It’s a once in a blue moon startup story: A company goes from idea to two-billion-dollar exit in the space of 6 years. And to this day, A Cloud Guru remains one of Australia’s most significant exits for a private software company. It’s a trajectory many founders hope to emulate but is difficult to execute. 

Expanding to the US played a big role in A Cloud Guru’s success. It was also the catalyst for pivoting away from a B2C focus to building a B2B growth engine that saw CEO and co-founder, Sam Kroonenburg, build and scale a team globally to over 600 people.

AirTree’s portfolio is lucky as they continue to benefit from Sam’s mentorship and advisory as one of our Venture Partners. But for everyone else, we have the next best thing: a Q&A with Sam exploring the pivotal moments, strategic decisions and invaluable insights that shaped A Cloud Guru’s remarkable journey from its inception in 2015, to acquisition by Nasdaq-listed Pluralsight in 2021. 

This transcript has been edited for clarity.

To set the scene, tell us about A Cloud Guru’s journey pre-international expansion.

I started the business with my brother Ryan in 2015. We saw the whole IT industry moving into the cloud and every company on Earth saying, “Crap, we’ve got to get into the cloud as quickly as possible because it makes us more competitive.” 

The biggest challenge at the time was companies not having enough skilled people to make the transition happen. People needed to upskill, but a lot of the training out there was dry, boring, expensive and in-person. We thought we could do it better and make something fit for purpose. So, we built A Cloud Guru, which is our online school dedicated to teaching geeks how to be geeks in the cloud. 

For the first two years of A Cloud Guru, we were a consumer business selling individual training courses. We were bootstrapping and growing organically, but in 2017, we had a lot of consumers who took our training courses coming to us and saying, “I learned cloud with you, but I want my whole team at work to learn cloud with you.” We realised that companies employed our consumer audience, and there was a big B2B potential for the business, and a major market was the US and Europe for those companies. 

We kept the consumer offering but decided to pivot the business and focus on building a B2B offering, and that’s when we raised our Series A and started using venture capital, not so much for the money, but for the expertise and connections that folks at AirTree and other funds bring to help us scale a B2B business because we had no idea how to do that. 

From 2017 to 2021, we focused everything on B2B and by the time we exited, the B2B business drove 70% of our revenue, and two-thirds of our workforce was in the US.  ‍

Could you run us through the strategic decision behind the pivot and how that played into your plans for international expansion?

After we saw a lot of incoming requests from customers in America wanting training for their teams, we started doing that by getting our bookkeeper to issue invoices. But we quickly realised, through conversations with VCs like yourselves who’ve been there done that before, that there was potential to take what could have been a great, small, lifestyle business selling one-off purchases to consumers and move it to a better business model with subscription revenue, which we didn’t know much about at the time. 

The biggest and most daunting thing for us at the time was going from being a few guys working from their houses in Melbourne and London to creating a big, B2B software business focused on selling to the biggest companies in the world. We knew a big transformation was needed as we weren’t doing any sales; we were just taking credit cards. 

The assessment of where to expand was: Where’s the biggest market opportunity? In a sense, it was good that our business was global from day one, with me in Melbourne and Ryan in London, because we always thought globally. It never made sense to scale the sales force in Australia because 60-70% of our market was in the US. 

Is there a right time to expand? Can you go too early?

You can’t just think about whether you’re ready to expand; you have to think through whether that market is ready for you. For example, for some of the founders I work with, regulatory tailwinds help drive the business in Australia. But the US doesn’t have the same conditions, so Europe makes more sense for them as they have the regulations to drive customer demand and support sales. 

I always try and think about what’s my strategic TAM opportunity to get me to a hundred-million-dollar revenue as a business?

If the market is ready and the TAM is larger than Australia, why are you investing in Australia and not the other market? Objectively, if there’s a bigger opportunity elsewhere, why would you invest your dollars in, say, an Australian sales team, where there is a cap on growth much lower than in the US or Europe?  

The other consideration around timing is do you have product-market fit for that market? We knew we had product-market fit because we were selling globally from day one. We’re lucky that our product is equally useful in Tel Aviv as in Paris or New York. But there are a lot of companies that need to figure out if their product works for that market.

Every year, we’d have a conversation about whether to expand into Asia. And every year, the answer was no because our cloud market wasn’t there–they used Alibaba Cloud, not AWS or Azure. On top of that, there was a language barrier, which we didn’t have in Europe as most people in tech there speak English. 

It’s important to say that there’s no right answer for everyone, as it depends on your market and your business. The best thing you can do is listen to people who’ve done it before to get a spread of experiences.

Your first hire in the US was your COO, which is an unusual move compared to most. What was the thinking behind that decision?

We hired a COO to stand up the go-to-market team in our largest market and be as close to the customer as possible. 

You need to be thoughtful about how you design your company for going global. We focused on having certain departments in different countries where they made the most sense for them to exist. This allowed everyone to execute, streamline and be effective in their department and time zone, but still operate as a global company. 

I see a lot of people putting a General Manager in charge of the US. You don’t need someone who’s in charge of just the US if you structure it in the right way. As we grew, we added the right leader in each location; I’ve had conversations with founders who have a Head of Marketing in the US and a Country Leader, and it’s unclear who’s making the decisions. We didn’t have any of that awkwardness. 

A lot of companies we work with get this wrong–you’re the exception. Can you tell us about the hiring process for your COO? 

This isn’t great advice that any company can pick up and run with–our US-based VC recommended a candidate to us. We knew he was the right fit because he was an American guy but had experience working for an Australian company–Campaign Monitor–and helped them expand into the US. He also had previous edtech experience at another company, so he was perfect. It was very serendipitous.

Our COO was the opposite of me and Ryan; super disciplined, super rigorous and he had a high bar for hiring people that really set the tone for our US operation.

When it came to finding the right fit for our US Head of Sales, we went through a few people before we found the right one. We had the discipline of holding anyone we brought in to a high standard and moving them on quickly when it wasn’t working. There are those little niggling feelings in the back of your mind like Is this person working out? And everyone convinces themselves to wait longer, and justify to themselves why it’s happening. 99% of the time your intuition is right, and if you get rid of them too late, it hurts the business. 

From exchange rates to wages, everything is more expensive in the US. How did you think about cost management and managing your bottom line with two thirds of the company there?

When you’re expanding into the US, you’re not going there because stuff is cheaper. You’re going because you want to access a large and lucrative market, so structure the company with that in mind and be intentional about which parts of the business you scale there, and which parts you don’t. 

We kept engineering, product and content in Australia and the UK where wages were lower. Alongside go-to-market, we scaled finance and operations in the US, as were figured many investment opportunities and potential acquirers would be US-based. 

It’s important to not try and recreate the company in every location, unless there’s a good reason.

You don’t have to have Product in every region unless you have region-specific customisation requirements and nuances that aren’t easily handled from another location. 

 For most of our journey, we kept functions completely siloed in countries and that allows you to keep focus and avoid layers of management fat in each country. Only in the last year before we were acquired did we start to build a Product team in the US. That was because we had very specific B2B requirements and we needed to be close to the customers who we were going back and forth to all day. 

How did you manage things like employee benefits and perks across geographies?

We tried to be as consistent globally but that’s not always possible. For example, employers provide health insurance in the US because the Government doesn’t provide it. But we didn’t then say everyone in Australia gets private health insurance because everyone in the US gets health insurance–they’re two different things. 

When it came to universal things like maternity and paternity leave, work from home and leave allowances, we tried to be as uniform as possible. 

You have to be intentional about this because if you make a decision off the cuff and say, “Just give them what they’re owed in that country”, it frustrates people. People talk, and they think, hold on, I’m doing just as much and they’re getting more.

How did you think through where to base the company in the US?

When we decided to expand to the US, we did a tour and went to a few cities. We considered LA because there was a direct flight there from London and Melbourne. Ultimately, we decided on Austin, which wasn’t great for direct flights, but we realised that wasn’t the most important thing to us. 

I encourage everyone to think about why they are going to the US. For us, we wanted to build a B2B sales force. We didn’t need to rock up to the Dow Jones in New York and convince them to buy our product, but we did need to be responsive during the day, be in the right time zones and speak the right language by understanding American requirements and how Americans buy. 

So we went with Austin because it was time zone central. If we set up on the East Coast, there’s many hours a day we can’t call the West Coast and vice versa. 

Something our COO encouraged us to think about which was another big reason why Austin worked for us was that at the time, Austin had 1-2 dozen strong SaaS businesses and a few big exits in the past 5 years. There was going to be the right talent in-market for the journey we were on. I’m a big proponent of hiring for the journey. It’s very easy to look at someone’s CV and go, this person worked at a big corporation with thousands of people and led this whole team. But did they build it? Because you’re trying to find someone to build it, not run it. 

That was the beauty of Austin; there was a swathe of people who had been in companies through that $5m to $100m ARR journey and we wanted that expertise.

On the tax and legal structure, where did your parent company reside?

We were originally a UK company, with an Australian subsidiary, and that was because my brother happened to open the company when he was in the UK. 

When our COO joined, he was like “This is the world’s smallest multinational company I’ve ever seen!”. We were 8 people, a few million in revenue with entities everywhere. It was a disaster, so we had to clean all that up. 

Once we got all the right kind of legal agreements, IP assignment and structures in place–which all happened over time as we scaled–we flipped up the company to a US topco when we did our Series B. 

There’s a bit of “US bias” in the US. You want to make it as easy as possible for people in the US to deal with you. Our Series B investors were asking us to make it a US company as it saves them from going through a whole bunch of things when they make an investment. 

We also realised we were probably going to sell to a US company and we want to make that as easy as possible. I’m so glad we did because we did end up selling to a US company and acquisitions are stressful as hell. I wouldn’t want to throw in a structural change at the same time as trying to close an acquisition deal on the right terms.

As CEO, you didn’t move full-time to the US. But from a leadership perspective, you needed to have relationships over there. How did you manage your role?

I travelled back and forth a lot. You have to be there regularly. There’s just something that a physical presence brings to a relationship that you just can’t get over Zoom. 

I made a compromise with my wife and kids that we wouldn’t move to the US, but I would go regularly. We structured it in a way where I would go every couple of months for no more than two weeks. The most time I was away for was 3 weeks, and I hated that. 

What worked well for us was the executive team of the company was spread across the globe. I think it’s really important for everyone to know what team they’re on and feel like they’re part of a high performing team–ours just happened to be spread between Melbourne, San Francisco, Austin and the UK.‍

What were the executive team’s operating rhythms being across time zones?

Everyone has to give a little. We would work very early in Australia and they would work late in the evenings in the US. We were big on having lots of asynchronous communication, collaborating in shared docs and Slack, and then having planned synchronous points of communication. 

We had a weekly review meeting to look at the top objectives for each leader and department. We would review them objectively with traffic lights–green, red, yellow–what’s working and what’s not, and have very frank conversations about what needs to be done. It never felt like we were a bunch of people in different countries running our own thing.

While you were away for a couple of weeks every few months travelling, was the rest of the executive team doing the same?

It’s important to have a healthy travel budget. And it’s not just about executives travelling. If you’re able to afford it, having key individual contributors and managers travel at some point in the year is a major contributor to cross-company pollination.

The big danger of internationalisation is us vs them; Australia is doing this and the US are doing that, especially when Sales is in the US and Product is in Australia. When you can have a team member from Product site with the Sales folk and hear them on calls with customers, it creates a lot of empathy and understanding. ‍

You went from being a software developer to running one of the fastest growing enterprise software companies in the world. How did your leadership evolve when you were working and managing teams in multiple markets?

It takes a bit of time to find your feet and confidence. 

Before I started A Cloud Guru, I used to look at the owners of the company I worked for in Melbourne and think, I don’t know how they do it! If you told me at that point that not only would I be a CEO, but I’ll be a CEO of a multi-billion dollar company, there’s no way I would have believed it. 

I think you build your leadership strides a piece at a time. It’s incremental. It’s a series of small and achievable challenges in front of you. And when you accomplish one, you face the next one. 

I had imposter syndrome when we started scaling in the US. Suddenly I had a US board with some amazing executives and I was sitting there looking at them and thinking, what do I do? Everyone was talking very technically about growing IRR, LTV, CAC and PMF, which I had learnt by that point, but it still wasn’t really my world. And I remember thinking, every single one of these people is here because of me. They chose to board this ship and go on this journey because they are inspired by what we want to build here and what the vision is. The biggest contribution I have to make is convince these people that this is the rocketship they should be on. I understand the customer better than any of them, because I used to be the customer. From there, I kept that in mind and my mantra from being a leader became: I want to learn from all these people. I’m here to facilitate and get the best out of them.

Did you have to change anything about your style working in the US?

I went to a customer meeting with our VP of Sales and after we came out he asked to have a chat and told me I did well, I just needed to be more American. When I asked him what he meant, he said, “This product is good, stop being so humble. Get rid of the Australian-ness and tell them it’s the greatest product ever and it’s going to change their world.”

I had to learn to pump up the company because it didn’t come naturally. In sales conversation, I wouldn’t admit a weakness in the product, even though in my head, as an engineer, my instant reaction is: the product’s good, but it doesn’t do this and there are all these issues. I learnt not to go there, but it’s a mistake I see engineers make a lot. For me, it’s not about lying or misrepresenting, it’s focusing on the positives, the solution and outcomes, and not getting into the weeds and the details–that’s where you start to lose people. 

Key takeaways

• Be open to strategic pivots. Founders should be willing to adapt their business models and consider global markets if they hold the most strategic TAM opportunity. 
• Timing matters. Expansion should align with market and product readiness.
• Hiring the right talent, especially in leadership roles, is crucial. Founders should focus on building a team that can execute in different regions effectively.
• Be intentional about cost management. You don't need to duplicate all functions across every location. Focus on scaling parts of the business that align with the market’s potential and key opportunities‍
• The right location to base your business is equal parts practical and strategic. Consider factors like time zones, talent availability and the presence of a relevant industry ecosystem.