SM: What was your solution to finally get more customers?
JL: I knew we just had to get out there. AdWords did not work great, but it worked a little. SEO did not workgreat, but it worked a little bit, so we did more of that. Then two things happened. We had one bit of good luck, and we made one good tactical decision.
The good luck occurred in 2006, when we won a bake-off at a technology event for the 50 most promising startups in Silicon Valley. The US representative for British Telecom saw us in early 2006 and thought it might be a good thing for BT and asked us to come and pitch them. BT had such an acute need and a broken process for its high volume/high velocity sales that they worked with us. It was great for all parties, and we had huge success for them. We brought their quote to close time down from two weeks to just under one hour.
We learned a lot from them, and leveraged them to iterate our product very rapidly. Right after that, we made an early bet on the AppExchange on the Salesforce platform. That one took a lot longer to be ROI positive. Getting into their ecosystem early has paid off. Now that we finally have competition, it is really paying off. There are 850 competing applications but based on the given day we are either the #1 or #2 rated. Nobody can displace us from that; we have the marquee customers on that platform.
SM: That is a perfect alignment because you are trying to reach salespeople anyway.
JL: It is a terrific alignment with Salesforce customers. The alignment with Salesforce itself can depend on what Salesforce’s tactical initiative is.
SM: In the early days, did they bring you into their customer base?
JL: No. A lesson for entrepreneurs is when it comes to a partnership, understand what the motivation of the partner is. Just like VCs, partners are good but you have to know their reasons for partnering. Salesforce has pretty high caliber customers, and they complain a lot. The real truth is that they are really nervous to bring you into their customers. Anything that is tiny will not get brought into their customers because it auto-sells. If they close Citibank or Time Warner for millions of dollars a year, they do not want to bring in a startup with seven employees. You have to earn the marquee clients, and now they will give us the leads.
SM: Were your early customers enterprise customers or smaller customers?
JL: About 30% of our revenue today is from enterprise customers, 15% is from SOHOs who use different versions of the product, and 55% is from small and medium businesses. If you have a product that is 10 times better than anything in the marketplace, you are going to get enterprise customers. There is a person sitting in those enterprises whose job it is to interface with you. Small business do not have that person; those accounts are harder to win. SMB does not have anybody searching through the AppExchange looking for cool new ways to improve business.