Startup veterans will recognize the opportunity presented by an early-stage company: You not only get to run your organization, you get to define how it runs. All the pieces may not be in place by the time you arrive, and the heart of the job becomes building the organization — the plane — while you run it.
I love to play that role. I love to jump into professional situations where everything isn’t figured out, where there’s time pressure to figure it out, and where I’m the one responsible for coming up with answers. Part of the reason is that instead of inheriting a status quo, this position lets me define the status quo, using the lessons and values I’ve cultivated over many years, multiple geographical hubs, and varying cultures of customer success.
My latest such opportunity has been with CloudZero, where I just celebrated one full year. For the uninitiated, CloudZero helps companies maximize the return on their cloud investments — like Upstart, whose cloud spending we reduced by saved $20M, or HighRadius, whose Cloud Efficiency Rate (CER) we elevated into elite SaaS territory (90%+). Or Nubank, or New Relic, or Coinbase, or any number of the world’s most sophisticated SaaS companies.
CloudZero takes customer success very seriously. It’s key to a space like FinOps, the implementation of which looks very different at different companies. Moreover, it’s built into our company DNA: Our CEO and co-founder are both customer success veterans who understand the importance of personalized service — especially in this space.
It’s been a thrilling year, with plenty of ups and downs, but with most every gauge in the cockpit signaling green. Coming into CloudZero, I recognized that our FinOps Account Management (FAM, CloudZero lingo for “customer success”) function had all the raw materials, it just needed a blueprint and a pilot.
Step 1: The Blueprint
Hiring the crew
The most important part of building the plane was finding a great team to do it with me. When I started at CloudZero, we had a four-person FAM team, one of whom was (and is) a CloudZero co-founder. Now, we have an incredible 14-person crew.
The crew, new and old, have done an outstanding job of helping build processes while also running them. When I was hiring, I looked for a combination of traits:
- Mindset. Given the state of CloudZero when I joined, the mindset I stressed for new hires is that this isn’t a job where you clock in and check some boxes and clock out, this is building a company. Technology, you can learn — a mindset, you either have or you don’t.
- Flexibility. In the context of “building a company,” everyone on the team was going to have to wear multiple hats and be willing and able to pivot quickly.
- Never “not my job.” You’re going to be asked to do things that weren’t covered in your job description. Our success depends on your willingness to jump in and help out.
- People people. Customer success hinges on trust, which itself depends on relationship-building. I needed to find people who love people, and who understand the role of relationships in strengthening professional trust.
Sharing the flight plan
As I built the team, I needed to give them a clear understanding of what exactly they (we) were responsible for within CloudZero — and how we’d be evaluated. Every little task we do rolls up to an overarching goal: strengthen and grow our customers’ businesses. When everyone understands their role in that mission, how each of their actions contributes to it, and the metrics by which we measure outcomes, they have the chance to work at maximum effectiveness.
- Onboard. Our first task is to get new customers into the platform — all the data, billing and otherwise, they need to get a clear picture of their cloud spending in a business context.
- Adopt. Customers have the most control over their cloud spend when individual engineers take a proactive role in managing it. Customers don’t always start here, so part of the FAM’s duties is designing a joint success plan, implementing prescriptive best practices based on their business goals, and quantifying the results.
- Retain. A strong business does more than bring in new customers — it keeps them engaged for a long time. Retention depends on defining each customer’s business outcomes, adapting our approach based on those outcomes, quantifying our progress, and regularly communicating our progress to each customer.
- Expand. If we’re doing our job right, over time, each customer will get more and more value out of CloudZero. In other words, the relationship will deepen, and with that deeper relationship should come steadily expanding contracts. Again, expansion depends on being able to quantify business-relevant value and sharing it regularly.
Step 2: The Passengers
At root, a healthy passenger (customer) is one with a clear destination in mind — that is, business outcomes developed in view of FinOps best practices expressed in their joint success plan. But it’s also one with whom we’ve developed strong relationships — not just with our main contact, but with numerous team members and stakeholders throughout the company. Here’s how I think about that.
Develop executive relationships with every customer
When I started, we lacked executive relationships with 50–60% of our customers. To reuse this metaphor yet again, that just wasn’t going to fly.
Why are executive relationships important? Because they give you line of sight into a customer’s true business goals, which is the only way to deliver enduring value (if you don’t have a target, how do you aim?). Knowing their goals is the only way to make your product an integral piece of facilitating them.
Now, I’m proud to say we have executive relationships with nearly 100% of our customers.
Develop joint success plans (JSPs) for every customer
A joint success plan (JSP) is a detailed overview of the main 3–5 things that are important to each customer, how we plan to fulfill them, and how we’re tracking against them. For us, these often include things like:
- Allocation: Get x% of the customer’s cloud spend allocated
- Savings: Reduce cloud spend by y%
- Engagement: Get z engineers engaging with CloudZero’s analysis and insights on a daily/weekly/monthly basis
- Unit costs: Define and quantify core unit cost metrics that customers can use to evaluate the unit economic health and scalability of their business
Also crucial to this is getting each customer on an Executive Business Review (EBR) schedule. EBRs are where we review the JSP, assess our progress, and make any necessary adjustments. It’s also how we strengthen our executive relationships repeatedly over time.
Step 3: The Perils Of Autopilot
A customer success function at a growing startup, or a business of any size for that matter, is not something you can put on autopilot. If you do, there are a number of common mistakes to which you become vulnerable. Here are a few.
1. The cookie-cutter fallacy
One mistake customer success functions often make is approaching every customer as if they’re the same. No two customers are exactly alike, and treating them as if they are will lead to unrealized value and churn.
The solution: Strong executive relationships and a rich understanding of customer needs. The better your relationships with the customer’s strategic leaders, the more you can gauge your work to their business needs, the more value you’ll deliver, and the better your retention and expansion numbers will be.
2. The white-glove fallacy
On the other side of the spectrum, you can also run into problems when delivering too white-glove an experience for every customer. A white-glove approach is great for the customer, but it doesn’t scale well.
The solution: Systems for gauging the condition of each customer. I implemented a FAM Cockpit, including a customer sentiment score, which assesses the health of each customer and helps our team direct their attention intelligently.
3. The siloization fallacy
Another big mistake customer success teams make is working in isolation — siloing their work from the rest of the company, which is especially problematic for product teams. Especially in a company’s early stages, customers are a goldmine for product feedback. Feedback can strengthen your product in crucial ways, and so it should flow directly to your product team.
The solution: Loop product and engineering folks into the CS process. We bring ours in for EBRs to show that our roadmap items are gauged to their business needs.
Please Fasten Your Seatbelts
A year in, these pieces are in place.
Now, we continue to execute.
I want to get even more sophisticated with how we identify, quantify, and optimize customer value. I have visions of building a FinOps Assessment Playbook, where we evaluate every customer against FinOps capabilities and goals and gauge our relationships according to where they see the most value. I also have visions of gamified engineering, where we create tangible rewards for engineers who are particularly active and successful within the CloudZero platform.
The next step beyond this would be to have multiple playbooks that drive particular runbooks for each customer based on business situations (e.g., mergers and acquisitions). All this will come in due course as we continue to map our flight plan.
Ultimately, whether or not we accomplish these higher-order objectives depends on how much we believe we can do it. It’s why my mantra is #Expect2Win, and why I do as much as possible to highlight good work, to get my team bought into our role and our goals, and to encourage the kind of mindset you need to succeed in this environment.
In a year, we’ve come a long way. We’ve got a long way to go. I have nothing but belief in my team’s potential to make it happen.
The Cloud Cost Playbook
The step-by-step guide to cost maturity
