Unleashing revenue growth when scaling – Roland Siebelink, CEO at Mid Stage Institute

Are you struggling to align your cybersecurity product with the market's demands? Do day-to-day disagreements in your team hinder overall progress? Are you pondering how to grow sales without diluting your company's focus or overspending? 

These common issues can be pivotal in either propelling a cybersecurity startup to success or leading it to an untimely plateau. This episode of the Cybersecurity Go-To-M  Podcast, featuring Roland Siebelink, dives into the nuanced strategies of scaling a tech business effectively.

In this conversation, we discuss:

👉 The critical balance between growth and cost-efficient scaling in tech startups.

👉 Prioritizing core business and customer satisfaction over rapid diversification.

👉 Different perspectives on making team decisions.

About our guest

Roland Siebelink, founder, and CEO of the Mid Stage Institute, is a seasoned entrepreneur, having scaled three companies to unicorn status. His expertise lies in guiding tech companies from the delicate stage of finding product-market fit to scaling effectively and sustainably. With his extensive background in market testing and building competitive sales teams, Roland offers invaluable insights to cybersecurity startups looking to leap from Series A to market dominance.

Summary

In this episode, Roland Siebelink shares his wisdom on fostering strong team dynamics, investing in go-to-market strategies, and scaling with precision. He discusses the crucial aspects of sales, marketing, and customer success vital to cybersecurity startups. Stay until the end for Roland's personal journey anecdotes that shaped his approach to business. Make sure to **listen in for actionable advice that can drive your company's revenue growth.**

Connect with Roland Siebelink:

- On LinkedIn 

- Mid Stage Institute 

Book a time to talk with me: 30-Minute Meeting 

Transcript

ndrew Monaghan:
Only a third of the companies that raise a series a go on to also raise a series C. Now, a few are acquired. Fewer still go IPO, but most unfortunately just simply don't make it. This week's guest has scaled up three companies to be unicorns and now advises companies how to make the transition from getting go to market fit to scaling successfully. We talk about scaling too early, where to invest when scaling, how to think about getting the right executives and salespeople on the bus, and a whole lot more with Roland Siebelink, the founder and CEO of the Mid Stage Institute. Don't go away. Welcome to the cybersecurity go to Market podcast, where we tackle the question, how can cybersecurity companies grow sales faster? I'm your host, Andrew Monahan. Our guest today is Roland Siebeling, founder and CEO at Mid Stage Institute.

Andrew Monaghan:
Roland, welcome to the podcast.

Roland Siebelink:
Thank you, Andrew. It's such an honor to be on your podcast finally.

Andrew Monaghan:
Well, you know, I'm looking forward to our discussion. Roland, you've got an interesting background and that you have been one of the key people at the starter at the center of three scale ups over the years. I'm sure there was probably a couple in between there that didn't work out quite so well. And now you're in a position where what you do is you advise other companies. We're trying to make that transition from finding product market fit into scaling up to be an impressive company in their sector. And it'd be good to get your impressions about how cybersecurity companies can make that transition.

Roland Siebelink:
Absolutely. Absolutely.

Andrew Monaghan:
Well, let's take a transition over here to the business part of the discussion here. Roland, we're going to take your experiences at the three scale ups you did, as well as everything you're working on right now with all your clients at the moment and apply it to our favorite cybersecurity company, which is Cyber donut. And listeners of the podcast are familiar with Cyber Donut. The company's growing a little bit. It's up to 50 employees. We've got about eight people in carrying a quota. We got some ses, some sdrs, and three people in marketing, as well as a leader in both sales and marketing. Customer wise, we've got five design partners, let's say, and we've managed to get as many as about 20 real, live paying customers as well.

Andrew Monaghan:
And we're just about to take our series a, and we've done really well in the current climate of getting about $20 million for our series A. And the excitement in the company is high. We're ready to go from experimenting and trying to figure out do we have something to sell and how do we sell it into actually ramping up the whole revenue engine? And I noticed that in your first book that you wrote, there's a quote in there that from you that says a scale up is a former startup looking to turn product market fit into product market dominance.

Roland Siebelink:
Wow, you've read by book. Andrew, I'm so impressed.

Andrew Monaghan:
Of course, of course. And everyone at Cyberdonut is thinking market dominance is what we're after. We're going to take on the world. We're excited. We've been through this whole world of hurt the last two, three years trying to figure out product market fit, and now we're ready to take on the world. However, let me tell you a quick story. So a few years back, I was at a startup and sales leader came in. They had a few design partners like Cyber Donut.

Andrew Monaghan:
I think we had about 15 customers or so. And it was a struggle. The sales leader brought in a few people and we went out to the market and we're trying to sell what we have. And what we realized was that the product worked and people had the problem that we had, but there was no urgency around it. We talked to people and they go, yeah, that's something that is not good for us. But, you know, they didn't really care that much. Right. There's few people that actually cared enough to say, let's go spin off a project and go solve this.

Andrew Monaghan:
And if they were, they were pretty low level people, right? It was senior, more senior. You got in your prospect, the less they seemed to really care about what it was you were working on. They kind of brought to mind the idea that sometimes there seems to be this thing where people think they're ready to scale, but perhaps, are they really? And I'm wondering what your thoughts are as you're advising companies like how do you, how do you know, how do they know that they're ready to actually, you know, pour some fuel on this engine and get going.

Roland Siebelink:
Yeah, I think it's a really important question. And often, actually, the one I start with, are you ready to scale? Because one of the biggest dangers in the tech startup world is premature scaling. Right. And to stick with your analogy there, Andrew, basically, it's starting to add a lot of fuel to an engine that's still sputtering. That is one of the biggest risks because all you do is starting to add expenses and complications, complexity to the business where if you don't really have figured out what makes your customers tick and what makes them spend and spend more scale and return with you, then, you know, pouring more fuel on that almost, you know, inexistent fire is not going to help you. It's only going to hurt you.

Andrew Monaghan:
So what drives them to do that though, Roland? Like why would perfectly rational, intelligent and smart human beings believe they're maybe a bit further ahead than they actually are?

Roland Siebelink:
Yeah, very good question. So delving into that a little bit, I think it's often a combination of sheer impatience combined with maybe a degree of fatigue and frustration that things are taking so long with the incessant pitching to angels and VC's, where after a while you start turning the fake until you make it into something you truly believe. Right. And so this is something that really is the most prevalent with people who are in that more investor relations function, go to market function, maybe where they've learned so much to pitch beyond what they have already, which is actually a good practice, right. That they start to believe it too much. And that is, I think, where I typically say, yes, you need the Kool aid for sure. No startup would survive without Kool Aid, but you also need a little bit of truth serum mixed into that where you can hold each other accountable for what is actually happening. Right? Yeah.

Andrew Monaghan:
And in that situation, it was interesting, you know, the team that we put together, we all cycled that. The next team cycled out and the next team after that cycled that. So it was like a third 4th time round I think they're at right now? How would you advise someone who believes they're seeing the real situation to actually work with the board or the CEO to say, well, actually, I don't think we're quite there yet?

Roland Siebelink:
It depends where they are at. Right. Is it primarily because the board or the investors are saying, oh, you need to move faster and I need to see money coming in faster? Or is it because they truly believe that they're there? I think usually one of the levers that helps us the most is to get more tolerance for the team actually discussing where the company really is at. So an early stage company, in my experience, really cannot function unless they have a very forceful founder that just tells everyone what to do. Because it's such a fiction at that stage that basically people need to just believe in that founder. And you'll find founders typically also hiring people who are primarily optimized for being zealots, believing the founder no matter what. Right. And so I'm not against that this is absolutely crucial in the beginning phase.

Roland Siebelink:
But when you start scaling up, then it becomes important to also encourage multiple perspectives to be shared for people to find the truth together. And that's often where we start. Like a very early exercise in working with companies is just drawing up what we think are strengths, our weaknesses, our opportunities, and our threats. Right. Or sometimes strengths, weaknesses, and just trends in the market. And all that does is get a common base about what do we believe and how do we prioritize? What are the most important things that we have to work. Understanding where our true strengths are, but also understanding where our weaknesses are, that we may not change over time, as well as what are the big trends in the industry. And just creating that foundation of a common truth will actually make it much more likely that people will argue for the same priorities and the same strategies.

Roland Siebelink:
Because it's my firm conviction, Andrew, that when people disagree, it's very often because they have a different framing or they have a different set of facts, and it's not because they're irrational in a way.

Andrew Monaghan:
Now imagine having a third party coming in to be the devolved person not involved in the day to day is a real benefit for them. That can really drive the conversation.

Roland Siebelink:
Absolutely. This is very hard to do from inside the company. And believe me, I've tried. I mean, before I became an independent facilitator, I actually was an internal facilitator at Rocket fuel and doing the scaling up program there. It is much, much harder to do that from the inside because, one, you're always swimming in your own soup. Right? And two, it's very hard to challenge people that are more senior than you. The hierarchy always plays a part. And so I think one of the key benefits of getting an outsider to help you, whether it be a coach or a facilitator or whatever outside person, is that that new perspective, also from a different angle, I would say very often you have this big worry in your head all the time as a founder, like, my God, I have no idea why my company is so messy.

Roland Siebelink:
Everything else seems to work so much better. What is wrong with us? Right? And an outsider will often, especially an outsider with experience, will often ground you and let you know that every other company out there is equally messy on the inside side. It's just that there you compare the nicely polished external marketing picture with your own internal reality. Right. And so the grass truly is not necessarily greener on the other side. Yeah.

Andrew Monaghan:
And having the strength of character to power through, that is what we look for from our founders. Where we want the person that can really drive the company forward like that through these kind of tough decisions and all the rest of it. I'm wondering, Roland, as you think about, I'm sure every company is different, but as you think about the companies you work with, any patterns you see where as they're making the transition, these are the areas they tend to have to invest in or tend to have to make the biggest changes.

Roland Siebelink:
Absolutely. So I work exclusively with tech companies. So typically, software sometimes has hardware components. And comparing this to the cyber doughnut case, one thing that cyber donut has already done is invest properly in the whole go to market function. So quickly going through the company, as you described it, I counted about 20 people in the go to market site, maybe 19, if I have it correct, out of 50. Right. Which is a little bit more than a third, which is really a standardized try to strive for around this time of them raising series a. You wouldn't believe, I don't know how many tech companies at that time are still 50, maybe even 100 engineers.

Roland Siebelink:
And then there's two or three salespeople and half a marketing person, you know, and so you keep asking like, well, but, you know, if you want to grow, who is going to basically take care of that growth? And then many technical people in particular love this idea of product led growth, and, like, everything will just be the product itself. But really, looking at that from a marketing perspective, that's just the better mousetrap fallacy in new clothes. Right? Product led growth has its place, and it can really help spark a pipeline. But I think, in general, it works much better for small business than for anything related to enterprise. And even then, it often is much more of a lead generation channel than an actual sales channel, especially for upselling and expansion.

Andrew Monaghan:
Yeah, I imagine that some people are looking at that headcount split and saying, I see burn rate. Right. We're paying these people a lot of money to get our go to market figured out. Can we not cut it down a little bit? What if we had half? What if we had a few less? Must be a lot of pressure from technical finders to really question that.

Roland Siebelink:
Yeah, it's that. And there's also the worry about. But we have so many features we need to build. We're not ready yet. Our product isn't good enough, so we need more engineers. And really, it is often more of a. Call it a gap between what they think the product should be like in a almost good enough or even perfect way versus what the market actually requires. And those go to market people will also help you understand that very often the market is not there yet, they don't require all that much.

Roland Siebelink:
80% of what you're building, to be blunt, is probably not needed at this stage. Right. And that's a very hard truth for technical people in particular to embrace. Even this morning I was just in a workshop with a client in Singapore and they were talking about this big issue on their roadmap and I was just asking the marketing people in the room, is this the scope that you were looking for? And they kind of sheepishly said actually all we needed was a checkbox on the website. And so there's this tendency, Andrew, to kind of take a requirement and gold plate it and put it in the most perfect way possible. But this is really something that as a scale up you have to be very good at. Like what is the minimum we can do to satisfy this requirement just a little bit and then we can always decide to invest in it further once there's more demand for it. But will that demand lead to further upselling, to further expansion to new customer segments coming on board? If not, why are we doing it?

Andrew Monaghan:
I'm interested as the change happened in the last few years, Roland, from a lot of money flying around in the zero interest rate period, now that's not the case. What changes have you seen about how people are planning their go to market growth and planning the engine growth over that time?

Roland Siebelink:
Yeah, very good question and it's been very challenging, I have to be honest. Most companies and most founders were totally steeped in that mindset of like let's just get growth at whatever cost. And at this point in time capital is just too expensive for that. Right? So now they have to learn to put a lot less money in it upfront. But still, investors, VC's want to see growth because that's ultimately what they invest in. There's this much harder balance to strike between we want growth but we don't want it to be too expensive. So can you grow a little bit slower? Is your competition also growing slower then? Very often it's too slow to actually make the VC's fund. So I think VC's also have trouble providing the right guidance there in terms of saying how much growth is actually.

Andrew Monaghan:
Good enough at this stage in terms of allocating resources. Then if they're thinking growth, where do you see people getting the most bang for the buck right now? Is it more into sales headcount? Is it the marketing programs or marketing headcount? What are you seeing?

Roland Siebelink:
Yeah, good question to be honest. I think many of the series A level, series B level companies in particular can get the best bang for the buck by focusing on their core business. And it's not necessarily the salespeople or it's marketing. It's very often that they're trying to run two, three businesses at the time. You know, they were seeking growth, maybe in one segment that they had first, and then they were saying, okay, let's launch that other product. Let's launch that other geography. Let's launch that other segment. Before you know it, you have a combinatorial explosion of maybe like, 120 different sandboxes, as I call them.

Roland Siebelink:
Right? Like all these combinations of segments, product geography. And so it's in that complexity that a lot of money is lost, where if you do a waterfall chart of how much of this is actually making us a gross profit, right. Then very often, out of those 120 cent boxes, there's less than five that actually do all the rest is just basically a burden to the company. And so the key in my mind is to say, let's focus more on our very core. Let's remember where we started. What was the one segment and the one product and the one geography where we were most successful? And have we actually exhausted that? Right. So often you will ask that, what's that core? And they can tell you right away. And then I'm like, what's your market share in that initial core? And they say, oh, either we don't measure it or it's like, less than 1% for sure.

Roland Siebelink:
And then I'll say, so what are you doing trying to open up all these other sandboxes if you haven't even conquered your first sandbox yet? Right now, this is very radical. And of course, they will not shut down everything. But I will say the growth at any cost mindset has often led to lots of speculative arrays that are not paying off for the company. And that's the first area where I would cut.

Andrew Monaghan:
So cyber donut should go back to their foundation, get clear on the vision, and see if it has changed over time. Make sure it's not changed into eight different ways, but maybe one or two ways, and that they're working on the right things that really are going to make the big impact, right?

Roland Siebelink:
Yeah. If I were coaching cyberdonut, that would be one of the first questions I would be asking, are your 20 paying customers similar, or are they very different? Like, what areas are they in? Are they working for the same? Are they paying for the same product? Are they different kinds of segments? What verticals? Are they in questions like that to tease out all that complexity underneath?

Andrew Monaghan:
You know, one thing I've experienced, Roland, back in the day when there was a lot of money flying around, was, you know, planning the scale up was often a headcount exercise. Right? How many sales people do we need to get the capacity to be able to drive this much growth? Things have changed, though. How are you encouraging companies to think about the planning side and how to actually plan for that scale in terms of systems or investments in people, et cetera?

Roland Siebelink:
Yeah, very good. So I would say there also, first we would look at, do you have one go to market motion or several go to market motions? And if you have several, which one is the most efficient? Right. So many times people are doing all these experiments, like, sometimes it's through events, sometimes it's online, sometimes it's in person, and they have. And distributors and direct and then maybe partners. And so, you know, like, is it. Are all these channels actually working? Is there not one bread and butter channel that works the best? I would actually invest more in that channel, but then cut down some of the other more experimental channels. And then I would say, like, look, let's start from the end and say, you know, what are your sales targets? Do you have the capacity to actually reach those sales targets with the people you have starting from sales? So assuming here that it's a direct sales model, right, you need certain sellers to close all this business, but then you calculate back, like, what's the pipeline for that? Right? So how many sdrs do you need to book all these meetings? How many marketing campaigns do you need to reach those? I think, again, the complexity comes from actually telling people, for example, in marketing, like, your main job is actually to generate those leads. It's not at this point in time to reinvent the brand or to come up with all these employee marketing materials or all the stuff that may matter in the long run but doesn't matter in the short run so much.

Roland Siebelink:
So it's really a focusing exercise and helping people to understand your main contribution to the company is just this pipeline and then the sales that results from that. Same for customer success. Of course, it wasn't mentioned here that much, but in SaaS in particular, the initial landing in enterprise is often very tiny. But then upselling, keeping people happy, getting expanded, getting more seats, that is probably the biggest revenue driver. And one scary number I read just yesterday, Andrew, is that net revenue retention in SaaS is now down to 63%.

Andrew Monaghan:
Only 63? Wow.

Roland Siebelink:
63%. Yeah. So, you know, that is actually really undermining this whole model of steady growth out of SaaS, which, where we, I think we used to say 100% is not good, 120% starts being good, 140% is great. Right. That's revenue retention. We're far below that now.

Andrew Monaghan:
Yeah, no kidding. Since I was talking to Tim Eads, who's a general partner of the cyber mentor fund, this is last year, and his take was he would actually hire a CS person, probably in the first two or three people on the go to market site, because getting someone happy is going to be a bigger driver for your success than trying to generate just more leads, for example. So he wanted someone, even if you only have three or five customers, he wanted someone to be responsible for making them extremely happy so that they go out there and talk about it in the marketplace.

Roland Siebelink:
Yeah. And that's actually a story I also hear on the marketing side, where the most experienced marketers say, you know, the first marketer I hire is actually a product marketer, just to make sure we get our messaging right and that we make sure that people talk about the right things and only then do I start getting a lead gen marketer to basically start scaling up that lead generation.

Andrew Monaghan:
Yeah. Yeah. The marketing folks tend to gravitate to being okay with lead Gen as their primary job, or they feel like they're being snipped a little bit.

Roland Siebelink:
I know very few marketers who are excited about lead generation. And, you know, it's because I always give this example when I coach a team. Like when we set up the KPI's, we always ask like, okay, what's the one number without which your function wouldn't exist? And even then, when I ask specifically for one number, they all come up with like four or five different KPI's. Right. And then we have to be very annoying with each of the functions and tell engineering, like, look, you may care a lot about stability and new technologies, but in the end, what matters the most is you delivering new features. Right. And same for marketing, what matters the most is leads. And then they all go like, yes, I know.

Andrew Monaghan:
Well, for sales, it's very clear, right? The KPI's are usually pretty obvious.

Roland Siebelink:
Yes, exactly. But even in sales, sometimes it is so much easier to just stick with current clients and get more out of them. Whereas the main challenge of the company for the longer run is to get more logos. Right. We all have jobs in which we are asked to do certain things that make us uncomfortable, but it's important to understand what the company actually needs from us, rather than what we'd like to do best. Right.

Andrew Monaghan:
You know, I've seen two approaches to this, Roland. I've seen people, like, take cyber donut right now. They're, let's say they're going to hire, I don't know, ten or 15 more people on the sales site because they've got this $20 million burning the hole in their pocket. And I've seen people go two paths. One is, well, let's get coverage. Let's hire heads and get coverage. And FCP will go for, well, I want quality, and I don't mind paying for quality. I really want the athlete there.

Andrew Monaghan:
That's going to make a difference. What's your thought about that?

Roland Siebelink:
I think it depends a lot on how much infrastructure you have already. And by infrastructure, I mean particularly a playbook. Like, do you have the guidelines of how to sell this product? And very often that's sorely missing. Even companies that have scaled to this level where everyone is still figuring out, how do we actually sell this? I think that would be a sign of premature scaling. Right. So it's not just about having the products in place, but also having figured out, like, what's the messaging roughly, what's the, what's the sales process roughly, or the tactics roughly, that get people to actually sign up. And in the beginning, that's just the founder who can do it. I don't think you can hire a salesperson too early to figure that out for you.

Roland Siebelink:
Right. But once that playbook is in place, then I think it's actually much better to just get more relative junior people in there so that you can cover more territory and then really focus on training the managers and the leaders to do a good job at gardening, at weeding out their garden of people, I.

Andrew Monaghan:
Would say, okay, so there's going to be scale through coverage. And then you want those people to be sponges so that they can figure out, they can learn from the playbook, essentially. Right.

Roland Siebelink:
Learn from the playbook. But also, you know, have enough people so that there's a healthy competition and that people are not getting complacent. Right. I mean, we all know that many salespeople are driven by a little friendly competition, so why not? Why not use that to our advantage?

Andrew Monaghan:
Roland, let's learn a little bit more about you. I'm going to spin the wheel here and let that choose questions for us to ask you. So let me start here and see what number it comes up with. All right. Number 32, how did you make money as a kid?

Roland Siebelink:
How do I make money as a kid? Well, to be honest, that was not my primary concern, as I hope it wasn't for most kids. But when I did make money as a kid, it was usually just by doing old little errands or jobs for the older people in my family, like my grandmother, grandma, like an old uncle and stuff like that. And it was also at that time, already clear to me that the value of money they had in mind was very different. Because sometimes for the same job, I would get five times as much as from another, maybe more stingy uncle.

Andrew Monaghan:
Yeah, I remember those days. You sometimes get something from one person, you're like, wow, that's amazing. And then you get three times as much for another. And for them, it's all nothing. But for you, it's like, wow, gosh, I've got this much.

Roland Siebelink:
It was just an early learning because that's exactly how enterprise sales works later on in life, too, right?

Andrew Monaghan:
That's right. And I should say, by the way, my spinning the wheel here, I'm using a very sophisticated AI, next generation wheel spinning device here. It's being audited by Deloitte to make sure that the questions that it picks are completely random.

Roland Siebelink:
Well, the AI part sounded really modern. The audited by Deloitte may be a little bit less so. But anyway, Andrew.

Andrew Monaghan:
Wow. Let's hope they're, they're reasonably modern. Let's see. Let's spin it again and see what question it comes back with. Number nine, what is one of your most memorable moments in business?

Roland Siebelink:
Yeah. So here I would say this is to do with your positioning in the market. In my earliest scale up telenet, we were kind of bogged down in our product pipeline, as happens in so many tech companies, and nothing was coming out. And we really were losing deals because we were not following the market closely enough. Customers started to get a feel for. These guys are just too slow. So we launched what I call the one innovation per month program, where I just told a team of really junior people, like, look, one engineer, one marketer, one customer support person, you together, you come up with an innovation once per month. I don't care what it is, as long as we can announce it to the customer and it can be as tiny as it, as you want it to be.

Roland Siebelink:
But we want to announce something, right? And that worked extraordinarily well because basically, just by empowering people and letting them run a pipeline of ideas where very often at the very last minute, they would swap out one that wasn't ready yet for something they had on the back burner. You know, it actually led us to 15 innovations in one year, so more than once a month. And we won a prize for the most innovative company in our industry at the end of that year. And, of course, sales turned around accordingly.

Andrew Monaghan:
They must have loved having that level of responsibility and freedom to do, you know, cool things they did.

Roland Siebelink:
After an initial period of fear, which I've really learned at that time, often comes with empowerment as well, because, you know, it's easy to complain about your boss taking all the wrong decisions, but then once you're actually responsible, it starts to feel very differently. So there's definitely a period of handholding needed in the beginning, but, yes, absolutely, they loved it, and I think still set them up for life because they've all grown to be powerful executives in their own right now.

Andrew Monaghan:
Oh, I love that. That's awesome. All right, let's spin the wheel again and get our last question here. All right, number 19, what is the story behind getting your job at Telenet?

Roland Siebelink:
Yeah, so I think, looking back, it was really because I was a pioneer at the new technologies of the time, and maybe that's even a red thread that I can pull back through some of my other scale ups as well. But to stick with Telenet, I had been one of the first people in Belgium, the country where I lived at the time, to be involved in the Internet from a non technical perspective. So I was a research assistant at university. It's my first job after graduating, and was exploring all the social and political consequences of this new Fengel technology, which led to media coverage, which led to me founding the very first website company in Belgium. And so when Telenet, a kind of cable provider, wanted to start launching broadband Internet and wanted somebody in marketing product management for that, they said, okay, this is really the only guy who has some relevant experience that we can, can recruit right now.

Andrew Monaghan:
Now, Belgium is not a large country, let's say. Right? Were you in a very small group of people that could have even been working in that whole area?

Roland Siebelink:
Well, it was very small. And, you know, it's not a large country, as you say, it's only 10 million people, or it was at the time. Plus, this was a rollout of a cable network towards making it available for broadband Internet. So all of these networks had to be physically converted, which really meant that in the beginning, there were only two communities that had even had the technology available. So that was really another learning there. Like, how do you do a market test in a tiny area where it was even forbidden from doing, like, the things that would be most efficient in those areas, such as like knocking on doors and getting to know people. Right. Because they said no.

Roland Siebelink:
Because we need to test how to make markets that will actually work nationally. And we have to say, ultimately this became part of a much broader european wide group. So the scope was never limited to just Belgium. Their learnings were going to be applied in a much broader context than just this small country.

Andrew Monaghan:
Two last questions for you. Let's imagine the cyber doughnut team, the sales leader that's there right now, was there right from the start. There's sometimes a temptation to say, well, we need horses for courses. We need to bring in someone who's scaled from one to five or five to ten, or whatever it might be. How do you know whether you've got someone who's going to be scalable with that model and someone who won't be?

Roland Siebelink:
Yeah, I think it's a very good question. I think generally people assume that people will just be okay until they are not. And I would often encourage people to reverse that thinking and say, assume that if they're good at this phase, they're not going to be good at that phase. One key insight I got from some research done in London maybe four or five years ago. They went through all of the companies that raised Series A and then looked five years later like how many had become a unicorn. And they tried to correlate that to personnel decisions. Like, did they hire people from a grade school? Did they hire people with experience or a lot? Not experience. And the most insightful part there was that none of these factors seemed to matter that much.

Roland Siebelink:
There was no clear correlation between all those things that they would have expected. There was only one factor that truly did make a difference, and that was how quickly they replaced people in their executive team. And this is a bit shocking, it was to me when I heard it. But they said that the best companies that made it to unicorn status, on average, changed one thing in their executive team every quarter.

Andrew Monaghan:
One person.

Roland Siebelink:
One person typically. And this was not necessarily firing someone. It could also have been combining some responsibilities. It could be promoting someone, it could be, you know, the person stays at the company, but we hire someone above them. So all kinds of changes, right? But basically they said one time, a quarter is ideal because it's just enough change to keep people on their toes. But at the same time, since they, you know, for an average team of twelve people, that would mean my job typically, on average, lasts three years. Right? That's still enough safety, psychological safety, to still do a good job and invest a little bit future. And the other thing they said is that average of three years is probably also related to people just burning out over that time.

Roland Siebelink:
Because, you know, after three years in such an intense environment as a scale up, you may still be able to work, but are you able to still give your best? Probably not.

Andrew Monaghan:
It does seem very machiavellian, though, that it's just the fact of having to replace people like that.

Roland Siebelink:
It is absolutely true. And the good news is that almost all companies actually keep these people and keep them for a long time, even long post IPo. It's just that at some point in time they say maybe you shouldn't be on the executive team anymore. And as I said, very often those people are actually, by that time, yeah, they'll need some convincing, but afterwards they're often actually relieved that they no longer carry that big responsibility and that some fresh blood can actually do that for them. Yeah.

Andrew Monaghan:
And maybe this last question is kind of related to this, but one of the things I've seen is people bringing in a sales leader and then either the CEO and the CFO or even the board just tell them what the number is and have to go do it, and they don't involve in the planning and the deciding and figuring out what the right model and rate is. How do you encourage a sales leader who's being treated like that to maybe try and get more of a seat at the table and maybe get more collaboration with the board?

Roland Siebelink:
Yeah, I think, first of all, this is not a problem that's only related to sales. I think engineering leaders all say the same, product leaders will say the same, HR recruiting leaders will say the same. And so I think it's really more about instituting a discipline of doing both top down and bottom up planning. Right. And so we often use what we call the W model, which in a nutshell, really means that, yes, you should absolutely start with expectations from the board or from the CEO, but then have the teams come back with what's our bottom up planning. Then you have a session where you reconcile it, and then you still have another, like down and up, where you go to even deeper levels of teams and have them write up what they're actually going to execute. Right. So this sounds a little bit complicated, but it really helps to reconcile those top down and bottom up views and get people to see why they think differently.

Roland Siebelink:
For bottom up planning, of course, you need to see why a board thinks this is not only feasible, but also a target that we should make in order to be successful. For people in the board and the CEO, it also matters that they see why people think something is not feasible and why it's not realistic to be expected. This, what I see too often, Andrew, is that people just shove all these discussions under the carpet and then it's at the end of the quarter that they figure out this was never feasible. So can we please move that a few months ahead?

Andrew Monaghan:
I like that approach. Right. Take it as a starting point and maybe it's the right number, maybe it's not. But at least go through the bottoms up and top down to figure that out. And don't sit there after six months going, yeah, yeah, yeah. But it wasn't the right number in the first place.

Roland Siebelink:
Exactly. Plus, by having this as a process, it also actually allows the CEO and maybe even the board to then be more free and say, I think I want to set this target because this is what I think the market will require. Now let other people come back with all the objections of why that's not feasible. It's not up to the CEO to say upfront, like, let me take into account what I think is feasible or not feasible. That's for the team to say, yeah, yeah.

Andrew Monaghan:
Well, final thought. Cyberdonut is getting the 20 million. They got their plans in place. Any final kind of rallying call for the leadership team to go and take on and become the dominant player in.

Roland Siebelink:
The market, get your rhythms in place. And the rhythms, by that I mean you have to have the discipline of actually executing on your targets. And that means you want to have on a weekly basis, a look at your targets and fix anything that's off track. On a quarterly basis, you want to revise your targets, set new goals or okrs, whatever the system is that you prefer. On an annual basis, you want to revise your strategy. And these should be targets that should be rhythms that are set well in advance. It's always the same time every week, every quarter, every every year. Agenda should be almost like set in advance so that people know this is the base that we can count on, the foundation that will make this company successful.

Andrew Monaghan:
That's great, Roland. If someone wants to get hold of you and tap into your experience and take you on as an advisor, what's the best way for them to get hold of you?

Roland Siebelink:
Yeah. So the best way is to go to midstage.org thrive, which is our summary page of everything we do, some key podcasts, videos, and as well as all the contact links. Please connect with me on LinkedIn bridged and then we will be in touch.

Andrew Monaghan:
Awesome. Good to chat.

Roland Siebelink:
Thank you so much. Andrew, on there.