1 x 1 = 100: Celebrating 2 Years of Community

Like many start-ups, Operator Collective began as an idea that would not leave my head. Obsessed, I would test the idea with seemingly anyone who would listen–vetting the thesis, seeking out potential supporters as well as naysayers, and unearthing insights. After countless hours, a new collaborative model for venture was born. One that required tearing apart the traditional structure and rebuilding it from the ground up to optimize for a large number of operator investors, most of whom had not invested in venture before. 

Operator Collective was always designed to be a community, not just a fund. It was constructed to bring together values- and incentive-aligned individuals whose networks didn’t naturally intersect. We sought to make venture accessible to the very people tech startups need most but who had been left out: experienced operators from diverse backgrounds who had built and scaled up the most admired companies in the world. By bringing in these highly talented but underrepresented individuals, we believed we could create a multiplier effect. We would change the tech industry from the ground up. 

It turns out that 1×1 can equal 100. This visualization of our connections data proves out that initial hypothesis

Visualization of the Operator Collective network over two years
Each dot represents a person, whether an operator LP or a portfolio company founder. With each individual who was introduced, connections immediately started happening, and our community grew rapidly. Notably, operators helped not only our portfolio companies but each other as well. 

Linking these dots, each line above represents a connection we have made: 

  • an investment opportunity
  • an introduction to a prospective customer or candidate
  • a referral for an open position, board seat, or advisor role
  • a tapped resource for diligence
  • a sharing of expertise or advice, whether about a business issue or professional one

These connections led to so many rewarding and tangible real-world outcomes: companies grew, new customers were signed, hires were made, and new bonds were forged between networks that had previously been separated–leading to yet more connections, and further growth.

Two years after our public launch, I reflect back with immense gratitude. Operator Collective would not be where it is today if not for the early supporters who signed on when this was still just an idea and for the many who’ve generously contributed every step along the way. 

My deepest heartfelt thank you to you, our community of operators, founders, co-investors, advisors, supporters, and of course the phenomenal Operator Collective team for believing in our vision and joining this journey to make the world a better place. Happiest of holidays from all of us at Operator Collective!

We believe culture, diversity, and operational excellence are a key part of building truly great companies. Learn more on our website or by connecting with us on Twitter and LinkedIn.

Operator Spotlight: Tech Leader Li Fan

Looking for practical help and advice on an operational area that may be outside your realm? Each month we spotlight one of our talented operators, who’ll share their expertise and offer insights and ideas that may help improve your own operations. This month we spoke with Li Fan, who has led all kinds of engineering and tech organizations—from Pinterest to Google, Lime, and her newest position as CTO at digital currency platform Circle.

Tell us about your road to tech, and how you overcame any bumps along the way.

Li: I grew up in Shanghai, China, and dreamed of being a designer or architect but my mom pressured me to focus on Science and Engineering (as almost every parent in China did at the time). I didn’t learn real programming until college. I chose the major because my teachers told me that computer science was the “future” and I had enough math skills to master it. My first year in college was a disaster. I just didn’t understand what programming was about. If there was an option to change majors at that time, I’m sure I would have taken that.

Unfortunately (or fortunately) the school didn’t allow it so I had to stick with computer science. The second year, I learned assembly language. Many of my classmates disliked the low-level machine language but I somehow clicked by grinding through one instruction at a time. I had a lightbulb moment during one assignment and after that, programming became natural to me.

How has your experience as a first-generation immigrant influenced the way you think about fostering inclusivity and empathy?

Li: When I started my career 22 years ago, my language skills were barely enough for me to get my professional work done. I lacked the cultural background to make deep connections with non-Chinese co-workers. When they talked about an old movie that they grew up watching, or a joke from a famous talk show, I was clueless. I remember feeling lonely at the lunch table, not able to join the lively conversation.

I also remember how grateful I was when my co-workers purposely slowed down their conversation and explained the context to me, knowing I needed this support. Later, when I was in a leadership position and hosted meetings or dinners, I always noticed those “outsiders” who sat quietly in the corner. I understand how one might feel even if he or she looks fine. I try my best to include them in the conversation, and pay special attention to them to let them know they are part of the family.

How has the ongoing era of remote work changed dynamics amongst tech teams? How has this impacted your approach in starting a new leadership role mid-pandemic?

LI: Before COVID, I was not a big fan of remote work. I value in-person interaction and real-time communication very much. After a few months of working remotely, reality sunk in and I had to adjust my work style in order to manage the team effectively over video calls. By the time I joined Circle, a fully remote crypto company, I was completely converted. I enjoy the extra two hours I save from not commuting to work every day (replaced with regular exercise and cooking time).

Nevertheless, not being in the same physical space still presents challenges. For one, over-communication is definitely a must. People rely more on Slack (for real-time interaction) but such tools are not the best for important notices or decision sharing. Some can feel they are “left out” unintentionally, which impacts their work. I now remind both myself and my team to communicate important messages again and again, both in verbal and written format.

Secondly, people need “hallway chats.” When you meet random co-workers at a break room in the physical world, you share unplanned information (both work or non-work-related). Those small talks build trust and connection. In the virtual world, it is hard to re-create this, so we need to be intentional about making connections. I start smaller meetings by asking about weekend activities or family vacation plans or recent books read, purposely diverting from the main topic in order to build those connections.

Finding world-class tech talent is always a struggle. What can early-stage companies do to build a team that matches the caliber of the Googles of the world?

Li: Early startups don’t have the brand or resources big companies have. It is very hard to compete if the candidates were looking for a brand to put on their resume or a low-risk compensation package. However, there are still plenty of talented people who are willing to take risks and work on new areas. The key to recruiting is to explain the risk/benefit of your company.

Tell a convincing story – You have to have the conviction of the company mission and market story before you can sell this to others. 99% of the candidates I talk to ask me “why did you join this company?” I always take 10-15 minutes to explain the research I did, the motivation I had, and the trade-offs I made before I made my choice. I also go further to explain why they should choose this company (or occasionally, why this might not be a good choice for them).

Understand their motivation – Good talent has options, so I never take their interest for granted. Even for those who worked with me before, I try to understand what’s motivating them to move. Comp is a foundation (so you can’t really under-pay and expect talent to jump for mission alone), but most of the time what gets a candidate over is the scope of work, the growth of the product, or an inspirational manager that they can learn from. The best talent wants to grow, so explain what you can offer (bigger platform, chance to build a team from scratch, working on high risk, high potential project, etc).

Female CTOs are hard to find. What advice do you give to female engineers with leadership aspirations?

LI: I always felt I could do more, have a bigger impact, learn new things, and challenge myself to be better. So I looked for those opportunities and focused on opening up more paths for myself. I have had frustrating moments when I realized that I was not in the “club” and was unfairly judged, but I told myself it would be their loss more than mine. My advice is to focus on what you can control and what is ahead of you. Be confident that you will come back from setbacks, accept the harsh reality but do not be defeated by it. Resilience will prevail

We loved your comments about mentorship in the recent Engineering Leadership podcast. What’s one misstep you’d caution new mentors (or mentees) to watch out for?

LI: When people asked me for career advice, my instinct used to be to immediately jump in and start to analyze the change for this person. Subconsciously I thought that they had similar criteria as I had when choosing career paths. It didn’t take long for me to realize that those assumptions were so wrong. 

Everyone’s life experience is different. What I value most might not be the top concern for others. There is no right or wrong when one makes a life choice, only the one that fits best in a situation. I started asking more questions, like: why do you want to change now, what’s your motivation, what do you want to achieve? If things do not happen as you expected, what would you do? Now my mentoring is more like coaching, leading the path by asking questions instead of giving answers. 

In your opinion, what are some ways the tech and venture industries could do a better job of empowering the next generation of diverse leaders?

LI: Interview more diverse leaders, founders, or board members, and give them an opportunity to shine in front of a bigger audience. I’ve met so many impressive women leaders and I sometimes wonder why they haven’t been discovered yet. In my experience, those diverse talents often work harder and smarter when given the opportunity because they don’t take it for granted.

AOC often talks about the skills she picked up as a bartender, and others talk about what they learned working retail. What were some of those formative jobs for you?

LI: My first paying job was at Cisco Systems, where I wrote and ran network simulations and analyzed results of different routing algorithms. I developed a specific idea of the scope of work for a software engineer, but then I joined Ingrian networks, a 10-person startup. I was hired to design high-performance web proxies but I soon found myself having to solve all kinds of issues — from compiler performance, release schedules, integration testing, UI bug fixes, network cable issues, hard disk failures, etc. Everything that our storage appliance touched or relied on, I had to understand and be ready to jump in because we were a small team. 

I soon understood that the “job description” doesn’t matter when it comes to getting results. You do what needs to be done. I learned to be adaptive and flexible at Ingrian. I played any role required, data analyst, testing engineer, UI designer, release engineer, or even receptionist or sales rep. I learned to pick up new skills on the job quickly and not be afraid of unknowns. This became one of my strengths that pushed me ahead in my later career.

What’s your secret super power? 

Li: I’m relatable to many people. I love technology and art. I’m a mom of two who volunteers in school while working full time at a FinTech company as an executive. I love spending time with my friends at happy hour or weekend hiking. I grew up in China but have spent half of my life in the US. These diverse life experiences give me the ability to understand and connect with many wonderful people, and learn from their wisdom and insight.

We believe culture, diversity, and operational excellence are a key part of building truly great companies. Learn more on our website or on Twitter and LinkedIn.

Meet Voiceflow: The force that’s democratizing conversational AI

The company: Voiceflow

Voiceflow is a visual design tool for conversational AI teams. It helps them design, prototype, and launch conversational interfaces across just about any channel—everything from those interactive voice response (IVR) phone systems we all know and (rarely) love, to web, chat, voice assistants, in-car, mobile apps, drive-thrus, and more.

Why you should pay attention 

With the prevalence of Amazon’s Alexa, Apple’s Siri, and all the rest, conversational AI is everywhere. It now powers trillions of conversations every year for things like customer support, simple transactions, and information gathering. All types of companies—not just tech giants—are investing in a new generation of conversation designers to help them meet user expectations, reduce costs, and extend their brand persona with innovative, flexible experiences.

In fact, the voice assistant application market is projected to grow to $11.2 billion by 2026 while the global conversational AI market size should reach $18.4 billion in that same time. However, traditional tools in this space were developed for designing automated call flows in 90s-era call centers. Their overly complex approaches simply didn’t cut it once COVID sent every consumer brand scrambling to reinvent and launch new digital experiences last year.

The details 

Voiceflow recognized this problem early on and created a modern creative platform in 2019 to help conversational AI teams work together, design great conversations, and iterate quickly. This year, over 80,000 designers, developers, and teams—at businesses like McDonald’s, Google, Spotify, Ford, Motorola, Amazon, BMW, and US Bank—generated more than 550 million conversational interactions using Voiceflow. It’s helping unify their design and prototyping workflows so they can easily launch banking assistants, IVR experiences, entertainment applications, games, support bots, and other live experiences for end users.

How it works

Voiceflow empowers teams to design, prototype, and launch chat and voice bots across channels like IVR, messenger, Alexa, Google Assistant, and web chat. Conversational AI designers can use Voiceflow’s intuitive, drag-and-drop visual editor to connect steps and blocks together and create sophisticated conversation designs in minutes. The system also provides shared team workspaces, auto-syncing and versioning, reusable components and templates, and omni-channel management tools.

Screenshot of in-car assistant conversational AI flow

This gives people at every level of technical expertise a visual way to build, test, and manage great conversations. Some customers also leverage Voiceflow’s open source API to support their full design-to-development pipeline for launching and actually hosting conversation experiences across any channel.

Why we’re obsessed

Voiceflow is on a mission to democratize conversational AI by creating a modern collaboration platform for these interfaces. And it’s working. The market is growing exponentially and more people are dedicating their careers to the space (Voiceflow’s user base grew by 60% this year alone). Conversation designers love having Voiceflow in their tech stack because it is legitimizing the tactics, methodologies, and industry standards for conversation design.

Customers like Home Depot have touted amazing results, such as scaling user testing from 12 tests to 300 in one week. In addition, Voiceflow has cultivated an active global community of 8,000 (and growing) conversation designers who now have a forum where they can connect with each other, up-level their skills, swap best practices, or recruit top talent in this emerging discipline.

Voiceflow’s origin

Company founders Braden Ream, Andrew Lawrence, Michael Hood, and Tyler Han joined forces back in 2018 to create a fun choose-your-own-adventure children’s stories app for Alexa, but quickly pivoted when they realized how difficult it was to collaborate in the world of nonlinear conversations. Their timing couldn’t have been better, since the pandemic brought these types of high ROI, socially distanced customer experiences to the top of every CTO’s priority list. And as the company has scaled rapidly to meet this demand, its founders are building a diverse, global team with a culture of creativity, curiosity, and owners.

Get involved

If you have a conversational AI team that could benefit from easier collaboration, be sure to have them check out Voiceflow to start building for free.

We believe culture, diversity, and operational excellence are a key part of building truly great companies. Learn more on our website or by connecting with us on Twitter and LinkedIn.

The ins & outs of SaaS metrics: Finance leader Christina Ross on revenue retention

With all the acronyms being thrown about, you may be left wondering which SaaS metrics are the best indicators of performance? Which ones do investors focus on? Christina Ross, CFO turned CEO/co-founder of Cube, not only analyzes these metrics for her own business, but brings decades of finance experience to the task of automating and optimizing strategic financial planning and analysis for other companies. 

In this blog series, we’ll hear firsthand from Christina about how to calculate and interpret the most helpful measurements of enterprise software success. To start off, we asked her about two metrics that help businesses measure customer retention and growth: gross revenue retention and net revenue retention.

At a high level, what is revenue retention and why does it matter?

CHRISTINA: Revenue retention is a measure of how much revenue a business keeps from the same customer base over a certain time period. You can track it by month, quarter, year, week, or even day. 

One important note is that revenue retention only refers to existing customers. Acquiring a new customer—and the associated revenue they bring in—can be 5 to 25 times more expensive than retaining one (in terms of time, resources, and finances). Thus, revenue retention is a good measure of sustainability and profitability. Customers with reliable revenue retention have a stable runway and are more profitable in the long run.

Can you get the same insights by tracking customer or logo retention?

CHRISTINA: Not all customers are created equal. One customer might constitute 30% of a company’s revenue while another just makes up 0.05%. Losing any customer hurts, but those that represent a greater share of revenue will hurt a lot more. Tracking revenue retention alongside customer retention can help you get the full picture, especially when you look at both gross revenue retention (GRR) and net revenue retention (NRR). 

What exactly is gross revenue retention (GRR) and why is it important to track? 

CHRISTINA: Gross revenue retention is the percentage of revenue a business retained from the start of a specific period. It shows how successful you’ve been in retaining customers at current price points or contract values.

GRR = (MRR – Churn – Contractions) / MRR

MRR is your monthly recurring revenue at the start of the month, churn is the amount lost (in dollars) to customers who are no longer customers, and contractions is the amount lost from customers who downgraded to a less expensive plan. Even if you earn new sales or upgrade revenue in a given month, this formula looks only at revenue retention as opposed to acquisition. The closer GRR is to 100%, the better. That said, this depends on your customers’ size, since higher churn is often expected from SMBs. 

If GRR is low, it could signal a few problems with your business’ health. For example, you might not be solving the right problem. People won’t stick around if the problem you’re solving is too small to warrant your price for the solution. Other issues might be that your customer experience is frustrating, or your customers simply don’t use the product enough. If people only log in once a month, you’re not building trust or loyalty with them.

How is net revenue retention (NRR) different?

CHRISTINA: GRR doesn’t account for new customers or expansions. It only looks at what you started with and how much you’ve lost, while net revenue retention (also known as “net dollar retention” or NDR) is the total change in recurring revenue. It tracks both your business’ ability to retain and acquire revenue from existing customers.  

NRR = (MRR + Expansions – Churn – Contractions) / MRR

As you can see, what’s different here is that we’re accounting for expansions, or the new money a group of customers have spent with your business. Even though NRR is a growth indicator, it’s still a retention metric, so we don’t include new sales. NRR measures how well a business’ cross-sell and upsell strategies are working.

Experts say a good median NRR for private companies is 104%, and generally NRR > 100% indicates growth, while NRR < 100% indicates decline. Businesses with high NRR are offering the right things customers need as they grow. On the other hand, when NRR is consistently low, this should sound alarm bells. It could mean the company isn’t offering the right upgrades to incentivize customers to move up the value ladder. Maybe the customer success experience is frustrating, or there’s not enough brand loyalty to prevent switching.

What does the combination of GRR and NRR tell us?

CHRISTINA: The best insights come from cross-referencing NRR and GRR. SaaS companies that have both high GRR and high NRR are in a great place and can focus on acquiring new customers. But if you have high GRR and low NRR, it means you’re good at keeping customers, but need to get better at selling to them again, perhaps by rethinking the upgrades you’re offering. And if you have both low NRR and low GRR, there are likely some larger underlying issues that need to be addressed quickly. This might require you to radically invest in customer support or take a hard look at the problem you’re trying to solve.

If there’s a problem with GRR or NRR, how can we improve these metrics?

CHRISTINA: At the end of the day, people are the ones who make the decision to churn or not. So while we might calculate revenue retention metrics separately from customer churn, in practical terms, there’s no separating them. When it comes to increasing GRR, the best strategies focus on keeping your customers involved and happy—improving the overall customer experience, building trust, or adding more integrations. 

Much of this will indirectly improve NRR as well, because it reduces churn and contractions. If you want to double down on NRR, focus on expansions—improving customer service, refining your value ladder, or adopting a customer expansion strategy. All of this can be informed by cohort analysis, which might help you hone in on what you need to do to better support the specific customer groups that are responsible for the majority of your churn.

Of course, don’t forget that these revenue metrics only look at existing customers, so it’s best to combine them with other KPIs for a full picture of what’s happening in the business. GRR doesn’t account for any growth and NRR may obscure and cloak a churn problem. To learn more about these and other important SaaS metrics, check out our recent blog post on GRR and NRR.

We believe culture, diversity, and operational excellence are a key part of building truly great companies. Learn more on our website or by connecting with us on Twitter and LinkedIn.

Why we’re amped about Amplitude

There was a time it felt like everywhere we turned, someone was telling us to take a look at Amplitude. This was coming not only from our network of Operator LPs at larger enterprises, but also startup founders in our portfolio. Folks were raving both about how Amplitude’s analytics platform provides step-by-step data on the performance of a digital product, as well as how particularly thoughtful and values-driven the Amplitude founders are. When we met co-founder and CEO Spenser Skates, we knew we wanted to be a part of Amplitude’s journey.

The company: Amplitude

Amplitude is the first unified product analytics system that brings together an entirely new depth of customer understanding with the speed of action needed to optimize experiences in the moment. A pioneer in digital optimization, its software enables organizations to see and predict which combination of features and actions translate to business outcomes — and then intelligently adapt each digital experience based on these insights.

Why you should pay attention 

In a pandemic world, companies no longer have much of a choice about whether to invest in digital transformation — they need amazing digital products in order to survive. Even before COVID-19, analysts were predicting that companies would deploy over 500 million digital apps by 2023. They’re now expecting 65% of the global economy to be digitized by next year. And the next frontier of digital transformation is digital optimization.

Although the revenue center for most companies is shifting from sales and marketing to product, many of the teams building these products still rely on their intuition to analyze performance. That approach just doesn’t cut it anymore. In order to keep up with the pace of disruption in our more digital-than-ever landscape, product teams require a fundamentally new approach. They need 360-degree insight into the entire digital experience. Only then can they make data-driven bets that transform customer value. Enter Amplitude’s digital optimization system.

The details 

Amplitude has changed the game for more than 1,200 organizations, including B2B software companies such as Atlassian, Intuit, and Hubspot, as well as consumer brands like Twitter, Walmart, Instacart, and Spirit Airlines (along with 26 of the Fortune 100). Its digital optimization system is the “Moneyball” brains behind 45,000+ digital products. Amplitude’s software helps these teams innovate faster and smarter by giving them fine-grained performance data that goes way deeper than the basic ad clicks and page views of previous decades. 

It shows them exactly how specific combinations of features and user actions translate to customer retention, loyalty, lifetime value, and other business outcomes. With this data, they can make strategic decisions — like whether to launch a big feature or change a distribution channel. They can experiment, see what’s working and what isn’t, and make changes to their product based on real-time behavior.

How it works

Amplitude’s platform tracks 900 billion customer behaviors each month in a privacy-conscious way. It aggregates all this data and uses machine learning to segment users, predict outcomes, and uncover relevant patterns throughout the digital journey. For example, Amplitude’s product analytics help teams find ways to quickly reduce friction and double-down on features that increase revenue. Earlier this year, the company also launched new solutions to help product and marketing teams easily personalize digital touchpoints and test experiences with key segments.

All of these solutions are powered by Amplitude’s proprietary behavioral graph, which was invented by company founder and chief architect, Jeffrey Wang. Built for the complexity of modern digital products, its native query engine and machine learning algorithms correlate every individual action taken across a digital product to understand and predict which behaviors are indicators of certain outcomes. 

Amplitude’s origin

Amplitude was founded in 2012 by former MIT alums (and Battlecode competition opponents) Curtis Liu and Spenser Skates, along with Stanford grad Jeffrey Wang. Curtis and Spenser had actually taken a stab at another startup (a voice recognition app called Sonalight) before that but decided it was a little too early for its time. However, they realized the product analytics tool they had built to better understand how customers were using Sonalight could actually be more valuable. Clearly, they were right about that, and Amplitude has been a rocketship ever since, culminating in a successful direct listing last month. 

Get involved

To find out more about Amplitude’s digital optimization system, explore its product demo or customer stories. And while you’re there, it’s worth a look at the company’s many career opportunities

We believe culture, diversity, and operational excellence are a key part of building truly great companies. Learn more on our website or by connecting with us on Twitter and LinkedIn.

Operator Spotlight: Finance Leader Elena Gomez

Looking for practical help and advice on an operational area that may be outside your realm? Each month we spotlight one of our talented operators, who’ll share their expertise and offer insights and ideas that may help improve your own operations. This month we spoke with Elena Gomez, CFO at Toast and the newest member of Operator Collective’s Board of Advisors.

Congratulations on Toast’s IPO last month. Tell us about the company, and what it was like to join at such a pivotal time for the business.

ELENA: I’m super excited to have joined Toast earlier this year and helped shepherd them through an IPO process. But in reality, the IPO is just a stop on our journey. I’m even more excited for what’s to come for Toast. We have big ambitions to continue to grow and power restaurants of all sizes on our platform. 

For those of you not familiar with the company: Toast is a cloud-based, end-to-end platform that is purpose-built for the restaurant industry. We have almost 50,000 restaurants on our platform. Restaurants are complex businesses with a lot of moving parts. And by working with them and understanding their needs, we’ve built a comprehensive suite of subscription services, hardware, and financial technology solutions. We aim to help restaurants of all sizes streamline nearly every aspect of their operation. 

You’ve worked for wildly successful public companies like Zendesk and Salesforce. What are some key practices or learnings that you took forward into your new CFO role at Toast?

ELENA: There are several learnings but I’ll boil it down to three: 

  1. Putting the customer at the center of what we do. Customer success is a key principle at Toast. Similar to Zendesk and Salesforce, we put the customer at the center of all of our decisions. We want to help restaurants in our communities thrive especially after the tough last 18 months of Covid. I personally look forward to meeting customers and understanding how we can make their businesses more successful. 
  2. Building a world-class organization with an eye towards diversity. It’s a hot market and we are living in an unprecedented time. But nonetheless, we have big ambitions at Toast to continue to grow as restaurants come out of the pandemic stronger than before. To achieve our goals, we will continue to add employees to the Toast family. Hiring diverse talent is a key part of the playbook at Zendesk and Salesforce, and it has been a game-changer. One of the reasons I joined Toast was because they value diversity as well. This week I joined a fireside panel with our Latinx employee resource group, “Migente”. I was excited to see over 100 Latinx Toasters participating on the call.  
  3. Staying agile and scrappy. If there is anything I learned at Zendesk and Salesforce it is to stay agile and scrappy. Even the best of plans can have a curveball thrown in the mix. For many of us, Covid was a major curveball. Customer expectations will continue to go up and evolve, so staying agile/flexible/current on all fronts is very important. The great news is the team at Toast is battlefield-tested. They’ve survived through Covid and given back to restaurants during this time.

What do you advise early-stage companies with IPO aspirations to be thinking about at each point in their trajectory? Any tips to help support financial IPO readiness?  

ELENA: Look for talent with public company experience, especially in finance and legal. Don’t wait too long to hire your CFO, VP of Finance, and Controller. Oftentimes, founders hire one leader to figure out the accounting side and expect that same person to do the finance side. I believe you need both or you will never get the headlights out further because the finance leader will be stuck closing the books. 

In terms of financial IPO readiness, I would make sure you deeply understand the path to sustainable growth. This means knowing the metrics and assumptions of what will drive durable growth, and ensuring the critical exec team is bought off on them. Next, I would understand some of the basic hygiene things in finance — how well the team closes the books, how they do their forecasting process, etc. And of course, pick your board carefully. Find a balance of operators and ex-operators. 

You’ve led finance in SaaS businesses for more than a decade. Which company-level metrics do you tend to monitor most closely? 

ELENA: Love this question. First and foremost, I look for growth across the board. But metrics I pay a lot of attention to are: ARR Growth, Net Retention and Churn rates, CAC, and Payback periods. If you can drive healthy NRR with solid unit economics, you will continue to sustain durable growth over time. 

You are a board member at PagerDuty and Smartsheet as the audit committee chair. How do you measure your success in that role? And what advice would you have for someone in that position for the first time? 

ELENA: I focus on making sure I continue to add value for Jen and Mark and to their management teams. In order to do that, I stay current on key themes, read all the board materials, and often connect with other board members or management in between board meetings to get a pulse of key issues or themes emerging. As a board member, you will be exposed to many different topics, and there will be great quarters as well as tougher quarters. Being a steady sounding board through all of it is important. 

But even more important, is to not be afraid to offer constructive feedback. Most CEOs want a board that is willing to lean in and offer a balanced outsider perspective. As a new board member, I would encourage you to build a relationship with another board member outside the boardroom. Over time, the relationships will build naturally but I found it super beneficial to have a board member I could call when I didn’t understand something and/or someone I could debate a specific topic with outside the board room. 

In your opinion, what are some ways the tech and venture industries could do a better job of empowering the next generation of diverse leaders?

ELENA: Well, I have to say this is so so hard. We have a pipeline problem. I would love to see venture and tech firms partner with local universities and colleges to change the diversity of graduating students. Even the best of companies — that are looking for diverse talent and have great intentions — don’t have the pipeline to succeed. 

In addition to fixing the pipeline problem, we can initiate change in the workplace as well. Some ideas that come to mind are focusing on funding startups with diverse founders, coupled with placing diverse talent across tech (startups and large tech). One of the reasons I joined Operator Collective was because I admire the ambition of changing how venture is done. Operator Collective is just one example of how we can begin to make the change we need to see.

AOC often talks about the skills she picked up as a bartender, and others talk about what they learned working retail. What were some of those formative jobs for you?

ELENA: One job I had was helping my mom with her AVON sales. She sold AVON to her family and friends so we could have extra money. I helped her write out the orders, deliver the catalogs, and sort the purchases when they arrived. Technically it wasn’t a paid job, but my mom loved the help. I learned to organize my tasks but also observed my mom juggle two jobs. That work ethic has passed on to me now. 

Another job I had was working at Longs Drugs (now CVS). I was a checker and occasionally worked the inventory on the floor. Sounds silly, but at 16 I knew that inventory on the shelves had to be found easily by customers or they wouldn’t buy it. Kind of reminds me of conversations I have now around taking friction out of the buying process. I enjoyed being friendly to my customers and checking them out quickly, and learned the most basic customer success skills. All of my happy customers kept coming back! 

What’s your secret super power? 

ELENA: I can connect the dots and have fairly decent emotional EQ. This has helped me tremendously in my career. As a leader, connecting people and insights across an organization just makes your job easier. In addition, understanding people’s emotions can help you resolve issues faster, connect with a customer or employee, and have greater empathy for them.

We believe culture, diversity, and operational excellence are a key part of building truly great companies. Learn more on our website or on Twitter and LinkedIn.

Supercharge sales productivity with an all-in-one “Scratchpad”

Meet Scratchpad, the digital workspace that puts an intuitive interface on top of Salesforce

The company: Scratchpad

Nearly all account executives use Salesforce, but most of their work is done in other places such as spreadsheets, note-taking apps, task managers, and calendars. This leaves data spread across tools and apps that never finds its way back to the organization. Scratchpad is the first workspace built for sales to solve this problem. It combines everything a rep needs for their daily work in a single intuitive interface. In less than 30 seconds, revenue teams can set up Scratchpad and start improving their data flows and forecasts to consistently attain quotas. 

Why you should pay attention 

While Salesforce is a powerful database, it doesn’t make it easy for day-to-day users to stay organized, manage meetings, update and share sales notes, follow through on next steps, set tasks, or collaborate. Instead, many AEs hack together general-purpose tools that usually remain completely siloed from each other and the system of record.  

With dozens or hundreds of tasks each day, every click matters. On average, sales professionals spend only about a third of their time selling. By eliminating duplicative data entry, Scratchpad helps AEs spend more time doing what they do best: selling. And because it’s seamlessly connected to everything they need in Salesforce, Scratchpad transforms CRM from tedious to delightful.  

The details 

Scratchpad empowers sales reps to do their best work by reducing the number of hoops they have to jump through to get their work done. With this modern workspace, AEs, account managers, and sales engineers at great companies like Algolia, Autodesk, Lacework, Productboard, Segment, Snowflake, Splunk, and Twilio are reducing drag in their sales organizations and helping more reps attain or surpass their quotas.

Scratchpad’s founders recognized early on that CRM was at the center of most revenue teams and always would be, so they thoughtfully designed every feature and interaction with front-line reps in mind. The solution is all about bringing Salesforce to where AEs need to be (whether in their calendar, email, anywhere on the web, or other sales tools) in ways that fit their existing workflows and help increase adoption of the CRM system.

How it works

Scratchpad brings a salesperson’s notes, tasks, customer context (including emails, calendar events, and activity history), spreadsheets, Kanban boards, search, and collaboration tools into one simple view. With this suite of tools, reps have everything they need to manage their day just one click away, so they’re no longer bouncing back and forth from a calendar, to a note-taking app, to tasks, and then to Salesforce. 

Users can quickly and easily update important fields for each opportunity, link their notes, create tasks or contacts, and view contextual data from Salesforce — all from Scratchpad tools embedded into their existing apps. For instance, with the product’s most recent update, they can launch Salesforce data directly from a calendar event view so they always have the full picture they need in order to take action. 

Why were obsessed 

We’re crazy about Scratchpad because the team recognizes that sales is a craft and reps are people like everyone else. Rather than painstakingly updating records, their time should be spent on moving deals forward, building customer relationships, and quality family time! Scratchpad is turning the notion of “boring” enterprise B2B tools on its head and bringing joy and delight into what can be an emotionally taxing job. This means sales managers get better visibility into pipeline health so they’re more efficient with coaching, and revenue operations leads no longer have to rely on best guesses for forecasting. 

Scratchpad’s origin

Serial entrepreneurs Pouyan Salehi and Cyrus Karbassiyoon co-founded Scratchpad in 2019 after observing the challenges salespeople were experiencing in their day-to-day workflows. The pair had previously co-founded another sales technology company, PersistIQ, where they developed a deep understanding and appreciation for the work of a salesperson and the challenges of working within a sales organization. 

Get involved

If you’re interested in learning more about Scratchpad, install its Chrome plugin or sign up for the web app in less than a minute, listen to the team’s Beyond Quota podcast, or check out the company’s many job openings.

We believe culture, diversity, and operational excellence are a key part of building truly great companies. Learn more on our website or by connecting with us on Twitter and LinkedIn.

Operator Spotlight: Lucid Co-founder and CEO Karl Sun

Looking for practical help and advice on an operational area that may be outside your realm? Each month we spotlight one of our talented operators, who’ll share their expertise and offer insights and ideas that may help improve your own operations. This month we spoke with Karl Sun, co-founder and CEO of Lucid Software.

Your company has been on quite a ride over the last 10+ years and just tripled its valuation. Describe what Lucid does and the problem it’s solving. 

KARL: The Lucid business is built on our foundational mission to help teams see and build the future. As we see it, there is a massive shift happening in the way that teams work together to build new products, new processes, or new strategies. These activities require that teams be able to work side-by-side to understand how their business works, and how to make it better.

We provide a unique approach to collaboration. Instead of relying on endless text to get a point across, our applications allow teams to work together on a shared canvas from anywhere in the world. Many have turned to our products, Lucidspark and Lucidchart, to bring their teams together virtually, and in so doing have discovered that this new way of working and collaborating is even better than what they were doing before. 

COVID has forced us all to rethink workplace collaboration and given rise to new ways of working. As a visual collaboration suite, how does Lucid fuel the future of work, while avoiding the trap of zoom/slack fatigue?   

KARL: Sometimes communication and collaboration are talked about synonymously. But the truth is many companies are acquiring tools that optimize for communication and hope that those solve their collaboration problems. In the context of a hybrid workforce, the power of a common visual language breaks down physical and digital communication barriers so teams get the big picture, achieve a shared understanding and align on next steps. The Lucid visual collaboration suite gives teams the chance to work side-by-side, no matter where they are located.

Right before Lucid, you were at Google for several years. What was the biggest mindset shift you had to make going from a $23 billion company to starting from scratch as a team of two?  

KARL: I actually came on initially as the first investor, but then my co-founder Ben (who was still in school at the time) eventually coaxed me into joining full-time. We worked out of a student apartment for a while — it couldn’t have been more different than what I had just left at Google. With a brand like Google, we could get any meeting with anyone. Starting from scratch with an unknown brand, we had to be a lot more scrappy to get any kind of attention. The product really had to speak for itself, so we spent most of those initial years making sure it was so good that people couldn’t ignore us. 

Another thing is, in a smaller company, you have to focus on the most essential projects that produce results and lead to progress. There’s an incredible need for everyone on your little team to be accountable and have a drive to do their best on every single project. 

Lucid had wild success with its freemium product before moving towards B2B SaaS. What advice would you give to other founders following that path? 

KARL: As we thought about growth, particularly before we had a sales team, we focused on three things. 

  1. End user outreach: We put a lot of effort into making sure that current and potential users understand we can solve a need that they have. This involves a few things, but one of the biggest factors is our focus on SEO. We rank for over 1000 keywords and phrases.
  2. Joining ecosystems: One of the main tenets of our products is that users can use Lucidspark and Lucidchart in the systems where they work. To enable this, in the beginning we worked really hard on our integrations and being available in different ecosystems. Having Lucidchart included in the launch of the Google Chrome Web Store and Google Apps Marketplace and being able to grow up in the Google ecosystem was huge for us early on. But now you can also find and use our products within Atlassian’s ecosystem, Microsoft 365, and Slack, to name a few. 
  3. Sharing and collaboration: Because of our focus on collaboration, we also see a lot of users come in through their exposure to a diagram or board that someone else has created and shared with them. Better collaboration not only makes for a better experience for the user, but it also then becomes something that they want to share with others to solve their same pains. This exposes more and more people to our products.

If products are conducive to these three things, there’s a lot of potential for going the freemium route.

There are many ways for CEOs to evaluate business success in a SaaS context. What are the most vital company-level metrics that you personally rely on?

KARL: In the early days, it was definitely user numbers. The main goal was to get more and more people into the product and just increase our general product awareness. More users in the product also meant we were able to collect more feedback to help make things better. As we started to mature beyond that, we started to focus more on usage and conversion rates. Those metrics helped us know we were making a product that was compelling enough that people were paying for it. 

Now, we’re focused on successful users. There are a lot of factors that we evaluate to determine whether a user is successful or not, such as how much time they spend in the product, whether they get to an outcome, etc. 

You’ve shared great insights on the people side of entrepreneurship. What have you done to maintain lasting connections with employees in today’s virtual world? 

KARL: Our company was office-based prior to the pandemic, so the shift to remote work was new to us and we really did have to rethink how we made sure employees still felt connected, especially to our leadership team. So we made it a goal to over-communicate as much as possible and bring our employees along with us as we made decisions. 

We increased the frequency of our company-wide emails and all-hands meetings. We also added a slack channel to these meetings to promote interaction and connection across the company as we adjusted to our new way of working. 

We tried to transition as many of our engagement activities to a virtual setting as possible. For example, we have an internal talk show called The Oatmeal that two of our employees started as a way to learn more about employees across the company on a personal level. We utilized that platform to help employees engage with leadership by interviewing a new executive team member each episode. This type of interaction is really foundational when building lasting connections between leaders and their teams. 

In your opinion, what are some ways the tech and venture industries could do a better job of empowering the next generation of diverse leaders?

KARL: Even though we have a lot of work to do with diversity in general in the industry, there is usually even more of a diversity problem in leadership positions compared to entry-level roles. So, I believe it’s really important to actively identify those diverse employees who are earlier in their careers, and are top performers or have high potential, and actively mentor them to be leaders in your organization.

AOC often talks about the skills she picked up as a bartender, and others talk about what they learned working retail. What were some of those formative jobs for you?

KARL: I learned important lessons from my first three jobs. 

My first job was reclaiming usable old bricks from demolition piles and stacking them on pallets. This taught me that sometimes the work isn’t fun, but it still needs to get done. It also taught me the benefits of a desk job and gave me an appreciation for air conditioning. My second job was bagging groceries at the supermarket. This gave me experience in direct customer service, and was also where I learned the importance of mastering every job, no matter how small. 

My third job was working at a summer camp for teenagers and my favorite part about that job was being exposed to so many different kids and counselors who had such unique interests and talents, and watching them come together to create some pretty amazing things. It gave me exposure at a formidable time in my life to the good that can be done when people with diverse backgrounds, perspectives, and experiences come together.

What’s your secret super power? 

KARL: I think I’m a good judge of talent. Part of that is identifying people who aren’t obvious fits (seeing beyond work history or experience) but have something in their background to suggest they have high potential. I also believe in looking at a group as a whole and understanding what needs to be added to the mix, whether that’s skills or personalities, to really complement the group and help the entire team be successful. 

The flip side of that is I also think I have a good BS detector 🙂

We believe culture, diversity, and operational excellence are a key part of building truly great companies. Learn more on our website or on Twitter and LinkedIn.

Our virtuous cycle: when operators do venture

I had ulterior motives for starting Operator Collective back in 2018. 

Sure, the core idea was always to bring together as limited partners (LPs) active operators from diverse backgrounds who had built the world’s most admired companies. They have the very expertise founders need as they grow and scale their companies, and the most relevant contacts with both potential customers and future employees.

They also bring their operating talent and outsider perspectives to shake up the venture world. After all, what operators do best when they see a problem is come up with a solution, and then execute the hell out of it.

Even though these incredibly talented executives are critical to the success of startups, they have largely been left out of the venture world. Traditional venture is rigid, competitive, and not team-oriented. It’s just not friendly nor particularly appealing to operators—especially in the case of our Operator LPs, 90% of whom are women and 40% people of color. The doors to venture have long been inaccessible to people from underrepresented groups.

Leyla Seka has always called herself an accidental venture capitalist. She first joined Operator Collective as a founding LP while still an EVP at Salesforce. She famously built and scaled the AppExchange, launching thousands of startups along the way, and was the first to champion equal pay, setting off the wave across the tech industry and beyond. After leaving Salesforce, Leyla was considering CEO positions as her next move. When I asked whether she’d be open to help build Operator Collective, I’m grateful she agreed to come on board.

Operator Collective was created, among other things, to serve as an anchor for active operators at the top of their game to engage in venture in a way that is collaborative and flexible, with aligned incentives. A place where they could not only continue to operate or ponder their next career move, but contribute to what we’re building, deepen their investing acumen, and have a supportive community of operators. Oh and have fun along the way.

Enter the virtuous cycle. I share with mixed emotions that Leyla is returning to a full-time operating position as COO of Ironclad.

She’s also transitioning to a new Operator Collective role as Chair of our Board of Advisors. Leyla joins Erica Ruliffson Schultz, Stacy Brown-Philpot, Claire Hughes Johnson, Tekedra Mawakana, and our newest Board member, Elena Gomez (welcome Elena!). I’m thrilled Leyla will remain a close part of the Operator Collective community, leading this group as they advise me, Operator Collective, and our portfolio founders.

Our model was designed to include active, current operators. Operator Collective and the venture world are better off today because Leyla Seka brought her operator lens to all that she learned about venture, and then ran with that knowledge to create a better ecosystem. Her substantial understanding of the enterprise software world helped Operator Collective make better investing decisions, and she leveraged her years of experience advising AppExchange startups to support our portfolio founders on how to scale.

One of these companies, of course, is Ironclad, which has built an extraordinary and beloved digital contracting platform. Working closely together for almost three years, Leyla and CEO Jason Boehmig very quickly developed a special bond, and it became apparent that she was uniquely situated to vault Ironclad forward in a way no one else could. Closing the loop on our virtuous cycle, Leyla is returning to her operator roots as Ironclad’s COO.

She has already made a huge impact on the industry, and she’s just getting started. Her relationships, outsider’s view, and execution also led her to create a long-lasting and game-changing institution called the Black Venture Institute, with a goal to increase the number of Black checkwriters in venture. This curriculum-based program has graduated 100+ fellows, including eight Operator LPs to date.

Leyla, my friend, I couldn’t be more grateful for all that you’ve contributed to building the heart, soul, and engine that is Operator Collective. Nor could I be more proud of how you took on the venture world and made lasting change during your time as an accidental venture capitalist. I can’t wait to see what you do next and am excited to be right by your side as you keep shaking it up.

5 actionable tips for DEIB recruiting

Countless research shows that diverse teams are better-performing. Harvard Business Review has demonstrated that what’s good for diversity is good for organizational performance. And according to global talent solutions firm Allegis Group, a diverse workforce and inclusive culture is one of the most in-demand asks from candidates. That’s important to recognize, since we all know how competitive it is to attract talent right now.

As the co-founder of a recruiting software platform Searchlight.ai, I have a lot of conversations with people and talent leaders. What’s become clear is that creating a diversity, equity, inclusion, and belonging (DEIB) strategy is a top priority for any company that hopes to be competitive. Many of these businesses are turning to recruiting as the place to start moving the needle on diversity.

In the words of Michael Kieran, Operator Collective LP and head of talent at Tray.io, “Recruiting is the front line where we can make the most impact on diversity. It’s our responsibility and a privilege to put DEI strategy in place and then tactically execute to improve what hiring practices look like.”

Read on for five actionable recruiting tips that will bring you closer to your DEIB goals.

1. Set one data-driven target at a time

Being focused is critical to changing behavior quickly. At Tray.io, Kieran says he cuts through the noise by choosing a main single target to aim at. His current metric focus is the percentage of the employee base that is non-male and non-white.

Be data-driven when crafting your diversity targets and customize them based on your company’s customers and mission. Zapier’s recruiting operations lead, Supreet Hundal, recommends investing in data hygiene and talent analytics software to measure demographic numbers. “Without data, it’s hard to know where we actually are against where we should be,” Hundal shared. “But with benchmarks, we can create targets and align on which groups to partner with, [and] which communities to invest money in.”

2. Define candidate success criteria based on competencies and capabilities

Jeff Diana, chief people officer at Calendly and former recruiting leader at Atlassian, says, “One of the fundamental truths about human psychology is that we’re drawn to people who look like us. We also know that organizations today are not diverse, especially in leadership. So it’s a fact that, despite our best efforts, there’s already all kinds of bias in our organizations.”

One way to counter these natural biases is to define objective, competency-centric hiring criteria. “Defining success criteria is key to successful hiring – period,” Diana says. “Getting scientific on the capabilities that make people successful at our organization helps us avoid screening people out on superficial attributes.”

3. Reinforce fair and consistent evaluation methods

While at Google, SVP of People Operations Laszlo Bock found that interviews were not actually that predictive of future performance. Recruiting teams need to get creative and look for new ways to accurately assess which candidate is the best fit for the job based on the objective success criteria set in step two.

“We must use frameworks and rubrics to keep our ratings consistent,” John Foster, chief people officer at Truecar, says. “Using a disciplined, pre-defined set of factors with clear definitions will result in less biased decisions and more objectivity. It will allow us to overcome gut instincts with numbers and science.”

One way to counteract subconscious bias is to corroborate what the candidate highlights in their resume and interviews with their prior on-the-job contributions. LinkedIn reports that reference checks can make your interview process more predictive. When reference data is compared with resume screens and interviews, hiring teams can confirm or disprove assumptions from interview feedback.

Some tips for fair and consistent evaluation include holding structured interviews, building diverse hiring panels, leveraging talent software, training interviewers, and building reinforcing mechanisms into your process.

4. Actively source from historically excluded communities, don’t rely on inbound

Once you’ve set your candidate success criteria and evaluation process, you’re ready to screen your pipeline. But the resume screening process for inbound applicants is often rife with inconsistencies that can lead to discrimination. By investing in outbound sourcing, you’ll have an ethical path to getting more diverse candidates into your funnel.

Sourcing is also a great way to remove barriers that have traditionally faced underrepresented groups. To bolster this strategy, experts recommend tapping into new sourcing channels, nurturing relationships with communities that work with historically excluded groups, and investing in software to support your sourcing strategy.

5. Tackle post-hire metrics together – especially quality of hire

“Sometimes recruiting is silo’d from the rest of HR, but that’s the craziest thing ever,” Diana believes. “You have to cross over to HR and see which candidates are actually successful. If recruiting doesn’t measure post-hire outcomes like quality-of-hire, you can’t show the positive impact that increasing diversity has on the business.”

Quality-of-hire (QoH) measures the value a new hire adds to your company, and gives recruiting teams data-backed answers around which candidates become top performers and which skills and competencies are predictive of performance during the interview process. Yet, how to properly track QoH is a long-standing debate amongst recruiting and HR leaders given the difficulties in effectively measuring it.

Despite this history, QoH is powerful for increasing DEIB for two reasons. First, it can scientifically show the benefits of hiring diverse talent. Secondly, by understanding which competencies and skills predict on-the-job experience, teams avoid over-indexing on prestige markers and familiar credentials. It’s not surprising that nearly 40% of talent acquisition leaders list tracking QoH as their top priority.

DEI is DNA

Brandon Sammut, chief people officer at Zapier, says, “DEI is DNA.” The world’s leading companies know this to be true, but making a sea change takes time. I believe that the quickest path to action is to embrace the reality that all humans have biases. Designing recruiting systems with the five core elements I’ve shared can create an engine for faster, fairer diversity outcomes.

Anna Wang is the co-founder and CTO of Searchlight, a critical piece of talent software for companies serious about hitting their diversity targets and increasing talent density.

We believe culture, diversity, and operational excellence are a key part of building truly great companies. Learn more on our website or on Twitter and LinkedIn.