All,
This is a bit dated, but in addition to seeing the rev growth, low S&M costs as a % of revenue, and other fundamentals we look for in fast-growers, I also like to get a strong feel for the leadership teams. Especially if they are founders.
Here’s a pretty insightful interview with New Relic Founder + CEO Lew Crine and one of Pure Storage’s co-founders John Hayes (no longer w/PSTG). Also, my rough notes follow the link… but the video is great!
https://www.youtube.com/watch?v=GZCDKUsHofs
New Relic: Mission help companies deliver best software to customers
6 times a year CEO takes a 1 week coding-retreat to get back to his roots.
Hiring: do they love the company and mission? Sometimes more important than the resume.
“purchasers of enterprise software are 54% through decision process before engaging w/sales person” so how do you get engaged with them and get their product to sell itself? – look for low marketing to % of revenue.
Question he asks himself Product built with business strategy in mind. How does product sell itself?
Pure Storage: Had to break-through status quo and not just say how much better things could be, but prove it. Needed to change what people wanted. Storage had been the same for 20 years.
Hired CEO because two tech guys started the company and realized they didn’t have the skills to be CEO.
Every company they sold to in the beginning had some major pain point which they tried to solve. Once they get in, earn the reputation of reliability, they can grow within each company.
Hiring: didn’t want people with a lot of storage background because they were trying to do something very different. Hayes didn’t have any storage background either.
Early Customers:
Small town companies you wouldn’t think of as tech.
“Why do people rebuy their product? Once they start using it, they get their weekends back.” --because of reliability/speed.
“You have to make one person love you in a company, but 5 people understand you.”
long PSTG, no position in NEWR
- Austin
Shopify (SHOP) Ticker Guide
For information on all of my current holdings view my profile here: http://my.fool.com/profile/CMFAleeb/info.aspx