Lessons From a Resilient CEO
How to build a stronger company after killing your multimillion-dollar product
Several years ago, shortly after raising new capital, SalesLoft CEO Kyle Porter opened his inbox to find a very stern message from executives at a global professional networking company. This email would become the first nail in the coffin for the company’s flagship product, one that Kyle had built to launch the company 3 years prior and had already been bringing in $7 million annually. That day was just the beginning of a series of tough conversations which ultimately led to one of the toughest decisions Kyle had yet to face. He had to kill his top-performing product and put his fast-growth company on ice.
SalesLoft’s flagship product, Prospector, was a freemium Chrome extension that allowed customers to build an accurate target list of prospects in a matter of moments using third party data. After the addition of several features and two years of his sales team hitting the pavement, it started taking off. Very quickly, SalesLoft was on the map as the defacto sales data platform generating substantial revenue for such a young startup. But then the team ran into problems.
“We had this worldview that sellers can be loved by the buyers they serve,” Kyle said. “But customers were buying our software and they were spam blasting contacts. The vision we had and the way the product was being used were grossly misaligned.”
The message Kyle received warned SalesLoft it was not okay with how the company was using its data. It came as a bit of a blow, but at the same time, he and his team were already uncomfortable with how their product was being used and were trying to find a way to be more in control of the data. Some CEOs with a battle mentality might have wanted to put up a fight, but Kyle saw it as an affirmation for what he already was stewing over. He wanted to build a company that had integrity for its customers and the data it provided.
So there SalesLoft was, a $7 million annual recurring revenue business, and its leaders decided to cancel their lead product. I remember walking through the airport terminal when he called to tell me about the decision. They had just raised millions in funding, but as an investor and one of Kyle’s biggest cheerleaders, I trusted that he was making the best decision for the company.
There were many ups and downs along the way, and it was incredible to watch Kyle navigate the unknown waters as he steered his company - and his team - into a whole new direction. And while many early companies are forced to make a significant pivot, there are so many variable factors that put the company at risk that it is rare to see one come out the other side stronger. Today, SalesLoft is the leading sales engagement platform that powers thousands of sales teams to deliver the best buying experience for their customers and help them grow their business. Achieving the original vision and mission that Kyle started out with. The company recently raised their Series D with a $600M valuation, has 450 employees and was voted #1 on the Best Places to Work in Atlanta for the second year in a row.
Whenever I am talking with other entrepreneurs and investors that are dealing with the significant company changes, whether product-related, organizational, branding or cultural, I always come back to the lessons we learned supporting SalesLoft. So when we hosted our first Emergence Summit, I knew I wanted to bring his learnings to our audience.
The full session video is available to watch or read on for Kyle’s tips for building a stronger company after a significant pivot.
1. Rally your troops.
Be upfront on how it will affect their role, but show them the future.
Getting Kyle’s executive leadership team, his immediate reports and his investors on board with the pivot was incredibly important from the get-go. To keep them passionate and motivated, he had to show them the future. Kyle also knew just how much this shift would impact the bottom line of the eight employees that ran his sales team. He pulled them aside and essentially said, “I know you're working with a product that is easy to sell - it is well-known and priced nicely - but now I need to ask you to get on board selling a more complicated product that the customers will not understand as much, that's got some bugs. If you do this, you'll be rewarded in the long term.” Kyle said that one of the reps that accepted the challenge went on to be number one for two years in a row, and a role model for the rest of his team.
2. Be vulnerable and transparent.
One of the reasons SalesLoft has been an excellent partner with our firm is that we see eye to eye with Kyle on who he is as a leader, what he stands for and his vision for the company. This was one of the main reasons we had total trust and faith in his decision to shut down the product and pivot the company.
Kyle lays out why this is vital to startup success when entering into a relationship with investors: “I talk to all of these entrepreneurs who get in this relationship with an investor, and they didn't connect over the person who they were and who they wanted to be. And so my advice to founders is to be transparent,” he said. “Be vulnerable and open about who you are, what you want to achieve with your business. And align with those investors on that long journey and outcome, because it's a journey. We've been in the trenches together, and if we disagreed on the fundamentals, what this thing should be at the end, it'd be a lot harder to work with you.”
3. Create principles to guide every action.
From early on, Kyle knew SalesLoft would only ever be as good as its people, and he wanted to build a company that was more than just a job to his team. When setting out to re-build his company, he created a Corporate Charter to use as the foundation for all aspects of the business. It outlines the vision, the mission, core values, strategies, and metrics. Kyle developed these principles by interviewing not only his team but also wanted input from customers and partners in order to find out how they viewed SalesLoft and what they wanted the business to be. The outcome is a condensed one-page chart that is the bedrock for the entire company informing employees on the way they should behave, what they look for in candidates, how they promote, reprimand and praise and how they lead the business.
This initiative significantly increased employee awareness and motivated the team to come together on a solidified and shared identity. He encourages other CEOs to do the same.
“I look at businesses as a vehicle to help change the lives of people,” Kyle said. “And so I thought if I could build a great company, then I can create an environment where others can come to learn more, to do more, to become more.”
Kyle was kind enough to allow us to share a pared-down version of his Corporate Charter to act as a template for any entrepreneur who is interested in following suit.
4. Let your Core Values drive hiring.
Hiring is hard, and often teams are left to interview candidates without much guidance from the corporate or executive team. But Kyle equipped his team with an understanding of who they hire and how based on their core values (as found in the Charter). Each Core Value has 10+ associated questions and the team is trained to ask and assess the answers to those questions. Kyle wants the process to be a two-way dialogue and ensures candidates understand that even if they are qualified for the role, if the values set don’t align and they were to take the job anyway, inevitably there will be a misalignment on some level. Kyle has seen proof that this process has built a winning team that wants to stay and build SalesLoft together.
5. Communication, Communication, Communication.
Keeping a team motivated starts with communication. From the very early days, Kyle sent the entire team (+ his investors and mentors as well) an email every Sunday. He outlined the team’s immediate goals, what they had achieved, customer success stories, running metrics as well as a more personal element such as a book, quote or anecdote that has inspired him that week. It has been more than seven years and he hasn’t missed one Sunday email. Kyle said showing your investment in updating the team and being consistent is key to keeping your team excited about where they were headed next.
6. Don’t go too far, too fast.
“We're not going to teleport upstream, we're going to expand upstream.” This was what Kyle would remind his team when they needed to focus on rebuilding the right way, even if it meant they had to turn down opportunities to pursue big-name customers. He forewarns that while it can be exciting to land a huge customer if you are not ready it could end up sinking the company. Thankfully, SalesLoft got back to a place where they were able to re-engage with those customers with success. His main advice for other CEOs is to set reasonable, but aggressive goals. Don’t go too far, too fast.
_____________________________________________________________________________________________________________
Today, SalesLoft’s business is healthier and more profitable, and it now has the same company that sent them the initial warning message as one of its investors, partners, and customers. Kyle’s favorite quote from the whole ordeal is proof if you lead with integrity and bring on a healthy, committed and focused team, you will have a strong foundation to navigate a significant pivot, failure or challenge. “I was at a cocktail party with the Execs from that company, and they said that we went from the doghouse to the penthouse with them.”
Enjoying this article?
Sign up to gain access to our thought leadership and have future articles delivered directly to your email.