Nearly a decade ago, engineer and entrepreneur Joris Poort had an idea. He envisioned developing software platforms and a hardware infrastructure that could aggregate and optimize computing power. This would enable large enterprises in science, engineering, and business to solve their biggest problems faster. In 2011, he and former co-worker Adam McKenzie co-founded Rescale, a close-knit team of four engineers working to prove an idea. Today, under Poort’s guidance as CEO, Rescale leads the industry in scientific and engineering simulation and high-performance computing (HPC). It has grown to 150 employees at five 5 offices worldwide and by 2020 was valued at half-billion dollars. In an informal interview with Shikhar Ghosh, Poort shares the insights he gained starting and scaling a technical hardware startup, including identifying key metrics for SaaS businesses. He discusses the challenges that fundraising, B2B Sales, and product testing pose for hardware startups, the evolving role of the CEO, and establishing culture as you scale. A lightly edited transcript follows the video.
Joris Poort interviewed by Shikhar Ghosh on October 21, 2019, at Harvard Business School.
Sales, Fundraising, Market Testing, Team-Building and Culture at Technical Hardware Startups
SHIKHAR GHOSH: Hi, I’m Shikhar Ghosh. I’m a professor at Harvard Business School. I have Joris Poort with me. Joris is the founder and the CEO of Rescale. How would you describe the company?
JORIS POORT: We’re a cloud platform for high-performance computing. We enable large enterprises to run their most mission-critical workloads faster.
SHIKHAR GHOSH: What does that mean?
JORIS POORT: That means we take all the different applications that are typically in an R&D environment, like designing an aircraft or a car, and help run them more efficiently through optimizing the compute stacks, so the different server configurations, operating systems, those types of things, all in a cloud SaaS environment.
SHIKHAR GHOSH: From the time you started, it’s now almost a decade that you’ve been doing this. That’s a pretty long run that you’ve been running this company.
JORIS POORT: Yep.
SHIKHAR GHOSH: You have what comes to 150 people now?
JORIS POORT: That’s right. Yeah. In 150 people, we have five offices worldwide, Tokyo, San Francisco. That’s where our headquarters is. There’s a couple of locations in Europe, and Seoul, in Korea, as well.
SHIKHAR GHOSH: As you’ve gone through the journey of starting, literally, with you alone in a room, writing code, reading books to where you have this company that’s now valued at about a half a billion dollars, is that right?
JORIS POORT: That’s right.
SHIKHAR GHOSH: Right. That’s been a journey of growth but, also, of ups and downs, along the way.
JORIS POORT: Yeah. Many challenges along the way.
SHIKHAR GHOSH: As you look at that journey, can you think about stages of the company where things felt different in the way that you, as a leader, had to come in and manage felt different?
JORIS POORT: Yeah. Absolutely. I think the most instrumental part is really that initial founding team. In our specific case, that was about four people that joined, which include my co-founder, who was my old boss from working at Boeing, and a few other folks, that technical, sort of development side. We’re just all writing code together. That was a phase of really ideation and the initial stages of building out the product that would really be able to demonstrate what the technology vision that we had and be able to have something that we could actually test the market with.
So, take it to market for initial, in our case, aerospace companies. That phase is really you’re an individual contributor. You’re a jack of all trades. I think, especially as a founder, you’re just filling gaps of all these different functions and resources you don’t have. You do all those jobs.
Then, I think a very meaningful change is when the company—probably when you really move from that managing everyone directly or introducing some level of hierarchy. Now you have a team of people who you work with directly. But then, for each of them, they have their own teams. So, you’re one layer removed from that individual contributor role. That’s a big step because you don’t have that direct insight into everything everyone is doing. Then, I think a really key one—
SHIKHAR GHOSH: So, roughly, that came when you had 20, 30 people?
JORIS POORT: Yeah, that would be around 20, 30 people. Then I think the next one is sort of the Dunbar number at around 100 people. At 100 people, somewhere between 80 and 100 people, the number of people that you can really know well and have some level of social control around is around 80 to 100 people. So, at that stage, is really where you’re at the limit of how you can manage people without a G&A and an HR department. I think that’s really when a lot of the people challenges start blowing up, so to speak. There’s just too many HR related issues that pop up. You really need a separate department to help handle that.
JORIS POORT: I think that’s, yeah, that’s another critical stage and you have another level of management, right? Now, there’s also, you’re building out the executive team. You’re trying to really find C-level executives that can scale these functions to another three, four acts from where you are at that stage.
SHIKHAR GHOSH: At each of these stages, you’ve had to go from more informal, direct communications—direct ways where people, where culture develops just by people imitating you—to more formal structures of process, of culture, of statements, of values, of all of those kinds of things.
JORIS POORT: Yeah. It’s very tricky, I think—process in large companies. I did work for a large company a long time ago. One of the most painful things is the amount of process that you see in these companies. A lot of reason why people like to work at a start-up is that there isn’t a lot of process. You have a lot of ability to contribute in many different ways without being constrained by maybe a broader process.
As you start scaling the company, if you don’t instrument your operating cadence as part of that process, you get a lot of misalignment between functions. These functions aren’t sitting next to each other, necessarily, anymore. So you need, basically, official communication methodologies, which can be QBRs. They can be internal email chains. Every company does it differently. But I think that’s when a lot of meetings start happening, right? So you try to start getting a lot more cross-functional alignment.
The hard thing is finding the right balance. You can certainly do too much. Then you’re in the big company thing. Our approach has been to wait for something to break then insert process there. You do try to catch things before they actually break but often you can see, at a larger scale, certainly at 150 people, if something’s broken, it usually has something to do with a process that wasn’t put in place correctly or no process at all, where you need to put some process in place.
Yeah, initially, I think it’s really helpful to not have process. That’s where the creativity and the ability to generate unique value and have an approach to problems that’s different from how large companies would approach a similar problem. In later stages, the only way to really scale the company is you have to have that process and operating cadence in place. Most of that, I think, comes from the principles and the culture you have as a team and as a company.
SHIKHAR GHOSH: There are some people who talk about the first year to two years of a company being absolutely critical that the culture pretty much gets, the DNA of a company gets set during that time. Then, even ten years later, you look at that company, and you know it came from these rules. Do you see the same thing in your company?
JORIS POORT: Absolutely. It’s hard to reflect on that sometimes yourself because these are all things that you maybe helped create. But we have a few building block principles that make Rescale unique, that have to do with, yeah, with that founding team and the way we worked together, at that time.
SHIKHAR GHOSH: So, as an example?
JORIS POORT: Let me think of a good example. We have an operating principle around transparency. I think a lot of companies say that. But we, at a larger scale, have implemented a scorecard system that anybody can see anybody’s OKRs, or objectives and key results, and their actual achievement of those throughout the company. That helps everybody understand, to a certain extent, what people are doing.
SHIKHAR GHOSH: Including yours?
JORIS POORT: Yeah, including my own. Yeah.
SHIKHAR GHOSH: Who evaluates yours?
JORIS POORT: Mine are the company ones. So, ultimately, for many people, there’s also personal development and things like that. But we transparently share, “Here’s the priorities that we’re working on as a company.” They cascade down through the entire company.
Well, thinking back to as a small team, I think we naturally shared a lot of that. So we didn’t necessarily have a scorecarding system or an OKR system. But we did really clearly share those objectives. We’ve very transparent about the challenges and the opportunities that we had for each of us. So, at a larger scale, the way you can instrument that is through one of these scorecarding systems.
It can come with, certainly, challenges, right? Not everybody wants to see, especially if you’re underperforming, showcase that to the entire company. But our principle is if you can surface your challenges, you can solve them much better as a team than an individual trying to hide problems. The opposite is also true. In cases where we’ve seen people hiding problems, then they just blow up into bigger problems later, right? So we’d rather surface them early on.
SHIKHAR GHOSH: One of the things that’s not unusual but at least it doesn’t get highlighted as much in a lot of discussions about entrepreneurial companies is deep technical, B2B kinds of businesses. You sell to large industrial companies, large pharma companies, and so on, long sales cycles, deeply technical, mission-critical services. When you do that, and the cycle’s really long, you can’t just put a prototype up, right and say, “What do you think of this?” And then I’m going to change it tomorrow. The lean testing methodologies and so on that we often, we talk about as an entrepreneurial staple. How does that work in the kind of business you’re in?
JORIS POORT: Yeah. I do think that lean methodology doesn’t really apply in these scenarios. I think other people have come up with—I forget what they call them—but wide and fat startups, or whatever they are. One of the challenges, certainly with lean development, is quick iterations. It’s very hard to build a large, complex system if that’s required through just very quick, minimal iterations.
JORIS POORT: So, I think the market testing comes in the form of usually co-development with the customer. In our specific case, there’s a certain set of—usually a founding team has some unique advantages of understanding some of these problems. Most of the people who found companies that are like this have experienced that problem themselves. Certainly, that was the case with me working at Boeing and how an aircraft is developed. There’s a lot of complex systems already in place there. So, understanding that intimately will help you work with similar types of customers, understanding what type of challenges they have and they face in executing on those complex challenges.
As developing that technology yourself, you have to have a good vision and a long-term alignment to solving those pinpoints. It is hard to incrementally add a lot of value in one of these big complex systems. You can’t just insert a widget and make a meaningful impact. The co-development approach is like working with a customer—maybe in a professional services engagement or something like that—where they maybe start paying you some money. They start testing your product, they give you some feedback. You keep iterating with that customer.
JORIS POORT: The danger there is that you end up building something that’s customized to one customer and there’s not a lot of maybe translating that work to other customers. So, you do want to have a strong vision for what problems you’re trying to solve, at scale, for the market.
By having a couple of customers who help both finance and help inform how you should be solving these problems can be really helpful early on. For us, that was certainly the case with Blue Origin and SpaceX, who helped us solve some of these. Now, as you can tell, those are smaller companies. They were able to iterate with us quickly. There were not many other examples like that in aerospace, at that time.
For a larger company, it’s much harder to set up these engagements. For example, in automotive, we started in the supply chain. But the key thing is building enough trust with the customer, they can really co-development something, as opposed to say, “Here’s a final product. Do you want to buy my widget or not?” So, I think getting the trust from the customer by being willing to do some custom development—to a certain extent, to own and solve their specific problem—is paid back through the ability then commercialize something that’s a broader product applicable for many customers.
The feedback loop, though, is quite long. Like procurement at a large aerospace company, as an example, is where really good startups go to die, right? I think for procurement cycles, in certain cases, of deals that we do are 18 to 24 months from when they decide they want to buy something to when they actually buy it.
SHIKHAR GHOSH: From showing it to them to when they want to buy it, might be another nine, ten months?
JORIS POORT: Absolutely, yeah. That cycle is really, really long. You only want to start entering that process when you’re really ready to do that. That cycle also comes with, obviously, really large deal sizes that are in the seven, eight, nine figures. But at the same time, you only get to that deal if you can survive that process and your product is also enterprise-grade. So a lot of people in enterprise software talk about, “Is your software really enterprise-grade?” That means meeting the SLAs that an enterprise customer would expect so that you-
SHIKHAR GHOSH: That’s everything from security to the way you handle data to … It’s a bunch of things around what you actually do, how you do them, how much instrumentation is there so they can check and work things through.
JORIS POORT: Yeah. That can be both a huge moat as a company. You can look at that as an advantage or a massive disadvantage. In our case, we have to be compliant to some of the highest standards in the medical device industry and aerospace and defense. These security certifications can take two, three years from when you start trying to get them, right? So there’s a huge cycle there that you have to be willing to invest in, to even have a shot at that type of market.
Things like support, do you have 24/7 staff support? Are you always on call? Then, the actual service level agreements of the performance of your software, right? If your software is instrumental and mission-critical, it’s great because customers will pay you a lot to have that perform well. But, at the same time, it comes with a set of responsibilities that, as a small company, is much harder to handle, right?
That is the, I think, the, like most entrepreneurial problems, that the chicken and egg thing you have to solve. How can you make those right investments without really being ready and being able to take the revenue from those customers in the short-term, right? You have to make the right investments that put you on the right path. Then, ideally, start generating some revenue with your customers before you’re really ready to be the entire system for that company.
SHIKHAR GHOSH: When you have these really long cycles, you can do a lot of activity and a lot of expense along the way. You don’t know if you’re going to get a huge deal or no deal, at the end of it.
JORIS POORT: Yep.
SHIKHAR GHOSH: For a company, an earlier stage company, that’s always going to be cash-constrained, how do you measure whether you’re making progress or not? What are the metrics you use? What are the ways you think about it?
JORIS POORT: Yeah. It’s a good question. It is really hard, especially when you don’t have a large data set. If you only have one or two salespeople, I think the most important thing you can do is have at least two salespeople, so they’re not 100% dependent on one person doing the selling. So that you’re at least solved for the variable of maybe you have an underperforming salesperson.
Then, on an enterprise sales cycle, these can take, in our case, three to nine months. So, that’s every step from getting an NDA signed, all the way through to implementation and going to production. There are, in our case, about fifteen different steps in that buying cycle. These are all sort of micro-commitments that our seller, or us as a company, is making to the customer and the customer’s making to us.
SHIKHAR GHOSH: You have to define all of this, right? These fifteen steps?
JORIS POORT: Yeah. These take a while to figure out. Over time, I think every company’s sales process is unique and actually can be a huge competitive advantage for a company, as well, if you understand how your customer wants to buy your product deeply. But, yeah, over time—The seller’s job is actually trying to figure out what is the process that will ultimately get this product sold and figure out in that maze of all these different routes you can take, which ones work, which ones don’t, right?
I think the key thing is those learnings, initially, come just to that seller, right? But eventually, you actually want all those learnings to end up in your CRM system or in a process where you can actually execute systematically with every new seller that gets plugged into your sales team. They can get trained on that process, they can execute, and you continue innovating and improving that. But initially, I think one of the hardest things is if your deal size is two, three million, it is really hard because those types of deals, you’re always going to be in these really long cycles.
If you haven’t sold that first deal yet, it’ll probably feel like that deal’s really close but it’s just going to keep moving away. The way I like to think about it is these micro-commitments the customer will make to you is really the best sales process. Test the customer every step of the way. Are they really serious about doing this thing, right?
What can often happen is that you salespeople who have what they call happy ears, right? They only hear the things that they want to hear. But it’s really important to be testing every step of the way. Is the customer really going to go buy this thing, right, and try to disprove that.
SHIKHAR GHOSH: Are they willing to put some money into doing a pilot?
JORIS POORT: Exactly.
SHIKHAR GHOSH: Where they’re actually making commitments.
JORIS POORT: Yeah. Paid pilots are a big part of that. Don’t do free pilots, right? If a customer’s committed to paying for the pilot, they’ve invested something. It can be any amount of money. But at least they’ve had to figure out how to write a check to go engage on that.
SHIKHAR GHOSH: Where someone’s had to get permission for it, as opposed to just their time.
JORIS POORT: Right. Yeah. There’s a lot of multi-stakeholders or decision-makers in most companies. Certainly, our product is one that the IT organization and the R&D organization both have a lot at stake for that solution to be successful. One of the most important things in that sales process you try to figure out is who are all those decision-makers? Who can say yes? Who can say no? Those are different usually.
A lot of people can say no but there are only a few people that can really say yes. Then, where does the budget set? What’s that timeline? There’s lots of different sales methodologies. Ultimately, trying to disprove that you’re going to make that sale is really important as early as possible. You can waste a huge amount of time on a customer hoping. There can be a really big deal at the end, if you are successful. But it doesn’t actually make sense if you can’t survive over that timeline, right? If you have a $20 million deal that’s going to take you four years, in the sales process, but you’re not sure if your company can really survive to that point, that’s not a very useful sales pursuit, right?
I think it’s really important to pursue the right sales pursuits for the stage of the company. You can demonstrate that meaningful progress. On that basis, you can also continue raising more money and investing in that sales cycle. On the sales cycle, ideally, you have a payback period of, in our case, around nine months or so. For a seller, if you don’t start seeing that productivity, and you want to be able to measure, essentially, a seller has a quota, so you’re trying to measure what that sales productivity is, as they’re ramping. Then, you want to make some changes, right, whether it’s a right patch they’re selling in or a right vertical, those types of things.
SHIKHAR GHOSH: This is in the sales process, itself.
JORIS POORT: Yep.
SHIKHAR GHOSH: As a business, as a SaaS business, what are the critical metrics that you look at?
JORIS POORT: I think one of the most important metrics is around dollar net expansion, or net dollar expansion, which is basically measuring a dollar-weighted growth. If you sold a dollar a year ago, what did that dollar, on average, with a customer turn into with an existing customer in the following year.
SHIKHAR GHOSH: For the same customer?
JORIS POORT: For the same customer. What that number really represents is that the higher that number is, the stronger your product-market fit is because it shows that whether you have a bad or a good sales process. Once you’ve made that sale, how is, in the consumption-based business, which is in our case, but also in the subscription-based business, how many more dollars does that single dollar turn into.
SHIKHAR GHOSH: So, that huge investment that two years, or whatever you took, to get to that stage, then after that, that keeps multiplying itself.
JORIS POORT: Yes.
SHIKHAR GHOSH: It goes up at some rate along the way. Now you’ve got predictable revenue from this one customer.
JORIS POORT: Yep.
SHIKHAR GHOSH: And you’re managing that growth of the revenue.
JORIS POORT: That’s right. I think it’s really hard to assess, as an enterprise software company. You’re talking about LTV, or a life time value of a customer that might be on the order. If you’re really a platform company, like a CRM or ERP system, it might be seven or eight years. So, as a startup, you have no idea how long that thing is, right?
SHIKHAR GHOSH: Right. You haven’t been around seven or eight years.
JORIS POORT: Yeah. So the only way to measure success with those customers is really how much are you growing that account. Another number we like to look at for a customer is what’s our wallet penetration. Wallet being the annual customer. The max, on an annual basis that the customer is willing to spend for this category. You can assess that on, in our case, what a data center footprint might look like. It can also be assessed on just what’s your annual budget for this category. Then you can look at your what’s your maximum annual contract value with that customer. If you’re at 10% penetration, you can continue and say you have a two X growth, year over year, there’s a lot of headroom there, right?
So, for a customer base, that might, especially if it’s a customer base that takes many years to land, these are usually pretty loyal customers. They have a very hard time adopting new technologies. How much more headroom do you have in that account until you tap out and you have a ceiling of the maximum that they’ll spend with you.
Of course, you can add more products to your portfolio and there’s other ways to up-sale beyond that. But that’s the line of sight. Budget and revenue you have in your accounts, that’s your current account footprint. So, looking at the easiest place to sell is your current customers, right? So, looking at how much more headroom there is there can be a really valuable metric. Just understanding, also, from a bottom-up basis, what your TAM (Total Addressable Market) is for that product or that solution.
SHIKHAR GHOSH: As you’ve grown, you’ve talked about your going out and dealing with the level just directly below you and then the level below that.
JORIS POORT: Yeah.
SHIKHAR GHOSH: When you hit about 100 people, you can’t know everybody personally, at that stage.
JORIS POORT: Yeah.
SHIKHAR GHOSH: How do you make sure that they get to know you?
JORIS POORT: I think that can be very challenging. There’s a few different things we do. We do have these onboarding cohorts. You do try to spend some time with them, as a group, when new hires are coming in. Another thing-
SHIKHAR GHOSH: Just describe that process. How does that work?
JORIS POORT: I spend every month with all the new hires, a certain amount of time. It’s usually spent on talking about the company principles, the cultural values that we have. I also share a lot of personal stories. Give them an opportunity to get to know me as a real person, as opposed to this figurehead that is difficult to approach. I think one of the unique opportunities in a startup is to have a very direct line and relationship with everybody in the company. As you mentioned, after 100 people, that’s actually hard to build. To still give them some exposure and an opportunity to speak-
SHIKHAR GHOSH: How much time would you spend doing something like that?
JORIS POORT: Two hours on a monthly basis, on just that. Then, the other part, I do provide each of them this document on “Working with Joris” and what that looks like.
SHIKHAR GHOSH: Joris is your operating system?
JORIS POORT: Yeah.
SHIKHAR GHOSH: Have you ever shown that to your wife?
JORIS POORT: I have. In fact, she-
SHIKHAR GHOSH: She edited it?
JORIS POORT: She wrote the last page on it, which is her describing me. She wrote that and how she works with me.
SHIKHAR GHOSH: Okay, okay.
JORIS POORT: It’s really funny.
SHIKHAR GHOSH: What does it say, by the way?
JORIS POORT: You should read it. I think she is as, as our relationship has evolved, she’s figured out how to work with me better. Some of those key lessons learned, she put in there. I’m a hyper-logical person. I behave much more on logic than on emotion. At least I like to think so. She says some things about that.
JORIS POORT: But more broadly, it provides a bunch of books I’ve found meaningful and interesting in my career, that I learned a lot from. A lot of principles that aren’t necessarily super innovative but that are different and have a point of view in how you operate. At least how I like to operate, right? Both gives them an opportunity to understand the DNA of the company and also, if they’re actually interacting with me, how to approach that interaction in a way that’s productive, right?
SHIKHAR GHOSH: So, for example?
JORIS POORT: For example, I like to have meetings with an agenda upfront. Not just have coffee, right? A lot of people often want to just spend some time chit-chatting but my schedule’s so busy, it’s hard. It’s okay to spend that time, right, but it is hard to dedicate. If I did that 45 minutes for every employee, you’d be spending a couple of weeks doing that, right?
It’s, I think, especially uniquely when I’m able to have a conversation with an employee on some topic that other people have a harder time with, those are things that I feel like are very impactful for them. I like dedicating my time to that. I think the document also provides people just a good exposure to how I think, without having to … If they don’t have the opportunity to work with me directly, right? I think for the people that work with me directly, they probably feel like they get that everyday, right? For especially the people who don’t, it gives them an opportunity to feel closer, I think, to the founder, CEO, than otherwise, that might be possible.
SHIKHAR GHOSH: You mentioned that your wife, Flora, wrote one piece on this and how to work with you. You’ve been doing this now for what’s it? Going on ten years?
JORIS POORT: That’s right.
SHIKHAR GHOSH: Has it gotten easier, the amount of work, the stress levels, of creating the company?
JORIS POORT: I think emotionally and from a stress level perspective, it has not really gotten easier. There’s certainly waves, right? So, at certain times, when things are looking really difficult, that’s down and stress remains the same. The magnitude does increase over time. It’s almost like, as the company grows, what you used to think was an enormously stressful situation, for example, firing somebody. Once you’ve done it a few times, becomes much less stressful, right? As you grow yourself, I think, in your position, then-
SHIKHAR GHOSH: Your capacity grows.
JORIS POORT: Yeah. Your capacity grows and actually what drives stress. I think that’s different for everybody. But for me, there are certainly a new set of challenges I’m always tackling, especially when there’s a lot of unknowns that can drive stress or uncertainty. Over time, I do think experience, you get more, I would say level headed on how to approach these decisions, right?
And you have a network of people you can count on. You have a broader executive team that can help attack a lot of those challenges. In a high growth company, the problem, or the opportunity, is that your challenges are different at every phase, right? So, just like when you feel like you’ve solved all the problems. Say, you’re a 20 to 40 person company.
You have your operating model down. Everything seems to be clicking. Before you know it, you’ve grown the revenue three times the amount of headcount has been grown. Most SaaS companies try to 3X, 3X, 3X, and then 2X, 2X, 2X. You start with a small revenue base. But continuing to triple or double on the revenue side is a whole new set of challenges every year, right?
Even when the people are staying at a relatively stable amount of headcount, the actual problems you’re tackling are changing, right? So, I think when the company grows in a more measured or slower way, then I imagine the stress starts leveling out a bit.
SHIKHAR GHOSH: You can only imagine because it has happened to you.
JORIS POORT: It hasn’t really happened yet. There are times when you’re not growing. But that, in itself, can bring the stress, too, right? I would say, emotionally, it feels like you’re on a treadmill and somebody’s just pressing the faster, faster, faster button. Over time, you build up some muscle and you’re able to keep pace. Yeah, it doesn’t really get that much easier, over time. Especially the magnitude of all the decisions and the problems you face are certainly bigger, right? That said, ideally, you have a team built with a bunch of executives that can help make those decisions, as well, right?
SHIKHAR GHOSH: This has been such a long journey, right?
JORIS POORT: Yeah.
SHIKHAR GHOSH: How do you manage, and as you’ve said, it’s not like the stress and the pressure goes away. If anything, it becomes bigger and you learn how to cope. It becomes bigger and you learn how to cope. How do you manage the family side of this? You’ve only got so many hours in the day.
JORIS POORT: Yeah.
SHIKHAR GHOSH: There are infinite problems that need your attention at work.
JORIS POORT: Yep.
SHIKHAR GHOSH: Usually, one spouse or the family can, for short periods of time, be put on the back burner, while you’re dealing with this.
JORIS POORT: Yeah.
SHIKHAR GHOSH: Over time, of course, that becomes really expensive. How do you manage to balance those two things?
JORIS POORT: Yeah. I don’t think I’ve fully figured it out yet. I was saying that earlier stages, my wife, Flora, was working at McKinsey. She’s spending a lot of time, like 80 to 100% travel. That allowed us both to be all in on careers. I think what really changes, once we start having kids, then the sacrifice of the amount of time became—I think before kids, the things we were sacrificing were less meaningful, right?
After we had kids, we made a conscious decision to change our operating model because it wasn’t sustainable having me be founder, CEO of Rescale, and having her be an Associate Partner at McKinsey. Well, together, we chose a path where she would take a step back, spend some more time with the kids, do some independent consulting, and allow me to continue down my journey, on the professional side. It was a conscious choice. I would say, in a relatively time-bound choice, right? Right now, my kids are still two years old and seven months old. Yeah, I can see it already materially, that if you spend less time with them, they don’t know you as well. That’s something you will never get back, right? I think finding-
SHIKHAR GHOSH: From kids to parents to friends—
JORIS POORT: Absolutely.
SHIKHAR GHOSH: All of these things need attention.
JORIS POORT: Yes.
SHIKHAR GHOSH: If you don’t give them attention, you don’t see the cost immediately but over time, you will feel the effects.
JORIS POORT: Yeah. I don’t know who said that but, everything in business is a rubber ball, right, except for your family is a glass ball. It doesn’t bounce back if you drop it.
JORIS POORT: I do believe, though, that, if you want exceptional results, right, it takes an exceptional team and an exceptional amount of commitment. Over time, of course, you can’t keep that 100% for a decade, right? Especially when you’re asking those types of commitments from your own team, that’s, yeah, I expect that of myself as well, to have that same level of commitment. I think the key thing is around time management is trying to figure out how can you balance, figure out the amount of time you allocate to each of the different things in your life appropriately, right, and hold yourself to that standard.
SHIKHAR GHOSH: If you think about the business right now, there are periods of time where this wouldn’t have been true, but you’ve reached a stage where the business has its own flywheel.
JORIS POORT: Yeah.
SHIKHAR GHOSH: It’s moving forward. On the one hand, you’re getting a valuation that’s really great at half a billion dollars. You’re the founder of the company, so you own a sizable amount of it. You don’t need to keep working for the money. Even if you slowed down and you chose to … Maybe it wouldn’t be five billion dollars but it would be some big amount of money you could have. So, what keeps you still working the way you do?
JORIS POORT: Okay. It’s certainly not the money, right? I think the, I mean, the monetary amount of how much money you really need to live a very happy life, at least on paper, has been crossed a long time ago. I think the ultimate ambition we had as a company and as a founding team that we set up to achieve as a company, there’s a vision and a mission there. We still have lots of-
SHIKHAR GHOSH: If you say, “Who are you accountable to?”
JORIS POORT: Yeah.
SHIKHAR GHOSH: Why do you do the things you do every day? Do you feel accountable to your customers, to the team you’ve hired, to the investors, to your family?
JORIS POORT: To all of them but in different ways, right? I think especially to our, certainly to our customers. We sign long-term contracts with them. We will deliver on those contracts, right? But in many of those cases, with or without me, I think the company can deliver on those obligations.
To the team, there’s certainly, especially when you’re bringing in top-flight executives, they’re at the company because it’s an exciting, high growth, lots of opportunity to scale a big team, and make a big impact. That’s why they joined the company, right? So, there is a, I wouldn’t say it’s an obligation, but I think people are excited in a high-growth, fast-paced environment, especially if you’re interested in making an impact with that technology.
I do, though, believe in a measured growth, not just growth at all costs. Ultimately, for Rescale, that impact can only happen fully within the different verticals we operate in by scaling out the company, right? The fastest way to get there, is grow fast, right? You can certainly grow slower. I think that it actually makes it harder to recruit and retain great employees because the best people, I think, are excited about tackling some of the biggest challenges. The slower growth the company is, I think the harder it is to also make that industry impact in the timeframe that most people look at their careers, right?
SHIKHAR GHOSH: Do you think that some of this becomes addictive? Do you just get used to it so you normalize it and you just keep going?
JORIS POORT: I think a bit but it’s painful enough that you reevaluate yourself frequently enough. I think what I do think is true is around what probably gets you excited becomes, there are fewer and fewer things, over time. You’re making such a big impact with what you’re doing at work that most of the other things you do, in day to day life, become a lot less meaningful.
SHIKHAR GHOSH: Time becomes more valuable in some sense.
JORIS POORT: Yeah.
SHIKHAR GHOSH: In the sense of you get careful about how you use it.
JORIS POORT: Absolutely. I think there are so many demands that come in on your time that if you’re not proactive about policing that on a weekly basis, or even a daily basis, it’s very easy to lose track of that. I think the hard thing is that the payback period on your time at work is very short, right?
You make meaningful impacts within the same—it could be—week, month, or year. You can see the progress of the company. It’s monetary. You can touch it and feel it. I think, whenever it comes to family, the payback period is maybe really, really long, right?
SHIKHAR GHOSH: Right.
JORIS POORT: Or maybe never. I think it’s … I think that’s what makes it easy to sacrifice that time to focus on something that you can measure yourself against. I also think there’s a unique time in your life when you’re able to really make a big impact. I envision myself, I’d say 10 years down the line, that I’m not going to be willing to work as hard.
SHIKHAR GHOSH: Right. Ten years ago, you might have said the same thing.
JORIS POORT: Yes. I only worked harder, I think, to a certain extent. Yeah. I think the challenge is, it’s as a founder, CEO, it is sort of all or nothing, to a certain extent. It feels like that. There is a feeling of, “If I dial down to 80%”—
SHIKHAR GHOSH: Everyone else will.
JORIS POORT: My executive team dials down to 60%. Then, their ICs dial down to 40%, right? It doesn’t come down to, obviously, linearly, the time you invest, right? That’s the hard thing to figure out, what are those really meaningful inflection points for the company, where you absolutely have to invest that time and what are all the other things that you probably don’t, right?
SHIKHAR GHOSH: You’ve clearly made a choice. You could have gone into many other roles, many other careers. Even now, you can do the same thing. What’s kept you as an entrepreneur? What’s the greatest reward, the greatest thing on the positive side?
JORIS POORT: Well, the impact we’re making with customers and building a really high performing team, seeing the people grow within that team are certainly some of the most rewarding things.
SHIKHAR GHOSH: If you worked at Boeing or something like that, you’d still have an impact. But your individual impact would be pretty small.
JORIS POORT: Exactly. One of the things that I was always very excited about at Boeing was working as part of a team, delivering, in that case, a very revolutionary, new technology for an aircraft product, right?
That was a unique time in the history of that market. The first 787 Dreamliner, the first carbon fiber aircraft on the commercial side. To be part of that team was really exciting, right? I think that the challenge a little bit, as founder, CEO, you figured out a really high leverage way to make a massive impact, if you’ve been able to grow the team to the size we have.
Most other things, most other jobs, probably look less meaningful in that aspect, right? There’s certainly jobs that maybe monetarily will pay you more money, in a guaranteed fashion. There’s, obviously, jobs where you could spend a lot less time actually working. I think I look at my life as, “You’re going to spend a lot of that time working. You might as well do something that really matters,” right?
SHIKHAR GHOSH: I forget who it was who said the worst thing you could do is aim low and miss.
JORIS POORT: That’s right. Yeah. I do believe, certainly, also, as a company, we set a very high standard, right? I don’t really believe in double standards, right? If I have those high standards for my own executive team, I have those for myself, as well. I think it is a bit of a slippery slope, that if you … Yeah, if you start … You take your foot off the gas, which has a disproportionately worse impact throughout the company. That’s always the fear. Whether that’s actually true or not, you never really know until you do that, probably.
SHIKHAR GHOSH: Thank you.