Learning from your peers to spot areas for improvement
How do you know how well your business is doing? As a CEO or Founder, you are focused on growing your business and can measure a number of internal metrics. But what are the metrics telling you? Are there other indicators you are not aware of that are flashing red? How do you know if there are areas which may limit your growth trajectory or delay your path to profitability? How can you spot areas which could be improved versus best practices in other software companies? You need to be able to compare and benchmark how you are doing in comparison to other best-in-class vendors in your space.
You might have 25% growth in ARR, and pat yourself on the back but maybe you could safely grow faster, at say 30%
Boardwave and Bain & Co have partnered to deliver a large scale European benchmarking exercise on the most important metrics for growth that will allow CEOs to compare themselves to others globally, measuring a range of metrics that are important and have been proven to be consistently good indicators of business health over time.
Our initial work has focussed on talking to some of our investor partners to create an agreed framework for the research that will follow. So when we say a business is a "Start-up", "Scale-up", or in "Growth" mode, we all know what that means with a common definition. And then we have also started to capture the common issues that software companies face at each growth stage. It's been fascinating to start seeing the commonality of issues software businesses see as they evolve.
Avg. Growth Rate
Founder, Angel, VC
VC, Growth Equity
Growth Equity, PE
10%+ (maybe run for EBITDA & lower growth)
The table above is incredibly high level, based on initial feedback, but we now aim to distribute a questionnaire to our member CEOs and Founders, in order to increase granularity. It will also test our theory that most software companies consistently struggle with the same issues in each stage of growth. So please take a few minutes to fill it in when you receive a questionnaire email from us.
Using this approach we aim to create a framework for key issues and how to think about and resolve them. So for instance, its fairly obvious that in Start-up mode most Founders spend time worrying about getting the right "Product-Market" fit. And that Scale-ups focus on creating a scalable professional Engineering team and worry about the efficiency of their Go-to-market efforts. Of course some challenges will be unique by business, but many are the same. Please give us feedback, have we missed anything that's important, do we have the right focus, how do you think about this?
Size of potential market, Product-market fit, Quality of Founding team, Rapid ARR growth & scaling of sales resources, Establishing tech team
Scale-up & Growth
Getting to profitability, professionalising sales & ops, scaling workforce, exploring new avenues of growth (acquisitions, new products, new markets), improving customer engagement (NPS)
Maximising value from existing customers (pricing, x-sell and upsell), optimising organisational structure, M&A
Large Leader (slow growth or decline)
Managing for steady decline & cash, realising cost savings, exploring growth outside original core market focus
By using our benchmarking questionnaire to gain a deeper understanding of these and other issues that occur, we should be able to provide better support and help for CEOs of software firms based on their current stage of development and match them with mentors and advisors that have "been there and done that", mentors that have possibly run their own business and are currently on the next level of growth. So a Scale-up Founder/CEO, might be best placed to advise a Start-up founder in the same sector or sub-sector, since they clearly solved those particular issues and moved into the net phase of development of their own business. And interestingly the Scale-up CEO may in turn get best advice on "Improving Unit Economics" from a Growth CEO who has that already figured that out.
"Excitingly, 150 CEOs/Founders who are Boardwave Members have pledged their own time and volunteered to be a Mentor to other members of the community"
Whats been fascinating as we have built the Boardwave community, ahead of our launch in September, is how willing busy people are to help one another. We have around 350 members at the moment, with 150 of them promising to be part of our Mentoring programme, pledging their time to help others. That's incredibly powerful, and they range from CEOs of start-ups all the way through to executives of the Largest Leading companies in their field.
It feels like very soon we will have all the key ingredients of a compelling programme, helping Founders and CEOs build and create value in their businesses. We hope to have a standard language and platform for classifying companies and their common issues, we have a more detailed benchmark for Leaders to compare their businesses to others globally, and we have the Mentors primed and ready to help them move forwards.
Members should expect an email from Boardwave and BAIN & Co very soon, so please take time to fill it in. A few minutes of your time will help everyone in our community and beyond. If you have any questions at any time please let us know, we are here to be helpful.
If you are a CEO, Founder, NED, Chair of a European software company, and you are not yet a Boardwave member and you would like to join us please press the button below.