How Marketo Built A Billion Dollar SaaS Company

We’ve looked at a number of Unicorn companies so far: Tableau, FireEye, RightNow, Palo Alto Networks,Kayak, and SuccessFactors. Today, we look at Marketo.

Marketo was founded in 2006 with the stated objective of building a high-velocity SaaS company focused on a critical (and then somewhat new) business process called lead nurturing.
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Building a Global Software Company From Australia: Bigcommerce Co-Founder Mitch Harper (Part 7)

Sramana Mitra: So merchants in India can pay in Indian currency to subscribe to Bigcommerce? There is a problem in India with currency as you know.

Mitch Harper: They have to pay us in US dollars, but they can accept in their local currency.

Sramana Mitra: That’s an issue in India. A lot of people find it difficult to buy services in USD.

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Building a Global Software Company From Australia: Bigcommerce Co-Founder Mitch Harper (Part 6)

Sramana Mitra: By now, you are now in your Series B phase. You have already leveraged your install base from your previous company. What has been the primary customer acquisition strategy in the scaling phase? I do see you advertising a lot online.

Mitch Harper: I wouldn’t say there’s one main channel. I’m really good at optimizing – using Google AdWords, using retargeting, using content marketing through the blog and YouTube, and working with design agencies as well. We work with 2,500 >>>

Building a Global Software Company From Australia: Bigcommerce Co-Founder Mitch Harper (Part 5)

Sramana Mitra: What was your revenue level in 2010? The 9,800 customers translated into what kind of revenue level?

Mitch Harper: Our average per user back then was about $40 per month. It was somewhere around $5 million to $10 million at that time.

Sramana Mitra: What were the milestones that you set for yourself with your Series A financing?

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Building a Global Software Company From Australia: Bigcommerce Co-Founder Mitch Harper (Part 4)

Sramana Mitra: Do your merchants have $100,000 in revenue or are they $2 million in revenue? Is there any kind of cut-off there?

Mitch Harper: Our customers’ revenue typically ranges from $1 million to $30 million of revenue per year.

Sramana Mitra: Your customer base is more in the $1 million to $30 million range. Then, the customer base with revenue of $30 million and above goes to Magento and below $1 million is with Shopify and GoDaddy.

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Building a Global Software Company From Australia: Bigcommerce Co-Founder Mitch Harper (Part 3)

Sramana Mitra: Was there any geographical bias in the 2,000-customer base?

Mitch Harper: They were mainly from North America and Australia.

Sramana Mitra: Why were they pre-ordering? Why were they interested in your product? This is a segue into the discussion about your competitive landscape. There are a few players in that space. There is Volution, Magento, and Shopify. When you were starting out in 2008, what exactly was the competitive landscape? How were you positioning, and what is it that these 2,000 customers, who pre-ordered, found attractive? >>>

Building a Global Software Company From Australia: Bigcommerce Co-Founder Mitch Harper (Part 2)

Sramana Mitra: Is it the same team that you had in Sydney that got Bigcommerce off the ground?

Mitch Harper: Not really. As I had mentioned, I used to be an engineer and built the first version along with Chris who was one of our early employees from that initial team. He’s still with us today leading a team here in Sydney.

Sramana Mitra: Was Eddie also involved in Bigcommerce? What was his progression in this story?

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Building a Cloud-Based Property Management Platform, Ric Leutwyler, President of SkyTouch (Part 6)

Sramana Mitra: What is an average deal size for you?

Ric Leutwyler: For independent hotels, which average 80 rooms per hotel, the deal size is $5,000 a year or more. If you’re talking about a Choice hotel as a group, it is around $25 million. It depends on whether we’re selling to independent hotels, small group, or giant companies.

Sramana Mitra: So there’s no bias in there. It’s all over the place.

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