How to Turn Failure into Success
With Frederic Laluyaux, President & CEO of Area Technology
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Frederic Laluyaux’s first startup flopped but he has taken that experience with him to his current position as president and CEO of Aera Technology. Frederic tells me how to new founders can find what they’re looking for.
I. Episode Recap
At 23 years old, Frederic Laluyaux created his first startup before his native France even had a word for startups. Four years later, the internet having rendered his EDI technology company obsolete, he thought he was a failure. An encouraging note from his father gave him the confidence to make the move to software, working for ALG Software and SAP before becoming the CEO of Anaplan in 2012. In four years, Frederic built Anaplan into an enterprise SaaS platform company with 650 employees, $100 million in revenue, and a $1 billion valuation. He’s now hoping to do the same for business intelligence software company Aera Technology. In this conversation, he reveals how he found the right strategy for success.
Finding Your Goals
- Frederic never saw Anaplan’s then-small size as a limiting factor. Cloud technology allows even the smallest companies to have a global presence.
- Frederic set revenue goals that scaled with the business: $10 million revenue, then $100 million, then $1 billion.
- He called his plan to get to $1 billion the “1k3 Strategy”: get 1,000 companies with 1,000 users paying $1,000 per user.
Finding the Right Problem
- A successful business doesn’t just solve a problem.
- It solves a big enough problem that customers will pay you to solve it.
- And a big enough problem that customers will prioritize solving it over other ones.
- At a point in time that customers will really value and need your product.
- If your product solves a problem and adds value, you will be the leader in your industry.
Finding the Right Execution
- It’s not just enough to have great software and customers.
- Find a use case and dig into that rather than over-innovating to find different use cases.
- Look at who your customer is and why they bought your software.
- Your next goal should be finding another customer like that, and then another.
- Keep evaluating your customers and making sure your product is successful with them.
- Your vision doesn’t have to be pragmatic; your execution does.
Finding the VP of Sales
- Figure out the traits and strengths you want and need in a VP of sales and hire someone who best fits those needs.
- Hire people who understand and can articulate your vision to customers.
- Don’t hire based on where someone worked before; that company’s success may have nothing to do with them.
- Don’t hire someone just because you hit it off with them.
- Hire the right person, not the easy person.
Finding Your Board
Assuming you’re in a position to choose your investors and board members:
- A practitioner will best understand your company’s early struggles and be a good person to turn to when things aren’t going well.
- You want a board member with several investments; if your company is your board member’s big bet, they will care more about their own interests than those of the company and its shareholders, because they don’t have other investments to fall back on.
- Find a sounding board. A CEO needs people talk to who don’t have a vested interest in the company.
Published on 10.19.2018
Written by Ashu Garg