Building a Global Software Company Was the Best Education I Could Have Ever Gotten
My last company was born out of the frustration I had with the software available in the staffing and recruiting industry.
When I initially came up with the idea that would solve for that frustration, I had no idea where it would go. It started with the creation of a product, and eventually a company, named Talent Rover. And it led to building a global software company with nine offices in eight countries and customers in more than 40.
But when I look at how we ran it compared to how we’re running Place, so much is different — our operations, the processes we’ve instated, the metrics we pay attention to, and the way I think about leadership.
I learned so many things at Talent Rover, from coming up with the initial idea, battling a lawsuit early on, finding product-market-fit and go-to-market fit, opening all those international offices, and to the eventual exit.
Here are four key learnings from my experience building Talent Rover.
1. You should always be prepared to sell your company…even if you can’t imagine doing that right now
When our biggest competitor started pursuing us for acquisition, we told them no repeatedly, as we had no intentions of selling … until we signed a deal the week before Christmas in 2017. What changed? The offer.
When you’re the founder of a software company, people are constantly asking you about your exit plan. There are really three options for exiting: go public, get acquired, or keep the company and focus on profitability.
We knew we would never take Talent Rover public. We knew that most likely we would be acquired, but we hadn’t exactly been preparing for an acquisition. So when the due diligence process began, we hit a few snags.
For example, we had been selling blocks of hours of custom development work to clients but didn’t put an expiration date on them. So unused hours were just kind of floating out there in the ether, which hurt us a bit financially with our acquirer.
We also failed to maximize opportunities for top-line recurring revenue, the primary area the valuation would be based on. It was a tough lesson learned — non-recurring revenue is pretty irrelevant in the negotiation of price when you’re selling a SaaS company.
Also, I had signed hundreds of NDAs with clients, and though I read them all thoroughly before signing, I didn’t have a centralized place to save them all. We had to track them all down, along with anything else we’d signed. It may sound minor, but it took a tremendous amount of time.
Even if an acquisition seems far off, you should run your business with a future exit in mind. You never know when an incredible offer is going to show up on your doorstep, and that acquiring company is going to want the best deal possible on their side. Set yourself up now to be able to accept your dream offer.
Regardless of whether you have the opportunity for an exit or not, this will just help you run a better business.
2. Creating repeatable processes is key
There are so many competing priorities when you’re building a company, especially when you are transitioning from one stage to the next. There are more people, more things, more processes, and more unique customer situations.
So the more organized and diligent you can be about operational flow, the better. That’s one of the reasons we do things the way we do at Place — we want to give our customers simple solutions so they can easily manage revenue, produce accurate forecasts, and connect the entire company with all the data it needs in real-time.
The ultimate solution is to create repeatable processes as much as possible. That’s something people typically associate with sales — you want your sales team to have the same conversations with the same types of customers with the same pricing and contract over and over. Putting the same lens on your other processes is going to help you grow and scale quickly and efficiently.
But you need to really understand why you’re putting a process in place. If you over-engineer and a simple task ends up taking 15 steps, people are going to start creating their own workarounds.
3. You need to work on yourself as a leader
Over the years at Talent Rover and at Place, I learned countless lessons about how to be the best leader I can be. This is a journey that will never stop.
Every founder says they want the very best people. But many don’t take that next step and ask how to retain high-performing team members once they’ve hired them. My experience has taught me that the best way to keep people encouraged and motivated — and keep them from burning out — is to be human and vulnerable with them. You want to make sure that you’re not just some figurehead, but a real person they want to connect with and work with.
I’ve also found that one of the best ways to grow as a leader is to seek out people you trust and solicit feedback. For example, I belong to Pavilion’s CEO community. It’s a peer group of CEOs where we can share ideas, ask for help, and generally support each other.
I didn’t even know this kind of thing existed when I was at Talent Rover. And as a result, I ended up operating in more of a bubble.
I flew to Park City last month for a multiple-day workshop with Pavilion. It’s a huge time commitment, but it’s incredibly valuable to me and to my business.
4. It’s easy to pay attention to the wrong metrics
In the early years at Talent Rover, I thought that headcount was a key benchmark by which both people inside and outside of the company would measure our success. You hear it all the time, “Oh wow, look at their growth. They tripled their employees.”
I want to hire people, I want them to be happy, and I want them to have reasonable workloads. But I don’t want a large team just for the sake of having a large team. At the end of the day, that number doesn’t say much about my business.
Now, at Place, I’d rather look at how cash efficient we are and how happy our customers are. We obsess over a metric called time to value. Once a customer buys our product, how quickly do we deliver value to them? We never thought about that at Talent Rover, and we should have.
As proud as I am of what we built at Talent Rover, there’s so much that I would have done differently knowing what I know now. And I know that learning and growth are never finished. At Place, we’ll continue working to understand what makes a SaaS company really thrive.