It’s time we put the infatuation with Unicorns to bed – why? It’s creating bad companies that are going to fail. It’s creating a focus that’s bad for our industry – and bad for our economy.
Sure – there are a few Unicorns that have transformed the industry: Facebook being the most notable. But these companies are exceptions to the rule – they shouldn’t be treated as “standard practice for success”. These days, there are simply way too many Unicorns (by valuation only) and they’re going to struggle to fill the boots they’ve created. Forget IPOs – they’re impossible.
But ultimately I don’t care about valuations, IPOs or the financial vehicles that make this crazy tech boom work. What I care about is the lack of focus. What I care about is the lack of focus on two things: customers and employees.
You might say I’m part of the Marc Benioff start-up cloud. He has been a mentor to me and Salesforce invested in ManyWho to help it succeed. For all the big personality that is Marc Benioff, one thing is unwavering: customer success. I remember very early on after my company was acquired by Salesforce, Marc saying: “Steve, it’s all about our customers. Focus on that. That is the only thing you need to focus on. Customer success.” Wise words.
But the focus on customers goes beyond success at companies like Salesforce. It’s about trust. While at Salesforce, that trust was that we would look after customers’ data. It was always the number one value: trust. Absolutely always. Now at ManyWho, our customers trust that we will look after their workflow applications. They are betting their success on us. We take that trust very seriously.
Silicon Valley seems to have lost this focus. Customer data is being abused and it appears the business model is: the customer is the product. Giving a service away for free attracts high valuations if it can show high user growth to investors. Your trust is not important. Your data is being sold.
Balmers “developers, developers, developers!!!!” mantra should be replaced by “customers, customers customers!!!!”, though unfortunately, it seems it’s now “investors, investors, investors!!!!”
I never get asked about customers and revenue growth anymore – out and about in Silicon Valley. I only get asked how many employees we have, how much we’ve raised, and how much we’re worth. I see blog posts about the growth from $10m, $100m, to $1b (the fabled unicorn status). They’re not talking about revenue – they’re talking about valuation! Quite frankly – who gives a #$it how much you’re worth. How are your customers doing? How much success are you bringing to the industry and the economy. How much trust should customers be placing in your business model?
After customer success and revenue growth metrics the most important number I’m interested in is revenue per employee. We raise money to make sure we can manage growth – and the best run companies don’t need to do that very often.
I think we need to remind ourselves that many of the world’s most successful software companies grew because of customers, not investors: Microsoft, Salesforce being two big names.
I talk to a lot of companies in Silicon Valley and you can see a big problem emerging. Investors are creating growth problems. Why? You can’t scale what you don’t yet know. You can only theorize and debate when the growth of the company is based on investor money, not actual customer experience and success. I see companies with 100+ employees, and less than $1m revenue – I mean – what!? Who are they working for? It makes for a miserable employee experience. It disempowers people fast under bureaucracy that was not created for customer success – but rather theory of customer demand.
Despite companies at a macro level being very similar – it’s the nuance that makes the difference between industry juggernaut and complete flop. Too many people, too fast just creates chaos. So ironically, too much money creates dismal employee experiences and with that, dismal customer success. They’re too busy working out how to interact with each other and build mature processes around immature theories of customer engagement. As a customer, you’re at the bottom of the pecking order. They’re too busy working out how to work.
So lets change the record Silicon Valley. I like the prestigious investors. I like the big valuations, fancy offices and hipster ethos…
But what I love is customer success. What I love is empowered employees to do their best work in a customer demanding environment. No unicorns required.
Steve is the CEO of the cloud workflow company, ManyWho. He lives in San Francisco with his wife and three children. When not working to better the world of enterprise application development he can be found amusing his kids with his guitar playing.