Startup CXO

One of the greatest challenges for startup teams is scaling because usually there's not a blueprint to follow, people are learning their function as they go, and everyone is wearing multiple hats. There can be lots of trial and error, lots of missteps, and lots of valuable time and money squandered as companies scale. Matt Blumberg and his team understand the scaling challenges—they've been there, and it took them nearly 20 years to scale and achieve a successful exit. Along the way they learned what worked and what didn’t work, and they share their lessons learned in Startup CXO.

Unlike other business books, Startup CXO is designed to help each functional leader understand how their function scales, what to anticipate as they scale, and what things to avoid. Beyond providing function-specific advice, tools, and tactics, Startup CXO is a resource for each team member to learn about the other functions, understand other functional challenges, and get greater clarity on how to collaborate effectively with the other functional leads.

CEOs, Board members, and investors have a book they can consult to pinpoint areas of weakness and learn how to turn those into strengths. Startup CXO has in-depth chapters covering the nine most common functions in startups: finance, people, marketing, sales, customers, business development, product, operations, and privacy. Each functional section has a "CEO to CEO Advice" summary from Blumberg on what great looks like for that CXO, signs your CXO isn't scaling, and how to engage with your CXO.

Startup CXO also has a section on the future of executive work, fractional and interim roles. Written by leading practitioners in the newly emergent fractional executive world, each function is covered with useful tips on how to be a successful fractional executive as well as what to look for and how to manage fractional executives.

Startup CXO is an amazing resource for CEOs but also for functional leaders and professionals at any stage of their career."
—Scott Dorsey, Managing Partner, High Alpha

Foreword xvii

Part One: Introduction 1
Matt Blumberg

Introduction 2

Chapter 1: The Nature of a CXO's Role 9

Chapter 2: Scaling a CXO 12

Part Two: Finance and Administration 15
Jack Sinclair

Chief Financial Officer 16

Chapter 3: In the Beginning: Laying the CFO Foundation 19

Chapter 4: Fundraising 22

Chapter 5: Size of Opportunity 25

Chapter 6: Financial Plan 27

Chapter 7: Unit Economics and KPIs 30

Chapter 8: Investor Ecosystem Research 32

Chapter 9: Pricing and Valuation 34

Chapter 10: Due Diligence and Corporate Documentation 37

Chapter 11: Using External Counsel 40

Chapter 12: Operational Accounting 42

Chapter 13: Treasury and Cash Management 49

Chapter 14: Building an In-House Accounting Team 52

Chapter 15: International Operations 55

Chapter 16: Strategic Finance 58

Chapter 17: Other Areas to Partner With 67

Chapter 18: High Impact Areas for the Startup CFO as Partner 71

Chapter 19: Board and Shareholder Management 77

Chapter 20: Equity 80

Chapter 21: Mergers and Acquisitions (M&A) 85

Chapter 22: Bonus Section: WhatWe Used for Our Internal Systems WhenWe Started Bolster 91

Chapter 23: CEO-to-CEO Advice About the Finance Role 97
Matt Blumberg

Part Three: People and Human Resources 101
Cathy Hawley

Chief People Officer 102

Chapter 24: Values and Culture 105

Chapter 25: Diversity, Equity, and Inclusion (DE&I) 111

Chapter 26: Building Your Team 113

Chapter 27: Organizational Design and Operating Systems 118

Chapter 28: Team Development 124

Chapter 29: Leadership Development 127

Chapter 30: Talent and Performance Management 130

Chapter 31: Career Pathing 132

Chapter 32: Role-Specific Learning and Development 134

Chapter 33: Employee Engagement 136

Chapter 34: Rewards and Recognition 138

Chapter 35: Reductions in Force 140

Chapter 36: Recruiting 142

Chapter 37: Onboarding 149

Chapter 38: Compensation 152

Chapter 39: People Operations 154

Chapter 40: Systems 164

Chapter 41: CEO-to-CEO Advice About the People/HR Role 167
Matt Blumberg

Part Four: Marketing 173
Nick Badgett and Holly Enneking

Chief Marketing Officer 174

Chapter 42: Where to Start 177

Chapter 43: Generating Demand for Sales 181

Chapter 44: Supporting the Company Culture 186

Chapter 45: Breaking Down Marketing’s Functions 191

Chapter 46: Events 204

Chapter 47: Content and Communications 212

Chapter 48: Product Marketing 218

Chapter 49: Marketing Operations 223

Chapter 50: Sales Development 226

Chapter 51: Marketing as a Partner/Collaborating with the Rest of the C-suite 233

Chapter 52: Building a Marketing Machine (Scaleup) 236

Chapter 53: CEO-to-CEO Advice About the Marketing Role 243
Matt Blumberg

Part Five: Sales 249
Anita Absey

Chief Revenue Officer 250

Chapter 54: In the Beginning: From Prospect to Customer 251

Chapter 55: Hiring the Right People 254

Chapter 56: Profile of Successful Salespeople 257

Chapter 57: Some Myth Busting 260

Chapter 58: Compensating Sales Team Members 262

Chapter 59: Pipeline 266

Chapter 60: Scaling the Sales Organization 268

Chapter 61: Scaling Your Team Through Culture 271

Chapter 62: Scaling Sales Process and Methodology 276

Chapter 63: Scaling the Operating System 279

Chapter 64: Marketing Alignment 282

Chapter 65: Market Assessment and Alignment 286

Chapter 66: Expanding Distribution Channels 288

Chapter 67: Geographic Expansion 291

Chapter 68: Pricing and Packaging 294

Chapter 69: CEO-to-CEO Advice About the Sales Role 300
Matt Blumberg

Part Six: Business/Corporate Development 305
Ken Takahashi

Chief Business Development Officer 306

Chapter 70: How to Make the Biggest Impact as a CBDO 311

Chapter 71: Building Your Influence Internally 314

Chapter 72: Building Your Influence Externally 318

Chapter 73: Where Internal and External Meet: Your Relationship with Your CEO 323

Chapter 74: Influence Meets Operating System 325

Chapter 75: Develop External Trust for the Company 327

Chapter 76: Build Your Influence in Strategy 329

Chapter 77: Building Your Influence in Business Development 330

Chapter 78: When Things GoWrong in a Partnership…and They Will 335

Chapter 79: Geographic Expansion 338

Chapter 80: M&A: Buy Side 341

Chapter 81: M&A: Sell Side 344

Chapter 82: CEO-to-CEO Advice About the Business/Corporate Development Role 348
Matt Blumberg

Part Seven: Customer Success/Account Management 353
George Bilbrey

Chief Customer Officer 354

Chapter 83: Five Misperceptions 357

Chapter 84: Startup Customer Success Organization 360

Chapter 85: Scaling the Service Organization 362

Chapter 86: Timing: When to Hire Your Team 366

Chapter 87: Customer Segmentation and Journey 368

Chapter 88: Understanding Customers 372

Chapter 89: Understanding Customers Through Metrics 374

Chapter 90: Foundations of a Great Customer Service Organization 379

Chapter 91: Building an Effective Team 385

Chapter 92: Partnering with the Organization 387

Chapter 93: Five Eternal Questions 391

Chapter 94: CEO-to-CEO Advice About the Customer Success Role 396
Matt Blumberg

Part Eight: Product and Engineering 401
Shawn Nussbaum

Chief Product Officer and Chief Technology Officer 402

Chapter 95: The Product Development Leaders 405

Chapter 96: Product Development Culture 412

Chapter 97: Technical Strategy: Proportional Engineering Investment and Managing Technical Debt 416

Chapter 98: Shifting to a New Development Culture 424

Chapter 99: Starting Things 427

Chapter 100: Hiring Product Development Team Members 434

Chapter 101: Increasing the Funnel and Building Diverse Teams 442

Chapter 102: Retaining and Career Pathing People 446

Chapter 103: Hiring and Growing Leaders 449

Chapter 104: Organizing, Collaborating with, and Motivating Effective Teams 455

Chapter 105: Due Diligence and Lessons Learned from a Sale Process 468

Chapter 106: Selling Your Company: Preparation 475

Chapter 107: Selling Your Company: Telling the Story 479

Chapter 108: CEO-to-CEO Advice About the Product/Engineering Role 482
Matt Blumberg

Part Nine: Privacy 487
Dennis Dayman

Chief Privacy Officer 488

Chapter 109: The Role of Privacy Officer 491

Chapter 110: Privacy Advice for Startups 494

Chapter 111: Legal Documents 500

Chapter 112: The European Union 505

Chapter 113: Data Mapping 507

Chapter 114: Data Breach 510

Chapter 115: Least Privileged Access 515

Chapter 116: Employee Training Engagement 519

Chapter 117: Building Your Privacy Team in a Startup 522

Chapter 118: Building Your Privacy Team as You Scaleup 525

Chapter 119: Certifications 527

Chapter 120: Assessments 529

Chapter 121: CEO-to-CEO Advice About the Privacy Role 536
Matt Blumberg

Part Ten: Operations 541
Jack Sinclair

Chief Operating Officer 542

Chapter 122: CEO-to-CEO Advice About the Operating Role 549
Matt Blumberg

Part Eleven: The Future of ExecutiveWork 551

Chapter 123: The Future of ExecutiveWork 553
Matt Blumberg

Chapter 124: Fractional Chief Financial Officer 556
John McCarthy

Chapter 125: Fractional Chief People Officer 562
Courtney Graeber

Chapter 126: Fractional Chief Marketing Officer 567
Scott Kabat

Chapter 127: Fractional Chief Revenue Officer 571
B.J. Bushur

Chapter 128: Fractional Chief Revenue Officer 576
Sherri Sklar

Chapter 129: Fractional Chief Business Development Officer 580
Jon Guttenberg

Chapter 130: Fractional Chief Customer Officer 586
Amy Mustoe

Chapter 131: Fractional Chief Product/Technology Officer 590
Drew Dillon

Chapter 132: Fractional Chief Privacy Officer 594
Teresa Troester-Falk

Conclusion 599

Epilogue 601
Pete Birkeland

References 603

Acknowledgments 604

About the Authors 606

Index 613

MATT BLUMBERG is founder and CEO of Bolster, an on-demand executive talent marketplace to help startup CEOs scale their leadership team, themselves, and their board. He was the founder and CEO of Return Path and is the author of Startup CEO, and the blog, StartupCEO.com. He lives in New York with his wife and three children.

PETER M. BIRKELAND is a sociologist, author, and writer who helps people turn ideas into books. www.peterbirkeland.com

One of the greatest challenges faced by startups is scaling up their teams, themselves, and their boards as their businesses scale, because there isn’t a clear blueprint to follow. Many startup leaders are in leadership roles for the first time, and most startup CEOs don’t know what they don’t know about how to manage and coach each functional executive on the team. There can be lots of trial and error, lots of missteps, and lots of valuable time and money squandered as companies scale.

Matt Blumberg and his team understand the scaling challenges faced by startup executives—they’ve been there and done that multiple times over multiple decades. Along the way they learned what worked and what didn’t work, and they share their lessons learned in Startup CXO.

Startup CXO will help CEOs and each primary functional leader in a company (heads of sales, marketing, HR, technology, product, finance, business development, and privacy) understand:

• How their function scales
• What to anticipate as they scale
• What obstacles prevent scaling
• How to collaborate effectively with other functions

With the help of Startup CXO, functional leaders, CEOs, Board members, and investors can pinpoint areas of weakness and turn those into strengths. Each functional section is written by a long-time practitioner of that function and also has a “CEO to CEO Advice” summary from Blumberg on what great looks like for that CXO, signs your CXO isn’t scaling, and how to engage with your CXO.

As an added bonus, Startup CXO explores fractional roles—the future of executive work. Written by leading practitioners, each function is covered with useful tips on how to be a successful fractional executive and from a startup’s perspective, what to look for in hiring and managing fractional executives.

Praise for STARTUP CXO

“The leadership team of a startup/growth company is the heart and soul of the business. While there are many books on how to lead a startup, I have not seen any about how to build the leadership team, how to scale it, and maybe most importantly, how to be the functional leader of part of the startup, whether that is Chief People Officer, Chief Revenue Officer, Chief Product Officer, or Chief Financial Officer. In Startup CXO, Matt Blumberg and his leadership team tackle those questions and provide a roadmap on how to do exactly these things. If you are starting a company for the first time, or scaling a company for the first time, or if you have done it before but want to do it better this time, I strongly encourage you to pick up this book, read it, and then give it to each of your functional leaders and ask them to read it too. You and your leadership team will be so happy you did that.”
—Fred Wilson, Managing Director, Union Square Ventures

“The biggest challenge CEOs face? Learning how to effectively orchestrate the activities of a leadership team. Startup CXO is the ultimate playbook for leadership teams looking to scale their business—and themselves as leaders.”
—Linda Kozlowski, CEO, Blue Apron

“Every first-time CEO comes to the job knowing one or two functions really well. What they can get from Startup CXO is a candid view of what ‘great’ looks like across every function and how the functions should all fit together into a high functioning executive team. Matt and his team bring insights to the craft of leading and scaling a robust executive team in a format that makes it easy to find advice on any challenge you face at any given moment in the journey.”
—Jeff Lawson, CEO, Twilio

“Like any first-time job, a first-time CEO is learning as they go. Luckily, there are lots of resources and access to people who can help accelerate first-time CEOs through the many learning curves. Fundamentally, being a CEO is a job of leadership and the best CEOs also have strong CXOs. Startup CXO is the perfect companion book for both CEOs and functional leaders to validate and open up new learning opportunities and shared experiences across all functional roles on a leadership team. Every CEO and functional leader looking to get a holistic view of their company and looking to scale should read Startup CXO.”
—Jenny Lawton, former CXO, Techstars, littleBits, and MakerBot

“Startup CXO is a must-read for any CEO—first-time or otherwise—of a high-growth company. Startups move at an extremely fast pace and this book will help your entire team understand how to scale their function and work effectively with others. Read this book before your competitors do.”
—Brad Feld, Managing Director, Foundry Group