Chapter 12: Back to the Crunch

Every growth story has its struggles. Join Signavio as it faces scaling challenges, relocates to Boston, and reimagines its approach to building a stronger, smarter team.

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Transcript

Right after Christmas, the real work started.

We decided to rebuild our U.S. team as quickly as possible, this time focusing on the East Coast as our main location.

Previously, all of our U.S. colleagues were based in Sunnyvale, California. The nine-hour time difference made it very hard to collaborate and the travel distance from Berlin to San Francisco was just insane.

Summit promised to help us with recruiting in the U.S. and they took their promise very seriously. We considered Boston, New York, and Atlanta as potential locations for our U.S. headquarters. The Summit team quickly generated a long list of candidates for the U.S. leader position, conducted initial interviews, and passed a shortlist of promising candidates to me.

Four weeks into the search, they informed me that they had found "the one." A leader they were deeply impressed with, ready for his next move and eager to learn more.

His name was David Gaudin, based in Boston and serving as a regional sales leader at SAP Concur. Concur had been acquired by SAP a year earlier, and although it initially operated independently, SAP’s influence had gradually crept in, prompting David to look for change.

David and I connected immediately during our first conversation. Many of the candidates I met before were extremely fond of themselves and thought that they were the center of the universe. David was different - humble and thoughtful. I gained valuable sales insights just from that initial call and couldn’t wait to meet him again. Gerrit also liked him and we decided to fly him over to Berlin to meet the rest of the team.

He arrived in the morning, talked to the entire team over the course of the day and met Gerrit and me again for dinner in the evening. He was exhausted because of the jetlag but seemed happy and eager to take the next step with us. Everybody on the team gave us their thumbs up.

The next day, we extended him an offer. I told him we were convinced he was the right choice and couldn’t wait for him to start as VP Sales North America at Signavio. It was a significant offer by our standards: his cash compensation was four times the highest salary in Germany, with a generous options package on top.

Then, silence. For a week, I couldn’t reach him, and neither could the Summit colleagues.

When he finally resurfaced, David delivered the disappointing news. He loved the role and our team but ultimately chose a position at a local company.

I was super disappointed. Back to square one - back to more interviews and sifting through other candidates.

Meanwhile, we began the search for a CFO. Torben was eager to hand over his responsibilities and step back. At the same time, he was committed to stay on as long as required.

The CFO search was equally hard. Despite being a 90-person team, we had no dedicated finance or admin staff. Our assistant, Kira, managed numerous tasks, while the rest fell on Torben.

Our investors wanted a "real" CFO - someone experienced with financial investors. They didn’t need to be IPO-ready but should at least have guided companies from €5 to €50 million euros in revenue.

All of the candidates that fit the profile proposed to build massive finance teams. They were incompatible with the pragmatic, efficient way of working at Signavio. These candidates preferred working at a strategic level, steering from afar rather than handling the nitty-gritty of accounting and controlling.

Eventually, we found the right person - pragmatic, hands-on, and ready to roll up their sleeves. Torben was finally able to transition out of his role.

When we announced Torben’s departure and the arrival of our new CFO, some employees were surprised and saddened. Many folks told me that they feared that Nico, Willi or I would be next, too. But we had no intention to leave and we could reassure the team.

For the first time, Signavio received significant attention in the media. Before the funding round, we had flown “under the radar” - nobody took notice of us.

Now, I was being invited to interviews and conferences to share the Signavio story. My favorite event was “Founders Unscripted,” a fireside chat evening with a twist. The entire setup felt like a late-night show, complete with a band to kick things off and leather armchairs on stage. 

The twist? Christoph Räthke, the host, and I had whisky shots throughout the fireside chat. By the end, we had nearly emptied the bottle, and the conversation became increasingly lively with every glass.

During the show, Christoph prepared a little game for me. He pitched three startup ideas and asked me to distribute a hypothetical $1 million dollars of investment among them. I chose to bet most of the amount on a company focused on automating responses to customer support requests using natural language processing - an idea I had seen work effectively at Ebay years earlier but now seemed widely applicable.

The company behind this idea was called Parlamind, and it became my first business angel investment. They had a strong team and promising technology, with early traction among customers. Unfortunately, their CEO left just days before signing their Series A financing, causing the company to unravel. We managed to sell it later to a call center company for a decent multiple, but it was a reminder of how fragile startups can be.

With this first startup investment, I realized how fortunate we had been with Signavio. Our original founding team stayed together for nearly seven years and managed to work reasonably well as a leadership team throughout that time.

I truly enjoyed the newfound attention and opportunities to jump on stage. People were truly interested in our journey and how we built our company. I loved sharing our learnings with others.

At university, I had learned a lot about software development. However, the things I hadn’t learned fascinated me even more - how sales works, what drives people, and why customers care about a product.

Learning was my main driver and I loved meeting people who I could learn from. This was the biggest luxury for me: To soak in all of that inspiration and try to make it work for myself.

A few months after the investment round, I felt liberated. For the first time, I didn’t have to worry about money, and I had a team of skilled professionals around me running the company with confidence. I slept well at night - at least, when our baby Adam allowed me to.

I was on fire, ready to take on any challenge.

Time for another big company event: our seventh birthday. It was a great party, as always, but the real surprise came later that night, just as things were winding down.

David called me on my mobile. I was exhausted but picked up, curious about what he had to say.

David told me he had been thinking a lot about Signavio in recent weeks. He had started his job at the other company, but it was nothing like what he had expected. The team was dysfunctional, and the executives were horrible to work with. He was ready to make a move and wanted to know if we were still looking to fill our position.

Jackpot! Of course, we were still looking and I couldn’t be happier to have him on our team. A week later, he started with us and flew to Berlin for onboarding.

Two weeks into the job, he presented his plan for the U.S. business. He proposed hiring sales reps, a marketing person, and a customer success manager for the Boston office. He had already found a great spot in Burlington, Massachusetts - 800 District Court, a nice campus with an Island Creek Oyster Bar, my favorite place for seafood in Boston.

David also introduced a new role at Signavio: Business Development Representative (BDR). These were young professionals at the beginning of their careers, aspiring to become sales reps one day. David was a coach and mentor at a local BDR school in Boston, where aspiring BDRs learned the basics. Thanks to his involvement, he was able to handpick some of the most talented candidates, and we hired four of them at once.

For the sales reps, we recruited several of David’s former colleagues from Concur. They all adored him as a leader and eagerly followed him to Signavio. 

Within four weeks, we had assembled the entire team. In addition to the two colleagues already in California, we added about fifteen more in Boston. It was a significant cost block increase, but my investors were fully on board and agreed it was the right move.

For the first time, we had a proper annual plan, the one we had promised to our investors during the Series A fundraise. With the arrival of our new CFO, we also introduced monthly reporting.

Quarterly board meetings were established as well. While the Q1 meeting focused on introductions and planning, by Q2, we were already deep into business discussions. The heat was on.

Matthias Allgaier, our main contact at Summit, facilitated an introduction to Leo Apotheker, who joined as chairman of the board. Leo, former CEO of SAP and Hewlett Packard, had faced challenges since his departure from HP, particularly due to the fallout from the Autonomy acquisition. Signavio was one of his first touchpoints with software companies again and he was eager to help us.

Leo never told us what to do; he always asked questions. 

“Gero, help me understand, …” which sparked long discussions, especially about Go-To-Market strategies. We were struggling with our partner ecosystem and lacked predictability in sales. Our primary lead generation still relied heavily on marketing-driven leads, and our sales motions were unclear. Leo’s approach pushed me to reflect on achieving operational scalability. I recognized that my leadership style, which wasn’t centered on control, had allowed our team to step up, creating a more collaborative and resilient environment that didn’t require my constant involvement.

Leo also frequently asked, “Gerrit, help me understand, …” but these exchanges didn’t go over as well. Gerrit felt Leo’s questions challenged his competence as a sales leader. Unlike Leo, who focused on strategy and the architecture of the bigger picture, Gerrit thrived on the day-to-day grind of individual customer engagements and managing sales dynamics. Their contrasting styles created tension.

In the Q2 board meeting, things exploded. Our numbers were disappointing, and the clash between Leo, Matthias, and Gerrit reached its peak.

After every board meeting, I debriefed with Matthias and Leo while they waited for their taxi. This time, Matthias was furious, and Leo was deeply frustrated. 

“Gero,” they were blunt, “Gerrit has to go.” They suggested that I replace Gerrit as soon as possible.

I immediately refused and told Leo and Matthias that I wanted to keep Gerrit. Gerrit had driven our revenue growth and skillfully managed the German sales team. He was highly respected, an excellent coach, and a great friend. I stood firm, telling them that I believed in Gerrit. However, I conceded that he might not be the right fit to lead our global sales organization. With David successfully leading sales in the U.S., I wanted Gerrit to continue focusing on Germany.

Leo and I began sketching out a future Go-To-Market structure. Until now, Gerrit and David (sales), Katharina Beuck (marketing), and Stefan Krumnow (customer success and support) all reported directly to me. I was the glue for Go-To-Market, although I didn’t have a clue how to actually do that.

The crux of the issue was the evolving needs of our sales and market strategy. In the early days, we needed sellers - people who thrived on the rush of deals, pushing to hit targets at any cost. Gerrit fit that role perfectly. He was the kind of person who could walk into a room, sense an opportunity, and close it. That relentless drive and focus had been instrumental in getting Signavio off the ground and growing rapidly in Germany. Gerrit was also a phenomenal sales manager, who could lead and motivate teams.

But as we scaled, the demands on our sales leadership changed. We needed more than just go-getters and sales managers: we needed "architects" who could design adaptable, scalable Go-To-Market structures that aligned with our growth goals and market complexities globally. 

As Signavio grew, this gap became more pronounced. We couldn’t rely solely on raw sales energy; we needed analytical and architectural thinking to create a sustainable foundation. While Gerrit’s passion and instincts for sales were unmatched, adapting to this more strategic, structured role wasn’t his natural fit. Leo, Matthias, and ultimately the board saw this mismatch as a barrier to our next phase of growth. For them, hiring a seasoned leader with experience building scalable Go-To-Market frameworks wasn’t just an option; it was a necessity.

This transition forced me to confront the painful reality that the qualities that had driven our initial success weren’t necessarily the ones that would lead us into the future. It was a difficult and emotional pivot for everyone involved.

Leo recommended hiring a Go-To-Market executive, a strategic role designed to unify sales, marketing, and post-sales support under one cohesive structure. He guided the recruiting process personally, emphasizing the importance of finding the right fit. The goal was not only operational scalability but also to integrate departments more tightly for market expansion. 

But I held back. I feared Gerrit would quit as soon as he heard that we looked for somebody to become his boss.

I didn’t share it with Nico or Willi, either. Instead, I quietly flew to London for candidate interviews, pretending to be on customer trips.

One of the lead candidates was Mark Holenstein. Like David, he had joined SAP through an acquisition. He started as one of the first sales reps at Hybris, grew with the company, and eventually became their global head of sales at the time of acquisition. Mark stayed on for some more years at SAP as chief revenue officer for the entire “CX” (Customer Experience) solution area, which included customer relationship management systems (CRM), Hybris, and other products. It was a massive division with over a billion euros in revenue, and Mark oversaw an entire army of sellers.

I was surprised that someone as accomplished as Mark would consider a small startup like Signavio. He didn’t have any prior connection with us; he simply trusted Summit’s recommendation that we were on to something significant.

This was pivotal for sustainable growth and echoed Leo’s vision of a more cohesive approach​. This hiring decision was operationally effective, and would welcome an evolution for our culture.

I often considered telling Gerrit what we were doing - how we were looking for someone to take on global responsibility and effectively become his boss. I knew he wanted that role himself and resented still being "VP Sales" while Nico, Willi, and I held C-level titles. 

Leo compared Signavio to a race car gearing up for competition. In his eyes, Mark was the strongest engine we could find. But, as Leo put it, we had to quickly upgrade the rest of the car, or this powerful engine would tear it apart.

At this point, I started involving the others. I spoke to Willi first, thinking he would understand that we needed to upgrade our management team to reach the next level. Willi understood but wasn’t happy with how I handled things. He heavily criticized me for working around Gerrit. Maximum transparency was a core value for Willi, and he felt that I had failed in that regard.

Once Mark was ready to sign the contract, I finally spoke with Gerrit. I knew it would be a tough conversation, but it was far worse than I expected. I was in Boston, on a playground with my family, when I called him.

Gerrit was furious - not because I didn’t consider him for the role, but because neither I nor the investors had told him we were looking for someone else. 

“Couldn’t we have talked about it?” he asked, feeling betrayed. I could sense that he hated me at that moment. There was no attempt to convince me not to hire Mark; it was all about the broken trust between us.

After the call, I had one thought: This is it. He’s gone.

A couple of days later, we talked again, and he was still upset. He had calmed down a bit and promised he wouldn’t make any rash decisions. He loved Signavio and didn’t want to do anything that would harm the company.

Mark was scheduled to start on January 1, 2017, and Gerrit agreed to stay on at least until the start of the year.

Reflecting back on those events, I spoke with Gerrit about how things unfolded. 

“I was really disappointed, Gero,” he admitted to me. “The decision was made before I even knew about it. You had already talked with Mark, and I wasn’t part of it.” 

I could see how deeply it had affected him. 

“You tried to hold off, to push it back a week, and then another week - but by then, it was already done.” He added. “At first, it really stung. I felt left out of something so important.” But then, he shared a moment of self-reflection that struck me. 

“I told myself my ego was as big as the disappointment I felt. And I knew I had to set it aside,” he said, candidly. “I was also a shareholder and I wanted to make sure that the company will be successful going forward, but I didn’t know anything about these decisions. Holding onto that frustration wasn’t going to help anyone - not me, not the team, not Signavio.”

“The best thing I could do,” he said, “was to be an important part of the company. To make the business better, to build a stronger team.” 

His words have stuck with me ever since. He turned a difficult moment into motivation, choosing to contribute rather than retreat. That’s the type of resilience and commitment that makes great leaders, even when circumstances are different to expectation.

My CFO also started building out additional functions for the company. So far, we didn’t have anyone in HR. Team leads took care of recruiting directly and my assistant prepared the contracts. Payroll was done by our respective service providers in Germany, the U.S. and in Singapore.

We had committed to an ambitious growth plan, which meant hiring many more people over the coming months. With Mark joining, we anticipated a major boost, particularly in Go-To-Market functions. My CFO also gradually expanded the finance and admin teams, but more on the story later.

To lead HR, we hired Inga Bayer as an interim head. She came from Apple, where she had managed large-scale recruitment for the Apple stores.

HR was a completely new area for me, and Inga asked many questions I couldn’t answer. One of them was, “What type of company are we?” She needed this clarity to communicate effectively with potential candidates - “what kind of team would they be joining?”

I didn’t have a clear answer. In the seven years, we never really thought about values or what made us special. We all knew that Signavio was a great place but it was hard to articulate what exactly that was.

In a brainstorming session, the best description we could come up with was “Wumms and Hug.” 

"Wumms" is a German word that conveys energy, drive, and momentum. "Hug" referred to the literal hugs we exchanged when meeting colleagues, reflecting a real sense of caring for one another as people.

“Wumms and Hug” was good enough for Inga, and she set about building an impressive recruiting engine for Signavio. Recruiters became the new sellers, bringing a remarkable number of people on board who were excited about our mission. This time, we focused on hiring more experienced professionals - gone were the days when we primarily brought in fresh university graduates.

We also assembled a small team to start developing our own Process Mining solution. Celonis was gaining strong traction in the market and had secured significant funding earlier that year. Customers were increasingly open to cloud-based software, and Signavio was seeing more success with large enterprises. Therefore, we felt it was time to finally dip our feet in the Process Mining water as well.

Up to that point, Celonis focused primarily on process discovery - reverse-engineering process logic from IT event logs. With our expertise in process modeling, we were more interested in conformance checking, comparing actual process behavior to its idealized definition. Conformance checking algorithms already existed in academia but none of the commercial products had added it so far.

We assumed this could be the perfect entry point for Signavio into Process Mining. We already had strong traction with process modeling and knew that customers were eager to see whether their designed processes aligned with reality.

We had no idea how long it would take to build a competitive product. Our early prototypes were, frankly, embarrassing. But as an optimist, I had a gut feeling we could eventually create something successful.

In order to staff our Process Mining team, I called up a lot of my former academic colleagues and asked whether they wanted to join. Funny coincidence: On one of those calls, I learned that my former colleague had just started Lana Labs, another Process Mining provider from Berlin. Actually, a number of new Process Mining companies started around this time in different places in the world. The Celonis success story had created the appetite for others to follow.

Unfortunately, our revenue numbers looked horrible in Q3. Our monthly report stated: “The overall business is far behind budget. Especially the U.S. business lacks revenue and is now adding cost because of the investment in sales.”

David was busy filling the U.S. sales pipeline but the fact that we could only hire him so late had ripped a big hole into our financial plan. Our year-over-year Annual Recurring Revenue (ARR) growth was at 50%, which might sound decent at first glance. Unfortunately, we had committed to delivering more than 80% growth. And our profitability had vanished, with the stream of one-off license deals drying up.

We introduced ARR as the company’s north star metric and worked to rally everyone around it, even our developers. ARR growth became the single most important KPI we monitored, and we shared it transparently with the entire team each month.

Some developers who had been with us since the early days started questioning why revenue growth even mattered. Up to that point, revenue had been a byproduct of building cool things, everyone giving their best, and simply having a good time. Suddenly growth became the main objective for the company and the center of attention.

We had interesting discussions about what type of company we actually wanted to be. I was convinced of the flywheel logic where momentum breeds momentum. We build a greater product, so that we sell more, so that we have more money to expand the team, so that we attract the best people and let people learn and grow, so that everyone has a ton of fun and is motivated, so that customers are better served and we can learn a lot from them, so that we build greater products, so that we sell more, and so on, and so on. The Software-as-a-Service (SaaS) flywheel is incredibly powerful and once it is set in motion, it propels you up and up and up! 

People often describe enterprise SaaS companies as a train. Trains are very hard to get moving in the first place, but once you leave the station and the train continues to accelerate, you can’t stop it anymore.

I explained to the team that we faced a choice between two flywheels: the positive flywheel of growth or the negative flywheel of stalling and decline. Much like my early fascination with fractal geometry, I saw it as Signavio was the algorithm that would produce the compounding effect to create something complex and beautiful. By ensuring that our culture remains intact during this evolution and we could effectively integrate these new areas into it, we would be able to thrive at the next level. 

Many of our competitors in the process modeling space weren’t growing and fell further behind month after month. Their tech was terrible, they lacked great people, had no budget to spend, and their customers constantly berated them.

“Would you rather work for one of those companies?” I asked my colleagues. Of course not. But it took time for everyone to internalize that ARR growth was the best measure of our progress - the acceleration of our train. Momentum breeds more momentum, and it feels incredible. Yes, constant growth comes with constant change, and that can be exhausting, but the positive energy that comes from success and recognition is an incredibly powerful force.

Sales didn’t improve in Q4. Our investors were seriously disappointed by our performance, and they made sure we felt it. On-Premise license deals dried up, which hit us hard on the profitability front.

As I later learned, there is a critical KPI that correlates strongly with the overall success of an investment: Do you beat or miss your targets in the first year after investment? The breakout successes beat their targets, while unsuccessful investments stumble in that crucial first year. We failed our first year - a bad sign.

At the very least, we had enough cash in the bank to keep building out the organization, but catching up on sales performance was urgent if we were going to maintain our momentum.

We ended the year 20% below sales targets, with €9.5 million euros ARR and a loss for the first time in the company’s history. Not a great start to be honest. I was counting down the days until Mark would finally begin - I had a strong feeling he was the key to getting us to the next level. In the meantime, the team had already grown to more than 120 people.