Zendesk’s founding team (left to right): Alexander Aghassipour, Mikkel Svane, and Morten Primdahl. Photo credit: Zendesk.
In the media world, there’s a tendency to talk about startups and big corporates in David and Goliath rhetoric (we’re guilty of it too). Startups are lean, flexible, and bold; big corporates are clumsy and risk-averse. But what happens when David scales into Goliath?
“Everything is a pain,” says Mikkel Svane, the CEO of Zendesk, a US-based customer service company. “When you’re growing so quickly, you have to rethink a lot of things all the time and you have to start over in many ways.”
Founded nine years ago by three Danes – Mikkel Svane, Morten Primdahl, and Alexander Aghassipour – Zendesk is no longer the scrappy, bootstrapped startup that it was in 2007. The company went public in 2014 and is today valued at US$2 billion. It has 1,600 employees scattered across the globe and competes with both traditional players like Salesforce, as well as startups like India’s Freshdesk.
But the scaling process hasn’t been pretty.
In expanding its business, the company has experienced various growing pains, from increasing bureaucracy to an entire rebranding of the company. And the pain hasn’t stopped. Nine years into Zendesk, Mikkel still doesn’t feel like the company is on stable ground.
“Right now, [there’s] just a ton of stuff we have to figure out – where we are, where we want to go,” he says.
Keep your company culture simple
Maintaining company culture becomes all the more critical once your teams are spread across the globe. At the same time, you don’t want to be too cheesy, says Mikkel.
“When I come out to a company and I see they have the ten company values written on the wall, I’m just like, god,” he says, laughing. “But you need to find a way to have a narrative for your company.”
Mikkel estimates that about half of Zendesk’s workforce – roughly 800 employees – have been with the company for less than a year. That means a lot of bright-eyed recruits who know nothing about the company’s history and culture. Sometimes word-of-mouth rumors about how the company conducts business or what Zendesk’s culture entails can get out of control.
“Suddenly you have these people coming to you and saying: but this is how we do business,” says Mikkel. “And I’m like, why? Who says that? Where does that come from?”
To maintain a consistent company culture across different locales and generations, Zendesk tries to keep things simple. The company’s “three key values” – transparency, responsiveness, and empowerment – help define not only Zendesk’s culture, but also its attitude towards product development and customer service.
“Instead of creating a very elaborate story, we try to tie it back to the key values,” he explains.
In addition, Mikkel’s role as the company’s CEO since the beginning has helped keep the company together. There’s value in having a founder as the CEO, he says. In 2014, Mikkel published a book, Startupland: How Three Guys Risked Everything to Turn an Idea into a Global Business, documenting the origins and early days of the company. It wasn’t meant to be an official record of the company by any means – “that book could be told in ten different ways” – but now it is.
“Writing that book is a kind of a natural way of anchoring [the company’s] story,” he says.
Rebrand carefully – and only if you have to
A lot of startups choose to rebrand after they scale. Uber and Airbnb, for example, have changed their logos – with varying degrees of criticism.
“When we talked to a lot of companies, they were like, don’t do it,” Mikkel laughs.
For almost nine years, Zendesk maintained more or less the same brand. In particular, the company’s customer service guru – a laughing buddha with customer service headsets – became its iconic symbol.
Quirky and unique, Zendesk’s customer service guru was easy to remember. But it pigeon-holed the company in customer service software, not allowing for growth in other areas, like customer intelligence or data analytics services. After two acquisitions and a growing product suite, Zendesk started to outgrow its brand.
Zendesk’s retired customer service guru. Photo credit: Zendesk.
“It’s a great symbol but it doesn’t scale,” he explains, referring to the happy buddha. “It’s served us incredibly well – it’s just the next level of what we do. It becomes a constraint for us rather than a platform.”
The company dedicated a whole year to its rebranding efforts and launched its new brand in October. Taking that time was key, says Mikkel. Even though effort doesn’t always correlate with positive outcomes, it was important to invest time and effort into rebranding – and not just throw a few dollars at some freelancer on Upwork.
“We didn’t just do a rebrand because we wanted to rebrand. It was something that we kind of needed to do to completely change the platform for the company,” he says.
Beware of policy bloat
When a company scales, a certain amount of structure and overhead is expected to follow. But the devolution into big company behavior can sneak up on you.
“You get new people into the organization and then they’re like, […] what is our policy for this and that?” says Mikkel. “That’s how a lot of things come along.”
Maternity leave, paternity leave, 401K matching, whether or not coconut water is a necessity in the office – all of these questions start coming in as the company grows up. Suddenly, it’s someone’s job to stock chips and snacks in the office, he says.
“And then you have to manage their schedule,” he laughs.
Sometimes this results in policies that the company and its employees can live without, he says. Other ‘big company’ habits pop up too, like creating Powerpoint decks for every team offsite trip when in fact there’s nothing new to report. All of this can take a life of its own, spiraling out into pointless paperwork.
But at the same time, some policies – however minor – can be important, like adding gender-neutral bathrooms to the office or figuring out paid leave policies for adoption.
“It is a tough balance,” he says. “Sometimes it’s more complicated to not do something than to do something.”
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