Reaching the Startup Tipping Point: When We Knew We Had a Real Company

March 4, 2014

It’s the moment every entrepreneur lives for — reaching the startup tipping point when you know your idea is actually a viable business. But as UnboundID founder and CEO Steve Shoaff recalls, as exhilarating as that moment is, it also means the pressure is officially on.

Reaching the Startup Tipping Point: When We Knew We Had a Real Company
Whether you kicked off your company in your garage (hello, HP, Google, and Apple) at your kitchen table, or in a more official setting, there is one key milestone every entrepreneur strives to reach: Realizing that you have, in fact, built a real business.
In this edition of OpenView’s Founder’s Corner, UnboundID founder and CEO Steve Shoaff remembers the excitement and celebration that came with that moment — as well as all the questions and uncertainty that soon followed. The result is a candid look at what tends to be the untold side of many entrepreneurs’ founding stories.

Reaching the Startup Tipping Point: When We Knew We Had a Real Company

Note: The “Founders Corner” is exclusive content for OpenView’s newsletter subscribers. To access Steve’s story and get additional insights from other founders in the series, please sign up using the form below. 
[gated-content]

It’s something many entrepreneurs can only dream of — landing a multi-million dollar deal.
But while the excitement of landing their first real deal of that size was palpable, Shoaff and his fellow co-founders at UnboundID quickly realized that the company had a long way to go before it could truly be considered the “real deal.” More specifically, Shoaff says he and his co-founders discovered that landing a big customer was just the first step in a challenging new journey.
In order to be successful, not only did the company have to ensure that first major client was successful, the pressure was then also on to also follow up that first deal with many others like it to prove UnboundID wasn’t a one-hit wonder.

Key Takeaways

Signing your first major customer is important — but it’s just a start. [0:30]

Seven months into founding UnboundID, Shoaff and the company’s other four co-founders were sitting in his living room when it finally dawned on them that they’d reached a critical tipping point.
“We signed a deal with a very large networking provider, and it was a long-term deal valued at $14 million,” Shoaff recalls. “When you have five guys sitting in a living room and you sign a contract like that, it’s both exhilarating and a ‘what do we do now’ moment. But at that point we knew we had a company, so then it became, ‘How do we scale?'”
The next challenges Shoaff and his team had to tackle included was determining how they’d make their first customer successful, and which strategic direction made the most sense for scale.

Addressing two primary challenges during your first two years are crucial. [0:58]

“It was really in that first two year period where we had customer validation, real money coming in, successful partnerships, and early evidence in different verticals when we realized we had a real product,” Shoaff explains.
But the key during that early period, Shoaff warns, is not to get too caught up in initial successes, and to remain equally focused on two key goals:

  1. Making existing customers successful.
  2. Finding new ones who are a great fit that you can add to your roster.

More Insights on Reaching Your Startup Tipping Point and Pushing Through to Scale

GinzaMetrics CEO Ray Grieselhuber on How to Stay Out of the Startup Graveyard and Scale
The path to scalability is littered with failed startups. GinzaMetrics CEO Ray Grieselhuber offers advice on making your company a success story, instead of a cautionary tale of early-stage promise unfulfilled. Read more.

Kirk Dando on the 12 Warning Signs of Startup Success
Leadership and growth expert Kirk Dando sheds light on a dozen signs your growing company is falling victim to the very thing you’ve been working so hard for — success. Read more.

Scott Maxwell on Why Startup Growth Isn’t Rocket Science: The Key to Understanding & Boosting Your Growth Rate
You don’t have to be an experienced CFO to understand and improve your company’s economic performance. In fact, with this high-level guide you can dive right in by learning how to discover, develop, and optimize your economic model. Read more.

Startup Perspectives: Steve Blank on the Keys to Growing Your Company and Changing Course
There are plenty of resources to help you get your startup company off the ground. But what about resources for when your search for a viable market is over and it’s time to take the next step toward building a scalable, repeatable model? Entrepreneurial legend Steve Blank shares his advice for making the transition. Read more.

Thank you for signing up! Stay tuned for our newsletter as well as more videos in the Founder’s Corner series every week in your inbox.

Photo by: Adrian Cornejo

CEO & Founder

<strong>Steve Shoaff </strong>is the CEO and founder at <a href="https://www.unboundid.com/">UnboundID</a>, defining the company's vision and overall business strategy. He is also the Chief Product Officer at Ping Identity. Steve is internationally recognized as a trusted adviser on identity and security issues for Global 100 companies. Prior to founding UnboundID, he served as Technical Director and Chief of Staff for the Identity Management product division at Sun Microsystems, and as Senior Product Manager for Directory and Security at Netscape Communications. Steve has also been a key technical adviser to the US Department of Justice.