Making Community Building More Than a Catchphrase to Unlock Growth – Jonathan Mildenhall Shares Lessons from Airbnb and More for Companies of All Sizes

Growth Hacks – Moving the Metric

Brands like Airbnb and Peloton that have been able to build a loyal community around their products, may seem to have cultivated that community size through an alchemical mix of marketing spend, timing, and luck. But it doesn’t have to be so opaque — especially not for businesses that make community building an essential part of their blueprint to growth, even from the early days. 

In this episode of Growth Hacks, Kunal and Katja talk to Jonathan Mildenhall, former CMO of Airbnb and founder and Chairman of strategic branding firm, TwentyFirstCenturyBrand, about ways to articulate the narrative of a modern brand – with community building as a key element. Jonathan walks us through a four-pillar process for creating strategic blueprints to build brand narrative, and tips for B2B brands to elicit the sort of emotional resonance that B2C brands have found with customers. 

Key Takeaways:

  • The four pillars of a modern 21st century brand that’s built to scale. Community isn’t just something that comes once a brand has been built. In fact, having a vocal, loyal community is one of the four core pillars of building a modern-day company. In addition to community building, the other three pillars for twenty-first century brands are being purpose driven, making sure your technology is well-designed and human, and focusing on storytelling.
  • How to perform a deep analysis on your own company and create a strategic blueprint to activate on each pillar. One of the first things Jonathan and his team at TwentyFirstCenturyBrand do when building out a new brand is to sit down with the founders and leaders of the company to do what they call a deep extraction. The purpose is to get a better understanding of the brand’s potential size and aspirations. “I don’t just mean in total numbers and size of revenue, but in terms of its cultural impact. We like to say we’re revealing the soul and purpose of the company back to the founding team,” Jonathan says.
  • Specific strategies on building a community that can meaningfully drive growth and brand perception. When Jonathan was the CMO of Airbnb, they had to get creative about how to use their marketing spend, which was a fraction of their competitors’ budgets. Jonathan’s team decided to activate Airbnb’s community of hosts to tell stories, by providing them photographers to take photos of their rentals and turn that into marketing collateral. Those community stories helped drive Airbnb’s initial brand narrative and turned those same hosts into vocal advocates for Airbnb with cities and potential users. Per Jonathan, “if you get community right, you can reduce acquisition costs, content creation costs, and you can drive referrals, word of mouth, and the brand narrative in ways that are unprecedented for marketers.” 
  • Why strategic community building has to come from the C-suite. Community building is an ongoing process and a two-way conversation; not just when a brand needs the community to telegraph its approval. It’s why Jonathan believes that community engagement should come from company leadership, who can maintain that dialog with followers of the brand and the wider community: “The chief executive’s voice and presence needs to be heard.”
  • Lessons B2B marketers can take from B2C campaigns when it comes to eliciting an emotional connection. Whether you’re a B2B company or a B2C company, Jonathan urges marketing teams to think about more than selling a product, and instead focus on the human being receiving the message, and whether that message moves them emotionally. His advice for B2B marketers? “I would love it if B2B businesses made a greater effort to move audiences emotionally and treat them as human beings, as opposed to somebody on the other side of a business transaction,” says Jonathan.


To learn more, tune into Growth Hacks: Elevating Community Building to Drive Meaningful Growth

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The 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 and blog post are 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 regarding this interview and blog post, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at http://www.tcv.com/terms-of-use/.


Invest Like the Best: Jay Hoag – Calibrating Market Adoption

Post by Patrick OShaughnessy

My guest today is Jay Hoag, co-founder of TCV. If you look at Jay’s investment track record, it’s a “who’s who” of tech giants with Airbnb, Netflix, Peloton, Zillow, and a list that does not stop there. Needless to say, Jay has a Hall of Fame career. During our conversation, we talk about his own journey founding TCV, what advice he has for visionaries, and why he sees advantages for private to public crossover investors. Jay has such a wealth of experience that is on display throughout this episode. Please enjoy my conversation with Jay Hoag.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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The 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 and blog post are 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 regarding this interview and blog post, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at http://www.tcv.com/terms-of-use/.


TCV Closes TCV XI at $4 Billion

MENLO PARK, CA, January 27, 2021 – We are excited to announce the closing of TCV XI, our largest fund to date at $4 billion. With the new fund, we strive to accelerate TCV’s strong momentum and capture the vast opportunities presented by digital transformation and rapid technology adoption. This will continue our long history of partnering with exceptional founders and CEOs to build iconic technology franchises redefining their industries. 

TCV turned 25 in 2020. Since 1995, we have invested more than $14 billion in over 350 growth stage technology companies. We lived up to our middle name, “crossover”, by supporting our portfolio companies throughout their entire lifecycle as private and public companies. 

Over a quarter century, Netflix has gone from an outrageous idea to one of the world’s leading entertainment companies — and TCV has supported us every step of the way. I’m so grateful for the enduring partnership, which includes Jay Hoag’s wisdom and guidance as our lead independent director.” 

Reed Hastings, Co-Founder and Co-CEO, Netflix Inc.

The pandemic accelerated innovation in many of TCV’s key areas of sector specialization, including SaaS, edtech, remote collaboration, fitness, media/entertainment, touchless commerce, and digital banking. In 2020 we made big bets in companies aligned with secular technology trends across fintech (Klarna, Mambu, Mollie, Revolut, Wealthsimple), digital health and fitness (Strava), e-commerce enablement (Spryker) and SaaS (OneTrust, Oversight, Redis Labs). 

We specifically sought out TCV in our last private fundraise. They are the best late-stage growth capital partner and have proven this discernibly and tangibly to us while we were private, while they increased their stake via a large IPO purchase, and on an ongoing basis. Their knowledge of and experience with digital media, global technology platforms and subscription businesses, stemming from their long-term involvement with leading franchises such as Netflix, Spotify, Dollar Shave Club, and many more continues to help us in immeasurable ways as we push to become the global digital fitness winner.”  

John Foley, Founder and CEO of Peloton

Our experience enabled us to decisively guide our portfolio companies through a historic year of uncertainty and opportunity and help them grow and thrive. In spite of unprecedented global challenges, TCV’s portfolio enjoyed IPOs and was proactively sought after by strategic acquirers. Airbnb went public, and the sales of AxiomSL, Genesys, Cradlepoint, and Silver Peak represented major liquidity events. 

We embark upon TCV XI with over 100 people across offices in Silicon Valley, New York, and London. Through several strategic hires, we deepened our domain expertise in addition to making investments in the technology hubs of Europe, Asia-Pacific, and Latin America. TCV’s investments beyond North America today exceed $4 billion. 

Looking ahead, we continue to help our companies reach the mountain top, knowing that the path will never be a straight line. We remain dedicated to supporting management teams on their journey to become market leaders that provide their customers with a tremendous value proposition. 

We are humbled by the ongoing support of new and returning investors, which enabled us to raise a record sized fund. Just as importantly, we are honored by all the great entrepreneurs we have worked with over the past 25 years, as their vision and relentless execution has been our foundation. We look forward to backing entrepreneurs with our new fund that we believe will become the next generation of iconic companies, in this incredibly fertile technology industry.

Jay Hoag, a Founding General Partner at TCV

We are excited about the year ahead and the decades to follow.

The General Partners of TCV

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The 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 authors and disclaims any responsibility therefor. This blog post 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 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 blog post, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at http://www.tcv.com/terms-of-use/.


Mambu Raises €110 Million in Funding Round Led by TCV

January 07, 2021 — BERLIN, MIAMI & SINGAPORE–(BUSINESS WIRE)–Mambu, the market-leading SaaS banking platform, today announced its latest funding round of €110 million ($134 million USD) in new capital. This round was led by TCV, whose investments include Netflix, RELEX, Spotify, and WorldRemit. Additional investment was received by Tiger Global and Arena Holdings, as well as existing investors Bessemer Venture Partners, Runa Capital and Acton Capital Partners. The new round brings the company’s valuation to over €1.7 billion.

With this new round of financing, Mambu will continue to accelerate its rapid growth and deepen its footprint in the more than 50 countries in which it already operates and focus on markets like Brazil, Japan, and the United States. This announcement follows another year of approximately 100% YoY growth for Mambu in a banking software market which Gartner currently values at over $100 billion and is forecasting to grow at double-digits. FT Partners was the exclusive financial advisor on this transaction.

Mambu’s SaaS banking platform sets it apart from traditional core banking players as it drastically accelerates and simplifies the way financial products are built and serviced by any financial institution. Mambu’s platform is used by traditional banks, fintech startups, financial institutions, nonprofits and other businesses to power their financial products and services. Counting the likes of ABN AMRO, N26, OakNorth, Orange and Santander among its customer base, Mambu is powering both the building of new fintechs as well as the migration of existing financial institutions onto a tech stack fit for the fintech era. Mambu is continuing to expand both the breadth and depth of its platform and is planning to double the team to over 1000 Mambuvians by 2022.

Eugene Danilkis, founder and CEO of Mambu said: “When Mambu launched in 2011, we knew the future of banking would have to be built on agile and flexible technology. Nearly a decade later, this is more true now than ever, particularly given developments over the past year. As an increasing number of challenger and established banks sign on to prepare themselves to thrive in the fintech era, we have, and will continue to provide them with a world-class platform on which to build modern, agile customer-centric businesses.

“This latest funding round allows us to accelerate our mission to make banking better for a billion people around the world and address one of the largest, most complex global market opportunities that’s still in the infancy of cloud,” he said.

TCV General Partner, John Doran who joins the Mambu board, said: “Mambu was one of the first companies to leverage the opportunity to move banking software into the cloud. The team has built a highly composable, truly cloud-native product in a multi-billion dollar, rapidly-growing market traditionally dominated by large, slow-moving on-prem vendors. We have been following Mambu’s progress for many years and are truly delighted to be able to partner with Eugene and the entire Mambu team on their journey to expand their offerings to customers worldwide.”

About Mambu

​Mambu is the SaaS banking platform that is changing financial services. This rapidly growing company​ ​was launched in 2011​ and is enabling customers to build modern banking ​and lending​ offerings​ fast, securely and simply​. Through its composable banking approach, the platform gives customers the ability to design and service nearly any financial product while rapidly integrating to the best-of-service ecosystem of complementary solutions around the world. Mambu has a global network​ of nearly 500 employees​ supports ​160 customers in over 50 countries. ​It counts N26, OakNorth, ABN AMRO and Santander amongst its extensive list of customers.​ For more information, please visit our website or connect with us on TwitterLinkedInYouTube and​ ​Facebook.

About TCV

Founded in 1995, TCV provides capital to growth-stage private and public companies in the technology industry. Since its inception, TCV has invested over $14 billion in leading technology companies, including more than $2.5 billion in fintech, and has helped guide CEOs through more than 125 IPOs and strategic acquisitions.

TCV’s investments include Airbnb, AxiomSL, Dollar Shave Club, ExactTarget, Expedia, Facebook, LinkedIn, Netflix, Nubank, Payoneer, Splunk, Spotify, WorldRemit, and Zillow. In Europe, TCV has invested over $2 billion in companies including Believe Digital, Brillen.de, Perfecto, FlixMobility, Klarna, Mollie, OneTrust, RELEX Solutions, Revolut, RMS, Sportradar, Spryker, The Pracuj Group, and WorldRemit. 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

Media Contacts:
For Mambu US/Canada
Anna Stanley
251.517.7857
anna@williammills.com

For Mambu UK/Europe
Stephanie Libous
stephanie.libous@allisonpr.com
+44 7751 597 558

For TCV
Katja Gagen
+1 415.690.6689
kgagen@tcv.com


Ride to the Mountaintop: How Peloton Re-Invented the Fitness Industry with a Revolutionary Business Model, Precise Execution, and Focus on Culture & Community

Recognized as a true disruptor of an established industry, at-home fitness pioneer Peloton initially struggled to get funded. Investors questioned whether Peloton could unseat entrenched workout chains and exercise machine makers, especially with a business model that requires blended expertise in hardware, software, content, retail, and logistics. But CEO John Foley and his co-founders persisted in their vision of a fitness company that actually gets people fit, delivering revenue growth, expanding internationally, going public, and continually adding value to memberships.

TCV led Peloton’s Series F financing round in 2018 and supported the company on its journey to its IPO. John Foley joins Peloton board member and TCV general partner Jay Hoag for a wide-ranging discussion with multiple lessons for entrepreneurs:

  • Why the fitness industry was ripe for disruption
  • Why many investors had a tough time seeing the potential in Peloton’s approach
  • How Peloton makes memberships more affordable than you thought
  • Why culture and social responsibility are increasingly important to business success
  • How to navigate the road to the IPO and life as a public company

For all this and much more, settle back and press play.

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The 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 authors and disclaims any responsibility therefor. This interview and blog post are 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 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 interview and blog post, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at http://www.tcv.com/terms-of-use/.


TCV 2020 Summer Newsletter

Keeping our team members safe and helping our companies navigate COVID-19 and prepare for the rebound has been our main focus at TCV. Our Portfolio Operations group, along with our Investment, Legal, Marketing and Capital Markets teams, are providing a surge of support for our companies. The takeaways of these efforts are the main themes of this newsletter. We hope that you will find nuggets you can apply in your business, in areas such as talent, sales and marketing, systems and technology, and more.


Revolut raises $500 million in Series D funding as it sets sight on profitability and daily adoption in 2020

  • Revolut raises $500 million in Series D funding, valuing the business at $5.5 billion, making Revolut one of the highest valued fintech companies in the world
  • The round was led by US-based investor TCV, with a number of existing investors also participating in the round
  • Revolut will use the capital to further strengthen product development in existing markets, roll-out banking operations in Europe and increase daily engagement

LONDON, 25 February 2020 — Revolut, the global financial platform with over 10 million customers worldwide, has today raised an additional $500 million in Series D funding, taking the total amount raised by the company to $836 million.

The new funding round was led by US-based growth capital firm TCV, with a number of existing investors also participating. The latest funding round values the business at $5.5 billion, making Revolut one of the highest valued fintech companies in the world.

The new capital was secured on the back of high customer demand and engagement and a strong financial performance last year. In 2019, Revolut increased customer growth by 169%, the number of daily active customers by 380%, and saw financial revenues in 2018 grow by 354%.

The new capital will be focused on the customer experience and used to strengthen Revolut’s core retail and business offering in existing markets, with a particular focus on product development that will help accelerate daily usage of accounts. Future plans include lending services for retail and business customers, extending high interest savings accounts beyond the UK, further improving customer service and rolling out banking operations across Europe. 

Revolut will also focus on further developing its Premium and Metal subscription accounts, which have proven to be a successful revenue stream for the business, growing by 154% last year. Revolut’s Premium and Metal accounts include a variety of benefits for customers, such as unlimited foreign exchange, airport lounge access, commission-free stock trading and travel insurance. 

Revolut will continue to invest in expanding its workforce across multiple locations. The company now employs over 2,000 people, and last year made a number of senior appointments across the business in order to scale up its governance. Last year, Revolut appointed Martin Gilbert, the former Co-Chief Executive of Standard Life Aberdeen, as Chairman of the Board. Caroline Britton, a former Audit Partner at Deloitte, and Bruce Wallace, the former Chief Operations Officer at Silicon Valley Bank, were both appointed as Non-Executive Directors. 

Commenting on the new investment, Nik Storonsky, Founder & CEO at Revolut said: “We’re on a mission to build a global financial platform – a single app where our customers can manage all of their daily finances, and this investment demonstrates investor confidence in our business model. Going forward, our focus is on rolling-out banking operations in Europe, increasing the number of people who use Revolut as their daily account, and striving towards profitability. TCV has a long history of backing founders who are changing their industries on a global scale, so we are excited to partner with them as we prepare for the next stage of our journey.”

Commenting on the investment, John Doran, General Partner at TCV said: “We are delighted to partner with Nik, Vlad and the entire Revolut team. Using a modern technology stack and with a relentless focus on delighting customers, Revolut has built a truly exceptional customer experience that is exceeding anything that existing banks can offer. We look forward to supporting the team on their journey to build Revolut into one of the biggest financial services companies in the world.”

Commenting on the investment, John Glen MP, the UK Economic Secretary and City Minister said: “It is clear that the UK fintech sector continues to thrive, and Revolut’s announcement, which comes on the back of record-breaking fintech venture capital investment in 2019, is a clear indicator of our strength as a place for fintech business as we leave the EU.”

— END —

About Revolut 

Revolut is here to transform the way money works.  As an innovative, new kind of financial platform, it gives people the power to spend, invest and transfer money without the sky-high fees charged by the big banks. 

Since launching in 2015 in the UK, Revolut has expanded significantly beyond its origins as an FX product, adding new features all the time, including Commission-Free Stock Trading, Cryptocurrencies, Business Accounts and more.  

Headquartered in London, with 2,000 people in 23 offices, Revolut is now one of the biggest Fintech communities in the world, with over 10 million customers globally. Since launch, Revolut has processed over 1bn transactions worth over $130bn.

Revolut Press Contact 
Chad West, Director, Global Communications 
chad@revolut.com l +447860651737

Kiran Wylie, Senior Communications Manager 
kiran@revolut.com l +447875057754

About TCV

Founded in 1995, TCV provides capital to growth-stage private and public companies in the technology industry. Since its inception, TCV has invested over $13 billion in leading technology companies, including more than $1.5 billion in fintech, and has helped guide CEOs through more than 120 IPOs and strategic acquisitions.

TCV’s investments include Airbnb, AxiomSL, Dollar Shave Club, ExactTarget, Expedia, Facebook, LinkedIn, Netflix, Nubank, Payoneer, Splunk, Spotify, Toast, WorldRemit, Xero, and Zillow. In Europe, TCV has invested $2 billion in companies including Believe Digital, Brillen.de, Perfecto, FlixMobility, RELEX Solutions, RMS, Sportradar, The Pracuj Group, and WorldRemit. 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/.

TCV Press Contact
Katja Gagen, TCV Communications 
kgagen@tcv.com l +1 415 690 6689


FULL POTENTIAL SAAS

We believe that SaaS vendors, particularly vertical and SMB, that provide a “system of record” are seeing massive increases in TAM, competitive moats, and economic opportunity. By extending and leveraging their workflow, data, and account ownership, SaaS vendors are delighting end customers while creating platform and networks.

With opportunity comes competition, both from within one’s category (e.g. application area) or from adjacent categories within one’s vertical (e.g. industry). As boards and management teams wake up to the opportunity, they realize that the race is on to capture the full potential of their vertical.

This post is a framework to help leaders of SaaS companies think through the strategic choices and hopefully increase the odds of reaching their full potential.Strategy is implemented by focused alignment of execution, talent, M&A, organizational structure, functional excellence, and financial and governance/board frameworks. I hope to write about these supporting pieces over time, but I wanted to start with strategy first.

Finally, I think it’s important to acknowledge that very few companies have reached “full potential,” and this framework is inherently aspirational. However, “most entrepreneurs aren’t building a house, they are putting bricks in the foundation of a skyscraper” (Naval Ravikant). Aspiration is important, so hopefully this is an articulation of what is possible.

Special thanks to my co-authors John Burke, Katja Gagen, and Payam Vadi from TCV as well as Tim Barash, Kevin Burke, Henrique Dubugras, Mike Ford, Marc Fredman, Noah Glass, Andrew Low Ah Kee, Ara Mahdessian, David McJannet, Aman Narang, Sankar Narayan, Githesh Ramamurthy, Jason Randall, Bob Solomon, Connor Theilmann, Dan Wernikoff, and Dai Williams for great insight and support in creating this framework to date. We’ve also learned a ton from working with great management teams in the TCV portfolio[1] as well as across a broad network of friends.

Lead the Category

This phase of the SaaS strategy is well understood so I won’t spend much time on it. A SaaS company aspires to:

  1. build a great product (and service)
  2. over time, build an efficient and repeatable go-to-market model (marketing -> sales -> onboarding)
  3. and then “add capital” and execution to press its advantage against sluggish incumbents or poorly capitalized competitors

This is the playbook that Omniture and our portfolio company ExactTarget pioneered a decade ago. Despite massive capital inflows into SaaS and deteriorating economics, this model generally still works today.

On the product side, scale in data + AI can create increasing differentiation. For example, when you start to have more data than anyone else, you can flip your product from being reactive to proactive — having the product tell users where to look and how to optimize the system. Both Xero and Shopify have done this well.

Five other things to think about in this early phase that don’t get enough attention:

  • Scalable onboarding: Onboarding friction can be unaccounted drivers of CAC and churn. A great onboarding process builds the trust and confidence that are the foundations of virality/word of mouth, future cross- as well as third party channel strategies. Carefully measure funnel metrics and be attentive to new customer NPS. Automate early as “throwing bodies at it” can create process debt that will be difficult to unwind later.
  • Expansion: Expansion drives net revenue retention and most of the strategies we are about to discuss. With all sales processes, it’s a lot easier to learn, iterate, and optimize with fewer bodies and less complexity.
  • UI and Architecture: Like onboarding, these can be long-lead time fixes that compound as your business scales and gets more complex. A specific call out is to plan for an API strategy. It can facilitate future partner strategies and increase the value and stickiness of your offering.
  • Pricing structure/strategy: You will constantly revisit tactics, but it’s important to have some sense of how your pricing structure might change over time.
  • Foundations for global, including a work culture that can support distributed executives and operations, and good product feedback loops that incorporate non-home market needs.

Hyperscale Locations, Feed the Beast

A lot of ink has been spilled on forward investing in sales and marketing, and arguably it’s part of a/the “lead the category” strategy. But, it’s worth a call out as it’s important you don’t take your eye off the ball too early. So much of winning and future monetization is getting location market share. When the wind is at your back, go get it done! Market structures have a nasty habit of shifting, future secular tailwinds may abate, or competitors may leapfrog your product or your go-to-market model. If your churn and sales economics are sound, keep “feeding the beast!”

One particularly powerful unlock is Channel. There are verticals and categories, where influencers in a channel are kingmakers and can help you engage with segments that are otherwise difficult or uneconomical to reach.  Furthermore, Channel partners’ engagement and contributions can enrich your products and increase overall customer value. A great example is in tax software, where Xero’s wooing of accountants proved to be an effective source of customers and a formidable competitive moat (thereby disrupting the incumbent provider). Xero went as far as offering free practice management tools to help accountants run and grow their business on Xero.

Win the Control Points: Own Your Vertical

This is where management teams are faced with a paradox of choice: “Where should we go next? How should we spend the next incremental dollar? On increasing ARPU, acquiring incremental locations, or expanding into new verticals, geos or segments?” At this juncture, it is my belief that you should focus on winning the control points. In vertical SaaS, there are typically one or two control points, “systems of record.” Usually one control point in the front office (e.g. Point of Sale, CRM, e-commerce) – “that drives sales, that grows the business, that serves as the cash register.” And one control point in the back office (e.g. general ledger) – “where everything else reconciles to.” Hopefully, you provide one of the systems of record, so go build or acquire the other system(s) of record and secure the high ground! 

Pragmatically, a system of record is the last software package a customer will “turn off” in a tough economic time.

I also like to think about the concept of “gravity”:

  • Workflow gravity – the system that all other systems integrate to – it’swhere the most users spend the most time. Not all workflows deliver the same value; in my experience the system of record workflow tends to deliver the most value.
  • Data gravity – the system that creates and holds the most critical information and is the hardest to migrate. That data can be critical to a client for a wide range of applications, from understanding their customers (e.g. CRM) to managing risk (e.g. compliance). Data also can be critical in two-level situations, such as loan underwriting (e.g. a bank underwriting a merchant’s risk via POS data) or supplier information management (e.g. a client managing risk by validating supplier capabilities and quality). Data depth and scope also create gravity where AI technologies can be highly productive.
  • Account gravity – the user/sponsor of the system is the highest-ranking individual in the customer organization; it’s the system that requires the biggest financial outlay, etc.

Winning the other system of record is not easy. By definition, a system of record is hard to displace and unless the market is greenfield pen and paper, competition can be challenging. You may be able to do it organically with product innovation, but M&A can be the more desirable path if “integration debt” is manageable. If M&A is not possible, a slow winnowing of your competitor may be the only approach available to you.

If you own multiple systems of record in a vertical, the benefits are enormous:

  • Customer delight: automation from integrated workflows and potentially unified data and data models allow efficiencies and offerings unavailable before
  • “SaaS as a Platform and SaaS as Network” opportunities
  • Stronger account ownership to capture incremental spend and drive more efficient growth
  • A new level of durability and stickiness

A good example is Veeva. The company started in 2007 with the launch of a CRM and a sales automation platform for pharma sales reps (e.g. record their activity, keep track of the doctors they meet with or drop off samples for, etc.). After becoming the dominant player in that category, Veeva saw an opportunity to move backward into research and development for their life science customers (developing new drugs, conducting clinical trials and bringing those drugs to market). In 2011 Veeva launched Vault, a suite of applications that first centered on the core content management needs for clinical trials, regulatory submissions, and quality documentation. The company then expanded to include a series of core data applications that help manage clinical trials, quality processes, safety processes, etc. Veeva is expected to finish 2019 with $1.1B in revenue (26% YoY Growth) and 37% EBIT margins. Vault represented 51% of total revenue and grew 38% YoY. Analysts also estimate Vault meaningfully expanded Veeva’s addressable market. 

Another recent example might be front office player Shopify’s $450M acquisition of 6 River Systems to move into back office fulfillment and warehouse management. Some financial analysts estimate that merchants spend up to ~10-15% of their GMV on logistics which could potentially provide multiples of Shopify’s current take rate.

Expand Headroom

With category leadership comes high market share and potentially high saturation. Long-term growth is driven by location growth, as there’s generally a finite share of wallet you can access. It’s important to invest in the S-curves of geos, segments, and adjacent verticals that can unlock new location TAM. This can take a couple of tries before you’re successful, so start this during your growth phase when there’s less pressure on maximizing profitability.

Extend Through the Value Chain

This stage of growth can be transformative. By leveraging the strengths of your core customers, you can expand into a new market with a new set of customers. Typical patterns include moving from front office software to extend to your customer’s customers, or from back office software and extending to suppliers. These can be riskier bets, but success can pay out big here:

  • Increased TAM
  • Workflow that spans multiple parties and creates increased customer value and vendor stickiness
  • Two-level network effects

Supplier

Extension seems to work best by “following the money” and leveraging purchasing power. TCV portfolio company Ariba articulated the “golden rule”— He with the gold rules! By using their leadership in procurement software at large corporate buyers, Ariba extended to build a robust suppliers software business for merchants that serviced those corporate buyers. More recently, Avetta has followed a similar path in the supplier information space by building a strong two-level network effect. We believe corporate clients want to be on Avetta because it has the largest network of suppliers, and suppliers want to be on Avetta because it has the most corporate clients. Avetta’s advantage gets stronger as it scales. Moreover, Avetta has an opportunity to help suppliers do more than just manage compliance information. As a result, Avetta sees growth in helping suppliers grow and operate their business.  

CCC is on the third generation of this approach. They started by serving large auto insurance carriers and then extended into autobody repair shops that serve the carriers. CCC is now in the process of expanding to parts suppliers. By getting all the key constituents on its software platform, CCC is able to leverage AI and automation to massively reduce friction and provide a great customer experience across all steps of the auto insurance process.

Employee

The employee opportunity is similar to the supplier opportunity in terms of “following the money.” Companies can use integrated payroll or time & attendance offerings to establish a relationship with the employee. Employees are also consumers who represent significant B2C opportunities such as consumer lending, insurance, etc. There are big dollars here, but perhaps less opportunity to build significant network effects.

Consumer

The consumer/demand opportunity is the white whale. We believe that SaaS companies tend to capture ~ 50-100bps of GMV for software subscription, whereas online demand channels can take 15-20% of GMV in categories such as hotels and restaurants. In addition to the massive revenue opportunity, Consumer also represents a strategic flank worth monitoring carefully. Online marketplaces have large competing salesforces that engage with your merchant customers and have strategic interests encroach on the software layer to try to control supply.  Booking.com bought Buuteeq and Hotel Ninjas to vertically integrate into hotel supply. Uber is rapidly expanding its driver offering to over-draft protection, a debit card, and likely lending over time to manage driver churn. This is another example of increasing marketplace + SaaS convergence.

That said, success stories of extending SaaS to Consumer are rare. Few SaaS companies have consumer product DNA, the funds, or the skills to build a consumer brand. While a SaaS provider can have a high market share of merchants in a vertical, it’s rare that it has the supply ubiquity that an online marketplace would require. Eventbrite is one of the few companies that has landed as a software tool for creators, built liquidity, and created a marketplace.

Some derivative Consumer monetization models include:

  • Consumer pay: FareHarbor approaches tour and activity operators with a free to merchant, consumer pay model: “We’ll build your website and booking engine for free, with no work on your part; you just pay us for payment processing and the customer will pay us a booking fee.”  
  • Channel management: SiteMinder offers channel management to help hotels manage existing channels in real time. SiteMinder has extended that value proposition to “Demand Plus,” an offering that helps hotels easily expand into new channels to scale demand.
  • Existing customers: While 15-20% marketplace take rates may be sensible for new customer acquisition/discovery, companies such as Olo are looking to move existing customers to lower cost channels through their dispatch offering while taking a much lower percentage of GMV.
  • Customer Co-opt: By seeing consumer data pass through their systems, some SaaS vendors are building consumer profile databases that they might monetize over time. In the recruiting market, we’ve seen players leverage job distribution tools to build a candidate database. Shopify similarly has built a large shopper profile database across all their merchants. While Shopify hasn’t monetized directly, the uplift in conversion rate is likely significant. This model is the most capital efficient but can create conflicts with the vendor’s core merchant customers.

The biggest benefit of extending through the value chain is that it gives you a beachhead and a right to win in a new vertical to start the “full potential” growth cycle again. As you do this, it’s important to reconsider your end market and focus. When Ariba transitioned from procurement software to supply network, they started to represent a front office “system of record” for their suppliers. In doing so, Ariba was both a large enterprise “procurement company” and an SMB “supplier enablement company.” The question was: “Which priority should dominate?” When extension leads to conflicts, there are no easy answers. As such, it is important to acknowledge that this growth strategy is ever-evolving.

Deepen Functionality/ Monetization

Deepen Functionality/Monetization doesn’t literally mean waiting to pursue this step until all other strategies have been completed. It’s more a reflection of priorities. Acquire as many customers as you can, win the control points, and you will likely have many of these profit pools locked up to pursue in the future.

In winning the key control points, for the same reason a single system of record has a lot of “gravity,” you now have an even stronger opportunity to turn your product into a channel. This enables entry into adjacencies with data, workflow, and account ownership advantages for you as well as for the end customer. The most extreme example is the “platform/ecosystem” play, where you monetize third party vendors that want access to the channel your product has become (e.g. Salesforce, Intuit, Shopify). However, most commonly a SaaS vendor will pursue additional monetization with in-house or white-labeled products.

Another key consideration in prioritizing adjacent function/monetization is consistency with your core go-to-market channel and proximity to key decision makers. Go-to-market will determine the financial leverage of the cross-sell and often the overall success. The core advantage of SMB software here is that often the decision-making is relatively consistent and concentrated across software purchases.

Every vertical is different, but there are some common functionality/monetization patterns emerging. Each of these patterns deserves its own write-up, but for the sake of brevity here are some highlights:

  • “Integrated payments -> integrated banking”: The attachment of payments to SaaS has been well covered. That trend is expanding to the attachment of integrated banking. I had an opportunity to interview two of the smartest people in the business, Tim Barash and Jackie Reses. Square is out front here with broad based merchant and consumer plays. To understand the magnitude of the opportunity, Square’s Subscription & Services (most of which are financial services) are expected to reach $1.3B in 2020. This represents 23% of 2020 total GAAP revenue and 47% of 2020 Total Gross Profit (incremental gross profit is ~90%). Brex is earlier in its progression, but we’re excited to see how the company leverages its initial corporate card and expense management offerings to extend into broader financial services.

  •  “Follow the workflow”: At times SaaS companies have actually observed customers at work or mapped out the physical sites to understand all the areas their workflow touches as areas of expansion.
  • “TAM shark”: HashiCorp CEO David McJannet describes expansion as “TAM Shark,” constantly circling the biggest, fastest growing (most change/opportunity) markets. He requires product managers to report on market size and growth of all adjacent categories to make sure they are focused on the biggest opportunities. Generally, over a 2-3 year period companies have one, maybe two opportunities to build distinct add-on businesses. Make sure you’re picking the biggest markets and therefore the biggest payoffs.

Summary

If the typical SaaS playbook is “Lead the Category” and “Hyperscale Locations,” clearly the full potential for vertical SaaS players is dramatically larger than conventional SaaS wisdom would suggest. We’re excited to work with — and hopefully invest in —the frontier players as they explore the “Full Potential of SaaS.”  

If you found this useful, let me know, and we’ll continue to publish and explore the topic. I look forward to hearing your adds, edits, and challenges.

Caveats

  • There’s a tension between aggregating as big a profit pool as quickly as possible vs. “winning the market.”
  • This framework is characterized as a sequential strategy. In reality, most companies are pursuing multiple steps concurrently, and the sequence is more a reflection of prioritization.
  • Time horizon: this approach is a long-term strategy to winning, which may often be at odds with short-term maximization of valuation multiple and financial performance.
  • This approach is informed by a U.S./western/mature approach. In emerging/more greenfield markets, less focus and value chain expansion earlier in company development may make sense.

The views and opinions expressed are those of the authors and do not necessarily reflect those of TCMI, Inc. or its affiliates (“TCV”). TCV has not verified the accuracy of any statements by the authors and disclaims any responsibility therefor. This blog post 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 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/.

[1] See TCV’s SMB and Vertical SaaS investments at the end of the document.


The Most Important Relationship in Business: Best Practices for Board Directors and CEOs They Advise

Board members can bring a wealth of experience and advice to their CEOs – and not just when the board convenes each quarter. The chemistry of this critical relationship requires careful attention, particularly when selecting and onboarding new directors, coaching the team and providing diverse insights. Tayloe Stansbury, Venture Partner at TCV, shares lessons and insights from his board memberships and two decades reporting to corporate boards as CTO at Intuit, CIO at VMware, and EVP at Ariba. Beth Knuppel, Principal in TCV’s Portfolio Operations, guides the conversation to the key moments and processes that board members and CEOs need to master so that their relationships – and the business – can thrive.

In this podcast, Beth and Tayloe address practical questions for anyone coming onto a board or running a company with board support, such as:

  • The most important criteria for joining a board
  • How to maintain diversity of opinion on the board while still providing the CEO with convergent advice
  • Why board members should meet with their CEO informally between board meetings
  • How to set efficient board meeting agendas that allow for in-depth discussion of pressing issues
  • Why board members should evaluate their own performance and not just the CEO’s

For this and more, settle back and click play.

TRANSCRIPT

Beth Knuppel: Welcome to Growth Journeys. This is a podcast series from TCV focused on lessons from the field from both operators and entrepreneurs in the TCV ecosystem. I’m Beth Knuppel. I’m an Operating Principal at TCV, where I lead our talent center of excellence within portfolio operations. Our podcast today is all about the CEO board partnership and lessons learned for effective governance. I’m joined today by Tayloe Stansbury. Tayloe is a Venture Partner at TCV, where he works with existing portfolio companies, and he’s also involved in diligence for potential investments. In addition, Tayloe serves on the board of directors at Coupa Software and BlueJeans. Welcome to Growth Journeys, Tayloe.

Tayloe Stansbury: Thank you very much. It’s great to be here.

Beth Knuppel: So, Tayloe, you had a long, successful corporate career before joining TCV as a venture partner. Most recently you were CTO at Intuit. Tell me a little bit about your background and how you got to this point.

Tayloe Stansbury: For the last decade, I was CTO at Intuit. I looked after all their technology operations — so engineering, data AI, IT, and information security. And before that, I worked at a number of other companies, including Ariba. I was EVP of product and operations there, which included customer support, product management, engineering, and operations. I worked also at VMware, Calico, Xerox, Sun, and Borland in a variety of different engineering and general management positions.

Beth Knuppel: So you are a technology veteran, for sure?

Tayloe Stansbury: I guess.

Beth Knuppel: In addition to those roles, I mentioned you also serve in some board of director roles. You were on the board of Shutterfly for three years. You continue to serve on the board at Coupa and at BlueJeans. What was it that attracted you to board service in the first place?

Tayloe Stansbury: I was a direct report to CEOs of public companies for some 20 years, which meant that most every quarter I was doing presentations to boards. And it started to intrigue me that maybe I could contribute at a different level. And that’s what led me to getting onto my first board.

Beth Knuppel: When you say at a different level, tell me more about what that means to you. What is it that a good board really adds to a company?

Tayloe Stansbury: Boards advise, right? Boards don’t manage. Management manages. And I think that distinction is really important. Boards bring a wealth of experience that is orthogonal to what some of the managers have and can advise them on new situations that arise and how to think about new problems.

Beth Knuppel: I think that a lot of people have in their mind this outdated stereotype of the board member who sort of jets in, goes to dinner, maybe makes a few pithy comments at the meeting the next day, and then you don’t hear from them again for another quarter. I should say, that is definitely not the model at TCV. Our boards are really engaged. But I’m curious, what would a management team expect, or what should they expect, in terms of engagement in between those quarterly board meetings? How do you work with the board in between those formal opportunities?

Tayloe Stansbury: For myself, I’d say, I generally meet with the CEO of each of the boards that I’m on once in between each board meeting — go out to dinner, to breakfast, or something like that — and just talk about whatever’s on their mind. And I usually adopt one or two, sometimes three members of the senior management team that I coach. And I usually meet with them once off-cycle between board meetings. And those meetings can be a lot of fun, high engagement.

Beth Knuppel: Got it. You know, a lot of our audience are founders who may not have ever worked with a board before. So you’re talking about this engagement in between. Who’s initiating that? Is that you, on the board? How should the CEO be reaching out?

Tayloe Stansbury: I think it’s best always if the CEO is making the introductions so you’re not invading their space and having meetings unbeknownst to the CEO. I’d give an example from a board I was on that was for a college. And the president asked me if I would lead the advancement committee, which means fundraising. And I said, “Hey, I’ll do anything for you, but I know nothing about fundraising.” And she said, “You’ll figure it out,” and turned around and then walked away. So she did actually introduce me to the head of fundraising and, we had a very fruitful relationship, where I would come down before each of the board meetings and go over his management challenges, his prioritization challenges, and how it is that he was going to present to the board, because while he was very experienced in fundraising and I was not, I knew something about presenting to boards and he didn’t. And so it would end up being a very fruitful relationship and we blew through all our targets and it was great.

Beth Knuppel: That’s great. One of the sayings that we have here at TCV is that the journey to the top is never a straight line, right? Every organization experiences setbacks and challenges. But I’m wondering, the CEO is typically looking to put their best foot forward with the board. How should a CEO balance that? How should they bring bad news or maybe challenging situations to the attention of their board?

Tayloe Stansbury: If all you’re doing is the Pollyanna version, nobody learns anything. I think what’s really best is approaching it with complete transparency and an attitude of seeking counsel, because that’s when you get the true value out of a board member who may have been through some of these things, or have cognated things before. So that’s hard to do. It means you’ve got to show your dirty laundry. But over time, you can build a relationship with a board where that’s okay, because they’ve had dirty laundry in managing the things that they did earlier in their lives as well. And they’re not going to be freaked out about it, and they’ll be able to give you much better advice which will enable you to perform better over time, with the transparency.

Beth Knuppel: It sounds like a key piece of that is just developing trust.

Tayloe Stansbury: Absolutely.

Beth Knuppel: How do you think about doing that when you’ve joined a new board and you’re establishing your own relationships with the other board members, with the CEO? How do you think about your entry into that board?

Tayloe Stansbury: Well, I think you’re hitting on a really important issue which is that the relationships are really important. And I think boards work best when there’s diversity of thought, everybody is respectful of each other’s opinions, but they’re also able to converge towards something which is a plan of action or a consistent set of advice for the management team. And I think the same thing is true with management. There has to be that trust of each other, the sense that different people are bringing something different to the party that is worth listening to and every now and then might be the key thing you need to know to manage through a tough situation. Mechanically, how that would work is going out to dinner with these people off-cycle from regular board meetings, getting to know them, and getting to build up that level of trust and respect for what it is that they’ve done.

Beth Knuppel: Right. I’m curious. As you work with a CEO, you want to build that trusted relationship, but at the end of the day, as a member of the board, part of your job is to evaluate the performance of the CEO.

Tayloe Stansbury: That’s right.

Beth Knuppel: How do you work through CEO evaluation?

Tayloe Stansbury: I think it’s best practice to have an annual evaluation of the CEO and actually even an annual evaluation of the other board members, where you think about: “What are the objectives that were set for the company, what are the objectives that the CEO may have set?” And everybody actually scores the CEO on that. You have a discussion as a board, and that gets presented to the CEO on an annual basis. And that discussion precedes setting the compensation for the CEO for the following year. I think that detachment where you can help and also provide some evaluation — hopefully which has got constructive ideas as to how the CEO can improve in areas where perhaps they need to grow.

Beth Knuppel: And you mentioned that you think it’s good hygiene for the board to engage in some self-reflection as well.

Tayloe Stansbury: Yes.

Beth Knuppel: How does that process work?

Tayloe Stansbury: Same way. Score each other, get together to have a couple-hour discussion about what came out in the survey. And if it’s a board that has mutual respect, those kinds of comments can end up helping bring the board closer together and help smooth out some rough spots.

Beth Knuppel: In the case of, maybe, a board that’s underperforming, what are some of the things that in the past you’ve encountered that help address an underperforming board?

Tayloe Stansbury: I see it as a spectrum – where at one end of the spectrum, you have a rubber-stamp board that’s not really providing any meaningful thought diversity to the problem, and the other end, where you have an acrimonious board which can’t agree on anything and they’re just fighting over stuff. And I think the sweet spot is somewhere in the middle, where everybody is thoughtful, they’re presenting diverse points of view, and they’re figuring out how to converge that into something that is constructive for the management team. And how do you get there? Again, I think it’s by spending time with each other and learning to appreciate what each other’s gifts are, what each other’s experiences are, what their scars are that they’ve managed to live through and learn things from. On a rare occasion, it may be best if some people move off the board if they just can’t get aligned with the rest of the team.

Beth Knuppel: Are there any common pitfalls that you see?

Tayloe Stansbury: In one case in particular, we did have a board that was pretty acrimonious and couldn’t get on the same page and it was very hard to get anything done. It was very hard to give consistent advice to the president of that organization. What happened in the end is some of the people who were really on a different page rolled off. And we got down to a set of people not who were rubber-stamped, who had diverse points of view but were able to come together in the end.

Beth Knuppel: I know at Coupa, you’re a member of the nominating and governance committee. What is it that you think about when you’re evaluating somebody who might potentially join the board? For CEOs out there, what should they be looking for when they’re thinking about board composition?

Tayloe Stansbury: We look at: “What is the skill set?” We have a whole matrix for skill sets that would be desirable for the board, and we score each other on how strong we think we are on those things. And that leaves it clear where there are some areas where we may have some gaps, some skills gaps — some experience gaps — that it would be really nice to flesh the board out with. And so then you go and say, “Well, who would be the people who could best fill those skill or experience gaps?” And then you look for, “Who are the people who are going to work well with the rest of the board, whose voices will be heard, who will hear other people’s voices, and will actually be convergent in their thinking, over time.”

Beth Knuppel: And, of course, the other side of the coin, as you’ve joined boards, you’re also making an evaluation. What is it that you look for to figure out whether a board is a good fit or not?

Tayloe Stansbury: The first thing is, you’ve got to have a passion for the business. If it isn’t a business that you love, then you probably shouldn’t be taking up space on the board. Another thing I really want is to have a visceral sense of what is the strategic path to success for this organization. So how is it that they’re going to weather whatever competitive threats and come out on top? Your sense of that may change over time, but I think you have to go in with a pretty good hypothesis of how this organization can become durable and win against the invariable competition. And the last thing is, it’s got to be people I like, because you’re going to be working with these people over several years. And you’re going to have to come to converged advice for management. It helps if you like everybody who’s involved.

Beth Knuppel: Sure. I’m curious to get your perspective on bringing on a new board member. Is there anything that you’ve experienced personally, or you’ve seen done really well, in terms of onboarding somebody onto the board?

Tayloe Stansbury: I think that bringing on a new board member is a big deal, and if you just hand them a board book and say, “Show up for the next meeting,” they’re going to come in without a lot of context, and they’re going to feel a little bit not on the inside, and their questions are just going to be off-kilter. And what I’ve seen as a best practice is you invest several hours, like a day, in training a new board member by having them meet with some of the senior management people, one-to-one, and then also go through a full rundown on the products, including demos of the products, so they have a real feel for the business and the competitive space.

Beth Knuppel: I’d love to get your perspective on how you think about the board agenda, and what topics are actually covered. Board time is so precious, you want to make sure that you’ve got a thoughtfully constructed agenda. What, in your view, rises to the level of importance for a board meeting?

Tayloe Stansbury: One thing I’ve seen that doesn’t really work really well for board agendas is to try to have every key member of the senior leadership team talk about the progress in their area every single board meeting. What I have found works a lot, lot better is if you look at the board calendar over the course of a year and say, “How do we make sure that every function gets their day in court, if you will, with the board, over the course of a year rather than the course of a single meeting?” And everybody can have a deeper discussion, and you get into the meatier stuff. Now, to complement that, I think having board materials that are first-rate, that come out early enough so that all the board members have a chance to read and digest them, is really important.

And what you can do in the board materials is make sure that the board materials include some news about what’s happening in every function that has something to report — even if they’re not going to present — so the board gets a view of that as it’s happening but then gets the deeper-dive discussions.

Beth Knuppel: Great. When I was presenting to boards on a regular basis, one of the things my CEO always said was, “Be bright, be brief, be gone.” In other words, do whatever you need to, to avoid the dreaded page flip where it’s kind of a march through slides that hopefully the board has already read. Is there anything you would share with folks who are in that spot of presenting to the board?

Tayloe Stansbury: I think it’s important for presenters to realize that the board has read the materials in advance and say the things only that punch up the most important parts of what’s on the pages. I think another good practice is you may think that you’re going to have an hour to present or half an hour to present, and it may be that the schedule goes sideways and you end up with only 5 or 10 minutes to present. It’s always good to have the 5-minute version of your presentation in the back of your mind so if you’re asked to do that, you can say something intelligent and helpful during whatever time remains. An important thing to remember about board members is they come and engage only periodically in the business. You, as an operating leader, are in there every single day. The board member isn’t going to remember all the context that you’ve got in your brain, and they’re not going to remember the thing that you told them three months ago. So making sure that you show not current state, but trajectory over what’s happened before, can help make sense for the board member.

Beth Knuppel: Great. Good advice. I want to close out with two questions. And first, I’m curious, if you look back over your board service, what do you think is the biggest learning that you’ve taken away? What is it that you would do differently the next time you join a board?

Tayloe Stansbury: You know, I think that getting to a sense of flow with a board, where you’ve got good ideas that are coming in, people bringing diverse thoughts, and where people are thoughtful about that and get to a good place quickly in terms of advising management, those are the boards that feel really good. The ones where you have people who are on a different place of, “Hey, I’m excited about this company,” and others who are thinking, “We ought to sell this company,” and you just can’t get them together, those end up being pretty rough situations. And you want to avoid the latter, if you can.

Beth Knuppel: Finally, for founders, for management teams who might be listening, what would you say would be the key takeaway that you would offer them for, really, how do you build and leverage an effective board?

Tayloe Stansbury: Look for openness and trust. Build a board where that exists. And working together, you can actually be a lot smarter than you can individually.

Beth Knuppel: Absolutely. Great insights, Tayloe. Thank you so much for joining us today.

Tayloe Stansbury: Thank you so much.

###

The 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 blog post 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/.