Inspiring and Executing a High Growth Strategy

An Interview with Chet Kapoor, CEO & Chairman, DataStax

Chet Kapoor is Chairman and CEO of DataStax. He has more than 20 years of leadership experience at innovative software and cloud companies, including Google, IBM, BEA Systems, and NeXT. Chet is a charismatic leader who cares deeply about inspiring the hearts and minds of others. Chet hosts his own podcast called Inspired Execution, where he interviews world-class technology leaders.

Recently, I sat down with Chet to talk about his views on how to inspire and execute on a high growth strategy.

We discussed many topics: the changing role of CIOs, customer mindset needed for digital transformation, the different go-to-market motions (developer-led and sales-led), innovating for product-market fit, and the culture needed to nurture growth.

The interview has been edited for brevity. 

Anurag: Chet, one of the mantras I've heard you speak many times is: Believe, Inspire, Execute. So, as a third time CEO, what has changed in this mantra for you over time?

Chet: The mantra – Believe, Inspire, and Execute – started a long time ago for me. There was a venture capitalist who asked me, “What is unique about you versus everybody else you've ever met.” And I said,

I believe in things longer and faster than almost anybody else I’ve met, and that has always come naturally to me.

But it's not enough to just believe. You need a team around you, and you have to inspire them to believe. Then, the third thing is you have to execute. There are a lot of people who believe and inspire, but awesome leaders actually execute on the belief and inspiration. 

This framework – Believe, Inspire, Execute – continues to work for me. But I have become a bigger believer in the execution part because that is what defines our success. Without execution, we're nothing.

Anurag: So you believe that the execution part is the most critical, almost at the expense of inspiration or belief?

Chet: I don't think it is at the expense of others, but it is the best way to show belief and inspiration. Because you can inspire somebody to do something, but if you do not get the results through execution, it means nothing.

In the tech business, we need to be inspired to do a lot more than just our jobs. It’s about being on a mission. You have to start with the concept. That's what you believe in and inspire people with. But if you do not ship a product or a service – if it doesn't manifest into something that others can use – the belief and inspiration are useless. And that's why I continue to focus on the execution part.

Anurag: Makes sense. Let's talk about selling to IT leaders. You've been doing this for a long time with different technologies. How do you think IT buyers – CTOs, CIOs – have changed in the past few years? What shift do you see happening with them?

Chet: I started thinking about digital transformation a long time before it became something that the industry talked about. When the iPhone came out, it changed everything for me. I realize it had happened before with client-server, but the iPhone was fundamental. Client-server was still mostly about how the internal IT worked. The iPhone was, “OMG, that is the only way I can interact with my customers.” 

The early days of digital transformation were all about App Modernization. The CIO and the CTO were not driving digital transformation at that stage. They were sitting back and letting the Chief Digital Officer or business units drive, because apps and mobile were not the core business. So when SaaS apps and mobile started taking off, the CIO was not as involved in app modernization.

The second stage of digital transformation was cloud. That's when I saw CIOs came back into the game, saying, “I think you are doing well on app monetization, but the only way you're going to see true digital transformation is if you become a cloud company.” Because you need agility, not with the app but with the backend systems as well. The customer wants to have an experience across the company, not just on what they're seeing on their screen.

The awesome stuff is in the third stage of digital transformation, which is led by data. And now, not only have I seen CIOs come to the front, but they're starting to lead the business. Now they can sit with their colleagues and say, “We have the app, we can deliver something new in three months and we can do it with high availability and cost effectively.”

How do you use data to transform your business for a competitive advantage? How do you become a data-driven company? How do you use AI and ML to make that happen? And that's where I see the successful CTOs and CIOs have a seat at the table, not as technology providers, but as business partners to the CEO and leaders of the business units. It's superb to see that transformation.

The CIOs and CTOs who don't show up as business leaders are the ones falling behind and becoming back office patrons.  

Anurag: Do you see a generational shift among the technology leaders who grew up on consumer apps? 

Chet: I think there's a generational aspect. It’s slower in larger companies because they are more complex and have a lot of legacy systems that their businesses run on. Some of them are still on mainframes, some have 30 year old databases, etc. – so you don't see the new generation showing up there yet. But in the smaller or mid-size companies, absolutely. And the pace at which the new generation makes decisions is mind-blowing.

There are two mindsets on technology inside the enterprise. There's an IT mindset and there's an engineering mindset.

The newer generation does not think of it from an IT point-of-view. They think of it from an engineering point-of-view. Folks who've been in the business for a while have no choice but to think from an IT perspective. And their challenge is to make sure that while they're running an IT shop, they create an engineering mindset.

Anurag: That's fascinating. Engineering mindset equates to “we have to build this” versus the IT mindset being “I have to support this.”

Chet: Absolutely correct. Or another way of saying it:

The engineering mindset says, “I am building a product” and the IT mindset says, “I am delivering a project.” A product has everything that goes with it, such as a life cycle, while a project is one and done.

Anurag: How is the engineering mindset getting adopted inside the company? Developer-led growth has now taken off. PLG (Product-Led Growth) sounds like a religious mantra. Everybody's jumping on PLG, although it's been coming for a while. What do most people get right with this approach, and more importantly, how do people go wrong with this? 

Chet: I've been in tech long enough, and PLG has been around for quite a while. This is not a new concept.

My first job out of college was at Steve Jobs’ company NeXT. We were selling computer hardware to universities while making sure the evangelism was done through developers because they were the ones who were going to build custom apps. So, Steve Jobs was doing PLG way back in 1988 and 89.

Anyway, PLG has been around for a while, and the point is simple.

You build products that developers love, but you monetize them through the enterprises.

The enterprise buys it, but the developer should love it because they are the ones changing the trajectory of the enterprise.

There are three critical things about PLG that a lot of people forget. The number one thing is community. Tech people have known how to build companies for a while. There was a Java community, C++ community, even MSDN was a community. Open source has helped the community flywheel a lot. You don't need to be a large corporation. You can be three people and a dog. As long as you can solve a problem that people care about, it makes a big difference. So community is a big part of how PLG becomes successful. 

The second misperception is that people think PLG means no-touch, or entirely self-service. I completely disagree. I think that PLG must have some human touch. People want to interact with people. Not everybody is an alpha developer where they don't need any help. Not everybody is able to look at the docs and solve the problem. You should say low-touch, but not zero-touch.

The third one is that the community-based or PLG-based cycle is a long road. There is no quick win there. You have to sow and water the seeds. You have to think about the weather.  You have to wait until they grow. There is no way of accelerating PLG. You have to make sure that you have a product-market fit and let the developers build the product. Then you grow from there. 

Anurag: Particularly this kind of low-touch is different from a sales-led motion. You're not inserting salespeople, but adding credible people that the developers need support from, such as product or engineering.

Chet: I completely agree. One of our Advisors is Jose Morales, who spent many years at Atlassian. His perspective on PLG is that you should focus on only one metric: Time to First Project. How quickly can you get developers through a project where they have delivered something; and if that happens, you will have them for life.

Anurag: Let's talk about Go-To-Market because the craft of GTM has changed in B2B in the last decade. What are your observations on GTM, particularly for DataStax with both a sales and developer motion? How do you orchestrate between these? 

Chet: The most ideal scenario is this:

Think of a carpenter building a chair for themselves. No product managers. No sales people. No onboarding engineers. They are just building a chair for themselves. That is the ideal scenario.

Unfortunately, that is hard to do in a scalable way. Very seldom do you have a product that you're building for yourself. So then the next best thing becomes: How do you make sure there are as few people as possible between the chair and the carpenter?

You start with zero and then add as few people as you possibly can. That’s the best way to build a high-velocity business from scratch.

Start with PLG, and as you start having multiple projects, add enterprise sales. That is how Salesforce, Atlassian, and Slack did it. That is the right way, but it takes longer because your company and the community flywheel is built to serve the person that's building the chair and not the showroom salesperson, for example. You create a better company that is more sustainable.

When I joined Datastax, we were an enterprise sales company but also selling to the user of the product, who was an operator. We have changed that significantly. Now, the user of our product is a developer, since the operational part is taken care of by our cloud service. We have spent time getting a high-velocity PLG motion for developers. It is much harder to do both PLG and an enterprise sales motion. You have to contain the larger enterprise flywheel that wants to kill PLG. So you have to protect PLG and feed it for a long time. 

You can start GTM with enterprise sales and add in PLG, or you start with PLG and go to enterprise sales. The latter is the better choice.

By the time you're successful, you want both high-velocity sales and enterprise sales, one feeding the other. Because the lifeblood of a company is new customers. You cannot just milk the old ones. The combination is what a company should strive for. 

Bottomline, start with the PLG motion. But if you inherit an enterprise sales motion, make sure you have the patience to tag on a PLG motion and make it mainstream.

Anurag: Now that both of these motions are possible, particularly for early stage companies, is there a rule of thumb as to when to add enterprise sales? At $2 million or $20 million? 

Chet: You will know because your customers will tell you. What will happen is you’ll have multiple people from the same company buying your technology. And when you start seeing 20 people from FedEx or 26 people from Verizon on your product, you will know that somebody at Verizon is also seeing the same data. That's when you will want to do a consolidated deal. By the way, it's how AWS [Amazon Web Services] grew up. So I don't believe there's a magic number here. The market will tell you when they want a salesperson to call on them. 

Anurag: Very helpful. Let's talk about product-market fit. Early stage companies invariably make a customer promise while their product is not quite there to deliver on the promise. Call it the Promise-to-Product Gap. If you are a market leader with a vision or a thesis but your product is not yet there, how do you navigate that gap at every stage of growth?

Chet: Painfully. 

So let me give you an example. The enterprise customers will always want to protect their information. Not to say the small company or the developer doesn't, but the enterprise is focused on HIPAA, PCI, FedRAMP etc. Those are very important, but they slow down the engineering shop significantly.

All companies have to support these eventually, but if you can survive without putting a lot of those things in your product and get a ton of growth, then do it for as long as you possibly can. Because the moment you put in things like SOX compliance, you will slow down your innovation machine.

Innovation is related to PMF (product-market fit). How do you get PMF by innovating? You have a point-of-view and the market has a point-of-view. There's a gap, and you have to continue to innovate your PoV and show the market the way you're thinking about the problem. That requires a lot of iteration.

And if you have all this heavyweight stuff along the way, you don't get there fast enough. Generally, avoid the large enterprise product weight until you are clear on PMF.

Anurag: Quite right. This brings us to the question of growth at scale. How do you think of growth in operational terms, and not just from a financial metrics perspective? What's your framework around the order of operations in which you have to grow stuff? 

Chet: The framework I've used forever came from a book called Execution by Larry Bossidy. I've morphed it, but it is generally the same concept. Three things: strategy, people, and operations. 

Make sure you have a point of view on strategy – what it is and what you're doing. It doesn't have to be written in stone; it has to be typed up so it can be changed, but be careful on how often you change it. Once you have a strategy, figure out the people you want, make sure you have the people to match the strategy. Not the other way around, a lot of people make that mistake. But the third and the most important thing is operationalizing it. 

The problem with operationalizing strategy is that people generally come up with 30 metrics. I find that you need all the 29 – they all are really important – but there's always one True North metric that every function should have or every company should have.

And everybody should succinctly understand it. In an enterprise company, that is Annual Recurring Revenue, high predictable ARR growth. In a PLG company, it is the number of active customers. If you have both, that's a challenge. But if you apply the framework – strategy, people, and operations – it works phenomenally well.

Anurag: High growth has to be supported by the culture of the organization. Companies get hierarchical and bureaucratic as they grow, even after hiring the best and the brightest. Growth slows down and things take longer to get done. What advice do you have for first-time CEOs to keep this from happening?

Chet: So I'll go back to my mantra “Believe, Inspire, Execute.”

The first one is believing in yourself.

Just because you haven't done it before doesn't mean you can't do it better than somebody who's done it three times.

We all have struggles, and they don't go away based on the number of times you do a gig. I spoke to an excellent first time CEO today. I told her I couldn't see a single reason why she couldn’t scale the company. So believe in yourself, and just because you haven't done it doesn't mean shit. You may even be able to do it better than somebody who has done it five times.

So the first thing is Humble Confidence. “This is my first time. I don't know what I don't know. But I'm confident I'll figure it out.” 

The second one is inspiring the people around you.

It is important for leaders to be vulnerable. It’s ok for a first time CEO to say, “I'm figuring it out.” Nearly everybody is figuring out something in their lives that they don't have answers for right now. 

One tactical piece of advice is to embrace change. I was talking to another CEO four weeks ago about our economy today. I told her to start by saying it's a gift. This is not a bad thing. When something happens, say this is an opportunity for us to get better. The second tactical thing is to over-communicate and do it transparently. The human spirit is superbly strong. It is okay to tell people that things are not going well. Finally, human beings are inherently inefficient. Eliminate as many meetings as possible. Only do them if you need to. And share everything through writing. 

The last thing is about 95% to 98% of the decisions you make are what Jeff Bezos calls “two-way doors.” Just make them. Don’t spend too much time consulting. Sometimes you will mistake a door to be two-way, and it might be a one-way door. It’s okay to make a mistake. But do spend a lot of time sweating the “one-way door” decisions – and feel comfortable with them because you will have to not only explain these to yourself but to other people as well. 

Anurag: I have had the privilege of working with you so I know your superpower is finding and nurturing the superpower of others. I've seen you do it many times. How do you think it shapes the companies you build?

Chet: I believe human beings are far more capable than they believe they are. You can do a lot more than you think. And if you go back to the history of innovation – not just technology – people have somehow been inspired to do something beyond what they ever dreamed. I try to nurture that, to find what somebody's really good at and then create an environment that they can stretch in ways they never thought they could, not only as individuals but as groups as well. 

So how do I do that?

I try to make sure I lead from the heart, because the mind of an employee says, “You're the CEO and I work for you.” What you want them to think is that it's more than their job.

I read this HBR article years ago that said, in a nutshell, leadership is about leading from the heart. That has stuck with me forever. 

The second thing is that if you can get the team to work together, it is magic.

If you follow sports, think about the “no look pass” in basketball or any football. It gives you goosebumps: two completely different minds and bodies coming together, without looking at each other, and winning unselfishly. That is beautiful.

Those are the two things I always aspire to do with people around me. 

Anurag: What do you wish you had learned sooner in your career as a CEO?

Chet: I've always had a ton of respect for the people that I worked with, but always in the context of work. And I have recently changed that to get to know them beyond their work. You can still lead people from the heart at a professional level, but getting to be more involved in their personal journeys is something that I find far more rewarding.

So I wish I could have done that a little earlier. But we were all young once, charging up the mountain and didn’t give a shit about anything else. Now we're older and we care a bit more about those things because we have grown as human beings.

Anurag: Now for a rapid fire round. What is a book you would recommend?

Chet: The book that shaped my life was the book called The Little Kingdom by Mike Moritz. Mike was a reporter for TIME magazine and wrote this book about Steve Jobs and Steve Wozniak. It transformed my life, and got me into computers early on when I came to the US. It's a treasure. 

Anurag: What is a habit you have that is underestimated by others?

Chet: Waking up early, insanely early.

Anurag: Who inspires you from history?

Chet: I'll answer this a little differently. I've never had to look for a mentor or look for inspiration because my inspiration comes from being the best version of myself. The only person I look up to for that is my father.

Anurag: What do you avoid?

Chet: Not having fun. If you're doing it with the right people, for the right reason, it becomes fun. The moment it becomes not fun, you should rethink it.

Anurag: What is an insight or advice that changed your career?

Chet: I felt it very early on. Be true to yourself because you cannot be anybody else anyway. Just be the best version of yourself.

Anurag: Thank you for sharing your wisdom.

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INTERVIEW References

• Chet Kapoor’s Inspired Execution Podcast

• Product Led Growth PLG Companies

• One Way and Two Door Decisions – Jeff Bezos

• Book: Execution by Larry Bossidy

• Book: The Little Kingdom by Mike Moritz

• HBR Article on Leadership

About DataStax

Founded in 2010, DataStax was known as the company behind Apache Cassandra – the popular and battle-tested NoSQL database behind 90% of the Fortune 100. Chet joined DataStax in October 2019 with a fresh perspective and vision to take the company in a new direction. Now, DataStax is the real-time data company, focused on serving real-time applications with an open data stack that just works.