From Startup to Global Scale: Securing and Building the Company’s Culture Are Keys to Success of Tech Leaders

The days when technology chiefs could focus simply on hardware and software are gone. For technology leaders, aligning IT with long-term strategy and attracting and nurturing a winning team has become key in a world where customer expectations are growing, and the pace of change continues to accelerate.

Today’s technology businesses need to think strategically at the local, national, and global level. Many companies run business online or mobile first and are getting creative and competitive advantages from collecting and analyzing consumer data. This provides both opportunities and challenges: on one hand, companies can get access to global customers fast, yet they are also facing competitors both at home and abroad, not to mention threat actors who could be located anywhere and can come at you with sophisticated attacks. It’s your talent against theirs – with your enterprise and your customers in the middle.

At TCV, we’ve been focused on talent and culture as critical success factors for more than 20 years. Many of our investments have turned on building or sustaining successful cultures and nurturing them with the right people. For this year’s invitation only CTO/CIO Summit we decided to look at talent and culture together with the challenges of globalizing and securing the enterprise. We brought together over 40 technology executives, including founders, product leaders, TCV partners, and — of course — CTOs and CIOs, in Half Moon Bay, CA, for an opportunity to build peer relationships, learn from shared experiences, and discuss top-of-mind issues facing these leaders. We also mixed up the “talent” for the event itself, drawing not only on working CTOs and CIOs but also career IT experts with consulting and investing experience across multiple industries.

For us, the most important part of the two-day event was gaining a deeper understanding of both the challenges and opportunities technology executives need to balance, including:

  • Winning the Talent Wars and Creating a Winning Culture
  • Building a Globally Distributed Organization
  • Privacy and Identity Initiatives and Securing the Enterprise
  • Our agenda centered around best practices in scaling a global organization. Other topics we discussed included how to integrate acquisitions and best practices in managing a global workforce.

Here are the highlights:

Over dinner, Zillow CTO Dave Beitel spoke about how technology has transformed the real estate industry. Dave joined Zillow in 2005 and has seen the company grow, both organically and with 13 acquisitions in the last 12 years. Dave explained the importance of creating a strong culture across multiple locations and laying out paths to career development to motivate teams as organizations scale. He also provided advice on a common challenge that many growing companies face, particularly how to integrate offshore teams and make them an extension of existing efforts rather than adjacent resources. He also discussed with the group how to achieve success in scale with multiple office locations and different cultural identities.

Tim McAdam led the next day’s first panel with Victoria Schillinger, VP of HR at Alarm.com; Caroline Horn, Partner at Andreessen Horowitz; Michael Morell, Managing Partner at Riviera Partners; and Jonathan Schoonmaker, SVP of HR at FinancialForce. Their topic: winning the talent wars against today’s tech giants. The practical tips flowed freely, starting with university recruiting. Pick a few schools and work them, including both Ivy League schools and state colleges. Build relationships with influential faculty. Introduce your brand to younger students, not just seniors. When they become interns, give them meat to work on, not crumbs – having an impact is what they value most. If they turn down an offer, wait 2-3 years and call again – they may not be having the impact they expected at that big company they chose. Retaining key talent has to be proactive. Sit people down and map out how they will develop themselves and increase their impact by staying with you. Give them management opportunities so they can imagine themselves as leaders. Don’t expect diversity to walk in the door — look for talented, highly motivated people who come from completely different fields such as law or the military. And finally, the 90 days after a new hire starts are more important than the 90 days spent hiring them. Set them up for quick wins, build in plenty of touch-points, and make sure they’re comfortable in the culture.

Ted Coons continued the conversation with a focus on talent and culture, talking with Kameron Kordestani, a partner at McKinsey & Company, and Otto Berkes, CTO of CA Technologies, about building a globally distributed company. Both speakers separated the “artifacts” of culture – posters, slogans, logos – from its essence: ways of working that make the organization succeed. People who embody those essentials should be made ambassadors to new acquisitions or newly built development centers, so that people new to your culture can experience it live. When new team members absorb it, they should be given broader responsibilities in the combined company – this leverages their talent and inspires their original team. Particularly after M&A, the acquired team needs to understand its role and contribution to the combined entity; this should happen quickly and positively. Pay for travel if you can; people in far-flung organizations form bonds faster when they meet in person. Both Otto and Kam warned against sticking too closely to integration playbooks, particularly when the acquired technology is new or different. Sometimes a talent-rich team should not be integrated rapidly. Don’t compromise on security or safety but take time to observe how they work before you impose on a new team – the last thing you want to do is spoil an acquisition by how you integrate it.

TCV EIR Jonathan Shottan, Manmeet Singh, Co-founder and CEO of Dataguise and Pablo Jensen, CTO of Sportradar pulled back the curtain on Europe’s General Data Protection Regulation (GDPR) and California’s new privacy laws. Simply put, GPDR is about What, Where and Why: What private data do you have? Where is private data stored? Why do you need to process that private data? Both the compliance challenge and market opportunity of the new regulations are huge and what unites them is the challenge of identifying the vulnerabilities. Many companies mistakenly believe they are compliant, because they encrypt and segregate various types of customer data physically or in the cloud; but when they bring data types together for analysis, they create “PII” – personally identifiable information. The new laws also require companies to delete data if customers demand it, but that’s likely to create havoc with legacy database applications built on relational technology. And how do you delete older data stored on physical media? Enter data masking, at production scale, to stand in for deletion and encryption. First movers — with enough IT spend on decoupling, segregating, and masking data — may even competitively enhance their brands as “more secure” than others.

After lunch, Ted Coons and Charles Beadnall, CTO of GoDaddy, delved into the transformation of GoDaddy’s culture, a process that started back in 2013. Engineers loved the company’s mission of providing small businesses with a home on the internet, but deterrents included fly-over geography, aging facilities and sensationalist marketing. With a new CEO – and marketing campaign – GoDaddy began recruiting heavily. The challenge was forming a new culture that welcomed both existing employees and a flood of new developers in ways that produced better products, faster. Charles employed a version of the 80/20 rule: if he could populate 20% of a department with more diverse people who modeled the right behaviors, they would tip over the rest. The company hired people based on referrals, recruited many female graduates from local universities and placed experienced diverse hires in senior IT roles. Charles also drew in Ph.D.s from MIT and spent time with teams around the globe to transform a culture while keeping the company focused on growth.

Matt Robinson led the day’s final session on securing the enterprise with Amir Ben-Efraim, co-founder and CEO of Menlo Security; Rob Fry, VP of Engineering at JASK; Robert West, Managing Director at Deloitte LLP; and Christian McCarrick, VP of Engineering at Auth0. Matt first asked the panel how CIOs and CTOs should differentiate among today’s legions of security providers. Recommendations included assessing your vulnerabilities so you’re asking the right questions, getting referrals from peers, and anticipating the inevitable consolidation among security providers. Not every company needs an industry giant – those companies were startups once, and today’s upstarts may have superior technology. The panel then discussed prioritizing among today’s proliferating threats. Getting governance in place is critical – if no one fully owns the security portfolio, priorities will be set for the wrong reasons. If the role falls to you as CTO or CIO, you must be (or become) a good storyteller to convey the threats to your company and build consensus on addressing them. It’s also vital to recognize that malware will get inside your systems, but it won’t be the end of the world if you’re prepared. Ultimately the biggest weakness of all security systems is the human element. Education and training are essential and need to be on the agenda regularly. In addition, Amir argued that companies should hold vendors to a higher standard, aiming to receive 100% efficacy to keep companies protected.

We are grateful for all the valuable insights our speakers shared with attendees and the TCV community we strive to create. We look forward to exploring new topics and connections during our next TCV event.

###

 

The views and opinions expressed are those of the CTO/CIO Summit speakers and do not necessarily reflect those of TCMI, Inc. or its affiliates (“TCV”).  This summary is not an offer to sell or the solicitation of an offer to purchase an interest in any private fund managed or sponsored by TCV or any of the securities of any company discussed.  Not all companies discussed above are TCV portfolio companies.  Any TCV portfolio companies discussed above are not necessarily representative of all TCV investments, and no assumption should be made that the investments identified were or will be profitable. For a complete list of TCV investments, please visit www.tcv.com/all-companies/.  For additional important disclaimers regarding this document, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at http://www.tcv.com/terms-of-use/.

 


TCV Promotes Nari Ansari to General Partner

We are delighted to announce the promotion of Nari Ansari to General Partner.

Nari joined TCV in 2006 and has played an integral role in the firm’s B2B investing practices and our collective efforts to accelerate growth at our portfolio companies. Since our inception in 1995, we have been committed to helping entrepreneurs become market leaders, and Nari’s deep understanding of technology, his connections with category leaders, and his ability to uncover exceptional opportunities and partner with talented management teams reflect the value the TCV team strives to bring to CEOs.

Nari Ansari

Nari focuses on investments in the software, fintech, healthcare IT, and tech/data-enabled services sectors. He currently serves on the board of directors at HireVue, OneSource Virtual, and Watermark and also works closely with Avalara (NYSE: AVLR), AxiomSLPayoneer, and Varsity Tutors. Prior investments include EmbanetCompass (acquired by Pearson) and Merkle (acquired by Dentsu). Before TCV, Nari was with McKinsey & Company in the San Francisco office, where he focused on assisting clients in the software, storage, and semiconductor sectors. Nari received his M.S. and B.S. in Management Science & Engineering (MS&E) from Stanford University’s School of Engineering.

We are delighted to acknowledge Nari’s outstanding contributions to the firm to date and we look forward to his continued success at TCV for many years to come. Congratulations to Nari on his promotion.

The General Partners of TCV

###

 

The companies identified above are not necessarily representative of all TCV investments and no assumption should be made that the investments identified were or will be profitable. For a complete list of TCV investments, please visit http://www.tcv.com/portfolio-list/. For additional important disclaimers regarding this post, please see “Informational Purposes Only” in the Terms of Use for TCV’s website.


Making Mobile Magical = Selling Without Sales Reps

When the world flipped from desktop to mobile, consumer brands made an often painful, but highly profitable pivot. It stood to reason that high-velocity B2B software companies could likewise take advantage of the big shift to mobile. Platform trends make for disruptive go-to-market models, right?

Many tried, but few have succeeded. SafetyCulture is one of the few that thrived. At TCV’s annual growth offsite, David Yuan, GP at TCV, caught up with Luke Anear, CEO and founder of SafetyCulture, to talk through his path. Luke is not only building a disruptive mobile-SaaS company. He’s also one of the most interesting entrepreneurs. Over dinner, he shared his career as a private investigator, nearly losing his shirt as a spec boxing match promoter and working as a videographer for Tony Robbins.

For an inside story on how SafetyCulture reached high-level scale and a compelling market position on the back of a mobile-first product, settle back and click play.

 

Dave Yuan: I’m a general partner at TCV. I’ve been passionate about this conversion between consumer, internet and enterprise software go-to-market models. We’ve been exploring this intersection for the past decade. This past Summer I had Luke, the founder and CEO of SafteyCulture, join us at our offsite and talk through mobile first. SafetyCulture’s reached a high-level scale, great growth, and a really interesting market position on the back of a mobile-first product, monetization, and go-to-market strategy. Hey, Luke. Thanks for joining us today. Good to have you this Summer.

Luke Anear: Thanks, David. Yeah. Nice to be chatting to you.

David Yuan: Well, I know the topic for today is mobile, but before we jump into it, give us a snapshot in SafetyCulture.

Luke Anear: SafetyCulture created the checklist app that allowed teams to be able to do inspections and take photos and build workflow around maintaining standards in the workplace. And originally, it was based on purely safety and helping people go home at the end of the day, but today it’s across quality and really anywhere that teams are trying to maintain a high standard in the work they do. I think it collects about 400 million responses a year now through the app, and we’ve built a pretty interesting database now which allows us to benchmark and understand how well teams are managing risk and also how they can improve performance.

David Yuan: Awesome. Can you give us a sense of size? You know, customers or whatnot. Just so folks know the level of scale you’ve reached because it’s been impressive to watch you grow.

Luke Anear: Sure. We service about 70,000 organizations, and the team– we’ve got about 280 people on our team and we’re in most of the developed countries around the world. And people use us across all sorts of different industries from transport and logistics, to hotels, to Starbucks stores making sure they’re clean and look good every day. It’s a pretty broad spectrum of customers that we interact with.

David Yuan: That’s impressive. Okay. Well, the topic is mobile. On the consumer internet side, obviously, over the past 5, 10 years, we’ve gone through this often times painful pivot from desktop to mobile. But generally, that’s where the world is on the consumer side. Mobile is everything at this point, or at least for right now. Why hasn’t that happened in the enterprise software market?

Luke Anear: I think the people who buy software are typically still taking directives from management and it makes sense that they want to be able to get certainty from what they buy and so that’s based on traditional sales processes, people promising a lot with their software and then quite often they’re not quite coming to fruition over an extended period of time. We’re really empowering more operations and field-based people to do their jobs better and once they get traction with that, then it’s hard to stop. So I think we’re seeing more and more examples of that, but there’s still a long way to go. Enterprise is slow to adopt things. There’s a lot of stakeholders and so, I guess, companies like SafetyCulture being able to Trojan Horse our way in and then navigate through that process without having to be negotiating and trying to sell software to anyone. It’s a pretty fun time.

David Yuan: Absolutely. You’re obviously successful now but when you were getting going, when you were getting started, why do you think Mobile First would work as an approach for your product?

Luke Anear: I think you go back to around 2011-2012 when we started looking at this. It was really the point where everyday workers now had this computer in the pocket.  We heard the term before but when you think back, the iPhone came out in ’07, and it took three or four years really for people who weren’t sitting in front of computers to get that level of penetration. It was around 2011 that we went, “I think the timing is right for us to provide a tool that everyday people can pick up and build a workflow and start implementing”. The hypothesis was would these people be comfortable enough to even download software.  It turns out most of them, because they had never been involved in buying software and they didn’t know the rules about buying software and using software. And so they just would do it and other people would tell each other that that’s what they’re using and so word had spread. It’s worked well for us.

David Yuan: That’s great. I imagine when you were getting started that the first step was getting individual use, so getting that download. And we have seen quite a bit of that level of traction. But very few companies get the broad adoption that SafetyCulture has achieved within a company or organization. How did you do it? Was it intentional? Was it organic or a mix of both?

Luke Anear: Probably a little bit of luck in there as well. We focused pretty much on solving a specific problem for the workers out in the field trying to do their job, trying to manage risks so, it’s kind of like the field manager, is probably the person we targeted. And, essentially, they became our champions. They were our salesforce in a sense where they would all of a sudden feel that they’ve got this new superpower, and they can share that across and up and down through their business and that one thing would lead to another. Because they were able to articulate the benefits so well internally, they could steamroll over the top of IT policies or any of the normal barriers. We’re not going to stop using this. You guys are going to figure out how to make it work because we love it.

That was really the secret to our growth, that we were empowering those people. They had asked us for slide decks to present to their management. We still get asked that all the time from people like what materials can I use to present? It’s a marketer’s dream where you’ve got people who are your customers, who are working hard for us to roll it out because it makes their lives better. And that was really quite something I hadn’t seen before, when we saw that happening.

David Yuan: So I understand it, people are looking for help from SafetyCulture to present to the internal procurement folks or help to actually present the work that they’ve created in SafetyCulture to be consumed by upper levels?

Luke Anear: Interestingly, from a growth point of view, they’re pitching our software to their internal management. They’re literally doing pitches. They’ve got the decks up and they’re saying, “Here’s the company. Here’s how many users they have. These are the companies that use it. These are the use cases.” And then they bring their own use case in and “this is how we’re using it. We want everyone here to be using it.” It’s just a phenomenal thing to kind of watch. You kind of pinch yourself and think: How did ever even happen? Because we never had salespeople and, yet, these people were using our products and selling it for us.

David Yuan: Absolutely. I played around with your product a little bit. It strikes me, that there’s that elegance to it. The product really works well for an individual user, but it feels like the more people on SafetyCulture in my organization, the greater the power. And so how do you incent that team adoption?

Luke Anear: The path to getting them to adopt it across their team gets accelerated when we get more people doing it, particularly early on. That’s been an area that we were focused on in terms of onboarding and getting people up to speed as quickly they can, inviting other people on their team. That’s when things start to move. Frankly, if they’re a three- or a four-person team, they’re never going to experience incredible benefits from it compared to 1,000-person team. We want to help them get to 1,000.

David Yuan: That’s where you set the paywall.

Luke Anear: Yes, we move around the paywall and look at different things. You see churn come down once it gets stickier once more people are using it, and that’s when the value increases for them. So we focus on getting them to that point.

David Yuan: Are there other elements of the paywall? One, obviously, is users, which we describe, where the trade-off is monetization and adoption and churn, like you just walked through, but are there other elements of the paywall that you either experimented with or currently employ now?

Luke Anear: We’ve tried usage limits and things like that. We still have a usage limit for users in terms of how much they can collect and store, but I always try and push the free line out on that. And we’ve played around with a certain number of inspections and things like that and then you hit a paywall. But I try not to put shackles on the experience as much as possible. There are companies that try and extract money at every opportunity, and then there are companies that want to see you do well, firstly, and then we’ll give you opportunities to pay for more. And I think we take that seriously. It’s not something that we kind of sit back and say, “Let’s get at every dollar we possibly can.” We always leave quite a bit on the table from that point of view because we value that experience more than we value getting every dollar that we can.

David Yuan: Absolutely. Can we double-click a little bit on that because I think a lot of companies aspire to have that customer intimacy and insight but as you scale, it can be quite difficult to capture those voices in a way that cuts through at all. Are there specific things that you guys do to make sure you stay close to the customer voice on this like paywall on product and other aspects?

Luke Anear: Yeah. Like engagement metrics are probably the strongest signal on that. And you want to see at what points do people get their real sort of aha moments or wow moments. And building the experience towards those moments, that’s kind of key, and so understanding and breaking down what are the points where people achieve a certain level of interaction so that we can either accelerate the time to that moment or increase the peak of that moment. People remember the peaks of the experience and that’s what brings them back. And sometimes it’s simple things. It’s often not necessarily what we value. It could be a PDF report, for example, that’s got photos in it. That’s the most basic thing from a tech point of view. But from our customer’s point of view, they used to take photos on their phone and then type stuff up in Microsoft Word and then put it all in. And now magically, it kind of happens.

David Yuan: That’s great. If the broader topic is mobile, it leads us down a line of thinking, which is providing discreet value or utility value or great experience through individual user. As we talked about, as you deploy more broadly into organizations, you start bringing teams online. When you think about the features or the product experiences that really drive joy for an organization, are they different than the specific user experiences or are things like analytics or benchmarking?  Do they become more central? How do you think about the overall organizational experience to complement the user experience?

Luke Anear: I think collecting data for the sake of it is no one’s outcome. And so it’s about, what are the decisions we can make with this data? How do we get the insights? Or how does this make us more intelligent or smarter? That’s ultimately the goal. And the more that we can do that proactively and the less burden that we place on the organization to have to understand the data and make sense of it, the easier it is for them to be able to adopt it and share it. For us, collecting, having an incredible front-end user experience, is part of it. That makes it easy to collect information. But then how do you take a position on what information is important? And I think we’ve seen a lot of BI tools and stuff, where people can pivot and do all sorts of stuff with their data, but I don’t think that’s enough anymore. And for us, it’s about understanding our customers, so that we take a position on what data is going to be most valuable to them. And then we shape the experience around that and really serve up those decisions for them on a platter. They essentially want to know, our customers want to know, what’s working well across their teams today? What’s not working well?

And importantly, what do we do about that? Understanding just those three basic questions drives a lot of the decision-making for us around how do we present this information back? And how do we make it easy for them to get the insights that help them run their business? And make it easy for your customers to get value from that data and those insights. That takes a deep understanding of the customer to do that. And also, when you do it well, it increases the competitive barrier for other people to come in, because a lot of them just take the easy way out and go, “Let’s just allow everybody to pivot, however they want to pivot the data.” And that just creates work for our customers. They’re like, “Don’t create work for me. Make it easy for me.”

David Yuan: I love it. The same intensive focus on consumer experience at the individual user level extending into the team level and ultimately the enterprise level. That makes a lot of sense. And do you see that progression as SafetyCulture is adopted in your customer? Do you see that progression naturally mirroring monetization? Is there a certain point in which that you realize that experiences gone from the individual now to the team, now to the organization, where it does make more sense to consider different paywalls or different levels of monetization?

Luke Anear: Yes. And it also gives you opportunities to add value layers on top of that. We can mix that data with other data sets. We now do IoT and sensor-based hardware as well, which collects data that we layer in on top. When you sit back and take a position on what’s valuable, you’re then in a great place to decide what else is relevant, and what else can we provide that’s going to be helpful? A lot of thought goes into that, and our customers have got other data that’s valuable. And we’ve mixed data with customer satisfaction data, and we can see uplifts in CSAT when people are doing regular checks and inspections. It becomes multi-dimensional.

David Yuan: We’ve talked about being super intentional about the user experience from individual users to team to organizations. We’ve talked about monetization along those same dynamics. Let’s shift gears a little bit to go-to-market. So, initially, most bottoms-up premium models are all marketing and, primarily, organic marketing. When did you get the conviction to start really leaning into paid marketing, if you have, and when did you start thinking through hiring that next layer of expense, those inside sales reps? You’re moving from a very organic business to more a traditional software model over time, so when did you know that it was time to start putting some money to work?

Luke Anear: I think we’re still getting there actually. We haven’t spent a lot on acquisition and that. We do a little bit on content and things, but I think we’re still at the beginning of that journey. I probably can’t offer much in that sort of area, but in terms of inside sales, we have in the last 12 months, had people who are now focused on our existing customers and helping them get more value and expand and accelerate their path to value. We now will pick up the phone and chat with people. We never used to do that. I think for about the first 40,000 organizations, we never picked up the phone and spoke to them unless they specifically wanted to talk to us about something.

Because we’re a fairly low price point, it doesn’t make sense for us to try and have someone closing every sale. We’ve always got to sort of separate that out and make sure that our organic growth engine is strong. And that makes everything else easier. If you’ve got a product that sells itself and that can be adopted and self-served, then when you come to talk to a customer they’ve already got their own case study. We’re very conscious of that. We never want to be just saying, “Well, let’s just build out massive amount of salespeople,” and that becomes your growth engine. For us, it’s all about the organic adoption and then expanding that adoption and making sure that they’re getting maximum value from it. That’s a conscious choice and something we’re continuing to find a balance on.

David Yuan: You’re the envy of probably 90% of the software world, to be a product-led go-to-market, that’s fantastic. In terms of your customer success and customer support, it sounds like you think about those heads or that expense on a return-on-investment basis. But my guess is you aren’t actually compensating them on sales. Are you assigning quota to your customer success reps or is it purely organic?

Luke Anear: Not for the most part. There are a couple now of account execs, two or three or something. But all the rest are just focused on helping the customer and doing what they do. So yeah, there’s probably a place for it, I think, as we continue to grow. And talking particulars, we never actually sold a big, upfront deal, in terms of 1,000 seats or something, until just probably seven months ago was the first time we’d even done 500-seat deal. It was always only just one user and then they expanded up to thousands. And now that we’ve got companies that come to us and say, “Look, we want to start with 2,000 users.” That’s where the account execs can have that conversation and it makes sense to have a quota for them. But that’s a new area for us.

David Yuan: The beauty of your business, and as we talk through it becomes more and more explicit, is that SafetyCulture is following a different playbook. It’s a different software business model. As you think about the mobile opportunity and the bottoms-up opportunity, do those apply to traditional application software companies? Are there things that a traditional app company can learn from SafetyCulture, or is it really a grounds-up business model and grounds-up product model?

Luke Anear: That’s a good question. What we’re seeing from a lot of the established desktop or legacy players is that they’re trying to extend their software to mobile. And I think at best all they’re going to do is sort of keep their current customer because their current customer wants them on mobile. You’ve got a lot of luxuries on desktop. There’s more real estate. You have typically people who sit in front of a computer for at least a good part of their day. Those luxuries don’t exist with mobile. People are on the move. They’re out and about.

Where we see companies struggle is when they’re simply extending the functionality, or even a reduced functionality, of their desktop experience. You need to be able to step back and think about that user as a different customer. You’ve got to break down what they do in their day, what their outcomes are, and how can we do that. And that may be an extension of some of our software. Or it could be a completely different experience.

We want to get them out of our app as fast as we can with the outcome they want. Whereas a lot of the time, people think about trying to keep people in their software for longer. We’re trying to help them get on with the things they need to do, and that means get them in and get them out so that they can get on with their day.

David Yuan: Absolutely. If it is a truly generational shift and it’s a new category of application companies, who else is doing this well? Who else besides SafetyCulture do you look to, do you admire, that inspires you from a mobile product standpoint?

Luke Anear: I think for enterprise software to do well, you’ve got to solve a particular problem. There’s an Aussie company, Canva for Work, which is a design experience for teams. They’re doing great. There are obvious ones like Intercom, where I can now see what customers are saying and how we’re interacting with them. I can deal with stuff. And then you’ve got other guys, Trello, which is part of Atlassian now. I think there’s a mix. But I think the key thing is not necessarily to follow some of these others. Canva for Work is very different to us, as is Slack and Intercom, and so while there might be similarities in some of the functionality, the outcome that they deliver, those peaks and those moments for customers are completely different. There’s a few around that we looked at. But I think that the biggest clues will come from your customer base and understanding that more than admiring what other mobile-first companies have achieved or mobile experiences are on offer.

David Yuan: Good point. You’re a global business. SafetyCulture is a global business, but you were founded in Australia and as we look at product-led software companies, a preponderance of them are actually coming out of Australia and New Zealand. What’s going on? Is there something in the water? Is there something foundational going on in your neck of the woods that make for these beautiful UI product-led business models?

Luke Anear: I think the simple answer is probably we never had the money that you guys had in the U.S. and so we just had to figure it out. And we didn’t have that kind of luxury of time and great investors that would just be backing us from the beginning. We had to really get traction and prove out a business model before people would even take any notice of us. I think that’s played a part for a while. And then there’s a couple of other factors as well. We never had the experience or the talent, really, in Australia. No one really had the belief on how you could scale a company from your garage. You’d hear about it, but it was always in the U.S. Now there are more examples, people are starting to realize what’s possible. And we’re also seeing a lot more talent coming back to Australia that had left. There’s 24,000 Australians working in the Bay Area. You’re seeing more and more of those come home. And then we’re seeing other people from all around the world realizing that there’s now a pretty healthy tech community, and it’s like doubling every couple of years. Sydney’s got at least twice as much talent as it had two years ago and we’re seeing that continue. It’s a number of factors all coagulating together to make it a better outcome for us all, but we’re still going to work hard. And as much as people think we’re out surfing at the beach all day, we’re doing some long days and hard work to get it done.

David Yuan: Absolutely. The good news is, the market certainly has noticed and I’ve been taking that 14-hour flight for the past five years looking for companies like yours, so the world has noticed. And congratulations to that whole ecosystem. This has been awesome, Luke. Really appreciate all the great thoughts.

Maybe stepping back from business a little bit, you lived a super interesting life in addition to being a successful entrepreneur. Taking a step back from SafetyCulture, what are you most interested in the business world or even outside of the business world?

Luke Anear: Well, a couple of things. I think travel is so accessible now to everyone fortunately, compared to previous generations, that your ability to go and experience different culture or different part of the world is greater than ever. I think that’s super exciting. I have a very curious mind, I love learning from different people, and cultures, and stuff. So anytime I can get exposed to the way other people doing things, that’s something I always look for. In terms of a broader business world, I think it’s great to see the amount of wealth that individuals are amassing, Bezos and different people, and even what we saw Warren Buffet doing with Bill Gates. I think to see them now harnessing that and channeling it towards solving really complex and big problems around the world that perhaps governments in the past would take responsibility for but just can’t anymore. I think to see that and these examples being set for everyone that’s following, is something that I look up to and think that’s making the world a better place. I think the more social conscious we become and the deep desire for people to want to improve the world around them, and make life better for other people, I think more of that that’s happening, the better. It’s just a great time to be alive.

David Yuan: Absolutely. 100%. Luke, thank you so much for your time and your thoughts. This is fantastic and congrats on all your successes at SafetyCulture.

Luke Anear: Thanks, David. Much appreciated.

 

###

The statements, views, and opinions expressed are those of the speakers and do not necessarily reflect those of TCMI, Inc. or its affiliates (“TCV”). TCV has not verified the accuracy of any statements by the speakers and disclaims any responsibility therefor. This interview is not an offer to sell or the solicitation of an offer to purchase an interest in any private fund managed or sponsored by TCV or any of the securities of any company discussed. The TCV portfolio companies identified, if any, are not necessarily representative of all TCV investments and no assumption should be made that the investments identified were or will be profitable. For a complete list of TCV investments, please visit www.tcv.com/all-companies. For additional important disclaimers, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at http://www.tcv.com/terms-of-use/.


Congratulations to the entire Avalara team on their IPO!

Avalara Announces Pricing of Initial Public Offering

The shares are expected to begin trading on the New York Stock Exchange on June 15, 2018, under the symbol “AVLR,” and the offering is expected to close on June 19, 2018, subject to customary closing conditions. Avalara has granted the underwriters a 30-day option to purchase up to an additional 1,125,000 shares of common stock to cover over-allotments, if any.

Goldman Sachs & Co. LLC, J.P. Morgan, and BofA Merrill Lynch are acting as book-running managers for the offering. JMP Securities, KeyBanc Capital Markets, and Stifel are acting as co-managers.

The offering is being made only by means of a prospectus. Copies of the final prospectus related to the offering, when available, may be obtained from Goldman Sachs & Co. LLC, Prospectus Department, 200 West Street, New York, NY 10282, or by telephone at 866-471-2526, or by email at prospectus-ny@ny.email.gs.com, or from J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, or by telephone at 866-803-9204, or email at prospectus-eq_fi@jpmchase.com. A registration statement relating to these securities has been filed with, and declared effective by, the Securities and Exchange Commission. This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

View source version on businesswire.comhttps://www.businesswire.com/news/home/20180614006357/en/

Investor Contact
ICR, LLC
Kevin Faulkner, 206-641-2425
investor@avalara.com
or
Media Contact
Avalara
Jesse Hamlin, 518-281-0631
media@avalara.com

Source: Avalara, Inc.


Watermark and TCV Close on Strategic Investment to Accelerate 2018 Growth

NEW YORKApril 17, 2018 /PRNewswire/ — Watermark, the largest provider of assessment software for higher education institutions worldwide, has announced the close of its agreement with TCV to acquire a controlling interest in the company. TCV is one of the largest providers of capital to growth-stage private and public companies in the technology industry and has backed industry-leading technology companies, including Airbnb, Capella Education, EA, EmbanetCompass, ExactTarget, HomeAway, Netflix, Spotify, and Zillow. In addition, Quad Partners and Watermark’s management team have reinvested alongside TCV and are joined by new investor Exceed Capital Partners.

Watermark provides educational intelligence systems to over 1,100 higher education institutions worldwide, including a majority of the top 200 U.S. News & World Report colleges. Watermark continues to grow rapidly, with over 50 institutions joining the Watermark community or expanding their use of Watermark across the institution so far this year, including top universities such as Syracuse UniversityPrinceton UniversityMichigan State University, and Prince Sattam Bin Abdulaziz University in Saudi Arabia. With over 300 employees supporting these partner institutions, Watermark will use TCV’s investment to continue its growth trajectory as well as accelerate development of its innovative educational intelligence platform.

“We’re excited to have TCV as a financial partner. With a deep understanding of and experience in the education technology and software/SaaS markets, TCV will help us to welcome more clients to our community and to continue building solutions these institutions need to drive meaningful improvements in institutional effectiveness, program quality, and student learning,” said Watermark CEO Kevin Michielsen.

Assisting in the close, global independent investment banking firm Evercore advised Quad Partners, and investment banking firm Tyton Partners advised TCV on the transaction.

About Watermark
Watermark’s mission is to put better data into the hands of administrators, educators, and learners everywhere in order to empower them to connect information and gain insights into learning which will drive meaningful improvements. Through its innovative educational intelligence platform, Watermark supports institutions in developing an intentional approach to learning and development based on data they can trust. For more information, visit www.watermarkinsights.com.

About TCV
Founded in 1995, TCV provides capital to growth-stage private and public companies in the technology industry. Since inception, TCV has invested over $10 billion in leading technology companies and has helped guide CEOs through more than 110 IPOs and strategic acquisitions. TCV’s investments include Airbnb, Altiris, AxiomSL, Dollar Shave Club, EmbanetCompass, EtQ, ExactTarget, Expedia, Facebook, Fandango, GoDaddy, HomeAway, LinkedIn, Netflix, OSIsoft, Rent the Runway, Sitecore, Splunk, Spotify, Varsity Tutors, and Zillow. TCV is headquartered in Menlo Park, California, with offices in New York and London. For more information about TCV, including a complete list of TCV investments, visit https://www.tcv.com/.

Contacts:
Victoria Guzzo
Director of Corporate Communications
708.588.1735
vguzzo@watermarkinsights.com

TCV
Katja Gagen
Marketing
415.690.6689
kgagen@tcv.com


Welsh, Carson, Anderson & Stowe to Lead Majority Investment in Avetta Alongside TCV and Norwest Venture Partners

OREM, Utah, March 21, 2018 /PRNewswire/ — Avetta (www.avetta.com), a leading provider of cloud-based supply chain risk management solutions, today announced that Welsh, Carson, Anderson & Stowe (WCAS), a leading private equity firm focused exclusively on the technology and healthcare industries, will acquire a majority equity interest in the Company. In addition, TCV, a leading provider of capital to growth-stage private and public companies in the technology industry, will acquire a minority equity interest in Avetta. Norwest Venture Partners (Norwest), a premier multi-stage investment firm that partnered with Avetta in 2012, intends to retain a portion of its investment in the Company, alongside the founders and management.

Avetta provides cloud-based supplier risk management and compliance software that allows enterprises to more effectively manage and qualify service providers performing activities across their global operating sites to drive better safety, regulatory compliance and sustainability outcomes. The Company’s platform centralizes the management of contractors in a single system, enabling efficient assessment of safety, compliance and performance records. Avetta’s customers include more than 220 enterprises in over 100 countries. Over 55,000 suppliers and service providers use Avetta’s platform to manage their relationships with enterprise clients.

“We are proud of the role played by Avetta today in connecting the world’s leading organizations with qualified suppliers, contractors and vendors, and look forward to the next phase of our Company’s growth,” said John Herr, Chief Executive Officer of Avetta. “As we welcome WCAS and TCV on board as new partners to Avetta, we also thank Norwest for the support they have provided to our team over the past six years. We are excited to benefit from the combined support and expertise of WCAS, TCV and Norwest.”

Christopher Hooper, General Partner of WCAS, said, “Avetta is a compelling network-based platform given its clear and quantifiable value proposition to both enterprise clients and suppliers, underpinned by a scalable cloud-based software platform and distinguished by a strong leadership team. We look forward to partnering with and supporting John Herrand the broader Avetta team to capitalize on the Company’s significant growth opportunities to build the premier global supply chain risk management platform and continue to enhance safety, compliance and sustainability outcomes for its customers.”

David Yuan, General Partner at TCV, said, “The Avetta platform is unique in that it helps transform how enterprises assess and mitigate risk within their supply chains, simplifying the engagement and evaluation of suppliers to ensure alignment with each client’s unique operating requirements. We are excited to partner with the Avetta team as it pursues a broad range of market opportunities.”

Jon Kossow, Managing Partner at Norwest, said, “This is a fantastic outcome for Avetta’s founders, management team and shareholders. The Company’s technology platform, product roadmap and huge greenfield market opportunity suggest a future that’s just as bright for all parties involved.”

The Company has locations in Utah, California and Texas, with international offices in the UK, Australia and Canada.

Avetta and Norwest were advised by William Blair & Company, LLC. WCAS was advised by Raymond James & Associates.

About Avetta

Avetta provides a cloud-based supply chain risk management platform. Avetta’s global solution connects the world’s leading organizations with qualified suppliers, driving safe and sustainable supply chains. Its next-generation software is used by more than 55,000 active customers in over 100 countries to reduce risk and optimize efficiency. Over 220 of the world’s biggest organizations depend on Avetta every day. See www.avetta.com for more information.

About TCV

Founded in 1995, TCV provides capital to growth-stage private and public companies in the technology industry. Since inception, TCV has invested over $10 billion in leading technology companies and has helped guide CEOs through more than 110 IPOs and strategic acquisitions. TCV’s investments include Airbnb, Altiris, AxiomSL, Dollar Shave Club, EtQ, ExactTarget, Expedia, Facebook, Fandango, GoDaddy, HomeAway, Netflix, Rent the Runway, Sitecore, Splunk, Spotify, VICE Media, and Zillow. TCV is headquartered in Palo Alto, California, with offices in New York and London. For more information about TCV, including a complete list of TCV investments, visit https://www.tcv.com.

All brands, names, or trademarks mentioned in this document are the property of their respective owners.

SOURCE Welsh, Carson, Anderson & Stowe; Avetta; TCV; Norwest Venture Partners

Contact:

Katja Gagen, TCV

kgagen@tcv.com

415-690-6689


Quality: Getting Reacquainted With a Mission-Critical Discipline That’s Been Taken for Granted

Key Takeaways by Kapil Venkatachalam from EtQ’s Annual User Conference

The global quality management software market is estimated to reach over $12 billion by 2024, according to Grand View Research. As industries like automotive, healthcare, pharma, biotech, energy, food and beverage, and chemicals are becoming more sophisticated, quality management has become a large-scale phenomenon around the world for companies of all sizes.

Purpose-built Enterprise Quality Management Software (EQMS) platforms enable organizations to collect key quality indicators, monitor them and proactively address root causes of deviations from the norm. “This approach becomes a strategic asset when it is adopted across the organization,” says Matthew Littlefield, President and Principal Analyst at LNS Research. It can also have a symbiotic effect across related functions within an enterprise, such as R&D, product design, and manufacturing. LNS Research, for example, has found that companies using EQMS see measurable and significant improvements in everything from product compliance and manufacturing defect rates to engineering and service metrics. In LNS’s most recent research, Building the Executive Business Case for EQMS, Principal Analyst Dan Jacob analyzes over 1,000 manufacturing companies, showing that those that deployed EQMS have reduced the Cost of Poor Quality (COPQ) by 11% and increased the share of successful New Product Introductions (NPI) by 21%.

I recently had a chance to connect with leading-edge quality experts across multiple industries at EtQ’s User Conference. We talked about the forces driving radical changes in how companies think about their products, how quality can be a competitive advantage, and the trends companies need to focus on with regards to quality management.


Quality and Brand: One and the Same

One of the strongest themes was that quality is no longer a late-stage process of weeding out defects at the end of a production line—today, it’s a proactive concern of senior management. Quality and reliability have become a differentiator between equally priced products and a reason you’d buy Brand A over Brand B. For some companies, quality goes beyond brand reputation because their products can be a matter of life and death. Case in point: the brakes in your car. They must work without fail, regardless of the price or brand of the car.

Meanwhile, market-side communication about products and services now operates at digital speed. Customer mishaps with a brand-name product can go viral and create a crisis for the manufacturer overnight. Examples include General Motors’ ignition switch recalls and Chipotle Mexican Grill’s food safety issues which sickened customers and pushed the stock down dramatically since the first outbreak was reported.

Source: CNN Money, Yahoo Finance


The Factors of Quality Management Systems (QMS) Growth

Some trends, I think, are driving the increased adoption of better quality management software:

  • Companies now go through more external inspections and validations than ever before, and regulators increasingly want direct access to companies’ QMSs. This speeds things up and makes inspections more efficient, compared to plowing through reams of paper documentation. In addition, regulatory rigor is rapidly spreading around the world, using industrialized economies as models. India, for example, passed new legislation regulating medical devices in early 2017—just a few months before the European Union updated its own rules.

 

  • Digitization is another major driver of how companies are now thinking about quality. Today, growth in sensors and Internet of Things (IoT) in manufacturing processes generate billions of data points along the supply chain. Companies now have access to information in digital format that is allowing them to track and make informed decisions in real time, so they can manage and optimize their assets more effectively and deliver consistent products aligned with regulations.

 

  • A shift in the social mindset around risk. For example, a toy manufacturer that manages to maintain strict quality control of its products might hear about a child that ended up getting injured, even though the product had no defect and was designed for children. The toy manufacturer might use that as a learning point to design the next version of the toy, taking into consideration these corner cases, even though it might not be mandated to do so by any kind of regulation. Arguably, society has become more aware and less tolerant to risk than ever before.

 

From Control to Assurance: A Shift in the Approach to Quality

With many factors driving the adoption of quality management, companies have shifted their approach to quality as well. Quality management used to mean inspecting products at the end of the assembly line. That was Quality Control, and it was reactive and not very efficient.

Now, big pharma companies (among many others) start from the very conception of the product in R&D and manage quality through production and all the way to eventual product retirement. In other words, quality is now managed end-to-end. This is what the industry now calls Quality Assurance.

In line with that strategic approach, some quality managers are pushing themselves to look at quality beyond regulatory requirements. “You have to imagine there is no FDA,” said a quality executive at a major supplier of healthcare consumables. “That’s the way you have to think. For some products, our company services up to 20 million accounts. How do we make sure every one of our medical gloves, for each of those accounts, has the same quality, reliability, and characteristics as the next glove?”

Companies Implement New Org Structures and Technology to Rise to the Challenge

Companies have spent decades answering the above-mentioned question of delivering consistent quality by throwing more people and processes at the issue. Today, a large company might have a technical quality team that assesses products from an R&D perspective, a regulatory team focused on the supply chain of materials, quality engineers in production processes, a compliance team doing internal audits, and post-market surveillance to close the quality feedback loop.

The proliferation of quality assurance processes has driven responsibility for quality management higher up in the organization. When quality leadership ultimately landed in the C suite, so did the need for integrated, on-demand reporting of key quality metrics. Many companies I spoke with have done surveys of their entire quality teams, only to find more than hundreds of different systems were being used for quality. The need to streamline processes has therefore become key to delivering operational excellence.

Quality managers related their struggles to developing an internal quality management software system or getting their existing ERP suppliers to provide it, before they discovered EtQ’s platform solution. EtQ makes it easy to integrate data streams from existing quality processes, create new ones, and present management with a clear picture of key metrics.

“We had one of the large ERP systems,” explained a manufacturing quality manager, “and we were told they offered a quality management software. That came with a $3,000 per day development cost. We didn’t want something that rigid, because we already had some processes in-house that included a lot of existing data. Newer platforms like EtQ’s give you that flexibility. As an end user you can play around with the platform to create your own processes.”

Looking ahead, conference participants predicted that quality management will continue to become even more strategic while also getting more mobile and more granular, right down to the electronic device history records for every part of a product. Companies like EtQ will continue to drive this innovation in quality management software because, as many conference attendees concluded, “quality is non-negotiable.”

###

 

The views and opinions expressed in the article above are those of the author and do not necessarily reflect those of TCMI, Inc. or its affiliates (“TCV”).  This article is not an offer to sell or the solicitation of an offer to purchase an interest in any private fund managed or sponsored by TCV or any of the securities of any company discussed.  The TCV portfolio companies identified above, if any, are not necessarily representative of all TCV investments, and no assumption should be made that the investments identified were or will be profitable. For a complete list of TCV investments, please visit www.tcv.com/all-companies/.  For additional important disclaimers regarding this document, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at http://www.tcv.com/terms-of-use/.