Most entrepreneurs would like to be where enterprise software provider DivvyCloud is right now. The six-year-old company has technology that’s in red-hot demand right now: It has developed software that lets businesses create “bot armies” to protect and optimize their IT cloud network infrastructure. Its base of corporate customers includes Discovery Communications, Fannie Mae and GE, and is in expansion mode. The company closed a successful VC financing round in late 2017.
CEO Brian Johnson founded DivvyCloud in 2012 with CTO Chris DeRamus in the Northern Virginia suburbs of Washington DC. He shares a small office with two other executives and has an informal but all-about-business attitude. “We are a Silicon Valley startup with East Coast sensibilities,” says COO Peter Scott. “We’re careful with our money and our customers’ trust.”
Their software sits at the intersection of multiple hot IT trends: cloud computing, Internet of Things and containerization (an IT networking approach that allows software applications to run efficiently in the cloud). But lots of companies have cool technology. DivvyCloud, unlike so many startups, has survived and thrived. A study by the Information Technology and Innovation Foundation found roughly 60% of high tech firms die within five years of starting. Not only has DivvyCloud beaten the odds, but its founders have insights for leaders facing similarly challenging environments.
Hire People Who Can Succeed In A Startup – And At A Fortune 100
DivvyCloud sells to very big companies. So, one might assume it would make sense to hire salespeople from IBM. Not necessarily, says Scott.
“That’s the easy answer,” Scott explains, “but someone who has only worked with large companies can struggle with the uncertainty and rate of change that comes with a startup.” DivvyCloud needed people who could bridge both types of organizational cultures. For any leader trying to steer a company in a tough market the lesson is clear: you need people with high levels of passion and flexibility, not just relevant experience.
As innovative as DivvyCloud’s technology is, it’s just one of many companies trying to attract talent and customers in a hyper-competitive market. “It can get very noisy out there as the waves of change crash around you,” notes COO Scott. “It’s a challenge to get the mindshare of potential employees and busy customers.”
What the founders learned was that as important as great technology is, it won’t tell your story. A big part of DivvyCloud’s success has been its ability to capture customers’ imagination in person when its leadership team meets with potential customers one-on-one.
Scott remembers an exchange he had in the company’s early days that left an indelible impression. “We asked a customer, ‘What do you like about us?’ We thought he would say our software. Instead, he said, ‘Working with your team is the best part of my day.’ He was a computer scientist, but a lot of his day was spent dealing with corporate bureaucracy. We gave him a break from that. We brought him new ideas on how to solve tough technical problems, so he made time for us.”
Effective leaders connect. It can be by being a source of innovative thinking or having a compelling vision, or through sheer force of personality. But whatever the means, these people build strong relationships with individuals who can help their organization survive.
Listen And Pivot
A single piece of negative feedback – and how leaders respond to it – can affect an organization’s success trajectory. DivvyCloud experienced this firsthand when a promising meeting, held when the company was just getting started, started to go south.
“One of our board members introduced us to a great prospect. We take the train to Connecticut, meet the COO of corporate IT, go through our sales pitch,” Scott recalls. “After an hour, the COO politely lets us know there were half a dozen companies offering similar solutions, some 12-18 months ahead of us from an enterprise capabilities perspective.”
This happens when you are an early-stage business. And many entrepreneurs would have said “thank you,” and called it a day. But the DivvyCloud team didn’t do that. Instead, it shifted gears.
“What saved us was our CEO, Brian Johnson, started talking about our underlying bot technology, and how it could respond to IT network governance problems in real time. And that capability – which wasn’t highlighted in our original pitch – got the customer excited. We realized we had a key point of differentiation, which has affected how we position ourselves and continue to evolve our product,” Scott explained.
DivvyCloud’s experience shows that even in a world where everyone is on social media, interpersonal skills are still of crucial importance. DivvyCloud’s leadership are experts in their field, but more than that, they listen. And they enjoy helping customers solve problems as much as selling to them. That combination of innovation and excellent interpersonal skills make them role models for any organization trying to navigate a challenging environment.