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How This Serial Entrepreneur Got Funding During a Financial Crisis by Sam Colt

By Rodney Rogers, CEO, Virtustream

This article originally appeared in Fortune.

There’s a growing consensus that shifts in the larger economy are leading to a potential downturn that will make fundraising more difficult in the coming months—and even years. Large institutional investors like Fidelity and TPG have even been marking down their private tech investments.

Founders right now are racing to raise funds before access to venture capital potentially becomes more limited. When raising capital in any kind of market, I’ve found it helpful to keep three things in context:

Opportunities exist in any macro market
In 2000, I cofounded Adjoined, an IT services firm, just after the NASDQ hit its historical high of 5,000-plus in March of 2000. In the ensuing years, it was one of the most challenging times possible to build and fund a business. In the company’s formative years, the dot-com bubble burst, the U.S. was dealing with the aftermath of the horrific events of 9/11, and subsequently fell into the recession of 2002. Even with those dire circumstances, there was a need for a new, vertical, industry-oriented IT services model focused on automating the relatively boring backend supply chain feeding the Internet—automating the plumbing behind all of those sexy new websites that actually didn’t go bust.

After a lot of hard work, Adjoined was indeed successful against the macroeconomic odds, and eventually set the bar for a private, U.S.-based IT services value creation multiple in the post-2000 era. Adjoined was recognized as the fastest-growing U.S.-based IT Services company of any size or tenure from its inception in 2000 to its final sale in 2007 to Capgemini through Kanbay. It can be done.

In late 2008, I (perhaps somewhat masochistically) decided to give it another go and cofounded Virtustream. I’ll never forget the day we did our first venture capital pitch. It was the same autumn day of 2008 that Congress failed to pass the first attempt of the Troubled Asset Relief Program bill. The DOW was down 770 points—not a great day to raise venture capital.

Despite the macro-economic climate, however, there was a massive opportunity present in the transformative potential of cloud computing—especially as it related to servicing mission-critical workloads within enterprise organizations. In March/April of 2009, the global financial system came very close to total collapse. Yes, that was a pretty harrowing time to make payroll.

In the case of Virtustream, it helped that we were able to call upon existing relationships with investors that we had worked with during our previous venture. It may sound obvious, but it’s amazing how often entrepreneurs overlook the importance of establishing lasting relationships with investors—relationships that transcend the latest bubble or downturn.

It’s also not about raising the most capital. It’s about raising quality capital from those investors who can actually help you build the business. Again, it sounds obvious, but few investors actually do this. Do as much reference work on them as they do on you.

Meet with your P&L weekly
You should never let the market dictate when you should or should not raise a funding round—that decision should always be driven by your own unique business needs.

Startups looking to raise funding need not feel an undue sense of panic about closing a round sooner rather than later, even if the market is about to turn, as many project. It’s this kind of panicked mentality that brings entrepreneurs into unenviable term sheets and overly diluted management incentive equity in the companies that they’ve built.

Regardless of the economic climate, entrepreneurs should have a clearly defined vision and clear understanding of the primary objectives and principles that will guide the way they operate their business from the outset. This refers largely to rigorous attention to financial details and a focus on managing high-performance initiatives that deliver results. If you are burning cash—something that is generally essential to getting lift in a new business—manage it very carefully and avoid excess at every turn. Personally, I’ve found it helpful to run a weekly profit and loss statement. It will force you to intimately know where your levers are to push, and your strings are to pull. If we are running ahead of income/cash relative to plan, I’ll tend to invest unplanned dollars into product development and sales capacity. If we are running short on income/cash relative to plan, we have earlier and continual visibility on where to tighten.

It’s easy for technology-focused entrepreneurs to overlook this process early in their careers. Don’t. You need to know how much you’re spending—and on what—or you’ll never be able to even realize the ambitious product vision you’ve laid out. What’s more, having a sophisticated understanding of your P&L is going to be extremely appealing to potential investors, who are always conscious of their eventual return.

There will always be some sort of bust looming
I’ve often said that being a venture-growth CEO is the opposite of being an airline pilot: hours of terror interrupted by seconds of boredom. Companies will always have to grow and acquire customers, whether valuations are exploding or not. You shouldn’t make important funding decisions based on where the market’s heading. Have the courage to stay the course. Focus on building great product, commercializing it effectively, servicing those precious customers and employees, and micro-managing your P&L. These things will drive more effective and efficient funding in the long run than any attempt at market timing.

We used this general approach at Virtustream to raise $120 million of venture capital between 2009 and 2013, and EMC acquired it for $1.2 billion.

Rodney Rogers is cofounder and CEO of Virtustream, a leading enterprise cloud software and services provider that was acquired in July 2015 by EMC for $1.2 billion. He is a successful entrepreneur and well-recognized thought leader with over 25 years of experience in the information technology services industry.

You’re doing DevOps wrong by Sam Colt

By Andy Vitus, Partner, Scale Venture Partners

This article originally appeared in TechCrunch.

Gone are the days of the quarterly product release cycle. To meet the evolving expectations of today’s end user, software must continuously adapt. As a result, hyper-automation of the software development process has become the thing on which companies, regardless of industry, compete. From fledgling startups to enterprise heavyweights, business leaders are realizing that they need to figure out how to embrace ideas like DevOps to keep up.

As an engineer and investor in the infrastructure space, I see where the breakdown happens with DevOps in theory and in practice. Progressive companies get the value of agile development, but the approach is often misguided, primarily because of the fact that DevOps comes into play too late in the game: Too often, startups only go back to layer in automation and test scripts once they’ve run into problems scaling. Enterprise giants face a similar challenge as they grapple with weaving DevOps into legacy infrastructure and processes.

It doesn’t have to be like this. There’s an old saying that an ounce of prevention is worth a gallon of cure.

Baking in DevOps from the start is the key to running a lean and agile team that can scale quickly and adapt easily. Whether you’re just starting out or you’re part of an established organization that wants to make the shift, here are three guiding principles for doing DevOps right.

Account for automation and testing from day one

Building in automation and testing from the beginning is your linchpin for success. Here’s why. Taking the idea of the minimum viable product to an almost stupid degree, companies of all sizes are getting crushed by mountains of technical debt. It’s common to see companies write code for a product or service and find themselves trapped a couple of years later because they didn’t think about what would happen at scale. So they frantically hire engineers whose sole purpose is to fix what’s broken and rewrite the code base to build in automation, instead of focusing on creating new product features. Meanwhile, customers wonder why they aren’t seeing new features, and often move on to more innovative competitors.

Similarly, test-driven development is a concept that’s touted as best practice, but, in reality, very few companies actually follow this practice. People don’t test from the start for the same reason they don’t floss their teeth: It’s unpleasant. But then one day you find yourself getting a root canal. There is a common perception that building testing into the development process slows things down, because the amount of code for testing can sometimes be two or three times what is needed to build a product. I find this thinking nearsighted.

There’s an easy way to avoid this issue — build in automation and test-driven development from the very earliest phase of a company (or product). Spending the extra time up front, rather than waiting for things to break, will save you time (and a huge headache) down the line.

Get to know the new DevOps stack

The entire software development and operations process used to be (and for many companies still is) manual. Thanks to a newly defined DevOps stack, comprised of tools purpose-built to simplify and automate each step of the development and operations process, taking advantage of DevOps can actually be quite simple.

Companies like GitHub provide a repository for writing and controlling the initial source code. CircleCI and Travis CI make continuous integration easy by automating testing. Companies like JFrog provide an end-to-end solution for storing and managing binary code, allowing developers to have full control over the software release flow — from development to distribution. And then there are companies like Chef that automate the next phase of taking that data into production. Sitting above all of this are containers like Docker and Kubernetes, which accelerate delivery and enable continuous deployment.

Companies that take advantage of these tools find themselves able to make changes to software as quickly as developers can write the code, without any down time.

Decentralize IT and empower developers

In addition to the tools and moving to a mentality of building for scale, you need a leader with a strong vision and commitment to making the organizational changes required. Nike, Facebook and Netflix are great examples of DevOps success stories — largely credited to their leadership. Having an executive-level advocate — likely a CIO or VP of Engineering — who believes in a meritocracy across development, operations and testing and prioritizing agile development processes, is a key factor for success.

The CIO must be willing to challenge the status quo and change the mindset of how developers and operations teams work together. While enterprises have traditionally relied on a massive, hierarchical IT organization to oversee operations and testing, DevOps requires decentralizing IT and empowering developers to create agile, scalable and innovative teams.

Startups have an opportunity to adopt this approach from inception, but for legacy companies, the DevOps shift is happening more organically — one project or application at a time, rather than across an entire organization at once.

Embracing DevOps is essential for companies to stay nimble and competitive. But the fact of the matter is that failing to have the discipline to do it the right way is holding them back. Taking the time up-front to bake in best practices, leveraging the latest tools for innovation and a willingness to dive in and reorganize your IT organization with DevOps in mind are the keys to deriving the most value from agile development.

Research Shows the Top 3 Things Millennials Expect From Their Jobs (and Perks Are Not on the List) by Sam Colt

By Alex Rynne, Millennial Marketer, LinkedIn

This article originally appeared in Inc.

Finding great employees can be hard. Keeping great employees can be even harder, especially if you don't see the employer/employee relationship as a two-way street. Sure, your employees need to give you what you need... but you also need to give them what they need.

Since Millennials now make up a significant and growing percentage of the workforce, LinkedIn decided to research what Millennials look for from employers, surveying over 5,000 to ask why they switched jobs.

Here's what they found, fittingly written from the perspective of one of their own Millennial employees: Alexandra Rynne, a Millennial Marketer and Associate Content Marketing Manager at LinkedIn.

Here's Alexandra:

If you're a Millennial like me, chances are you aren't the only one in your office. In fact, Millennials are taking the workplace by storm -- we're projected to make up half of the workforce by 2020, according to PwC. Since we're the largest generation since the Baby Boomers, there's no doubt that Millennials will have a huge impact on our economy.

And unlike Baby Boomers, who would often stay at a job for years, two-thirds of us want to switch jobs by 2020, according to Deloitte.

Companies that want to succeed at attracting and retaining Millennials have to know and demonstrate what we're looking for in a particular job or career. One of the biggest misconceptions about Millennials is that we care too much about shiny job perks like pajama days or free concerts; in reality, we have concrete goals and desires about what we want from our employers that we weigh more heavily.

Since losing a Millennial employee can cost upwards of $15,000-25,000, companies need to rethink how they attract and retain talent. So how can companies best compete for Millennial talent?

In search of the answer, LinkedIn surveyed over 5,000 Millennials worldwide to learn why we switch jobs. Our priorities were clear: Millennials want:

  1. Advancement opportunities
  2. Competitive pay
  3. Challenging assignments

With that in mind, here's what your company can do to attract and retain Millennial talent.

Make an impression online.

We know the right job can make or break a career. That's why Millennials are studying up on prospective employers before considering a job.

Research is the second most common way we find new work behind networking,according to a Boston College study. We're checking out sites like Glassdoor and LinkedIn in addition to your job postings and company landing page to learn as much as we can early on.

For companies this is a challenge and an opportunity. Your company's digital footprint -- especially its web and social properties -- will shape the impression of your company in Millennials' eyes before they've even made contact with your organization.

Companies like Unilever and Southwest Airlines understand the value of employee experience and post videos to demonstrate their commitment to building a strong corporate culture that resonates with younger folks. Nike launched a scripted seriesearlier this year to specifically reach Millennial women candidates.

Compensation

When it comes to switching jobs, Millennials rarely make the jump without a pay increase. The importance of compensation has grown, with nearly 80% of Millennials reporting a salary bump when they most recently switched jobs, according to the survey.

Of those who switched jobs, 25% are seeing their salaries increase by up to 30%.

We aren't afraid to climb the ladder, which means negotiating on compensation when we want or need to. Companies should think about compensation holistically, with an eye on base salary and a benefits package to match.

Salesforce, for example, was recently named one of the most attractive places to workbecause of the company's above-market pay.

Don't believe the perception that Millennials are only looking for job perks -- we care about salary much more.

Customize your recruiting experience.

While some factors are relevant to every job search -- say, your hours -- companies should be mindful of creating custom recruiting experiences that cater to Millennials.

Our research revealed that we look for a personalized approach during the job hunt. Custom recruiting tactics can vary widely from building a mobile-responsive website for applicants on the go to tailoring a position around a particular candidate.

Millennials also think differently about qualifications. Some of us will look at a company's social media when forming a first impression or hunting for evidence of a healthy work environment and work-life balance. Others will try to gauge how challenging their work will be and whether the company they're considering is innovative.

These experiences aren't broadly applicable, though, so companies should be thinking of the individual experience first and foremost. Microsoft, for example, isknown for its "individual adventure" approach to career development and encourages employees to forge their own path within the company.

You're being interviewed -- not the other way around.

Above all, Millennials want jobs that will advance our careers. We also want the right compensation -- competitive companies have to offer both to recruit top talent. 21% of Millennials leave their job to start in a new industry, which makes having a relevant brand all the more important.

Think about your website and social profiles differently because they might not just be how one of us discovers your company; it could be our introduction to an entire industry. When you're looking for the best talent, Millennials are interviewing you as much as you're interviewing them.

To score the best people, you have to understand how to market yourself to them -- and deliver.