# Grow or Die 4 In technology, very few things remain constant. As a result, you either grow up to be- come a dominant company in your category, or get passed by and killed off by some- one who does accomplish this goal. Not surprisingly, growth rate is often the biggest driver of valuation multiples in both private and public markets. Investors, employees, and partners aren’t buying into your current company as much as they are investing into some future version of your business, and growth rate determines the size of the business, at that future period. The power of compounding numbers is straightforward but still surprising, when you Aaron Levie consider that a $1M business that grows 100% each year will be a $1B revenue busi- CEO, Box ness within 10 years, whereas the same business growing at 10% per year will reach less than $2.6M in revenue a decade later. Both growth rates may sound interesting “At Box, we discovered that the against GDP growth, but in technology, that’s the difference between life-changing market for cloud-based content wealth for a core management team and a wasted decade. management and collaboration was far larger than any of the analysts or existing As a senior executive of a cloud business, you will likely want investors to pay you a players had recognized; because huge valuation based on current financial metrics, and you will need to convince pro- cloud solutions are instantly avail- spective employees to walk away from rich cash compensation packages from others able to businesses of all sizes and all geographies, and new mobile in exchange for the potential upside of options for your stock. How do you do this? devices and platforms enable Present a credible plan for capital efficient hyper-growth. every worker to bring technology into the workplace, opportunities For a business growing 300+% a year – as many of our today are 10x larger than tradi- tional enterprise software startups. early investments often do – the discussions are much The corollary to this re-sizing, of easier because time is an easy variable. Valuation gap? course, is that you must grow No problem, just wait a few months and the business will rapidly for a sustained period to grow into it. Even if you make an investment and later win in your market.” believe you are off on “fair” valuation by 50%, all other things being equal, you will still grow through the gap in just over a quarter. Similarly for the entrepreneur, there is massive Al Lieb value in deploying capital and resources of an investor against the plan to get leverage from CEO, ClearSlide the investments earlier. If you can bring capital into the business earlier – even if it’s at a “Growth really is the lifeblood of lower valuation – and steepen the slope of the growth line to get the compounding effects of any startup. If your product can deploying the capital, then the dilution will quickly pay for itself over time. drive increased revenues for your customers, it becomes highly viral. Related to high level growth are many more detailed metrics that you’ll want to un- The “Land and Expand” sales derstand including areas of acceleration and deceleration in the business and cohort model works well for us, because performance over time. In technology, you’re either getting bigger or you’re getting once a few sales reps start closing smaller. Growth, and ways to efficiently accelerate the rate of growth, should always deals faster with ClearSlide, the rest of their team quickly follows.” be top of mind for your entire team. Bessemer Venture Partners 9