Four key relationships that define the journey from startup to billion-dollar business
by Team SaaStr | Sponsored Posts
By Neha Mirchandani, RingCentral VP of Corporate Marketing
At SaaStr Annual this year, Vlad Shmunis, RingCentral founder and CEO, participated in a fireside chat with Fortune Magazine's Jonathan Vanian. The topic was: the journey from idea to billion-dollar business. Vlad's experiences could serve as a roadmap for others on a similar journey.
For leaders nurturing a startup or scaling a business to the next level, Vlad had one central piece of advice: Embrace change. The ability to adapt quickly is critical to business success at every stage of the growth journey. And know that at every step it is the relationships built and nurtured that define how quickly and efficiently a leader and team is able to adapt–and drive business growth.
Of all the relationships developed on this journey four are the most critical.
Identifying the right target customers and their needs is perhaps the most critical requirement for any business. The foundational idea that RingCentral was built on was about empowering people to work the way they want with cloud communications technology. It's about being in the right place at the right time. The company addressed a market that was ripe for disruption as legacy on premises communications systems were unable to address the needs of the increasingly mobile, global and distributed workforce.
And as a business grows, Vlad believes it's important to stay ahead of market trends and anticipate customer needs- leading the industry forward.
Startup leaders can never have enough good advice. Vlad suggests always being on the lookout for people who have traveled the road ahead of you, and strategically align the board with where the company wants to go. It's important to find advisors who have been there and will bring their own unique experiences and wisdom to help guide the way through each growth stage.
He found this to be particularly critical when preparing for an IPO. The board was instrumental in identifying the key processes required to ensure a successful IPO.
As a leader, especially in the early stages of a startup, it's important to invest in areas with the biggest impact, stretching money as far is it will go. For a startup, this typically plays out in hiring a fair number of generalists who are capable of wearing several hats. In Vlad's case, his mother and wife were early employees of RingCentral.
Over time though this thinking has to evolve. You need to start focusing less on stretching dollars and more about speed and agility, by hiring specialists instead of generalists. Also at different growth stages, you need to keep a strong pulse on ensuring you have the right team. As the team that gets you to $10M may not be the exact same team that will grow the business to a $100M, $500M or $1B.
Vlad shared that he found many business relationships in life are temporary and fade with time. But investors will be involved throughout the life of a company. It is important for leaders to think carefully about who to bring in, as this relationship will likely be a long-term one.
Investors not only provide capital, but also experience and insight. Their job is to make sure new businesses thrive. In his case, he found the right investors. An interesting point Vlad made is that he regretted waiting as long as he did to bring in investors to RingCentral. He believes earlier investment might have allowed RingCentral to grow at an even faster rate and bypass some of the mistakes made early on.
Craft your reputation carefully
In closing, Vlad shared that employees, customers, and investors get involved with a business because they have high expectations for success. They're counting on you to deliver. A leader's reputation is critical at each stage of the company's growth, so guard it carefully. Be honest about opportunities and challenges. Be open with your team. Be clear about the mission. And through it all, be ready to adapt yourself and your company at every turn, and the journey will be amazing.
Team SaaStr
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