Despite economic uncertainty, the time to join Calendly is now
Dear Talented Software professional,
Recently, I struggled with the same questions you are wrestling with: why join a high growth startup in a period of economic uncertainty? I joined Calendly as CFO in June 2022. I could not be more happy with the decision. Let me tell you how I got here.
First, some background.
The headlines are correct. World economies are showing signs of stress relative to recent history. In the US, there are recessionary pressures driven mainly by rising interest rates to combat inflation, a tense geo-political backdrop, and supply chain issues associated with a prolonged pandemic.
Since November 2021, software companies have been trading down from all time high valuations, both in public and private markets. For example, as of May 2022, 93% of the record 107 software companies that went public in 2021 were trading below issuance price, many of them well below issuance.
(Source: Bank of America Investment Banking, May 26, 2022.)
The combination of a challenging macroeconomic outlook and less access to capital on less favorable terms has led to cost cutting measures across software, including layoffs.Things changed quickly as companies are scrambling to rightsize from an era of cash burning ‘growth at all cost’ to profitable ‘efficient growth’. This backdrop has created an understandably more complicated environment to make hiring decisions.
The questions I asked myself when jumping to Calendly, and the ones I encourage you to consider, are:
- Is the company addressing a large, under penetrated market?
- Does the company have scale and growth to endure harder times?
- Probably most importantly, is the company profitable and how much cash runway does the company have?
Now, with those questions in mind, let me address them specifically as you are considering joining us at Calendly and why I think Calendly is a terrific place to grow through an economic slowdown and beyond.
- Calendly is the leader in the growing but nascent automated scheduling market. Scheduling is a major pain point for almost everyone and we are in the early innings of providing customers with elegant solutions to solve basic and complex scheduling scenarios. Simply put: Calendly is the undisputed market leader with a huge unpenetrated total addressable market and is poised to win in any economic condition.
- Calendly operates like a startup, we are hungry and eager to change the world, but our business has substantial scale and strong growth, which helps us steer clear of the whim of macro economic trends. Calendly’s last publicly disclosed revenue was $100M and, while I cannot give exact numbers, I can say we are well ahead of this mark and expect to grow even more..
- Third, and probably most important in challenging economic conditions, Calendly has unlimited cash runway. We have a strong balance sheet with no long term debt and each month we bring in more cash than we pay out. We are cash flow positive. This gives us the freedom to make investment decisions quickly and allows us to avoid raising capital outside of when we want and on our terms.
Profitability also helps our valuation. Up until November 2021, access to capital was historically easy which created a growth at all costs environment. Ever since November, as capital began to dry up, profitability became back in vogue as boards and execs batten down the hatches. In fact, in today’s market, profitability has a stronger correlation to valuation than growth. See: Growth is No Longer the Best Predictor of a Software Company's Value. With world class growth and profitability, Calendly believes it can drive world class results for our shareholders.
In conclusion, you are getting this letter because the team at Calendly has identified you as a world class software pro. As CFO, I know people are the most important asset our company has and I’m maniacal about recruiting and retaining the world’s best. I think Calendly is a world class organization in any economy but particularly great when things are rocky.
I encourage you to learn more about us I hope to work with you in the future.
Please note, this letter is written from my point of view. My thoughts on economic conditions, projections and forward looking statements may or may not be correct. Ultimately, you need to make your own assumptions and decide what is best for you and your family.