An insightful discussion with Sam Gutmann, the former CEO of Own, as he reveals his journey to building a billion-dollar backup company by saying “no” to nearly everything. Together with Harpinder Singh from Innovation Endeavors, Sam shares his experiences along with the significant mistakes he made along the way, including his thoughts on the Salesforce acquisition story.
Key Takeaways from Sam’s Experience
1. Challenging Conventions Can Lead to Greatness
In 2008, during a pivotal board meeting, Sam called the notion of “Backup for Salesforce” a misguided idea. Fast forward six years, and he was steering the very company that would champion the space. This illustrates a vital lesson: markets are ever-evolving, and the most successful entrepreneurs adapt their beliefs in response to new insights, which ties into the broader Salesforce acquisition story.
2. Hold Off on Expansion Until You Establish a Strong Base
Even with backup solutions for platforms like ServiceNow and Microsoft ready to go, Sam made the wise choice to focus solely on Salesforce until the company crossed the $100 million ARR mark. By discarding non-revenue generating products, Own achieved remarkable growth rates while laying the groundwork for future expansion—a key point in their Salesforce acquisition story.
3. Maintain a Grip on Financial Models for Real Insight
Sam meticulously managed the financial model himself until reaching $200 million ARR, ensuring every investment aligned with his vision. This agile approach kept Own on track and helped them meet their targets consistently, showcasing the importance of direct involvement in financial planning.
4. Focus on Execution, Not Ideas
Salesforce attempted to launch a competing product, but after several failed attempts, decided to acquire Own instead. Sam recognized that having a dedicated team obsessed with improving the backup product allowed them to outshine competitors with broader focuses, a critical turning point leading up to the Salesforce acquisition story.
5. Making Tough Leadership Decisions is Essential
Every CEO grapples with the difficulty of replacing key leaders or founders. Despite the emotional challenge, many agree that timely action could have saved resources and ensured better alignment with the company’s trajectory.
The Foundational Journey: A Chance Encounter
Sam’s path to Own’s inception is one of surprising turns. It all began during a 2014 vacation in Israel, far removed from his professional network.
A chance meeting with an old colleague led Sam to speak with Ariel, one of the founders of What would become OwnBackup. Instead of pitching a sales role, they surprised Sam by inviting him to consider the CEO position. This unexpected hour-long meeting redirected the course of his career.
The Unexpected Misjudgment
Ironically, Sam initially believed that “Backup for Salesforce” was nonsensical. However, upon analyzing data, he recognized opportunity:
- With 250,000 Salesforce customers, a strong need for data protection was evident.
- Most enterprises manage numerous SaaS apps, creating vulnerabilities regardless of where data resides.
- The common language surrounding who is responsible for data security pointed to a significant market need.
Achieving Product-Market Fit
The founders of Own began in disaster recovery, but as challenges evolved with customer needs, they pivoted toward cloud backups. The turning point came with a major enterprise client, prompting them to pursue this direction full-time.
Sam joined at a crucial moment, refining the product-market fit after extensive testing, ensuring that the solution addressed real issues faced by users.
Power of Singular Focus Before Expanding
Upon joining, Sam made the bold decision to concentrate solely on the revenue-generating product, forgoing various platform solutions until Own established a stable foundation. The rationale was crystal clear—maintaining focus to optimize resources until reaching the $100 million ARR threshold was paramount.
Fostering Relationships Within the Ecosystem
An ecosystem requires nurturing. Sam hired a dedicated individual to manage relations with Salesforce, emphasizing that it’s crucial to have someone running that collaboration full-time to enhance connections and drive success.
Metrics Matter: A Data-Driven Approach
From day one, Sam took charge of the financial model, stressing the need for clarity and deep understanding of the business at every level. This transparency trickled down and helped nurture a culture of accountability across the organization.
Creating a Lasting Culture
Sam’s hands-on approach extended to hiring, as he prioritized cultural fit over technical expertise during interviews, recognizing the importance of maintaining a positive work environment as the company grew. Company culture starts at the top and should vibrate throughout every aspect of the business.
Knowing When to Transition Leadership
Sam believes in the importance of recognizing when leaders need to transition, acknowledging that staying tied to past successes can hinder future progress. Leaders should be evaluated based on their ability to scale with the company’s growth.
The Importance of Experienced Hires
Hiring individuals who’ve navigated similar challenges before is essential. Experienced leaders bring invaluable insights into scaling operations and refining processes, an approach that pays dividends in exponential growth.
Deciding to Sell to Salesforce
Though initially focused on an IPO, the opportunity presented by Salesforce led to a strategic decision. Sam concluded that aligning with Salesforce presented the fastest path to scale their data protection solutions, facilitating broader access to potential customers, and ultimately becoming a part of the Salesforce acquisition story.
Delivering the Whole Product Experience
Customers gravitated towards Own not just for their reliable technology but also for the exceptional service that accompanied it. Their commitment to culture and a holistic customer experience proved vital in building long-lasting relationships.
Expanding into New Ecosystems
With growth comes learning, and expanding into different ecosystems taught Own that adaptable approaches are necessary. Each platform speaks its language, requiring an understanding of unique customer needs and the effective delivery of solutions.
The Non-Negotiable: Hard Work
Sam emphasizes that hard work remains a decisive factor in a startup’s success. The commitment to long hours and relentless pursuit of goals often sets thriving companies apart from the rest.
Reflections on Sam’s Top Mistakes
1. Treating Different Ecosystems the Same
Assuming that the strategies successful in Salesforce would translate smoothly to ServiceNow and Microsoft led to challenges. Each ecosystem’s unique dynamics require tailored strategies.
2. Limiting Interviews for Cultural Fit
Sam feels that interviewing employees up to 1,000 would have solidified the cultural foundation, as cultural misfits can dilute a company’s core strengths.
3. Delaying Leadership Changes
Recognizing when to make tough leadership decisions quickly is crucial. Prolonging transitions ultimately cost more than anticipated while hindering progress.
4. Questioning the Timing for Multi-Platform Strategies
While Own’s laser focus on Salesforce fueled impressive early growth, Sam considers whether earlier diversification could have capitalized on emerging opportunities in the market.
5. Underestimating the Value of In-Person Events
Heavy reliance on in-person events for lead generation proved risky during unforeseen global shifts. Diversifying lead channels could have eased these pressures.
The Essence of Own’s Success
Ultimately, Own’s journey showcases the importance of focus, robust measurement, and unwavering execution in building a successful company. They affirmed that saying “no” to distractions, maintaining a founder-led financial approach, and fostering a deep-seated company culture underpinned their achievements. When Salesforce sought a strong data protection partner, Own was the clear choice—they had spent years establishing their expertise in this specialized area, making the Salesforce acquisition story a testament to their success.
Sam Gutmann, the former CEO of Own (OwnBackup), now spends his time contemplating his next venture while enjoying a family break from the startup grind.