Talking Leadership with the CEO of Five9 | Human First CEO Series

Alright, hello and welcome back to our Human First CEO series. I'm Nick Mehta, CEO of Gainsight, and really excited to be joined here with my very long-time good friend, Rowan Trollope. Welcome, Rowan.

Hey, Nick, good to see you. Hi, everyone.

So Rowan is like the— in that intersection, that Venn diagram of like amazingly accomplished business leaders and good human beings and really thoughtful people and people that I can nerd out about like quantum physics with. In that tiny intersection is Rowan Trollope. I greatly appreciate his friendship. On the business side, he's the CEO of Five9, a rapidly growing publicly traded SaaS company. And I'll let him describe a little more details as we get into it. But on the personal side, he is a human being as well. CEOs every now and then are human beings. And we get to actually learn from Rowan about how he thinks about his business, not just from a business perspective, but from a human perspective. In this series, we talk about all the different aspects of a business from how you think about your community, to your team, to your customers, and of course to your shareholders in your business. But before that, we'd like to get to know you more on the personal side. So you and I are both quarantined right now, as is everyone else. You have a great family that you're quarantined with, but if you can magically transport a celebrity into your quarantine, who would yours be?

Well, it's funny, you know, Nick, last night I was reading your questions, some of the questions you were gonna ask me anyways. I'm sure you're gonna go off script here, but to my kids as we were sort of reading to them at night. And I said, who would we have come visit us? Because it would be not just with me, but with my whole family.

Yeah.

So their answer was our dog Teddy, who passed away recently. So of course, that went on the list.

That is so—

sorry. And there was really no number 2 or 3 from the kids. For me, and he was a celebrity in our own family, but my grandfather, who I never got to spend much time with— he was in World War II. British in the Royal Navy. He was a commander in the Royal Navy, and he had so many amazing stories to tell and so many amazing lessons that he had learned. And I— he died when I was 6 years old. I never had a chance to get to meet him. And so I also thought, whoever I invite, it needs to be someone who I'm going to get along with, who's going to be in my house for a while. So It would be my grandfather.

That's a great answer. Actually, that's really, really cool. And actually, so sorry about your kids and the dog, but shows you how much of a connection they can make, so.

Yeah, we're trying to get another. It's hard to get dogs right now.

Yeah, it really is. It's the time to have a dog. We have, we got one strategically right before quarantine, so we saw the future coming. Yeah, my choice, by the way, it varies every week, but I am, I think you love the musical too. Craziest Hamilton fan. And so getting Lin-Manuel Miranda transplanted into our house would be amazing for us because we sing along to it all the time and would be terrible for him because I'm sure he'd get really old hearing me try to rap over and over again, "My Shot," and try to impress him. But that would be very fun.

Very nice.

So we want to talk about, like I mentioned, kind of different themes of all the stakeholders in your business and kind of how you think about your stakeholders. We're going to start the furthest out with the community and I think you and I both believe that our companies can't be successful if the community around us isn't successful. And there's never been a time in recent history where this is more highlighted than COVID-19 and Black Lives Matter, everything going on this year. So I want to touch on two things about how you think about community. One is kind of on the COVID side, when that happened, when things started happening in the US, how Five9 mobilized to try to help. I think you did some amazing things there. And then on the justice side after that.

Yeah, absolutely. I'll start with COVID We put in place a plan right in the beginning that had sort of 4 elements. And the first one was take care of our employees. Well, actually, no, the first step was take care of yourself. So this was really a lot of— and so what went along with this plan, before I go through the 4 parts, were really was a dramatic increase in the amount of communication from leadership. I think folks were hearing a lot of different things online and wherever they get their news. And frankly, we're looking to company leadership for our guidance and reassurance and what was going to happen to our business. And everyone was extremely worried if you go back into March. And so we, number one, just really dramatically increased the amount of communication. And I'm already a big communicator. Right.

I have my weekly emails.

24/7 AMA channel on Slack where employees can ask me and the rest of the leadership team any question that they want in real time, and we will try and answer them as soon as they come in. So we already had a lot of communication, but people needed more than that. They needed more proactivity, they needed more, and they also needed to see the more human side of us. And so this is relevant to the topic today. And so I found myself being, you know, I'm already, I already share a lot, maybe, maybe too much. I found myself, you know, really going all in on basically being extremely vulnerable, sharing how I was feeling. And I think that helped employees feel like, if, wow, if our leaders are sharing that vulnerability, it's okay for us too. One great example of that was, you know, the issue of kids in meetings. And I remember back, you know, so you and I both crossed paths initially way back in the day at the, Symantec. And, and I remember, uh, when I very first started in tech in 1991, I had a baby, uh, was born, uh, at the time. And, um, I felt embarrassed about ever having my kid get in the way of work. And it was sort of this idea was like, everyone's there to work. And like, the idea of like, you have to leave early to go to the daycare or this or that was like, just, it wasn't done. And I was like, this is so weird. Like I'm expected to be this robot person at work and that I don't have a family or anything else to do except for be at work all the time. And it was not healthy. It wasn't healthy for the employees. I never liked it. So when I became a CEO of Five9 2 years ago, I said, I'm gonna change that. And so when COVID hit, you know, I sent out an email to all the employees like, hey, we all have kids. It's okay if you need to jump off a meeting to, you know, go deal with your children. If they come onto the screen, introduce them. We're human beings. We wanna know who your families are. We're gonna be in your homes for the next 3, 6, 9, who knows how many months. And so that was the kind of tone that really shifted in the leadership style. And that went along with COVID worked really well. We got a lot of great feedback and we've kept it up. And so I think it's sort of the new normal for me anyways.

That's awesome. And I think you extended that not just for your employees, but actually the community around through some of the Five9 technology you offered up. Talk about how you tried to mobilize your employees to have an impact on the broader world.

Absolutely. So, you know, we're in the contact center space. And when businesses transitioned from, you know, brick and mortar retail into sort of, okay, we're just gonna have an online presence, the contact center very quickly became the new front door for that business. A great example is Lululemon, one of our large customers. You know, they shut down all of their stores, at least in the US, I'm sure probably everywhere else. And that just sort of instantly sent all their traffic online. And if you're, you know, I guess I don't know what the questions are going to be about yoga pants, but whatever question— they're no longer going into the store, they're now engaging with the contact center. So a rapid shift on that front where the contact center became the new front door. We offered up our technology to all the track and trace initiatives as well as the PPP. So we actually powered the PPP hotlines, maybe we still are, I'm sure we all, we still are, they're still ongoing. And so, you know, we went out into the community and we said like, let's help our employees, let's help our customers, let's help our communities wherever we can. So we offered up our services and our software. Another one was, I think it was Delivery Angels, it was delivering at-home food, we offered Five9 for free to help them engage with elderly folks. So we gave it out for free, we also stood up contact centers, like again, like for the PPP and in 24, 48 hours for, in this case, 30,000 concurrent lines just to get the help instantly. Our employees have never been working harder than they have in the last 6 months. I mean, it has just been absolutely flat out nonstop for us ever since quarantine started. And yeah, so it's been pretty, pretty darn busy, I have to say.

Yeah, and I can imagine that probably helps your employees feel more motivated because they're connecting to the broader problems out there, right? Did you see that at all in terms of employees feeling like more connected to Five9 than ever?

I think so. Yeah, we saw our engagement scores go up and I don't think we're unique in this.

I've heard from other VCs the same thing.

Yeah. And engagement scores have gone up. I mean, our engagement, I don't remember the exact number, but it's 87 or 90.

It's in the 90s.

It just went up to a level that I think it's 18 points higher than benchmark. So we are, we saw our employees absolutely feeling much more engaged. We also did a bonus, a spot bonus, I think several, a couple of thousand dollars to every single employee, at least in the US and different amounts for different countries. But We sent out cash, we gave back out of the— we're a profitable company, free cash flow positive. So we took that opportunity and just went to Wall Street and say, hey, this is the right thing to do. We're going to give back to our employees. Yeah, so we've been doing that kind of stuff and all kinds of other fun activities and enablement for employees and work from home equipment and this and that and the other thing. My theory—

Rowan, you and I have been working for a long time, and my theory is that leaders are responding differently during this year than they would have in the past. And there's a lot more like, how can I help, trying to help the world. There's a lot more doing the right, even if it's not good short-term for investors, it's good long-term. Do you feel the same way? Do you feel like this is like a different sort of mode of leadership than people have seen in the past?

You know, certainly for our company, we were able to take extraordinary actions and sort of be covered by coronavirus. Right, yeah. Hey, it's the right thing to do. And, you know, a lot of companies pulled their guidance.

We didn't.

We continued to issue guidance. But we did take the numbers, in the case of our bottom line, down to accommodate for the increased investment we were going to make, not only in giving back to our employees, but also in investing in the business. So, yeah, no, I do think that— I mean, look, we've had so many more calls with CEOs of other companies who are all dealing with the same issue, all at the same time. And it does feel like it's softened people's hearts somehow.

Yeah, I think so too. Yeah, that's why we're doing this series because I do think things are changing. One of the other things that are changing, I think, is CEOs' willingness to take a stand on issues that are, that are, can be, you know, I don't want to say controversial, but can actually create debate. Lots of times I feel like as a CEO, I was guided by other CEOs earlier in my career to say, don't stick your head up, just Just stay focused on the numbers. Don't get involved in anything that anyone could debate. And I feel like with Black Lives Matter now, as well as many other things, I'm seeing more and more CEOs, including actually, like, as an example, your former CEO at Cisco. I mean, the CEO at Cisco now, Chuck Robbins, who you worked with, and his, you know, what he's done there, what you've done. Talk a little bit about how you navigated this, the conversations around social justice, racial justice in the last couple of months.

Yeah, I mean, I've definitely seen that. I wanted to steer away from sort of any of the virtue signaling, empty, you know, tweets in support. And I spent actually, so I kind of pulled away from all of that and had a chat with my leadership team and we came up with some sort of principles about how we thought we should deal with this. And one of them was we should deal with this in a way that is natural to our company. We— that was number one. And, you know, so I think people wanted to say like, well, Facebook's doing this and they're doing that. And it's like, yeah, but we're— every company is different. We need to think about what's real and true for us. So that was step— that was sort of the first principle. The second one was— oh gosh, what was the second one? Was no grand gestures. We thought that making change was going to take real concrete action, not sort of these huge things, but like nitty-gritty stuff. And so those are the two of the principles we started with. The third thing was like, it starts at the top. The third principle was it starts at the top and we have to get our top-level leaders all fully aligned about what the program is gonna be. And that could be difficult in, and has been difficult in an environment where these issues have become politicized. And so you're, you know, that old adage of like, don't mix politics and work. It was like, well, that's, straight out the window, like, okay, how are we gonna deal with this? And it did create an environment where we were able to have conversations that we wouldn't have normally had. And I think that's what's needed everywhere right now. It is a lack of real conversation between different sides. And we were able to do that internally. One of the concrete actions we took is we created a daily safe space listening session for our Black and Latinx sort of community. And I joined that many times, and I also talked individually to many of our Black employees. And so it was really about listening to them and hearing them. And I will tell you, it was a huge eye-opener. I saved all the stories. I got permission from all of our employees who had stories in order to share those stories. Because what I realized as I heard the stories was that the rest of our employees, you know, the Black community at Five9, it's, you know, it's underrepresented, I think, like it is at most companies. Let's just be honest. And I don't believe that the vast majority of our employees actually appreciated what was happening in society to our Black employees. So getting permission to share their stories was the first step. And so the idea there is to sort of share their stories out with our employees to generate empathy. When you know that the person who sort of puts your paycheck in the envelope, or I guess we don't do that anymore, but calling the bills or handling your HR thing, that they've had a child who has had a police officer holding a gun to their head in their front yard, was saved by an innocent, you know, was saved by a sort of a random white passerby. That's the kind of story that really opens people's eyes to the fact that this is real.

Yeah.

And it is something that needs to be addressed.

I love that. And I really appreciate you saying that point about not virtue signaling and not the grand gestures, because I do think that's the risk. Like, if you really care about something, you see all these other people doing things maybe without actually caring about that much, just to sort of fit in. And finding an authentic way to kind of be human in these situations versus making it look like you're doing it to be fashionable. I think that's a real challenge for leaders. Actually, I brought some different folks onto this LinkedIn Live and we've had some good nuanced discussions over like, what's the right way to have the discussion? I think the point you made is totally right. Sharing stories like I've been just thirsty, like for reading and learning. Like I've read so many books now since, you know, since George Floyd was murdered, just about getting more perspective on this, which has been great. And I think our employees have as well. So, and we all give a plug for one thing we did, which is we, in our, as you know, customer success management is like a rapidly growing job. It's one of the 6 fastest growing jobs according to LinkedIn. And so, but it's super underrepresented. Minorities are not well represented in CSM either. Just like the rest of tech. But when you have a new job, there's an opportunity to change that. So we actually just announced last week privately in a small group, and I'll announce here, we launched this program called CSU, which is an internship program where we can kind of an apprenticeship program where we bring people from underrepresented backgrounds that haven't worked in tech before through a training program that we're doing in partnership with an organization called SV Academy and then into internships in CSM jobs in tech companies. And so the idea is to try to give like a little bit of an on-ramp. It's going to be in the grand scheme of things, it's just one tiny thing, but I think everyone does a tiny thing and ends up being big, right? So, yeah, that's awesome. That's— I really appreciate the nuance around that. You also have a lot of nuance around how you think about your team. I mean, you've been passionate about your team forever, and I remember working with you at Symantec and like seeing you at Cisco and now Five9, and you care a lot about them. One of the things I think teams are dealing with now is that we've all adjusted to the nonstop Zooms and we love them. It's great. But we definitely have a lot— have a little bit of that isolation, mental fatigue, and in particular, a lack of like ability to have those spontaneous conversations that kind of give us energy either in a Starbucks or at work or whatever. And I know you're using— you've tried some different technology and approaches to kind of get spontaneity going. Can you talk about that? Yeah, absolutely.

Well, let me, before I do that, I'll back up to the first part of your statement. There's a lot there to unpack, but yeah, you know, the first thing I would say is on the Zoom situation, I think that it affects everyone differently. We opened our office in San Francisco recently. We had to close it again, unfortunately, a week later or two. You know, we weren't expecting to have that many people go back in. What we found was our younger employees wanted to go back in.

Yeah.

You know, sub-25, you know, sort of college grads who are LDRs and SDRs.

Right.

And for them, it totally makes sense. They almost always have roommates. They're typically living in San Francisco or, you know, maybe they're living with their parents. They're not in an ideal situation to do work from home, nor can they afford that. Right. So I think it's really important to recognize that we have extremely diverse employee populations at these companies. And While the CEO sort of, you know, you and I probably sit in dedicated spaces where we can work, not everyone has that luxury. We did a little contest at Five9 where we asked everyone to send in their, we did, you know, these weekly share your home office pictures. And it was eye-opening. You know, you see people sitting in front of their oven with, you know, the Post-it notes on the oven and like the laptop. That's what people have to deal with. And so I think the first thing is just recognizing that, we deal with a very wide range of people in different kinds of situations. Also imagine not only whether or not your home office is acceptable for that, but maybe that in-person interaction is really important for our SDRs, our sales development reps, for example, you know, being able to hear their peers and hear a tough call and sort of empathize with them and say, hey, you know, we, oh man, that really sucked. Or, you know, wow, that was great. How did you do that? Or, you know, you're learning because you're overhearing different things. So we've tried to bring in technology to help with this in a couple of ways. One, we use Zoom in a slightly different way. And this was something that I learned back in my days. I've been in the collaboration space for a while. This I learned from the Tandem, not Tandem, but the Tandberg team, which is what was bought by Cisco. And that was persistent video. So the setup that we had our SDRs and LDRs do is a Zoom call where everyone's muted. You could just see your whole team on the screen.

Yeah.

You can see that they're all talking, but you can't hear them. But if you do have a question, you can unmute and you can just say something. It's sort of like being in the office and everyone hears you say what you're going to say. It's a really, really powerful tool for generating a sense of team, uh, without sort of like, oh, let's all jump on a Zoom call and then it's going to be awkward because, you know, we don't know what to say to each other. So it's just having a feeling of presence that everyone is around you. All the time and you can still have—

They're all working on their work, but they're just on Zoom. And yeah, that's awesome.

They're making their calls, they're calling customers, but you can look at the screen and you can see them. Now there have been some companies that have been working on this. One of them is funded by Xcelerprise, touchbase.com. So touchbase.com is a great app and it basically takes this kind of an approach. But so that's, that's one idea. The other one was a tool called Donut. That we implemented on Slack. So it plugs into Slack. And what that allowed us to do is to have randomized meetups. So Donut essentially takes 2 employees in the channel and just introduces them once every 2 weeks and says, go get a coffee together. So in our case, it's get a Zoom together. And so I'm in that channel, so I get to meet new employees and it's totally random. So it sort of like mimics that idea of being in the office and you see someone new and Hey, you know, let's grab a coffee, you know, join me tomorrow at 3 PM and you go down and grab a coffee. So I think there's a lot of ways that creative ways we can use existing technologies to replicate some of the in-person things that the benefits of being in person that we lose when we're just sitting at home doing Zoom meetings.

Yeah, that's super thoughtful. I think the tactics you shared are really relevant. And I think the philosophy of just not assuming everyone is the same I agree with you. Like a lot of us are privileged to have good home office setups and also have company at home like our families or whatever. And other people, I think about some of our employees that are single and in an apartment alone all day, you know, and that's, that's pretty isolating. So I think there's a lot to unpack there. So thanks for sharing that. So that's a third stakeholder is obviously very near and dear to my heart, customers, right? We talked about community, we talked about employees. I have to talk about customer success. As you know, that's contractually obligated for me every time. And I'd love to talk about your customers before we get into like CS mechanics, just your customers and kind of the dynamic you're in, because in some ways you are a big part of this revolution of customer experience that's out there. And you've seen this huge change in the way customer service is thought of. So talk a little bit about the way people are shifting their thinking on customer service and how Five9 plays in that.

Sure, and this ties into customer success management, which we are huge proponents of, and we're happy Gainsight customers. I know there's— Thank you. There's even more we can do with Gainsight, but we've been hiring like crazy in our customer success management org. So if anyone is an awesome customer success manager and wants to work from home, Five9.com, please take a look. Awesome. But look, I'll go back to my very first job, and that first job was customer service. I was in technical support. And, you know, for the first 6 months or so, it was pretty, it was pretty good. You know, we just helped customers as much as we could. And when more calls came in, we would hire like crazy to get more people to help those customers. And one of the bigger problems that we had, I remember I had a guy sitting next to me named Ken and a guy sitting right on my right named Dave. And Ken's desk was covered in flowers and chocolates and other, you know, gifts from customers. And one of the support managers basically said, no more gifts from customers. Like, there's going to become a tax liability or some, some strange rule. Oh, you know, you know that. And I just remember thinking about this. Something's right about this situation when our biggest problem is that we're getting too many gifts from customers.

Seriously.

Let me tell you something. That did not last long. You know, this was the early '90s. It was sort of like offshoring and reducing your customer support costs was all the rage. And they went through the sort of probably what most companies went through. Okay, first we're going to move it out of Santa— we were in Santa Monica, like on 1 Ocean Avenue. I had a beach view in customer support. I felt like I was one of the most important people in the company. Well, you know, that's not how— when we got acquired by Symantec, that's not how Symantec felt. And so next thing you know, we got moved to— well, the team got moved to Eugene, Oregon, much cheaper. Into a basement, you know, and then shopping mall. And it was like, okay, well, what you say to your employees who deal with your customers is essentially a really good reflection of how you think about your customers and how important they are. And, and this was like, you know, I remember that somebody at the time said, you know, every time you guys pick up the phone, it costs the company money. We're losing money. We only make X amount of profit per box. Whenever you guys pick up the phone, we're losing money. So this— somebody came in and was hired to like hide the phone number, literally. Like, the solution to too many calls is to take the phone number and make the font size bigger, and then make— or smaller, and then make it smaller and make it smaller, and then put it on another page. And then eventually, when the internet came, like, put it behind a web page where they have to fill out a form in order to get the phone number. It was like IVRs, all ridiculous. And basically, the way I would sum it all up is like the vibe was run away from your customers. Like, and the irony was we were on the 12th floor and above us was the sales team. And the sales team could not get ahold of customers to save their life, right? They're outbound calling, they're cold calling, and like potential customers just do not wanna talk to them. And so you had this, you know, this situation where you have, we're running away from the customer, and we're running towards the customer on two different floors, and it made absolutely no sense. And I think that the customer success management revolution is really about embracing your— like running towards your customer. If I had to simplify it, it's about running towards your customers and embracing them with everything you've got. And it's almost you can't spend too much money in this area. And so when I came into Five9, I mean, this is a huge part of of what we do here. We invest heavily. It's the number one differentiator of our company, and it better be. We live in the world of customer support and customer service. Is the number one differentiator for a company is how we treat our customers, like above and beyond everything else. And that it's not just customer success, it's customer service, it's professional services, it's our sales, it's everyone who touches the customer, which is about half the company directly. That's where we invest our money, and that's what is the difference. And it's not technology, that is good. We're better than many others. It's not this or that or the other thing. It's all about this. This is what makes companies successful today. And that's such a difference than 30 years ago, such a difference. And I couldn't be happier about it.

I love hearing the passion around that. And it's so— it's interesting, the parallels of you operating in the contact center world and delivering success for all these consumers out there, but then having customer success strategy internally, you're also like an awesome product person based on your background. So you've got this, this, this like mindset of product and you've got this passion for customer experience. What do you do to link those two together? Have you built good loops between the people talking to your customers and CS and other functions and then the product team? And how have you taken that forward at Five9?

Yeah, well, number one, I think about it in two ways. First is what does your product do, not do, that the customer really wants it to do? So what are the problems that they have with your product? And sort of like, these are, this is what creates detractors. It's not, they're the opposite of delighters. It's the things that bugs, for example, or, you know, it really should do this, but it doesn't work the way that I think it should work. And that's just really all downside for the company. So one of the things that I've, used very successfully as an approach. And it's actually kind of meat and potatoes. It's not very exciting, but it's simple. And that is we tell the product managers, listen, every time you remove a detractor, that, you know, when I say a detractor, not like a person, but like a feature or a bug.

Yeah. A feature, a bug, UX issue. Yeah. Attach a cost to that.

You can recapture half of the cost that you eliminate, that you invest in to make the product better. You can recapture that in more headcount, in more engineers.

That is brilliant. Wow.

50/50. So, and you know what that allows us to do is it actually means when we look, when we get less calls or less messages, we need fewer people on the support side, right? We're just moving money around the P&L. And so, but when the product manager gets that into their mind, oh, I'm investing in something and it's going to get me more headcount. Holy crap. Like this is, you know, We did this very successfully at Norton when I was working on Norton Antivirus. And so I've taken this technology, this approach forward, which is a sort of a recapture and a way to fund and grow your team as a product manager, is by fixing the things that your customers spend time on that they shouldn't be spending time on. And when you fix those things, you can repurpose the savings from support back into engineering and product. So that's one approach that we take. And then the second approach that we take is journey mapping and customer success lifecycle, customer lifecycle management. So we— I hired Vicki Amanhiga, who used to work with Steve Jobs, and I've been working with her for many years. And she also worked at Intuit, who are very famously customer service friendly. And we brought her into Five9. I've used— I used her at Cisco as well, putting in place a customer lifecycle management process. And what that does is it helps open the eyes to your product people that the experience is much more than just, you know, from the time you install it until the time you delete it. Right. From the very first time you hear about the company to the time you hit the website to do your research, to, you know, the demo that you get, to the person you talk to, all the way through to, you know, you're uninstalling and, you know, or you're renewing or you're uninstalling and leaving. And when you look at the big experience, like experience with a capital E, not a little e, as a product person, you start to look at the whole lifecycle and go, oh, I get it. Now I can think about product investments across the entire spectrum of your company. So for us, what that entailed was walking through, for example, individual pieces of that process, like the billing process, the way that customers get your bills. If the way that those bills are confusing or they're alarming, that's going to be a very negative experience. And you have to look at those when it comes to customer experience.

That is awesome. I love the two really, really tangible ideas. And that first one, by the way, I think I'm going to go use that. I'm going to talk to my product team about a budgeting process. That's a very, very practical way. And I think, I'm sure your PMs get very excited about being able to drive real impact, right?

Yeah, we're still implementing it at Five9. So, you know, part of the hard part here is you have to get good cost data.

Yes.

A defect, if you're going to go invest in fixing that defect, what's the cost of that defect? And getting that data out of customer support is not always that easy. So it actually is— we've begun that process at Five9 by investing in getting additional intelligence from our customer service team and tech support team so we can get that data because we need to know the cost data.

Yeah, that's a really— it's a good point. So last stakeholder, we talked about community, we talked about team, talked about customers, talk about— want to talk about shareholders and just kind of this, this world that we're in of the The economy broadly, obviously lots of challenges, but the cloud world just totally exploding. You've done an amazing job the last couple of years. What's your inside view of digital transformation in 2020? You know, everyone says it's been accelerated. We've been kind of sent forward. How are you seeing that? And what do you think that kind of holds for the future for all of us in software?

Well, I think when I start with investors, there's two things that they think about. Market and execution. Yeah, that's really like, if you classify everything they ask and care about, it's what does the market look like and how are you executing?

Totally.

Market front, yeah, there is a broadly accepted sort of idea that digital transformation is accelerating with COVID and certainly I believe that. I mean, you know, I heard Starbucks is sort of like not opening many of their stores, or they're gonna The first time I used the Starbucks remote order capability was in the COVID world.

Yeah, me too.

I did it with Phil in San Francisco.

Yes, me too.

And so I think that from an investor's perspective, they're definitely all seeing the acceleration of cloud as a sort of underneath the sort of digital transformation trend. And so we've got really now a market that's being driven by not— like, you're very lucky if you can get into a market where there's a significant secular tailwind driving the market up because then it sort of like doesn't really matter. Like, you don't have to be that great at execution. You're just in the right market at the right time. So you're lucky if you can be in a market with one big tailwind. And one of them for us is cloud. You know, on-premises to cloud transition. That all by itself is a $24 billion TAM transformation opportunity, you know, once in a lifetime, never going to happen again kind of a thing. Our category and yours as well also benefits from the second, another tailwind. They got two tailwinds pushing it along and that's digital transformation. And that I do believe has only been accelerated by COVID. And I don't think that we're going to go back, quote unquote, to the way things were. I just, you know, I look at my own behavior, my kids' behavior, my wife's behavior, and that's the only people I can see right now. And it's like, these are permanent shifts. Now, some things will go back, but a lot is going to be permanent. And, you know, I'll give you one example: travel and entertainment. I was looking at my T&E savings over the last 6 months, and I'm like, I'm not ever going back to 100% of what I was spending before.

Yeah.

I think that that is really important to keep in mind that there is a better way. And by the way, it's better for the environment. We don't have to travel all over the place and burn fuel and all this and that. We can sit at home and do this work, or we can be in our offices and do this work. And so I think we're going to enter into a new normal, and I think digital transformation benefits from that really dramatically. The second thing, of course, investors care a lot about is execution. And on that front— oh, hold on.

No problem.

Yeah, yeah. On that front, you know, Five9 is different than most Silicon Valley companies. We are not a growth at all costs culture. And, you know, this is really a mindset thing. The growth is there, but my perspective is that it's really, really hard. I wanna build a company that's durable, that's gonna last for 20, 30, 40, you know, many, many decades. And if you're hiring 50% you know, more salespeople or 50% more engineers every year, that means that 1 out of every 3 people you meet as a new employee are going to be new to the company. And it's really hard to maintain consistency of culture in that kind of a hypergrowth environment. So we use something that I call digestible growth. It's a little slower. It's still 30%. It's not that much slower, but, you know, that's roughly the rate at which we've been growing our our business in terms of headcount and hiring. And our revenue growth is in the high 20s. So, you know, we, well, and to be complete, we don't grow expenses faster than revenue. We grow expenses— revenue, but net-net, we're not a 50% growth company. And I think that gives us the luxury to grow the company right. And that leads to consistent execution because the culture is maintained. Culture is so important. It's the number one thing in my opinion. It leads to consistency of execution, which is really what investors care a lot about. And so, you know, that's maybe not the most fashionable thing to say, but it's the way that we run our business.

I love that. I think there's a really good thread through this whole thing then, because I do think that if you don't watch out, your growth can hurt all of your stakeholders because it can make your employee experience and your culture worse. It can make it harder to be a responsible member of the community. It can make it harder to drive success for your customers. I've seen that some companies growing so fast, they just can't keep the wheels on the bus for the customers. So, and you know, not to say everyone wants to grow fast, but I think there's getting the right growth rate for your company and your market, which I think Five9 has done an amazing job. And if you don't know that, just check out the last few years of the stock. I think you've been rewarded for that. Yeah.

Look, you can't be shortsighted and one-dimensional because the problem is if you only look at one angle, which is like, let's say share growth, in a high-end market, what I'm saying essentially is you could be losing share. And like any business person is like, that's going to like— the hairs on the back of your neck should be rising. But the question is, over what horizon? Because if my competitor is gaining share in a world where they are not going to be able to do that sustainably, I'm eventually going to get those customers back.

Totally.

It's the— you have to look at the time horizon and say, if that's a 10-year time horizon, of gaining share and being number one, well, then you're going to do things differently than just, I got to close this deal and I got to go hire, you know, 50 new salespeople or whatever. I don't like that. I don't want to work in a company like that. If people have figured out how to grow at 50% sustainably for 10 years, fine, great. Maybe I can go learn from them. But in our market, this is what we're doing. And by the way, we're not losing share. It just so happens that, you know, this has actually been playing out for some time, not just for me, but from the previous leadership team. And we've been doing very well. My predecessor, Mike Berkland, was amazing at this. My leadership team, who I've retained, have been amazing at this. And it has allowed us to have that consistent execution story and to be gaining share in a growing market.

I love that. Sequoia Capital, famous VC, has this expression, long-term greedy. They like people that are long-term greedy versus short-term. I think that's a good definition of the strategy you're trying to put in place. So I'll close out with just to get everyone back to their day jobs with a little word association for fun. You gotta think the first phrase or thing that comes to mind. Digital transformation.

Growth.

Growth. All right, good. COVID-19. Hopefully not growth.

Scary. Scary.

Scary. Very scary. Still scary, sadly. Customer success.

Happy. Happy.

Okay, good. And then human first.

The only way.

The only way. I love it. What a perfect way to close this out. It's the only way you can do it, 'cause that's just who you are, Rowan. I really appreciate you being here. You're a role model to me and to a lot of people out there. Thanks for all you do, and look forward to everyone seeing you soon. Thanks.

Hey, thank you, Nick. Thanks for everything you do. Thank you, everyone.