SaaStr Podcasts for the Week with Byron Deeter, Elliott Robinson, Henry Schuck, and Jason Lemkin


This post is by Amelia Ibarra from SaaStr

Ep. 373: Bessemer’s 5th Annual State of the Cloud Report returns for a definitive look at the cloud industry today. Byron Deeter and Elliott Robinson, partners at Bessemer Venture Partners, offer macro trends in the public and private cloud markets, strategic advice to cloud founders, and insights into why entrepreneurs should feel auspicious about the future.

 

This episode is sponsored by Linode.

 

SaaStr’s Founder’s Favorites Series features one of SaaStr’s best of the best sessions that you might have missed.

This episode is an excerpt from a session at SaaStr Annual @ Home. You can read the podcast transcript below.

 

Ep. 374: ZoomInfo founder and CEO Henry Schuck shares how he built a business from scratch and grew it into one of the most successful IPOs of the 21st century—and what it was really like…the good, the bad, and most of all, the ugly. He reflects on where he went wrong, what he would do differently, and how to avoid making the same mistakes he did.

 

This episode is sponsored by Outgrow.

 

This episode is an excerpt from Jason and Henry’s session at SaaStr Annual @ Home. You can read the podcast transcript below.

 

If you would like to find out more about the show and the guests presented, you can follow us on Twitter here:

Jason Lemkin
SaaStr
Byron Deeter
Elliott Robinson
Henry Schuck

We’ve shared the transcript of episode 373 below. You can also jump down to the transcript of episode 374.

Transcript of Episode 373:

Byron Deeter:

I’m going to dive in here with a little bit of an overview. To say that 2020 has been unusual, and unprecedented, and momentous would all be understatements. But let’s just begin by taking a little look back at how we’ve gotten here. We want to take you through the cloud journey over the last several years. We’re going to start with some dates that predated COVID and really go to prior SaaStrs. If you look back on February 5th, 2019, which was the SaaStr Annual, hopefully many of you were there in person, we gave the state of the cloud presentation and talked about the power of the industry, and the power that’s been building in terms of market capitalization of just the public cloud companies and what they show. That was February 5th, 2019.

Coincidentally, SaaStr Annual was slated to be February 5th, 2020 this year, where we were going to reveal that the cloud had passed the one trillion market cap mark, which was exactly one year after the SaaStr Annual 2019. It was a meaningful milestone for many reasons, and yet, just a few days later, the world change pretty dramatically. If you look at the March volatility, the major indices fell 30% pretty much across the board as the health crisis started to take hold, and the economic crisis was starting to be previewed.

Now, the cloud index fell along with it. The blue line here is the Bessemer Nasdaq Emerging Cloud Index, which is an index that we’ve tracked for many years, which is the basket of the pure play public cloud stocks. You’ll see here from this blue line, the 30% fall that rapidly rolled through our entire industry. Now, as April came, we started to see those climb back. You fast-forward to May, you started to see not only the indices roll back, but specifically this blue line of the cloud industry. As we rolled to June and July, and then all the way through to August, we saw essentially a separation that is reflected over the longer time arc here as well.

If you go back to before 2014, what you see is the power of the cloud. You see that both organizations embracing this cloud movement, but specifically in COVID, more and more companies turning to the cloud as their solution for business continuity or for business growth in these times when shelter in place is making on-prem solutions difficult and in many cases, impossible to use. It’s also been a powerful moment for technology to be a force for good. We’ve seen many of the cloud community companies help usher in this transformative, somewhat defensive posture, but also allowing companies to reinvent themselves and to grow.

To give a few examples, when the entire restaurant and hospitality industry was forced to reinvent themselves, most restaurants shutting down entirely due to shelter-in-place mandates, Toast, which is a leading point of sale solution and vertical SaaS application and mobile application for the restaurant industry, and an all-in-one restaurant platform, rapidly switched and helped offer new solutions for online ordering, contactless delivery, and allowed restaurants that had never before provided takeout, and were literally facing bankruptcy shutdown situations to suddenly create an entire new line of business.

Another collection of their customers actually turned their kitchens into service offerings. This here is an example from a Burmese restaurant called Thamee, in DC, which has partnered with World Central Kitchen, and they’re donating thousands and thousands of meals to people in need, healthcare staff, and frontline workers, Black Lives Matter protesters in the community. You see that these teams and these small businesses across America rallying with the help of technology solutions provided by many of you on this call and cloud providers more broadly, the same needs existed with the physical world that we saw with the virtual world in many ways, and physical store owners had this crisis moment where they were shutting down. They had to reinvent themselves.

This million business milestone was passed in March by Shopify, one of the leading storefront providers, and a cloud vertical solution for eCommerce, where they grew 400,000 storefronts between mid March and mid April, because of small businesses, again, that had been only physical before, and found that to survive and hopefully ultimately thrive, the cloud solutions were their way forward. We celebrate businesses like that, and of course, the platform we’re on today with Zoom, that has really become a communications platform that’s defining this COVID era. They’re giving us the connectivity to communicate with our colleagues, friends and family. They’re facilitating virtual schooling, they’re helping governments organize. They’ve helped with life’s most important and sacred moments, whether that’s birthday celebrations, weddings, and unfortunately, even in some cases, the last goodbyes. But it is really incredible and inspiring to see how these companies and these cloud leaders have ushered in this new phase of innovation and growth, even in the hardest moments of society.

What we see is this unlocking of cloud power, and we see this acceleration of the trends that we’ve known are building through the years. It reinforces the growth of the industry. If we look at that and step back, you can think of this, again, from the leading perspective of the public’s first, which is this evolution over time. Just 12 years ago, the entire market capitalization of the top five cloud companies was less than $14 billion. When you roll that forward just seven years, that was up 8X, you roll that for just 12 years, is that a staggering 61X. Just in the top five names, the growth has been spectacular.

If you think about the broader hybrid vendors, so the Amazons, Googles and Microsofts that have cloud businesses that are growing and building within, the same trends exist there. If you look at the IAS vendors, they passed $130 billion revenue milestone this year. We’ve all seen AWS and what they’ve done with their platform. It is staggering. Even at spectacular scale, they’re still growing at 30%. Azure has been gaining on them rapidly and is growing a double that rate. Still has some market share to go, but is providing a fantastic offering that many of you benefit from. Google Cloud, AliCloud International, et cetera, the industry has just been going through this massive transformation, and has been responsive to the market demands of COVID in ways that wouldn’t be possible in a non-public cloud, non-scalable way that’s allowing the continuity and the power in a modern format that wasn’t before possible.

But if you think of all these stats out there, there’s one number that for me is most impressive. It’s 94%. What this number means is across all industries, 94% of businesses today use at least one cloud solution. We are truly living in a cloud first world today, where businesses not only understand, but they now embrace and are looking to lead with technology solutions from folks on this Zoom, who are cloud first and providing that next generation of solutions. If you think of this in the context of software, it’s particularly powerful because for years, we’ve been seeing the visionaries out there promoting this transition. But it takes a long time to build.

The dark blue bar here is cloud as a percentage of worldwide software spend. For years, it barely registered as it was building. What we’ve seen over the last several years is that compounding starting to develop, and if you roll forward and see what happens, if you go to 2032, out just a dozen years from now, how massively that transformation takes hold. The 50% mark is going to cross within the next three years, and the vast majority of all software quickly will become cloud. If you think of this over this arc, and in fact, if you reinvent it in a circle chart or a pie chart, you can see visually how cloud is eating software.

You’ve got this dynamic within the next couple of years where cloud becomes a majority, but it just rolls forward. You get this almost eating effect, I think of it as Pac-Man in motion, where truly, cloud is taking over the core of technology and all of software. If you think of this from a market size standpoint, there’s often this debate, is that good or bad? What happens when cloud has consumed software? What happens to growth? What is the potential? This fantastic, staggering growth that we’ve seen over the prior years, is that sustainable? Can it continue? There’s all sorts of implications. For you out there founding new businesses, is it too late for investors, public and private? Have I missed my window, or what is fair value?

This is the chart that we think helps answer that, which is to zoom out, and think of not only cloud and its current market size, or not even just software in its current market size, which mind you, is a multiple of that. We have through that 2032 range, we show how the growth rates are certainly sustainable, and in fact, in some industries will accelerate as you get this compounding building, and you get this sea change effect as the industry realizes and embraces cloud.

But you actually should zoom out another level. You should think of this as the technology industry as a whole is really the addressable market by all of you. Because more and more hardware is becoming soft. It’s the software within hardware that’s powering innovation, and powering efficiency, and powering growth. Really, cloud absorbs hardware, software and services. As you see more opportunities for automation, and as you see more of the technology of the cloud and software percentage of technology reveal itself, it’s really that 3.7 trillion dollar market that’s addressable.

As you think even more, both broadly, in sector, and in geography, the global GDP is increasingly becoming tech-based. As you think about cloud as hands down the most powerful force in all software, and really now in all of technology, and we all know that technology is increasingly driving other industries and innovation across industries. We absolutely believe that a large percentage of global GDP will be cloud-driven and cloud-based in the years ahead. When asked specifically, “How does this end, or how does this play out?” We absolutely believe we’re still in the early days. What has become obvious to those of us in the cloud community, and what’s starting to become more and more obvious to the world, has a long and powerful future ahead.

That’s going to be the basis of the rest of this conversation. We’re going to talk you through a little bit of the learnings from these leaders and our experiences working with many of the innovators. Then we’re going to end with some predictions. With that, I’m going to let my partner, Ell, take it from here and guide you through some of the lessons learned and some of the 10 laws takeaways over the last many years of working with these leading companies.

Elliott Robinson:

Thanks, Byron.  As Byron walked everyone through, there’s been a lot of change and evolution that’s taken place in the cloud software market. Today, there’s more than 140 private and public cloud companies that are worth more than a billion dollars, including a lot of companies that are speaking at SaaStr. Here at Bessemer, we’ve been really lucky to work with some of the best, as you can tell from my partner Byron’s Zoom background. But what we really like to do is try to share best practices amongst the many years of experience we’ve had working with cloud companies.

What we’re going to do today is highlight three of them. We’re all living through a really unique time with COVID. Companies are working more remote first, everyone’s trying to traverse the new landscape, and I think that these three have really stood the test of time since we published the first 10 Laws of Cloud report more than a decade ago. Let’s dive in.

Law number one, in the cloud economy, scale wins. A bit of a personal note for me, before coming to Bessemer, I was with a great fund in Toronto, Canada called Georgian Partners. I’m a big fan of Canadian entrepreneurs, so shout out to any of you on the Zoom today. One of the early co-investments with my prior firm in Bessemer was in Shopify. One of the favorite quotes that I always had from Tobi, and really, his philosophy was that reaching scale, it’s not just about the revenue, it really is about finding a product that sets the pace of innovation, and having this mentality that while you might be really excited about the product that you’re offering to the market today, you actually want to render it obsolete so that your competitors can’t just copy what you’re doing.

We’ve had a lot of discussion about Zoom over the last few months, as Byron alluded to, with everyone working at home. But if you just take a step back for any kind of market that we’ve had success with, with cloud software companies, the majority of the market, say 50, 60, sometimes 70% goes to the scaled leader. Then unified communications and video conferencing space, Zoom has definitely taken a new position as the market leader. This number might have increased just in the past week, but it certainly sits somewhere around 64, 65%, where you’re seeing companies like Skype, BlueJeans, and WebEx coming up just behind them.

Another thing that we’ve seen over the last decade is cloud companies have this unique ability to scale way more rapidly than they have in the past than many of their other tech market peers. If you look at companies like Cornerstone OnDemand, which we invested in a long time ago, it took them some time to get to 100 million of ARR. But if you look at new companies like a Shopify, a Twilio, a HashiCorp, they’re able to get there even faster, somewhere around four or five, six years, and that’s something that we’re seeing with all the cloud giants that are entering the market today.

Leveraging on some of Tobi’s philosophy, it’s something here that we call at Bessemer, Finding Your Second Act. Everyone knows Shopify for what it is today, but in the earlier days, it really was the best SaaS platform for SMB eCommerce providers. Then they found somewhere in like year 2014 and ’15 that they could layer in something like payments as an additional way to monetize their customer base. We call that a second act. What that does is not only did it accelerate the top line revenue for Shopify, but it dramatically opened up their total addressable market on a revenue basis. 

If you’re a cloud founder sitting at home today, and you’ve got a great value prop for your customer base and your market, you do want to think about maybe 12 months, 18 months from now, “What’s that next thing that I could layer into the market?” Not just for expansion in your base, but upsell as well, and more of a new platform, value prop you could take to the market. Byron gave a great example with Toast, one of my favorite portfolio companies. They started in the point of sale market, and then as the company scaled, they rolled out new value props and modules for payroll, or Toast capital, or ways to manage your employee base.

With Twilio, for example, they expanded into email. You can also find your second act inorganically via acquisition as Twilio did with SendGrid. Then in HashiCorp’s case, one of the most exciting cloud infrastructure software companies that we found, they’ve expanded their second act with Terraform in the provisioning space, and then Consul in the networking space. 

Law number three, this is huge, particularly in COVID, so we’re going to talk about this a little bit differently. Everyone is trying to figure out the go-to-market learning curve. Now, what we haven’t really seen over a lot of time, and we kind of predicted, was everyone in Salesforce is basically working from home. If you’re a founder today and you’re trying to scale your go-to-market org, in the early days, you’re in what we call the initiation phase. This is really founder-led sales. You’re wearing multiple hats, you’re probably the head of sales, head of content marketing, also head of inside sales.

But what you really want to do is as you’re finding your first sales leaders to bring into the org, we typically call them Renaissance Salespeople. They have this unique ability to evangelize your product in the market, learn from your early customers what they like, what they don’t like, bring that feedback loop into product, into marketing, and really start to make that flywheel work. You really don’t want to think about bringing in new salespeople until you’re seeing that first round of product market fit, and then you’re ready to go into the transition phase. This is when you’re actually building out your org. You might be thinking about BDR, some ISR, some field sales reps, and you as a founder can take off one of your hats and maybe move into more strategic sales with your biggest and most valued customers.

Here, what you really want to think about is testing out two or three reps, seeing how they work, see if their quotas are about right. Are they hitting their numbers? Are customers happy with what they’re seeing? You don’t really want to scale beyond that first batch of reps. A general rule of thumb is about two to three times their fully loaded cost before you start rolling them in. Again, this is supposed to be our COVID considerations version of this report, and everyone is an inside sales rep today. The one thing that we like to talk about is CAC payback. That’s really analyzing a period back, how much does it cost to acquire a customer? That’s your CAC. If you divide that by the gross margin, how many customers you get into Period Four, you can start to figure out against your churn, how many months, gross margin effected, does it take for you to turn that newly acquired customer into a profitable customer?

Why does that matter even more in COVID? Well, there’s just more uncertainty. We don’t really know how long it’s going to be before people are back in the field, flying on planes regularly where you can touch and feel your customers. Your churn might be a little more volatile in this period, so actually tracking your CAC, calculating it, gross margin affecting it, and figuring out what your CAC payback is on a monthly basis is even more important.

After you figure out how your go-to-market org is going to scale, potentially, you see success, you’re adding field sales reps, you might be going more geo-focused, more industry vertical-focused. Now, you’re in the execution phase. This for us means typically, you’re finding some sales folks that may or may not be a little more coin-operated, so less of that renaissance rep that’s really evangelizing. They’re are always going to be great shepherds and voice and face of your company, but these folks, you want to give them a territory, a good list of customers, maybe they even have their own book of business, and you let them go. Then the one thing that you always want to think about is nail it before you scale it. Make sure in the initiation phase you feel comfortable with the results before you move into the transition phase, and that’s the same thing with the execution phase.

Then my favorite personal law, number nine, tone starts at the top. What’s really interesting about this, we talked about it, and we updated the report before COVID, and oftentimes, people say things like culture, and values, and how we track that stuff internally. How important is it? Well, I’ll tell you one thing, portfolio companies of ours and founder friends of mine, who now have their entire employee base working remotely or from home, now, this really matters. You as a founder have to set the tone, and you can’t do it in a weekly stand up, or an all hands meeting in person. You got to do it remote. 

We have this framework that we typically talk to our portfolio company founders about. It starts with defining your culture and values early, really understanding and letting your early employees understand, “Why do we work here? What are we really trying to accomplish?” It also allows your early employees to find that values fit with you, your philosophy and where your company is going.

Number two, we really want companies to report and track these metrics early. If you can’t measure it, you can’t really change it. You’re just putting your finger in the air and doing a gut check. Then number three, 360 feedbacks. Our advice is you can’t really do these too early. It’s how we all get better, and as a investor and board member, one of my favorite things is doing 360 feedback for the founder or CEO, talking to the board members, talking to their direct reports, and giving a unique set of feedback to that founder.

Beyond that, there’s some great software, cloud software options you can use. Both Glint and Culture Amp are great solutions that many of our companies use. Then just a personal note, we’re living through a really interesting time here in our country and in tech. Statistically, I don’t look like your average venture capitalist, but I really do care about diversity and inclusion. It’s not just something good to do. It’s actually a great business strategy and competitive advantage. This is just a little bit of a shout out to one of my favorite companies. It just so happens they’re a Bessemer company, but that doesn’t matter. Edith at LaunchDarkly, they put their culture and values very publicly on their website, very prominently. They’ve got some incredible initiatives, particularly in the engineering and coding org about how to make diversity and inclusion a strategic advantage for them.

Byron Deeter:

Very well said, and we look forward to hopefully seeing you all in person at the next SaaStr Annual next year. Until then, stay well, stay sane, and stay cloudy. 

 

*****

Transcript of Episode 374:

Henry Schuck:

Every company big and small is realizing that high quality data is a necessity to go to market. My name’s Henry Schuck, I’m the CEO of ZoomInfo and DiscoverOrg. There’s no platform out there that’s brought together the breadth, the depth, and the accuracy of business information the way that we have. Business information is constantly changing. What we’ve built is this core AI machine learning engine that takes literally millions and millions of unique sources so that we can deliver 95% accuracy to our clients. We have data scientists who are embedded into our go to market motion. We’re looking at every single metric and figuring out, how to convert that a little bit better, a little bit better, a little bit better?

Henry Schuck:

I really want to build a business that in every single department, whether it’s sales, or marketing, or product development, I want every single piece of that business to be literally best in class. I think the culture of continuous improvement at our company is a big part of our success. We’re just going to grind this thing out. We’re going to work harder. We’re going to care more. You have to be paranoid when it’s good because I want to make sure that it’s repeatable. I want to make sure that if there’s something that we did last week that made it the best week ever, that we keep on doing it. Whose idea was it to IPO in the middle of a pandemic, anyways? It’s not a celebration. It’s really just a launching point for the next thing.

Jason Lemkin:

All right. Sometimes on these digital things, the crowd can be a little quiet. But let’s all give it up for Henry Schuck from ZoomInfo. It’s great to have him here. And Henry, thank you so much for making the time and joining us.

Henry Schuck:

Absolutely. We can just sit here and watch that movie on loop if you’d like.

Jason Lemkin:

It was pretty good. I did notice you’re a little fitter now than you were for a brief moment in that journey. I hadn’t noticed that before. Is that fair to say?

Henry Schuck:

I’m more fit now, or during the journey?

Jason Lemkin:

Now, now.

Henry Schuck:

Maybe. It might just be the camera angle.

Jason Lemkin:

Might just be the camera angle, yeah. It’s funny, I’ve learned over the years, it’s subtle, but if you see a CEO, a founder that you know and you see them get fitter, it’s a good sign. Invest, do whatever you can when they go because it’s a tell when they start looking good.

Henry Schuck:

I had somebody tell me once, “Sometimes I feel guilty if I take time away from work to work out.” And I had somebody tell me, they said, “Henry, you’ve told me that when you work out, you’re more productive at work. You’re a better version of yourself at work. And so why are you not just thinking about that as an investment into your productivity at work?” He was like, “Yeah, I could get behind that.”

Jason Lemkin:

It’s true. So this is a special session. First of all, we will try to do some Q and A, so click on Q and A at the bottom if you’re watching this on Zoom rather than on social media. Click in there, we’ll try to get to some of these questions. And this will be a fun session for two reasons. First, I think as a case study, ZoomInfo’s a super interesting company. We’ve obviously all used the product. And I think, but when it IPOed I was shocked at the scale of the company. Right? I didn’t know. There’s a lot of vendors. I knew it had broken out, so we were shocked. And Henry will share some stories as we wend through this of how folks maybe underestimated him on the journey, and what it took for him to build a decacorn. And it’s so interesting to see one of these products that we know and are like, “Oh, my God. The scale of the product,” and why. Why did ZoomInfo break out? And it is a competitive space. And how does this really work? So I think it’s super fun.

Jason Lemkin:

And Henry pointed out the company did not raise 11 $100 million rounds from Sequoia and Andreessen, and had its own sort of path through private equity and other things. And in some ways as a company, not a product, might’ve floated under the radar a little bit until it kind of exploded this year. So a lot of interesting things. Henry asked what he could talk about at SaaStr, and he did us a gift, which we’re going to go through, is he laid out his top 10 mistakes getting to the first $400 million or so in revenue. So I’m going to ask him about these 10 mistakes. And what’s great is so many of these are themes that we’ve all talked about in our community in SaaStr for years. And I think it’s special to get his time to sit down quietly and write them.

Jason Lemkin:

And it’s so interesting when a CEO or founder does this because you can hear their brain and their heart. The number one mistake probably was the number one piece of scar tissue you have. And then you can just peer into their brain. So with that, let me kick this one off because this could mean so many things. But mistake number one, being risk averse in investment outside of sales. A lot of founders might have the opposite experience. But what does this mean? Where did you hold back too much?

Henry Schuck:

Yeah. And I think you could probably replace sales with your area of expertise if you’re a founder or a CEO. And so I felt really tied into sales. I understood how it worked. I did all of the sales for the first … Not all the sales, but I was on the frontline doing the sales for the first five years of the company’s existence. I had regular quota carrying sales rep on top of everything else. And so every time it came to spend the next dollar, I was much more likely to spend it in sales than really anywhere else in the business.

Henry Schuck:

And when I was thinking about this mistake, I was thinking about: Why was it that I wanted to put all the dollars into sales, and I was much less likely to put it in marketing, or HR, or customer success? And really, I think sales was easy for us because you could see a direct line to rep. You put a dollar in sales, you saw it turn into money. And everywhere else in the business, that line was less clear, so you could put it in marketing. And do you trust the reports you’re getting about attribution and where the leads are coming in? You could put it in HR, but do you really believe that they’re going to strategically grow your talent?

Henry Schuck:

And when you think about not making the investments in all of those other areas, what you’re really telling yourself is either you don’t trust the people in the department, and so you’re going, “I’m not going to give that money to marketing because I just don’t really trust that they’re going to be able to execute with those dollars.” So go fix that, don’t not make the investment in marketing because you don’t trust the execution of the team or the leader. If you’re not going to make the investment in product, you have to ask yourself, “Why would I not be making that investment in product?” And it’s probably because either you’re chasing the wrong things, you don’t trust the product leader, or you don’t think your customers are going to engage with that side of the product.

Henry Schuck:

And so I think on this one, we always wanted immediate payoff, and so we never looked to, for the early portion of the business didn’t really look to making investments that had long-term payoff. And a lot of that is because we didn’t trust, or I didn’t, trust the leaders in those organizations to deliver me the results that I trust the leaders in sales to deliver. And so the learning here is if you don’t trust a team, and you’re not making an investment in that team because you don’t trust them, you have to fix the underlying issue there because these investments go a long way.

Jason Lemkin:

Well, that’s an interesting point. You took it a slightly different place than I was expecting. I thought you were going to say, “I trusted sales, so I just put, with limited capital, I put it where I knew.” But you’re really saying, “I didn’t know these other areas, and I’m not sure about the leaders I hired.” Did you hire the wrong first generation management team because you hadn’t done those functional areas before? Or why were you not able to trust them? Did you just make the classic mis-hires?

Henry Schuck:

I think I made the classic mis-hires. And then after I made the classic mis-hires, if I took marketing for example, after I made a classic mis-hire there, what I convinced myself of was what I was getting from them was better than what I would do myself in the limited time that I would’ve focused on marketing across all of the other things I was focusing on, instead of: Am I getting in just a vacuum what I would expect from a fantastic marketing organization? And I wasn’t ever getting that in the early days. What I was getting instead was something better than what I was able to do on my own. And it was just the wrong lens to look at it through.

Jason Lemkin:

And what was the first VP you hired outside of sales that was your ah-ha moment that changed the game, that moved the needle? How were you able to change this? What was that game changing VP?

Henry Schuck:

Yeah. I hired a great sales leader, revenue ops, and now he’s our chief revenue officer. And what you saw when he came in, now you’ve written about this too, Jason, is the minute he came in, we thought we were really good. And he was immediately making impact all over like, “Why aren’t we doing this? Let’s do this,” and not just like, a lot of leaders can come in and just poo poo on everything. I can’t believe you guys are doing it this way. And oh, it’s an embarrassment that we’re doing it this way. The great leaders go, “Hey, we’re missing this opportunity.” Then they execute against that opportunity and give you results against it. And they’re able to do that over and over and over at scale.

Henry Schuck:

And so when we hired this revenue operations leader, all of a sudden, you could see everything he put his hands on turned to gold. And you were like, “Okay. Leadership can really turn around really any area of the company.”

Jason Lemkin:

Yeah. One other one on this. I want to get mistake number two first. But when you focused on sales because of this, looking back, obviously it’s ended up being an amazing journey. But did you end up with certain types of product feature gaps and technical debt because it wasn’t an area you were focused on? Did you miss some investments in the product in those first couple years because of this?

Henry Schuck:

Yeah, totally. We missed investments in the product along the way. We missed investments in building a great engineering team early on. And then I think maybe more so than anything, we missed investments on the account management and customer success side. We were so focused on the sales side that we didn’t invest the same sort of vigor around talent and training and onboarding, and just getting the right people and continuously giving them feedback in the account management side. And so in the early years of the company, we really struggled from a net retention and logo churn perspective.

Henry Schuck:

And that was another area where when we hired somebody good and you saw their numbers turn, yeah, it’s just magic. And you actually kind of convince yourself at some point, my business is different. My business is different. I have SMBs. My business is different, data and software together are just more complicated and less sticky than other things. You just convince yourself of all of these. You have this very special thing, so it can’t be best in class. And that’s just not true. You just don’t have the right leadership or structure to get there often.

Jason Lemkin:

That’s really good insight. You hear that a lot from data focused companies that high churn is okay. Right? You hear from a lot of HR focused companies that NPS is going to be low because employees hate using those tools. Right? They hate doing self assessment. They hate it. And that is true, probably true historically if you went into G2 and looked. But you shouldn’t settle for that, should you? [crosstalk 00:12:32] settle for that.

Henry Schuck:

And if you use Webex users and Citrix users how they felt about their conferencing solution, early on, they might tell you, “Oh, I hate conferencing.” And I think what you saw Zoom Communications do was make that an enjoyable experience, and that was a big differentiator. You didn’t have to settle for low NPS scores in video conferencing. You could be a lot better.

Jason Lemkin:

Yeah. It’s a super good insight. And I want to hit the next, number two, but especially in data, so many folks make so many excuses. Right? It’s ephemeral. It’s a marketing tool. Of course, it’s going to churn. If the asset doesn’t perform, if the data’s not great, I’ll just leave and try another one. This isn’t like Salesforce. It’s not sticky. But your lesson here I think is a profound challenge to founders, which is, don’t settle, it’s not okay. You can have 30, 40, 50, 60 NPS in any field. Right?

Henry Schuck:

Absolutely.

Jason Lemkin:

Not just … Okay. This one is niche, but it’s interesting, not doing mergers and acquisitions sooner. I don’t know that every founder would put this as a mistake number two. But it’s interesting because you put it second here.

Henry Schuck:

Yeah. So maybe I’ll give a little bit of a lineage. I bootstrapped the company with my co-founder in 2007. We put $25,000 on our credit cards and went to market. We built a really profitable business that had high margins. And we didn’t bring in our first outside capital until for seven years later, the business was already at a $25 million ARR run rate. And we’re doing that profitably. And when you have a profitable business, you have the opportunity to do M&A, and actually do that M&A with … We did M&A with debt. And so if you’ve built this growing, profitable business, and you’re able to loan against your balance sheet to go out and acquire competitors in your space, or other technology tuck ins in your space along the way, that is absolutely, in my opinion, a play you should run.

Henry Schuck:

And we were always kind of late to this. For every, our big acquisitions that we did along the way were a company called BrainKing in 2007, 2017, and ZoomInfo, which I founded the business as a company called DiscoverOrg. You changed the name to ZoomInfo after that acquisition. We made that ZoomInfo acquisition in 2019. And both of them, we had looks at those businesses a year or a year and a half before. And if we had done the acquisitions earlier, we would’ve saved I think $700 million in acquisition M&A costs. Now it’s hard to go, “Oh, what a mistake that was.” It’s a mistake in that the cost in capital was higher. Things ended up working great.

Henry Schuck:

But part of the reason why we didn’t do that is, and I think probably a lot of founders feel this way, is when you’re looking at your business that you’ve grown up inside of, you start to feel like you’re just like a kid pretending in an adult world. People who do M&A don’t feel like 30 year olds who started their companies, and we just didn’t have the confidence that we could pull something like that off. And we’re were always a year behind getting the confidence to be able to actually do M&A successfully. And it just costs us money along the way.

Jason Lemkin:

Yeah. The first point’s interesting because we’re all kind of … There’s been a bunch of talks already at this event. We’re all a little bit woke to the power of debt in SaaS if you do it right. Right?

Henry Schuck:

Yep.

Jason Lemkin:

It has to be for leverage. It can’t be in lieu of equity on its own because then you’ll spend it and you’ll get into trouble on the service. But if you’re at $25 million in ARR, and it’s predictable. And how much did you borrow to do the first acquisition?

Henry Schuck:

$200 million.

Jason Lemkin:

Okay. Well, you did take advantage of the growth in multiples that we’ve had over the last few years. Right?

Henry Schuck:

Yes, I did take advantage of the growth in multiples. And we protected equity.

Jason Lemkin:

You protected equity. But you were able to somewhat confidently say, “Hey, I can service that debt.” Right? Given the repeatable cash flows, right?

Henry Schuck:

Yeah.

Jason Lemkin:

And that’s something that whether it’s just to take a little bit of debt to hire that extra VP of product that you wish you’d hired back in the day, or whether it’s to do something. We should all, if we have strong metrics, strong revenue retention, we should be confident to do this. It’s sort of what you’re saying. Be confident. Be confident and do it a year early because you were going to get there. Right? You saw it already in the numbers at $25 million ARR. You were going to get to 100. The odds of going from 25 to 100 approached 100% at that point. Right? It’s just the resolution was unclear. Right?

Henry Schuck:

Yeah. And if you were confident about from an M&A perspective, if you’re confident that you could put two businesses together, get synergies out of it, grow them faster, and make them more efficient in the process, you have even a bigger pot of sort of cashflow to service the debt.

Jason Lemkin:

And did you … It’s niche because I want to hit the next one, but it is interesting. Did you feel like you had to get a discount, like they had to have a lower multiple than you as you build up your confidence for M&A? Is it hard to pay up versus having to pay down?

Henry Schuck:

I did feel that way. I don’t mind having some room to make mistakes on execution along the way. And so you do look for … Today, you get some companies who will tell me, “Well, Henry, you’re trading at this multiple, so why shouldn’t we get that multiple?” It’s like, well-

Jason Lemkin:

We should get higher. We should get higher. We’re growing even faster.

Henry Schuck:

[crosstalk 00:18:11] get a higher multiple because we’re more strategic. And the truth is there’s a lot of execution risk when you do M&A. And you have to be organized and focused. And so leaving you some room to slip somewhere is a useful thing to have.

Jason Lemkin:

Yeah. It’s a good lesson for founders because I mean, from the other side, it’s confusing. Right? ZoomInfo’s great, but whatever you’re trading at, you’re growing, I don’t know what you’re growing that you’re public. But let’s say you’re growing 50%, 40%, doesn’t matter, 60%.

Henry Schuck:

We’re growing 40, yes. Almost 40% [inaudible 00:18:45].

Jason Lemkin:

But Henry, I’m growing 80%. And so I deserve 40 X ARR because I know, I know, I know, but it’s not fair, Henry. Just draw a line, and founders are in this, you just need to be aware of it. Right? You just need to be aware of it. And every situation … I remember back in the day when Salesforce wanted to buy us in the beginning, the biggest acquisition they’d done was $16 million at the time.

Henry Schuck:

Wow.

Jason Lemkin:

And they’d met with us, and they were like, “We really want to buy you, but 16 would be too much.” Now you look at Tableau and MuleSoft. Right? And then you look at Jeff Lawson at Twillo. He’s like, “I’m not messing around. I’m not buying an itty bitty mail company. I’m buying the best thing, SendGrid, and I don’t care.” Even though the multiple was a little off, he’s going. And it’s a spectrum in companies of all the different rates. You were kind of in the middle, I think. Right?

Henry Schuck:

Yeah.

Jason Lemkin:

You didn’t want to mess around.

Henry Schuck:

I didn’t. I think the way, if I’m thinking in Jeff’s shoes, one of the things that I’m thinking is when I bring this asset in, what am I able to do with it when I put it in the product, when I give it access to my go to market team? How much faster can I grow it? Where are the synergies from that perspective? That was always really important. Actually, that takes us to mistake number three, which is not appreciating go to market as a strategic advantage.

Jason Lemkin:

What does this mean?

Henry Schuck:

So this means when we were doing, first, when we were doing M&A, when we were growing the business, I never thought of how valuable it was to have an incredibly efficient go to market engine. And we have a go to market engine that drives at 10 XLTV to cap. It does a 30 day, there’s a 30 day average sales cycle. It’s super efficient in generating leads and driving them through the pipeline with automation. And what I didn’t appreciate was when you look at a business, and you’re like, “What are the key assets in that business?” If you’re a founder, or you’re a senior executive at a company, and you’re thinking about your business and going, “What are the strategic advantages to our business? Or are there strategic levers here?” If go to market is just something you don’t even think about as part of that, that’s a major mistake because go to market, how you generate leads and find new customers and upsell and grow your customer base, that is a major, can be a major strategic advantage for your business.

Henry Schuck:

And it’s so often that I see companies where you have two companies, their features and product are in parity. And one is just running circles around the other one. And when you see that happening, it’s because one figured out go to market in a more precise, more efficient way. And that gives them an incredible advantage along the way.

Jason Lemkin:

Okay. I get that. That’s what I’ve observed. But what do you mean by leveraging that? You’ve got two companies. Right? Both have the same product. Maybe even the slower growing one is better. Sometimes that happens because they’re inwardly focused. But one’s figured out their go to market motion. Right? If that’s you, and that’s what you were, what do you mean? How do you take that to the next level? Why was it a mistake? That’s the piece I’m missing. What’s the investment or the action you didn’t take here when you had that advantage?

Henry Schuck:

So along the way when we were looking at acquisitions, especially when we were looking at acquisitions.

Jason Lemkin:

Bolted in.

Henry Schuck:

When you would look at an acquisition, you would go, “Oh, I have an opportunity to take what is a company that didn’t focus on go to market as in such a focused way as we did, and if I can take this team of 20 sellers, who are doing $10 million a year in ARR, what if I can take that team and make them do $20 million by just bringing in our go to market motion into that?”

Jason Lemkin:

Oh, on top, not get rid of them, but actually just add your expertise to their team. Take the same talent without training and tools and people, and just leverage up their revenue per lead, just increase their revenue per lead. Right?

Henry Schuck:

Increase their revenue per lead from an M&A perspective. Internally, the way I think about it too is if you can make go to market incredibly efficient, incredibly effective, then that gives you a strategic advantage to be able to take dollars that you would be spending there and spend them in product, and spend them in account management, and spend them in customer success and marketing. The more efficient you make your go to market motion, the more dollars you have to spend across the company. And I never really … I actually, when people would say, “Hey, ZoomInfo is a sales first company.” And I’d be like, “No. No. We’re a product first company. We’re a customer first company.” I hated hearing that. And it took a while to-

Jason Lemkin:

I’m with you.

 

Henry Schuck:

To just realizing that’s okay. That’s a strategic advantage of the business. We shouldn’t be embarrassed of it.

Jason Lemkin:

There’s something really interesting you said, which I think goes against some typical Twitter advice, which is that if you have an efficient go to market engine, the classic advice from VCs and others is pour gasoline on the fire. If you have an efficient … If you have 50 great reps, hire 500. Right? Go raise $200 million. And you’re saying an insight which is what I believe philosophically, although I don’t know if it works in the real world, which is if you have efficient engine, that means you can free up resources in other areas. It’s a weapon. Right?

Henry Schuck:

It’s a weapon.

Jason Lemkin:

Because if you’re inefficient, you end up having to spend every nickel in sales and marketing, every, it consumes all your oxygen. So you’re saying if your sales focused, [inaudible 00:24:23] good, put the money elsewhere. Don’t give into the fuel in the fire mentality, necessarily.

Henry Schuck:

Yeah. And then, by the way, if you’re putting money elsewhere and you’re making those investments in a smart way, that just should drive your ability to continue to invest in a disciplined way inside of your sales organization. So if I take the dollars from that strategic asset and I put it in other places, and then that should drive reinvestment back into the sales team.

Jason Lemkin:

That makes sense. So this one, we might’ve hit, and I like the fuel to fire at the end. It’s a good tie to the last thread. We might’ve hit this a little bit in the beginning. But what does this mean, hesitation stopped you going even faster?

Henry Schuck:

Yes. So I think that we did kind of hit this the beginning. But I think the way that I think about this was we’ve always been a pretty high margin business. But one of the things that we didn’t do was really think through prescriptively, where should the margin and the business be? And how should we trade? How should we think about growth versus profitability? And what did the market actually prefer here?

Jason Lemkin:

Got it.

Henry Schuck:

Instead of doing … And the reason why we didn’t do that, I think, is we had hesitation around trusting where that investment would go to change the profile of the business. And so if today, we’re 40% growth and 47% margins, then saying, “Hey, in the future, what does 60% growth and 30% margin look like?” It was tough to have that conversation along the way because we didn’t trust that the dollars invested downstream would turn into that result.

Jason Lemkin:

I got it.

Henry Schuck:

And so being convicted about making those investments and how it changes the face of the business, and trusting your ability to put the next dollar in marketing, or put the next dollar in sales, to have it grow, I think we got comfortable with who we were and how we were operating the business, and then didn’t take risks on that type of growth.

Jason Lemkin:

So whatever your own version of the rule of 40 is, it took you a while to believe it at a gut level that, that would work, that you could retain that. Right?

Henry Schuck:

[crosstalk 00:26:30] of the rule of 40 is like a rule of 80 today. But yeah, it was hard to-

Jason Lemkin:

But it’s true. Whether it’s 80, it’s hard. I didn’t believe that was true. I thought that was a silly-ism, the rule of 40 or 80. But if you have a well oiled machine, it is true for a while at least. Isn’t it?

Henry Schuck:

Yeah, absolutely. If you have a well oiled machine, you should be able to continue to invest and continue to grow in those areas. And I think we were just not convicted that the additional dollar would net the same return.

Jason Lemkin:

And there’s particularly this moment where on the sales team, you go from, you start, you have to believe that it really is bodies in, bodies out, assuming quality. Right? It’s a tough transition because in the beginning, you’re like, “Linda, Bob and Henry are so good. I just need more of them.” And then your sales leader’s like, “No, I need 40 reps,” and you don’t believe it. You don’t believe that it’s capacity. But you’re doing capacity planning for 2021 right now. Right? You know you need this number of reps.

Henry Schuck:

[crosstalk 00:27:32] in 2021. I think one of the interesting things here is I think a lot of people say, you hear a lot of people when you ask, “Why is your company successful?” They say, “Well, it’s because of the people.” And early in the early days of ZoomInfo, I got really frustrated with that answer. So I’d be on a webinar like this, and the CEO would say, “Hey, we’re really successful because of the people.” And I’d be like, “Come on. You’re really successful because of the product.” It’s got to be the-

Jason Lemkin:

It sounds like a platitude. Right? You didn’t believe it.

Henry Schuck:

Sounds like a platitude, totally. But then I found myself often, to that point, saying, “Man, if I had 10 of this guy, or 20 of that guy, or 30 of this woman, how much faster could I grow the business?” And that’s really just saying growth of your business comes down to the people. If you can look in your business, and I know everybody on this call can, and say, “If I had 10 more of him or 10 more of her, this business would grow exponentially faster,” then you really do believe that talent drives your business growth. And that’s an easy way to get to the core of what drives it, is to go, “If I clone this person 10 times, would the business grow faster?” And if the answer to that question is yes, for any number of folks in your organization, then you really do believe talent is the driver to success.

Jason Lemkin:

That’s a good insight. If there’s someone I’d say, “If I had 10 of her, I’m 100% confident,” then you’ve got to find a VP to go find that person for you. Right?

Henry Schuck:

Yep.

Jason Lemkin:

Can’t be you, going to your first point, because you can’t recruit 10 yourself. But go find the VP to do it. 

 

Jason Lemkin:

Henry, this was amazing. This was one of my favorite sessions of all time. These are the same mistakes we all make and keep making. But I think you’ve given us an incredible set of challenges to just make fewer of these mistakes. That’s the trick. Isn’t it?

Henry Schuck:

Yes.

Jason Lemkin:

Just make a couple fewer, and then watch how much faster you grow.

Henry Schuck:

That’s right.

Jason Lemkin:

All right. So this was a 10. I’m sure everyone is quietly applauding in cyberspace during this global pandemic. But I’m deeply appreciative for the time, as we all are, so thank you so much.

Henry Schuck:

Thank you, Jason. Thank you, everybody.

 

The post SaaStr Podcasts for the Week with Byron Deeter, Elliott Robinson, Henry Schuck, and Jason Lemkin appeared first on SaaStr.

Who’s the Most Popular YouTuber in Every Country?


This post is by Carmen Ang from Visual Capitalist

View the full-size version of this infographic.

Who’s the Most Popular YouTuber in Every Country?

View the high resolution of this infographic by clicking here.

Forgot about becoming an astronaut—these days, kids are three times more likely to dream of becoming a professional YouTuber.

And who can blame them? With a big enough fan base, vlogging can be a lucrative business. Who exactly are these professional content creators, and how do they make their money?

This graphic by Accredited Debt Relief shows the most popular YouTuber in nearly every country. The list only considers individual YouTubers, so brands, bands, or shows didn’t make the cut.

How Do YouTubers Make Money?

Before diving into the list, it’s important to understand the basics of the business. How do these content creators generate revenue?

  • Advertisements
    If a YouTuber reaches 1,000 subscribers and 4,000 watch hours within a year, they can start to monetize their account with advertisements. YouTubers only get paid when a viewer watches the full ad, or clicks on it.
  • YouTube Premium
    This is a monthly subscription service that allows fans to watch their favourite content without ads. YouTubers get a cut of subscription profits, based on how many views their channel attracts.
  • Corporate Sponsorships
    Also known as influencer marketing, this is when brands pay content creators to promote their product. A vlogger typically needs a large following before brands are willing to work with them, but expectations from brands vary based on the company and their marketing objectives.
  • Merchandise Sales
    If an influencer has a loyal fan base, they can make a pretty penny selling branded swag. It’s estimated that PewDiePie, the world’s most popular YouTuber, makes over $6 million a month from merch sales.

While there are several options for making money on YouTube, it’s nearly impossible to make a living without a large following.

The Full Breakdown

With over 50 million content creators on YouTube, getting noticed is no easy feat. Here’s a look at the most popular YouTubers in 187 different countries, based on their total subscribers:

Country YouTuber Category Subscribers Est. Monthly Earnings
🇮🇸 Iceland Sorelle Amore Entertainment 965,000 $3,300
🇧🇸 Bahamas Crypto Beadles Tech 92,600 $2,400
🇨🇾 Cyprus TumkaGames / Тумка:3 Gaming 900,000 $7,900
🇲🇿 Mozambique Arte e Vida Entertainment 86,800 $654.90
🇹🇿 Tanzania Young Tubers Kids 828,000 $63,100
🇱🇾 Libya King GTA Gaming 812,000 $69,900
🇪🇹 Ethiopia Amharic Cooking How To 81,700 $872.10
🇧🇼 Botswana Shree craft place How To 80,800 $11,000
🇳🇷 Nauru JerseySurvivor Entertainment 80,700 $2,800
🇹🇴 Tonga TasteoftheSouthPacific How To 8,700 $281.40
🇯🇵 Japan はじめしゃちょー(hajime) Entertainment 8,710,000 $238,800
🇻🇳 Vietnam NTN Vlogs Entertainment 8,610,000 $19,600
🇸🇪 Sweden Narins Beauty Beauty & Style 8,310,000 $203,300
🇷🇸 Serbia Life Hacks & Experiments How To 8,040,000 $318,400
🇫🇲 Micronesia, Federated States of dxd101 Entertainment 79,300 $2,700
🇯🇲 Jamaica Yanrique Gaming 785,000 $50,300
🇬🇾 Guyana Pro Marathi Tech 77,000 $28.80
🇵🇸 Palestine Fozi Mozi Kids 7,700,000 $723,900
🇮🇹 Italy Marzia Entertainment 7,660,000 $1,800
🇩🇿 Algeria Oum Walid How To 7,470,000 $217,700
🇹🇱 Timor Leste king_vieira OFFICIAL Music 7,300 $220.80
🇮🇶 Iraq قناة منوعات الكوميدية العراقيه People & Blogs 7,260,000 $593,000
🇦🇿 Azerbaijan Resul Abbasov Official Entertainment 668,000 $33,400
🇲🇪 Montenegro AdnanBro Gaming 626,000 $18,000
🇸🇨 Seychelles Rosa Gruner Gaming 60,900 $7,100
🇬🇼 Guinea-Bissau Editing ki Dukan How To 60,500 $635.40
🇷🇴 Romania Be Inspired Education 6,690,000 $86,500
🇳🇬 Nigeria MarkAngelComedy Comedy 6,340,000 $326,800
🇵🇦 Panama Mimonona Stories Kids 6,230,000 $7,900
🇱🇦 Laos Bigyai Seehalad Entertainment 582,000 $114,300
🇧🇧 Barbados Brilliant News Entertainment 580,000 $158,500
🇧🇹 Bhutan Cigano Ramires People & Blogs 56,900 $7,200
🇺🇸 United States of America Like Nastya Kids 56,900,000 $7,730,000
🇧🇿 Belize ngashigi kangleipak People & Blogs 56,300 $806.40
🇩🇯 Djibouti Eman Lotfi Entertainment 55,700 $1,400
🇨🇺 Cuba Lifeples Entertainment 538,000 $70,700
🇧🇳 Brunei Bernardo Werneck Entertainment 52,800 n/a
🇸🇲 San Marino BlackJack997 Autos 51,500 $221.70
🇲🇳 Mongolia Mesmerism Official Comedy 504,000 $16,300
🇫🇮 Finland TheRelaxingEnd Gaming 5,800,000 $128,600
🇦🇩 Andorra Tri-line Entertainment 5,700,000 $127,900
🇺🇾 Uruguay Dosogas Entertainment 5,600,000 $55,800
🇪🇬 Egypt Ahmed Hassan Family Entertainment 5,450,000 $218,200
🇸🇬 Singapore মায়াজাল Entertainment 5,320,000 $19,000
🇳🇿 New Zealand Rainbow Learning Kids 5,250,000 $5,100
🇬🇪 Georgia Guka Family Show Kids 5,210,000 $339,800
🇰🇼 Kuwait AboFlah Gaming 5,130,000 $786,800
🇵🇹 Portugal SirKazzio Entertainment 5,060,000 $11,600
🇦🇹 Austria Fabio Wibmer Sports 5,020,000 $317,000
🇻🇨 Saint Vincent and the Grenadines The Motivator 2 Sports 48,100 $60.30
🇲🇬 Madagascar Philippe MARRONE Sports 47,700 $3,800
🇸🇧 Solomon Islands Caroline Elizabeth Entertainment 45,400 $54.00
🇬🇭 Ghana RakGhana Comedy 448,000 $12,600
🇲🇼 Malawi Dj Àmit Áligarh Music 44,100 $468.00
🇲🇽 Mexico Badabun Entertainment 43,000,000 $299,100
🇧🇯 Benin Ma Chaîne How To 42,000 $610.50
🇨🇱 Chile HolaSoyGerman Entertainment 41,100,000 $208,400
🇮🇱 Israel Jamal alimwase ـ جمال العمواسي Nature 4,730,000 $89,100
🏴󠁧󠁢󠁷󠁬󠁳󠁿 Wales Ben Phillips Entertainment 4,610,000 $53,600
🇲🇾 Malaysia PlataBush Gaming 4,590,000 $70,000
🇧🇩 Bangladesh Farjana Drawing Academy How To 4,580,000 $225,300
🇵🇱 Poland Blowek Entertainment 4,530,000 $87,700
🇲🇦 Morocco YassPlays Gaming 4,460,000 $322,900
🇸🇮 Slovenia TimKo Kid Kids 4.45M $58.2K
🇻🇪 Venezuela KeiferMC Gaming 4.31M $210.0K
🇩🇴 Dominican Republic ElFlacoWTF Entertainment 4.27M $54.0K
🇧🇪 Belgium Akosi Dogie Entertainment 4.21M $415.4K
🇸🇩 Sudan المنهج السلفي بالسودان People & Blogs 398.0K $20.4K
🇧🇷 Brazil whinderssonnunes Comedy 39.80M $62.4K
🇸🇴 Somalia Balanbaalis Studio Music 384.0K $1.5K
🇳🇦 Namibia Namiban gospel music Entertainment 38.8K $1.2K
🇧🇫 Burkina Faso Jackson Oliveira Entertainment 38.7K $333.30
🇪🇸 Spain elrubiusOMG Entertainment 38.00M $204.4K
🇸🇱 Sierra Leone BlackPearl How To 36.8K $327.00
🇸🇻 El Salvador Fernanfloo Gaming 36.60M $730.9K
🇿🇼 Zimbabwe King Gryph Gaming 334.0K $639.00
🇰🇳 Saint Kitts and Nevis Dr.Mungli Education 33.5K $873.00
🇰🇪 Kenya Henry DeSagu Entertainment 328.0K $8.8K
🇹🇬 Togo Fortnite Fantasy Gaming 310.0K $2.9K
🇹🇻 Tuvalu GuruKidHD Gaming 31.8K $8.70
🇹🇲 Turkmenistan Ned Tocino Entertainment 31.2K n/a
🇲🇴 Macau 籽岷 Gaming 300.0K $1.2K
🇬🇳 Guinea Faits – Divers GUINEE News 30.6K $10.50
🇩🇰 Denmark SYBO TV Gaming 3.75M $76.4K
🇹🇳 Tunisia Born2Kill Gaming 3.69M $232.3K
🇧🇭 Bahrain عمر فاروق Omar Farooq Entertainment 3.50M $23.8K
🇦🇱 Albania Co Vines Entertainment 3.44M $81.7K
🇵🇰 Pakistan Kitchen with Amna How To 3.42M $101.7K
🇵🇼 Palau Ananda Kelly How To 3.3K $26.10
🇹🇼 Taiwan TGOP (This Group Of People) Entertainment 3.26M $15.3K
🇯🇴 Jordan Rozzah Entertainment 3.21M $38.2K
🇪🇪 Estonia Life of Boris Entertainment 3.04M $56.2K
🇨🇭 Switzerland LE GRAND JD Entertainment 3.02M $65.3K
🇨🇲 Cameroon BYSNESS Comédie Club Comedy 292.0K $7.3K
🇱🇨 Saint Lucia The Dating Guru How To 28.0K $31.50
🇱🇮 Liechtenstein caracol3000 News 27.2K $818.70
🇰🇵 North Korea Making ASMR How To 260.0K $15.00
🇸🇹 Sao Tome and Principe Anrita Melchizedek Education 25.3K $94.80
🇨🇦 Canada VanossGaming Gaming 25.10M $429.0K
🇹🇹 Trinidad and Tobago Certified sampson Comedy 241.0K $19.4K
🇮🇪 Ireland (Republic of) jacksepticeye Gaming 24.30M $991.7K
🇮🇩 Indonesia Atta Halilintar Entertainment 24.10M $218.9K
🇨🇬 Congo (Republic of the) ASTUCES NATURELLES – DR KOLO Education 230.0K $1.3K
🇩🇲 Dominica Chanel Raphael. People & Blogs 23.5K $1.9K
🇬🇩 Grenada Laura Forde How To 23.2K $610.50
🇺🇿 Uzbekistan Jasur Hamroyev People & Blogs 220.0K $2.0K
🇮🇳 India CarryMinati Comedy 22.70M $66.1K
🇦🇪 United Arab Emirates shfa Kids 22.20M $287.2K
🇹🇯 Tajikistan Shava TuBe People & Blogs 215.0K $673.80
🇱🇺 Luxembourg LuxGamer Gaming 215.0K $269.40
🇦🇫 Afghanistan Tech Zaada Tech 206.0K $8.1K
🇨🇻 Cape Verde Fred walkthrough Gaming 203.0K $1.8K
🇹🇩 Chad twifacetube Entertainment 20.1K $130.20
🇧🇾 Belarus A4 Entertainment 20.00M $2.21M
🇬🇧 Ireland (Northern) Adam B People & Blogs 2.93M $47.6K
🇾🇪 Yemen صدام العزي Entertainment 2.89M $92.0K
🇨🇿 Czech Republic ViralBrothers Entertainment 2.78M $7.8K
🇱🇷 Liberia مهووس عضلات/كمال الاجسام How To 2.77M $136.9K
🇸🇰 Slovakia Peter PlutaX How To 2.70M $169.0K
🇲🇹 Malta Grandayy Entertainment 2.69M $133.3K
🇳🇮 Nicaragua JR INN Comedy 2.67M $65.2K
🇭🇰 Hong Kong Emi Wong People & Blogs 2.54M $42.7K
🏴󠁧󠁢󠁳󠁣󠁴󠁿 Scotland Mike Boyd Entertainment 2.44M $31.5K
🇲🇩 Moldova GurinelTV Kids 2.41M $460.7K
🇬🇷 Greece KM Music Entertainment 2.26M $317.1K
🇵🇾 Paraguay TÍO RICZER Entertainment 2.20M $15.6K
🇱🇹 Lithuania Maria OMG Entertainment 2.16M $128.1K
🇴🇲 Oman قرية العجائب Entertainment 2.15M $13.0K
🇱🇧 Lebanon Laila Mourad Entertainment 2.14M $7.2K
🇧🇬 Bulgaria Bodil40 Gaming 2.03M $14.8K
🇰🇲 Comoros Vallenatos En Vivo Oficial Entertainment 199.0K $151.50
🇭🇹 Haiti Komedyen Lakay Official Comedy 197.0K $4.3K
🇦🇴 Angola ShiryuAmigo龍 Comedy 196.0K $315.60
🇲🇱 Mali MS2A FUNNY Comedy 195.0K $5.6K
🇨🇫 Central African Republic THE TRUE ROYAL FAMILY Education 19.7K $311.10
🇦🇷 Argentina DrossRotzank Entertainment 19.60M $131.1K
🇩🇪 Germany HaerteTest Entertainment 18.90M $25.6K
🇲🇺 Mauritius Ikhlaas MJ Entertainment 170.0K $34.9K
🇸🇦 Saudi Arabia mmoshaya Entertainment 17.30M $913.3K
🇺🇦 Ukraine SlivkiShow Entertainment 16.90M $620.2K
🇧🇮 Burundi Gasore Ismael Comedien Comedy 16.4K $429.30
🇦🇺 Australia CKN Toys Kids 15.40M $838.7K
🇸🇷 Suriname SRJ Musik Music 146.0K $820.20
🇫🇷 France SQUEEZIE Entertainment 14.70M $325.2K
🇮🇷 Iran KhanAga Alireza Alibabaei Jabbari Entertainment 138.0K $63.00
🇷🇺 Russia TheBrianMaps Entertainment 13.90M $126.9K
🇰🇷 South Korea Boram Tube ToysReview [보람튜브 토이리뷰] Kids 13.80M $13.4K
🇹🇭 Thailand Kaykai Salaider Entertainment 13.60M $194.6K
🇳🇱 Netherlands NikkieTutorials Beauty & Style 13.40M $90.5K
🇵🇪 Peru Shidory Drawblogs Entertainment 13.30M $195.9K
🇹🇷 Turkey Enes Batur Entertainment 13,100,000 $1,120,000
🇵🇭 Philippines Ranz Kyle Entertainment 12,000,000 $52,400
🇲🇲 Myanmar khunThinmg pao Comedy 119,000 $4,800
🇬🇦 Gabon Xavier HUBERT-BRIERRE Nature 113,000 $7,000
🇨🇴 Colombia Ami Rodriguez Entertainment 11,700,000 $244,000
🇬🇲 The Gambia ebrohaugh People & Blogs 11,400 $159.00
🇨🇳 China 李子柒 Liziqi How To 11,100,000 $810,000
🇷🇼 Rwanda Shangazi Emma-Claudine People & Blogs 108,000 $2,900
🏴󠁧󠁢󠁥󠁮󠁧󠁿 England PewDiePie Entertainment 105,000,000 $1,160,000
🇲🇷 Mauritania INFOS AABD Tech 102,000 $235.80
🇳🇴 Norway SaraBeautyCorner – DIY, Comedy, Makeup, Nail Art Beauty & Style 10,600,000 $100,900
🇪🇨 Ecuador Doc Tops Entertainment 10,500,000 $307,500
🇰🇮 Kiribati TV WULKAN – లొఽథటలలొప్రఠఽరగల్వ Entertainment 10,200 $2.40
🇱🇸 Lesotho Omnia Stars How To 1,900 $1.80
🇭🇺 Hungary R3D 1 Entertainment 1,990,000 $56,200
🇰🇭 Cambodia fanKID Entertainment 1,940,000 $38,000
🇱🇻 Latvia Little Movies Games & Fun Gaming 1,940,000 $19,800
🇳🇵 Nepal Tattato Khabar News 1,850,000 $69,800
🇬🇹 Guatemala Jexs Comedy 1,810,000 $102,000
🇿🇦 South Africa morecaspar Entertainment 1,750,000 $204.60
🇨🇮 Cote d’Ivoire (Ivory Coast) video whatsapptube Entertainment 1,700,000 $5,100
🇨🇷 Costa Rica Germán Rodezel Entertainment 1,690,000 $13,600
🇧🇴 Bolivia Edson FDB Gaming 1,640,000 $48,800
🇶🇦 Qatar Kareemtime Official Comedy 1,530,000 $40,000
🇧🇦 Bosnia and Herzegovina Omco Comedy 1,480,000 $227,000
🇲🇨 Monaco Jon Olsson People & Blogs 1,470,000 $24,900
🇿🇲 Zambia Cartoon Club Kids 1,440,000 $3,400
🇱🇰 Sri Lanka Apé Amma People & Blogs 1,430,000 $94,500
🇦🇲 Armenia Arin أرين Entertainment 1,410,000 $145,500
🇰🇿 Kazakhstan Ekaterina Saibel People & Blogs 1,310,000 $20,600
🇭🇳 Honduras músicos Cínicos 鯉 Music 1,270,000 $139,600
🇭🇷 Croatia Doctor DS Autos 1,260,000 $86,400
🇸🇳 Senegal Hussein and Zeinab. Kids 1,230,000 $184,700
🇺🇬 Uganda Masaka Kids Afrikana Kids 1,140,000 $103,600
🇰🇬 Kyrgyzstan Сань Янь Kids 1,140,000 $474.90
🇸🇾 Syria OtakuGamer – أوتاكو قيمر Gaming 1,130,000 $114,900
🇸🇿 Swaziland (Eswatini) OuSSama MiZani Entertainment 779 n/a

As mentioned earlier, the world’s most popular YouTuber is Swedish-born vlogger PewDiePie. He’s well known for his “Let’s Play” videos, which document him playing various video games. PewDiePie joined YouTube in 2010, and has now amassed 105 million subscribers. While he’s based in England, his channel is registered under the United States.

It’s worth noting the vast discrepancies between certain countries. For example, while the U.S.’s most popular YouTuber, Like Nastya boasts 57 million subscribers, Eswatini’s top vlogger, OuSSama MiZani has less than 800. Clearly, some markets are more saturated than others.

Categories, Ranked by Popularity

Geography isn’t the only factor that impacts popularity—the type of content is important as well. Which 10 categories do the top earning YouTubers fall into?

Rank Category Number of Top Earning YouTubers
1 Entertainment 72
2 Gaming 25
3 How To 18
4 Comedy 16
5 Kids 15
6 People & Blogs 14
7 Education 5
8 Music 5
9 Tech 4
10 Beauty & Style 3

Not surprisingly, the most popular category is entertainment, which has 72 of the top earning YouTubers. Some of the biggest YouTube personalities fall under this category, such as PewDiePie and Chilean YouTuber HolaSoyGerman, who has 41 million subscribers.

The second most popular category is gaming, which has 25 of YouTube’s top earners. Some big names in this category include Ireland’s jacksepticeye with 24.7 million subscribers, and Canada’s VanossGaming, who has 25.2 million.

In third place are “How To” videos—18 of the 187 top earners fall into this category. Life Hacks & Experiments is the most popular YouTuber in this group, with 8.3 million subscribers.

Categories, Ranked by Earnings

Here’s the highest earning YouTuber on this list for each category.

Rank Category Top Earner in Category Est. Monthly Earnings      
1 Kids Like Nastya $7.73M
2 Entertainment A4 $2.21M
3 Gaming jacksepticeye $991.7K
4 How To 李子柒 Liziqi $810.0K
5 People & Blogs قناة منوعات الكوميدية العراقيه $593.0K
6 Comedy MarkAngelComedy $326.8K
7 Sports Fabio Wibmer $317.0K
8 Beauty & Style Narins Beauty $203.3K
9 Nature Jamal alimwase ـ جمال العمواسي $89.1K
10 Education Be Inspired $86.5K
11 Auto Doctor DS $86.4K
12 News Tattato Khabar $69.8K
13 Tech Tech Zaada $8.1K
14 Music Balanbaalis Studio $1.5K

When ranked by monthly earnings, the kids category comes in at first place. Six-year-old Like Nastya makes an estimated $7.73 million per month—that’s over 5 million more than the second ranking category, which is entertainment. The third most lucrative category is gaming, with the highest earner, jacksepticeye grossing an estimated $990,000 a month.

It’s important to note that figures are estimates of each YouTuber’s ad revenue, so it doesn’t account for corporate sponsorships, merchandise sales, or any fan donations.

So for all we know, these influencers could be making even more money. If that doesn’t inspire you to start posting amateur videos on YouTube, we don’t know what will.

Subscribe to Visual Capitalist


Thank you!
Given email address is already subscribed, thank you!
Please provide a valid email address.
Please complete the CAPTCHA.
Oops. Something went wrong. Please try again later.

The post Who’s the Most Popular YouTuber in Every Country? appeared first on Visual Capitalist.

How Do I Develop Inbound Leads in a New Category?


This post is by Jason Lemkin from SaaStr

Q:  What’s the best way to develop inbound leads when creating a new market/product category?

The answer is you do All of It.  Just more of it.

Category creation is hard because you have to build awareness of both a new vendor AND a new category.

But … the problem you are solving isn’t new. That’s the key.

So go everywhere that problem is:

  • Content marketing. Write about the problem and how you solve it. Write a truly awesome, canonical piece and Google will drive you leads here over time. More with some great examples here: Corporate Blogs Always Work. But Only If You Do Them Right. | SaaStr
  • Events — digital and IRL now. Go to the places folks need your product are. You may not get 1,000 leads from this. But I bet you can get a few good ones.
  • Integrations in leading platforms. Get on the marketplaces for Shopify, Salesforce, Google, etc. You won’t get a million leads over night. But there is some discovery in every marketplace.
  • Specific high-affinity / value integrations. Pick a few apps, even if they are much smaller than Shopify, where you can add insane value. Reach out to the CEO, confirm the synergy, and go build the integration.
  • Targeted Outbound. Yes, outbound works. Identify 100 buyers that could really, really, really benefit from your problem. And spend an hour researching and customizing an email just for them. Yes, this will take 100+ hours. Yes, it is worth it.  More here.

It’s harder, but the key to not forget is even when you are creating a new category — is the problem is known. Now they just need to know the solution is finally here.

The post How Do I Develop Inbound Leads in a New Category? appeared first on SaaStr.

SaaStr Podcasts for the Week with Jennifer Tejada, Ben Chestnut, and Jason Lemkin


This post is by Amelia Ibarra from SaaStr

Ep. 370: As organizations race to achieve relevance and a competitive edge in the digital era, automation is fueling the fight. Join PagerDuty’s CEO, Jennifer Tejada, as she discusses the need for agility and innovation and how automation is aiding adaptability and allowing enterprises to surge ahead.

 

This episode is sponsored by Linode.

 

SaaStr’s Founder’s Favorites Series features one of SaaStr’s best of the best sessions that you might have missed.

This episode is an excerpt from a session at SaaStr Summit: Enterprise. You can see the full video here, and read the podcast transcript below.

 

Ep. 371: It’s no secret that businesses today are struggling with an unpredictable economy. In this session, Mailchimp Co-founder and CEO Ben Chestnut will share the story of Mailchimp’s founding amidst—and despite—the dot-com bubble burst, and how the company navigated a number of inflection points in the first 10 years of its founding.

 

This episode is sponsored by Outgrow.

 

This episode is an excerpt from Jason and Ben’s session at SaaStr Annual @ Home. You can read the podcast transcript below.

 

If you would like to find out more about the show and the guests presented, you can follow us on Twitter here:

Jason Lemkin
SaaStr
Jennifer Tejada
Ben Chestnut

We’ve shared the transcript of episode 370 below. You can also jump down to the transcript of episode 371.

Transcript of Episode 370:

Jennifer Tejada:

But I thought today I would start off with a little bit of good news, and that good news is the fact that digital acceleration has truly become a reality. And with that, it’s a transition that we’ve seen take place over several decades. I’ve been in software since the ’90s and for over 20 years, nearly that entire time, we’ve been talking about digital transformation, developing strategies, architecting new technologies, and moving beyond digitization to rethinking our businesses, our products, and our services in a way that’s optimized for a digital world.

Jennifer Tejada:

With the advent of a global pandemic and the resulting recession, transformation efforts around the world and across industries, as you’ve all seen, have been thrust into high gear. And for some companies, this transformation is a requirement for survival, where for other companies, it enables them to exploit opportunities that are presented by the current environment. And this current environment that we’re in, marked by an ongoing global health crisis, by lockdowns, by remote work, social distancing and civil unrest and market volatility, it’s challenging in new ways that we as leaders have never experienced. Not the least of which, by being exhausting.

Jennifer Tejada:

This shift has come suddenly. It’s been extraordinarily fast and it’s been compulsory. It’s not like we had a choice, as opposed to more gradual like in earlier industrial revolutions. And it’ll be interesting to find out what sticks, which changes stick around and stand the test of time and which kind of return to the way they were when we find our new normal. Since the only real certainty is ongoing uncertainty, I found myself as a leader seeking inspiration. And I didn’t have to look very far. I looked to our customer base. Many of our customers are doing amazing things. They’ve helped us get through the stay at home and shelter in place orders and manage the fear and uncertainty of COVID, like Peloton. I don’t know about you, but all of my fitness is now happening in my home and within a six mile radius of my house.

Jennifer Tejada:

Slack, which has become an online collaboration lifesaver for many of us at work and also a social environment for us to engage with our peers. Netflix. My daughter is using Netflix Party all the time to feel that sense of watching a movie with her friends when she can’t be together with them. Shopify. We’ve seen tremendous results from their earnings recently because they are enabling the world to transition to e-commerce essentially overnight. Ocado, which is an online grocery deliverer in the UK which is getting food to people when you need it when you don’t really want to walk into a grocery store. And of course we know Amazon has been delivering all kinds of things from desks to working at home to common household supplies. My favorite though is Zipline. Zipline is a California drone-based delivery company that transports critical medical supplies like blood and vaccines in Rwanda and Ghana. And in April, it added COVID-19 test samples to its distribution.

Jennifer Tejada:

So it’s not all terrible bad news because Winston Churchill told us, “Never waste a good crisis.” And many of our enterprise customers at PagerDuty have delivered digital transformation programs that were supposed to take years in months. That is really happening in the marketplace. And it’s happening at companies that are 50 or 100 years old, where they’re having to find new ways to reach their customers with brands and services. Some of the examples that ready come to mind are remote work, contactless, curbside pickup, and cashless transactions, which we all experience as consumers. Some are less obvious like tele-health. This came from necessity. Teladoc, Cigna Virtual Care has been super helpful to my family. Maven Clinic.

Jennifer Tejada:

Or even manufacturing companies like Ford and Dyson transitioning their manufacturing lines to build much needed ventilators or Estee Lauder transitioning its cosmetic lines to build hand sanitizers when New York was really struggling to stop the spread of COVID. And finally we’ve seen social media play a role in organizing and catalyzing the global anti-racism movement. Much of this acceleration can be credited to this crisis, which while being chaotic, it’s actually the perfect forcing function for change. Prior to the pandemic, you had to plan and orchestrate and sell change. Often you needed consultants and boards and change management experts to be involved to help you convince your people that even if it wasn’t broken, they needed to fix it, to disrupt something that was working really well.

Jennifer Tejada:

There’s typically a very high internal cost to change, not to mention the external market risk and customer risk. And in this case, we’re now seeing an environment where your employees and your customers not only know they need to change, change is sometimes the only or the most immediate viable path. And in that case, this is actually a gift. I think of this crisis in some ways as a gift because change for us is now practically free. Relatively speaking, the ability to pivot your organization, the ability to move in a different direction, the ability to look at all those things as a leader you had on your bucket list that you wanted to do differently or experiment with, well, now you have that opportunity and the time is now to start ticking those things off your bucket list.

Jennifer Tejada:

The other thing that’s changing and evolving really fast is the role of the leader. We now have new stakeholders and new challenges. This crisis has accelerated the change in the CEO role permanently, broadening all of our responsibilities and our constituencies. It’s not enough to just make our customers happy or our employees happy. We have to think about all of the communities that we serve, our investors and the communities around us that need our help. We need to leverage our tech, our people, our position, our voices, our power, and that has become a central requirement in the CEO role. Trust has also become the most valuable currency. It takes years to build up trust with your customers and employees, and it can be destroyed in a heartbeat, in a minute. And that means that transparency, vulnerability, continuous engagement with our employees and our customers is now mission critical.

Jennifer Tejada:

And work is everywhere. It’s all the time. The lines between work and home have blurred. So who owns the wellbeing of our employees? We do. Who owns keeping them informed in a world of misinformation? We do. And our values have become increasingly more critical. You now have to go beyond explaining your values making sure everybody understands them. You have to lean into them and demonstrate with a high level of empathy that every decision you make, big or small, is values-led because your employees are looking to you. They are trusting you to keep them engaged in your mission. And as CEOs and leaders, sometimes that’s really challenging because we all need to provide a compelling future, a purpose to keep people who are dealing with things like isolation or their kids at home or the prospect of school not picking up in the fall, the stress of COVID and its impact on family members.

Jennifer Tejada:

We need to keep them engaged in the purpose and the mission so that they’re driven so that they can continue to find fulfillment and enjoyment in their work. And to do this, you’ve got to scale it through your managers. But management has changed. When I grew up in the world of management training, it was all about duty of care. First, do no harm and deliver the business results. Well, we have to now start with demonstrating personal care first. And this may not naturally come to all of your managers. It may not be first nature. That role of the manager is increasingly important, that frontline manager, not simply to direct priorities and direct work, but to model, to coach and most of all, to demonstrate care to your employees.

Jennifer Tejada:

I was speaking with Brad Smith, the chairman of Intuit, the other day, and he shared this simple process that they’ve executed at Intuit that I thought was really interesting. They’ve created a form and a flow for their managers to do check-ins. And instead of doing what we all naturally want to do, which is to check in on the project, check in on how the work’s going. Like is it going to be delivered on time, is it going to be on budget, will we ship it, will customers like it, will they understand it, start with the people first. How are you? How are you feeling about things? How’s your family? How’s everything going? This really resonated with me because one of PagerDuty’s values is people first. And this just feels like a great executable on that. They’re taking it one step further and they’re tracking it in Betterworks or Reflektive or one of their HR online systems. And I think that’s a really good way to help managers practice, but also hold them accountable to demonstrating that care for employees.

Jennifer Tejada:

The challenge is even the best management and training processes won’t always work. They won’t prevent burnout because when we’re working from home and we’re supported by this technology, there’s great technology that we’re using today which blurs the lines between work and family time. People are going to get burned out and you’re going to see that ebb and flow and going in cycles. So looking forward, we also need to innovate and automate policies around flexible working, childcare and lead to address some of these challenges. For example, at PagerDuty we’ve offered Newtonian days, spontaneous Fridays off to really enable employees to decompress and refresh and step away from the blue screen.

Jennifer Tejada:

We’ve also kicked off this concept of simple Wednesdays. Simple stands for stop internal meetings, plan lots of external ones. And the idea is that on Wednesdays, if we take meetings, they’re going to be external, customer-facing meetings. This has helped us to break up the meeting gridlock mid week and it’s also turned our collective focus forward and outward towards the market and our customers, which is where our priority lies. In addition of having an existing five months of parental leave, we extended emergency and caregiver leave and launched an online mental health platform called ginger.io for our employees. We also gave our employees an expense allowance for their work in home environments. And to support personal activism and anti-racism, we updated our 20-hour volunteer time off policy to include peaceful demonstration, self-education, and voting.

Jennifer Tejada:

I’m not suggesting this is perfect, that this is all inclusive or that you’re not doing a lot of this already, or frankly that you need to do all of this. But what I am suggesting is, we need to keep improving and experimenting and figure out how we create that purpose and that fulfillment for our employees while delivering on new needs for our customers. Sound easy? Not so much. One of the big questions is, how do we find the capacity as leaders, personally, and the capacity within our organizations and our teams to get some of this done.

Jennifer Tejada:

Nicole Malachowski is a retired Air Force officer and the First Woman Thunderbird Pilot and I’ve had the great fortune of hosting her to speak with our leaders in many occasions. And one of the things that she talked about recently really struck with me. It’s the fact that when you’re in combat and it’s chaotic, your natural instinct is to play defense. But the winning playbook to surviving and winning in a combat environment is all about seizing your advantage. And I’ve heard people talk about seizing opportunity, but this nuance is a little different, right? Because again, most of us normal humans in a chaotic or situation where we feel attacked and uncomfortable, we’re going to shift to the back foot. We’re going to shift to defense.

Jennifer Tejada:

Nicole’s astute point is that you are unlikely to win playing defense because someone’s chasing you suddenly. First, you need to identify and name your advantage. That sounds pretty simple and straight forward, and it can be surprisingly hard to do because we all think we’re good at lots of things. We all think we have many benefits. What is your greatest advantage? Be intellectually honest. Maybe it’s not that list that was in your last pitch deck, but what you truly believe your customers in the market reflect back to you as your defensible advantage. How’s your product essential? Do you solve a current urgent problem? How do you point your advantage at your customer’s biggest challenges?

Jennifer Tejada:

Next, focus on turbo powering that advantage. This is the hard part because if your company is anything like mine, we have teams working on all kinds of initiatives that were super relevant in January and not so much now. But we have people that are wedded to those projects that feel a deep level of personal connection to that work. And on close examination, even though they deserve re-prioritization or maybe canceling, people will be resistant to that change. Your job is to as quickly as possible shift your resources to strengthening your advantage. So how do you free up your people so that they can focus on being creative, they can shift to that advantage, digging in deeper, building a stronger moat with that advantage, being innovative and yet finding the capacity and the time to do that despite all of the personal challenges I just mentioned and all of the business challenges that are in play.

Jennifer Tejada:

I’m positive that you need to automate or eliminate anything that can create capacity for the stuff that matters, that advantage that we talked about. And making space is literally and figuratively space for transformation. So like us, as you’re probably scenario planning your butts off to maximize growth and conserve cash in case this pandemic goes on for a while, which it looks like it will, how are you going to do more with less, particularly in a cash-constrained world, and how do you know which projects to stop and which projects to accelerate? How do you leverage your team to do that? Well, for us we have to start with elimination. We had to ruthlessly prioritize our team’s investments and activities.

Jennifer Tejada:

And I was somewhat helped because we used the V2MOM methodology, where you stack rank all of your key initiatives, you stack rank the projects that support them. So, you kind of have to challenge that stack ranking in order to keep something that’s low on the list in play, or you have to make a really good business case for reordering that stack rank. And that’s precisely what we did. It allowed us to reshuffle some things. It allowed us to stop some projects or back burner some projects. Some projects that I particularly was very interested in and committed to. We had to put on the back shelf when the world started to change.

Jennifer Tejada:

Then you’ve got to assess your progress and then you’ve got to reprioritize again. I think the thing that surprised me was that you’re constantly having to monitor this, check your progress, potentially reprioritize because the market and the environment we’re in is evolving faster than in any experience in my professional lifetime. And what I’ve learned is this is really a cycle of days and weeks, not months. In this environment, I think the frustrating thing is the annual planning cycles that we’ve built our businesses around don’t serve us. They’re static and unresponsible to the evolving situation in front of us and we need something more dynamic and more fluid. Canceling projects to promote your advantage will serve you in this environment. So while it may be hard, cross some things off the list.

Jennifer Tejada:

Now let’s turn to the role that automation can play in accelerating your strategy and your business and your customer outcomes. As a startup, we covered a lot of processes together really quickly out of necessity and we haven’t really had time or the wherewithal to go back to them and harden them for scaling. And those manual processes, they build up like plaque on your teeth. You can’t really see it until it’s bad. And by then you’ve got a mouth full of decay and your teeth falling out, this whole set of painful bigger problems that are now harder and more expensive to resolve. And that’s where automation comes in, whether you’re leveraging robotic process automation from UiPath and your finance teams or your HR teams, or you use SaaS apps like Pendo to find insights and track and learn your customer behavior in your product, or you use People.ait o understand the auto and automate the process of gaining insights on sales capacity and sales productivity.

Jennifer Tejada:

All of these types of automation can not only accelerate work and get rid of manual work, they can help you institutionally learn faster, get smarter and get better faster. And those are the outcomes that we’re looking for. Earlier this year, we redoubled our focus on our enterprise segment where we have a strong leadership position. Think of this as something we identified as an advantage. And to shift resources, we had to automate more and more of our SMB offering and make sure that we could refine our product to make sure self service journeys were more productive and frictionless. We made in-app purchases available for all of our customers, and we are the only mobile app that you can run an end-to-end incident and response on, which is really important when we’re talking about supporting distributed teams.

Jennifer Tejada:

Another example we’ve seen plenty of in our customer world is this expedition of cloud migration. And in particular, we’re seeing this in retail and e-commerce and traditional consumer businesses where bricks and mortar brands have been forced to shift to 100% e-commerce overnight. And I remember seeing Andy Jassy speak about this at Reinvent, the idea of kind of cleaning out the garage and starting fresh as opposed to just digitizing the processes that were available today. So, we’re now seeing customers that are reinventing, reinvigorating the customer journey, leveraging the cloud as an automation platform for that. And all of you are very fortunate, many of you are cloud native companies. And so I think there is an opportunity and potentially an advantage here.

Jennifer Tejada:

This may sound kind of primitive when we talk about customers making that shift now, because you were born that way, but the biggest brands in the world didn’t start here; and underestimating those brands, do that at your peril because many of them have some of the best marketing, product and business operators in the planet and they have now gone Mach 5 into learning how to leverage the cloud to their advantage and they may be coming after some of you. So, the other thing to think about is your advantage of being a cloud-based company, that competitive lead or gap may be getting smaller for you and you’re really going to have to innovate on behalf of your customer in other ways.

Jennifer Tejada:

If you’re not already, you’re also going to need to retrain yourself and your teams to take a more agile approach to planning and capital allocation. Think about doing it on a rolling quarterly basis if not a monthly basis, so you can find opportunities for automation really quickly. You can pivot when you see a project that you’re investing in right now is not going to pay off for too long of a term. And at the same time, you can weigh up some of the long-term initiatives that are going to be really important for the future that are going to ensure that you can not only survive but thrive and come out of this environment much, much stronger.

*****

Transcript of Episode 371:

Jason Lemkin:

This is very exciting to me. Ben, thank you so much for coming and joining thousands of us in cyberspace here.

Ben Chestnut:

It’s about time you invited me.

Jason Lemkin:

Yeah. I’ve been asking Ben over Twitter for years to come and I think his kids got older, they had sports and spring break and it’s hard to lure someone from Atlanta sometimes, although you never know. Every once in a while someone has to have a meeting in the Bay Area or Paris and they’ll come but I’m super excited-

Ben Chestnut:

[crosstalk 00:02:10] finally aligned and I can be here with you and your audience.

Jason Lemkin:

What’s your gut on all the office stuff? Where will we be … has MailChimp gone, made any formal decisions and where will you be at the end of next year in an office? Have you figured that out?

Ben Chestnut:

I really like what Patrick Collison said recently on Twitter. I think when things do get back to normal and they will, six months after that, you’ll look back and things will look like nothing ever happened. Maybe that’s just faith, blind faith that it’ll get back to normal. I have family that was stationed in China for work and they said it got back to normal.

Jason Lemkin:

It’s definitely back normal. Even in Europe, like all the entrepreneurs I know in France, it’s like 90%, right?

Ben Chestnut:

Yeah.

Jason Lemkin:

All right, so no thinking of getting back to normal is sort of how you’re thinking as a leader, right, for all of this. It makes sense to me. I’m super excited. I think, I’ve been … I was trying to think last night whether I’m a 3X or 4X MailChimp customer but it’s fun to … there’s apps we use every day, right, but there’s not that many times you’ve been a three or 4X customer and it’s fun to see it and then MailChimp to me is so interesting for founders here because it took me by surprise how big it was.

Jason Lemkin:

Maybe it’s because you didn’t raise 11 rounds of venture capital, which we’ll touch into and bang your chest on TechCrunch every week with another huge round or maybe it’s because I wasn’t a marketer by training, right and I just grabbed an app here or there. MailChimp, several times I think took all of a surprise and it’s kind of a hero company because of that. So, I want to do … like I want to go back in time a little bit to the very, very beginning but to me, the most fun … I want to jump around time, if it’s okay and talk about breakout, right?

Jason Lemkin:

So, MailChimp is … I don’t know whether you’ve announced your numbers, you don’t have to comment but around a billion ARR on either side, it’s a lot of ARRs, whatever it is, it’s very large but it’s a category nominally with a lot of vendors, right? A lot of vendors, tiny, minute, they probably pop up every hour. There’s someone with some specialized … at least on email and we’ll talk about getting bigger and into micro animation. So, what was like the 10X feature … whenever it was, a million in revenue, two million, what let MailChimp break out for real from the competition?

Ben Chestnut:

It had to be freemium. It was 10 years in, 2010, 2009-ish when we launched our freemium plan, everything took off. It was this rocket ride right after that. I mean we went from, I don’t know, tens of thousands of users to a million in the first year and then it doubled and doubled and doubled after that. It’s been a crazy rocket ride from there.

Jason Lemkin:

So, that’s interesting so before you went freemium, which was like 2009-ish, is that right? Let’s talk about that-

Ben Chestnut:

Yeah, we didn’t have a free plan. We didn’t have a free trial before that. You had to pay.

Jason Lemkin:

You were nominally founded in 2001, right?

Ben Chestnut:

Yes.

Jason Lemkin:

We’ll talk about that. So, MailChimp wasn’t an overnight success story by any stretch of the definition. You launched … and the first two years before you went freemium, do you remember … it took you two years. Two years is a long time as a founder too, right? How big were you were … but you still managed to get to a couple million in revenue but you were not a differentiated tool at that point?

Ben Chestnut:

It didn’t feel like it. I was eating off the McDonald’s value meal, I was still eating ramen, that’s all I remember of those days-

Jason Lemkin:

Is that true, even two years in.

Ben Chestnut:

Yeah, like you said, I think my revenue is in the hundreds of thousands.

Jason Lemkin:

Okay, so freemium, which we have and … So, that is interesting because … and then, why did it work, were people … because freemium alone isn’t always a marketing strategy, is it? You have to have traffic. You have to have a denominator. You have to have people searching for you and finding you, so did you even know … and to me, MailChimp is interesting because I would think of it as lightly viral, right? If you’re on the free plan, you see the MailChimp at the bottom, if you take a look at the to field or whatever, you can see that it came where there’s URLs but it’s not Zoom viral, right? It’s not that real time. Why did freemium work besides that it worked? Did you even know?

Ben Chestnut:

Well, I think it was just perfect timing. I think there was a crisis going on. It was 2009, we were still reeling from the recession and people needed it badly. Small businesses badly needed help and there we were with the solution, a little bit like Zoom. A much smaller scale of Zoom, but we were there with the right tool at the right time.

Jason Lemkin:

What was, when you launched it, not to go too much in details, it’s interesting because it worked. It didn’t worked fast, it worked in 30 days or 60 days. The conversions happened, right? Your paid business went up, dramatically, quickly right?

Ben Chestnut:

There was immediate, yeah, server outages, people were running around like chickens with their heads cut off. I mean it was crazy. Yeah. I was at the time-

Jason Lemkin:

What did you do?

Ben Chestnut:

I was getting flashbacks from like the AOL dial-up issues where no one could dial in, everyone was complaining about that and I was like, “Oh my god. I’m AOL.” Nothing would stay alive it seemed like.

Jason Lemkin:

Man. Yeah and what was the first … if you remember, what was the first … I hate this word but what was the first choke or what was your first point where you had to convert to paid that actually worked? Did you test anything or what was that insight? When did you know when to throttle the free folks back when you first launched?

Ben Chestnut:

It’s a little bit weird with small businesses because sometimes with small businesses they need like five years to figure it out. You know how it is, it’s a grind. We never really found the one choke. What we found was that they just need lots of time to find their way and everything we tried just really didn’t seem to work. Sometimes they just needed to get to … 30% of small businesses die in two years, 50% die in five years. So, it’s like our sales pipeline, it needs to be five to 10 years. That’s the pipeline for small business, it felt like at the time.

Ben Chestnut:

So, all we really did was give them more time. That was really the only kind of choke point that we had to make people … they would shut down their business but they would keep their free MailChimp account alive. They’d get a job. They’d learned how business actually runs. They take that learning, quit, start their business up again and then-

Jason Lemkin:

With their list.

Ben Chestnut:

Yeah, yeah but it was really just … once their list grew to about 2000, that’s when they felt like it was less of like a forcing mechanism but more like a celebratory rite of passage, like if they could get their audience to 2000 and they had to start paying, they felt proud of that. We saw tweets of people saying, I’m finally a paid MailChimp customer. Yeah.

Jason Lemkin:

It’s interesting, I had an eye opening moment years ago when I first met with someone at SurveyMonkey when it was tiny and they said, “We don’t count churn when we lose a customer because they may come back in their next job with their next thing. We don’t actually count that. We don’t count that as churn. We wait some …” They waited a mammoth amount of time in the early days, probably not today as a public company. How do you think about that sort of churn because you didn’t really lose that customer, right? Even though the revenue paused. Do you have a nuanced view of churn at the very low end of the market?

Ben Chestnut:

At the very low end of the market, absolutely and a very nuanced view of ARPU as well. We kind of went lower ARPU because we want a larger denominator. We want more and more small users than we do very, very big users.

Jason Lemkin:

So, when you’re the CEO and you’re … I would imagine at this point, you’ve got a few dashboards at MailChimp. How do you think about the goals for those … because the smaller the customer usually the higher the churn, right? That’s the law, especially the very small businesses, right? The one person shops, it’s hard, right? What do you see on your dashboard in terms of churn and how do you incent the team or drive the team to do better in those tiny, tiny customers in terms of churn?

Ben Chestnut:

Well, what you do is you say what are the industries where … our small business customers are really tech savvy and they really push the limits of innovation inside of MailChimp and we didn’t say where the most revenue comes from, we said where do they push our limits because that’s what drives us, is innovating and then, we said, “Well, it’s eCommerce customers.” So, we really look at just a few slices of our audience and we say, what’s going to help them sell more? Those are small customers. They’re tiny but they can make millions of dollars after sending every email campaign.

Ben Chestnut:

They’re making hundreds of thousands or millions of dollars every time they hit send. We focus a little bit more on those and any technology that we get out of serving those sort of high-end, high-innovation, high-income customers, it trickles down to the small businesses.

Jason Lemkin:

It’s interesting that’s … I guess that’s obvious that … even back in 2009 when you converted, eCommerce was sort of your north star customer, was folks selling, and then MailChimp is almost like your ERP isn’t it? It’s certainly your marketing automation … but it’s almost more, right? Your list can be everything as a tiny vendor, right?

Ben Chestnut:

I can walk through at a restaurant and I can see someone … or at a coffee shop, they’re using MailChimp, they’re using it like a CRM. I see them with their database, the MailChimp audience screen up live. It’s less of the sending and it’s more of the analyzing the data of their customer base for sure.

Jason Lemkin:

Just one last question on this and let’s hit the next one. The step function of those going to freemium, two years, charging everybody, the second … again, give me your credit card, no chance for a small business to get to know you, to see if they want to fall in love, right? Freemium worked but what was the surprise and delight feature? People back then loved MailChimp, right? It wasn’t just the chimp and the cute ads, and I can’t remember because I didn’t know nothing about email, I just found MailChimp on a Google search which is probably our next slide I want to talk about. What was your surprise and delight? Why did they love you? Did you have a hero feature? What was that special product moment or feature?

Ben Chestnut:

I was a real stressed out entrepreneur in those early days and I was just constantly micromanaging everybody in the office like, we got to get this done. We got these goals. I have a Gantt chart of everything and I noticed nobody wanted to stay late. They just weren’t inspired but one day, people were staying late and I was like, “What are you doing?” They would hide their screens every time I looked. Then, later I found out what they were doing was they were planting Easter eggs and that’s what got engineers and techies inspired to actually work late and I said, “You know what, as long as we hit our goals, do all the Easter eggs you want.”

Ben Chestnut:

So, people start to infuse personality into the app. They started to build an app that they wanted to use and it turned out small business customers running a small business is dismal, I’ve learned over the years and they really need like a ray of sunshine, some sense of hope, some kind of humor in the app. So, I think that was sort of the … that was the thing that kind of was the key unlock for MailChimp in the early days, just personality.

Jason Lemkin:

Yeah, make it accessible, right? Make it fun and interesting.

Ben Chestnut:

Yeah. We’ve had … I’ve seen news headlines where we take down a billboard of Freddie and people complain. They said, “That was my only joy in life.” We’ve reduced the amount of Freddie in the app because people were saying it’s taking up too much space on mobile and everything and we’ve had … We get a deluge of complaints. I had one small business customer saying, “He was my only joy.”

Jason Lemkin:

That is a sign of something special. Yeah, and then this one … this is just one of your billboards. This is the one but MailChimp has always been bootstrapped which we can dig into but that especially means every dollar is scrutinized … in the beginning, at a force of necessity, for years and then it becomes part of your mentality and then, I remember, one day, I was driving up 101 in the Bay Area and I saw, I think that the one on the right. I’m colorblind, the yellow one, the classic one and I’m like MailChimp must be … like how can they afford these … I didn’t even know what billboards cost back then, right? I know today, they are cheap.

Ben Chestnut:

They’re expensive now.

Jason Lemkin:

Back in the day as a founder, I’m like, “Oh my god,” but still you were buying billboards and now I get it, it’s tech, you want to expand into tech, right? What did you learn about brand because all you had was that chimp on the 101 in the Bay Area and this display ad and brand advertising, it’s not intuitive to founders, right? It is non-intuitive, why did you do that relatively early and what were your learnings about how to build on your brand?

Ben Chestnut:

Well, that was always really cheap.

Jason Lemkin:

Yeah.

Ben Chestnut:

Always experimenting with different kinds of media. I was doing podcasts when they first came out, really just for affordable-

Jason Lemkin:

On an iPod.

Ben Chestnut:

Yeah, yeah.

Jason Lemkin:

Hence the name, yeah.

Ben Chestnut:

Billboards was just one of the things we always tinkered with. We have a culture of tinkering and experimentation at MailChimp. The thing about billboards and branding is … one thing is I always wanted something tangible with our brand. Everyone interacts digitally but you need something to feel. So, I always have like MailChimp toys, something that I want on your desk, that you can feel or see, that makes your brand real when you can see that in the real world, like you saw it in your car on highway 101. Then, with the billboards, I had a competitor. We would listen to their analyst calls every quarter and they said that they opened up a San Francisco office.

Ben Chestnut:

That was going to really stick to us because they could have a physical office right there in the heart of Silicon Valley and they would have everybody come to their office and I told my team, “You know what, why don’t you set up a billboard across the street from their office.” So, that was sort of-

Jason Lemkin:

That might have been the one I saw, right?

Ben Chestnut:

Thankfully my team saw that that was kind of a jerk move and so they said, “We like the idea of billboards. We won’t do that, we’re going to put them up and somebody put one up across from this building, I never heard of, called Moscone. I’d never heard of it at the time. They did it right before Apple’s Dub Dub DC and then right after that was Google IO and it just went viral. People took pictures of that mysterious monkey, posted it to this new thing called Instagram and it just kind of went viral from there. So, I mean, I guess the lesson is care about your brand. Try to get it physical not just digital only when you can afford it.

Ben Chestnut:

Always be tinkering and if you’re always tinkering then, when they really become available like CVS and all the people that do outdoor, once they saw us buy a couple, then they just went nuts that we’ve got all these other properties, how about the highway, how about this, how about … and then, it just kind of grew from there.

Jason Lemkin:

And then related to this like brand. Brand is really … it’s a funny thing, it creeps up on us as founders, doesn’t it? Because we kind of make fun of it in the early days. We think … At least we used to, we think that’s a Pepsi thing, a John Sculley thing. Brand is … The last thing you want to do in the early days is hire a marketer that just wants to work on your brand and then you realize they were right, like MailChimp has this brand and when does that work? How do you know when to invest in brand versus leads versus the other thing and how do you protect your brand today? Because it’s always at risk, right?

Jason Lemkin:

We’ll talk a little bit maybe more about doom that we talked about the other day, right? What have you learned about brand and when does it matter?

Ben Chestnut:

It matters always. It’s what … I was a designer at heart so brand meant a lot to me from the early get-go. I mean, I started wanting to build a global brand So, I might be the wrong person to ask about that.

Jason Lemkin:

Well, maybe you’re the right person.

Ben Chestnut:

I wanted a brand from day one. Yeah, maybe. The thing is like, it makes people loyal. It makes people love. I mean, I’ve always said, I don’t shoot for loyalty. I shoot for love. I don’t want people to just blindly use my product. I want them to use it out of its merits. You do want people to kind of just love that brand and it’s actually the most economical marketing to do because it goes viral that way. People tell their friends about it and that’s the cheapest marketing that you could pay for.

Jason Lemkin:

Yeah, for sure. So, this slide you guys put together, who am I seeing here? What’s going on in this slide?

Ben Chestnut:

That’s me and my co-founder. That’s my mother, she ran a hair salon in the kitchen. I couldn’t get an action shot of her actually doing her work. That’s just Thanksgiving, that’s just Thanksgiving. Over on the right, that’s my co-founder, Dan. He’s the tall one and that’s his father’s bakery. So, we both had entrepreneurial families and we both grew up in the kitchen, watching their businesses grow and then ultimately fail. That’s what drives us today, we really want to empower small businesses. That’s DNA of MailChimp so that they don’t fail like our parents did.

Jason Lemkin:

Yeah, I hear … and they failed while you’re … you saw them fail.

Ben Chestnut:

You see them and you can see that it’s not just a business that fails. It’s a person, it’s a family and the effects linger for generations.

Jason Lemkin:

Yeah. When we were chatting before this, I heard some of that linger in your thinking right? There is this … Conservatism is the wrong word but there’s this fear of doom that we chatted about, maybe attacks back to your childhood. It’s interesting that it inspired you to be an entrepreneur, right because these feelings linger with us, don’t they?

Ben Chestnut:

They really do and they also kind of tell you that doom and despair might be the norm. So, you just have to kind of be marching. Everyone is talking about 2020 is a dumpster fire and it really is and sometimes I asked people what if it’s always been a dumpster fire and we’re just now noticing it. Yeah, entrepreneurialism is about one setback after another, isn’t it?

Jason Lemkin:

Yeah, you told me when we were chatting before, which floored me a little bit, that even at MailChimp scale, you have doom thoughts. You worry that the company could fail, right? I feel like my SaaS learning is that after 10 million or so in revenue, you can go into a terminal decline, right, but it could take a decade, right? I mean, let’s look at Oracle and companies, like even if Oracle never releases a new product, we want it to be 2050 before those last Oracle servers are shut down in some data center but you have doom fear still today. Today, you still have doom fear.

Ben Chestnut:

Yeah, I tell somebody that I still feel this way, we could die tomorrow. We could die tomorrow and then somebody told me, “You know, you really can. Most likely, the plane will crash like this. The plane will just lie to a slow kind of embarrassing descent.” I just thought, that’s worse than crashing?

Jason Lemkin:

That’s worse.

Ben Chestnut:

Yeah, I do have that, that is the attitude that I think is necessary. I mean, isn’t their book about that Only The Paranoid Survive or something along those lines?

Jason Lemkin:

There is. What that means … like I think we all take away slightly different meaning from that title, right? That might have been more about competition killing you than doom, right?

Ben Chestnut:

Doom as well.

Jason Lemkin:

It is. It’s funny that the Intel … When we were growing up, I thought hardware was the hard one and software was the easy one but it’s backwards. These hardware … look at phones, hardware phone … but the cycles are so fast, but MailChimp will last 30 years at this point, if you don’t totally screw it up, Ben. Software is harder than hardware, which doesn’t even still make sense to me. Hardware is ephemeral, right? Software if you do it right … look at the Decacorns, right? Look at these companies, if you do software right, it’ll last 40, 50 years and if I was running MailChimp … like I’m jealous. I don’t literally mean jealous but it’s up to you, right? It’s your job now to build a 50 plus year platform and we’re not going to have that AOL experience, right? If we do it right.

Ben Chestnut:

That’s right. It’s like S curves. The first S curve is like the fastest and the tallest and then, there’s like lots and lots of subsequent smaller harder S curves. I look at some of those software companies that have lasted over the years, and it’s like constant reinvention is what I see in their numbers, right?

Jason Lemkin:

Yeah. Which phase … I wanted to do a little bit more in the early stage if we had more time, but tell me about the phases of MailChimp because today, we’re sort of this … we’re even more than a marketing automation platform, right? MailChimp is like a marketing platform. We’ve got social and images and timing and AI and ML and all of these things, but MailChimp stayed email only for a long time, didn’t it? Are we in the second phase of MailChimp or the third? What did you learn? What were those evolutions and why did they take a while versus a year?

Ben Chestnut:

Well, I always felt like … I read Crossing The Chasm a long time ago by Geoffrey Moore and he said, a lot of people want to cross that chasm. It’s important to cross it but they cross it too soon. I said, “Oh, okay, I’ll just dwell a little bit longer.” I think that that’s kind of the advice, if you read between the lines, it’s like really master what you do. So, I took that seriously and I mastered email and then, it wasn’t until I started talking to customers out in the Midwest. What is it that MailChimp’s brand means to you? They told me it’s marketing. It’s not just email. Get out of email, expand. That was when I was inspired but I wasn’t like a strategic … like a genius strategic decision that I made, it was talking to customers.

Ben Chestnut:

They said, “Dear God, expand, sprinkle that Mailchimp magic on other marketing channels.” So, that’s kind of what took us so long. So, I tell my employees, we’re in Act Two of the business. Act One was great. It took us really far. It’s not going to be enough. We’ve got to evolve from here.

Jason Lemkin:

Yeah, so I didn’t … you’re not on Act Three, I didn’t miss one, right? Act One was email, nailing it. Probably lasted 15 years though, Act One, right? Some part … better part of 15 years, right? Depending on how you count, depending on when you start, right? A decade-

Ben Chestnut:

We’ll still be looking Act One for a long time, until Act Two, except what, 30 … at least 30% of our revenue is my philosophy and then really Act Two has taken a hold.

Jason Lemkin:

I want to ask about proportionality, right? How big those product extensions need to be. Do you think of that as just the same customer and maybe more revenue from the time or do you think of this as accessing different customers and that has to be big because MailChimp is already big, right? You can’t add something that adds 2% to your revenue because it doesn’t move the needle, does it?

Ben Chestnut:

Yeah, maybe not so much a different customer, maybe a little bit like the whole world is skewing more to eCommerce. In a sense it is more … a little bit of a different customer but the product is more sophisticated and it’s going to require different amounts of sales. We’re looking into that, how do we broaden a self-serve app that just quickly sells like one point solution called email, that’s kind of easy but when you start to sell multiple channels across the whole platform that’s going to take more assistance and hand holding. Yeah, it’s going to take an evolution more.

Jason Lemkin:

It will, right? I never talked to a sales rep but did MailChimp have any sales people today? Did you have any sales people two years ago?

Ben Chestnut:

Not two years ago, no. We have small little teams that dabble a little bit but we just hired a chief customer officer, starting in a couple of weeks so yeah, changes afoot.

Jason Lemkin:

Change or maybe … there maybe a few hundred sales reps at MailChimp next year. That’ll be an interesting journey right there, won’t it?

Ben Chestnut:

Everything changes.

Jason Lemkin:

Well, it’s cool. Well, Ben, this was incredible. Is there anything I missed that you wanted to hit or chat about at the very end?

Ben Chestnut:

No, I hope all the entrepreneurs out there see us and recognize, we are transitioning from Act One to Act Two so watch us.

Jason Lemkin:

I’m excited. Let’s continue the discussion about Act Two. I think this is one of the great case studies, right? MailChimp, learning the freemium, doing it bootstrapped and then taking, depending on how we count, 12 years to go to Act Two, right? Whether we start in 2007, 2009, 2001, it’s a slow roll to Act Two, right? It’s a slow roll to get to 10 billion in revenue.

Ben Chestnut:

I mean, you can characterize it as slow, you can characterize me like making lots of money-

Jason Lemkin:

Deliberate. Yeah, lots of money. Yeah, so I want to track the next 10 years for fun as a fan and as a case study, right? It’s going to be a fun case study to see how MailChimp evolves on these two vectors today. So, we will keep pestering you Ben to share your learnings over the next 10 years on phase two. So, thank you again for the time. This has been tremendous and thanks to everyone for tuning in.

 

The post SaaStr Podcasts for the Week with Jennifer Tejada, Ben Chestnut, and Jason Lemkin appeared first on SaaStr.

Marketing in the Age of Resistance


This post is by Christine Alemany from HBR.org

Are you ready to have an honest conversation with your customers?

What’s Better Than Free Lunch? Free Growth.


This post is by Justine Sink from Khosla Ventures

I very much enjoy the time I get to spend with Vinod Khosla on both a personal and professional level, and always come away from our conversations with a nugget or two of business gold. Last year he shared with me his idea of “free growth” for a company. At its core, this means getting the new members of your sales team to produce more revenue than what they cost the company by way of cash. This, ideally, is accomplished by having each sales rep deliver more revenue than their cost in their first 12 months with the company. Not only will that revenue balance out the operational expense, but it will also add to the growth of your business. This helps us manage the one thing which is critical to all in an early stage (or even growth stage company) – cash burn. 

As with most of my best ideas, I take what I have learned from the brilliant minds of others and pass them off as my own to my team (said tongue-in-cheek!). I took the idea back and worked with our teams to implement it. One year later, we have seen tremendous success and free growth is now the cornerstone of all hiring, territory planning, enablement, and management objectives. 

My colleague Mick Charles, VP of Corporate Marketing & Enablement, helped implement this at MemSQL, and has captured its execution and best practices in the following post. I hope you find some value in it for your business as I did for mine. 

– Raj Verma, Co-CEO of MemSQL 

Free Lunch: No; Free Growth: Yes 

I often ask my team members on our new-normal video conferences what they miss most about the pre-work-from-home era at our company. A common response is that they long for the free lunches we served at our home office, and I have to say that I couldn’t agree more. Not only was the food delicious, but it also catered to the varied tastes, cultural influences, and dietary sensitivities of all our employees, and there was the freedom of not having to think about lunch plans at 11:30 every morning. Lastly, of course, there was the free part…I mean who doesn’t want something for free? What I really miss, though, is that 30-minute break in the day where we came together as a company and were able to share stories, thoughts, and ideas over a healthy meal. So in the absence of our communal lunch and learn sessions, I thought I would use this forum to share some ideas I’ve been contemplating as we all try to do more with less and try to find that “something” to help move our respective companies forward. What if that something was free growth for your business? 

We’ve all been told that it takes money to make money, especially in the world of start-ups and venture capitalism. In order to achieve the desired result of significant valuation for your burgeoning company, you have to invest in engineering, manufacturing or development, infrastructure or supply chain optimization; whatever it takes to get your product or service to market at scale. And the name of the game is getting the maximum boost in minimal time. But there can be a way to make money without spending any…technically anyway. The market will always go to the operators – those who know how to tune their go-to-market engine for increased horsepower without burning excess fuel (read cash). If approached with the proper amount of planning and diligence, followed by flawless execution, it is possible to drive additional revenue for your business as you scale your sales reach with zero impact on your burn rate. To me, that sounds like free growth! 

So how do you grow your business without spending any money? Over lunch one day, Raj shared with me a concept that he calls “Rep Revenue Neutrality.” By definition, this is the point in year one of a sales rep’s employment where he or she has essentially paid for themself by booking revenue equal to the amount of cash the company has allocated for their annual employment (fully-loaded cost). The revenue offsets the cash burn, so, therefore, it doesn’t cost the company anything to hire that person…and there’s an added benefit. Let’s say you hire ten new reps and their fully loaded cost is $400k each (salary, commissions, benefits, etc.). They would need to generate a total of $4m in the first year to reach Rep Revenue Neutrality. Now that $4m may not have done anything for profitability, but it is new revenue and therefore added to the growth of the company while cash burn remained the same. And the idea of free growth is really just that simple. Now comes the hard part: getting your new hires to Rep Revenue Neutrality as quickly as possible. 

There are five basic tenets to free growth. I will dig deeper into each of these, as well as introduce the notion of the “Process Carousel”, another term coined by Raj. If there is one thing that is non-negotiable when it comes to monetizing your business as quickly as possible, it’s the notion that everyone must adopt and adhere to your sales process. You will be hiring sellers who have been trained in every methodology out there and who have their own way of closing deals. It is critical that they follow the process that your go-to-market team has outlined, and your front line managers must enforce this on a regular basis. For now, let’s keep it high level and just cover the concepts of Territory/Account Planning, Recruiting/Interviewing, Onboarding/Enablement/Ramping, Account-Based Marketing, & Instrumentation, and why these are the essential elements to drive Rep Revenue Neutrality in the shortest amount of time. 

Territory/Account Planning 

Before you begin the hiring process, you need to identify the accounts you want to target in each territory and what skill-level salesperson you will need to sell into those accounts. This is called market segmentation, a process that will help you become laser-focused on who your audience is and how to properly reach them. Instead of trying to sell to everyone in the market, only enter into cycles with the companies that have the highest propensity to buy your product or service. This will allow your new salespeople to get on the board much more quickly and at a higher value. It will also assist with hiring the right people as you now know what experience will meet your requirements. For example, you don’t need someone with an extensive background in selling to the financial services vertical if the territory is comprised mostly of manufacturing or retail companies. Group the accounts into territories and the territories under managers in the most efficient way possible. The closer a rep is to their customer base, the more time they can spend in front of them delivering your value proposition. 

Recruiting/Interviewing 

Speaking of your new salespeople, talent acquisition is an essential part of your business and the key to quick success. Over my 25 years of enterprise software sales experience, I’ve found that in-network hires always seem to work out the best, which makes sense since they have been field-tested by those who are recommending them. Last year MemSQL hired thirty-nine new employees and all but seven came from internal references, and they were able to hit the ground running. That’s not to say there’s a dearth of talent outside of the network, but when trying to achieve free growth, time to value is of the essence. Don’t be afraid to ask tough questions during the interview process even if they do come highly recommended. Throw them a curveball, put them on the spot, don’t give them a pass. Since you already know the accounts that you are hiring this person to cover, ensure that they have the necessary relationships that will allow them to get high in the organization quickly. Ask them for names of the people they know and then validate those are the contacts that will lead to early success. We have also implemented a cognitive aptitude test and personality assessment as part of our hiring process, even for in-network candidates. Selling your product or service may be quite different from anything they have been successful with in the past. Take the extra steps necessary to ensure that each hiring decision is made with the most information available to you now in order to avoid the painful process of reversing that decision in a few months. 

Onboarding/Enablement/Ramping 

It goes without saying that once you have hired your new reps, you need to expose them to your selling methodology and internal processes as quickly as possible. Getting them trained and properly enabled to sell within the first three months will give them every opportunity to reach this target within the first year. Remember that there is only one process for them to follow…yours! To assist with this, I highly recommend an extensive certification curriculum through a digital learning management system (LMS). Our company has implemented a 30/60/90 program to get our reps ramped as efficiently as possible in all areas of our business: product, go-to-market strategy, competition, and sales methodology. The LMS is not a substitute for the full immersion training that the front line managers and enablement team provide, but it is a great way to reinforce essential concepts in a self-paced manner and includes quizzes to ensure that the concepts are fully understood by the learner. As a matter of preference, I find that essay questions, as opposed to multiple-choice, will allow front line managers to properly assess progress. Providing a digital badge or banner that the reps can use as part of their signature block, or some other recognition for successful completion of the coursework is a good way for the new hires to appreciate the importance of this training. 

Account-Based Marketing 

Empowering your new hires to market directly to their accounts using ABM technology and techniques will result in getting valuable meetings scheduled more quickly. Not only can these tools be used for automating mass emails and sequencing other touchpoints, but they can also be used to measure the effectiveness of broader marketing efforts by providing engagement metrics and heat maps. This allows new reps to focus their efforts with prospects who are showing increased interest and therefore a higher propensity to purchase sooner. The rep who will reach revenue neutrality as quickly as possible is the one who will do the hard work of prospecting and cold-calling on their own, instead of waiting for something to be handed to them. This is another good area to focus on during the hiring process. There are plenty of capable candidates who understand the value of making that initial touchpoint into their account base on their own, and these are the ones that you want working for your company instead of the competition. 

Instrumentation 

So how do you know how these new hires are tracking against the defined metrics in order to reach free growth? You instrument all of the processes so you can monitor and measure their progress on a regular basis. If someone is underperforming you have the ability to intervene and course-correct before it’s too late. The old adage of people doing what you inspect versus what you expect has never been more relevant. Make sure that everyone understands they are being observed, reviewed, and rated against their peers. Present the dashboard on your weekly sales management calls and hold managers accountable for their role in helping their new team members reach the goal of Rep Revenue Neutrality. It’s in the nature of every quality sales professional to have their name be at the top of any list, and not settle for mediocrity. If they don’t have that bone in their body, then they probably weren’t the right hire in the first place. 

Most of what I’ve just described is quite possibly already part of your business plan and overall sales execution strategy, so it really just comes down to having a maniacal focus on quick wins and getting to that break-even point in the shortest amount of time. I would add that these steps must be completed in the proper order if you want to achieve the desired result. A quick anecdote to illustrate this point: prior to 1955, when you went to eat at a restaurant there was a simple process associated with your visit. You would sit down at a table, place your order, food would arrive, and then you would pay after you finished eating. Ray Kroc took that simple process and turned it around to provide a faster result: order your meal, pay, receive the food, and then sit down to eat. Placing those four steps in a different order gave birth to the quick-service restaurant industry, currently a $12B global industry. 

Similarly, the sequence to this free growth strategy is very important and could be the difference between enjoying quick service or hanging around waiting for the check. Last year, MemSQL increased sales rep headcount by 20%, adding an extra $500k to cash burn. Those reps accounted for more than $1.5m in new ACV, exceeding the neutrality metric. Thank you, Vinod, for the free growth.

The post What’s Better Than Free Lunch? Free Growth. appeared first on Khosla Ventures.

Data Privacy Rules Are Changing. How Can Marketers Keep Up?


This post is by Einat Weiss from HBR.org

Analytics and automation technologies make it easier than you might expect.

SaaStr Podcasts for the Week with Justin Bedecarre, Jen Nguyen, Jason Lemkin, and Aaron Levie


This post is by Amelia Ibarra from SaaStr

Ep. 365: The Office of the Future, How Everything’s Changed and What 2021 Will be Like with Justin Bedecarre, CEO @ HelloOffice and Jen Nguyen, Founding Partner @ TEAMWERC

Centralized HQs with all the perks and amenities “under one roof” have traditionally been used as recruiting tools to attract and retain top talent. In this episode, Justin and Jen discuss what the Office of the Future will be like.

 

This episode is sponsored by Linode.

 

SaaStr’s Founder’s Favorites Series features one of SaaStr’s best of the best sessions that you might have missed.

This episode is an excerpt from a session at SaaStr Summit: Enterprise. You can see the full video here, and read the podcast transcript below.

 

Ep. 366: The buzz that accompanies digital transformation trends is infinite. Cut through the noise with Aaron Levie, CEO of Box and Jason Lemkin, CEO & Co-founder of SaaStr as they share insights on what will make a lasting impact and what may fail to materialize in the future of work.

This episode is sponsored by Guideline.

 

This episode is an excerpt from Jason and Loren’s session at SaaStr Summit: Enterprise. You can see the full video here, and read the podcast transcript below.

 

If you would like to find out more about the show and the guests presented, you can follow us on Twitter here:

Jason Lemkin
SaaStr
Justin Bedecarre
Aaron Levie

We’ve shared the transcript of episode 365 below. You can also jump down to the transcript of episode 366.

Transcript of Episode 365:

Jen Nguyen:

Hi everyone, thank you for joining us today and giving us this platform to share the thoughts on what we love, the office. I’m Jen Nguyen from TEAMWERC. And at TEAMWERC, our mission is to deliver workplace as a service, helping companies navigate the company’s changing working environments. And I’m joined by…

Justin Bedecarre:

Justin Bedecarre, co-founder and CEO of HelloOffice. We’re a full-stack technology-powered brokerage helping usher in the hybrid workplace and the office of the future.

Jen Nguyen:

So Justin, it’s so great to be co-hosting this session with you.

Justin Bedecarre:

Totally.

Jen Nguyen:

It feels like deja vu. Six months ago in January, you and I were nerding out talking all things workplace and how the workplace ecosystem was broken. Everything from how workplace office space is delivered to workplace services end to end, from how workplace tools are often the last adopted tools by companies, often cut out of the annual budget, actually, and how the real estate brokerage industry was antiquated, lost in a century of manual workflow process.

Jen Nguyen:

And I clearly remember back then you told me, “Jen, this isn’t scalable. The future of workplace is going to be hybrid.” And fast-forward, here we are today, the pandemic has woke us all up and has accelerated our need to change our mindset about the workplace and all things workplace. And personally, it’s actually been very scary to think about as what I love to do, building workplaces, will no longer exist. And I’ve had a lot of my peers in the industry who have been impacted and laid off.

Jen Nguyen:

And what I found is this silver lining in that we all want the ability to come back, we want the choice to come back and we actually want hope. And that’s a really big thing. And companies are looking for guidance for us to pave that way.

Justin Bedecarre:

Totally. I mean, I remember that conversation back in January. And what we were planning on five years of that it would take to really usher in the hybrid workplace, well that condensed into what? Five months, judging by the length of my hair and my COVID haircut.

Justin Bedecarre:

It is truly amazing how fast the mindset around the future of office has changed. Pre-pandemic and going into the pandemic has been really tough. We’ve seen a lot of layoffs, a lot of people hurt. But at the same time, there is a silver lining in all of this, that coming out of the pandemic, a lot more people are going to have the choice of how they work, where they work.

Justin Bedecarre:

And yesterday’s workplace is going to get catapulted to the future of office. And so, that’s something to be really excited about. This industry, in many ways, has been broken, right? And there’s things that have worked and there’s things that really need to change. And a lot of our assumptions around yesterday’s workplace are going to be challenged.

Justin Bedecarre:

Some would say that it’s too rigid, that the 9:00 to 5:00, 40 hour workweek, what you were telling me, right? That started in the Ford era.

Jen Nguyen:

A hundred years ago.

Justin Bedecarre:

A century ago. And so, things do need to change. And decisions can be led by employees. And it doesn’t have to be a 100% office-centric. And so, when thinking about yesterday’s workplace, which is really important to touch on before we get into the future workplace, you have built workplaces for some of the most iconic brands in the world; Pinterest, Zynga, Tesla, what has been your experience? What have you learned from building yesterday’s workplace?

Jen Nguyen:

Well, first, I still love yesterday’s workplace, and I truly believe that it’s not going anywhere. But yesterday’s workplace from my previous company is we focus a lot about being a hundred percent HQ-centric, constantly being under one roof. And the purpose, obviously, was to enhance face-to-face collaboration, innovation, and productivity.

Jen Nguyen:

And we create this entire infrastructure to support this 1-to-1 seating model so that everyone under one location could be there at the same time. But it created this huge subset of issues that we’re constantly trying to solve for. For one, there was never enough real estate, given we were in San Francisco and Zynga on Pinterest weren’t the only companies with a real estate strategy of being under one roof. There just wasn’t enough square footage. And there wasn’t enough space to accommodate that.

Jen Nguyen:

We also created this huge commuting congestion problem, driving thousands of employees to the city, which also had an impact on affordable housing. And honestly, we’re limiting ourselves by proximity on recruiting a diverse best-in-class team. And we also had multi-generational issues with people working with different lifestyles, with different obligations, whether it’s childcare, taking care of elderly parents. We just never were able to solve for that. And then there was this great workplace experience of 2020, which we’re still living now. And somehow it unintentionally solved a lot of this friction.

Justin Bedecarre:

Right. I mean, think about, like you said, the infrastructure needed to be a single HQ-centric workplace, right? I mean, thousands of people being shuttled around the Bay Area for hours every day. I remember growing up and my neighbor’s dad would literally read the newspaper on the freeway because it was bumper to bumper to get into the city and not much has changed.

Justin Bedecarre:

And so, the idea that how many people would get shuttled down to Facebook, it was only a couple of years ago that they introduced their first San Francisco office. And so, things are really changing. And we have to think about, you have yesterday’s workplace a hundred percent office-centric, the pendulum is going to be swinging back and forth, right? So now we’re in this, like you call it, the great workplace experiment of 2020, where we’re forced to be a hundred percent remote.

Justin Bedecarre:

And the pendulum has swung the entire other direction. And now, after a few months, the novelty of being 100% remote is wearing off. And so, we’re all starting to realize what works and what doesn’t, right? What we miss out of the office, the serendipity, the collaboration, just being around our colleagues in person. And so, what we have to do to build the office of the future is take the best of the hundred percent office-centric world and the best of remote, where there is more transparency, there could be more productivity, and basically combine those.

Justin Bedecarre:

And it’s a really inspirational thing to add technology and innovation to the workplace, how you find space, how you manage space, and build the office of the future.

Jen Nguyen:

Well, going back to this one-on-one seating and the workplace of yesterday, I actually now miss, after being in back to back Zoom calls, being able to walk between conference rooms and taking that few minutes break to feel normal and bump into a peer of mine. And the other thing that it also reminds me of too is, in this whole one-on-one seating model, what actually didn’t work was that I realized for myself, I was never at my desk.

Jen Nguyen:

I was in conference meetings and back to back, very reflective of what I’m doing now. And so, my desk sat empty almost full time. And so, what it means is we just need to retrofit and recalibrate how we use this space and change the purpose of why we come into work. So, Justin, so now that we know all this, and for everyone listening, what does this mean? How are you and how have you been advising your clients on this hybrid strategy?

Justin Bedecarre:

I think that it’s such an important question, right? And what people have to realize is that it is different for everyone. One of our clients has over 500 employees with offices around the world, right? And in major hubs like San Francisco and New York, what we’re doing is helping create the vision for a more experiential space, almost like a cafe where they can come and go as they want, they can bring clients, they can bring customers.

Justin Bedecarre:

And so, it’s just going to be like, in these major hubs, no one’s going to have assigned seating, but in their Salt Lake City, everyone wants to come into the office five days a week. And so, we’re still positioning that space for a hundred percent office-centric.

Justin Bedecarre:

So, even within some of our clients, they’re thinking about what their employees want in any given market. Another client of ours, most of their employees came from the South Bay and commuted into San Francisco because they just felt like they had to be there. Now that that assumption is being challenged, we’re going to help them find an office in Palo Alto. Their employees are going to be able to come and go. And they’re going to reduce their commute by 45 minutes.

Justin Bedecarre:

And then another client of ours is an international company that has decided that they truly want to scale up in San Francisco. And they’re moving forward with really a significant lease because they get to save so much money because rents have stabilized and there are so many subleases on the market.

Justin Bedecarre:

And so, through all of this, we have so many different client stories about how they’re planning, how they’re figuring out, how they’re getting back into the office. And so, it’s not one-size-fits-all. We’re going to learn so much about ourselves, about how we should and can run our companies, how we run our day-to-day lives. Right? The challenge is that there’s a lot of uncertainty, right? We don’t know when we’re going to be able to get safely back at scale.

Justin Bedecarre:

Some of your clients, I would imagine, are actually going back into the office already. Some of them are like a wait and see approach, right? We have Slack saying, “Hey, we’re not going to consider going back into the office until 2021.” We have Google saying, “Look, we know we’re going to get back into the office, but we’re going to put a hard date at mid-’21 of next year. And so, how do people in the session figure out how to plan? What do we think about?

Jen Nguyen:

I think just like we think about the pendulum of how we think about real estate 100% in-office, 100% remote, it’s not one or the other. And as we hear companies like Google are saying that they’re going to push out the return to office till sometime next year, I think we’re all forgetting that they’re also still planning when that time happens. And they’re taking the time now to create those workplace resilient playbooks as part of their business continuity plan.

Jen Nguyen:

I’ve also heard, “Well, why plan, if things are going to change tomorrow? We’re already in this like a new gen.” But it’s important to plan that it’s flexible enough so that you can pivot those realities of today and tomorrow. And quite honestly, it is a corporate responsibility to start planning now for the well-being of your employees to implement COVID-19 guidelines into your workplace.

Jen Nguyen:

And really, I think companies should really focus on the fact that both current and future employees will be closely tuning in, on how companies navigate through this change and then adopting a hybrid employee choice philosophy. This will be a really strong indicator of retention and recruiting. Whereas before, the old workplace that we know it of yesterday, we built these huge HQ anchor buildings for recruiting purpose, now giving the employees choice, and this hybrid approach is going to be what’s going to make a big difference in terms of recruiting intention.

Justin Bedecarre:

Right. I mean, these decisions have a lot of implications, right? If you are temporarily remote, but you don’t really have a solid strategy for when we can return to the workplace, families are going to be making decisions whether they move or not. Are you going to ask them to move back after the pandemic? People will decide to rent versus buy because they need to decide what their workplace is going to be like.

Justin Bedecarre:

And so, it’s really, really important to plan and understand what your employees want. Going through a few of the points on our slide, it’s not solely based on health and safety, but that is a big issue right now, right? Planning for long-term means a lot of implications for how employees live and work, how they work together, and engagement and collaboration is now a preference. It’s really important, but we all want to choose when we do that versus when we go heads down work and can be flexible.

Justin Bedecarre:

And another really important point that we really believe in is that you have to use data to drive decisions, right? You have to use data on how people are using the space. One of our good friends actually just raised a big brand called Density, where they can track. We’re implementing that in all of our workplaces where you can track how many people are coming and going in conference rooms, and different things.

Justin Bedecarre:

And so, we really need to layer on meaningful and efficient technology into our workplaces to understand how people are using it. What never changes is that the space has to represent your culture. It has to represent what you want to achieve as a company, right? If you’re building automation for trucking or whatever, you need to be in the space, and so you need to figure that out.

Justin Bedecarre:

Whereas if you’re a software company, you can wait until, you don’t have to compel people to come in sooner than they feel safe. And so, there’s a lot of implications for that.

Jen Nguyen:

Yeah. Justin, you actually made a really good point on data. What was really interesting in working with a lot of these clients on the return to office, 60% had workplace tools, 40% didn’t. And in that 60% that actually had workplace tools, we could only use 80% of that data. So, we haven’t done a really good job using analytics, and the time is now to do that, to make the right decisions. How do we unpack this? How do we unpack what hybrid means? What does it look like? What is it and what is it not?

Justin Bedecarre:

Well, let’s start with what it is, right? So, it’s employee-led, which means that we’re really going to need to take a pulse of what employees want and how they work best and help them make decisions on, whether it’s an individual contributor or if you’re on a team and your team has the right cadence. Right?

Justin Bedecarre:

So, it truly has to be employee-led and it emphasizes choice. Something that’s so important right now for everyone to realize is that for most of us, we don’t have a choice right now. Right? And so, once we’re given that choice, what do we actually decide? And it can’t be a rash decision, right? You have to continually take a pulse of your team and how they’re feeling. Right? We’re, what, five months into the pandemic and for many of us it’s been five months since we’d been into an office.

Justin Bedecarre:

And so, the novelty, like I said, is wearing off and now we’re starting to recognize, “Okay, maybe I don’t want to be a hundred percent remote, but I do want to come into the office four days a week, or one to two days a week.” It’s going to differ employee to employee, and so you have to give choice and flexibility. Right? Flexibility is so huge.

Justin Bedecarre:

Aaron Levie just did a poll on Twitter that thousands and thousands of people responded to on what is the future of work, right. Is it, get me back into the office as soon as possible? Is it remote forever for the win, or is it flexibility? And over 70% of people said, just give me the flexibility, from thousands and thousands of people.

Justin Bedecarre:

And so, the data is starting to prove that the hybrid is here to stay and that people really want it. One of the things that you and I talk about a lot is hiring for skill and impact over proximity, right? You don’t have to live in a short drive distance away or a long drive distance away from HQ to contribute and have a big impact.

Justin Bedecarre:

During the pandemic, HelloOffice, my company has promoted engineering manager, [Jaziel 00:17:46] out of Dallas, our first remote engineering manager. And it’s been working out phenomenally. And so, we have to really think about how people can have an impact, not just their proximity. And it has to be purpose-driven, right? You have to go about this with a lot of purpose.

Justin Bedecarre:

So, let’s talk about what it’s not, right? It’s not prescriptive, right? Earlier I gave three examples of all technology companies, all with very dramatically different approaches. And so, it’s not one-size-fits-all. It’s not the death of the office despite the narrative that’s been going around, but it’s also not the death of remote, right?

Justin Bedecarre:

There is the combination, like the sweet spot, where you can have the best of both worlds. That being said, as we know, it is not the easy choice. Hybrid is not the easiest path, right? A hundred percent office-centric, we have playbooks for that. We’ve been doing it for over a decade. Right? And for the playbooks for fully remote, with GitLab and WordPress, those are relatively well-established albeit less companies have done that at scale.

Justin Bedecarre:

And so, the combination of both, you have to be really great at both, and you have to be really intentional. And the final thing that it’s not is, it’s not standard or homogenous. We all know the open office has just taken off over the last decade. And requiring everyone having 1-to-1 seating, like you talked about. The days of homogenous offices are over and every company is going to have to purposely build and design the workplace and how they run their companies that best fits them.

Jen Nguyen:

Mm-hmm (affirmative). Well, the irony that you mentioned how we’re currently in a pandemic and we don’t have choice, this lack of choice actually gave us a taste, just like our first time trying sugar, of what it’s like to work at home and having the flexibility of working anywhere.

Jen Nguyen:

And so, now we can’t untaste it, right? And so, the idea of having that flexibility, and the other thing that you point out is pulse your employees, but it takes courage for a company to ask, really ask, what it is that employees want, because you have to be prepared for what the [crosstalk 00:20:00] are.

Jen Nguyen:

But I think a really, really great example of implementing a hybrid workplace that we’ve seen recently this week is Siemens announcing that they’re allowing 140,000 of their employees globally, across 200 countries to work two to three days, work from anywhere. And their focus is not time spent in the office, but the focus really is on impact, which is so amazing.

Jen Nguyen:

And I think they did two things really, really well, to your point, Justin, is that they took a forward-looking approach, not a wait and see. And second and most important is, they actually pulsed and surveyed their employees, they heard what they asked, and those employees highlighted the preference for greater flexibility in their approach to work.

Justin Bedecarre:

Right. I mean, that is so pivotal. I truly believe that with the hybrid approach, having two to three days of being together, two to three days of work from anywhere, wherever you do your best work, that still could be in the office. It could be at home, it could be at a co-working spot or a coffee shop. But it’s truly like giving people the option, but also like having some structure around when people actually come into the office, right?

Justin Bedecarre:

For the office to be valuable for the things that we’re talking about; serendipity, collaboration, just being around your team in person and having those in between meetings where you can throw out an idea and let it ruminate, that requires people to be in the office too.

Justin Bedecarre:

And so, you can’t just work from anywhere. It doesn’t just mean that you don’t have any kind of structure around it, right? So, you have to intentionally manage through this, which is really important. And Siemens is a great example.

Justin Bedecarre:

Well, that is the presentation for today. We understand this is a confusing time and it’s really hard for a lot of folks. But there is a silver lining in all of this and there is a balance between not having to worry about the office being dead or being forced to be remote forever, right? The hybrid solution, we believe, is the future and a really big opportunity to achieve a lot of things for your companies and your employees. 

 

****

Transcript of Episode 366:

Jason Lemkin:

The end of a great day in the enterprise. It’s always fun to be with Aaron, but for this topic, The Real Future of Work, I think it’s especially fun because I can’t think of anyone who we’ve been talking more about digital transformation, future of work, when will things go online, the office 2.0, when will the office finally go on the internet? I mean, I can’t think of anyone. You and me have been talking about this stuff for the better part of two decades, right?

Aaron Levie:

Oh, man, you just brought up like six terms I haven’t heard in 15 years.

Jason Lemkin:

Yeah. But now everyone’s a future of work fan, right? But it’s the same idea, isn’t it? It’s just finally happening.

Aaron Levie:

Well, it helps when the internet is about like 100 times faster and computing and storage is about 100 times cheaper. So, it turns out that that’s really important to be able to enable these technologies.

Jason Lemkin:

But long.

Aaron Levie:

Certainly, for anyone younger in this video than us, nobody will ever have respect for how much work it took back in the day. We would have to go fly around to conferences all throughout the country and stand at our little booth as founders. I literally remember handing out like T-shirts just to try and get signups just to promote where work is going. Those were the days, but I’m a little bit glad that some of those days are over.

Jason Lemkin:

Yeah, so there’s a bunch of things I want to chat about. I grabbed a bunch of your tweets to use as props.

Aaron Levie:

Oh boy.

Jason Lemkin:

I want to talk about, we chatted about a little bit backstage before we started, the almost the different phases we’ve been in through March 15, because you have even a different lens. But to me, this is an interesting chart. This was obviously right after we went into shelter, but this is Box and Zoom, right? So, this is super interesting because this isn’t me using Box in my left monitor and then firing up a Zoom call in the right. This is a new workflow, isn’t it? This is a new use case that looked interesting before we all worked from home but exploded, right? So, what does this mean? What are we doing actually differently now than before March 15, for reals?

Aaron Levie:

Yeah, well, I think first of all, the one dynamic is that I think for probably anybody who would be paying attention to the SaaS universe and joining us today, probably actually less has changed about our daily lives than the vast majority of the world.

Jason Lemkin:

You and I, we’re working the same.

Aaron Levie:

We’re working more or less the same. We’re in Slack channels, we’re in Zoom calls. We’re using digital workflows and storing data in the cloud, but the rest of the world, this was an overnight just shift in how people worked and how they communicated. The easiest way for us to think about it is just if you took eight hours of in-person meetings a day that maybe we previously would have been if we were at a big CPG company or a bank or a retailer or a life sciences company, that whole model has blown up. Now obviously, everything that you’re doing has been virtualized or digitize. Previously, it just wasn’t the case.

Aaron Levie:

So, we thought really early in our data, one of the earliest signals was sort of our change in IP address. So, people moving from their primary work location to a remote location, and obviously, that just sort of became exponential right around the middle part of March to the end of March. And then we saw a bunch of other characteristics that were changing in how people working. I think it’s ones that now we’re all collectively experiencing together. I think it’s really how big of a shift this was for the worker that traditionally was working on analog business processes with in-person settings, how big of a change this was in their world where were all of a sudden, now their job is on a computer all day long interacting with all their colleagues and how big of a shift this is in terms of what that work looks like.

Aaron Levie:

One thing that I’m optimistic about is that even as the health environment hopefully gets better as soon as possible and we’re back in offices, I’m optimistic that this shift in how we work continues forward, even kind of post the pandemic dynamic. Just because I think people are going to see like, “Well, wait a second, I can just get on a video call and talk to my partner in a different country. I don’t need to actually go and get an airplane every time I want to do that type of interaction.”

Jason Lemkin:

Yup. Have you been talking to the customers, especially where you’ve seen acceleration since March? Are there new use cases of Box or an increase of prior use cases where maybe people are using Box a lot more for certain reason than we might have in a traditional office environment or before all this? Has something changed with some of your bigger customers?

Aaron Levie:

Yeah, so we have seen that there has been frankly just a much more accelerated push to, obviously, in our buzzword terms, digital transformation, but for most companies, this is a very real idea, which is I maybe had a roadmap that was two or three or five years of projects I was going to go implement. I have to now both accelerate and reprioritize that list of projects. It’s interesting, when you look at the environment we’re in, it’s actually incredibly clarifying for most IT organizations exactly what they need to go focus on. Compared to a year ago, digital transformation actually had way too many sort of both nuances and sort of vectors you could go down that actually weren’t as strategic.

Jason Lemkin:

Everyone had a pet project, right?

Aaron Levie:

Everybody had their digital team. Five people in the digital team were looking at blockchain projects and three people on that digital team were looking for long term AI transformation. At the exact same time, that company hadn’t moved basic applications to the cloud. So, what this environment is doing is every enterprise is taking inventory of how they work, how their people in their organization can collaborate, how they work across their supply chain. It is, to some extent, a bit of back to basics.

Aaron Levie:

I mean, it’s incredible that the mainstay technologies of this era have been technologies that we’ve had for 20 plus years. It’s just they finally work well, and they have the ability to be ubiquitous all at once, because we all have to use them to survive. So, whether it’s cloud storage or cloud video or messaging. Ray Ozzie somewhere is out there being like, “What the fuck, guys? I came up with all this stuff in the 90s. Why is this now finally happening?”

Jason Lemkin:

Sort of my question, yeah.

Aaron Levie:

So, I think there’s definitely a lot of cognitive dissonance if you’ve been doing this for so long, but the reality is most of the world hasn’t been doing this for more than the past couple of years or the past couple of weeks.

Jason Lemkin:

Yeah. So, let’s talk about the pet project, it’s interesting. I didn’t mean it as a pejorative term, but it’s true, right? Digital transformation has led every stakeholder in the enterprise, every C-level or senior person to throw a chip in the table. What do they want to accelerate this year? There’s a fixed budget. There’s only so much capital out there for these projects. Tell me a little bit about the CIO level conversations you’ve had since March. You don’t hear about the blockchain initiatives anymore. Is it really just like three projects that I need? I need like sales, procurement, collaboration. What are the actual conversations like?

Aaron Levie:

I think the easiest way to think about that we kind of got keyed in on early on was almost like a Maslow’s Hierarchy of Needs for IT, right? Before you get to kind of total enlightenment, what are the fundamentals that you’re going to need? What’s the shelter of IT? That’s your basic cloud infrastructure. That’s being able to do flawless video calls. That’s being able to have a means of communicating in real time. I mean, I literally cannot imagine how we could run our company if we were only on email and we had sort of phone conference calls. I just actually don’t know how you would run a business.

Aaron Levie:

Before you had Slack, before you had Zoom or WebEx or Google Meet or whatever, I don’t know how you could actually get your teams together virtually. But there are literally thousands and tens of thousands and hundred thousands of companies out there where that’s either being implemented right now for the first time or frankly, it hasn’t even been implemented yet. These companies are still trying to coordinate and triage all of their work over email and over legacy ways of working. So, there’s a Maslow’s Hierarchy of Needs, which is like, “I got to get my fundamentals for work. How do I store data? How do I communicate? How do I have core applications, like you said, CRM, being able to work across the supply chain?”, the kind of foundational ERP systems.

Aaron Levie:

I think what’s happening is, is companies are realizing that the really big sort of flip the business model on its head project and we’re going to go and do a distributed ledger technology and all this, that’s going to have to get punted because we’re in core survival mode right now. So, the way I would sort of deduce it is, core productivity, data security, and cost savings have been the three big areas that we’ve seen companies focus on and CIOs focus on. If you don’t have something aligned up to one of those three, it’s going to be really hard to get the attention-

Jason Lemkin:

Slow those down again. Sometimes you’re a little fast, just so I catch up.

Aaron Levie:

Yeah, yeah, I’m sorry with that. I’m trying to pack in like four hours of content right now.

Jason Lemkin:

It’s okay, it’s good.

Aaron Levie:

Productivity, you’ve got to make your business be able to function better and faster, smoother. Security, because now everybody is in this remote and distributed world and data security privacy is only going to get amplified. And then be able to save money, you have to be able to prove that you’re going to save my business money. Those are the only three that are going to get funded in this environment. So, you have to make sure that from a software standpoint, that you’re able to help with those angles.

Jason Lemkin:

So, actually, that’s fun. Let’s dig into those three but let me step back. Let’s talk about content and Box. Boxes are pretty rich application today, which we can chat about. But let’s talk about kind of the nuclear element of content, right? Again, I’m not a CIO, but I’m struggling with content. I mean, the Slack and the Zoom is an obvious, how would we run our companies without Zoom or Google Meet? But I’m even struggling to find content in ways that even though I’ve always been on the web, right? I’ve had people.

Jason Lemkin:

I could ask my friends, ask Brendon or Emilia, “Where is that prospectus?” It’s not really that funny, because we may be stuck at home for years. So, is content in the core? Are people thinking about some of these core pieces of Box a little differently than in March? Are some things going from elective to mandatory that’s different?

Aaron Levie:

That shift is definitely starting. I think, video and kind of core communications was at the lowest level on [crosstalk 00:11:29]-

Jason Lemkin:

Day one.

Aaron Levie:

Because you just couldn’t even get your teams together until you can do a video conference or kind of channel conversation. This idea of content fragmentation and my data is in 3 or 5 or 10 different places is now being absolutely kind of amplified and becoming front and center for a lot of companies. If you go to an average life sciences company or a bank or a health care provider or a global manufacturer and you say, “I want to get the latest financial document,” or “the latest manufacturing file,” or “the latest marketing campaign,” there could be a dozen places where that content could live, which means a dozen different ways where you need to secure that data, a dozen different systems that you have to maintain, a dozen different platforms you have to back up and make sure are redundant.

Aaron Levie:

So what we’re trying to do with Box is basically wipe out all that mess and say, “What if you had one platform that connects to all of your applications, whether it’s Zoom, or WebEx or Teams or GSuite or Office 365 or Slack?” That’s our whole strategy. Fortunately, I think companies are now paying more and more attention to that. I mean, we’ve only been at this 15 years, but I think people are starting to realize that “Oh, wow, there’s actually an unbelievable amount of value in this data. I have to protect it, I have to secure it. I have to drive business process around it.” We’re certainly trying to make sure that we can support our customers as much as possible.

Jason Lemkin:

So, I want to talk about that second piece you had which I think was security, right? The first one was productivity. When you’re having CIO level conversations today, which of those buckets are you from framing Box in?

Aaron Levie:

I would say that security is probably the most impactful that where our differentiation shows up the greatest. This is 15 years of innovation in data security, compliance, and protection of content. That happens to coincide with obviously some of the biggest challenges around cybersecurity, data compliance and privacy, GDPR, CCPA, who has access to your information? All of those issues, those are front and center for every organization.

Aaron Levie:

So, we probably differentiate the greatest on our security and advanced capabilities around that. However, more and more customers are saying, “I want to go and simplify my IT environment, so I can reduce spend and get onto a common platform to manage all my content.” So, I do think we hit all three, but security probably is the biggest driver within our customer base.

Jason Lemkin:

Okay, I do want to dig in on that and ask you some thoughts, but on the third one on saving money, the third factor was saving money, right? How does Box, just as a use case, as a case study… I should know this, but I don’t. How does Box save an enterprise money?

Aaron Levie:

What? You’re not thinking about it all day long?

Jason Lemkin:

Well, there’s some things I can intuit, right? In all seriousness, right? But there’s some subtle elements too here. It’s not just soft costs, it’s hard cost. What’s the pitch to save money?

Aaron Levie:

So, it’s different by company size. But if you go to a company that has 5,000 or 10,000 or more employees and you were to get this perfect sort of bird’s eye view of where information is stored, what you’re going to find is effectively a plethora of SharePoint sites, document management systems, network storage arrays, FTP servers, data rooms, and-

Jason Lemkin:

Twenty systems, 20 systems.

Aaron Levie:

… back-up to all those systems. I blame myself that it’s taken this long, but for whatever reason, when you think CRM, you think, “Okay, there’s one platform for CRM.” When you think ERP, you think, “There’s one platform in the cloud with ERP.” When you think HR, you think, “There’s one platform in the cloud, I’m going to move to Workday or SAP or Oracle.” When you think content, people are totally fine with, “That can be my data center. I’ll have it in my back-office systems. I’ll keep paying these exorbitant rates for managing all that infrastructure.”

Aaron Levie:

We are really ultimately trying to be the platform where you can manage all that content and then connect it up to all of your applications. Just as you would not accept having multiple CRM systems or multiple ERP systems or multiple email systems, we don’t think the future is going to be about having multiple content silos in an enterprise.

Jason Lemkin:

I think it’s terrifying from data leakage and security and a whole bunch of pieces. Do you have to sell it ahead or CIOs and CTOs coming to that conclusion on their own? Where are we in that journey of seeing that?

Aaron Levie:

We’re getting closer. I think part of the challenge has been, most of the focus has been, “Okay I got to protect my network. I got to protect my email. I got to protect my kind of core databases.” And then what’s funny is you’ll spend millions, tens of millions, hundreds of millions of dollars securing all of your network, all of your on-premises systems, and then an employee will just send an email attachment of all of your banking data to a client.

Jason Lemkin:

They will, they will.

Aaron Levie:

So, how do you protect that flow of information? How do you protect the pre-release patent document that you need to be able to share with your partners? How do you protect the marketing asset that is going to turn into the marketing campaign? How do you protect the movie script before it turns into a film? That is what we effectively are enabling for our customers, the ability to ensure all that data is protected even as it gets shared inside and outside the enterprise.

Jason Lemkin:

Yeah, Box in many ways has become a security company in the space and you’re thinking about it more than I have. When I see Evil Corp, literally, Evil Corp taking Garmin down for four days, I thought Evil Corp was just part of whatever that TV show was. I’m so sorry. I didn’t even know there was a real Evil Corp. I mean, Evil Corp took Garmin down, including partially airplanes, for multiple days, right? I mean, cyber ransom, it’s getting crazy out there, right? So how are you thinking about that and the value proposition? Because I think this is going to get crazy the next couple years, it’s going to be much worse than it ever was.

Aaron Levie:

Yeah, it’s pretty crazy. So, the amazing benefit that the cloud offers is, is when you have your data stored in the cloud, you can effectively bring an infinite amount of technology to that data to be able to protect it. So, for instance, just yesterday, we announced a new feature with this product called Box Shield.

Jason Lemkin:

Yup, I saw it.

Aaron Levie:

You can upload a Word document or a PDF or a PowerPoint file into Box. If you turn this feature on, we’ll scan that data and we’ll tell you that there’s a social security number in that file or there’s a credit card number. And then you can classify that data. When you classify that data with whatever classification level you want, you can decide then what types of security controls you want with that content. So, you can prevent that file from being downloaded or for being shared or from being edited on a different computer.

Aaron Levie:

So, when data is stored in a central platform, we can bring to bear all of the malware detection, data scanning technology, IP alerting features that we’re building, that partners are building. And then in one common platform, you can store your file at once and get all that extra security and protection. So, that’s effectively what we’re working on.

Jason Lemkin:

Box Shield has a rule-based hire, I can pick rules. If there’s a social security number and other pieces of AI, then automatically it’s limited to this org or this subset of the org.

Aaron Levie:

Exactly.

Jason Lemkin:

Yeah, I still can’t believe that in 2020, you can just email out anything or you can leave an unencrypted elastic database in the cloud. Every week, it’s like 15 million names are leaked. Someone forgot to turn the security on, the elastic database. You didn’t ask my opinion, I feel like that’s a winner for Box. The next five years are sort of terrifying for security, because I’ll tell you, one of my CTO, one of the early things he said to me back in the day that Adobe Sign/Echo Sign. He said, “You know why we haven’t been hacked?” He says, “Nobody cares,” right? He’s like, “You don’t even want to know. You don’t even want to know back in the days all the issues we have.” He was thinking about them, right? Hopefully, there was no unencrypted data elastic database out there.

Jason Lemkin:

But now that the cloud is becoming the dominant part of our economy, everyone’s picking, right? Everyone’s looking for holes and issues. It’s good for Box but it’s scary because everything’s going to be found. I think all the issues are going to be found.

Aaron Levie:

Yeah, I think this only increases an order of magnitude that we’ve never seen, especially with a distributed workforce that by definition has to share completely digitally. So, now everything’s getting digitized and now the question is, “Do you know where all that stuff is?” That’s what we’re trying to offer our customers.

Jason Lemkin:

All right, I want to get your thoughts on this one and the phases we’re going through. I asked Rob Bernshteyn this morning, who helped kick it off. He had no idea what the world’s going to be looking like. I asked Loren Padelford and in his view in eCommerce, it’s been 10 years since March 15. I actually missed a cycle there, 10 years of digital transformation literally, in whatever, 100 and some odd days. How are you seeing this? Are we ever going back? Are we going back to a hybrid world? What’s the future look like from where you sit?

Aaron Levie:

Yeah, I mean, I think it’s always so hard because the debate is always including this issue of, “Well, has the pandemic been resolved? Do we have a vaccine or not?” So, I can only really imagine a post-pandemic world because anything pre-post-pandemic, you’re making health and social kind of judgments that are so impossible to predict at this stage. So, in a post-pandemic world, I do think we go back, but I think we go back differently. I think what happens is you get much more flexibility in how companies think about the workplace. They think about the hours in the office, and they think about the business travel. They think about which days you have to go to the office.

Aaron Levie:

Certainly, representing Box, but more and more customers that I talked to, I think people imagine a bit of a hybrid future. Where offices are still incredibly important, because you want to be able to see people and be able to work with colleagues, especially if you’re earlier in your career and your company is more of your community and you want mentorship. It’s your place of meeting friends and you don’t want to be kind of holed up in your apartment working all day, then I think an office environment can actually be incredibly important to a company culture and company execution. At the same time, there’s literally no reason why we have to have a classic 9:00 to 5:00. There’s no reason why meetings and teams have to arbitrarily be the number of people that can fit into a conference room.

Aaron Levie:

So, I think you’ll see much more digitization of work that happens in the office. So, that will mean more distributed work, more video calls, less business travel, more hopping on just a quick sync with a partner as opposed to saying, “Hey, can I fly to you next week?” And then you’ve got hundreds of hours of logistics of complexity that surrounds just that one little decision. In many respects, I actually think the world is moving faster, because of this sort of complete virtualization. Because at any given day, I can hop on a call with a customer in Japan and Australia and multiple parts of the US in the same day. So, think about how much business that propels forward and how many decisions that begins to propel.

Aaron Levie:

So, I don’t think people want to go back to the old way of working, where every single thing that we did had to result in an in-person conversation and in-person meeting. At the same time, I think there’s a bit of fatigue of saying, “Okay, I’d like to get out of my house now. It’d be great to be able to go into an office and see people.” So, it feels like okay, total compromised position, but I think the reality is, is that there are mixed modes of how you want to work and what kind of people are inside of your organization. We have to support a future that is hybrid, ultimately. I think what’s at the center of the hybrid future is digital, and digital is the thing that bridges these two worlds together.

Jason Lemkin:

Yup. I want to talk about that, but just a detail, remind me, what’s your current policy? What are you thinking on this point of remote work for Box as a policy?

Aaron Levie:

So, we announced a couple months ago that people don’t have to come back, at a minimum until January of next year. That if people want to move long term, we have a very flexible policy on that and people that want to raise their hand and go do that. We’re basically supporting every request that’s happening. And then obviously, I think there’ll be more remote hiring in this environment.

Jason Lemkin:

Yeah. How are you thinking about that? Is that a strategic hiring initiative yet, or is it still early to figure all that out?

Aaron Levie:

Certainly, as time goes on in this situation, I think it’ll have to become the strategic decision. I’ve tried to not make wholesale changes to how we operate in the midst of this being kind of very temporary crisis mode and really wait to see like, “How do we think settle back in when it’s not the crisis, but it’s actually can be a voluntary way of working as opposed to… Right now, it’s involuntary. So, there’s not really many decisions to make.

Aaron Levie:

But the question is once it becomes voluntary, what kind of corporate culture are you trading off between having a strong office hub versus a fully distributed team? I don’t know that we know the answer to that. Right now, we have the luxury of not having to make any of those decisions because nobody’s going back. So, it almost doesn’t really matter that much.

Jason Lemkin:

At a tactical level going back just for the founders, as you say, obviously, it’s much more efficient for you to talk to existing and new customers over Zoom or Google Meet, right? It’s much more efficient. Back in the day, we all wanted to sell everything remotely on a GoToMeeting or WebEx. No one wanted to get on planes and then we learned it mattered, right? We learned it mattered. I remember I told you the story, you’ll forget because you hear a lot of stories. But you were kind enough to have me be a panel at Box works in 2012 when I was recovering from Adobe.

Jason Lemkin:

One of your customers came up and grabbed me on the arm and she violently disagreed with something I said in the panel, which I thought was very tame. She’s like, “That’s not what Aaron told me.” That was like a magical moment to see. She probably met you for 20 minutes, right? But that magical connection from that face to face, right? Is this sufficient? We’re going to go back, what’s your gut on this now that you become very enterprise? More importantly, are buyers okay taking more risk? Has the rules change? Does this count as meeting for a seven-figure deal?

Aaron Levie:

Yeah, it’s a great question. I mean, a couple things to consider. I’ll give you one example. We are one of the larger SaaS providers that leverages public cloud. So, we spend a healthy amount of capital on the public cloud. I have never met in person the sales rep of… Maybe I have in passing or whatever. I don’t think I’ve ever met the sales rep of those public cloud deals, but I’m on video calls with them or conference calls.

Aaron Levie:

You just know, okay, Google or Amazon or IBM, whatever, these are going to be substantial platforms that you can trust, and you care way more about, “Are they there for you when there’s a problem? Are they able to hop on a call? Are they able to go solve one of your core issues?” Not “Did they take the time to drive to your office and deal with all the kind of perfunctory stuff that kind of goes into that?” I would flip it a little bit.

Aaron Levie:

I think that we as a selling ecosystem think of in-person interaction as being very customer centric, which is very intuitive for a long list of reasons I don’t need to get into. However, what I would posit is, is that that’s maybe customer centric for that one customer you’re meeting that day, but what about all the other customers that you could have been helping to support that day that now you had not been able to?

Jason Lemkin:

Because that’s the question, right?

Aaron Levie:

Right. So, the question is can I trade five video calls with customers for one or two in-person meetings, and overall, actually building much more customer centric organization, because now I can be supporting many more of our customers in a single day? So, in the past couple of months in this environment, I’ve spoken with more customers than I ever have certainly in an equivalent time period, in a kind of pre-pandemic world. It’s because it’s trivially easy for both sides to say, “Hey, let’s just jump on a video call tomorrow to hash this out for 30 minutes.” That’s actually more customer centric than me getting on an airplane and coming in and doing a one-hour sort of full presentation that, again, a day later, everybody kind of forgets anyway.

Aaron Levie:

This is actually to me a much better way to be able to serve our customers at scale, but I don’t think it fully replaces the in-person dynamic. I think we will be on airplanes at some point, we will be going to meetings, but I think that the question will be like “What really is the value of that dynamic versus being able to serve your customers virtually?” I think that that remains missing.

Jason Lemkin:

Yeah, we did a little event right after we went into shelter when things were crazy, right? Stewart Butterfield came, and he said he’d spoken to more customers already in the first three weeks than he had in years. So, he said, “One of his customers said, ‘Oh, Slack must be really struggling.’” He said, “Why?” “The CEO’s on the Zoom. That’s a really bad sign when the CEO has to get on the Zoom and sell me the product.”

Aaron Levie:

That’s funny. I imagine even at $1.6 trillion, Satya is on many, many video calls with top accounts.

Jason Lemkin:

Yeah, I mean, who knew that would be such a competitive space? It’s fascinating, isn’t it? That the way Microsoft, Google, and Amazon compete, it’s bare knuckles in the trillions. We didn’t know that that you could compete that way.

Aaron Levie:

Yeah, no, I’ve talked with customers and it’s like, “Yeah, last week, I talked to Satya and I talked to Thomas Green. It’s like, “Wow, we are all trying to grow.”

Jason Lemkin:

Yeah, I remember when Diane Green went, I’m like, “I guess, cloud’s going to be pretty big. It must be worth her time to kind of get this Google Cloud thing really going.” But yeah, it was all bigger than we thought, I think. Just a couple things I want to make sure, so we have a few minutes for time. Also, go ahead.

Aaron Levie:

I want to underscore that point though, it’s all bigger than we thought. I think that anytime that we thought about cloud and this is always a tricky thing with analysts is like, well, you have to take some baseline to then imagine how big this thing is. I think the baseline we took was like, “Okay, well, how big is the software industry today? How many servers are sold today? Well, let’s say data centers move to the cloud at this rate or whatever.” That all makes sense. I don’t think what we imagined though is like flip it and you basically say imagine a world where everything that could become digital became digital, how big would the internet need to get and how many use cases would there be for the internet? Not “What do we have today?”, and then that moves to the cloud.

Aaron Levie:

But what could the world do with unlimited computing? You’re just now seeing that play out. I think that there is probably another couple orders of magnitude of growth in these markets, which is why I don’t get that energized by like, “Okay, is Azure in the lead? Is AWS in the lead? Is the Google in the lead?” I don’t think it actually matters to any of these players. They could all grow 10 times the current size, and they’re probably still be growth left.

Jason Lemkin:

Yeah, I mean, we didn’t realize that every process that could run in the cloud would run, right? That’s why I almost teased out in the first slide like Box and Zoom. Maybe there’s no magic combination with Box and Zoom, but there could be next year that could create a workflow that didn’t really make sense before as standalone apps. That’s what I’m looking for, these interesting combinations that before everything was in the cloud, we couldn’t even predict that these combinations would happen.

Aaron Levie:

Yeah, totally.

Jason Lemkin:

Right. We might have hit this one before. I put a lot of slides, but I want to make sure at least we hit this one in terms of unexpected change. This is a tweet from a little while ago, but it’s interesting because it’s across industries, right? So, when we had Rob Bernshteyn this morning, we looked at the spend index for Coupa, which if you haven’t seen in a while, it’s rather depressing when you see how deeply impacted industries are, right? When we look at the cloud index, we’re like, “Wow, that index was up 11% yesterday.”

Jason Lemkin:

You pop into a Coupa scene underline, and I mean, the impact of 33% unemployment, which is like a different galaxy than what we’re living in the cloud, isn’t it? It wasn’t even the point I meant to make, which we could chat about. We could talk about that. but let’s talk about this one first and maybe that one, if you want, because I’d love to get your thoughts. But what are you seeing across industries that’s maybe different than people see or would expect? You see any special insights here?

Aaron Levie:

I think mostly, it’s been intuitive but in a surprising way. So, it’s like not at the full level of counterintuitive, but it’s kind of fun and intuitive, which is the least digitized industries, we saw the fastest growth from a collaboration standpoint. You would sort of think that “Okay, the laggards are going to really take a long time to come into the cloud and get digitized.” Where we saw some of the fastest pops were from the laggards, because all of a sudden you had government agencies that quite literally couldn’t run their functions. They couldn’t go and process loans or they couldn’t go in and work with… We did a deal in Q1 with the US Department of Agriculture. They couldn’t work with their farmers because they didn’t have cloud technology. So, that was actually where we saw these immediate bursts of–

Jason Lemkin:

That’s interesting on the left that the some of the slowest moving organizations traditionally became the fastest.

Aaron Levie:

Exactly. So, you kind of had this massive reversal, which is why in tech, largely we’re not working that differently. I think this is consistent with this other… It’s deeply unfair on every dimension. I think it’s worth acknowledging the tech industry is dealing with a complete bizarre world environment right now, which is the companies are able to operate smoothly because we’ve been working this way for a decade and a half. That business models are holding up better than almost every other industry, because most of the time, the customer are already on credit card and already all the information. It’s easy to buy more and it’s easy to have recurring subscriptions. The services are obviously entirely digital, so you don’t have to usually go into a physical area to get them.

Aaron Levie:

So, it truly is unfair, but it does, unfortunately, again, kind of correlate to why we’re seeing this divide in business performance and market caps in the digital industry versus the non-digital industry. That is why in the tech industry, the way we work is not changing dramatically, because this is already again-

Jason Lemkin:

[crosstalk 00:35:08].

Aaron Levie:

… a part of how we operate.

Jason Lemkin:

We’re a cloud of privilege. That’s the strangest thing. It is so privileged. We were privileged before and we didn’t appreciate it. I don’t know that we appreciate it today, because our lives have been changing. But the privilege in the cloud, it’s unprecedented I think in our lifetimes, the privilege we have working in the cloud, having a business from the cloud in a country with 33% effective unemployment and everyone’s hiring, not everyone. Maybe there’s a few Eventbrites and TripActions, but there’s open reqs in the Box site, I’m sure, right? The privilege is crazy.

Jason Lemkin:

I do want to at least finish this tiny bit of thread on the state and local governments because it’s interesting, but is this going to solve itself? Can the cloud grow when the country doesn’t work, when Boeing’s losing a billion dollars a week or whatever it’s losing, when our airlines are shut down? I mean, how long can this split, this dichotomy exist?

Aaron Levie:

Well, that’s like 100 times above my paygrade as a question.

Jason Lemkin:

Well, you’re above my paygrade.

Aaron Levie:

[inaudible 00:36:16] be above everybody’s paygrade.

Jason Lemkin:

It might be, right?

Aaron Levie:

I watched some of these New York Economic Council talks, and they’ll have Stanley Druckenmiller. When he’s confused about how the economy is playing out, I’m like, “Oh, God. I don’t know who has this thing figured out.” I think the answer has to be no, this can’t continue. Unless you have just some economic recovery. I do think it’s incredibly important that the government find ways of making sure that the individual employees are protected. I have no real opinion about kind of the business stimulus side, but at least, people’s paychecks are covered. And then frankly, obviously, the bigger issue is our country needs to grow up and fucking deal with the health crisis and wear masks and do social distancing and not do stupid stuff and start to actually take this thing seriously.

Aaron Levie:

It’s been this really unfortunate thing to have this dimension of people being like, “Well, the health safety measures are what’s going to impact our economy. So, we’re not going to do those things,” and then we kind of open up. And then our economy is impacted even worse because of the health issue blowing up on us. So, it’s like we have to address the health issue first, and then hopefully, the economy will follow. But yeah, it seems unsustainable, certainly. But again, I think the Shopify numbers are a great example, which are 100% growth, massive scale, which has just continued evidence that some of these markets, they’re way bigger than we realized. These companies are way smaller than the market size than we realized. That’s sort of what’s playing out in some of these categories.

Jason Lemkin:

Yeah. Essentially Rob said this morning from Coupa, they’re coming up on $500 million ARR. He said, “That’s already larger than the market was, first of all, category.” So, he’s like, “It just changes,” right? That’s a very tactical, but it’s the exact same point.

Aaron Levie:

Totally.

Jason Lemkin:

Yeah. So, two quick bits of advice, and then I want to open up to questions more tactical. So, state local governments, I imagine some of this is like the Jedi contract. It takes 10 years to wrangle out a decision in some cases, right? When I was briefly at Adobe, this was like their secret sauce. They could drive alignment with these governments. Just for folks struggling with this, what did you see? What did you learn? How do they drive internal alignment? How do these old companies make a decision in 30 days? Yes, you need to, of course, but it doesn’t mean you will.

Aaron Levie:

Yeah. I think the advice here is probably what any entrepreneur should always be kind of thinking about is, “Are you solving a problem that is urgent and painful for the customer?” If they don’t solve this problem and if they don’t get it immediately solved. In some customers, we are fortunate enough to line up to an urgent pain point. In other customers, we aren’t. A lot of the growth that we saw in Q1 from our enterprise segment was situations where we happen to line up with an urgent need. When you do that, companies have a funny way of aligning behind those needs very quickly.

Aaron Levie:

It’s our job to make sure that we’re as customer centric as possible. We’re having all the conversations with line of business, with security, with the CIO, with legal. The sales process has looked exactly the same. It’s just been in some cases accelerated and other cases completely on pause. The good news about this environment from a selling standpoint is you kind of figure out which mode you’re in really early in sales.

Jason Lemkin:

The discovery process has been shortened.

Aaron Levie:

The buyer doesn’t have enough time to waste your time. So, you really quickly can qualify in or out, whether this is a real opportunity and whether you’re going to be able to be helpful for that customer.

Jason Lemkin:

Yeah, last one I want to hit and then make sure we can just do one or two questions, because this will be interesting to founders and others about of products changing. So, I don’t exactly know what you mean by this, but it’s super interesting. In the middle of March, you pivoted the Box roadmap to just two features that would transform work while being remote. That sort of makes sense, but what do you mean by totally changing your roadmap? Are you building software differently than you have for the last 15 years? Is there some insights here that other folks can take away?

Aaron Levie:

I would say that not our software development process, but just the product roadmap. So what we did was we looked at what we wanted to build in coming into the year versus in March, April, once we knew that people were going to be doing remote work. We basically said, “Anything that doesn’t relate to sort of remote and distributed collaboration and data security, we’re not going to focus on.”

Jason Lemkin:

You dropped it, you dropped it.

Aaron Levie:

We’re going to put all of our chips on things that only help people while they’re in this work from home, collaborate anywhere type of dynamic. That was the bet that we made, it was highly focusing of the product strategy. What we saw was lo and behold, we actually were shipping software faster in some cases than we even anticipated, because we just had this hyper focused approach of “What do we have to build? What are customers going to need right now? How do we make sure we’re going and solving those problems?”

Jason Lemkin:

Yeah, that’s interesting. Yeah, that focus really does accelerate the roadmap, doesn’t it? Because everyone’s got a pet feature. It’s like a pet IT project, pet CIO project, right?

Aaron Levie:

This is definitely-

Jason Lemkin:

They’re all right. They’re all correct that you want to build all these things.

Aaron Levie:

They’re all correct but for different timescales. What became very clarifying was the stuff that was needed right now based on the urgency of our customers’ problems. So, that helped us prioritize very, very efficiently.

Jason Lemkin:

Yup. All right, just a couple and then I’ll let you go because you’re so kind to give us the time. One sort of fun one, but I think you’ll find it interesting. When Loren was on just before from Shopify, do you know how much revenue his enterprise at Shopify? Do you know what much your Shopify Plus?

Aaron Levie:

Just to break this out, what’s the distinction of the revenue groupings?

Jason Lemkin:

Well, Shopify Plus is the enterprise group. The line might be like $10 million of revenue, I forget what, but it’s clearly enterprise. It’s selling to big brands, big names.

Aaron Levie:

Knowing Shopify, I’m going to say 20%.

Jason Lemkin:

It’s gone from 20 to 29. Anyhow, we had a little fun, because if you go that fast, you’re going to be like Slack. You’re going to be all enterprise before you know it, right? Even if the product doesn’t feel like… I mean, Slack is enterprise today, right? Now, Loren’s point, he said, “Don’t do SLAs, don’t do RFPs. Build a safe and secure product. Resist doing SOC 2, push all of it off, because most of it doesn’t matter.” He says, “Don’t even do contracts.” I actually believe SLAs and contracts are stupid. Because if the customer wants to leave, let them go, right? An SLA doesn’t bring the site back up, does it? It does nothing.

Aaron Levie:

[inaudible 00:43:27].

Jason Lemkin:

It does nothing, but what do you think? Do we need RFPs and SLAs and all these things in 2020? Do you still do them? Does your team still do all this?

Aaron Levie:

We do all those. When I was [inaudible 00:43:41], if we can kill RFPs, I would donate anything to anybody.

Jason Lemkin:

That was his point is don’t fill them out. But I said, “I’m going to ask Aaron because I think we’re not past those yet.”

Aaron Levie:

Unfortunately, there’s too many things you just lumped in. So, RFPs, we should kill as an industry and we should end [inaudible 00:44:01]. There’s no way to compare two software products from two different vendors using any kind of classic RFP that I’ve ever seen. The biggest thing with RFPs is they don’t ever track trajectory of the vendor, they always track point in time feature requirements. It’s hilarious the amount of times when a customer will buy a solution, because on that day of that month of that year, one feature existed in one product and didn’t from another. But then literally, three months later, the other product just blew past that other company, because you don’t get a sense of the momentum of the vendor from a typical RFP process, so I hate RFPs.

Aaron Levie:

SLA is very different. I am very pro-SLAs. So, I’m going to take the other side of this one, Jason. We would not be comfortable relying on an infrastructure provider behind the scenes in our setup that wasn’t going to sign up for very significant SLAs. We can debate the kind of recourse of an SLA, should you just leave, should you sue the vendor, whatever different debate there, but I do think having a shared agreement of “What is my service level going to be of your product?” is actually really important. I think there’s a big difference between 99.8, 99.9 and 99.9999999. [crosstalk 00:45:29]-

Jason Lemkin:

It could be epic.

Aaron Levie:

… SLA really matters no matter what so.

Jason Lemkin:

I’m with you. It was a good challenge, your thought. I also think it’s something you should just give, right?

Aaron Levie:

Yeah.

Jason Lemkin:

You should stand behind it, right? It’s not even that complicated. You put it on your website, you put it in the contract. It’s not nearly as complicated as infrastructure changes and a whole bunch of other things that are part of it. So, last question before we run out of time, I want to get some [inaudible 00:45:58]. There’s a whole bunch of things in this question about Box infrastructure and bare metal and hybrid and cloud but let me simplify them. You’ve gone from all of your own infrastructure.

Jason Lemkin:

Maybe because in the old days, we had no choice to be running on multiple clouds to thinking through this piece to move into security and performance changing. Just give us your insights on all these pieces, on all the clouds, on hybrid clouds, on multiple clouds, on your own infrastructure. What have you learned? Maybe the more interesting question is, what have you learned circa 2020 to 2022?

Aaron Levie:

Yeah, I think certainly, we started the company in 2005. So, we had to build our own infrastructure. You fast forward 15 years and you just do the math. You realize that a Google or an Amazon or somebody else is going to put 100 times the capital or 1,000 times the capital into their infrastructure strategy, than you’re going to be able to do. And then you really have a decision point, which is am I going to be able to shave out those margins, the 5% or 10% extra margin, that you might be giving up that that vendor is going to be extracting from just your infrastructure expense? It’s not your company margins, just on your infrastructure margin. Would you want to trade that for possibly the uptime benefits, the scalability, the additional features that that cloud provider has?

Aaron Levie:

I think more and more the argument is going in favor of leveraging the cloud more and more, certainly, for us it is and lets us focus more of our attention and energy on software. We want to be a software company. We want to have the behind the scenes parts of what’s running Box be obviously incredibly robust and performant and secure. But whether that’s something in our data center, something in another major very large company’s data centers, as long as we’re securing, protecting that data, I think we’ve got a level of flexibility in how we do that.

Jason Lemkin:

And then just last follow-up question and then I will let you up, because you’re right in the center what’s your practical learning on multi-clouds, the practical learning on running on Amazon and Azure? I mean, it’s a lot of work.

Aaron Levie:

It’s a lot of work.

Jason Lemkin:

It’s so much work. They’re not the same. It’s so much work, right?

Aaron Levie:

It’s funny, they really wanted to differentiate from each other and not make it easy to be portable between systems.

Jason Lemkin:

Yeah. Does this get us anything? Is it just the world we’re in, is just a crazy tax of the cloud? Does it make any sense? What have you learned from this multi cloud world? But a lot of CIOs want it. They want to pitch the vendors again. They want security, they want trust. But it’s like an SLA, I get it, but I don’t get all of it.

Aaron Levie:

Yeah, I think there should be a limit. You should never do it because of some academic reason. We want competition between the vendors or whatever. I mean, that’s probably not academic, but that’s a very expensive price to pay for managing a multicloud environment. I think the only main argument is that there’s different features of different cloud providers and that there are sometimes a reason why you want to be able to leverage a unique feature of one major service. Then you have to decide, “Is that unique feature worth a split architecture?”, then your software team is going to have to go in and figure out a way to abstract.

Aaron Levie:

Sometimes it’s worth it, and sometimes it’s not. But I would generally say simplicity in architecture is always a good North Star to have, because it’s just going to free up your time and energy in the company. And I think we need more simplicity in architecture in most environments that we see.

Jason Lemkin:

All right, that’s helpful. All right, everybody, we’re out of time. Everyone in the enterprise, check out Box Shield. I’m terrified of security. I’m terrified of Evil Corp. I am terrified of content being everywhere. I’ve just lived in the content world, right? The signatures actually, we had a single unified place for your contracts. We actually had all these benefits early because of the nature of the service. I’ve seen all the issues, right? So, check out Box Shield, it’s a great choice. Sign up, sign the contract this quarter. Aaron, thank you for your time. It’s always wonderful that you’re here with us.

Aaron Levie:

Thank you. Appreciate it.

Jason Lemkin:

All right, talk to you soon.

Aaron Levie:

[inaudible 00:50:27]

 

The post SaaStr Podcasts for the Week with Justin Bedecarre, Jen Nguyen, Jason Lemkin, and Aaron Levie appeared first on SaaStr.

The Rise of LinkedIn as a Core Communications Platform


This post is by Jason Lemkin from SaaStr

When LinkedIn added a feed a few years back, it looked like a copycat of Facebook.  And perhaps it was, just one full of a ton of B2B product commercials (at least for me).

Fast forward to today, though and LinkedIn is about to pass Twitter as our #1 source of referrals from social to SaaStr.com.  It’s just at the edge of doing so right now:

This despite the fact that LinkedIn in many ways is a partial “walled garden”.  LinkedIn partially (though not fully) discourages linking to third party websites by giving more of an algorithmic push to content that doesn’t contain links, etc.

What about quality?  It’s a bit hard to tell right now, but we’ll track it more going forward.  Certain, far more SaaS unicorn and decacorn CEOs are active on Twitter, and they engage with us on Twitter.  Founders and CEOs are much more active there vs. LinkedIn for now.

But LinkedIn is now bigger than Twitter for us in terms of engagement.

Maybe you should invest a tiny bit more there, too.

A few quick learnings:

  • It’s fine to link to blog posts, etc.  Yes, these don’t get the same engagement as a “native” text post.  But they still perform fine.  I don’t see a huge need to do “the link is the comments”.  Net net it seems you are better off just posting the URL you want folks to go to.
  • You have to reinforce your brand more on LinkedIn.  Comments and similar engagement can seem high, but many of the Likes and Comments will be one-offs from folks that don’t really know who you are.
  • It’s (obviously) OK to be more commercial on LinkedIn.  This is maybe its #1 benefit.  Overhype your webinar or product feature on Twitter, and folks will unfollow you.  But folks seem to be totally fine with promoting your own product on LinkedIn.  It’s a B2B network, after all.

Things keep evolving.  Including your sources of trafffic.

I know a lot of folks like to think of social as a potential source of leads, and it certainly is and can be.  But it’s also a key source of awareness.  Use it for that, and your strategy may evolve.  Be where the most folks that matter see positive things about your brand.  That moves the needle.  Even if it doesn’t generate, on its own, a million dollar deal.

The post The Rise of LinkedIn as a Core Communications Platform appeared first on SaaStr.

iKala, an AI-based customer engagement platform, raises $17 million to expand in Southeast Asia


This post is by Catherine Shu from Fundings & Exits – TechCrunch

iKala, a Taiwanese startup that offers an artificial intelligence-based customer acquisition and engagement platform, will expand into new Southeast Asian markets after raising a $17 million Series B. The round was led by Wistron Digital Technology Holding Company, the investment arm of the electronics manufacturer, with participation from returning investors Hotung Investment Holdings Limited and Pacific Venture Partners. It brings iKala’s total raised so far to $30.3 million.

The new funding will be used to launch in Indonesia and Malaysia, and expand in markets where iKala already operates, including Singapore, Thailand, Hong Kong, the Philippines, Vietnam and Japan. Wistron Digital Technology Holding Company, which also offers big data analytics, will serve as a strategic investor, and this also marks the Taiwanese firm’s entry into Southeast Asia.

iKala’s products are targeted toward e-commerce companies, and include KOL Radar, for influencer marketing, and Shoplus, a social commerce service focused on Southeast Asian markets.

In a statement about the funding, iKala board member Lee-feng Chien, former managing director at Google Taiwan, said, “Taiwan has an excellent reputation for having some of the best high tech talents in both hardware and software around the region. With Wistron as a strategic partner, iKala can become a major driving force for transforming Taiwan into an AI industry and talent hub in Asia.”

While Taiwan’s technology industry is best-known for hardware, especially semiconductor manufacturers like Foxconn and TSMC, a new crop of startups are helping the country establish a reputation for AI prowess.

In addition to iKala, these include Appier, which also provides a customer analytics, and enterprise translation platform WritePath. Big American tech companies, including Amazon, Google and Microsoft, have also set up AI-focused research and development centers in Taiwan, drawing on the country’s engineering talent and government programs.

Why It’s Year 3 When You Lose Your Customers


This post is by Jason Lemkin from SaaStr

Recently I was catching up with a good friend who used to be CEO of an enterprise-y SaaS social networking company — and the usage and engagement numbers of his business were just awful.

Customers bought because they thought their organizations needed this functionality, and so they wrote the checks for Year 1, and even Year 2.  But the end-user usage just never appeared …

In SaaS, it actually takes until Year 3 for your customers to churn out from low engagement / low usage.

The reason is as follows:

  • Year 1 – the enterprise buys, but often doesn’t even fully deploy until month 6-9, or sometimes even longer.  So the buyer really doesn’t even have any success metrics going into the first renewal.
  • Year 2 – renewal comes up, deployment only finally got going a few months ago.  Engagement Metrics are often low but (x) it’s already in the budget, and (y) what do you expect, we finally just deployed?  It took us 9 months to get our act together and use the service.  OK, just renew at last year’s price.
  • Year 3 – hmmm.  OK, finally, 15-18 months under our belt — and engagement / usage is still low.  Should we renew?  Meh.  Well, if we do, let’s get a big price cut if usage isn’t high.  Or put it aside for a year.

It’s not like Zynga, where you see the latest XXXVille usage trail off in a few months after launch, and the revenue comes to a grinding halt.  Instead, from a revenue perspective at least, for enteprise SaaS with low engagement, it ‘s a long, slow steam railroad slowdown to zero revenue over 24+ months.

We also saw this at Adobe Sign / EchoSign, at least in small parts.  Most of our larger enterprise customers deployed relatively quickly – the first 60 days.  But some, most often due to internal manager changes (our purchase/champion quit, promoted, etc.), would never ever deploy at all in Year 1 despite all our attempts.  Yet they would still renew for Year 2.  And as long as we got them rolled and successful – we were good for the Year 3 renewal.  If not, the customer would churn – but not until month 24.

So if a SaaS app is fast growing, often because there’s segment pull, and there’s a lot of churn in Year 3, it can take a long time to see it, as the numbers can be masked at first by all the new Year 1 and Year 2 deals.  In other words, you just can’t tell unless you look at the engagement numbers, not just the churn numbers.

Churn is a lagging indicator. Especially where business process change is involved. Don’t let low churn give you comfort, unless it’s attached to high NPS and net retention.

(note: an updated version of a classic SaaStr post)

The post Why It’s Year 3 When You Lose Your Customers appeared first on SaaStr.

SaaStr Podcasts for the Week with Matt Garratt, Trisha Price, David Schmaier, Rob Bernshteyn, and Jason Lemkin


This post is by Amelia Ibarra from SaaStr

Ep. 359: The Secrets to Vertical Growth, What it Really Takes to Build a $1B SaaS Company with Matt Garratt, SVP, Managing Partner @ Salesforce Ventures, Trisha Price, Chief Product Officer @ nCino and David Schmaier, CEO & Founder @ Vlocity. From strategies in recruitment and team building to sales tactics, these leaders from Salesforce, nCino, and Vlocity, will discuss the top tips for moving beyond horizontal SaaS and building a billion-dollar SaaS company.

 

This episode is sponsored by Linode.

 

SaaStr’s Founder’s Favorites Series features one of SaaStr’s best of the best sessions that you might have missed.

This episode is an excerpt from a session at SaaStr Summit: Enterprise. You can see the full video here, and read the podcast transcript below.

 

Ep. 360: Digital transformation marks a radical rethinking of how companies use tech, people, and operations to fundamentally change their business performance. Coupa CEO, Rob Bernshteyn, and SaaStr CEO, Jason Lemkin, will discuss how the Cloud has changed in 2020.

This episode is sponsored by Guideline.

 

This episode is an excerpt from Jason and Rob’s session at SaaStr Summit: Enterprise. You can see the full video here, and read the podcast transcript below.

 

If you would like to find out more about the show and the guests presented, you can follow us on Twitter here:

Jason Lemkin
SaaStr
Matt Garratt
Trisha Price
David Schmaier
Rob Bernshteyn

We’ve shared the transcript of episode 359 below. You can also jump down to the transcript of episode 360.

Transcript of Episode 359:

Matt Garratt:

Thank you. I’m really excited to be here today. I am Matt Garratt, Managing Partner of Salesforce Ventures, and we will be talking about the secrets to building a $1 billion vertical SaaS company, and we’re very fortunate to have two executives from leading enterprise software companies who have done this.

So first, Trisha Price, who is the Chief Product Officer of nCino, who recently had an amazing IPO, and also David Schmaier, who’s the founding CEO of Vlocity, and CEO now of Salesforce Industries, as they were recently acquired by Salesforce for over a $1 billion, as well. So, very excited to have both of you with us today, and thank you so much for making the time.

Before we go into our stories [inaudible] a bit more, provide a bit of context. I’ve had the fortune of working with both of you over the last few years and seeing, really, the change in the vertical SaaS industry change over a number of years. We’ve invested in over 300 companies at Salesforce Ventures and have partnered with both of you closely and it’s been amazing to see this story up close and personal over the years.

Matt Garratt:

I remember a few years ago when companies were out fundraising, vertical SaaS was not as popular as it was today, and part of that is, the adage would go that, “Well, these are smaller TAMs and these are going to be lower gross margin businesses, and if you look at the chart we’re showing, the gross margin in the early days can be as low as 30% and maybe getting above 50%. There’s a lot of services. Are these really product companies? There’s heavy services, at least 30 to 45% versus best-in-class that want to be less than 10%.”

Matt Garratt:

But then when you start to grow and you start to get these customers, you see some really nice benefits. These companies can scale really efficiently. They need fewer sales as a percentage of overall employees. When you look at sales efficiency as measured by magic number, it’s quite good. Retention is much better than most businesses and then the upsell opportunities are quite good, so it’s not surprising that while maybe not so popular a few years ago, you’ve seen quite a few successful exits in this space. A few of the leading companies in the Cloud 100 list, as put together by Forbes, of leading enterprise software companies are in industry verticals and just on the Salesforce platform, the three most valuable companies built on the platform were industry-vertical companies, including nCino, Vlocity, and Veeva.

Matt Garratt:

If you just look at Vlocity and nCino, amazing businesses. Grew to over a hundred million dollars in revenue in five years. As I mentioned, acquired by Salesforce for over a billion dollars and nCino, amazing business. Had a fantastic IPO recently valued depending on stock price around $6 billion, so we wanted to hear firsthand: How did you do this? We have, again, David Schmaier of Salesforce Industries. David, maybe would you give us a quick background about you and what gave you the idea to start this company?

David Schmaier:

Yeah. Thank you, Matt, and it’s great to be here. Thanks for inviting me and welcome to all the folks from SaaStry. I’ve been working in the front office space for 34 years, so I’ve been doing this a long time and when I started, the worldwide market for what we now call CRM software was $50 million globally and so I worked back out of graduate school at a small company called Oracle in the ’80s and I met a guy named Tom Siebel there and I went off and founded a company called Siebel Systems with him and I met another guy named Marc Benioff who went off to found Salesforce, so I was either smart or lucky, and either answer’s okay by me, but maybe a little bit of both.

David Schmaier:

But I had built CRM and then I had built industry-specific verticals, actually over 20 in my prior life, and a few of my colleagues worked with Salesforce right when the app exchange started to found a company called Veeva Systems and Veeva became, I think, it’s still the biggest company ever built on the Salesforce platform and as the worldwide leader in life sciences CRM, and so I saw how successful Veeva was and I went to my first Dreamforce in 2013 to find the next Veeva and what I found was incredible. I was amazed by how big Salesforce was in the ecosystem. I was amazed by the app exchange. I think back then there was 2,800 companies. Now, there’s 5,000 and 2,799 of them were horizontal software companies and one was Veeva. Actually, two. I think nCino had been already started, but I didn’t see nCino there, I didn’t know of them then, so maybe there’s a couple of vertical SaaS companies, but Veeva was a big one and it became clear to me that this was a huge opportunity.

David Schmaier:

I’d built verticals before, so I called up my old friends from Oracle and Siebel who founded Veeva and I got together the next morning with the three Veeva founders, and of course it wouldn’t be a great software company without a cocktail napkin, so on a cocktail napkin, we drew out the strategy for what became Vlocity, so that’s how we got started.

Matt Garratt:

Fantastic. Trisha, I’d love to get a bit more of your background for everyone and then talk about the founding story of nCino, which is certainly a little bit different than Vlocity.

Trisha Price:

Sure, Matt, and David, the reason you didn’t know about the other industry vertical is because that stage, we probably had like two customers or something like that, so we were just too small to be on your radar back then, but I appreciate the chance to talk to everybody today, Matt.

Trisha Price:

nCino is a little bit different in its background. We were actually built out of a bank called Live Oak Bank and Live Oak Bank was founded in 2009 and they had a need for a completely digital bank. Well, to most of you, that may not seem crazy today. You may even engage with a bank that is completely digital today, but at that time, it was pretty much unheard of to have branchless institutions, and so they started looking around for the right software to help digitize their processes and Cloud was important to them for scalability and they couldn’t find anything, so they started working on this concept of digital banking in the Cloud, and from there, very early on, we spun out and created nCino, which is Spanish for Live Oak, and we created nCino.

Trisha Price:

Our roots from the very beginning were built by bankers for bankers and from the very beginning, we made the choice to build the application on the Salesforce platform and since then, we’ve scaled quite a bit. We have over 1100 customers across the globe. We have offices in Tokyo, Sydney, Melbourne, Toronto, Salt Lake City, and then our headquarters here at the beach in Wilmington, North Carolina, and we have over 900 employees.

Matt Garratt:

Super. We went to the idea, so let’s talk about the different phases of building a $1 billion vertical SaaS company. David was kind enough to share this framework that he uses. David, you talked a bit about the team and the founders. Can you talk about maybe a little bit broader than the initial founding team and when you were first hiring people, how did you think about hiring people who had SaaS and software experience versus people that had industry-specific experience?

David Schmaier:

Sure. I think the team is probably the most fundamental step, maybe even more important than the idea, so I’m a big believer in Jim Collins’s book, Good to Great, where “You want to get the right people on the bus and then figure out where you want to drive the bus to,” and luckily from my prior experience, I was able to call a few of my old colleagues who were like-minded, and I think that’s the key is if you’re starting a company, it sounds glamorous, but it’s 24 by seven and it’s a lot of work, it’s exciting, it’s thrilling. There’s amazing highs, but there’s low lows, too, and you have to do everything. You have to plug in the computers, you have to set up the network, you have to figure out how to pay people, you have to find office space, all that stuff.

David Schmaier:

But we found a team of people who are really passionate about building software and building a company and so I went through my Rolodex of top people that I knew from my prior networks of companies and there was a founding six and ultimately 10 of us that banded together in a little low-cost office to figure out how to build a bunch of industry Cloud verticals, and then the key part, which I think we’ll get to later, is we figured out that we had to do it with a partner and so there was no other choice in our mind, we were all aligned at doing it with Salesforce. That was maybe the other most fundamental decision besides the team is the partnership with Salesforce.

Matt Garratt:

Thank you. Trisha, similar question: When you were starting to hire and scale out the team in Wilmington, were you focused on people who had experience in financial services or software experience or a little bit of both and how did you balance that?

Trisha Price:

Yeah, I mean, I couldn’t agree more with David. At nCino, it all comes down to the people and execution, right? Ideas are a dime a dozen, lots of people have lots of them, but to make a company successful, it takes grit, it takes determination, it takes a certain attitude, it takes relentless focus on customers, and that is just a level of execution that you need to get to the kind of success that David’s company and we at nCino have had, and so we’ve always been one to hire for attitude and aptitude more than a specific skill set.

Trisha Price:

Now, in an industry vertical like financial services, you absolutely have to have a deep banking experience and the built by bankers for bankers has been a part of our core DNA, so we absolutely have hired lots of folks with a banking background, but the problem you get if you only focus on folks with a banking background is the faster horse’s problem and what I mean by faster horses is they know how to automate the processes that already exist at a bank, but that’s not really going to disrupt an industry, that’s not really going to get people to get off of their current systems and processes, and so it’s not about faster horses, it was about inventing a car, right?

Trisha Price:

So, how do you get people who are innovative, who can think outside the box? It does require, certainly, people with technical background. For us that didn’t necessarily mean Salesforce. We’ve tended to hire just the best attitude and aptitude full-stack developers we can find and Salesforce has such a plethora of trailheads and training that that’s not really an issue, and so it has been a combo, I would say, of three types of people: the best technical talent we could find with the best attitude, certainly people with deep domain experience, which is needed in vertical SaaS, and then those out-of-the-box thinkers, those inventors, those creative folks who can really cause you to think about things in a different way.

Matt Garratt:

Well, I can attest to the commitment to hire for aptitude versus specific skills. I don’t know if you recall, but we were at dinner one time and there was a waiter that she just blew us away. We were really impressed with her and she ended up becoming one of your… I kept saying, “You need to hire her,” and she became one of your customer success managers, if I recall.

Trisha Price:

Yes.

Matt Garratt:

A full testament to you never know where great talent is going to come from.

Trisha Price:

That’s right.

Matt Garratt:

Let’s move on to the initial product. David, can you talk about the initial product that you took to market? Maybe to provide some framework, I generally think of industry-vertical solutions of having to be sort of full-stack and a bit broader than a horizontal app, and so there’s generally a higher build upfront. Can you talk about the first product and how did you know it was done or at least ready to take to market in the first place?

David Schmaier:

Sure. Yeah, I’m a product person by training and so we had had a lot of experience building SaaS and vertical products. The key for us was we were building not one industry Cloud, but four, and then at Vlocity, we later added two more and expanded to six, so the secret of building one vertical SaaS product is going deep. The secret to building more than one is reusing components so that you don’t have six engines that do the same thing, that you reuse that engine and you get to use what we call metadata to reimagine it for each one of these industries.

David Schmaier:

Luckily, we had had experience doing that, so I couldn’t agree more with what Trisha said: If you do industries, you got to have domain experts, so I had originally four domain experts, now six, leading each one of our industry teams. Then we also hired full-stack developers, so like you said, Trisha, not Salesforce experts, but just great developers and they all learned Salesforce. We immediately standardized on Salesforce and did the full training course, I think this was pre-trailhead, but did whatever the training was back then, can’t even remember what it’s called now.

David Schmaier:

We were amazed how fast we were able to build on top of the platform. So my prior life, I had built the platform and the core apps and the industry apps, but to build the platform can actually be several years of work and cost hundreds of millions of dollars depending on how you do it, and so we got incredible leverage, incredible. It’s hard to overstate this from the Salesforce platform and so we actually created our company in March of 2014 and at Dreamforce, we showed the four vertical apps, which is about six months later, and they were beta releases and then we shipped them soon after Dreamforce, so maybe in seven or eight months, we were able to ship for industry Clouds, and then we were off to the races. But the key again in industry-specific SaaS is understanding the business processes, understanding the critical problems and the issues, and really going deep in each one of these industries.

Matt Garratt:

Now, I want to pick up on that in a second with you, Trisha, but David, I guess when you were building this out and you had such a big vision, can you talk about the fundraising? Did you need to raise more money to build such a big product platform and were there specific VCs that you sought out or that were going to be more attracted to this solution? How did you manage that?

David Schmaier:

Sure. Yeah, I think on the fundraising, maybe our experience was a little unique, which was we knew a lot of people in the industry, so because we wanted to partner with Salesforce, our first call was with Salesforce and John Somorjai and Marc Benioff wanted to immediately invest in our company, which was great. If you’re going to build a company with Salesforce, who better to invest than Salesforce? I think if that’s the question, the answer to that should be yes.

David Schmaier:

Salesforce became our lead investor and then in our second round, there was room for a second investor, and so we went with Sutter Hill Ventures was a VC partner of ours and I had known a bunch of the partners there. It’s a great tier one firm on Sand Hill Road, but I think what they’re looking at when they’re trying to fund you is this wheel of: Is there a great idea? Is there a strong team that’s done it before? What is the product, or what will the product be, or where is the product? Do you have customers? And then, how repeatable is the model? And so, because we had done this before, we were able to very quickly do the fundraising, so we literally had like two meetings with each one of the investors and were able to close on the financing, so I don’t think that’s normal. I wouldn’t expect that to be the typical process, but it was pretty straightforward for us

Matt Garratt:

And Trisha, maybe back to the product and building the platform: How do you compare this building a more vertical industry solution versus a horizontal application and how challenging is that initial build?

Trisha Price:

Yeah, I mean, certainly when you’re in a vertical build, the depth you have to go to for customer success is deep, right? There has to be value that you’re delivering beyond a surface level set of features. It’s got to solve end-to-end problems at a financial institution or whatever your vertical may be. It may be that they’re on spreadsheets or word documents or things of that nature and so maybe your barrier to entry in those type of processes can be a little bit lighter, but if you’re doing a rip-and-replace of a legacy solution, that requires an end-to-end set of features that really solve that end-to-end business problem, and that typically means deep integrations, right?

Trisha Price:

Most of these vertical industries that we’re talking about, you’re not the only shop in town, right? It’s an ecosystem of applications and so having a very strong approach to integrations, whether it’s one like Salesforce took with having your own app exchange type concept and ecosystem or whether you’re building direct productized integrations or a combination of both, that takes quite a bit of time, not just to solve your end-to-end set of workflows and feature sets, but to get those integrations right for customer success.

Trisha Price:

I do think that takes time, but I completely agree with David: Building on top of Salesforce dramatically decreased our time to market. From my background, I’ve been building banking software for my entire 20-plus year career. It’s really the only thing I’ve ever done, pretty much, and so for me, this was the first time I’ve worked for a product company built on top of Salesforce. It was a tremendous difference for me to come in, certainly a learning curve of different ways of doing things that takes some getting used to, but the benefit that we received from it from a company perspective was tremendous.

Trisha Price:

It wasn’t just in the early days to get that product out quicker. Think about the scalability as you go global. I talked about our offices in all these different countries across the world, data centers. I mean, have you thought about data centers in Japan? Have you thought about data centers in Australia? These are not simple things to solve. And then you layer on top of that platform features like multicurrency, multi language, you layer on top of that things like entitlements in security and investment in security and so that certainly did impact our ability to get to market, even with the kind of complexity and depth that our product and our vertical requires.

Matt Garratt:

You hit on something pretty interesting there, Trisha. When you said you’re talking about ripping out incumbent players. Even if it’s a bad solution, as long as people aren’t miserable, they’re not going to rip those out if it’s part of your banking platform. What was the core value proposition or the thing that you focused on most that was the most convincing thing or that really was compelling for banks, particularly the larger banks, to move off of their incumbent solution to you?

Trisha Price:

Yeah, I mean, for us, it has changed over the years and it has changed as we’ve launched new solutions, right? When we first started, we primarily focused in the commercial lending space and since then, we’ve launched retail banking solutions as well, and retail banking solutions tend to be more fully banked than the commercial lending space was when we first started, which was a lot of spreadsheets and Word documents in the early days. Changed a little bit now, but primarily, that’s still true.

Trisha Price:

But from the beginning, we’ve had core value that we’ve been able to deliver to our customers, right, faster. As a customer, what do you care about when you’re applying for a loan? Am I approved? When do I get my money, right? Whether you’re a business or you’re a consumer. And so, how do you help banks do that quicker? How do you help them do that at scalability and how do you as a software company do that for the smallest community and regional institution in the US to the largest, most sophisticated global institutions in the world on one code base, right? Cloud, definite differentiator, right? Because if you look at these financial institutions, they have growth aspirations, right? They get acquired, they acquire other institutions, so having immediate scalability of the Cloud, definite differentiator, and then having a set of features and solutions that drive value of regulatory compliance, supporting their growth strategies, doing it in a cost-efficient way are really our core values in how we think about building software and why I think so many customers have jumped on the nCino product.

Matt Garratt:

Maybe a follow onto that: When you’re building an industry-vertical solution, how do you avoid a lot of the customization work? Is that a challenge from company to company? You have presumably a somewhat smaller TAM and if a large bank is coming knocking and they want something, how do you balance that in making something that’s reusable without too much customization and services?

Trisha Price:

Relentless focus, relentless focus. It is very easy in vertical and these kind of depth of applications, and I know David’s been faced with this, I’m sure, many times, to get off course from the industry product that you’re building and say yes to a customer. But if you have those creative people that I talked about earlier, you can figure out how to solve a customer problem, but do it in an industry way. I think, yes, that requires the customer to be able to apply configurations on top of your base product to meet their needs and it requires some ingenuity in how you code and create a product, but it certainly can be done, and I think coming back to the Salesforce platform, Salesforce has done this phenomenally as a platform, and so you can learn from what they’ve done and take advantage of a lot of their configurations to handle that in a similar way that they have.

Matt Garratt:

Well, we are at the bottom of the hour, so, David, Trisha, thank you so much for taking the time, walking us through your experiences at Vlocity and nCino. It’s been a pleasure working with you, and a pleasure talking here, so thank you both so much.

Trisha Price:

Thank you, Matt.

David Schmaier: 

Matt, thanks so much.

*****


Transcript of Episode 360:

Jason Lemkin:

Good morning everybody. I’m super excited for the next session at SaaStr Enterprise with one of my favorite CEOs in one of, I think, one of the most interesting cloud companies, Coupa, and I’m glad to have Rob back at SaaStr in general. He was kind enough to come a couple of years ago when Coupa was still on fire, maybe had recently IPOed, I don’t know the timing. But I’m super glad to have Rob back now because Coupa, to me, in the crazy world we’re in, is at a very interesting intersection. And there are what we’ve talked about as COVID beneficiaries. Folks that have benefited from these crazy times and Coupa is one of them. Coupa’s growing quickly and its stock price has done fine and it has benefited.

Jason Lemkin:

But at the same time Coupa is the market leader in spend management, and managing procurement, and managing supply chains and those are areas that are deeply impacted by the economy, deeply impacted. It’s hard not to walk downtown through [inaudible 00:01:05] it to see what’s happening in healthcare all over the place, in financial services. And so Coupa is super interesting because it’s benefiting as a software player but yet it has this insight into the economy of software and the economy of the real world that I can’t think of another vendor that has. I’m super excited to talk with Rob and down at the bottom on the Zoom, hit Q&A, we will save time for questions. We had a few already come in but click there and I’ll remind you at the end so we can chat and I can let Rob talk a little bit about Coupa and then we can chat about it but managing almost 2 trillion of spend across basically all segments of our economy. Which we’ll chat about.

Jason Lemkin:

Coming up on 500 million in revenue, whatever the exact number is, no forward looking statements in this presentation but what’s super interesting that I’ll make sure we talk about even here is that Coupa has redefined the category and now has more revenue in this category than ever existed. What does that mean for the cloud? How do you change a category? And again, we’ve been talking about digital transformation for 20 years, probably, Rob, since you and I started in software but so much has changed. I want to dig into a bunch of things on the slide but what are you seeing? What’s changed the most since March 15th? What’s unexpected? What’s expected? What are the number one things that have shocked you, or have been pulled forward years that you weren’t expecting?

Rob Bernshyten:

Well, I think as everyone is saying, Jason, and again thank you for having me on, there has been a greater energy and focus in what was already happening, which is the move to digital. I think in our case it’s even more interesting because when you’re in times of hyper growth folks tend to focus a little bit more on revenue than they do on profitability. And they do on operational efficiency frankly and our value proposition at Coupa has always been to help companies become more operationally efficient. To help them unlock all of their potential so they can pursue all of their missions and visions.

Rob Bernshyten:

Obviously we’re doing that now for hundreds and hundreds of companies around the world. It’s an opportunity to engage in the same dialogue we’ve been having now for well over a decade but the ears are perking up even more because they know that they need to move to a digital method of driving their operational efficiency, understanding how they’re managing their spending as it pertains to everything they need for their business, how they’re thinking about supplier risk, how they’re thinking about their inventory levels, their sourcing activities, and so much more. It’s really, really exciting for us to have a greater emphasis into an area that we know is so important anyhow.

Jason Lemkin:

It’s interesting because it’s different for different vendors. Since March 15th, was there a trigger point where maybe I had a project that I was talking to Coupa, it might be a 2021, 2022, 2023 long term deployment because you have many enterprise customers. Was there a particular drama issue, shelter issue, a wedge issue that got projects pulled forward years?

Rob Bernshyten:

Well, interestingly enough it was actually a bit of the opposite in the first month or so, and I mentioned that on the last earnings call. There was almost a deer in headlights moment amongst all the vast majority I would say of our prospects around the world whereas we don’t know what’s going to happen so we actually need your help. We need to get PPE equipment. We need to get things to sort it out so then I’m back in two, three weeks. You can do that. It was really rewarding for us here at Coupa. We have this robust community of existing customers and they came together on our platform to source personal protective equipment for their organization. We were less oriented to how do we close more business during that first month, to more oriented towards how do we help this community make sure that they are going concern which was very real in some industries for sure.

Jason Lemkin:

Yeah, we’ve all been through four phases since March. I hadn’t fully… I did hear that when you said it before but didn’t think through it. There were vendors where the end of March into April were crazy even Zoom the next day exploded. But even Slack it took a while for folks to figure out we needed to Slack more. Then Slack took off. You had the chief procurement officers, CIOs and others needed to survive for that first month. Then what was… Has there been four waves? What are the next couple of waves that you’ve seen across your partners and customers?

Rob Bernshyten:

Well, the most interesting thing for us is that we’ve taken dozens of customers live since this hit. Because it’s one thing to sell new prospects, and of course we’re focused on that, and we’re doing just fine there but when you think about the existing inflight projects when suddenly these people are operating from home and they’ve never operated in a virtual environment, and to take large global deployments live and have see them start running massive amounts of spend through our system.

Rob Bernshyten:

Ceding them control spend. We have a whole bunch of customers who didn’t have control over their spend. They couldn’t stop the company from spending money in certain places. We’re able to help them do that on their mobile phone through our integrated email capabilities offered via Coupa. That was very, very rewarding and powerful. And then of course we reemerged and we started looking at how we can drive our global reach and expansion, obviously we’re well into that now months after the crisis started.

Jason Lemkin:

For a big Coupa customer, pick one if you want or don’t or an example, but before March 15th what was a typical deployment to be fully into production? Not an agile kind but maybe an old school type. Would it be a year? Would it take a year from really signing and fully going live? If it was or whatever it was, how do you compress that into weeks? How do you manage the team? How do you do the internal change management and the external because we’re not necessarily wired that way until March, were we?

Rob Bernshyten:

That’s right. Well the average is roughly six to nine months for our enterprise customers. Our mid-market customers, four, maybe five, weeks, so it’s not bad. But you know what happened is that we gained a lot of efficiency ourselves in working while our customers remotely, you don’t have the time. “Well we’ll meet you on Thursday we’re going to fly in. Were all going to get into a room.” “Well, it’s Monday let’s just do it right now.”

Rob Bernshyten:

You’d get the systems integrator on the Zoom session, you have the existing customer on the Zoom session, you have my Coupa colleague on the Zoom session. We’re sharing as you’re sharing this slide the configuration set up and literally walking through it. In many ways we stand to gain an advantage in the efficiency with which we can work together as long as we can overcome the change management required for some folks, as you say, to be a little bit more tech savvy and be willing to work in this way. We’re seeing that happening without a doubt.

Jason Lemkin:

Where do you think… It’s hard… There’s so much change it’s hard to even predict but in some ways it’s great that you can now deploy customers over Zoom, right? It’s so much more efficient. You don’t have to get on an airplane. You don’t have to book the hotel and all this but some things are lost and some things are different. Has enterprise buying changed? Do you think it will swing back into the middle? Can we live this dream where we never have to get on jets again? Where do you think we’ll be on the other side of COVID?

Rob Bernshyten:

You know it’s hard to predict that, Jason, of course, and probably it’s somewhere in the middle. I don’t think it’d be an extreme one way, or the other if I had to predict. But what I will tell you that will be consistent is that enterprise software is really about driving change management. Driving the change. One of our core values at Coupa is focused on results. In other words, identify exactly what it is that you’re attempting to achieve after you’re live, a year after you’re live and then focus everything in and around that. Limitations like the inability to travel, or advantages like the ability to get on a virtual session like this are the methods of getting to have that result. As long as we keep people oriented toward that outcome I think we’re in fine shape, and that’s how we think about this approach.

Jason Lemkin:

That’s good. I want to talk about this because you have some great data in this. I worry about supply chains. I try not to worry in the world but there’s a lot going on. You want to remain positive, but I look back at some of the first SaaStr blog posts in 2012. I wrote one in 2012 as I was walking Downtown University in Palo Alto when the last retail store reopened, but it was four years. Downtown Palo Alto, it’s a fairly gentrified community.

Jason Lemkin:

There’s a lot of money in Palo Alto–tech money, but it took four years for the last retail, what’s now West Elm to reopen for four years. I’m worried about this. What are you seeing? And this one is interesting, 43% of companies were worried about the ability to fulfill orders. At the beginning of COVID you still can’t get a webcam. You couldn’t get a monitor. We were worried there were some groceries you couldn’t get at the beginning of this. Tell us what you’ve learned being at the center of this.

Rob Bernshyten:

Well, first of all brick and mortar retail absolutely is in trouble, and frankly brick and mortar retail to some extent has been in trouble well before this pandemic. We were looking at our business spend index, if your viewers go to spendindex.com they can see the data on that. We’ve been looking at retail for three, four quarters and it’s been trending down. When we’ve seen a lot of very interesting data I could share with you around the downward trend. But when you think about global supply chains and this massive globalization dynamic we’ve had in the world for the last six, seven, eight years. We’re getting into, let’s call it globalization 2.0, which begins to balance global with local. As this slide says is there some fragility in our supply chain? Yes. But I would argue that fragility is really in the area of information technology, information access rather than in physical access because the goods and services exist.

Rob Bernshyten:

And as soon as there’s demand, supply gets there. You look at PPE there was a massive demand and within three, four weeks, there was massive supply. The challenge wasn’t there. The challenge was having the information at your fingertips to hot swap suppliers, get access to things you needed at the right time, make commitments contractually to people to know that you will fulfill your obligations. That’s the world in which we play in at Coupa. That was what makes it so interesting. We’ve got customers literally hot swapping suppliers, moving them into certain areas where they never even thought they’d be buying from, creating contingency plans for categories of spend. You need information technology for that and that’s what’s exciting about many of the things we’re doing and seeing in our customer community.

Jason Lemkin:

Well, that’s interesting. I was following after right when we got into this wonderful pandemic, how Coupa was at the center of getting PPE and identifying this but I didn’t fully understand why. Other than it’s a great thing to do but I guess it took a while for me but the supply got there within a relatively short period of time relatively speaking but it needed help, it needed liquidity, it needed connection. And I guess Amazon works again, right? We can still get Amazon products to our home. I guess we don’t need to worry as much that–the market will solve this, no matter what global turmoil there is in the short term as long as technology can connect us, I guess is the learning.

Rob Bernshyten:

Yeah. Absolutely information technology. Access to the right data at the right time to make the right decisions and collaborate amongst the supply chain. It’s very exciting to see some of the largest companies in the world really reorienting themselves to fully modernizing their supply chain, their business spend management approach. It couldn’t be more exciting for us obviously.

Jason Lemkin:

I want to get some of the data next but on this last point in the slide. This is something I think about a lot. Did we know that the cloud would be this strong after March, that there would be this boost? It’s crazy, right? Coupa is on fire but you talk about retail, look at Shopify. Shopify is a $120 billion company today. It’s crazy and the growth factor is insane. It’s the maximum output of this trend that we’ve seen but can’t… If we’re in shelter, if we’re in this world through the end of next year, can we have this divergence? Can we have a cloud on… Can cloud remain on fire when one out of three people are essentially unemployed in the country? How long can we remain divergent? Do you have any insights here?

Rob Bernshyten:

Well, it’s a tough question. It’s interestingly Shopify and Amazon, and these are our customers. Amazon runs in tens of billions they manage through Coupa so we’re close to these customers but the same value proposition that existed before this crisis exists now, it’s just seen as a higher priority. The ability to get greater speed, the ability to have information at your fingertips, the ability to embed, Jason, best practices into your deployments. Just about every CIO I talk to tells me, “Hey we’re going to go with Coupa, but hey promise me you’re going to deploy this in a way that’s going to be quote unquote, vanilla or best practice so that my team doesn’t start doing a whole bunch of end rounds that are going to make us on upgradable and slow us down.”

Rob Bernshyten:

They want agility. They want access to community information, hopefully we’ll talk about. I think there are a lot of dynamics that are really tailwinds for us in pushing cloud faster into the world at large and obviously these are big, big markets we’re all playing in and I’m sure many of your viewers are playing in. The opportunity is now, really, to accelerate our efforts, no doubt.

Jason Lemkin:

It’s usually the CIOs wanting these best practices, right? They don’t want custom made. They have this sort of on-prem scars of some hack. Some bit of corner code written that–or weird workflow. I should have known Amazon was a customer. I didn’t know it, but my mistake. But boy you must learn a lot from Amazon. Amazon must be the like the Walmart of today, where they’re an amazing customer, but they school you a bit. What is like for an Amazon? What do all your other customers benefit from? What are some… That vanillaism? What are some things you’ve learned from really those mega customers like Amazon that–and how does that benefit the others? How have they leveled you up?

Rob Bernshyten:

The beauty of enterprise software, as I think every one of you viewers knows is, is can you have minimal code that supports the massive amount of use cases, as many use cases as possible?

Jason Lemkin:

That’s the dream.

Rob Bernshyten:

That’s the dream. What we learn from our largest customers, Amazon being one and others, is how to support massive complexity in the simplest way possible. And what we learned from some of our smaller customers is how to keep things very intuitive and user centric but at the same time abstract them from some of the complexity that they may never need to use and make everything configurable. We’re constantly learning about scale and stretching our platform from the larger enterprise and we’re consistently staying very, very true to usability and user centricity that we’re picking up from the smaller growing companies. And that’s a beautiful marriage to have on one platform.

Jason Lemkin:

Yeah. Relate to this. This is something I wanted to learn from you in the enterprise is brands. You and I chatted right before we went live, I asked you about competition. I had some fun talking about Ariba which we’re in 2020, Coupa isn’t really an Ariba 2.0 but maybe in the early days there was some truth to that. I had a lot of experience there and you said I don’t spend some… Now that we’re big enough, now that we’re actually larger than this category used to be, I don’t spend as much time thinking about competition. I think one reason is you have this trusted brand. You’ve become… Every deal is hard. You have to prove yourself to Amazon and Shopify but you are this brand. There’s suites and there’s best-of-breed which we thought about. But do folks want even more from trusted brands now in 2020, and even more after March 15th? And what does that mean, versus going more horizontal? And where do we want to invest more in trusted brands?

Rob Bernshyten:

Well, it’s interesting. I’m looking at this slide and saying do enterprises want more from vendors? In some sense I would push back on the term vendors because I don’t consider our company, any one of my colleagues working here, anything that we offer, we’re not a vendor. When I think of vendors I think of a hotdogs at a baseball park-

Jason Lemkin:

I would have hated it myself as the CEO. You’re right. But-

Rob Bernshyten:

Well so, but-

Jason Lemkin:

But CIOs might still use the term.

Rob Bernshyten:

It plays into your question. It’s a term that’s grounded in business they used to be a products business, it smells of commoditization. The reality is what customers really want is they want trusted advisors, they want partners, they want people to bring best in class technology, embedded best practices, and they want folks that are focused on value creation with them and measurable success. That’s what they want more than ever and that’s what they deserve. They’ve always deserved. They just didn’t have the chance to get that on the first run of this thing, and enterprise software in the 90s and maybe a well into the new millennium.

Rob Bernshyten:

When you develop trust, and I believe trust is built on transparency. You have to actually see measurably that we’re delivering value for you. If a third party came in and said, “Okay, there’s a relationship between Coupa and one of their customers and here’s what’s happening.” They will be able to point to measurable value X amount saved, or X user adoption, or X spend categories and a management, or X improvement in operational efficiency, whatever that may be.

Rob Bernshyten:

Once that’s established, of course those customers are inclined to want to tap into subscribing to more what we call value as a service from those partners of theirs, and we consider ourselves to be that type of partner for them. We’ve benefited from that and I hope we’ll continue to benefit from that because we take every one of our customers very seriously. We want to keep them forever. We want to continue to drive more and more value for them.

Jason Lemkin:

Yeah, it’s interesting. I think at Salesforce, depending on how you look at it, CRM is either their fourth or third largest category now. It’s pretty crazy, isn’t it?

Rob Bernshyten:

Sure is, sure is. Well look, understanding every component of your customer, how you market to them, how you sell to them, how you service them, how you interact along on the web it’s super important. But I argue it’s just as important to understand your entire supply base and how you buy from them, how much you spend with them, how you can collaborate with them, whether or not you can mitigate risk when they have risks. We’re really operating on the exact opposite side of the equation. We’re helping people, companies who spend money do it in the most operationally efficient and thoughtful way.

Jason Lemkin:

And related to this and at the bottom point, when I listened to the last earnings call, you said inbound demand is up from your base. Your customers want more and more from you, from a trusted vendor. A related question because it seems like–so you’re coming up on 500 million in revenue, whenever it exactly, I don’t know exactly what ARR, it doesn’t really matter for this, but how far can you see? Can you see… You obviously can see to a billion. You can see it right behind you going across the bridge but can you see 10 X? Can you see to 5 billion now as crazy as that might have sounded a couple of years ago? How far can you see in… What do you see? What do customers want? How should the product and things like… What do you see? What’s the furthest you can see, and what do you see?

Rob Bernshyten:

Well, I appreciate that question, Jason. What I see is a $50 billion plus total adjustable market, and what I typically ask are two very, very simple questions of any prospect I interact with, frankly anyone I interact with whether it’s over Zoom, or before in the physical world. Do you think, number one, your company is doing a great job in managing the spending that it’s involved in for all the things and services that you need, or you think it’s done really, really well? I’ve rarely, rarely gotten an answer that says, “Oh yeah we’re great. We know everything about how we spend money. We have control over it. It’s complex.” Okay.

Rob Bernshyten:

Then I ask the second question, “Do you think you’re employing information technology in a way that’s comprehensive, and fully integrated, and user centric, and deployed quickly that addresses some of the challenges described?” And the answer is always no. Just about every company in the world can really stand to improve the way that they do their business spending and the way they manage their business spending. I see a huge, huge opportunity and I think this is in many ways early innings for this category. We’re proud to do our part in trying to lead a focus into this area and then fulfill that leadership with a real brand promise and real measurable outcomes for every one of our customers. I think that is why we’ve seen more inbound interest and more capabilities, and additional features and functions of modules that we can deliver for our customer base of course.

Jason Lemkin:

A couple things, this is more a tactical point and I want to make sure we get a couple of things on the data you have but this is a bit of a mystery to me. I should know the answer to this, but I don’t. Why are payments so hot now? I understand the innovation of Stripe of two lines of code back in the day, but why–you’re seeing this? Why is this all coming together now, and why couldn’t payments be as hot five years ago? I put hot in quotes. What’s so much more valuable today than it was, or what’s changed in technology because I’m missing a bit of, why now.

Rob Bernshyten:

Well first of all, it’s saying that the value proposition has been there for a long time. It’s been there for a long time. The question is, has the value proposition been fulfilled? I’m not sure [crosstalk 00:22:45]-

Jason Lemkin:

Why now?

Rob Bernshyten:

Well look at what’s happening in the consumer world. The value proposition has been there a long time too, but it’s only now starting to be fulfilled with Square, and Apple Pay, and Google Pay. Now if you look at B2B payments, my gosh. First of all it’s much bigger. There’s a lot more money flowing there but secondarily the technology, the capabilities there are really archaic. Old school technology, a lot of manual–a lot of paper. In the United States, nearly half is paper-based checks. What are we kidding ourselves? These systems are rigid, you have monthly batch jobs running out of incumbent solutions. There’s no ability to collaborate with your supply base around payment rails, around dynamic discounting, around virtual credit card payments and transfers, yet cross border is still super old school and complex.

Jason Lemkin:

Super old school.

Rob Bernshyten:

There’s is so much we can do here. You got third parties enter to do supply chain finance. We’re in the very early innings of a huge market and it requires leadership, and it requires incredible tech. Some of the approaches that been taken in the past year have largely been driven by banks. The approach we’re taking is partnering with banks where we’re bringing what we’re really good at to the equation. A highly scalable, robust, transactional platform. What we know about usability and how important user centricity is to that problem, and we’re starting to really get somewhere. We have, as I mentioned in the last earnings call, nearly 100 customers leveraging components of Coupa Pay and that’s growing. It’s really exciting for us.

Jason Lemkin:

If you look at what’s happened with Shopify, how big payments have gone there. If you look the very low end adjacent to like bill.com that used to have any payments revenue and then it became one of their key drivers of growth. What do you see a few years out here in the enterprise? How core is this? It’s obviously core to Coupa but how big… Is this flip around and become one of the most essential parts of what we’re doing in terms of managing this business commerce? Or are we… In five years will this be massive?

Rob Bernshyten:

It’s hard to make a detailed prediction. The way we like to do our business is do it very organically. Our customers are asking for these capabilities of us. We didn’t wake up and say we’re going to do payments. Our customers said we’re doing procure to okay to pay through your platform. How about we do procure to pay? [crosstalk 00:25:03]

Jason Lemkin:

Got to do the last mile, right?

Rob Bernshyten:

Yeah, let’s do the last mile and pick off a bunch of use cases that we’re struggling with. We see a big opportunity here. We’re going to co-develop with our customer community. We want to take the same approach we’ve taken with every other set of modules we’ve deployed and we’ll see where it goes. But the likelihood of us being able to capture a real meaningful portion of this market, based on what everyone is saying, I think, that’s objectively looking at this appears to be quite high.

Jason Lemkin:

Yep. Now this next slide is something I picked out of your investor report because it’s interesting to me as a founder, how do you… Fiscal discipline is super interesting. You turn around you probably can’t believe all the unicorns you read about on tech crunch each day that are raising 400 million and you don’t even want to know what the bottom line looks like because it doesn’t matter. Coupa is a generation… We’re generations ago in terms of thinking about this, and then you look at weird things like Zoom. You know what Zoom’s burn rate was the year before it’s IPO? You know what it was?

Rob Bernshyten:

I don’t, I don’t remember.

Jason Lemkin:

Zero. It wasn’t minus $1 or like Eric literally said to the marketing team, “You can spend every dollar we have, but it’s the funniest thing, it’s like 414 million in revenue and like 414 million of losses.” And it’s literally a zero. It’s the fun you can get it. You can imagine that conversation. Here’s your allowance. But what is this? What’s 50 is the new 40 and when should software be profitable? It’s supposed to… Shouldn’t it be really profitable? You need X number of engineers and everyone can buy it but what does this all mean? What are you saying about this 50 is the new 40?

Rob Bernshyten:

Well, first off let me say I love how Eric thinks and I think similarly in the sense that there need to be guardrails on your business. The idea of spending at all costs, and by the way we’ve had some pressure as a public company certain quarters where people say, “Well why don’t you just press further in sales and marketing and grow-“

Jason Lemkin:

Press on the gas.

Rob Bernshyten:

And then you’d have the other side as soon as there’s a little bit of backwards says “Hey, why don’t you accelerate the pace to profitability?” Look, we all know in software as a service what really matters is cash flow. Cash flow is what matters. That’s what fuels the business. We have put guardrails on the business now for 45 quarters. We’ve had guardrails on the business. Very, very careful and thoughtful growth not overextending ourselves, but at the same time, careful management of sales and marketing efficiency, and then getting scale into a model on the bottom line.

Rob Bernshyten:

Those are the guardrails we’ve had every quarter for 45 quarters, and just as Eric does it, here’s what it’s going to be for the next quarter. We’ve got 12 weeks, go, and we see what exactly what happens. We distill that, we look at all the metrics by business unit, by geography, by product line, and then we unlock the investment we’re going to have for the next quarter, go and do it over and over again. When you do that for as many quarters that we’ve done you get into this situation where you can have this rule 50 dynamic that my colleague and CFO came up with, I think when he became 50 years old. But we are operating at this level now and it’s exciting.

Jason Lemkin:

There’s a benefit at 50? Is 50 too much? Obviously you’re a proponent of it because you put it out, but where we’re at… How do you set that guardrail? What is too efficient versus too inefficient when you’re able to be efficient? I can think about it [crosstalk 00:28:26].

Rob Bernshyten:

I think you have to combine backwards looking metrics. When you complete a quarter, you look at all your backwards looking metrics and then you combine them with all your leading indicators as an executive which is what does the pipeline look like? What does our talent look like? Where are we in terms of stage of pipeline? Where would we want to make investments geographically? When are we launching the next product release, and then use your gut to fine tune exactly how you’re going to run out at the following quarter. You have the guardrails but you also don’t hamstrung yourself as an executive. Otherwise you could automate the job of the CEO in that area and that’s probably not the best way to do it.

Jason Lemkin:

Good. Let me skip… Oh, oops we had this slide. Maybe we lost one on the different segments. I want to talk about some of these points, but we might’ve taken some of this out, but tell me what you’re seeing across different industries because you do have some data on this. One of the most interesting things from some Coupa data I’ve seen is I read The Wall Street Journal, I read the New York Times. It seems like many banks are doing very well in this crazy environment. But like Coupa shows financial services under a lot of pressure, healthcare. It’s hard to get a handle on what’s happening in healthcare. Some hospitals are all at the edge of bankruptcy. On the other hand, other segments of healthcare are on fire. They’re literally on fire. Walk me through some of the data you see of different segments and maybe some things that are counterintuitive that you’re seeing in different parts of the economy.

Rob Bernshyten:

Well, I think one of the biggest things that I think most people now understand is that given the amount of liquidity in the market it’s very hard to gauge the extent to which financial services firms are doing well and healthcare et cetera. You have to have that context in mind. It’s very difficult to answer that question in two sound bites, I really do urge your audience to go to spendindex.com. Here’s what we’ve done there Jason-

Jason Lemkin:

We have a slide on it here. I think I just lost it but yes it was a great one.

Rob Bernshyten:

Let me tell you what we’ve done there because we have created an index that is a real leading indicator. Let me tell you why. We’re looking at things like what are the approval cycle times in the current quarter. In other words it didn’t take longer for people to prove something before they even bought it, before they even ordered it, before anything happened. We have a leading indicator in terms of how long, by industry, folks are thinking through purchases. That’s never been seen before, in an aggregate level with nearly $2 trillion worth of data. We’re looking at rejection levels. What percent of things are getting rejected? You never see that in the GDP. Now if there’s an increase in rejection levels, of course there’s a likelihood that that industry has concerns.

Rob Bernshyten:

We’re looking at average spend per employee and companies and we’ve put that into an index to give leading indicators that we launched this every quarter and when we backwards tested this to 2016 against the GDP, we saw a very real and meaningful correlation. We think this could be a real enabler for people to get a sense for things. But if you look at the last one, what we shared at the last earnings call of course significant retail slow down, slow down across the board frankly but what’s more so on pronouncing retail. When you look at a financial services slow down there as well whether that’s seen or not in stock prices. I’d urge people to go to spendindex.com. We’re sharing this openly. We want to be a good corporate citizen. We’re not gaining anything from sharing this other than maybe a little bit more awareness about Coupa. I’d urge your folks to check it out.

Jason Lemkin:

Yeah. Everyone go to that because it’s pretty awesome, spendindex.com and I’m on it on my iPad. I had a screenshot in here but I think maybe we took it out because it was backwards looking but let me ask you one or two questions because it is great. Everyone should check this out. It is great to see this data and granted there’s a little bit of a lot. It’s not up to the minute, right? It takes you… You’ve got to get that data so it’s through Q1. But one that that surprise to me is high tech was down. How you define high tech, right? That was down in Q1. When the cloud’s on fire but in spend index high tech’s down, what are we seeing there? What should I see something? Is there a story behind the story there?

Rob Bernshyten:

Well, you see what you see which is [crosstalk 00:32:27] Q1 when you look at the index purchases for hardware and software in the first quarter of the year, when you look at time to approve, when you look at number of rejections, we look at average spend per employee was down and that’s a reality of what happened there. Now whether or not that’s measured it in the stock prices of many of these companies, probably not. But again you could argue that the current liquidity environment and the longer term opportunity in the digitization area is very, very real. Look investors are looking for places where they going to get yield. They’re not going to get it U.S treasuries. They’ll look at placing a yield. They’re looking for longer term bets and there’s no question. Many things… My colleagues and I like Eric and others are doing have the opportunity to really stand the test of time and develop into very, very meaningful longterm businesses. That’s what we’re doing here.

Jason Lemkin:

I want to chat about your book next but on the spend index, the Q1 just remind me. Q1 is calendar Q1, right?

Rob Bernshyten:

That’s right.

Jason Lemkin:

So Q1 is through March. This retail one plummets dramatic even through Q1. That trend you can see it in Q4. Retail was already off deeply in Q4 then Q1 is down. Boy it’s just epic. It’s almost a step function. It’s almost a step function here, right?

Rob Bernshyten:

Absolutely step function. And look, if we have to make predictions I think they’re pretty obvious We’re going to see real backward seasoned retail, we’re going to see a lot of consolidation, we’re going to see brands get rolled up. It’s going to happen. It’s already beginning to happen because look, folks aren’t going to the mall and not buying in those stores. The retailers that are quick enough and nimble enough to get to consumers directly to figure out different innovative ways to manage their supply chain will stand the test of time but it’s a real struggle in retail. No question about it.

Jason Lemkin:

Yeah. I would literally encourage everyone listening now, or the thousands that will watch this later go to spendindex.com. It’s fascinating. Coupa has a massive… It has almost 2 trillion of spend thrown through the platform. If nothing else, this is a fascinating data point that you can segment across financial services, healthcare, high tech, manufacturing, retail, and it’s a slice but you may see right now a story that is worrisome of our economy. There is some optimism in this.

Jason Lemkin:

Actually health and life sciences out-performs more than I would expect from the press because our hospital’s not taking ordinary patients and our dentists at a lay level. I felt like that’s under more pressure than the spend index suggests. But outside of that, it’s a worrisome. It’s a bunch of more worrisome trends and maybe we’re all ballooned by the massive liquidity injections, the trillions of dollars in the economy, the planes fly nowhere and the extra unemployment checks but the real signals underneath our economy are very worrisome on these charts.

Rob Bernshyten:

Yes perhaps. I’m looking forward to the next quarters release. We’re actually going to start slicing by category of spend. What are the categories folks are spending on? Were they increasing, decreasing as part of the blocking enterprises? We’ll have more robust data. Greater fidelity of data as we go, and hopefully it’ll help folks understand what’s going on in the world frankly.

Jason Lemkin:

Yeah. All right. I’m going to post this on SaaStr after the next one’s out because it’s super fascinating. Okay so book. You got a book. Is it out? I should know I’m going to buy 100 copies, 50 copies are… Tell us about the book.

Rob Bernshyten:

Well, this is really a book that is the next step from values of service. A book that I did about three years ago. And this is really about breaking the silos of traditional enterprise software which was always deployed one customer time with one set of data and never being able to see anything across. Never able to take anonymized, sanitized, aggregated data. We’re beginning to take that data, distill insights from it, and push that back into individual customer environments so that we could be smarter together as a customer community.

Rob Bernshyten:

I look at this book as really… I don’t have a PhD, Jason, I ended at my MBA. This is kind of my hypothesis, or thesis, or dissertation if you’d like, and it’s really a position paper on where we see enterprise software going, which is the breakdown of those silos so that we could be smarter together as enterprises and customers for the use of information technology. We’re on the very bleeding edge of that with what we’re doing here at Coupa and every day we discover more and more interesting use cases that we can employ for our customers to take advantage of, and I’m happy to share anything you’d like about that.

Jason Lemkin:

It’s interesting in these communities. SaaStr is a community. I never knew much about community before this. I’m still learning. There’s a lot of talk about communities and how that customer, vendors, technology solution. People will be communities, communities are out there. What do you mean by communities? What are you seeing? What have you learned at Coupa in general? What does this mean?

Rob Bernshyten:

There’s so much but I would give you the metaphor that I love which is waves. I was very proud that Noma endorsed this book after having thought through our concept committee intelligence here-

Jason Lemkin:

Yeah, that’s a space you didn’t imagine community would exist on maps but it sure does.

Rob Bernshyten:

Exactly. And with waves we’re truly smarter together as we traveled from destination, from A to B because we’re leveraging immediate access to data and that data requires almost no friction, in some cases zero friction to collect, aggregate and distill insights that could be pushed back to the individual driver they could find their way through. The exact same concept applies to everything happening in business processes. Best practices for how many people you should have in your workflow Jason. There’s companies out there 60 people in their workflow to approve something that’s $200. If they knew how far outlier they are in real time they could fine tune that.

Rob Bernshyten:

They’re overpaying for categories of spend all over the place. They’re exposing themselves to risky suppliers and not leveraging community insights to figure out which suppliers they should be considering working with. The list goes on and on of all of these use cases where we can truly be smarter together, and proudly as a platform we’re enabling that for our customers. With every release of our product we’re turning on more and more of these community intelligence capabilities that allow them to be smarter together.

Jason Lemkin:

The book in large part, is it share a lot of learnings about how to build this community among your customer and partner base?

Rob Bernshyten:

Well, first of all it frames what it actually means to have a community intelligence environment. What are the components of that? It explains why the time is now to strike. Particularly if you have early stage companies that are watching us, right now is the time to really build up a platform that can have the stand the test of time in leveraging cross company committee insights, and then it shows a whole host of use cases and case studies of what we’ve experienced so far, and asks the reader as I did with values of service to comment on what they’re seeing, pushback on some of the hypotheses in the book so that we can learn together as a community of readers, frankly, of the book as well.

Jason Lemkin:

Okay. That’s great. Well let’s… Everyone let’s… I’m going to do a deep dive. I think community for business software is super powerful. It’s so important and it’s something we’re learning today. Just like payments, maybe. Everything in enterprise sometimes it’s four to five years later than consumer. Maybe payments is there, and maybe community is there too. Waze to hit this five years ago but we need to learn this as leaders. Let’s all read this and, Rob, if you want, maybe whenever you want we could do a deep dive on community on the podcast to 130,000 people because I think this is a great topic on its own.

Jason Lemkin:

How to building this community thing because… Otherwise this is a great book. Let’s all read it and I will share some learnings on it on SaaStr in a bit. There’s more I want to talk about, let’s make sure we have a few minutes of questions before we end. Actually hold on. How are we doing that? Let me make sure I grab… Apologies for one second. There was one very specific I wanted to hit and then we’ll go into the Zoom. These are specific to procurement but I think these are good ones to hit for Rob. What are the three pain points for chief procurement officers, excluding generating savings and reducing supply chain. What are the top pain points in 2020 for CPOs?

Rob Bernshyten:

One of the biggest pain points is ensuring that the CFO, the CEO, and the CIO become their truly connected colleagues in solving many of the challenges that they’ve been thinking about for a number of decades. If you go to a CPO conference of any kind, the conversation is typically, how do we get a seat at the table? How is it that the whole organization doesn’t understand all the value that we can offer? Now is the time to strike to showcase that value, and that value is in every possible way of course from savings, which is very obvious, but it extends to supplier risk mitigation, which is obvious, and all the way through managing the entire integrated way with which a business manages its spend through information technology. Now’s the time to strike.

Rob Bernshyten:

Look if we have a phenomenal CPO and we use our own platform but if my CPO ping me on Zoom, email or walked into my office and said, “Look, hey I need a budget of X because I’m going to make sure that we’re going to mitigate our supplier risk. I’m going to save us this much money. I’m going to give us a platform that’s going to help us be modern and scale into the future.” Why in the world would I not support them if they were a trusted advisor? That’s the opportunity.

Jason Lemkin:

Yup. The next one it’s a bit of a lay up, or even a commercial but I always love to hear what a CEO has to say which is, which new Coupa product or feature are you most excited about?

Rob Bernshyten:

Well, the most exciting one for me is community intelligence, which is a set of capabilities that we discuss in the book, but in the entire fabric of the product set. They appear for example in expense management, which we don’t talk about as often but we have hundreds of customers using Coupa’s expense management. We are mitigating fraud in spend management. We’re using the data set of our aggregated customer base and serving up individuals that are highest likely to be doing fraudulent activities so you can investigate rather than rigid policies, or a free for all. We found a way to use technology to be prescriptive, which is the P in Coupa. Prescriptive to individual controllers and people responsible for spending in a company leveraging community intelligence. And that’s just one example of many capabilities leveraging community intelligence within Coupa.

Jason Lemkin:

This one from Nikko. You probably don’t know the answer although it’d be wonderful if you did. I know Coupa works with many hospitality companies and how many quarters do you think bars and restaurants, hotels, airports will rebound? If you knew that you could probably be on CNBC any night, everywhere any night anyway but do you have any insights, or do you have a model? Do have an operating model, when will these hyper impacted hospitality businesses recover?

Rob Bernshyten:

Well, I love the second part of the question because of course I’m not a fortune teller. In fact, the big unknown is when some of these things will happen but we have a very clear scenario based model for V, U, and L, and then we execute accordingly based on where things work out.

Jason Lemkin:

So V, E. V I get. Are we past V, or is there still a chance for V?

Rob Bernshyten:

Well, it depends on how far you step back and looking at your V-

Jason Lemkin:

How wide it is.

Rob Bernshyten:

But I think in many ways you’re right. We are pretty much past it. I think that’s a fair assessment of the market.

Jason Lemkin:

This one will take you back but let’s at least do one and have some fun because we did chat about this before we started. What were the biggest challenges early on when Coupa was a startup procurement folks hadn’t quite heard of. You didn’t have the brand and were replacing their competing with solutions like Ariba.

Rob Bernshyten:

Well I can give you a very long list of challenges but I think the biggest is to get folks to give us a chance. If you look at some articles that came out in 2009 when I was raising money, and our first raise that I was involved in it was 15 million and a half post. There was I think $7 million raise, 15 and a half post. It was getting folks to try. We did things like we said, “Look, give us a year annual subscription. If we don’t deliver this quantifiable value to you within 12 months, you could cancel and we’ll give you your money back.”

Rob Bernshyten:

That was a big, big risk to take in 2009 and 2010. But we delivered for these customers and they became fans, and they became highly referenceable and they gave us a chance to go to the next customer, next customer and grow our ACV, and grow our renewal rate. It was very, very hard to really early days of course but that built a foundation and the right culture I think in this company because we don’t take anything for granted.

Jason Lemkin:

Did any material number of customers really ask for their money back?

Rob Bernshyten:

No, not even inmaterial. None asked for their money back.

Jason Lemkin:

I personally love the money back guarantee hack. It’s always one that asks for their money back, and it doesn’t matter because if you don’t keep the customer for life, it doesn’t matter if you give one year of revenue back, even though it’s stressful, it doesn’t matter.

Rob Bernshyten:

Well, you know, Jason, the beauty of it is, even if let’s say they were to ask at the end of the year if you’re objectively looking at data that said on a mid-market customer you paid a $100,000 a year. Well we’ve saved you $700,000 this year. Isn’t a little egregious for you to ask for your money back and isn’t it obvious we delivered value for you? Are we not a valued service partner for you? So frankly, we didn’t have that but that doesn’t mean it wasn’t easy to get those deployments, to configure the product, to build new features, to do what it took to get it done, no question. It’s very hard.

Jason Lemkin:

Let me ask you one related early question, and then we can wrap up with a few more current questions. But one of the reasons in the early days that I got very… From afar, I was interested in Coupa as back at Adobe Sign, EchoSign I would meet with a lot of folks and mostly on the contract side we would deal with sales side of course in the early days, but there’d be a lot of buy-side conversations, a lot of them. And we would go in and we built an Ariba connector early. It was very hard to do because it wasn’t an open platform but, and I mean this is no disrespect to anyone at SVB, but I never heard so many complaints.

Jason Lemkin:

People would complain about Ariba and people complain, obviously you’re biased, but it lit up the hair on the back of my neck because I hadn’t heard this. When you’re selling those early days and you don’t have the brand, can you… Looking back on it without bias, how do you leverage those complaints? How do you turn those into an asset? Do you bash the competitor? Do you not? Does that create a bigger wedge then if they’re happy, and maybe you didn’t see it but I heard this again and again at so many global 2000 companies Ariba would be their least favorite vendor.

Rob Bernshyten:

Well, to be frank, we did some bashing early on. We didn’t know whether it was right or wrong but that bashing wasn’t grounded in logic. It was grounded in facts. When you’re talking to a customer that’s getting 4% of their spend running through an incumbent system, the bar is not that high to get them to eight, nine, 10, 50.

Jason Lemkin:

It’s not that high.

Rob Bernshyten:

It’s not that high but it’s a matter of bringing that to the forefront. Bringing facts to the forefront that everybody could look at so they can make the right choices. Those were early day things you have to do but obviously now thankfully we’re well beyond that.

Jason Lemkin:

All right. Maybe the last one, or the penultimate one. Maybe this will be the last one. In this… But this is probably more from a founder perspective if you thinking about. In these uncertain times some deals go more quickly but some go most slowly. Any tips you’ve learned to accelerate closing of deals in these shelter area?

Rob Bernshyten:

Yeah I think it’s in the shelter area but I think it’s more broadly. What I notice now we work with so many different… I’ve had the chance to work with so many hundreds of sales professionals in my career, certainly hundreds of Coupa as well over this time. What you find is folks tend to pivot a little bit more towards being a bit aggressive. In other words, look where great, where the best, nine out of 10 people use us. I don’t love that. Then you have the other extreme which is they’re a little bit overly passive. In other words they chase balls. Yeah, let me give you 50 references. 50 references. Let me show you a customer exactly like you. What else can I do for you? Our mindset at Coupa is we don’t want to be too aggressive, and you don’t want to be too passive. You want to be assertive.

Rob Bernshyten:

Focus on the facts, become a trusted advisor, get vision lock on what is you’re attempting to achieve in working with us, and if we agree to that vision lock, perhaps I’m the right player to help you achieve it. If I’m not, you can go find the other player to help you achieve it. We try to be very, very assertive in our dealings and always, Jason, always grounded in integrity. That’s very, very important to me. I never wanted an environment where the sales person would sell something and then they’d be afraid to interact with that prospect. That’s horrible. We want a lifetime relationship with this customer. They should be proud of what they’ve done and they should know they have now thousands of people behind them, they’re going to deliver for that customer. This is value of service. It’s a different way of thinking about the traditional product space business into the business that is today. I mean, SaaStr right? This is what it’s about.

Jason Lemkin:

Yeah. No turn and burn deals.

Rob Bernshyten:

No.

Jason Lemkin:

They’re the worst. Rob this was incredible, thanks for giving us the full 50 minutes. I love spendindex.com go to it. We’ll talk about more about it on SaaStr spending next [inaudible 00:50:01] you will. There’ll be another quarter of data coming out shortly I assume.

Rob Bernshyten:

That true, it will.

Jason Lemkin:

But you will see things that are fascinating that are data-driven, which I love. Check that out and also Smarter Together. This community in B2B, I think, is super powerful for the next five years. So hopefully we can continue the conversation there but grab your copy. Rob again, this was wonderful. Thanks for taking the time out.

Rob Bernshyten:

Don’t mention it, cheers.

 

The post SaaStr Podcasts for the Week with Matt Garratt, Trisha Price, David Schmaier, Rob Bernshteyn, and Jason Lemkin appeared first on SaaStr.

Glossier Built a Cult Brand and a Digital Community, but What’s Next?


This post is by HBR.org from HBR.org

Glossier considers new marketing strategies that move beyond organic community support. But what does that mean for its loyal digital community?

Football Fever: Investing in the Beautiful Game


This post is by Iman Ghosh from Visual Capitalist

Football Fever Investing Infographic

Football Fever: Investing in the Beautiful Game

The very mention of football conjures up images of cheering fans from all corners of the world.

The global appeal of the game is undeniable, and it’s the strong support of fans that has propelled its growth into a multi-billion dollar industry.

Today’s infographic from Swissquote tracks how the sport has reached far and wide—even onto the stock exchange.

The Timeline of the Manchester United IPO

Manchester United is the largest publicly-traded football club in the world. The journey of its initial public offering (IPO) can be traced back almost 30 years.

  • 1991: Man United floats on the London Stock Exchange (LSE)
    It aims to raise £10 million, but falls short and finally raises £6.7 million.
  • 2003-2005: Malcolm Glazer acquires ownership of Man United
    This raises the club’s market capitalization to £790 million, and it delists from the LSE.
  • 2012: Man United lists on the New York Stock Exchange
    It aims to raise £62.8 million in this IPO, but surpasses this with a final raised value of £146.3 million. Interestingly, George Soros was the biggest investor in this deal, buying a nearly 2% stake in the club.

What makes a football team like Manchester United so attractive in the eyes of investors?

Over decades, a flourishing fan base from viewers to consumers has been the force behind the football industry’s success as a whole.

The Big Business of Football

FIFA, the international governing body of football, organizes and promotes all major tournaments. Its total revenue between 2015-2018 can be broken down into a few main components:

Revenue Source Amount % of total
Broadcasting rights €2,800 million 48%
Marketing rights €1,500 million 27%
Accommodation and ticket sales €600 million 11%
Licensing rights €500 million 9%
Other revenue €300 million 5%
Total: €5,800 million

In fact, 83% of this total revenue came from the 2018 Russia World Cup alone. This was viewed by approximately 3.6 billion people—nearly half the world’s population.

The World Cup’s revenue even rivals the combined strength of the top five European clubs. How do the five major clubs make their money?

Club Matchday Broadcast Commercial/ Sponsorships 2019 Revenue
FC Barcelona €159M €298M €384M €841M
Real Madrid €145M €258M €355M €757M
Man Utd €121M €274M €317M €712M
Bayern Munich €92M €211M €357M €660M
Paris Saint-German €116M €157M €363M €636M
Total €633M €1.2B €1.8B €3.6B

As viewership climbs, broadcasting rights furiously grow too—presenting numerous investment opportunities in sponsorship on the pitch and on the screen.

Cashing in on Clubs

Manchester United (NYSE:MANU) set a new precedent for publicly-traded football clubs—with a market cap worth near €1.8 billion today.

Following Man United’s example, other major clubs have since gone public across Europe. As well, Asia presents an emerging opportunity as the sport’s regional popularity expands.

Club Stock Ticker Mkt Cap (Jul 31, 2020)
🇮🇹 Juventus FC S.p.A JUVE:IM €1.19B
🇩🇪 Borussia Dortmund BVB:GR €511M
🇮🇹 AS Roma ASR:IM €320M
🇬🇧 Celtic F.C. CCP:LN €108M (£97M)
🇨🇳 Guangzhou Evergrande Taobao NEEQ:834338 N/A
🇮🇩 Bali United IDX:BOLA €57M (Rp894B)

China’s most valuable football club—backed in part by e-commerce giant Alibaba—closely matches the valuation of Manchester United.

In Southeast Asia, Bali United was the first team to go public in June 2019. Shares jumped 69% higher than the initial listing price upon its IPO. This move is already propelling more planned IPOs for more football teams in the region, such as Persija Jakarta—the 2018 Liga 1 champion—and Thailand’s Buriram United.

The Future of Football

Football has the power to stir passions and unite people—and it’s reinventing itself constantly.

The 2019 Women’s World Cup was the most watched in tournament history, with over 1.12 billion tuning in. FIFA plans to invest almost €454 million more into the women’s game between 2019-2022, and grow the number of female players to 600 million by 2026.

Additionally, the annual esports tournament eWorld Cup is taking place in Thailand in 2020—tapping into the esports boom in Asia, which hosts 57% of esports enthusiasts.

Any football fan will tell you that the beautiful game is more than just a sport. And for investors, there are a variety of ways to gain exposure to this market—meaning fans can be both personally and financially invested as it continues to grow.

Subscribe to Visual Capitalist


Thank you!
Given email address is already subscribed, thank you!
Please provide a valid email address.
Please complete the CAPTCHA.
Oops. Something went wrong. Please try again later.

The post Football Fever: Investing in the Beautiful Game appeared first on Visual Capitalist.

When a Brand Stands up for Racial Justice, Do People Buy It?


This post is by Geeta Menon from HBR.org

A framework to understand how your company’s actions are perceived.

How to Get More from Your Social Media Partner


This post is by Christine Moorman from HBR.org

Tips for building a more effective partnership with a social media agency.

Singapore-based marketing SaaS startup Insider gets $32 million to enter the US


This post is by Catherine Shu from Fundings & Exits – TechCrunch

Insider, a Singapore-based startup that develops software to help clients make marketing decisions, plans to launch in the United States after raising a $32 million Series C. The round was led by Riverwood Capital, with participation from Sequoia India, Wamda and Endeavor Catalyst.

Founded in 2012, the company says its SaaS for multichannel marketing and customer engagement is currently used by more than 800 brands, including Singapore Airlines, Marks and Spencer, Virgin, Uniqlo, Samsung and Estée Lauder.

Insider’s Series C brings its total funding so far to $42 million. In addition to entering the U.S., the new capital will be used on sales and marketing, hiring more engineers for its research and development team and adding new features to its platform.

One noteworthy aspect of the company is that half of its executive team, including co-founder and chief executive officer Hande Cilingir, are women. The company runs a program called Young Engineers that provides coding classes to high school students, especially girls, and it plans to expand to primary school-age kids as well.

Cilingir told TechCrunch that Insider’s AI-based technology differentiates it from older, larger competitors like Salesforce because it is able to integrate customer data from different marketing channels, including offline ones, to help companies make better predictions about customer behavior. Insider’s analytics help brands coordinate campaigns across different platforms, including the web, mobile apps, messaging apps, email and other channels.

“Insider, on top of all those solutions, creates a one-stop shop because you can overcome operational bottlenecks because of the technology, but at the same time, we are still offering all of the features, including personalization technologies, that online businesses need,” she said.

Helping brands create new marketing strategies is crucial during the COVID-19 pandemic. For example, e-commerce companies have seen a surge in traffic because of COVID-19 stay-at-home orders, but need to figure out how to make that translate into sales. Meanwhile, other verticals, like travel and hospitality, have to find new ways of making revenue.

The company has teams in 24 countries across Europe, Asia and the Middle East to support brands’ localization strategies. Even though Insider’s software does not need to be adapted in order to work in different countries, Cilingir said marketing differs widely between cultures.

For example, in Indonesia, direct sales are important, but in Japan, sales operations are often dependent on agencies within a company. Insider’s customer support teams serve as a complement to its software, helping clients use it to create marketing strategies.

In a press statement about the investment, Sequoia India principal Pieter Kemps said, “We liked the Insider team from the first days, but have been positively surprised by their highly efficient go-to-market engine. The quality of customer interactions, combined with exceptional product and technology, has enabled Insider to stand out among the many point-solutions out there—and build up a very impressive list of customer logos.”

How to Market Your Product Without Spending Money


This post is by MRINMAY from Startup Grind - Medium

It’s definitely possible if you know the trick — this is where the magic happens.

How to Market Your Product Without Spending Money


This post is by MRINMAY from Startup Grind - Medium

It’s definitely possible if you know the trick — this is where the magic happens.

Our Marketing Learnings From 350+ Podcasts with 130,000+ Downloads a Month


This post is by Jason Lemkin from SaaStr

Since Covid-19 we’ve spent more time on our digital assets in general, and on those for our partners and sponsors in particular.  We’ve added sponsor inventory on our core newsletters (some of which weren’t sponsorable before) ー the Insider (15k/day) and the Daily+Weekly (80k a week).  We’ve grown our YouTube views 50%.  Our digital events have attracted almost 100,000 attendees already, and we’ve added sponsor workshops there.
.
And we’ve paid a bit more attention to our industry-leading podcast, going from 1.5 to 3 podcasts a week and opening up new ad opportunities there.
.
FWIW here’s what we’ve learned from 350 SaaStr podcasts:
.
#1. It’s harder to get podcast guests than it should be.  It’s not that hard for SaaStr, but harder than you might think. Ut’s a bit ironic that a unicorn CEO can get 130,000+ listens for 20 minutes of work on a Zoom (e.g., a SaaStr podcast) … but would rather be on stage at Annual!  Both are great, but we’re surprised it’s easier to get many guests to our IRL and digital events than our podcast.  Something to think about for yours.  Not hard.  But harder.
.
#2. The reach is insane. But you gotta use it right.  Most marketers we’ve found aren’t podcast-fluent yet.  But think about it.  Where else are you going to get thousands of folks in your space to listen to your pitch?  Nowhere else.  We get 130,000+ downloads a month.  I mean if you are good at podcast marketing ー I almost wonder why you’d do anything else.
.
#3.  Use the pre-roll ad or whatever to be very succinct.  We’ve found folks that ask people to type in complicated URLs get middling response.  But announcing new product features, or reinforcing brand messaging, seems to perform very well.  Get people excited in 15 seconds.  That’s the job.  Not getting folks to your boring webinar via a complex URL.
#4. Yes, brands matter.  When we have a top-tier speaker on the podcast, we get about a 50%-70% lift.  But switch it up.  Stewart Butterfield (CEO of Slack) was our top download so far in 2020.  But … the converse is the rest of the podcasts still get a ton of downloads.  50%-70% as many as Stewart Butterfield.  Less known guests ride on the “download tail” of the top brand guests.  So perhaps the best strategy is to mix the brands in with the brands-to-be.
.
#5. Go on any podcast in your vertical or in SaaS with 10,000+ downloads.  Get your CEO, or get yourself on any podcast in SaaS with 10,000+ downloads.  Maybe even 1,000.  There really isn’t a better use of 20 minutes of your time.
.
If you want to sponsor the SaaStr podcast and reach 130,000+ buyers and execs, click here or just email us to talk.
.
If you want to submit a speaker, click here.

The post Our Marketing Learnings From 350+ Podcasts with 130,000+ Downloads a Month appeared first on SaaStr.