s move on to the next product, and the next market.

Mistake #10: Seeing the company through rose-colored glasses.

As mentioned, I have a natural tendency to be the head cheerleader. I genuinely want to inspire the team, and so I can over-rotate on everything that’s positive and driving momentum. Along the way, I began to realize that if you spend too much time looking at the company through rose-colored glasses, it’s hard to see the red flags. So, kind of like George Constanza in that classic Seinfeld episode, I asked myself, “What would happen if I did the opposite?” Good things, it turns out.

Lesson: Embrace “the red.” There’s a whole lotta good stuff going on at Clari, and I’m super proud of what we’re doing and what’s ahead. But I’ve learned to embrace the bad stuff. The red flags. After all, I’m the CEO — no one is in a better position than me to turn red flags yellow, and yellow flags green. I’m the top decision-maker. I marshal the resources. I can knock down the barriers faster than anyone else. So, if I can “embrace the red,” and focus on the problems dispassionately, the company is going to win more.

And on that note, I’ll conclude — but with a slight tweak to the famous “Always be closing” rallying cry of Glengarry Glen Ross. Always be learning. If you can commit yourself to finding the lessons in the mistakes, and continually improving every day, success will follow. Every day is a gift.

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