Why “Ops” Is Taking Over Startup Land
A little over a year ago, I wrote that for startups, the Secret Weapon for Scaling was Sales Operations.
Since my writing about the importance and value of Sales Operations (where there are now 11K job openings on LinkedIn for this role), I have observed with great interest the explosion of operations functions in every function in Startup Land (a less geographically biased way of referring to the world of startups than “Silicon Valley”). Here are a few examples:
- Business Operations: One of my talented HBS students works for the finance department at Pinterest in a job titled “Business Operations”. I have seen many of my portfolio companies create this role under the CFO as a complement to FP&A (financial planning and analysis). Whereas the FP&A function is typically responsible for instrumenting the financial metrics and reporting them, the Business Ops function has emerged as the group that interprets the strategic implications of the business metrics more broadly and then formulates and drives new initiatives cross-functionally to address key issues. For example, how do you measure the success of a new product launch — and what do you do post-launch about the results you do measure? Business Ops focuses on decisions, not just data, and then helps operationalize those decisions within a startup. A quick LinkedIn search shows 15K openings for Business Operations, 15M title holders in the network, including companies like Circle, Lyft, NerdWallet and many others.
- Product Operations: One of my portfolio companies, DataXu, recently created and filled the position head of “Product Operations”, a role that reports to the CTO who manages the entire 150+ product and engineering team. That executive will be responsible for measuring the product development process and implementing the necessary changes to make it more effective. They are also charged with training new hires and managing vendors. In short, they are like a “COO” or “VP of Ops” on behalf of the product organization. DataXu is not alone in hiring for this role. A quick LinkedIn search shows 6K opening for Product Operations and 200K title holders, with executives holding this title at growth stage companies like Fuze, Sonos, Wayfair and many others.
- Marketing Operations: One of Flybridge’s marketing advisors has been discussing with me the rise of this role. The Marketing Ops role has been created because of all the data coming out of marketing automation tools and other systems. Marketing Ops makes sure that the right leads are being transitioned to sales in the right way and that the sales reps are using the sales force automation systems properly and that they are integrated with the marketing automation systems. Marketing Ops might be the group that scores the leads, tracks them through the sales process and does the win/loss post-mortem analysis. Watching the data, making sure it is integrated across the organization, managing the marketing systems, and reporting cross-functionally on key marketing metrics are all the jobs of the marketing ops function. Our portfolio company, MongoDB, has a nice job description for their open position — Director of Marketing Automation and Operations — that tells the story well. There are 5K openings on LinkedIn for this role and 9M people with that title in their profile.
Why has Startup Land suddenly gone bonkers over Ops roles and embedding them within every function? I think the simple answer is Big Data and process maturity. As companies stabilize their business models and find product-market fit, they begin to adjust from a hunch-driven operating model, where decisions are made by the founders in large part on gut instinct, to a metrics-driven model, where decisions are made by professional managers based on data. With the availability of so much data across all functions to professional managers, they need more analytical and operational horsepower to synthesize that data and derive insights from them that drive the business. Hence, the thirst for an operations staff— analytical, mid-level executives who can get into the weeds, derive insights and turns insights into action cross-functionally.
I have been preaching this message to all my portfolio companies: if you’re a startup executive and haven’t begun to operationalize your organization, you’re at risk of falling behind.
