Scaling a Tech Startup: A Journey from $10M to $100M in Revenue
In September 2013, I took a moment to capture an image of our brand new offices - the latest symbol of our growth at Vision Critical. As I took in the sleek, modern surroundings, I reflected on how far we'd come since I first joined the company in mid-2009.
Back then, Vision Critical was a mid-sized operation. We had operations in two countries, maintained a single datacenter, and had a workforce of approximately 140 dedicated employees. While we were by no means a small operation, the Vision Critical of 2009 was a far cry from the international powerhouse it would become in just a few short years.
By 2013, our footprint had expanded dramatically. We now had a presence in 13 countries, with 16 offices and three major data centers. Our staff had grown more than sevenfold to over 1,000 employees, and our revenue had increased tenfold, bringing us to the brink of the $100 million mark. But this growth hadn't come without its challenges.
Growing Through a Downturn
Interestingly, our growth trajectory had taken off during the 2008 economic downturn. While we were expanding, our budgets were lean, to put it mildly. If we had a few bad months, we'd freeze hiring, and company-wide anxiety would spike.
As the executive overseeing business operations, product operations, research and development operations, IT, analytics, facilities, and any other areas that needed attention, my role was a challenging one. If it needed to be plugged in, it fell within my team's domain.
Every project, new hire, and expenditure required detailed justification. This responsibility extended to our team as well, given that most company activities involved some element of technology and facilities. Back then, launching a new software product wasn't a simple task. It required building servers, networks, security protocols, apps, and more - just to get started.
The Art of Procurement
Amidst this challenging environment, we became extremely adept at procurement. Our process, from identifying the need, to requesting the purchase order, to budget approval, to actual purchase, to tracking, delivery, and enablement, was executed with the utmost urgency.
However, the value we derived from this process wasn't merely in the purchases themselves. It was the discipline that this process instilled in us. We had to be ruthless in cancelling fringe projects when sales were low. Our spending plans were made in advance, and each expenditure was scrutinized for its necessity.
Spending was divided into three categories:
Keep The Lights On (KTLO): These were fundamental costs necessary for revenue acquisition and retention. We constantly sought ways to cut these costs while maintaining outcomes. These included all our systems and processes of record, such as our CRM or ERP.
Growth: These costs were tied to revenue growth. We adjusted these based on our direction - ramping up when things were going well, and dialing back when they weren't. These costs were our systems of differentiation that set us apart in the industry.
New: These were experimental initiatives, systems of innovation with unproven paths to long-term value. These were the first to be cut or paused when budgets were lean or if we were not hitting targets.
The Discipline of Decision Making
At the heart of our disciplined approach was our decision model. We had to make quick decisions on where to focus our efforts and capital. This required diligence to assess our operating engine holistically, determining where we placed our people and capital focus.
These decisions weren't just about finances; they were also about shaping our company culture. This culture of discipline, decision-making, and rapiddelivery had more impact on our identity than any foosball table or free soda Fridays could ever have.
As we look ahead, many companies may struggle with this cultural shift. After a decade of easy access to capital, they'll need to learn how to continue rapid growth while remaining cash flow neutral.
Our experience at Vision Critical, though challenging, has given us a model for navigating this landscape. By instilling discipline in our spending, adopting a rigorous decision-making model, and focusing on the right areas, we were able to grow our company substantially, even amidst an economic downturn.
Whether your business is a small startup or a growing mid-sized operation, the lessons we've learned can offer valuable insights into managing growth effectively and responsibly.
Despite the challenges that may come, remember that with the right discipline and focus, even the most ambitious growth goals can be achieved.