03: Day Two Business Operations: Scaling A Startup From $1 To $10M In Revenue

Jeff Gray brings 20 years of experience in sales, software delivery, engineering, operations and strategy. Most recently he was a VP of Business Operations at Domino Data Lab, a machine learning platform that focuses on the needs of enterprises with large teams of code-first data scientists. The company is funded by Sequoia and several other VCs. Prior to that, Jeff was a VP of Business Operations at CoreOS, a leader in the Kubernetes community that was acquired by Red Hat for $250M in Jan of 2018. In this episode, we talk about scaling a startup from $1 to $10 million in revenue.

Key takeaways from Episode 03

1. A great Day One of business operations helps the Day Two to start on the right foot.

“In the DevOps world Day One means installing application and getting it up and running. Day Two is about monitoring, troubleshooting and managing the whole lifecycle. Applying that metaphor to the business operations, it’s the stage of the company when plans start to matter. That’s when figuring out which leaders to hire and when, and which part of your portfolio to place and when, and being part of jack-of-all-trades helps companies navigate through that complexity. So that you change the way you operate to match that way of complexity”, said Jeff.

2. The key activities and tasks when your startup grows in revenue from $1 to $10 million.

“At CoreOS, the mission was how to use the goodwill of users and the project’s success to build a product and a business. And doing that without compromising on our ideals, while riding the wave of Kubernetes. In a nutshell, it was about Day One experience of taking something relatively complicated and making it very simple.”

3. The main challenges when applying Day Two concept for scaling up your company.

“When you no longer have just the founding team to start to grow, and you need to hire the next level of management… you need to hire much better individuals then you are at the individual things to scale up as-you-go. How to do that well, and to control spend is really complex. One of the challenges there is, do you hire for the job, needs and scope that you have today? Or do you hire for where you think you can get to?.. I would errr on the side of hire for the job today… Especially in a highly technical space.”

4. Who do you hire first depends on a number of things.

“In general my philosophy is build from the product. In marketing, you need to hire product marketing or developer relations (devrep) first, before you hire marketing execs. So that you have some content to build stuff around. In sales, you need people who are technical enough to demo product on their own. when you start building CS, you need customer success engineers that know the product and can fix stuff, before you have CSM (customer success managers) who’s job is to manage the process, the relationship and the renewal. They need engineers to rely on.”

5. On people moving from bigger companies into startups.

“You are going to make a two kinds of mistakes. And you are going to make them both. Sometimes you gonna look at a startup and say “everything is a hot mess, but it’s ok because it’s a startup and I’m going to let it go. That’s mistake #1. Sometimes you gonna say “everything is a hot mess, and I’m going to fix it right now”. That’s mistake #2″, Jeff pointed out.

6. On pulling away from competition.

“If you can’t build a monopoly, in early stages try not to worry about competition too much… Later, the only durable you can do is to keep moving fast, keeping development cycle down, having a great engineering team on the product side and it’s going to take a huge amount of focus, energy and infrastructure to do it.”