Sramana Mitra: When you were starting to see this traction from Starbucks, KMPG, and other corporates, what kind of a business model did you follow in these deals?
Matt MacInnis: We knew it was going to be SaaS. We gave Starbucks a very sweet deal. They got extra for the platform for all their district managers on a one-year subscription agreement. The important set of things that happened at that moment in time was that we decided to go and recruit a VP of Sales. Keep in mind I had on staff a consumer marketer who was wrong for enterprise marketing. I had consumer engineers. You had to retool the whole company. It was really difficult to see that we were going to pivot from consumer.
In hindsight, I think it was a mistake, but we decided to pursue both opportunities at once. We were going to keep the consumer business running while winning SaaS customers. We had a SaaS VP of Sales who we brought on in December of 2013, but we still had a consumer marketer. I was trying to be the CEO of two companies at once. That was terrible. It was totally intractable. The reason that we did it was because you don’t want to let go of the previous monkey bar before you get your hands firmly around the next one. That’s not how you win. You can’t hit two balls with one swing.
We went through a very difficult period. In 2013, we laid off about half the company. We ended up doing a financing with Sequoia’s growth fund in June of 2014. That gave us the runway that we needed to retool the system. We conducted the layoff and we started hiring a SaaS sales team. We had to retool the marketing organization. Everything had to be rebuilt.
From 2013 to the end of 2014, we were in that process. The wonderful thing that came out of that was that we built this killer technology that is deeply differentiated from anyone else in the market. I like to say that we were stupid enough to try and build it. Who in their right mind would finance a business to build a content platform in the cloud without a particular use case in mind? We built it and we found a really awesome use case. Anyone who wants to compete with us is going to have to find a different angle because it’s impossible to catch up to us in terms of the technology itself.
Matt MacInnis: Everywhere a business has a distributed workforce. They want to upgrade the way that they communicate with those workers. There’s a number of confluent drivers here. These include the shift of the millennials, the fact that everybody has a mobile device, that enterprises can purchase and deploy mobile devices for roughly the same cost as shipping a binder every quarter, economic trends, technology trends, and cultural trends. They’ve all come together to force businesses that have traditionally communicated either with binders or PDF’s uploaded to SharePoint to move their content. That’s driving people to go look for something like Inkling.
There’s this whole emergent category now for the desk less workers. You’re seeing task management startups and a whole category of different companies who position themselves slightly differently but all sound alike. We are in that competitive set today. KMPG and ComCast were ahead of the curve.
They were early in trying to figure out how to communicate with employees on mobile devices. I was in Kansas yesterday at H&R Block. They have 10,000 tax attorneys and consultants across the country who are still trained in binders. At long last, we’re going to fix that. Training, as you said, is a piece of it. Operational communication in the retail context like being able to do alerts for recalls and merchandising depend on this. What we do that they’ve never been able to get before is, we provide them with real-time data. We show them real-time information about what’s going on across their workforce. They can then correlate that with performance metrics. Retail is a big segment for us. They look at revenue performance through the lens of what’s happening at Inkling.