CTO Roundup: Startup Leaders Talk Cloud Computing Today
We are living in a new era of cloud technology, and its mainstream adoption over the past decade has created both opportunities and challenges for startups the world over. To explore this moment, we hosted a global roundtable with CTOs from across the Vertex portfolio and asked them to shed light on how their companies are thinking about cloud computing, cloud evolution, security, company growth, and more.
Our panel included Ankur Pandey, Co-Founder and CTO at Signzy; John Kodumal, Co-Founder and CTO at LaunchDarkly; Nilesh Pathak, CTO at NIUM; as well as, Piyush Kharbanda, Partner at Vertex Ventures SEA and India.
While many organizations favor the multi-cloud approach for a variety of reasons, several still choose a single provider due to cost, familiarity, and demand. Some of our panelists have been cloud-native from day one. Others migrated over time, but all had plenty of insights to share about what they’ve learned along the way.
Our dialogue also stretched beyond technology — it was about people, too, and how cloud-native has changed the way engineering teams are building companies and their teams.
Here’s what Vertex Ventures Portfolio CTOs are discussing today:
Security is a shared responsibility
Along with the fact that cloud-native architectures require statelessness, one big shift that occurs when going cloud-native is that the security requirements of your company are now linked to the security of your hosting provider. This concept is called feudal security, as by working with a cloud provider, the application becomes a kind of vassal for them from a security perspective.
Additionally, part of the new architecture is relying not just on your cloud provider, but also on third-party SaaS services you’re using. Security in a cloud-native world becomes a shared responsibility among you, your cloud provider, and all third party vendors you’re using in delivering your product.
Consumer startups should focus on data governance early
Improperly managing compliance and governance is a pitfall for many startups. The panel advised startups to prioritize compliance and governance and get it spot on, early on, or risk leaving your data vulnerable to attacks. One panelist recalled a board meeting where an analyst pulled consumer data in an Excel file without any authentication and shared it with the group — that shouldn’t happen.
While compliance tends to become more of a priority once companies acquire customers and begin scaling, it’s important to set expectations and put a framework in place before you reach that point. Cybersecurity breaches frequently result from misconfiguration or human error, and human mistakes are far too often overlooked. In fact, studies have shown that human error is the main cause of 95% of cybersecurity breaches. In other words, if human error was somehow eliminated entirely, 19 out of 20 cyber breaches may not have taken place at all. Typically, either company systems aren’t configured properly, or data is accessible to people who aren’t supposed to have it or aren’t handling it properly. By prioritizing compliance and governance from the start, companies can better protect themselves from issues or attacks as they grow.
The competitive hiring market requires clear plans for scale
Even though remote work has enabled the panelists’ companies to hire from locations all over the world, all agreed the hiring market is tighter than it’s been in years. Our panel advised taking the time to think deliberately about the structure of your scaling model before you hit a growth curve. For example, consider how you’ll add management layers, what steps will prompt you to review your organization structure and adjust it if need be, how you’ll add engineers, and how many individuals engineering managers can manage successfully before you’ll need to restructure the group or hire more. One panelist highly recommends reading “An Elegant Puzzle” by Will Larson, who helped grow Stripe’s team from 30 to 250. While the book centers on hyper-scale growth, it’s widely applicable. Doing this work beforehand will ensure you have the right systems in place to support growth when it happens.
One panelist’s company grew their engineering team from 30 to more than 100, hiring in bulk using talent incubator companies that place talent from universities and colleges into rigorous training programs. After six months, the candidates are ready for industry work.
Another company that grew from 30 to 300 realized quickly after the pandemic began that relying on location-based benefits, like shorter commutes, cost of living, etc., to draw talent isn’t relevant to today’s global, remote workforce. Instead, several panelists recommend zeroing in on what makes your company special — a smaller staff, a forward-thinking way of solving problems, a thriving industry, for example — and using that to excite candidates.
For compensation, the band-system still reigns
The panel also discussed compensation structures and noted two broad methodologies they’re observing: the band-based system (in which there’s a range of pay for each employee level) vs. paying talent competitively regardless of the band into which they fall. One panelist observed many startups in Southeast Asia and India wrestling between the two. However, all in attendance favored band-based compensation. It establishes a clear compensation system, which can be especially helpful for early-stage startups where compensation can vary widely. This method offers employees a clearer view of where they stand and what skills they need to acquire to level up internally. Band-based structures also aid in diversity, equity, and inclusion efforts by creating a framework for compensation based on performance and capabilities instead of irrelevant factors, like an individual’s ability to negotiate well.
Huge thanks to all of our panelists and attendees!
This event was made possible by our global network of more than 100 Vertex VC professionals worldwide and 200 portfolio companies. This robust network fosters pivotal relationships and local knowledge in key regions all over the world and enables portfolio companies to build community and learn from one another on an international scale. Have questions about our platform? Reach out to the Vertex US team here.
