When data security startup Rubrik first began selling its product, the company experienced almost overnight success. It wasn’t by luck.
Rather, the strong customer traction was the result of developing the product and acquiring customers in parallel, versus a back-and-forth process. Rubrik began pitching and selling customers well before the tool was complete, then offered a low-priced beta version as part of a one-year contract. This process, Rubrik CEO and co-founder Bipul Sinha says, “quickly filtered down who were our tire-kickers versus who were real believers. If you can’t approve $3,000, you will not buy a $100,000 product.”
By the time the product was fully available, nearly every beta customer had signed on. That strategy translated to almost $50 million in sales the first year, then $170 million second year, and $350 million third. Then the company hit a snag, says Sinha, as the over-emphasis on growth took a toll. More than anything, he says, the founding team lost sight of what was making the company successful in the first place.
“We grew so fast and we hired so many people in the company, we kind of lost the sense of our own intuition and started hearing other people. That was the biggest mistake I made,” says Sinha. “When you hire experienced executives, they come with a lot of experience in building large companies, and everybody’s telling you ‘Hey, I built this company and that company,’ and you lose sense that every company is different and your company is different.”
Sinha says the hiring mistakes became evident when they started changing fundamental parameters of the business without understanding the unique, core growth engine of Rubrik.
“At that speed, if you turn the dial a little bit wrong, the diversion comes to you and you cannot stop it,” says Sinha.
After a few bumpy quarters, Rubrik got back on track by returning to its original strategies and operational practices. Today, the company works with more than 5,000 customers around the world and across every industry, and recently announced it had surpassed the $500 million ARR mark. Additionally, the company has achieved an NRR of greater than 140 percent.
The biggest lesson Sinha gleaned from the experience was to listen to himself, even while incorporating ideas and feedback from others.
“Even if you are a first-time CEO and it’s your first time in a startup, you cannot override your intuition by all the input that you get from boards and advisors and executives and everyone else,” says Sinha.
Sinha discussed the importance of listening to your intuition; smart hiring; customer acquisition strategies; and other leadership lessons in detail with me as part of Greylock’s Iconversations series. You can watch the video of this interview on our YouTube channel or at the link below, and you can listen to the audio version at the link below or wherever your podcasts.
Bipul, it’s a privilege to have you here today.
Bipul grew up in rural India, went to IIT in India, and then moved to the U.S. He began at Oracle in the Bay area, was doing a part-time MBA in the evening, and ran into a venture capitalist. [From there], he ended up moving from Oracle into a VC fund, worked at a couple of different VC firms, and made fund-defining investments at both those firms. He could have easily coasted as a VC or stayed in VC for many years, but he got the itch to go to a company, so in 2014 he started Rubrik with three other co-founders.
Today, Rubrik has established itself a leader in data security. The business has been selling for about seven years since the initial product. So with that framing, Bipul, maybe the first question to start with is this: the business went from zero to 50 million in year one, which is a hard thing for any business to do, and certainly for an enterprise-facing business. So, how did you do that?
Thanks, Asheem. Glad to be here. After that introduction, it only goes downhill from here. Be ready for it.
When I started Rubrik, our idea was… how do we create a company that is the fastest ever? How do we create a new benchmark? Because we were obsessed with this idea that some people target good and some people target great.
How do you target great potential? Are you playing at your potential? Our idea was that if you’re playing at your potential, it means that you’re going to get customers at geometric progression. You go 3, 6, 9, 31, 39, 27, 81 quickly. You can’t do that if you are building products and talking to customers and trying to do things sequentially. So we changed that into a parallel stream. Pravana is here – he is one of our founding engineers. What we did was we hired an internal salesperson three months into the company, and the product was one and a half years out. We started pitching and selling to the customer from that day.
When the customer was ready to buy the product, we would send them a $3,000 early access program contract for them to sign, get their approval, give the money, and wait for one year for the product. What it did was it quickly filtered down who our tire kickers versus real believers. If you can’t approve $3,000, you will not buy a $100,000 product. It actually created a very deep beta pipeline. We sold to almost all of those early beta customers. Before we went into GA, we had close to $400,000 worth of product that we had sold and then we went onward from there.
So the first year went fast. The second and third year went fast as well. Three years into selling, I think you were about $350 million in sales. Then, things went sideways, things went down. Talk about what happened next and then how you handled that.
So in terms of the TCV sales (total dollars that you sell), we sold almost $50 million in the first year, then $170 million second year, and $350 million third. We grew so fast and we hired so many people in the company, we kind of lost the sense of our own intuition and started hearing other people. That was the biggest mistake I made. Because what happens is that when you hire experienced executives and they come with a lot of experience in building large companies and everybody’s telling you that, “Hey, I have done this and I have built this company and that company,” you lose sense that every company is different and your company is different. Although you have never done this before – you’re a first-time CEO or it’s your first time in a startup – you cannot override your intuition by all the input that you get from boards and advisors and executives and everyone else.
So I made a series of hiring mistakes where I brought folks who were trying to optimize the business as opposed to fundamentally thinking, “Why is this business growing rapidly?” and, “How do I make it grow even faster?”
As a result, when they started changing the different parameters of the business, they didn’t fundamentally understand the core growth engine. And at that speed, if you turn the dial a little bit wrong, the diversion that comes to you, you cannot stop it. So we were in a funk for almost four quarters before we got back on track.
“Even if you are a first-time CEO…you cannot override your intuition by all the input you get from boards and advisors and executives and everyone else.”
How do you manage stress?
I went through my own journey in terms of stress. In the early days, again, this idea of time compression. My whole thesis was that if we time-compress everything, then we can get to scale faster. [We can have results faster, hiring faster, everything faster. So accelerate, accelerate, accelerate.
But then, I was very worried about the outcome. I was always worried about the top line and what was going to happen. Once we hit the air pocket where for the first time I realized that there’s something wrong with the way we are making decisions – hiring people, the operating structure of the company – I figured that if I worry about the top line or worry about anything or stress, I’m not making the right decision.
So that was a little bit of a change that I brought in myself where I said, “I’m going to live today. Am I doing everything today to maximize today?” Not worry about whether the company will succeed, fail, [get to] higher scale, speed. Just maximize today. Every decision that you make today, make sure that you look at every input, make the right decision, and maximize the moment. That took the stress away, and that really kind of got me to a point where I don’t stress at all. Good times, bad times, people leaving, people coming in, it adds no stress to me. Only thing is that, am I maximizing right now?
So maybe if we can open it up to questions? If folks have questions?
Hi, Bipul. My question is there must be many other moments where you were influenced by others and then thinking that the decision is made more robustly. Can you share in hindsight what are some heuristics that you use to decide when to listen to others and change your mind and when not? Thank you.
The way I think about this is for every situation. How do I feel about the situation, or how do I feel about the decision? That’s all I make the decision on. I ask a lot of people about their input and just check whether it jives with what I’m thinking, or if they have a very strong point that will veer me away from my point of view. But I don’t make my point of view based on that. That was my modus operandi as a VC as well. I would always make the decision, and then try to create some boundaries and parameters to fix things. But I never made the decision after talking to people. You first make the decision and then create guard rails.
Nice to meet you. Absolutely love the talk today. Super energizing. I care a lot about going fast. One of the things I found most challenging is if you’re growing at a rate where you’re doubling over periods of months, maybe short years, whatever schedule you laid out three, six months ago is probably the wrong one. And so, maybe my question for you is what does your schedule actually look like Monday through Friday? If you could just describe your calendar. Has it been consistent? How has it changed? I’d just love to know if I could look at your calendar. What is it? How do you do it?
“You first make the decision and then create guard rails.”
Actually, maybe I’ll jump in with one anecdote. In the early days, I remember the early days. There were some weeks Bipul was doing not one red eye to the east coast, but two, which…I mean it was staggering to watch.
One of the things that we did was – and I had a strong belief that we are all prisoners of our own imagination – you can become what you think you will become. Then everyone tells you that this is the highest that company has done in their first year, this is the highest this company has done in the second year. I had the firm belief that if we think big, then we’ll become big. So this idea of thinking huge, thinking so big that you don’t define any limits to it. But when you think so big and then you look back saying, “What am I doing to achieve ‘big’?” And big has no definition, no numbers, but it’s massive.
So honestly speaking, my calendar is not as busy. I used to think as a young CEO or early CEO, seven, eight years ago, in the early days of the company, every CEO I was talking to, they were super busy. They were saying, “I’m this busy, that busy,” and I felt like my calendar was relatively open.
So I used to think, “Am I not working hard enough? I’m not thinking big enough?” The company didn’t have any numbers or actual customers. I was thinking that maybe I’m not pushing hard enough. Slowly I realized that people work for two reasons. Half of the people spend half of the time working and half of the time showing other people that they are working. So if you take that other half out saying that I don’t care what anybody thinks, I will do what I feel like doing, then your calendar is half empty. So, you are never too busy. If somebody says, “I’m too busy,” they are spending half of their time showing other people they’re working.
That’s one thing I also did: for the first six years of the company (before the Rubrik security team said that you can’t have an open calendar), my calendar was open to everybody in the company, from receptionist to interns to everybody. It was not very full.
One other fun follow-on that prompts in my mind: can you talk a little bit about recruiting and just how you’ve built your leadership team? Also, how did you go about recruiting those folks?
Recruiting is different in the different stages of the company. In the earliest stage of the company, I did all the recruiting myself. So I was the first recruiter in the company. For the first nine months there was no recruiter. I hired the first ten engineers, the first go-to-market team, the first business team. And all of it was LinkedIn cold calling. So I would cold call people on LinkedIn. I created a pitch deck just like you create a pitch deck for the customer. I would sit in a coffee shop and meet candidates one after another, and pitch them on the pitch deck.
It was mostly done on intuition – your interaction, your feeling about the candidate – and purely going with that. But once we got to, say, 500 to 800 people, then we started to have a process. Because it is very hard when you hire an experienced executive because they’re very good at talking, and your job is to cut the talking out and figure out what they can deliver.
So then, what I did was I created a very formatted process where I would have them present to the executive team and to the board the things that they would do differently, and then create a many to one interview situation where people would ask them quick-fire questions. That created a very interesting dynamic. Asheem has been part of few where you see the reaction of the people and how in-depth they are as opposed to just saying things that are pure recycled knowledge. Then you can fathom how far or how deep they are.
“It is very hard when you hire an experienced executive because they’re very good at talking, and your job is to cut the talking out and figure out what they can deliver.”
Bipul, maybe asking the other side of the hiring question. There are a number of founders in the room [who are] managing executives at progressing larger stages of the company where they haven’t managed an executive who’s seen that part of the journey before. So once you get the right person (or who you think is the right person) in the building, how do you learn how to manage and hold that person in the function accountable?
I always had the point of view that since I was a VC, I always thought that the failure mode of companies is that the founders are too overbearing on management teams. [I thought] the management team needs the freedom to execute. But I actually was wrong. When I sat on this side of the table, I felt that although people have experience and they have done it in other places, every situation is different and every company is different.
So what you have to do is you have to be close enough to not be in their hair all the time, but you can’t be far enough that you can’t see what is going on. So, you have to create. You have to give them clear direction in terms of a strategic imperative and then clear accountability where you got to be measuring the actual outcome. If you just rely on them to do the right thing, they will not be able to do the right thing, however experienced they are.
I have experimented with so many people, with so many different experiences. I have come to the conclusion that you, as a CEO, as a founder, you’re the person with a special intuition about the business. You don’t know everything about the business, but you have an intuition about overall business. So what you have to do is give people latitude to execute, but create accountability with some metrics that you are measuring, and if the metrics go sideways, hold people accountable.
Bipul, you talked a lot about kind of the inherent directionality in the way you make decisions. This is kind of a theme throughout a lot of the things you’ve been saying. But it’s counterbalanced with transparency. One of the things you mentioned is you do an update, you do some heuristics, you change your mind. How do you communicate to the team that you’ve changed your mind as a result of their input, and not necessarily just something you decided?
“Give people latitude to execute, but create accountability with some metrics that you are measuring, and if the metrics go sideways, hold people accountable.”
You have to be honest about it. When you go into the meeting, you just say, “Hey, I have this point of view, but I want all of you to give me your input.” You have to change their mind. I have changed my mind so many times in front of my executive team that they know that I’ll change my mind, and which is also teaching them that they also should change their mind. This is a big test for an executive. An executive who says, “This is how it is,” you want to fire them immediately. Because every company’s a learning environment. If you are not learning based on the parameters of the business, then you are taking a direction where business doesn’t or may not want to go.
So I changed my mind a lot of times, and in front of everybody. In fact, during Covid I publicly said that we’ll come across as deterring. We are not making decisions. And that’s a good thing for the company. We don’t have a strong point of view because we don’t know whether we can work from home, whether we can come to the office, or how we can collaborate. We have no idea. Actually this actually helped our attrition rate because we didn’t have a strong point of view and we publicly stated that we don’t have a strong point of view.
I think, Bipul, being at Rubrik early, we were on the other end of the decisions that you made. One of the things that the engineers always would say was that a lot of the things that are coming down are very clear. There’s a very clear line of sight. But to do that, to be operating at potential and to do this continuously, you need to have a really good retro process yourself for digesting what you’re hearing and coming to what the decision that needs to be made is. We’ve always wondered, could you actually walk us through what is your process? Like, when you go home, do you take time for yourself? What is the process of collecting all this feedback and coming to your decision and iterating on your gut feel?
I actually call a lot of people. If I have a hard decision to make, I call people one on one and say, “I’m thinking about this. What do you think?” Then, I challenge them. First of all I tell them that, “Hey, I’m challenging you not as a CEO, but as a colleague. As a colleague whose feedback I want.” But I challenge them, “Why are you thinking this way?” Sometimes they convince me that, “Hey, Bipul, you are thinking about it wrong.” But then I do a lot of one-on-one calls, and that’s the process.
So you have a point of view and then you’re trying to create boundary conditions to make sure that you are not completely off. And not all your decisions will actually go right, so don’t be afraid of making decisions. My personal point of view is that if you are making (at a high speed) more than 50% right decisions for your company, your company will never die and you will succeed. I mean, it may take longer for you to succeed if you are only at 50%, but you will succeed if you are making more than 50% right decisions.
The closing question is the five-year question. If you knew what you know now five years ago, any reflection of what you would run differently?
I already said that in some ways. You’ve got to have your own intuition and believe in your own intuition. Because again, nobody knows the future. However much experience people have, nobody knows the future. Neither you nor your board, nor your employees, nor the market. So in that situation, if you substitute your intuition for somebody else’s experience, [it will lead to disaster]. I made that mistake because I thought, “Hey, I’m hiring this person, they have so much experience, they must know this better.” I actually didn’t take my intuition into account and instead relied on their input which was the wrong decision. So now I know that I shouldn’t be egotistic. Be humble. Keep learning, keep checking the boundary condition, but don’t let your intuition be overwritten by anybody, including your board.
On that note, thanks so much, Bipul. Thanks for being here. Great session.