Running An Enterprise At Start-up Speed : Part 1
In the first blog of a two-part series, Christian Nilsson and Angelos Efthimiou share some of their observations and insights from their time working at Cloudreach as it has rapidly grown from start-up to a global cloud services leader. They also offer some advice and guidance for any businesses that are trying to improve agility, increase innovation and become more successful.
This year saw Cloudreach celebrate its 10th birthday. With that, we thought it was apt to take a moment, catch our breath and reflect on the journey so far. We’ve seen great success, but also a lot of painful learnings over the years and in this blog series we want to share with you some of our insights from this decade.
In the first installment of this two-post series, we will have a look at some of the painful learnings. The second part focuses on the things we feel were essential for our success. The insights, pains and lessons described here are not unique to Cloudreach, but shared by most companies indifferent of size as they try to improve agility, increase innovation and become more successful.
Find the full presentation slide deck online at the AWS Transformation Day Resource Hub.
Our humble beginnings
As many adventurous startups, Cloudreach was founded in a pub. We take great pride in our humble origins and the amazing story that followed. Our start was slow, but after a few course corrections, we started growing, fast. As a matter of fact, our growth over the last few years is defined as “hypergrowth” due to the year over year increase in revenue and people. Having grown from one single employee up to currently near 1000, we feel like we have experienced both sides of the story - the freedom and agility of a startup and the processes and structures needed in a larger organisation. Today we spend our days helping enterprises infuse their organisations with agile culture and to adopt the Public Cloud at scale.
Many of our customers and prospects in Germany are keen to emulate the fast growth of the unicorn startups (valued $1b+). The stories of Spotify, Amazon, Zalando, or HelloFresh are just a few of the ones inspiring corporate innovation and agility programs. Even in traditionally conservative Germany enterprises are setting up their own digital startups or acquire entire new business. Some successful examples of this are Allianz, who started Global Digital Factory, Deutsche Bank set up their Digital Factory, BMW acquired ParkMobile, and Volkswagen Financial Services established the Digital Unit. The evidence is in plain sight that German DAX enterprises are keen to emulate the speed, agility, and creativity of the startup world.
Indifferently, if enterprises start separate companies, or create cloud teams within their organisation, the journey they are embarking on is very similar to what we once did and we are often consulted to help with these initiatives. Our most common advice and valuable points stem from our own background and are:
- How to attract and keep talent
- How to foster innovation whilst controlling spend
- How to use data to make informed decisions
People are Key!
Ever since the inception of Cloudreach, we have been a people business. We are a technology company but our backbone are our amazing people. We believe this to be true to any company that wants to increase innovation and agility by moving to the cloud.
On the flip side, hiring and retaining the right talent has always been a struggle. In the early days, we were a few steps ahead of the market and we couldn't find talent that had experience in our sector (Public Cloud). Today some of our major markets (NA and EMEA) have matured significantly and we see a large uptake in people demonstrating relevant skills. However, it is not only the job seekers who have matured, so too have other companies and demand for this talent has increased as a result. In summary, the pressure on our talent acquisition team has not decreased over the years and hiring has remained a constant pain point for everyone.
Thankfully we have also identified a number of measures you can implement in order to mitigate this issue:
Hire for attitude: Start hiring based on who applicants are and not just what they know. Look for individuals who fit into the culture you have – or wish to instill – and lean towards candidates that “get stuff done”. You can always teach skills, promote learning and provide opportunities to gain experience. However, you can’t change who they are and you probably shouldn’t try.
Be open to diverse CVs: The people you need on your journey to higher agility and innovation are explorers, builders, and innovators. Their CVs might be filled with gaps, unexpected turns, and non-linear career paths. Instead of disqualifying them, we encourage everyone to take a second look, to be inquisitive, and above all, curious. They might surprise you.
Provide learning & development opportunities: At Cloudreach we are true to our word and hire a very diverse bunch of people with a variety of backgrounds. It is imperative for us to provide learning & development opportunities to all of our employees. We invest 10%+ of a workweek to personal development, encourage our staff to host as well as attend conferences and meetups and provide full access to several market-leading online learning platforms. We do this not only because it is the right thing to do but also because if our people are one step ahead, so too is the company!
Encourage exploration and experimentation: GCP, Azure, and AWS have brought down the cost of experimentation dramatically. Gone are the days of large upfront investments to test an idea. Make sure your team has a free and safe way to leverage this power. It’s fun, it helps them stay up to date with a large number of new features that are being released every year and will be the source of some great innovations. We offer all our people self-service Lab environments in AWS, Azure & GCP, arrange skunkworks and hackathons internally with grand prizes to this end.
Trust your team and encourage independence: All of the above requires a high level of trust. If you don’t trust your team with a Lab account or that they will spend their development time wisely then you need to review the first point in this list again. Don’t waste your time micromanaging your people and instead hire individuals you can trust. They will repay this investment ten-fold.
Money, money, money!
Now, what do you think happens when you hire a great team of creative, independent, and curious individuals and give them access to the latest and greatest Cloud Technology for free?
Well, they start building “cool stuff” which translates to nightmares for any controller or budget owner. Cloudreach is no exception and we have “achieved” to increase our own cloud spend substantially over the years (see dashboard graphic below). To a startup, this can be life-threatening and to a new enterprise cloud program, it can be a death sentence. The step from CapEx to OpEx brings a lot of opportunities but also uncertainties (no risk, no reward!). Long before things get out of control we recommend you start implementing the below items as soon as you are done with this article:
Instill a feeling of accountability for cost: “You build it, you own it” is not only true for DevOps but for FinOps too! Especially in larger organizations where a lot of people lack a feeling of accountability for the costs that they occur, simply because they don’t have the visibility. Use technologies like tagging to make it personal and ensure that people see what their impact is. It’s not about casting blame, that’s a reactive CapEx way of seeing it. It is, instead, proactive steps to make people take ownership and actions. At the end of the day, they are the best judges if money is being well spent.
Establish cost transparency: Visualizing your cloud spend is the first step in any FinOps process. You will hear a lot of “Ohs” and “Oops” right before people start shutting stuff (they forgot they ever started) down (been there ourselves). Your team can’t help you if they are unaware of the problem. A simple dashboard like our below example is more than enough.
Create automation that keeps everyone honest: Shut it down, no matter what. Use scripts that shut down your learning & development structure every night and over the weekend. It teaches people not only that playgrounds should be ephemeral but also to build fault-tolerant, self-healing, and highly available infrastructure (build for failure!). Encourage 'laziness' that gets people to automate everything instead of rebuilding it manually.
In data we trust!
Truth be told, in the early days we relied mostly on our smart people with their instincts and gut-feeling to make decisions. That’s ok if you are a startup or small group within an organization that can gather around a table to make decisions. The problem is that this approach just does not scale and can set you off course. Cloudreach did have to scale a lot and our ability to make fast and correct decisions across all our regions suffered significantly. Today, we are retrofitting analysis capabilities on the data we have accumulated and using said data to inform both our software development as well as our business decisions.
Start collecting data with purpose: What questions do you need to answer? Big Data and Data Lakes are great but sometimes it can start much simpler than that. Formulate what decisions you have to make and then start to gather or shape the data you need to inform those decisions.
Start to make use of your data: Don’t just feed systems with information. Start extracting data, build reports, and test your hypothesis as early as you can. The best way to know if you are storing the right data in the right shape is to start trying to make sense of said data. This should not be pushed to the future, but continuously happening!
Allow yourselves to not (only) rely on the ingenuity of people: You have smart people, you have done this many times, and you are sure you are doing the right thing. The problem is that, in fast-paced environments, the variables are changing frequently and it quickly gets hard to have an accurate overview. Don’t fall into the trap of making a judgment call or decision and then asking the data to back the decision up or justify it. Instead, data needs to give you clarity before deciding. Bottom line is, don’t make decisions without data and don’t let the data make the decisions for you.
This blog has shed some light on a few of the biggest hurdles we’ve had to overcome as well as how we did it. The advice here also aligns with what we (almost always) recommend to our enterprise customers as they set out on their cloud journey. In the next installment of this blog series, we will look at some of the structural and cultural decisions we made which we feel has been the largest contributors to our success and how you can do the same.
Read Part 2 of this series here.
Want to learn more about how you could accelerate your own cloud journey? Download our eBook: Accelerating Cloud Adoption