Scaling with Intuition
Rubrik CEO Bipul Sinha on the Importance of Focus in High-Growth Times
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.