Developing and Articulating a Clear and Compelling Growth Strategy to the Board

Katie Bullard, President & Chief Growth Officer @ DiscoverOrg; Nate Grossman, Co-Founder @ Growth Street Partners

Ascent 2019

Nate Grossman [00:00:05] I’m Nate Grossman, as it says up there, co-founder of Growth Street Partners, where growth equity firm based out in San Francisco, where typically partnering with founder, owned and led companies when they’re around 15 to 40 employees and helping them scale to 100, 150 plus whatever their goals are together. And so this topic is near and dear to our hearts at Growth Street, and there’s no better person to be talking about it than with Katie Bullard. And I’ll let her give her intro.

Katie Bullard [00:00:35] Hi, guys. I’m the president and chief growth officer at Discover or now also Zoominfo. We just went through a recent merger. How many of you guys are using zoominfo or any system like that yet for your sales and marketing? Great. So we have a new combined platform coming. If you haven’t already taken a look at it, definitely do. So this is my third VCP back to business that I’ve been at and all three of those we’ve been fortunate enough to go through an exit. And so here to share some of my lessons learned around building a good growth strategy, both with the board that I have at the time, but then also positioning us for the next next round of funding.

Nate Grossman [00:01:19] Awesome. So, yeah, yeah, we have 20 minutes, so it will be quick, but we’re going to talk a little bit about when, uh, is the right time to be thinking about this and developing a growth strategy, how and who the board’s role in the process. And then a few quick examples. But we’ll start with with when. And so maybe, you know what moment. Yeah. Throughout the different experiences you’ve had, uh, led you to realize you needed a growth strategy.

Katie Bullard [00:01:47] Also, what I would say is, first of all, if you guys are in, you know, really early start, I’m the number one thing you need to focus on is product market fit. So do you have a market that’s willing to not only is not only seeing value in the product that you’re building, but is willing to pay for the products that you’re building. So that’s number one. Once you feel like you have a really strong, good product market fit, what any investor, whether it’s an existing board or somebody that you want to get investing from, wants to know is how will you keep that growth going. So that’s great. This product that you have now, take it to market. What are your next vectors of growth for? For us? We were a little bit past the startup stage at each of the businesses I’ve I’ve been at, but we were at that point where our core product, we had done a good job of capturing a strong market. And that was the question which was great. What are the next growth factors for that business? And I always thank you. You don’t want to wait to figure that out until you’re ready to go pitch to a new investor. You want to actually have figured that out as an executive team, you know, really early on and used that to kind of guide everything that you’re doing, whether it’s your go to market strategy or product strategy or your M&A strategy.

Nate Grossman [00:03:09] And what does that look like internally at the company, the the process of developing the strategy and who’s involved in that process? Do you have frameworks for it?

Katie Bullard [00:03:18] Yeah. So let me talk high level. When I talk about a growth strategy, what I tend to think about is three years from now, you know, who are we going to be as an organization? What is it what are the products we’re building to go capture that market? What are the financial plans look like three years from now? How will we. What is the North Star that we’re aiming for as a as a company and so for any company, there are a lot of different ways to grow. There’s all kinds of different levers that you can pull. And so when this first came to to kind of our realization that we were, you know, we were getting ready to go in front of a bunch of investors and quite frankly, like we didn’t have a really clear growth strategy. We sat down as a team and put together a framework to to really help us evaluate what all of our different growth opportunities were. So we put together a really brief little animation that I thought would be helpful, and then we can use that to kind of go through the rest of the discussion. So let’s see if this will work. There’s no sound. OK, there you go. And I’m going to let it go through and then it’ll all come back to it all. So essentially, what we did as an organization was we built out this this vector model and we took the core business today first and we said, you know, is there a way to accelerate growth just from new pricing and packaging? Is there a way to accelerate accelerate growth just from putting additional investment, for instance, into our sales and marketing strategy? And we put together kind of on I’m going to call this a very many business case for each one of those things. So pricing and packaging, customer whitespace, you know, go to market optimization. And then we built out each of these other vectors and we said, what are the next adjacent products that are same buyer. Right. But something new that they could buy from us. And we mapped out white, just white, boarded out what all those different opportunities were. Then we did the same thing for new channels where the new channels could we build out a different partnership program? Could we, you know, use a channel to go you to go internationally, which gets to new geographies where what are the geographies that we’re strong in today, where the geographies that we aren’t and what are those opportunities for us? And then new buyers there actually could. And I’ll use the Discover, for example, as an example, we were selling really well to sales and marketing teams, but we knew that account management teams could actually use our data to help identify like churn risks. Right. So when it leaves, most of you guys know when a point of contact leaves an organization that’s actually a really high churn risk. Not only is it a great indicator for a sales guy to come in and sell, but the flip side is true to so account managers might be a new buyer for us. So we literally just mapped each of these out, sort of mapped out the vectors, and we did a one page market overview of each of those opportunities. So what would it take for us to go after that, that new growth opportunity? What was the competitive landscape look like? Were there any headwinds or tailwinds that existed in each of those? And we went into a strategy session as a leadership team with a one pager on each of those. I think we ended up with something like 10 or 15 different growth opportunities based on this framework right here, and had a discussion as an executive team. We did some, you know, market opportunity, fit rankings, gave everybody the opportunity to kind of come in and say, where do we think the biggest opportunity is? And the key thing is we left that that session with three things. And this happens every time I’ve done this. You leave those sessions with three to five things you want to double down on. And you also leave that session with ten things that you say I’m not going to focus on now. But you you leave the session with a with with enough understanding of the growth opportunity that it feels credible. Right. And so when you go to the board at the next board meeting and you say, hey, here’s where we’re going to focus, here’s where you want investment, we want to go international, we want to go down market. Here’s what we’re not going to do. It really it is very credible to the board.

Nate Grossman [00:08:04] Yeah, absolutely. And moving to that now, when do you feel like is the right time to get your board involved and make sure that there is alignment there? Because ultimately that is really what it’s about.

Katie Bullard [00:08:17] I think it totally depends on each of, you know, your boards or if you if you know you know them really well. So I’ll give you two examples. We had one example. So I was working for a small company that was part of the Vista Equity Partners portfolio, but we were like their small company portfolio and we wanted to come in. This is Vista is great, but like you got to be buttoned up. So when you come into the Vista board. So we wanted to do this ourselves, feel really, really good about everything that all the analysis that we had done. And so we did it ourselves. And then we brought it to the board at Discover. Org. We were actually really kind of struggling with two or three different avenues to go down like we came out of that session. I’m not entirely sure what we were going to do from a buyable perspective. And so we actually wanted to get the board involved as we were thinking through that strategy. So we actually did a session with the board and we made them actually go through this with us so that we all left. That all in alignment, by the way, ended up driving. The acquisition is some info, but we wanted to all get on the same page and feel totally aligned on that. And so for that board and for that situation, we actually did this together with the board.

Nate Grossman [00:09:40] And then I see you in those different scenarios, engage the board in different ways. Coming out of the engagement with the board. How do you feel like? How do you know it went well or didn’t go well?

Katie Bullard [00:09:53] Yeah. So I think the thing that was most compelling for us and I’ll use an example when I was that I was at a legal tax software company that was part of the Vista portfolio at the time. We had gotten some interest from other investors up until that, but nothing that had really stuck. And part of it was I think we had not clearly articulated this ourselves internally, which then meant we couldn’t articulate it to the next group. So when we went through this process and actually sat down, mapped this all out, put it together, this actually was like, you know what, I think it’s time to start potentially a process and bring bring in some additional investors, which to us was a signal of their confidence in us. And what they told us, though, was what you need to do for the next investors. You need to show some early traction in one or two of these so you can go out and say, these are the five ways we want to grow in the next three years. One’s a new product. One’s a new buyer, one’s a new geography. But you need to be able to show at least one of those already on your your PNL that you’re starting to see that momentum. So let’s pick one. Let’s go after it. For us, it was actually international. We wanted to we decided to show a little bit of growth in international and then that will give the next investor confidence that that these are these are real. And so actually, the fact that they. Got to that point, is what signal to us that they were confident in the strategy?

Nate Grossman [00:11:30] Yeah, yeah, definitely. And what what things do you need to show the board? What do you say to, um, uh, give them the confidence or help them help you like. Yeah. As an example, um, with our companies, we really want to make sure they’re being data driven. And so we want to make sure that a lot of that has happened before. We’re having the conversation with them.

Katie Bullard [00:11:55] Yes. Yeah, great point. So I think doing those little mini business cases and coming in with some hypothesis of how big this market opportunity is, how fast it’s growing, where we would need investment instead of just coming and saying, hey, we want to grow internationally or we want to go down market, or we think this next product is the next thing, I think coming in with with some data that we had already done ourselves without honestly, without going and spending a bunch of money on market research, we used our a couple of product managers to go gather some of this data and put it together, I think is really, really important. And I think especially, you know, when you’re in a startup phase like you don’t you don’t have the money to go, do, you know, hire Bain to do a deep dove on all of these different opportunities. But having a little bit of data behind it is important.

Nate Grossman [00:12:51] Yeah, for sure. Um, maybe moving on to examples. So examples of when this has worked really well and examples of when it didn’t work.

Katie Bullard [00:13:01] Well, yeah. So, you know, we all we are all in really dynamic markets. I feel like we think we know what the market’s going to be two to three years from now. And it never actually is that they change so, so fast. And so I I think my biggest cautionary tale is I was at one company and we put out, you know, we developed our three year growth strategy. We felt like we put a lot of research into it. We knew the products we were going to put onto the roadmap. We knew, you know, which companies we wanted to go buy versus build. We knew which channels we wanted to go after. And we were we were also really we wanted to stay focused. Right. We didn’t want to be focused. We don’t want to change priorities all the time. That was really important to us. It’s important to any business to grow, but you can take that to an extreme. And so I think we didn’t check back in on that growth strategy enough and. What that that meant we missed some opportunities or we we ended up going down a path that if we had taken a step back, you know, every quarter and relooked at that strategy, we probably would have pivoted more quickly. And so that was one advices use that north that guiding North Star like, you know, use that growth strategy as you’re guiding North Star. But check in on it every one to two quarters and make sure that the dynamics of the market haven’t changed to a point that you need to shift your priorities and be OK, saying it’s we need to shift the priority. And if you again, if you have this clearly outline and you’ve communicated it to to a board, then when you come back and say, here’s why we’re going to shift priorities, then it’s it’s easier for them to to buy into as well. So that was that was a cautionary tale. I think, you know, where it has worked really well. I there’s been a lot of places where it’s worked really well. But I think the example that I gave earlier where, you know, we said, hey, these are the three growth factors. We want to we have a good core product. We have good retention on this product. We want to take it internationally. We want to scale down markets. And we have this like adjacent interesting space. We’re not really sure what we want to do in there, but we we know that’s where we want to go, that we we went after each of those in very small chunks and we said we’re going to first focus on international. We’re going to prove it out. We’re, you know, and we’re going to show some traction there. And then once we feel good about that, we’re going to do the next one that actually worked really, really well. And in the case of that particular company we had had in an investor that had been interested in us previously, had come to us, was not really sure about the legal tech space. They didn’t they weren’t they weren’t entirely sold on the growth story of the business. And because we put this in place and because we built out this, you know, this international and honestly, we had more momentum internationally than we ever thought we were we were going to have. They then came back to us nine months later and paid double what they would have paid when they came prior to that, because we we had this story and we had, you know, shown some movement on it. Yeah.

Nate Grossman [00:16:31] Yeah, absolutely. Yeah. Um, and bringing it full circle, I guess this goes back to your cautionary tale a little bit. Yeah. Um, but what what’s the right cadence for this process of developing and reevaluating your growth strategy, both internally and communicating it back to the board?

Katie Bullard [00:16:51] So we go through the whole process once a year. We actually usually do it in the summer time. And the reason is that we use the growth strategy to then drive the product roadmap, to drive the investments we want to put in the next year’s plan. And so then that way we’re not like having to double back on things. So we go through the full process once a year relooking and re really validating the three year strategy. And then every quarter at our leadership offsite, we we check in on it. Are they still the right priorities? And so that we’re actually really well for us, I think that the biggest thing was lining up developing this three year growth strategy and then using that to feed the roadmap, the financial plan for the next year, the budget requests that we wanted to put in, that was what was most important.

Nate Grossman [00:17:38] Yeah, awesome.

Katie Bullard [00:17:41] I think we’re getting the one minute signal back there, too, to.

Nate Grossman [00:17:44] Oh, perfect. OK, um, I think that, uh, uh, we can finish there. Um, but again, I really appreciate you taking time to do this.

Katie Bullard [00:17:56] Yeah. Hopefully that was helpful. I’ll be here around in the back for a couple of minutes afterwards if you guys have any questions. I think this framework works, whether you’re just starting out, you know, whether you’re a ten million dollar company or whether you’re approaching the hundred million dollars states to hopefully you guys all get to that point soon.

Nate Grossman [00:18:15] Awesome. Thank you, everyone.