CloudNY 2024: Company-Building Lessons From Early-Stage to IPO & Beyond (Part Two)
Every year, CloudNY brings together 150 CEOs from the cloud ecosystem to learn from Founders & CEOs who have built and scaled billion-dollar technology companies from the private and public ecosystem.
Since off-the-record conversations are generally the most valuable, we have kept Chatham House Rules in place for CloudNY and the specific information shared during the summit. That said, we have summarized a few select company-building lessons from CloudNY below, in the hopes that they will be helpful for Founders who could not attend but are looking to learn from those who have been where they are before.
If you haven’t yet read part one, click here.
Constraints Breeding Innovation & Building Healthy Habits
“The vast majority of all innovations come from restraints” New Relic Founder Lew Cirne shared, “Embrace your constraints.” In Lew’s case, he was referring to New Relic’s PLG business model, which forced his sales teams to sell based on real value, which in turn created a very capital-efficient company. In the case of non-PLG companies, one CEO shared that his team has artificially created a similar restraint by imposing strict rules around revenue always needing to outpace hiring.
Sunny Gupta of Apptio shared his experience during the 2008 financial crisis and the years that followed, recalling a critical moment when Apptio had to simplify its offering, explaining “We had to adopt this concept of frugality, so we decided to spend a maximum of $1M to develop our first product, which really focused us on the shortest path to the highest ROI.” This endeavor was obviously a success, and as Sunny pointed out, the habits they built and locked in during these hard times, were critical for their long-term success.
Eynat Guez of Papaya reflected on her company’s origin as a bootstrapped services business, which required having enough team members to service customers, while also ensuring that at the end of the month, she’d have enough to pay everyone’s salary. She shared that when they transitioned to a technology company and went out to raise funding, they received hundreds of rejections, which, while disappointing at the time, forced her and her team to stay scrappy and focus on building their product and acquiring customers. They eventually raised their first round after they reached $7M of ARR after years of bootstrapping, which ingrained very healthy habits in the company that continue to this day.
How the Best Companies Hire & Retain Top Performers
“When you hire a new senior team member, take them and their spouse to dinner” one Founder advised. “When that hire needs to stay late, take a last-minute business trip, or is deciding whether or not to stay at your company, their spouse is who they’ll be talking through it all with. They are on your company’s journey as well.” Zooming out, this advice speaks to the larger theme of taking big bets and going all in on them. Whether you’re making product decisions or people decisions, especially in a resource-constrained environment, this approach is the only way to actually win, and not just survive.
When it comes to finding the right talent, many commonly-held notions were dispelled by our speakers. One such belief is that you should recruit from blue-chip companies, which multiple Founders cautioned against. They advised that you should always backchannel and go several layers deep to understand that person’s actual contribution to that company before hiring them.
These candidates are also very expensive, which runs counter to another piece of advice that was shared: to look for candidates with a high ceiling who might have been overlooked because they don’t come from a blue chip company — they might have dropped out of college, or perhaps spent time as a professional athlete and now want to break into tech. Ramp’s Eric Glyman explained their strategy of looking for “slope over intercept” which involves looking beyond whether or not the candidate has already done the job you’re considering them for at another company, and looks at how high a ceiling they have, and their long-term growth potential at the company.
Another strategy that was shared for evaluating potential hires was simply to ask yourself “Can this person do this job better than me?” If the answer is yes, you want to hire a lot of those people and put your trust in them to make the right decisions. New Relic’s Lew Cirne explained, “I always trust until I’m given a reason not to […] I’ve never regretted going heavy on trust with amazing people.” If, on the other hand, you aren’t confident a candidate can do a given job better than you can, you should likely hold off on the hire. As another CEO shared, “We’d rather take on the pain of waiting for the right person.”
Sunny Skies Ahead
One of the advantages of having the CEOs of Ramp and Papaya as CloudNY speakers is that between the two of them, they have unique visibility into the data around how companies are spending and hiring. Fortunately, they both had good news to share — both spending and hiring have increased from 2023, and continue to climb. Similarly, in hearing from Dataiku’s Florian Douetteau and Algolia’s Bernadette Nixon, it’s clear that enterprise adoption of AI is speeding up, and in some cases (as with Algolia) is already fully ingrained into every aspect of the product.
Looking beyond the current climate, it was also incredibly impactful and inspiring to hear from Founders and CEOs who have led through multiple economic cycles and achieved successful exits, who spoke to not only surviving the difficult times, but also shared specific examples of how those difficult times ended up being crucial to their long-term success.
CloudNY 2024 was a truly incredible day, and we’re grateful to our partners at Battery Ventures, to our sponsors at Golub Capital, Cooley, AWS, Comerica Bank, and Qatalyst, and to the 150 CEOs who spent the day learning with us. Follow us to stay in the loop for CloudNY 2025 and other exciting events to come!
