How "scale roles" enable founders to do more with less with Andy Mowat
These key roles help founders sustain rapid growth while staying efficient
I spoke with Andy Mowat about hiring for “scale roles,” key positions in SaaS companies that enable greater efficiency and productivity for startup teams while still managing headcount costs. Andy has seen the benefits first-hand in prior roles and shared insights about what scale roles are, which roles founders in the $10-20M ARR range should think about, and how boards can help with this process.
Andy Mowat has led Revenue Operations, Marketing and GTM strategy at 3 unicorns (Upwork, Box and Culture Amp). Andy is CEO of Gated, an innovative company giving each of us back control over our inbox. On the side, Andy loves advising other sharp CEOs and spending time with his family.
Part 1 of this conversation will cover an overview of scale roles, how they enable founders to do as much as they can with a few people as they can, and a few real-life examples.
Part 2 will cover Andy’s advice on how to hire for scale roles, the power of asking ‘why’ to identify these opportunities, and how startup board members help with the process.
Andy’s path into the startup world
Lyndsay Tell me about your background. How did you get into software and startups?
Andy I went to Princeton for undergrad, then did banking, and private equity, studied Eastern Europe, went over and worked in Europe for a couple of years, came back for Stanford Business School, and graduated in ‘01. It was bad, really bad. I ended up working for a wealthy family.
They owned the third largest movie theater chain in the country and I helped them build businesses for six years until I realized the power of technology to change the world.
I read the Four Hour Work Week by Tim Ferris and decided that I wanted to go work for Elance or oDesk (freelancer marketplace companies that merged to become Upwork). I met both CEOs and got offers to work for both of them and ended up doing that.
I was the business development guy for the CEO of Elance and he started throwing problems at me, fix my sales team, fix my CRM, build our marketing automation. I started to realize what I was really good at was the go-to-market systems data strategy and making all our teams work with data.
I have now run go-to-market ops, rev ops, marketing and strategy and data for three unicorns. I'm good at it, I enjoy it. I like scaling companies.
What scale roles are and how they provide value
Lyndsay Our topic for today is scale roles. What is a scale role and how did you come to learn about them?
Andy I joined Box to help run all their post-sale operations strategy. I worked directly for the Chief Customer Officer and ran all operations for a team of 400 people focused on growing Box’s customer base.
His philosophy was if five or six people are all doing something with a small percentage of their time, assign that work to one person. That really opened my mind to the power of a scale role.
A scale role is where you are not hiring another person to do something, but you're hiring somebody to make that process more efficient and to get more value out of other people doing the function.
I think a lot of companies don't think in terms of that, but that's how I've approached things in terms of scale roles and where you could leverage them.
Lyndsay How should a founder think about the value that adding a scale role brings? If a company is bootstrapping, planning for an upcoming recession, or otherwise thinking about how to make the most of limited resources, how can a scale role unlock value for their team?
Andy I think you see so many people that have over-hired. They've said “let's go hire a huge sales team. The math works on paper.” But they need to sit down and say, do they know how to sell? Are they trained up? Are they going to be effective? Are they going to be productive? Nobody's asking those questions.
At a fundamental level, would you rather have 50 people that have no training and support or would you rather have 30 that are highly enabled, highly trained, able to be much more efficient? People are our most expensive resource in every software company.
If you're not enabling those people so that they can be efficient, then you're behind the eight ball. How do you do as much as you can with as few people as you can?
I think sometimes people will cut these scale roles because they don't directly produce, but if you cut them, you're cutting the muscle out of a company in some cases.
Lyndsay Yes, the person that's helping all of your sales reps be more effective or your marketing team be more effective.
Scale role to consider at $10-20 million ARR companies
Lyndsay Let's say a company is between $10 to 20 million of ARR (annual recurring revenue). In what scenarios are scale roles most valuable and why? Can you give some examples?
Andy It's going to be a very different answer than if you are an enterprise sales company or if you're SMB versus mid-market. That being said, if you don't have a marketing ops person, if you don't have a sales ops team of probably two to three, those are basics.
At that size, CS is starting to mature. It takes 2-3 years for churn to surface. You will need CS ops to understand the data, the predictability, why are people churning.
One example from my past company was the security role. We were doing a lot of mid-market and SMB deals and we were getting a lot of security questionnaires and we were losing a lot - we could see it in the data. We didn’t want to have our reps go and hunt for the data to fill out questionnaires each time. We wanted somebody obsessing over whether we were clearing security reviews. Are we getting through that roadblock and the deal process and deal funnel?
We ultimately had a three person security review team that was purely focused on servicing go to market. And we were able to start to understand how many we win and then we start to expand that. We took that same team and expanded it to RFPs as well too.
Another great example is from my time at Box. We had Box Consulting, which was our team of implementation specialists. Customer success in a typical company also does implementations and what we were seeing was there were enough technical questions and the skillsets between CS and implementation were different.
We were able to prove with data that when the implementations team was involved, we had much higher net retention. We started to get to the point where we said, we're going to require that every deal comes with professional services. All of a sudden it became our superpower. we were doing $30 million a year in consulting services. If you're selling a complex product, everyone should want to pay for professional services.
Even within professional services, then we started ripping out roles within that too. So we took onboarding and specialized that role too.
For more detail on types of scale roles, Andy provides a great list here.
How to identify where scale roles may be needed
Lyndsay That's really interesting. It seems like both of those examples came from that question ‘why are you losing deals?’ Would you recommend a founder ask that as a starting point to figure out where they may need support from scale roles?
Andy I always view it a little broader. Our team's job is to understand the entire funnel from lead nurturing to closing that lead and then to expanding that customer. I look at where in the funnel is the problem. If you're just looking at why you lose something in the sales process, you may miss out on the most highly leveraged opportunity that there is.