What I’ve learned through Stoicism is that for anything that happens, assume it was your decision, and then work out how to deal with it. So we did the same with COVID.
- We adopted a three 3 phase process: 1) Get lean; 2) Hibernate & Hustle; 3) Rebound
- Our “winning from home” team has been very effective as adapting to the new working practices are not trivial
- We are learning to make decisions for the best of the business with far less certainty than before, but it’s working well.
In the latest episode of our “Reimagining” podcast series, Nik Whitfield, Founder and CEO at Panaseer, shares his COVID experiences, rescuing, recovering and ultimately reimagining his business and industry.
Nik Whitfield is a serial entrepreneur who founded Panaseer to provide a platform to unify IT and data security data, establishing total visibility and automating reporting processes. Panaseer’s goal is to give enterprise security teams and their stakeholders the insights they need to make risk-informed decisions that will keep their organisation and its data secure. Monitoring security controls during the current crisis has been a huge priority of Panaseer’s customers, putting Panaseer at the forefront.
Let’s jump straight in. When and how did you realise the significance of this pandemic crisis?
It first caught my attention when an investor I was talking to in January/February mentioned it as potentially disrupting the investment environment. I’m one of these people that doesn’t read any of the traditional media. I don’t watch the news, and I don’t read newspapers. Stuff that I have no control over I let pass me by. However, my leadership team, who are clued up and on the ball, began raising the risk, as well as the concerns from across the team. That was in mid-March, and that’s when we saw that this was going to be significant and have an impact on our operations, customers, stakeholders and the markets generally. So we started thinking about what we should do about it.
How did it feel when you started to realise that this was going to have an impact on your family and your business?
As a data professional, the trigger for me was looking at the metrics and the exponential nature of the spread – that was immediately meaningful for myself and the team. So, intellectually we saw that this is going to be disruptive. How did it feel? The analogy I use for founding a company is that you’ve gotten yourself ready to run the 110-metre hurdles at the Olympics. You’ve trained and you’re in the right mindset. The firing gun goes and you sprint off. But then you realise the first hurdle is actually a wall and you’re now in a water trough. What’s more the guy next to you is on a horse, half the competition started 20 minutes ago, and you’re completely clueless. What I learned early on is that if I allow myself to react with a negative mindset/emotional reaction to every hurdle, I’m going to die. Ultimately, all entrepreneurship is, is just a series of hurdles of problems to solve. I saw it in that light. What I’ve learned through Stoicism is, for anything that happens, assuming you decided that, assume that was your decision, and then work out what the opportunity is. So we did the same with COVID. We saw this coming and we asked ourselves – what do we think we need to do to safeguard the business? What opportunity is in it for us? How do we need to react? How quickly do we need to move? Quite quickly, we realised that the feeling was one of being very energised. I think it’s probably the same with a number of other entrepreneurs is that – the manna from heaven for us is changed. We love disruption. We love operating in an environment where things are changing. It’s actually when things are static that we find problems. We get into difficult situations where things aren’t changing. Overall, I was quite energised by it.
How did you come to terms with the changes that you needed to make?
There were some emotional hurdles. I and other members of the leadership team have been through recessions in the past. I personally have been in some companies which were slow to react and the reaction was insufficient. What I saw was that the staff were constantly fearing for their livelihood and their family’s financial well being, because they didn’t know if they were going to be made redundant or if their project was going to be cut.
So we decided to make a single, deep cut to the business, obviously with a lot of thought about which parts were non-core and which would have the minimum disruption in the short term. Some of those decisions were very emotional. As a team, we’ve been together for six years and we’re very much a family. Some of the decisions we made were to furlough some people and to let some others go. It’s the hardest decision ever to make I think as a leader. With the office we were lucky, the universe helped us out with some synchronicity. The lockdown started in the last week of March and our London office lease was up in the first week of April, which was a big expenditure – so we made the decision to let go of the office. We figured that it was a fixed cost that we could get rid of, that we weren’t going to be able to use to its fullest capacity for quite a long time. Even if we were able to work under social distancing, we’d only have 50% capacity at best. So yes, it was challenging, but once we’d made those decisions, we committed to them and made them stick. One of our founding values is around compassion – so with the people that were no longer with the business, we offer them support and tutoring from our head of talent to help them in any other pursuits.
So what’s changed now in the business? What are you doing differently?
We looked at our response as a 3 phase process. I haven’t done an MBA, but I understand that everything happens in three phases in MBA-lan! We basically said, “let’s get lean.” That was the cost-saving measures that we put in place that I described earlier, which was about 30% of the planned budget for 2020. The 2nd phase we called – hibernate & hustle – the phase we’re in now. The third phase is the rebound.
So in hibernate & hustle, the idea was to stay super-lean, operate as well as we can, given the resources that we’ve got. Some things have come out of that. One in particular is we’ve recognised that, in that period of getting lean, as a leadership team we felt we were highly effective, probably more effective than we ever have been. But then it started going back to normal again. We thought, “hang on a minute, we want to be that effective all of the time.” So we start introducing more awareness of our leadership behaviours. In times where there’s no crisis, how do we behave as leaders in the organisation? We didn’t do anything groundbreaking, we simply wanted to develop an awareness of distinguishing when I’m speaking for me personally, when I’m speaking for my team, or when I’m speaking for the company.
As leaders, we should be focused on company benefit, not teams or individuals and we’ve done a lot of work on that. We’ve done some practical stuff on the go-to-market. Obviously, 12-month marketing plans went out of the window, because no one knows how to sell in the current environment. I’ve got a great CMO, Sean Goldstein, over in New York who set up an experimentation process for marketing. We can now put ideas into a hopper to test different ideas, and see if they work. If they don’t work, we can throw it away and try different ones, if it does work, we can invest more into it and get the best benefit from it. So we’re quickly churning through ideas to work out what’s going to stick.
Operationally, we’re all sitting at home, and I don’t think anyone should underestimate the impact that has on a company. We’re learning as we go with it. What we have done is set up a “winning from home” team, a working group that sets representation across each function in business at all levels. It’s just a selection of people from the company representing both our UK and US geographies and each function. Their job is to firstly make sure people are as well as possible at home, as it’s a different environment and some people are suffering more than others, whilst some people are excelling, so it affects everyone differently. They’ve put in place a few things like additional counselling and so on. The group also looks at how effective people are in their jobs working at home as well as looking at what our future operating model will be. We used to be an office-based company with a few people working remotely. Now we’re all working at home, and the question is – what will we be in the future? It’s a non-trivial decision to make with lots of implications, both in terms of people’s well being, commercial implications, and legal implications. So we’re starting to collect ideas for those as well. It’s really all about the people, whether they’re our people or our customers/potential customers or investors/potential investors.
In terms of the rebound, it’ll be very interesting to see how it pans out. Looking at a business like ours, we sell a platform, in big deal sizes, to global financial institutions. We have a relatively long sales cycle for a SaaS company – between 6- 18 months, depending on the size of the organisation. When the COVID hit, there were some big question marks. For instance, we had less than 6 months of cash runway left, so we didn’t know whether we were going to be able to take an investment. We also didn’t know how our forecast was going to be affected or how our prospective customers and their ability/willingness to buy was going to change. We’ve been working through those questions since.
The 3 key things we wanted to get nailed down for 2020 were: 1) make sure we’ve got cash for the year – we’ve done that, and we’ve now got cash well into 2021; 2) Build as much reassurance as we can into our forecast, so we scrubbed and tested it and now have a very good understanding and confidence around our forecast for the year and we’re very happy about that; and 3) Getting assurance around the delivery of 2). Dealing with big, global organisations that we do, deliveries are never as simple as flipping a switch. Once we get that nailed down, we can then look at 2021, as that’s where we see our rebound happening.
How do you reimagine the future for your industry?
We call security companies cockroaches, because security companies are so hard to kill. There’s a fundamental reason for that, which is that no one really wants to turn off security. As most people are aware, cyber security’s already a big issue. What we find in security is that any change to working practices or operating model ends up in increased spending security, as it changes the risk profile that you’re operating under. If you change your working practices, the bad guy will use that to try a new attack vector to try and get into your institution information, steal the money or, or switch operations. So, in general, I would say, as an investment thesis, cybersecurity is a good place to put your money at this point in time. As a company specifically, what we do is make sure that an enterprise’s safeguards are all in place of working. Most breaches happen not because they haven’t bought the right security tools or not because they haven’t got the locks, it’s because they’re not switched on and working. So we would expect to see in this new world, even more opportunities for attackers to find gaps. So we’re anticipating that this change in operating model/working practises would benefit our business.
So how do you feel about the business now?
It’s a funny question because there are so many facets to it. Someone once said to me that having a company is like having a family and with a family, you’re only ever as happy as your unhappiest child. If you apply that to the company, there are some people I’m really worried about. They’re finding it harder than others to adapt to live with the current, lockdown and working arrangements. I do have compassion for those people. As a business, if I bear in mind, the commercial aspects of the company, the stakeholder environment, customers, prospective investors, I feel better than I ever have been, even better than back in March. A part of it is slightly growing up on my part, and that of our leadership team, in making decisions about the business and being more commercially aware in the business.
Would I go back to the way it was? No, as I only ever look forward. So I don’t think I could go back to how it was before. With this whole situation with how the world is changing, and reacting to this pandemic, it can’t go back to the way it was before and nothing ever does. It will be some variation of how things were and are now. I find that very exciting. I have compassion for those affected through illness and for those who’ve lost their lives, but the world is changing. There will be a whole load of benefits to this – some of which we’ve seen and others we haven’t envisaged yet that I anticipate will make things better for people. As a business, If we can help organisations to operate safely and securely, as well as people who’ve trusted banks to keep their money, we can make people’s lives better.