Capital Efficient Entrepreneurship from Utah: Ben Dilts, Founder and CTO of Lucid Chart (Part 6)

Sramana Mitra: Where are we in terms of chronology? You figure all these optimizations out at what point? Until what point is it primarily an SEO and content marketing-driven strategy? At what point do you layer on top of the paid search strategy?

Ben Dilts: I have to go back and look. It was really in 2014 that we started spending a lot of time, energy, and money on paid search. We layered that on and that became a good channel for us. I want to emphasize that we didn’t figure out the optimization of that funnel. That optimization is ongoing. In fact, we have some experiments going on right now that are showing promising results in the area of double-digit improvements in our conversion rates. That is an everlasting battle.

At this point, we have a team of 10 people. There are a couple of developers on there an a couple of analysts. That whole team’s job is to improve the funnel. They’re not working on core product improvement. They’re working on, “How do we get people who visit the website to give us money?” We have not let go of our focus on that. If anything, we’re investing into it more heavily than we ever have. On top of that, I think it was about 2014 when we started layering on significant spend on AdWords. In the beginning of 2015, we started layering on actual quota-carrying sales reps.

Sramana Mitra: What do the quota-carrying sales reps need to do? Where are you overlaying your exercise with that? Whom are they focused on? What is the strategy when you bring in those sales reps?

Ben Dilts: The strategy has evolved over time. In the beginning of 2015, we hired a few people to start that effort. It was experimental at that point. We were looking at different opportunities. What we rapidly found is that we have records of just millions upon millions of people who have signed up, give us their email addresses, and use the product to some extent.

Quite a lot of those have paid us. Quite a lot of those who have paid us actually work at the same company but don’t know each other. As an example, Google, who’s a tremendous customer as well as channel partner, had thousands of people. They’re enormous and they’re very heavily technically-focused. They’re in the sweet spot of people who would use Lucid Chart. They had hundreds or thousands of users who had signed up and started sharing that around. A bunch of them had been paying us for themselves or for their team.

A core strategy that we went after was to take places like that and call them up, “Do you realize that thousands of people are using this?” It becomes this shadow IT cleanup effort where you call these companies and say, “You have 12 different groups paying us for this product, and another 400 people who are using it on their own. We should roll this up and start promoting it to other people in the company who should be using it.” We’d roll up these accounts. You’d take a company that had five different groups paying us for a total of, maybe, a couple of thousand dollars a year.

You work a sales cycle with the higher ups who are in a position to make centralized IT decisions. You sell them a thousand licenses and you’re collecting drastically higher amounts of revenue from that customer. It works at the big enterprise level. It also works surprisingly well at smaller levels. If we look at the email domains of the people who signed up, we can group them up by domains and say, “Look at this. There are 400 people at AT&T. Maybe we should figure out a way to sell in even though none of them are paying us right now.

That roll up play got layered on last year as well as started getting a lot more involved at larger, more promising customers. If there’s a big company and they’re paying us for 150 licenses but we look at it and say, “These guys should be paying us for a thousand licenses.” We get more involved and go on-site and do training in an effort to drive adoption. People there are already using it. They’re paying for it and they love it. We need to find the rest of the people who work in that same environment and make those accounts grow. Even now, the sales team is almost exclusively focused on people who are already our users. It’s mining that database of all of these people who have signed up over the years.

This segment is part 6 in the series : Capital Efficient Entrepreneurship from Utah: Ben Dilts, Founder and CTO of Lucid Chart
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