Why this founder appointed a new chief executive to his 17-year-old startup

At 17 years old, Sydney startup Humanforce has hired its first external chief executive, as founder Bruce Mackenzie hands over the reins and gets back into the hustle of the business.

New chief executive Clayton Pyne previously headed up Cisco’s cloud and service provider channel and held several leadership positions at IBM. In 2017, he was named in BOSS magazine’s Young Executives list.

In his new role, Pyne will oversee Humanforce’s global expansion and growth plans. The startup has seen 40% revenue growth year-on-year for the past five years.

In January, it raised its first batch of funding, securing $22.5 million from Silicon Valley-based VC Accel-KKR, after bootstrapping for 17 years.

And since then, growth has ramped up a gear, Mackenzie tells StartupSmart. Humanforce reached its annual revenue targets within just six months, he says.

For many founders and entrepreneurs, stepping down as head of the business is “a really hard step”, Mackenzie tells StartupSmart.

However, he sees it as a chance to get back to the parts of Humanforce that he’s passionate about — and good at.

“I’ve always thought my role is to create things within the business, to create products and process,” he says.

“The bigger the business became, the less time I had to focus on customer experience and creating things, and I was spending more time on the functional processes of a pretty high-growth business.”

He was looking for someone to take over the business side of the business, he says, so he could focus on the things he is “genuinely unique at”.

“Some of that uniqueness comes from taking time to talk to clients.”

Mackenzie is also getting back to his entrepreneurial roots. Pyne has been with Humanforce for less than a week, but already the team has fallen into their new roles, the founder says.

While Pyne keeps the business going, Mackenzie will be personally jetting off to the US next week, to manage Humanforce’s US expansion.

“That’s where I need to spend time, because that’s where our growth is going to come from,” Mackenzie says.

“If you’re a good founder I believe you’ve got to have a good entrepreneurial mindset, and that’s what I need at the moment for growing our US business,” he adds.

“I’m looking forward to having time to think about it.”

Who does what?

When it came to choosing a new chief, Mackenzie says he was always looking for someone who could bring “that big-company background and experience, but had a desire to work with a high-growth software company”.

He has been talking to Pyne as a business friend and getting to know him for about two years, he says.

“To be honest, I was just using him as a sounding board,” he admits.

“It wasn’t something we rushed at, we didn’t place an ad. It was just something that, over time, grew.”

Eventually, Mackenzie felt confident that Pyne was the right person to lead Humanforce.

“The hardest thing for anybody is to hand the reins of what they have founded over to someone else,” Mackenzie says.

“They’re not going to do it how you’ve always done it, but that’s why you need somebody,” he adds.

“The main thing is that I felt confident, and I had thought about it a lot.”

However, the founder says part of the reason he had such confidence is he had done his homework, both when choosing his successor, and when considering his own ongoing role in the company.

He has only known a handful of other founders who have appointed an external chief, some with more success than others.

Mackenzie tracked down some of these founders, and found often problems had come about if they had appointed someone new, without really defining what their own role would be.

“I didn’t want to spend six months working on it. I did the homework first as to what success looks like,” he explains.

While Mackenzie has taken on the jobs he enjoys, he has also retained some that he doesn’t, but which “are vitally important to the team and the customer”, he says.

“Sometimes you might not necessarily like the task, and you would love to offload it to a CEO, but you know that ultimately you’ve got to do it.”

Now, he advises all founders, whether they’re considering stepping down or not, to consider the makeup of their business. Considering bringing in a new chief “involves working out … the delineation of responsibility”, he explains.

And that can help bring everything into focus.

“Take some time to think about who does what,” he advises.

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