Customer Success As Strategic Imperative: Why Founders Must Build This Function With Intention

Customer Success As Strategic Imperative: Why Founders Must Build This Function With Intention

The transition from founder-led customer support to a formalized customer success (CS) function represents a critical inflection point for growing startups. In her First Round Review piece, Atlassian's SVP of Customer Success Stephanie Berner provides a comprehensive framework for this transition, emphasizing that founders should establish CS operations when they find themselves "spending more than half [their] day resolving problems."

Berner's advice is timely and valuable, especially as more companies adopt subscription models where retention becomes as crucial as acquisition. However, while her tactical approach addresses immediate needs, I believe founders should view customer success not just as a reactive function to handle growing support volume, but as a strategic imperative that fundamentally shapes company trajectory, product development, and overall business model.

As I'll explore in this analysis, the real opportunity in building CS isn't just to offload founder responsibilities—it's to establish a systematic approach to understanding customer value realization that becomes a competitive advantage. Let's examine Berner's framework critically while expanding on areas where founders might want to think even more strategically about this crucial function.

Beyond Firefighting: Reframing the CS Imperative

Berner's trigger point for building CS—when founders spend half their day on customer issues—frames CS primarily as a relief valve for founder bandwidth. This framing, while practical, may lead founders to view CS as primarily a support function rather than a strategic driver of business outcomes.

A more forward-looking approach recognizes that CS should be built proactively, not reactively. Research from Gainsight indicates that companies with formal CS functions experience 34% better retention rates and 20% higher expansion revenue. These numbers suggest that waiting until you're overwhelmed with support requests may mean you've already missed significant growth opportunities.

Instead of asking, "When am I spending too much time on customer issues?" founders should ask, "How can I systematically ensure my customers realize the full value of our product?"

This reframing leads to different implementation decisions:

• Earlier investment in CS infrastructure before support volume becomes overwhelming
• Integration of CS principles into product design rather than treating CS as purely post-sales
• Measurement frameworks focused on value realization instead of just activity metrics

Consider Zoom's approach during their hypergrowth phase. Rather than waiting for support tickets to overwhelm them, they proactively built CS capabilities that allowed them to scale when the pandemic hit. They established standardized onboarding journeys and success metrics even when they had a relatively small customer base, creating a foundation that enabled their explosive growth.

The First CS Hire: Beyond Skill Sets to Organizational Design

Berner provides excellent guidance on the traits to look for in early CS hires: speed, curiosity, communication skills, bias for action, and customer empathy. She also offers practical interview questions to identify these traits.

However, I believe founders should approach these first hires with a broader organizational design mindset. The first CS hire isn't just filling a role—they're establishing a new organizational capability that will significantly impact how the company understands and serves customers.

This requires considering:

• Knowledge transfer mechanisms: How will customer insights from CS feed back into product and other functions?
• Career progression paths: How will this role evolve as the team grows?
• Cross-functional partnerships: How will this role collaborate with product, engineering, and sales?

Stephan Schambach, founder of NewStore and previously Demandware, approached his first CS hires with this broader context in mind. Rather than simply hiring strong individual contributors, he created "pods" that paired CS with product managers from day one, ensuring customer feedback directly influenced product development. This organizational design choice meant customer insights didn't require special "rituals" to reach product teams—they were built into the daily workflow.

The implication for founders is clear: when making that first CS hire, design the role not just for immediate customer support needs, but as the foundation of a system that will scale with your company.

The Compensation Conundrum: Beyond Renewals

Berner correctly highlights the importance of aligning compensation with the work you want CSMs to perform, noting that "if you put a significant amount of comp against renewals or expansion quota, that is going to drive behavior." She recommends a base-plus-bonus structure rather than pure commission, with incentives tied to commercial KPIs.

This approach represents sound conventional wisdom. However, recent research from McKinsey suggests more innovative compensation models may better align with long-term value creation. Their analysis of high-performing CS organizations found that the most effective teams used compensation models that:

• Balanced leading and lagging indicators (not just renewal outcomes)
• Included team-based components (not just individual performance)
• Incorporated product adoption metrics that predict future revenue

HubSpot provides an instructive example. Their CS compensation includes components tied to customer NPS, feature adoption of new releases, and team-based renewal goals. This approach ensures CSMs remain focused on the customer experience while still maintaining accountability for business outcomes.

Founders should consider more nuanced compensation models that encourage collaboration across functions and focus on the metrics that truly predict long-term customer value, not just renewal rates.

CS Organizational Structure: Beyond Reporting Lines

Berner presents a binary choice for CS reporting structure: either to the CEO or the CRO. She recommends CEO reporting because it "puts the CEO in direct line of sight to what's happening with the customer business."

While this advice provides a clear starting point, organizational design research suggests the optimal reporting structure depends more on your business model and growth stage than on universal principles.

According to McKinsey's research on CS organizational design, companies should consider three key factors when determining reporting structure:

• Product complexity (how much expertise is required to derive value)
• Customer segmentation (enterprise vs. SMB, technical vs. non-technical)
• Go-to-market model (high-touch vs. product-led)

These factors may lead to more varied organizational designs than a simple CEO vs. CRO decision. For example:

• Product-led growth companies like Dropbox often place CS under the product organization to ensure tight integration between product experience and success outcomes
• Enterprise-focused companies like Salesforce often use a matrix structure where CS has both CRO reporting and dotted-line relationships to product
• Platform companies like Shopify sometimes distribute CS capabilities across multiple functions rather than centralizing them

GitLab offers an interesting case study in alternative CS organization. Their CS function reports to neither the CEO nor CRO, but instead to the Chief Product Officer, reflecting their view that customer success is fundamentally about ensuring product value realization. This structure helps them maintain a tight feedback loop between customer experiences and product development.

Founders should consider their specific business context rather than following universal organizational design principles. The key question isn't "Who should CS report to?" but "How do we design our organization to systematically deliver and capture customer value?"

Metrics That Matter: Beyond Usage and Renewals

Berner recommends focusing on two primary metrics in early CS organizations: customer health (measured as product usage) and renewal rate. These metrics provide a solid foundation, but I believe founders should establish a more comprehensive measurement framework from day one.

Research from customer success platform Gainsight indicates that the most effective CS organizations track metrics across four dimensions:

• Adoption metrics: Not just usage, but feature-specific adoption that indicates value realization
• Outcome metrics: Customer-specific business outcomes achieved through your product
• Experience metrics: Friction points and moments of delight in the customer journey
• Growth indicators: Early signals of expansion potential

Slack's CS organization provides an instructive example of this broader approach. Beyond basic usage metrics, they track:

• Message effectiveness rate: How often messages receive responses, indicating meaningful collaboration
• Cross-team collaboration: Usage patterns that predict organizational stickiness
• Feature adoption velocity: How quickly teams adopt new capabilities after release
• Internal champion engagement: Interaction with learning resources and community

This multidimensional measurement framework allows them to identify at-risk accounts before usage metrics decline and find expansion opportunities before customers explicitly request them.

Founders should establish more comprehensive measurement frameworks from the beginning, focusing not just on usage and renewals but on the specific indicators that predict value realization for their unique product.

Beyond Teams: Building CS as a Company-Wide Capability

Berner concludes with valuable advice on building company-wide rituals that reinforce customer-centricity, such as always bringing discussions back to the customer, facilitating cross-team collaboration, and celebrating CS achievements.

I strongly agree with this approach but would suggest taking it further. The most successful companies don't just build customer success teams—they build customer success as an organizational capability that spans all functions.

This broader view has important implications:

• Product development processes should incorporate CS principles from the beginning, not just respond to CS feedback after release
• Sales and marketing teams should align their messaging and qualification processes with customer success outcomes
• Engineering organizations should have direct visibility into customer success metrics and participate in customer interactions

Intercom provides a compelling example of this approach. Rather than treating CS as a separate function, they implemented "customer outcome reviews" across all teams, where each function examines how their work contributes to customer success. Engineers participate in customer calls quarterly, product managers spend time in support rotations, and marketing teams align campaigns with identified success patterns.

This integrated approach ensures customer success isn't just a department but a fundamental orientation of the entire company. As CEO Eoghan McCabe noted, "Customer success isn't someone's job—it's everyone's job in different ways."

The Self-Service Dimension: A Critical Missing Element

One significant omission in Berner's otherwise comprehensive framework is the role of self-service in modern customer success. While she acknowledges that team size calculations should consider various factors, the article doesn't address how to balance high-touch CS with scalable self-service capabilities.

Research from both Gainsight and Forrester indicates that the most efficient CS organizations increasingly leverage self-service capabilities to handle routine tasks while reserving human touchpoints for high-value interactions. This approach allows CS teams to scale more effectively and focus on strategic activities.

Dropbox provides an instructive case study in this balanced approach. Their CS organization focuses on three levels of support:

• Product-embedded guidance: Contextual help and onboarding that requires no human intervention
• Community-powered support: Peer-to-peer assistance for common questions and use cases
• Proactive CSM engagement: Human touchpoints focused on business outcomes rather than technical support

This tiered approach allows them to support millions of users with a relatively small CS team while still providing high-touch service where it creates the most value.

Founders should consider self-service capabilities as a core component of their CS strategy from the beginning, not just as a cost-saving measure to implement later. The question isn't "How many CSMs do I need?" but "What's the right balance between human touchpoints and scalable self-service for my customer base?"

CS in Product-Led Growth: The Emerging Hybrid Model

Another dimension not fully explored in Berner's framework is how CS fits into product-led growth (PLG) models, where the product itself—rather than sales or marketing—is the primary driver of customer acquisition and expansion.

In PLG companies, the line between product and CS often blurs. Customer success becomes less about reactive support or relationship management and more about proactively embedding success principles into the product experience itself.

Companies like Calendly, Notion, and Figma have pioneered this approach, creating hybrid models where:

• Product analytics directly inform CS prioritization
• CS insights directly influence product roadmaps
• CS teams focus on broader use cases and outcomes rather than feature adoption

Notion's approach is particularly instructive. Rather than building a traditional CS team focused on account management, they created a "customer experience" function that blends elements of support, education, and community. This team works closely with product to identify friction points and success patterns, which then influence product development directly.

For founders building PLG companies, this suggests a different approach to CS than the traditional enterprise model Berner outlines. The question becomes less about when to hire dedicated CSMs and more about how to build customer success principles into every aspect of the product experience.

Moving Beyond the V1: Planning for CS Evolution

While Berner's article focuses specifically on building a V1 of customer success, I believe founders should approach this function with a clearer vision of how it will evolve over time. The CS organization you need at 10 customers looks very different from what you need at 100 or 1,000 customers.

Research from Gainsight suggests that CS typically evolves through four distinct phases:

• Reactive support: Addressing problems as they arise
• Proactive guidance: Standardized onboarding and success planning
• Strategic partnership: Business outcome alignment and expansion planning
• Transformational value: Industry expertise and best practice leadership

Planning for this evolution from the beginning allows founders to make more strategic investments in people, processes, and technology. Rather than repeatedly restructuring CS as the company grows, you can build foundational elements that scale with you.

Zoom again provides an instructive example. Even when they were relatively small, they designed their CS organization with distinct tiers (from high-touch enterprise to tech-touch SMB) and clear evolution paths for each. This approach allowed them to scale rapidly when the pandemic hit without fundamental reorganization.

Founders should approach CS not just as a function to build when support volume becomes overwhelming, but as a capability that will evolve as the company grows. This longer-term view informs better decisions about early investments in people, processes, and technology.

Conclusion: CS as Strategic Differentiator

Stephanie Berner's framework provides valuable tactical guidance for founders establishing their first customer success function. Her emphasis on finding the right people, establishing clear metrics, and building customer-centric rituals offers a solid foundation for any growing startup.

However, I believe founders should view customer success not just as an operational necessity but as a potential strategic differentiator. In increasingly crowded markets, the ability to systematically deliver and capture customer value can become a sustainable competitive advantage.

This broader view has several important implications:

• Start earlier than when founder bandwidth becomes overwhelmed
• Think beyond team structure to company-wide customer success capability
• Balance high-touch and self-service approaches from the beginning
• Plan for evolution across different company growth stages
• Integrate CS principles into product development and go-to-market strategies

As subscription models become the norm across industries, the line between customer acquisition and customer retention continues to blur. The most successful companies don't just build customer success teams—they build entire businesses around the principle of customer value realization.

For founders navigating this landscape, Berner's tactical framework provides an excellent starting point. But the greatest opportunities lie in viewing customer success not just as a department to build but as a fundamental orientation for the entire company. The question isn't just "When should I hire my first CSM?" but "How do I build a company that systematically delivers and captures customer value at every touchpoint?"

Answering that broader question will lead to more strategic decisions about when, how, and why to build your customer success function—decisions that will shape your company's trajectory for years to come.

For further insights on building effective customer success strategies, explore more tips and case studies on this comprehensive guide.