09 Aug 6 tips for building a $695 million business — Part 2
How did Jos White build, grow and ultimately sell MessageLabs for $695 million in cash? At SaaSGrowth2018, he told us. Now we’re telling you.
In June we staged our first Sales Confidence conference at HereEast, in London’s Olympic Park. We called it SaaSGrowth2018. We had over 200 SaaS professionals in the audience, watching more than 30 of London’s foremost SaaS experts share their knowledge. Even if you couldn’t make it, we want to share the inspiration and education with you through our SaaSGrowth2018 articles.
In Jos’ talk for SaaSGrowth, he shared his story, including 6 pieces of advice if you’re looking to build your startup into a multimillion-dollar company. This is Part 2 of Jos’ tips. If you’d like to see numbers 1–3 please click here. LINK
4 — Your mission is your product strategy
What are you going to be best at? If you have a long-term focus on how you want your product to develop, you are more likely to win. There are many inputs trying to influence your startup, so the clearer your vision, the easier it is.
‘For us at MessageLabs, it was all about security. We want to be the best at protecting our customers. We want to the be the best at identifying threats and stopping them reaching our customers.’
‘We are prepared to compromise on the user interface. We are prepared to compromise on UX and side functionality. What we’re not going to compromise on is the security aspect.’
‘Once we distilled that down, it helped us know what to prioritise and what not to prioritise.’
5 — Make game-changing hires
Hiring is often the hardest part of running a startup. Get it right and everything’s great. Get it wrong and it can derail your whole operation.
‘At MessageLabs, when we were growing, we reached a point where we were hiring 20 people a month. It was crazy. In certain departments, we found we were compromising on the quality of people. We just needed people. The early hires set the DNA for the organisation. You get those people right, it sets the tone for the rest, with the people that they hire. When we compromised on quality, and also on cultural alignment, we found that we had trouble. These people and the people they hired didn’t reflect our values or our mission.’
‘The problem was, it was difficult to get engineers to come to Gloucestershire, so we had to compromise. It ended up that there were a group of engineers that as soon as the second hand hit 1 o’clock, would disappear and go and sit in their cars and eat sandwiches until the dot of 2 o’clock! No one else in the company would do that. We were on a mission! Once you have that situation, it’s very difficult to fix.’
‘Aim to make a game-changing hire every year. Find someone who breaks the mould and changes your trajectory.’
6 — Use your competition to your advantage
It’s natural to worry about your competitors, but don’t let it distract from your mission. Find what makes you unique.
‘We had 2 main competitors. One was acquired by Microsoft in 2005. The other was acquired by Google in 2006. Suddenly Microsoft and Google were my competition!’
‘Google started offering their service for free. I remember walking around MessageLabs thinking, ‘Well, that’s it. We can’t compete.’ But actually, it helped us.’
‘Most of the best people at our competitors left. Google, when they dropped the price, removed all credibility from their service. We’d say, ‘Would you have cut-price brain surgery?’
‘We were just about security and being enterprise-strength. These big companies, they can’t focus. They’re not agile. They’re not quick-moving enough. We made that our advantage.’
The lesson is, big competitors are not as scary as you think. There’s always a hole in their armour.
Do you notice a pattern in Jos’ tips? The majority of them came from things that went wrong at MessageLabs. Jos made mistakes, adding products that were not needed, hiring the wrong people, going with the wrong investors. However, he still managed to build a multi-million dollar company. Now you can learn from those mistakes, without having to make them first!
Over to you now. What were your favourite parts of Jos’ story? We’d love to know. Leave us a comment down below.