Peter McKay (Snyk): On Hypergrowth, Hard Decisions, and Hidden Challenges
Hypergrowth companies are treasured by venture capitalists and founders alike for their incredible expansion speed and profit potential, but with that potential comes massive risk.
As you can imagine, hypergrowth is difficult to sustain, and can be impossible to meet if company leadership isn’t on the ball.
Peter McKay is.
As a four-time CEO and current CEO of Snyk—a leading company in developer security—Peter has developed his own best practices for growth, which he applies to Snyk to great effect.
Peter recently joined Blake Bartlett on the BUILD podcast, where they talked about hypergrowth, the challenges around it, and how CEOs can effectively drive it.
The multi-dimensional challenges of hypergrowth
When Peter set out to pursue hypergrowth for Snyk, he acknowledged and understood how multi-faceted the process was. In growing the organization, Peter has to keep track of:
- Strengths and weaknesses of individual teams. Do each team’s strengths match the goals that they’re trying to achieve, and are their weaknesses affecting performance where it counts?
- Team capacity levels. Which teams are overcommitted, and which are not?
- Opportunities to scale. Are either of the factors above an opportunity to scale the team? Are there opportunities that haven’t yet been explored?
“There’s just so many dimensions to hypergrowth,” Peter said. “To do it effectively, you have to get all the different components growing consistently. You can’t have one particular part of the company lagging behind the other.”
This becomes more challenging as the business grows. New product lines might get introduced, or new territories might open up. If you work in financial services or healthtech, you’ll have to go through security checks and compliance reviews.
Peter and other leaders like him have to constantly push and pull on multiple levers, balancing them and the resources they consume to maintain the desired growth rate. For example, increasing the size of your sales team may lead to more new customers per month. But these new customers will need to be onboarded, so you’ll have to assess whether your customer success teams can keep up, and expand them if they can’t.
Something many founders don’t realize is that growth is not a single, continuous campaign. “What got you to this point is not going to get you to the next,” Peter said.
This is why you see companies grow and then plateau. The old strategy isn’t working, and so they have to change things up and then that makes them grow again. The key challenge for any CEO or founder, according to Peter, is how to anticipate the plateau before you plateau.
“What makes that hard is that the perfect time to make those changes is when things are going the best.”
This makes it psychologically difficult to push for change; because why would you, when things are clearly working? But Peter points out that even strong numbers only reflect past performance, and don’t necessarily predict the future. They may be leading you down the wrong path. If you follow it blindly, you may end up making decisions that will be hard to reverse.
It’s easy to pay too much attention to your results and assume this positive trend will continue if you don’t rock the boat. The hardest thing to do in these situations is change course.
Peter uses a sports analogy: your team makes a really great play and begins celebrating. But at that exact moment, the other team increases their pace. You’re caught by surprise because you were too busy cheering and patting each other on the back, and so you lose whatever lead you had.
This risk of plateauing is what led Peter to develop his sense of paranoia.
“I’m always looking for what could go wrong. That’s a big part of the CEO’s job: to be well out in front, looking for all the things that we may be missing. I’ve been doing this for 30 years, and I’m still asking questions, because some of the easiest and most obvious things could be right in front of you that you don’t see.”
Ask questions like:
- Is the market evolving?
- What objections are prospects raising?
- Why are we losing deals?
- Why are we winning deals?
- How are our internal teams doing?
- What are our internal teams doing?
Go beyond the numbers in the spreadsheet and get the ground-level assessment, because that will serve as your early-warning indicator for when you’re about to plateau.
“There are lots of early indicators that kind of tip you off that there’s smoke, there’s issues that you should start paying attention. There’s a little bit of a fire going. Look at group frustrations between sales and marketing, and between marketing and product teams. You start to see these signs of frustration, and the wheels start wobbling. Decisions aren’t being made fast enough or there’s conflict that isn’t being resolved.”
Companies can sometimes fall into the trap of what Peter calls “artificial harmony.” People work well together on the surface, but they’re not talking about the tough problems.
Your paranoia is a way for you to anticipate a problem that is in the process of festering and getting in front of it. If you do it proactively, then everybody is the better for it. If you sit back and do nothing, then you’ll say “I should’ve made this move nine months ago,” and forever regret it.
Growing a team demands feedback and hard conversations
If a company is going to achieve and maintain rapid growth, its people have to grow at a similarly fast pace. “We are growing at 170% year over year,” Peter says. “It’s hard for an individual to develop themselves fast enough. It means being 175% better YoY, too. It’s hard, and not everybody can do that or wants to do that.”
Growth at such a blistering pace sometimes outstretches your available talent. If your team can’t keep up, then the company will hit that plateau—and even start to decline.
“You’ve got to constantly do whatever you can possibly do to develop your talent, because it’s so much better to promote from within than bring people in and groom them.”
But employees don’t suddenly just “get good.” They have to be trained, coached and nurtured, and doing so means a constant flow of feedback. Unfortunately, that feedback can sometimes be watered down or non-specific.
“One of our core values at Snyk is ‘care deeply,’” Peter shares. “And one of the parts of ‘care deeply’ is everybody genuinely cares about each other. But when I first got here, people weren’t giving feedback to each other. Like people were afraid because they didn’t want to hurt people’s feelings.”
“That’s not caring deeply. If you really care about someone, you’ll give them feedback; you’ll coach them. You’ll talk to them about what’s working and what’s not. You’ll be very transparent, and you build this loyalty and you build this trust. That’s only going to help them, and help the company as well.”
If you have to hire, hire wisely
As valuable as developing your existing team is, it can’t cover every need.
If someone on your team lacks a certain skill set, it may not be practical to train them up (especially in complex skills like programming or design). Instead, you can hire someone else strong in that skill as a way of helping your team scale. So you’re not replacing or up-leveling that specific role; you’re strengthening the team as a whole.
“As the CEO, 25% of my time is constantly looking for talent—at all levels, not just reporting to me. In this market, where resources are getting harder and harder to find, that’s going to be a CEO’s top priority. If you can’t hire top talent, then that usually indicates that you’re not scaling.”
A manager is only as good as the people on their team. And when you’re trying to achieve hypergrowth, that means recruiting the best people possible. But that doesn’t mean hiring for hiring’s sake.
Hypergrowth leaders should fight empire-building, where managers create little fiefdoms to build influence and power. Instead, hires should be purposeful and clearly address a skill or capacity gap that will be valuable for the company’s future growth.
- Trust is the core tenet of any leader or person in a company. Trust the people you recruit to do the job they were hired to do. They will gain confidence and experience in the role and became leaders in their own right–but not if they’re being micromanaged.
- Know your limitations—and remove them. As a CEO, you need to understand what you’re good at and what you’re not. Understand how far your skills can take you in the company and work to fill in the gaps. Get good at what you hate doing, and don’t cover for it by hiring someone else.
- Only the paranoid survive. A CEO has to be watchful of potential risks to the company, but you can’t be the only one. Everyone from the management team to the board of directors and beyond have to call out potential risks whenever they are found, so that the company can plan for them well in advance.