Rapidly Scaling SaaS Companies as a 3X CEO
Randy Wootton is the CEO of Maxio, a financial operations platform helping B2B SaaS companies unlock their next stage of growth. Before Maxio, he was the Chief Strategy Officer at Seismic, the leading sales enablement platform company. Randy was also the CEO of Percolate, a fast-growing SaaS company acquired by Seismic. In his early career, he helped Microsoft and Salesforce triple their revenue growth and also held the CEO position for Rocket Fuel.
Welcome to The Future Is Borderless podcast with David Nilssen, we feature top entrepreneurs and thought leaders from around the world, those who bring a global mindset and a unique perspective to their life and business. Now, let’s get started with the show.
David Nilssen 0:23
Hey, David Nilssen here I’m the host of the show. We started The Future Is Borderless to connect with business leaders around the world who have what I refer to is a borderless mindset. And so the idea here is to share new ideas, best practices, innovations, things that will help us grow both personally and professionally, and ultimately thrive in a rapidly changing world. Now, this episode is brought to you by Doxa Talent. Doxa helps businesses source full-time highly-skilled workers from all over the world. And as a result, these companies can scale faster, increase margin and improve culture. If you want to learn how to grow your business with offshore professionals simply visit doxatalent.com. All right. Well, I’m excited for today’s show. Our guest is Randy Wootton who is a go-to-market executive who’s been helping SaaS companies grow for over 20 years. He serves as the CEO of Maxio today, which is a leading provider of billing and financial operations solutions for high-growth b2b SaaS companies. I think I got it. Got it right. Okay. In his last role, he was the chief strategy officer and president of Percolate, which is a Seismic company. And he led their transformation from a mid-market social media product to an industry-leading content marketing platform for some of the world’s largest companies. Prior to that he was the CEO of Rocket Fuel. And during his career, he’s held senior positions at both Microsoft and Salesforce. Wow, that’s a lot. Randy, welcome to the show.
Randy Wootton 1:45
Yeah, great to be here dude.
David Nilssen 1:46
Awesome. Well, look, you’ve been a CEO many, many times. I’m just curious. When did you first realize that that was a position that you’d actually like to take on? Was that an ambition from the get-go? Or was that something that just happened naturally?
Randy Wootton 1:59
Yeah, I keep doing it. I’m still trying to get it right. So we’ll see if I ever get it right. I think about my background, the one thing you didn’t mention is actually, I started in the Navy. And I went to the Naval Academy a long time ago. And when you go to the Naval Academy, it’s one of those things you’re driven by, clearly your desire to serve, do cool things, I got to fly jets. But I think at the core, it’s also about wanting to learn how to be a leader, and they call the Naval Academy, a leadership laboratory. And I think a lot of people will go there are really interested in becoming a leader in the military, much like you do at West Point, and Air Force. So this idea of being the captain of a ship is something that I wanted to do for many, many years. I had the good fortune to go to business school. And I think what translated for me as I moved from the military context to the corporate context was the same idea. Well, what’s the captain of the ship in the corporate world? And that was the CEO. And so I think, through my entire life, I’ve always wanted to be at the nexus of information. I always like, being in the middle of things and it’s fun to be the guy or the gal in the seat. And so it wasn’t ambition, I didn’t know it was gonna happen. I feel very fortunate for my first gig at Rocket Fuel. And then I think it’s easier to get the CEO gig actually done at once.
David Nilssen 3:13
Yeah, I could see that. Actually. It’s funny. I was going to ask you about like, what did you learn in the Navy that prepared you for business? I think he put that all together. So I appreciate that.
Randy Wootton 3:24
One thing that is different about the Navy versus the corporate sector, I always joke about in the Navy, it’s lead, follow or get out of the way. And you learn followership first. So that in the heat of battle, you do what you’re told, and you’re not following unlawful orders. But you certainly there’s clarity, and I take great pride in being a good follower, and then you’ll learn how to be a good leader. The big shift for me in the corporate sector was it was lead follower, let’s talk about it. And I was like, what do you mean, let’s talk about it. Is it your decision? Is it my decision, I don’t care if you just make the decision? So I think to your question, one of the really interesting things about coming from a military environment is you really have a sense for accountability for making decisions and iterating quickly, and taking accountability. And I think in big corporate settings, it’s really easy to kind of be the voice of no, like you think you can say no to everything. But it’s very rare to have people come up and say I’m taking ownership for it. And if it doesn’t work, I’m taking accountability for it.
David Nilssen 4:26
Do you think the sense of ownership and accountability is also what’s helped you sort of move up in the ranks per se?
Randy Wootton 4:32
I think so. I would say for CEOs, like there are three things to CEOs have to do. One is they have to deliver the results. If you’re not delivering results in you need to be super transparent, and having scorecards and ways of measuring things and talking about what’s working, what’s not. And if you’re not hitting the results, and you’re not transparent, you just got to show a lot of hustle. And so I think one of the things in my life, it’s always been about wait, how do I measure success? Like what are we trying to do? How do we measure success? What does world-class look like? And then being completely transparent about it. And one of my favorite reviews I got was from a senior leader at Avenue A in my review, it came back he said, Randy is the guy that if something’s going wrong, it’s going to show up at your door at eight o’clock in the morning and tell you, something’s wrong. Here’s what we’re doing. And I’ll report back to you every four hours. And like, I do think that level of accountability and transparency, you build an engender trust over time. And people get more and more confident that even if it doesn’t work, which it never always works, like you’re gonna provide transparency and invite them to participate in the solution.
David Nilssen 5:36
Yeah, I there’s a, there’s a book, I think called Radical Accountability, that sort of reminds me of funny, you describe you in the early years, and I can think of that person in my own organization. And I trust her with everything. And I keep testing her capacity. And she keeps outperforming. And so I can see why that worked.
Randy Wootton 5:54
The other part on that just one last point is I think I evolved in my understanding of that as a CEO. And so my first time as CEO and I imagine maybe for you as well, is you’re kind of fraught with the imposter syndrome, right? There is no training to become the CEO, you need to be able to understand all the different functions, you got to connect the dots, you got to pattern match, you got to anticipate it on the corners. It’s really scary. And you’re all alone. Right? You’re all alone, you got everyone below you telling you you’re doing it wrong, the investors above you are telling you, you’re doing it wrong. And you got to have this confidence to make the call. And I think that my first gig, I was perhaps more resistant to suggestions because I thought they were questioning my ability. But now on this third gig, where I’m working with an incredible general partner, Chelsea Stoner at Battery, like, I come to him regularly say, hey, I don’t know, this is what I got going on. What do you think you’ve been in the space for 10 years? You tell me about CFOs? What should we be doing? And it’s released me from a lot of self-imposed pressure and fear of failure, having had a couple of at bats as a CEO?
David Nilssen 6:59
Yeah, it’s funny, I think I do think we actually talked about this a lot with guests on the show. I think every entrepreneur, every CEO, does feel a sense of imposter syndrome. And look, if you figure that out, great. I still feel it on a regular basis, the difference is to what you said is I’m now open about it. Right? So now it’s I don’t feel like I have to have all the answers. But I can actually openly admit to my team or anybody else that hey, these are problems that we’re still trying to figure out. And that’s okay.
Randy Wootton 7:24
And I talked about that is leading with humility, which is about having self-awareness and empathy. And so the self-awareness is as CEO, you’re gonna have a strong suit. So in your opening, for example, I’m gonna go to market guy. That means, though, I can talk about business requirements, I’m not gonna go and tell you, like how you should think about Ruby on Rails versus Python. But I can omit that, and then invite people in to say, well, help me understand how you’re thinking about it. And why are you recommending x and y. And so it’s more about facilitating conversations and decision-making in areas where there’s less expertise. And in the areas where I know a little bit, it’s more around digging another level of detail, help me understand how you think about that, and why it is versus that?
David Nilssen 8:06
Yeah, yeah. One thing I’m really interested in, because I’ve been the CEO of two different organizations. But I started them both. So I got to decide that right? You’ve actually been brought into different organizations as CEO. I’m curious, though, about what the first 90 days looks like when you’re coming in a team’s already up and operating. They’ve got a history context, so on and so forth, like, how do you jump in and take ownership of that role?
Randy Wootton 8:32
Well, anytime someone needs a CEO, something’s wrong. Right? If you’re growing like crazy, and you’re knocking all your numbers out of the park, and you’re doing, the investors super excited, you don’t need a professional CEO. Now, it may be a thing in terms of situation, maybe it’s a company with a mostly software. So most of the companies that I’ve worked with are founded by really technical folks who don’t want to manage people don’t want to manage operations, and they can move into a CTO role, but they recognize they need someone to be more of the operator professional, go to market guy. So that’s the best-case scenario. When you come in and you have complementary skills, two situations I had was it was just things weren’t working and I head to come in and clean it up. So I think the first 90 days, or it actually starts before you show up, it’s the work you do on the due diligence with the investors because I’m often always brought in by a batter or to me like a PE firm or a VC firm that is syndicate that saying, we know something’s wrong, we don’t know what it is. And you spend that first 30 days phase zero, just getting up to speed and doing all your due diligence, primarily again, for me, it’s sales. So that would be like bookings, growth, churn reasons, systems, structure processes, and in the first 90 days of being the CEO in chair, you’re listening, right? You’re trying to identify and diagnose what’s happening, what’s working, what’s not, what are the big rocks, you have to go after first, and you’re doing a lot of valuation of the team. I think you send signals with everything you do in the first 30 60 90 days as the CEO and you’re often in your best interest to let go of someone on the executive team, someone is not meeting the mark, you go in you say, hey, you need to change these three things or they don’t boom. And that sends a signal to the executive team, like the old business is not going to work. And we’ve got to create this sense of urgency for change. Where do we need to go because what has been working has not been working, right. And so it’s a really different mandate than what you’ve been able to do is just have incredible success and grow it and then know, well, now I’m gonna go off and do another one and have incredible success and grow it like we would never meet in our worlds.
David Nilssen 10:35
I would love to have you tell my story then in the future, because you paint a much prettier picture than reality. But you don’t actually, so let’s talk about, you talked about being a go-to-market guy and scaling businesses, a lot of the people that I spend time with are businesses that sit within that, you know, maybe 10 million to $50 million mark, and they’re trying to get from one level to the next. Given your experience, I wonder if there’s like any suggestions you have, or any sort of correlations you’ve seen between those that succeed in doing that, and those that don’t?
Randy Wootton 11:04
Yeah. So I’m primarily a tech guy. So I’ll talk in terms of technology, there is these different inflection points. And so I think 10 million is a really good sort of benchmark for changing how you think about running a company and growing a company. Prior to that, as CEO, you’re the primary salesperson, you’re closing the deals, even if you’re the product person, you’re closing the deals, you’re the one that building the product. And so you’re really trying to ensure you have product market fit. What you often find is early-stage startups hire an expensive head of sales before they have product market fit, or an ability to drive replicable revenue. To drive replicable revenue, you have to have a predictable pipeline, you got to be able to train ramp AEs, and you’ve got to be able to have them hit their quota. If you make all that investment in marketing and sales, and you don’t have rentable motion, you’ve just burned all that VC money. So that’s often what happens is these companies get to that 30-40 million and they’re out of money. And that’s where they got to bring me in and say, okay, well, let’s reevaluate, put some more cash in and figure out what we’re going to do streamline structure, etc. So I think companies often spend money ahead of building a system. And it’s hard, like, how do you get a person who’s done it a couple of times to be a VP of sales at a series a company, there’s a lot of tension there. But I think that’s number one. Number two is, you want to be super clear in terms of what type of model you’re building. Are you going after SMB, you’re going after mid-market, you’re going after enterprise out of the gate? Are you doing a sales lead books, are you doing product lead growth, and so it’s almost like your monetization strategy. And if you’re not a go to market person, like this is where your investors, if you’re taking money from VCs, you want to make sure you’re getting a VC that has operating partners that are go to market experts who can help you think about it. So for example, there’s a guy named Bill Binch at Battery. He was at Marketo helped him globe scale, he did Pendo global scale. Now, I would go to market guy, we chat and I still learn stuff from him. But he’s an operating partner that’s available to the portfolio for first-time CEOs to really think deeply about their go-to-market strategy.
David Nilssen 13:16
Yeah. Is it hard then as your CEO coming in, in this case, turnaround scenarios? Is it hard to bring someone in at that point, then because someone that’s burned up enough cash like now they’re in a place where like, ah, we got to restructure, retool the organization, is it harder to bring those people in at that point?
Randy Wootton 13:36
Yeah, again, in the due diligence, you have to have done enough work on the modeling to understand what the burn is, and then you cut it by or you increase the burn by 30%. You reduce your forecast by whatever 20%. And you ensure you got enough cash. And as part of that, and we call it enough capital, you won’t have enough cash to be able to do a couple of moves. And no, it’s not going to work. And you want enough equity, that when you go out to hire senior executives, you’re able to say, and this is the package, because one of the things that work to your advantage is the most recent 409 A is probably going to have the company valued at a low valuation. And so you can start talking upside, but you do have to be able to sell them on we’re going to invest in sales tech, like Seismic we’re going to adapt and invest in less only, like sales readiness, we’re going to invest in BDRs, we’re going to invest in BDR. So it’s almost like the way I describe it is you want to build a go to market engine. And there’s a way of thinking about how many sales engineers do you have to AEs do you have to AM’s you have a BDR and there’s a bunch of information out there you can use for benchmarks, and you get that unit of work. And then you have the marketing and you say okay, we get this much pipeline coverage. We’re going to build the next unit of work much like on the product and engineering side, you say hey, I need one product manager to one engineering manager for engineers. I need a designer 1/3 of a designer for every product manager and you have a unit of work and so you build in scale your or product and engineering organizations. Similarly, you can’t have more engineers and you have a product manager, you can’t have a product manager without a product designer. And so on the go-to-market side, it’s really similar.
David Nilssen 15:11
Wow. So you said the mistake that often people make is that they sort of over-invest before they have product market fit. Yeah, right. So let’s pretend someone, though, has then reached that $10 million mark as inflection point for the business. Now they got to think about restructuring. What are your thoughts on the sort of next steps for them there?
Randy Wootton 15:30
So I use a rule of 80% of your AEs, need to be making at least 80% of quota before you add anybody else. Meaning you’re feeding the AE you have because if the AE is not getting fed, or the head of sales in this case, is not getting fed, they’re gonna quit. So they got to be able to make quota without putting a bunch of spiffs on top. So that’s the one I use a four to 5x pipeline coverage, meaning you want to make this much money, show me that marketing, inbound marketing, or if you have PDAs, and BDR, that are helping to do outbound out of the gate, you’re able to create five X of what you want, and you should be able to show 20 to 30% close rates. So if you put those three pieces together, you have a go-to-market engine, if you ever drive more pipeline, your AE is still closing at the rate they need to be closing, then they add another AE. Now AEs hate it when you add new AEs because their territory just shrunk. That’s where you need a head of sales, who’s able to see more broadly, like if I take on more AEs, I’m going to drive more growth. And that’s what they’re being held accountable for. So it’s a little bit different in terms of the incentives, but they’re clear metrics of putting that whole system together around the good market engine.
David Nilssen 16:44
I love the intentionality behind watching the numbers. And because if you’re investing in marketing, at the same time, you’re expanding your sales force, that tension between the two should help scale. I actually just talked to somebody yesterday, who said, I’ve been trying to scale up my sales, I doubled my sales force, and I got the same number of sales.
Randy Wootton 17:03
Because they weren’t driving the pipeline. And that’s one of the things I think of is trying to when you have because you’ll probably buy a marketing person before you buy a salesperson, right. So if you get a marketing person who’s focused on in marketing is really complicated. And that’s my background experience, demand creation, demand capture, usually start with a website and then search and you build on that all that sort of stuff, you build your list. But ultimately you’re trying to build a pipeline. And pipeline is a joint effort between marketing and sales. So you got to like hold them jointly accountable for pipeline, like marketing has to feel as a kind of can’t be, oh, I gave you all these MQLs, and you took them as SEOs, we didn’t get the right conversion rate. But the thing I love about a day, it’s literally like, you apply science to something that doesn’t seem scientific, which is sales. And it’s all in marketing, right? And you can go from the top and you look at your conversions through your funnel, it rolls into your sales pipeline, what’s going on all the way down to win rate? How do you learn and go back up? See where things are getting stuck? How do you drive initiatives and campaigns and content to affect both awareness to preference and choice?
David Nilssen 18:10
Do you expect declining efficiencies in the pipeline as you scale up?
Randy Wootton 18:15
Wow. No, why would you assume that? That’s an interesting question.
David Nilssen 18:26
Well, I mean, when you say like, hey, 80%, hitting 80% of their quota, and then hey, look, close rates are still at 20 or 30%. Like, as you start to scale up, I assume you start to test sources where you’re unlikely to hit gold every single time. Right. So, as you scale up, I would assume you’re starting to stretch, and that’s assuming that there’s a cap to you know, how far someone can.
Randy Wootton 18:49
Well, that’s what I’m saying. So, usually I’m in markets where those so for example, in Maxio, we think there’s 10,000 billing opportunities every year based on the total number of software companies. So what is the available pool, not the TAM, but like literally in market of that we saw 2000. So we had 2000 sales accepted opportunities last year. So I think there’s 8000 opportunities we’re not part of, how do you get after those eight opportunities? How do you create awareness? How do you bring people in in the market? They’re not in the market, but if they’re happening, where are they happening? So I think I’ve never lived in the world of constraint growth or tam it’s always been about how do you go get more of it? I would have argued that I think as you become a category leader, you then benefit from more people calling you first or calling you last and your close rates are probably gonna go up and I saw that a Seismic. So Seismic, when we sold Percolate to Seismic. Luckily, call them 200 million-ish, but they were 3x bigger than the competition and are closed rates are world-class. Now, having said that, we did have different segments and so close rates are different, but that was also one of my favorite things to talk to people, especially early stage CEO’s is a concept called sales velocity. Sales velocity is a combination of your average sales price, number of opportunities, win rates divided by your days to close. If you know those four metrics and talk to your investors about them, and what’s working, what’s happening, you have a deep insight into your sales engine. The one I was pointing to was, as you go up, your days to close will probably be longer because now you’re in a multi-person buying scenario, etc, your average sales price should go up, though, right? And number opportunities may be lower. And so you create a segment your strategic or enterprise segment, which has a different cost associated with it, but the close rate should still be pretty good. Now down at the bottom segment, if you’re in an SMB, really early stage, hyper-competitive market, super-fast transaction you’re selling every 10 days, a new product at a $5,000 price point, maybe your close rate is lower, but it’s because of the dynamics of the market and the price. And if your overall brand is bigger, I think you and scaling, very few companies get to 100 million, right? Like it’s one to 2% of all companies get to $100 million in revenue. If you’re there, you’re the category leader, the benefits of being a category leader, it’s going to accrue in terms of profit over time.
David Nilssen 21:19
Are you familiar with the book Play Bigger?
Randy Wootton 21:21
Of course, is one of my favorite I use it every, that’s another one that I always use is Play Pigger is to find the category where can you play leads to a strategic narrative positioning messaging, you’ve got to define the other one on that is do read Playing To Win? Playing To Win, it’s one of my favorite strategy books, I’m use it for different companies, everyone should go by it. It literally talks about what’s your aspiration? Where are you going to win? So that’s the category thing and you go into play bigger, which talks you all about category creation? And you get down to the level of thinking about, well, what are the capabilities we need to build? So do you have a inside sales motion of enterprise sales motion? And then what are the management systems? And in this case, bringing it back to borderless? Like how are you thinking about capability to manage a hybrid work environment, which is the New World Order, that’s a new capability that we’re all kind of trying to make sense of. So how do you do that? And how do you think about it? What are the systems and processes you need in place to make that work? And then that goes back up your strategy?
David Nilssen 22:20
Yep. Well, it’s funny, you’ve said category leader or category King a few times. So I had to assume that you’ve been introduced to the concept. And it’s one I’d love to and I would agree with you that actually, as you start to establish yourself as a category king, actually becomes easier to close business and people are proactively seeking you out. So I love it. Let’s talk about what you’re working on today. So you’re the CEO of Maxio. For some of the people here who may not be familiar with the company, tell us a little bit about what Maxio does, but more importantly, what’s the pain point or opportunity it’s solving for the customer?
Randy Wootton 22:51
Yeah, well, I speak to it as one who was a customer. So Maxio is a combination of two companies, one called SaaS Optics, and one called Chargify. SaaS Optics is revenue recognition, subscription management. And I just remember as CEO of a subscription business, how much time and energy I spent with my CFO and FBA team, trying to close the books, figure out the operating metrics do the investor reports, it was mind-boggling. It was always wrong, the Excel files didn’t work took too long. And so that pain was the one that I felt acutely. We bought, then at Percolate, we bought SaaS Optics, it changed my life. Like literally my CFO went from spending 10 days closing the books, and then the next 10 days of the cycle, trying to figure out all the operating metrics to be able to push a button and and get what my ARR was an LTV to capture and magic number all the SaaS operating metrics. So then day one, after the month close, I could spend time with my CEO or CFO sort of talking about what was going on. So there is an enormous around amount of efficiency gain for the CFO, financial operations professionals and the CEO. That capability I wasn’t as familiar with was Chargify, which is basically a billing capability where you credit cards, etc. And so companies that have subscription businesses that want to do credit cards, ACH, etc. Chargify was the billing engine that enabled that so we put those two things together. And now what we help companies do is bill collect and report. With 606 there’s a whole another level of terms of revenue recognition that you have to maintain subscription management and so we cover all that, GAAP compliant IFRS compliant like we’ve made it we will reduce inefficiency and risks for SaaS businesses. And why this is important Dave is because then I sold Percolate to Seismic. Seismic as chief strategy officer and I ran acquisitions. I bought a company that was a SaaS Optics customer, they were three times bigger than the other company I bought, which wasn’t a SaaS Optic customer, and all the contracts are in place. There was no issue with their customer waterfall cohort analysis, the revenue waterfall, their ARR like it all made sense and it sorted because it was all tied together in the end We sing below record. This other company 1/3, the size took probably 5x or 10x longer because a contractor in like filing cabinets. And so we have hired forensic accountants to go in and find all this stuff. And it extended the due diligence. So if you think about as a CEO of an early-stage company, and you’re trying to get investment, and you want to go through the due diligence process, and you don’t want to spend months of doing that, or you going through an acquisition, you don’t spend months of doing it, like investor grade reporting, and insights, it makes all the difference.
David Nilssen 25:29
So is it actually an accounting system or is it sit in between the accounting system and CRM.
Randy Wootton 25:33
That sits between your CRM so often that Salesforce or HubSpot in early stage company, your general ledger, which is QuickBooks or Xero, as companies get bigger, they often replace QuickBooks or Xero, with like a NetSuite or an intact, but we sit between the two. And so we take the orders as they’re registered in your CRM, do the revenue recognition that then creates a transaction journal entry in your general ledger. But we also understand that we’re the source of truth for revenue and subscription management, when’s the next customers coming up? What does that mean? How do you break out your ARR or software versus your professional services? How do you do the revenue recognition for that? And then ultimately, we track expenses as well, so we can give you cash forecasting. And in this environment, that’s the most important thing is how much cash do I have in the bank? What am I getting more? And when do I run out?
David Nilssen 26:24
Yeah, absolutely was funny, I’m chuckling to myself here, because I know so many people, I might be guilty of this at times, too. So we should probably talk where you’re waiting on that two-week closing cycle at the end of the month. So you can figure out where the heck you are, right. And I’ve seen that so many businesses, as an investor as an operator, so on and so forth. So how is it going? So you’ve joined the company in the last year, right? So like, what’s happening? And how are you guys performing?
Randy Wootton 26:49
Yeah, I mean, we’re doing well at north of 25%, year-over-year growth in 2022, which is great. I would say that to our earlier comment, like when you come into a situation as CEO, you’re spending your first 60 90 days trying to figure out what’s going on. And that came in and one of the engines was on flame. And so you had to go figure out a bunch of stuff in vain, oh, get the fire Hunter, not in and I would say the going back to play bigger. One of the things I did immediately when I came in is the integration still feel a little haphazard, like it wasn’t a really integrated experience from the UI UX. So I put a lightning strike moment out. I went to Sastre in September. So I started in June, I said, okay, by September, we’re gonna have a new website, we’re gonna have a new application. And the experience for prospects is got to be exactly the same. So we had a beautiful new brand Maxio. But it wasn’t playing out across our marketing materials or application. So by September, we had a new website, we had a new application, we had a single sign-on, we had a really, I mean, there’s some tweaks and blah, blah, blah, we gotta keep working on our design system. But it was like planting a flag and saying, we’re going to get hit this mark. And everyone was, I mean, there are a lot of people who were anxious about it. But I think in hindsight, everyone appreciated around this moment, that wasn’t gonna change, you can’t change the date for Sastre. And what I learned this from was Marc Benioff at Salesforce. So he has Dreamforce every year, it is a forcing function for the entire company to come out with new innovation, new ideas. And as of May, coming into September, you know you’re on hook for Dreamforce. And a huge company is still able to have that agility that they have like three releases a year, but the big releases are once a year. And you remember back in the day, like he was announcing a new cloud every year, like how’s that possible, but he just like force of will. And so I do think those lightning strike moments or mini lightning strike moments that are forcing functions for people to get on board is really important.
David Nilssen 28:46
I love it. I have to imagine that change gave people some anxiety, though, knowing that like if you’re even a day off, you’ve missed it, right.
Randy Wootton 28:55
You can’t be. But I think what it helps to Dave is we didn’t do everything we wanted to, like we ended up with website v1 or website v2 came out like last week. But what it forces is a collective effort around, okay, what’s the most essential, something’s changed? What are we going to do? And so that point we were making earlier about decision-making speed of decision making accountability, being transparent, it was as much about building a culture of connected, constructive tension, connected alignment to deliver and being able to make quick decisions and putting stuff and I wish we’d had more done than we did. But I think everyone kind of took a deep breath. And that’s it. All right, what’s next?
David Nilssen 29:37
That’s awesome. I’m curious. Regardless of how many customers you guys have, if you look across that customer set, I’m curious if there are any commonalities between them or places that you see that they often struggle or sorry, I missed opportunities.
Randy Wootton 29:52
Yeah, we’re going to publish some information on this day. So we have about 2400 customers and the new report will come out, I don’t know, couple of weeks. So if people have my email or just follow me on LinkedIn, we’ll give it to you. Because we have $13 billion in billings going across our system. So we know exactly what’s going on for that set of customers. And we split it by segments between like zero and one million to five million, 10 to 30 million, 30 to 50 million. So all of this benchmarking data built on buildings, this becomes our ability to build our brand is we’ve got proprietary data, we’re going to share it etc. And what I would say is there are inflection points, one of the ones is a 10 million. The other one is actually interesting, about 5 million, zero to 5 million in revenue. You see this continual growth, great growth, even 21 and 22, between five and 10 there’s a slowdown. And I think it’s because of what we were talking about before, a lot of companies at 5 million, they’re almost product market fit, they’re not sure they may be higher, some people things start to get muddled they get the series a right, but at 10 million, the people that continue to grow are the ones that got product market fit, and they hit the accelerator. And so we see growth in that phase. And so what we’ll share more about it, but I do think what I would really encourage people to look at I do a lot riding on this, like, how do you manage the, what is the rule of 40 mean, for a company that’s under 10 million versus greater than 30 million, I think getting world-class benchmarks and using that to help guide your company in terms of customer acquisition costs, LTV to CAC, magic number, like really understanding the health of your go to market and how to use compare to other companies in your industry at that stage. That’s where having a good VC, one of the top tier VCs can really help us they have such purview across the world. So we’ll publish data on it. But I think, everywhere I go, we say here the benchmarks, the Bessemer, has them, KeyBanc has them, there was just a report again, if people want to reach out, I’m happy to share it. There’s a great report that was just published by the SAS CFO on CFO Tech Stack, which has some benchmarks for people. So I think it is like where are you looking to define what world-class looks like?
David Nilssen 32:18
Yeah, love it. I think it’s a fantastic and you know what, I’m actually surprised to hear that there’s a between five and 10 million, there’s another threshold, because I’ve seen this so many times, I’m very active in the Entrepreneurs Organization, you see these people that they get up to 5 million, but they don’t quite make the investment in the team that’s going to help them grow from there. And so they try to keep that scrappy bootstrap entrepreneur, sort of culture going through that period of time. And eventually it does break.
Randy Wootton 32:44
Yeah, that’s great. And you have so much more experience than I do at that stage. I think of it as one of the military models is you have these org structures. So you have the idea of a fire team, which is four or five people, then you have a little too it’s like 15, and then you have a company, which is like three platoons or 150. And then you have the next whatever is the brigade. And I really think that corresponds was inflection points for company size. Like, what we find is when companies get about 30, people, they moved from having outsource CPAs to hiring their first finance person, and that’s the controller or VP of Finance. And then that changes how they think about that whole operation before it was like, hey, I just need to pay people and pay my taxes, you have a different set of problems when you got 30 people. And there are multiple states, that though, allows you to get probably to like, I don’t know, 150 to 200 people. Now you have a different inflection point. Now you’re not able to meet everybody every week. And now you got to think about how do you create management systems and performance reviews, and it’s different energy than what it was it was only 10 people? Well, I don’t know, 200 people I think to about 1000 is probably the next stage for me. That corresponds with that kind of brigade versus company size. And you need a major running that not a captain. And so it’s, do you have the skills and experiences? And if not, well, who are you going to get as a mentor to help coach. I remember when I took over Rocket Fuel as a public company, I got a battlefield promotion, be careful what you wish for. But I asked for three things. I wanted a mentor, someone who’d done a turnaround before. And I ended up an incredible mentor, the guy named Tony Sigoly, I still incredibly grateful for him. I wanted to coach, a coach with someone who’s going to help me understand how to manage boards, because I’ve never done that before. And I had a guy John Baird awesome. He was a coach to one of the Apple executives and just really awesome helped me understand that whole imposter thing and blah, blah, blah. And the third thing is I wanted a group of peers. And I know you’re involved with EO and YPO. And like, I was too old for either of those, and I couldn’t afford the global 100. So I had to find this other group and ended up with a it’s called the alliance of CEOs. I think they have around the country. But I can’t tell you how powerful it was to have that support network as a first-time public company CEO to help me scale to run an organization that was I don’t know, where 2000 people, biggest organization ever ran. And how you think about that, and all the complexity and blah, blah, blah, very, very different than when I walked into Percolate. It was 200 people.
David Nilssen 35:12
Yeah, I don’t think I’ve ever read a book on this, but seems like a really interesting topic. Because I remember one of my early mentors told me all Dave, the culture at your startup, it’s so great. But be careful at about 50, it’s going to change dramatically. And I refused to accept that. But the reality is around 75, and it starts to shift and how you lead, how you think about that has to shift, same thing about how you organize the business strategies, all that stuff. So anyways, there’s your next book idea?
Randy Wootton 35:41
Well, there’s a book out there, there’s a really interesting book, Linda Hill, Becoming A Manager, which has this idea of, and there’s another book out there called Transitions, which is a book about people making these transitions at different stages. And the number one transition is when you move from an interview contributor to a manager. Yeah. Because you’ve gone from a place where you’re being rewarded or recognized for just getting stuff done. And it’s all about me to now work into a model like a servant leadership model, and how do you get more out of people and recognize the people that aren’t going to be the crusher was that you were and making that work? And then I think the next inflection point for me, is a director. And so I told the people like directors, you got to be directing something, you got to be directing strategy, resources, or being in an organization. And so there’s an inflection point there. And then we get to VP there’s another inflection point.
David Nilssen 36:29
Yeah, yeah. And it’s you said, Linda Hill.
Randy Wootton 36:32
Yeah, Linda Hill. She’s a Harvard woman, incredibly successful. It’s called Becoming A Manager, I wish I had it, I can’t put my finger on it. And there’s another book, which I really found valuable, which is called Transitions, which had the same idea of as you make a transition up, scaling up. So let me give an example. So my executive team, I talked about having to put a leadership system in place and the leadership system in place allows you to create alignment, and allows you to start taking the executive team and moving in to think about what needs to be true in the next 12 to 18 months. If you are spending time as an executive in a company, our size 240 worried about what’s happening this month, you’re over-functioning. And so how do you create an organization at this stage where you have directors focused on the quarter VPs focused on the half, and you’re focused on the year. And so that’s how you allocate time and energy, the type of decisions you care about, because it’s super easy to go back down and solve the problems that you know how to solve when you were in that role three years ago, but how do you stretch to be able to solve the problems that we get paid the bucks, because we’re solving problems or making bets that are going to pay off in 12 to 18 months, that whole horizon? One horizon to horizon three, like I’m spending all my time in horizon two, and scared of crap, because I’m putting capital investments in these things. I don’t know if they’re gonna work. But that’s where the team has to make the bet. Because that’s the future growth.
David Nilssen 37:56
Yeah, we’ll put those in the show notes. I’m an avid reader. And there’s no big fan of developing talent from within. But that is the transition that is the hardest is when you take someone from an individual contributor to a manager, and I think helping to frame that would be great. And let’s talk about workspace. You brought this up a minute ago. I have two businesses, we have no office space whatsoever. I know, a lot of people are struggling, do I go back to the office? Do I go hybrid? Now, if I do hybrid and my world class and either like, how do you guys think about it? And then what are you sort of working on right now?
Randy Wootton 38:26
Yeah, it’s a great question. Dave, I will tell you that my default has always been in the office, because my magic happens when I’m with someone else. We got a whiteboard. And so it was really hard for me to move to a world that was remote. The role I took at Seismic though was very small role. It was chief strategy officer had three people and all my work was on call. So actually I was fortunate that I wasn’t CEO at the beginning of COVID. Right now, I personally I struggle I go to our office headquarter in Atlanta, I go there once a month for a week, I bring all the executive team in for a week and it’s where the magic happens. And then the rest of the other three weeks are kind of like you we have our two-hour executive call once a week. And I’m like one on one, but it doesn’t feel the same. And so I think that I’m glad I’m at the sort of tail end of my career on this, I think for specific roles, they need to be in office. And so I think of like BDR as early-stage developers where you are, you really need mentorship. And I think it’s really hard to do that. Some coming out of college and you’re teaching them how to do cold calling, and you’re trying to watch the zoom or the gong, call it so that that’s my predisposition. I do think that there are roles that are better to have some type of environment where there can be in-person coaching and just a fast iteration similar for developers like you’d need the lead developer to help the young developer understand the codebase etc. So I am not a full remote dude. Having said that, I think what was fascinating was, we found that the technology had developed to a level that enabled remote work in a way that none of us thought was possible probably beforehand. And so we were a customer of Doxa. I have a couple of folks that are supporting me, out of the Philippines, and they’re part of the team technology works, Zoom work, Slack works. Unfortunately, they kind of accommodate our business hours. So I feel bad about that. But them being on the team, they’re part of Maxio. And so it’s been great. It’s been great.
David Nilssen 40:38
Yeah, it’s hard. I mean, I always tell people, I think that from a productivity standpoint, being remote works just great. From a collaboration standpoint, and for human connection, there’s still a lot to learn and a lot to work through.
Randy Wootton 40:51
Yes, it’s that point, Dave, like we just did a couple of kickoff, and I brought everybody in, I couldn’t afford to bring Poland in this time. But if we hit our number next year, I’m gonna bring Poland but we brought everyone from Ireland and across the US in and so I don’t know, 240 180 190 people, and it was magical. And I took that lesson from the CEO that I worked for, at Seismic a guy named Doug Winter, big company, they were really hybrid, all their engineering was out of China. And he would do this every year. And he’s got a bunch of money on it. I remember he and the CFO arm wrestled over it as a line item. And Doug said, I don’t care. I’m doing it. And it was magic. And so when I told Battery I was doing it there like a really. And then I issuer’s who’s our investors, I invested, I asked Chelsea and Dylan to come. And they were part of it. And they were like, wow, that was really good. And none of our other companies asked us to come and I said, well, you’re gonna open for the expense, they’re not going to invite you to come. But we did it super frugally. We did a Casino Night in our own office. And it doesn’t have to be lavish. But I think having the opportunity to have the bonding, having those impromptu conversations, identifying a problem going off in the corner, like there’s just something special about it.
David Nilssen 42:05
Yeah, no question about that. We always say we’re remote first, not remote, only twice a year, we get everyone together for that same reason, and nothing compares.
Randy Wootton 42:15
And I don’t think you save a lot of money. I mean, it’s not like you go to remote just to save money, because you’re gonna pay for these other things, etc. So for me, it’s a recruiting tool. Absolutely. If I can have people working for me out of South Dakota, hopefully it’ll stay with me. I got one dude in Australia, and he just wanted to move to Australia was like cooling the contract would be in Australia, like it works. So like, I can’t compete with the price in this well, maybe now I’m a stock with Google and Facebook, etc. But in technology is so hard as you guys probably saw the great resignation and just everyone going to different jobs like this is now almost like a requirement is to have a remote first or a higher intentional hybrid, hiring and culture build model.
David Nilssen 43:00
Yeah, 100% There’s a great report from McKinsey put out that there’s these new personas that are emerging and a commonality between four of the five was radical flexibility. And so I think that’s just something that as employers, we’re just going to have to embrace. Randy, I know we’re getting close to the end of the time, I would love to just kind of understand, I always love asking CEOs, what are they reading right now? Where are they trying to get better, personally?
Randy Wootton 43:28
Wow. Well, I’m a voracious reader. I’m for business for book clubs. One of them I just finished with a gender series, where we went through and looked at books written about women by women, since like, way back when and we went through The Second Sex, The Feminine Mystique, we just did The Handmaid’s Tale, which is a haunting story. So I was an English major, I taught literature, like I love stuff like that. The other one I’m doing which I really recommend hit men and people who don’t have a lot of time is called the slow reads symposium. It meets once a week. I’m actually doing Shakespeare’s and Anthony and Cleopatra, and you just take a couple of scenes a week. And it’s just fun to engage with people who care about working through Shakespeare. The third book I’m reading is Sam Adams with my family, which is a historical study of the revolutionary it just fascinating. And then on the book club, I lead a book club and every company I go to, and we’re doing Think Again, which is a great book about, you know, how do you counter your initial thinking and come up with a different idea. So yeah, I talk to people like, I’m always operating at the edge of my own ignorance. Right. And so I’d love it to my earlier point. I love ideas. I want to engage with people around conversations. I’m not good at small talk. So let’s pick a book and have a conversation.
David Nilssen 44:53
I love it operating at the edge of my own ignorance. We’ll leave it there. We’ve been talking to Randy Woitton, the CEO of Maxio, leading provider billing and financial operations solutions for high growth b2b SaaS companies. Randy, where can people go to learn more about the work you guys do?
Randy Wootton 45:06
Yeah. maxio.com or follow me on LinkedIn.
David Nilssen 45:09
Awesome. We’ll get that in our show notes. And thanks again for being on the show today.
Randy Wootton 45:12
My pleasure, Dave. Best of luck.
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