CEO Systems Five learnings from traversing multiple phases of growth

SaaStr Annual 2022

1. CEO Systems Five learnings from Traversing Multiple Phases of Growth Dave McJannet CEO, HashiCorp @davidmcj 1

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4. 4 Building companies = three elements Pick the market Find the people Build the systems

5. 5 B2C example Pick the market Social media company or metaverse company?

6. 6 Pick the market Find the people Social media company or metaverse company? This requires new and different teams B2C example

7. 7 Pick the market Find the people Build the systems Social media company or metaverse company? This requires new and different teams Which requires new and different systems B2C example

8. 8 B2B example Pick the market Data warehouse or CLOUD data warehouse?

9. 9 Pick the market Find the people Data warehouse or CLOUD data warehouse? Which requires functional leaders for product, GTM, etc. B2B example

10. 10 Pick the market Find the people Build the systems Data warehouse or CLOUD data warehouse? Which requires functional leaders for product, GTM, etc. Which requires systems to make this company go B2B example

11. 11 Let’s talk about five learnings from systems building…

12. The phase shifts of growth companies 1

13. 13 The problem with most startup advice is that it doesn’t account for phase shifts.

14. 14 $ 500M $ 1B+ $ 250M $ 100M $ 30M $ 10M Repeatability Early Scale Mid Scale Scale & diversify Product / Market Fit Pattern Matching

15. A framework for systems Inspired by Ray Dalio’s Systems Thinking 2

16. 16 Outcomes Goals A framework for systems

17. 17 Machine Outcomes Goals A framework for systems

18. 18 Input: Employee expenses and invoices Output: Expenses paid within 14 days Error rate <0.1% A framework for systems Example: Expense processing system

19. 19 Input: Employee expenses and invoices System Output: Expenses paid within 14 days Error rate <0.1% A framework for systems Example: Expense processing system

20. 20 Input: Employee expenses and invoices System Output: Expenses paid within 14 days Error rate <0.1% Your startup will have a different system for expenses than a Fortune 500 company A framework for systems Example: Expense processing system

21. 21 Machine Outcomes Goals Culture People A framework for systems

22. A company is comprised of four core plans 3

23. Financial Plan GTM Plan Product Plan 23 People Plan How many people? How much can we build? How much, how fast? How do we get users on the journey with us? A company is comprised of four core plans

24. Financial Plan GTM Plan Product Plan 24 People Plan A company is comprised of four core plans

25. Those plans are achieved through systems 4

26. Financial System 26 A company is a set of interlocking systems People System Product System GTM System Goals System Outcome

27. 27 A company is a set of interlocking systems Financial System People System Product System GTM System Goals System Outcome Goals System Outcome Goals System Outcome Goals System Outcome Case Collection System Talent Acquisition System New Product Intro System Lead-to-Cash System

28. Financial System 28 Goals System Outcome People System Product System GTM System Goals System Outcome Goals System Outcome Goals System Outcome Goals System Outcome Goals System Outcome Goals System Outcome Goals System Outcome Goals System Outcome Goals System Outcome Goals System Outcome Goals System Outcome Goals System Outcome Goals System Outcome Goals System Outcome Goals System Outcome Goals System Outcome A company is a set of interlocking systems

29. 29 $ 500M $ 1B+ $ 250M $ 100M $ 30M $ 10M Repeatability Early Scale Mid Scale Scale & diversify Product / Market Fit Pattern Matching

30. Financial System 30 Systems must change with each phase Goals System Outcome People System Product System GTM System Goals System Outcome Goals System Outcome Goals System Outcome Goals System Outcome Goals System Outcome Goals System Outcome Goals System Outcome Goals System Outcome Goals System Outcome Goals System Outcome Goals System Outcome Goals System Outcome Goals System Outcome Goals System Outcome Goals System Outcome Goals System Outcome

31. Time horizons and system design 5

32. 32 CEO Leadership team Managers ICs 6 mo 12 mo 18 mo Laddering time horizons 36 mo

33. 33 The CEO’s job is to anticipate phase shifts CEO Leadership team Managers IC 6 mo 12 mo 18 mo 36 mo

34. 34 We live this at HashiCorp… $ 500M $ 1B+ $ 250M $ 100M $ 30M $ 10M Repeatability Early Scale Mid Scale Scale & diversify Product / Market Fit Pattern Matching

35. 35 Phase shifts Goals → [SYSTEM] → Outcomes Finance plan, People plan, Product plan, GTM plan Visualize the interlocking systems. People come and go, systems endure Laddered time horizons Summary Pick the market. Find the people. Build the systems.

36. 36 The three “IPs” of startup life Unlocking puzzles, or intellectual curiosity as a driver Intellectual Philanthropy Sharing ideas freely. The startup world is small, you cross paths with people multiple times on the upswing and downswing. Most startups and people are struggling to survive. They’re talented but often seeing things for the first time. Help them . Institutional Paranoia Continuous inspection. No matter how well you do, or well you did a thing, assume someone is about to do it better. This is about ‘professional’ critique of oneself and team, not personal fear of failure. Information Flow Privileged perspectives. Things that seem mundane or obvious to you are simply not obvious or mundane to others. Your ‘unique value’ can be derived from your position in the information flow. Ph They also know things you don’t. “An adventure is an inconvenience rightly considered.” Feel the “Gell-Mann Amnesia Effect”.

37. THANK YOU hashicorp.com/jobs