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An Investor’s Perspective: The Importance of Ops

Posted June 8, 2022
Anand Thaker

Anand dipped his toes in the investing waters at age 14, but it took time to find his way to his current role as a strategic advisor. His first official career was in software engineering, but he was drawn to marketing. Anand enjoyed forming connections with many different people, the challenge of interpreting human behavior, and decoding how people connect in the digital realm.

A longtime mentor advised Anand, saying, “If you want to learn how to invest in something, it’s worth getting your hands dirty and going and doing it.” As a result, Anand led multiple ventures and worked with Scott Brinker on the MarTech Landscape.

While Anand isn’t a formal venture capitalist, he’s advised venture capitalists, private equity firms, and other investors. Anand has been given the nickname “Midas of Martech” by investors because he helped navigate over $1B in investment returns by 2018 within the Martech sector and by using Martech as a lens into the larger marketplace. Naturally, we had to ask him how operations fits into an investor’s evaluation on The Revenue Marketing Report.

What to Look for When Investing

“One of the things you’re looking for is traction in the market. An investor needs to understand how well you recruit talent and keep it. Talent acquisition and retention are almost on par with the product-market fit, which is usually tantamount to a decision to invest. It’s crazy how talent management has become such a priority.

“But if we were back in our normal state of things, investors prioritize the traction a company has gained in the market and customer retention. The rule of thumb is that acquiring a new customer costs more than keeping them.

“I think companies that are mindful of keeping the right customers–sometimes you’ve got challenges, especially in the freemium market–that’s critically important if you’re keeping the right customers. And it’s something that’s very much overlooked. Yes, there’s a churn number on most startups’ investor decks that they pitch, but I like to double click into that and ask how they keep the right customer? What does that look like? I understand retention is a moving target, but it’s essential.

data is a house of cards

“Recently, investors have focused almost exclusively on whether or not companies can attract good people. If you can hire good people, you have a great culture–which translates into how much people respect the company.

“Right now, the sentiment of the company matters. We used to see investors inspecting the sales cycle, ARR, ARPU, or the three cost metrics I like to use: churn, burn, and yearn. Recently, investors have been ignoring some of the traditional metrics because they needed to deploy capital that was just sitting in the bank doing nothing.”

For those of you who have been watching the news, the market has changed drastically since recording this episode. Companies’ valuation has dropped tremendously, and investors are no longer throwing money at any moving target. While the current fears surrounding inflation, a war, and more may be temporary, it’s not unfathomable that investors will return to their more prudent measures when evaluating companies.

Anand provided us the following update, “We are finally returning to fundamentals. One specifically that has been a common thread for growth and later stage startups has been margins. The other–and one of my favorite key metrics–is NDR (Net Retention Dollars), which will continue to differentiate strong players. However, I don’t see the focus going away when it comes to talent and customer retention.”

The Value of Operational Infrastructure

Anand gave an excellent summary of the oddities in investing over the last few years. Now that things are stabilizing, how can operations play into a company’s attractiveness to investors?

Operations is a critical component in establishing the systems and data collection necessary to run meaningful analysis. It turns out that understanding the company beyond the surface co-founders and the c-suite usually operate at is vital.

“Usually, the investors are talking to the co-founders. Later-stage companies may bring the rest of the C-suite into board meetings. Whoever is representing the business should understand what’s beneath the top-level metrics. It’s remarkably important. So your ops team or the person responsible for ops should be keeping the executive team informed of the latest and greatest numbers.

“For an operations professional to grow, the key is to think more like a CEO or the founder as you’re reviewing metrics. No one cares about a nuanced metric if it isn’t impacting the bottom line. The business wants to understand what they’re doing right and how to repeat it. They want to know what they’re doing wrong and how to avoid it. You need to think of each metric from a customer growth perspective and then make sure your executive team understands the importance and meaning of the data.”

build a strong foundation

What’s even better than having your execs know and understand the numbers?

“I think that if you have your ops person in an executive team meeting–someone working directly with the numbers–that person learns a lot.

“They don’t have to be in the board meetings. They don’t have to be in every executive session. But I think bringing them in on an occasional basis is very important because they get the context behind the requests.

“As an operations person, if I know how important a request is, I’m going to take that to heart and prioritize the ask. Ops people always have a longer list of things to do than they ever can accomplish, no matter how much budget they have.

Next, Anand brought up a novel way to attract more customers: the community.

“I don’t think many executives understand how powerful a community is. If executives and operations work together on building communities–for example, how much content to create and how to engage community members, deciding on the role our partners play or leveraging influencers as a key component of growth… Those things are remarkable for businesses.

“I have a proprietary method of measuring community value. A community isn’t just people rallying around a product. It’s an entire ecosystem. Executives should leverage their communities more when making big decisions.

“If you have a narrative that you need to get out there, a community can evaluate that language and see if it strikes a chord. You’re able to be ahead of the game in terms of controlling the conversation, as they say in politics, right? You have to be able to control the narrative.”

Trusting the Data

Being the data advocate of the organization can be challenging, especially when the data is questionable. Part of being in operations is identifying data issues and learning how to provide value (and inspire trust) despite those issues.

“Make sure there’s trust in the data. I know that it’s oversaid, but don’t just bring numbers to the table. Make sure that everybody’s on the same page about the results. That means getting people to understand where that data is coming from and how it’s calculated.

trust in data

“Creating trust in the data is remarkably important. And I know how tricky that is. Don’t get me wrong. It’s easier said than done. It can take a couple of years before you get to that point. And that’s not exactly what many ops people or executives want to hear. Building trust helps people make better decisions using the data around things like company growth targets, the next market expansion, and pricing.

“Operations professionals are in a unique position in that they can help de-risk a company. They can spot cross-functional issues and raise problems that would otherwise go unspotted. Operations people can bring so much to the table, and we don’t talk about it enough.”


You can find Anand on LinkedIn, Twitter, or his website, where he talks about his journey behind the scenes in the investing world and the marketing tech landscape. For more ways to understand the relationship between ops and investing, listen to the full Revenue Marketing Report episode at the top of the article or anywhere you podcast.