The tradeoffs are clear: risk/reward. Raise too much and you get too diluted, raise too little and you may not have enough money to show progress to get to the next round. Often your valuation is a little aspirational and you grow into it.
Is owning 50% of a 10M ARR company better than owning 5% of an 100M ARR company? It depends on your goals in life. If you want to fast track your learning & personal growth than start a venture-backed business. If you want a chill time run a lifestyle business. Both are fine choices.
Have VC add-on services actually been useful? Generally, they are vastly overstated. Assume value-neutral to value-negative. Some of our investors are the exception, but they're rare.
Does taking investment change the things you prioritise? Of course - growth :)
Two pieces of feedback come to mind:
"You suck at public speaking" - probably not the most consciously worded feedback, but inspired me to get a speaking coach.
"You need an exec coach" - I wrote about this here: https://blog.alexmaccaw.com/ceo-coaches
Probably running a lifestyle business, traveling, and writing.
I wake up at 8am, get in the office by 9am. Then I work till 5pm, go to Barrys, and then head back to the office. Some nights I work till midnight, others I have dinners (which are typically work dinners). Make no mistake, building a startup is very hard and requires a lot of time; don't believe anyone who tells you otherwise. It's important to take exercise during the week and unwind (or party!) on the weekend.
I'm most proud of our culture. We have hired some really awesome people that I just love to be around. I get to work with many of my best friends every day. What could be better than that?
There are two ways founders attract talent in the early days.
The early people at Clearbit were all friends of friends. They are all here five years later!
If I was building a company from scratch again, I would either build it entirely distributed, or I would build it in Canada and take advantage of the exchange rate / lower wages.
SF is insanely expensive; building a large company here is no longer viable. However, what is still viable is a small headquarters. The advantage being that you can hire really talented people, especially for leadership roles.
We track topline growth a number of ways, but primarily via ARR.
Let me paste an internal memo:
How do you build a successful company? The mantra of Y Combinator, the famed startup accelerator, has always been: make something people want. In other words, make something useful, and people will beat a path to your door.
Perhaps that was true a decade ago, but look around and you will see companies with great products that are struggling - why is that?
It turns out there has been a shift in the fundamental requirements for success, especially in the B2B SAAS world. In the past, having a great product was enough. Today it's table-stakes. It has become easier and easier to build a great product thanks to AWS, new development frameworks, and open source libraries that save us years of development time. Because of the low interest rates and an abundance of capital, it’s never been an easier time to start a business. All of this has led to an explosion of SaaS companies (over 8000 in the Martech space alone).
What this means, is that it’s no longer enough to build the best product. Today, companies have to excel at both product and go-to-market (sales & marketing) in order to succeed.
The companies that are succeeding are taking a product-like mindset to their go-to-market motions. They've automated marketing processes, built experiment frameworks for testing, and quickly iterated to optimize the most out of their funnels. In other words, they've built growth engines.
Look around you at the technology companies killing it right now: Segment, Slack, Stripe, Zendesk. They all treat growth like a product, building scalable growth engines that are fuelling their incredible success.
At Clearbit, we've been right in the thick of this. One of the reasons we've been so successful over the last five years is that we've been selling shovels in a gold-rush. Our data is the fuel used to power our customers’ growth engines. We've noticed something interesting though.
Firstly, building these home-grown growth engines are very expensive. A growth engine requires unified access to all of the data you have, both first and third party, a tricky undertaking. It requires engineers to pipe it all together at near real-time speeds. And it requires hiring domain experts who understand the cutting edge of sales and marketing tech.
Secondly, these home-grown growth engines more or less look the same. They all have three characteristics: a way of creating demand (e.g. ads), understanding when people show intent to buy, and converting that intent.
So we asked ourselves a simple question: What would it take to build a growth engine that worked out of the box? That's why we built Clearbit X.
At Clearbit, we're already domain experts in the latest go-to-market tech. We also have the underlying backbone of data necessary. We can leverage all of that to build a world class universal growth engine, saving our customers the trouble of reinventing the wheel.
X is a ground-breaking technology that marries our customer's own database with ours. With X, you can:
Identify and reach your entire total addressable market (i.e. ads) Increase conversion to intent by providing target accounts with a custom experience using Reveal & Personalization Convert accounts that show intent by ensuring your sales team reaches out at the exact right moment (sales alerts)
Hope that answers the question!