It’s August 2011 in Seattle and Manny is bored.
He’s bored trying to “shill” the latest Windows phone to South America. He wants to build something that he loves.
So what does he do?
He quits Microsoft, dives into the Seattle underworld of startup hopefuls… and bumps into a gentleman by the name of Andrew Kinzer.
They start a business called…
Outreach?
Nope – GroupTalent.
GroupTalent was a revolutionary new recruitment platform (think Hired), they built an initial product, joined Techstars and started selling.
Though traction was slow and they were running out of cash: they needed to sell more.
In a last ditch attempt to solve this sales problem (and save their business) they started building software to make their sales reps more productive – and it worked. Their reps started booking more meetings AND performing better in those meetings.
Before long, prospects were asking these reps why they were so happy and what tool they were using to book all these meetings.
Outreach was born…
When CEO Manny Medina joined The Top Entrepreneurs podcast host Nathan Latka back in March of 2019, he shared that they are adding more than $10m in new bookings per quarter:
Here are 16 steps that Manny and his three co-founders took to get them there…
Step 1 – Pivoting To A Product People Actually Want
Look at this:
Manny and his three co founders spent 2.25 years of their lives building something that didn’t work: a glorified recruitment agency that clearly would not scale.
This is not unusual… there are a litany of other big businesses that originated from a pivot:
- Slack emerged as an internal collaboration tool from an online gaming startup
- Twitter hatched from a fledgling podcasting startup
- YouTube was initially supposed to be a video dating service
And each of these billion dollar businesses were pulled out of a product team that had no experience in the new market.
Or in other words:
Market > Strategy
Bear this in mind whilst we return to the Outreach story:
It’s October 2013, Manny and the team were struggling to sell their recruitment solution. They had users (internal sales reps) raving and potential customers asking about their new tool.
In other words, their strategy was telling them to stick with the glorified recruitment agency but the market was telling them to switch.
So they sucked up their +2 years of sunk cost and went all in on Outreach. They started riding the market wave.
And it turned out to be a pretty good decision…
LEARNING 1 – Look to the market to understand if you are building what you should be building.
Step 2 – Close Your First 100 Customers (And Angel Investors) Door To Door
Fast forward to October 2013 and the founding team are fully focussed on building Outreach after scrapping GroupTalent (interestingly they kept the same cap table e.g. they didn’t f*ck over their original investors).
What next?
Time to find customers…
Now most early stage startup founders would:
- Launch on Product Hunt
- List on startup directories
- Apply to TechCrunch Disrupt Pitch Competition
- Export the email addresses of all their Linkedin connections and spam the lot of them
- Create Twitter, Linkedin and Facebook Pages and invite their friends to like and follow
The list goes on.
They problem here though… is that none of those options are likely to achieve either of the two things the business needs at this stage:
- Learning from real customers
- Ca$h in the bank
So what does Manny do?
He hits the streets.
More specifically, he hits the streets of SoMa, San Francisco:
And goes door to door with his early sales team to sign up their first 100 customers.
Why SoMa?
Only early adopters are going to want to invest in this new “sales engagement” thing.
Why door to door?
So he can look into the faces of the people that reject him to collect the early learning that is so valuable to the early product roadmap.
Apparently AWS literally walked him out of their building during this period as “sales engagement” was not something they were looking to invest in at the time – they have since become a customer.
Today, Outreach has over 3,300 customers with other 66,000 sales reps using the platform.
LEARNING 2 – In the early days, hit the streets to gain the initial learnings AND cash that you need.
Step 3 – Ignore Marketing For 2-3 Years
Until recently, Outreach have never been big on SaaS marketing.
(Check out Step 10 for more info on their recent marketing department “acquisition”)
Why?
Because it isn’t their CEO’s core competency?
Maybe.
Or maybe it’s because there is no point in telling the world about what you have built if you don’t need to.
You don’t need to… if you have a different growth channel churning out customers.
You can keep telling the investors the right story, yourself the right story – without investing in beautiful Twitter cards, environmentally unfriendly swag and Linkedin live video.
Here is Outreach’s lackluster Twitter profile:
Was leaving a placeholder here to to go fetch the Twitter profile screenshot – wait a second… I can’t even find a link to their Twitter profile on their homepage?!?
99% of SaaS businesses link to their social profiles in their footer:
Outreach don’t.
99% of SaaS businesses that have raised over $5m would invest in a .com domain:
Outreach haven’t.
And here is the first recorded snapshot of their website:
Let’s face it… any of us could have designed a better logo 😉
And maybe this will change in the next few years as they balance out their acquisition strategy but for now…
But I feel confident when I see mediocre Twitter engagement on a profile that isn’t even linked from the homepage. I feel even more confident when I see a .io domain even when it’s very clear this business has raised enough cash to afford the .com.
I see a business that focuses on what they do well, what they were designed to do… high velocity sales.
And maybe high velocity sales doesn’t generate a rabid Twitter following, a busy conference stand or more followers on Linkedin … but it does generate revenue.
LEARNING 3 – In the early days, choose your growth engine and focus on it relentlessly.
Step 4 – Develop An Extremely Agile Product Release Schedule
Picture this…
You’re sat there prepping a new sales cadence with Outreach, and let’s face it… I love sales as much as the next person but sometimes it does get repetitive.
You’re bored… and there’s this small UI mishap that is really frustrating you, you have to keep switching screens to import new email addresses from Salesforce and your thumb is aching. This really is not good enough (plus you are yet to hit your monthly quota so things aren’t looking good).
You scroll down to the bottom right of the product to their live chat widget and get frustrated when they don’t respond in 30 seconds…
And then your support rep starts typing. At last, someone to hear you rant.
You let rip – this is outrageous. Why would you as an account executive, yes an ACCOUNT EXECUTIVE have to switch screens like that. Ridiculous.
Your support rep is kind and understanding, he says he’ll “submit a ticket right now for you sir” (whatever that means).
It’s two days later and you completely forgot this incident… a couple of deals have come through and your job is safe (for the next quarter anyway). The chat window pops up with your support rep…
And guess what?
Outreach have only gone and pushed a change that eradicates your screen switching inefficiency.
Outreach push new code live three times per week.
Yep – on a Monday, Wednesday and Friday… the Outreach product team release product updates, enabling them to make the small performance improvements that drive their North Star Metric (see Step 5).
LEARNING 4 – Who or what is slowing down your release schedule?
Step 5 – Choose A B2C North Star Metric?!?
Outreach prioritize one metric over all others: monthly active users.
(And last I heard, they had over 50k of these).
Why did they choose this rather B2C-esque metric to rally the whole organisation around?
Surely they don’t really care if people are using their software? After all, the users are not paying, their businesses are.
Why not choose a metric like active customers or Annual Recurring Revenue?
If their businesses continue to pay, do Outreach really care how active the users are?
Yes, is the answer.
Outreach are building what they call a “system of action”. A software layer that sits above the CRM to facilitate actions that a user needs to make to engage with customers.
The more engagement Outreach facilitates with the prospects and customers of their clients, the more likely they are to be successful in realising an ROI from their investment. It is the leading metric of customer success and therefore most correlated with a reduction in churn.
So what are they doing to impact this North Star Metric?
First of all Outreach have created a new role call the System Implementation Manager. This person jumps in right after a deal is signed and is solely focussed on getting 70% of the new Outreach licenses to daily usage.
Read that paragraph again… Outreach employ a person whose only role is to make sure users within a new account are using the product daily. Contrast this to most other SaaS businesses who would take the cash, assign a CS manager and then never look at the metrics again.
The System Implementation Manager is responsible for “going wide” and ensuring adoption of Outreach across the account.
Once 70% daily usage is achieved, normally within 2-3 months, the account is handed over to the Customer Success Manager who is then solely responsible for education (not adoption – this has already been handled).
The Customer Success Manager then engages with users that are not using specific features and educates them on how to use the product to drive more engagement.
The Customer Success Manager is responsible for “going deep” and increasing the average number of features used by each user.
The CSM is also eligible for 5-10% commission over their base from renewals and upsells of their accounts.
And how does Outreach know this approach is working?
Their annual, net revenue retention is 140%.
That means that if Outreach added no new customers over the past 12 months, they could only grow from keeping their existing customers and upselling them, they’d still grow by 40%.
LEARNING 5 – Which growth metric is a leading indicator of the success of your customers?
Step 6 – Create A Category & Write The Book
It’s weird…
I think it’s a hangover from the time where writing a book was a big deal. You see, before Amazon, it was expensive to write a book. You had to pay for the ink, for the printing and for the distribution.
And then Amazon happened and the cost to produce a book collapsed, meaning that anyone could now write and release a book in a weekend.
I mean, both the writer of this post and Nathan Latka have written and released books, how hard can it be? 😉
That said, we still subconsciously give authority to a person that writes a book about something we care or would like to learn about. They are immediately elevated to a place of authority in our mind.
Here’s the formula:
- Build a mildly differentiated product
- Make up a name for the new category this product will sit in
- Write a book with the category name as the title
- Become a unicorn
Drift executed this playbook down to a tee, they built a mildly differentiated product and then created “Conversational Marketing”:
And in January 2019, they released a book with the title… you guessed it:
At their last fundraise, Drift were valued at approximately $500m.
If you weren’t already aware, Outreach have created the Sales Engagement category:
And in March 2019, they released a book…
And one month later, Outreach become a unicorn:
Try it…
And then call me after with a 1% equity gift as a thank you… (EDIT: Nathan also would like 1%) 🙂
LEARNING 6 – Name your category, and then write a book about it…
Step 7 – Become Obsessed With Your Trade
Outreach employ a single person that is solely responsible for split testing written sales email cadences. They practice what they preach.
In fact, their ratio of SDR’s (Sales Development Reps) to AE’s (Account Executives) is 1:2.
This means that there is 1 person responsible for booking qualified sales meetings for two other full time resources, normally this ratio is much larger e.g. 2 or even 3 SDR’s for 1 AE.
“How?”
Manny was asked this in episode 1,504 of The Top podcast.
He replied:
“Because we use Outreach”
It’s almost like ever since Manny started managing sales people for GroupTalent back in 2011, all he has been trying to do is make them more effective:
- Less sales admin
- Less time spent in the CRM
- More personalisation
- More machine learning
And the Outreach product is simply a virtual manifestation of this obsession. An obsession that is now driving results for Outreach’s 3,100 customers.
Here’s how I would pitch Outreach to a B2B SaaS sales leader:
- SDR’s cost you between $50-100k per year
- If you invest $50k per year in Outreach, you can fire 50% of your SDR’s whilst maintaining profitability (assuming you have a SDR/AE ratio that is equal to or greater than 1:1) and bank the rest of that cash
And if someone wanted more details about reducing their SDR:AE ratio, I would be perfectly placed to advise.
Why?
Because I live and breath this stuff… I’m a salesperson at Outreach.
LEARNING 7 – What is the mission of your SaaS and how does that manifest itself your business and product?
Step 8 – Develop A Metric Driven Outbound Process
Now we’re getting into the detail…
Obviously Outreach are pretty sophisticated when it comes to their outbound sales process, but I didn’t think they would go this deep.
Outreach customize their full outbound process based on the persona within the business and the industry that the business sits within.
“Yeah, that’s pretty standard stuff Tom, I tweak the subject line of my Linkedin Inmail based on the job role, it takes like 5 seconds per message”
Oh no, we’re not talking subject lines… we’re talking about the WHOLE process.
Outreach are looking at persona and industry cohorts and then customising the whole outbound process from the ground up based on their:
- Customer acquisition cost
- Average contract value
- Time to close
It makes sense…
If you knew that selling to a sales enablement manager in the retail niche normally takes twice as long, delivered deals half the size and cost twice as much as selling to a sales operations manager in the SaaS space… you should tweak your approach.
Outreach have 14 key personas and industries they currently target with a combination of the following tactics:
- Outbound calls
- Outbound emails
- Outbound Linkedin messages/comments
- Outbound videos
- Direct mail
- Company & role targeted Linkedin Ads
- Onsite retargeting
- Local events
And for those SaaS metric geeks out there, Outreach currently have a 20 month payback period, adjusted for gross margin.
E.g. if Outreach determine a persona and industry target is likely to result in a deal worth $5k monthly recurring revenue, with their approx. 80% margin, they would be willing to invest $5k*0.8*20 = $80k in the acquisition of that customer.
Therefore the sales operations manager in the SaaS space may receive each of the above tactics over a 6 month period whereas is the sales enablement manager in the retail space would only receive outbound emails and Linkedin messages.
So if you’re an Outreach competitor and you don’t have that kind of cash to throw at customer acquisition, you best arrange that investor meeting you’ve been dragging your feet on 😉
LEARNING 8 – Customize your outbound process first by persona… and then by industry.
Step 9 – Steal Competitor Traffic
When you see Google Ad spend scale like this:
You have to assume that something is working (that or they just have too much cash and their paid traffic team is incompetent). Outreach have scaled their Google Ad spend from £3k to £23k over a 2 year period.
“That’s great,” I hear you say… they must be running some kind of long tail strategy focussing on keywords such as:
- sales process automation
- inside sales framework
- sales engagement software
Which they are:
It’s just that these keywords account for a tiny fraction of the paid traffic they are driving through Google each month, and when I say tiny I mean zero:
So where are they spending?
On competitor brand names:
Over 61% of Outreach’s current Google Ad traffic originates from competitor brand name terms.
Why?
Because people searching for their competitors are educated enough about the market to be looking for a solution to their problem. This type of traffic is significantly more likely to convert than someone searching for “how to sell more effectively” for example.
Outreach can also benefit from their competitors brand awareness spend. For example, I was at an event in London last night where SalesLoft (Outreach’s biggest competitor) were a sponsor. There was nothing “direct response” about that marketing investment from SalesLoft, they had a banner with a little swag and some representatives standing there waiting to chat.
Maybe they took some names, but the goal was to increase awareness of their brand in the London SaaS sales space – and would have invested tens of thousands for the privilege.
It would be reasonable to assume that search traffic for the SalesLoft brand would increase in London after that event… and guess who will be there waiting?
Exactly.
So where is all this traffic going?
To these three pages:
- https://www.outreach.io/product
- https://www.outreach.io/lp/outbound-sales
- https://www.outreach.io/lp/watch-demo
Very basic stuff.
No crazy “Us Vs Them” landing page like you see with Drift and Intercom. Just straight forward direct response PPC – from clicking the Google Ad to demo.
And 7x ad spend over two years suggests it’s working.
LEARNING 9 – Go back to basics with some competitor search bidding straight to your homepage, product page or demo page.
Step 10 – Don’t Grow An Audience: Buy One
“What’s the content plan?”
Said every early stage SaaS CEO to their first marketing hire during an early progress meeting. It’s assumed that you as a SaaS business… are also supposed to be a media business.
It’s also assumed that you as a SaaS marketer are going to start producing written content that adds value to the life of your target customer.
So you set up WordPress and start pumping out content. You’re getting traffic from social and finally, 12 month later Google starts ranking you, but it’s a long hard slog.
Is this what Outreach did?
Not really.
Outreach built an insanely efficient outbound sales capability. Then kind of forgot about marketing (see Step 3).
Until Max Altschuler, founder of Sales Hacker heads to the Outreach conference in May 2018 and asks Outreach CEO, Manny a single question:
“What keeps you up at night?”
He replies:
“Marketing”
This is the answer that Max was looking for:
“Sure, then why not marry up the best in class sales technology with the leading B2B sales media company?”
6-8 weeks later and the terms were agreed, Outreach acquire Sales Hacker.
Bear in mind that Sales Hacker has:
- 4x the Backlinks
- 2x the Organic keywords
- 2.5x the Organic traffic
It’s safe to say that the addition of Sales Hacker to Outreach’s online marketing presence was a significant event.
But what they did (or didn’t do…) next is genius…
To this day, Sales Hacker and Outreach remain completely separate entities with different teams, strategies and CRM’s.
Outreach remain a Sales Hacker Marquee Partner:
But get no special treatment over other Sales Hacker sponsors. If Outreach sponsor a Sales Hacker webinar, Outreach will get just those leads, just like a normal sponsor.
And now that Sales Hacker don’t have to focus on revenue. They can focus purely on investing back into quality content and audience growth.
And it’s working…
In the 9 months post acquisition in August 2018, the Sales Hacker community has grown over 50% from 80,000 to 125,000 email subscribers.
They’re now at 166k:
They’ve also made $2m in profit during the same 9 month period. Allowing them to re-invest that cash back into the Outreach and Sales Hacker marketing machines.
Now I don’t know the amount Outreach paid for Sales Hacker, but they acquired an organic traffic machine and an expert VP of Marketing that has an intense knowledge of their target persona.
I hope Max read Never Split the Difference 😉
LEARNING 10 – Start building you own, independent media brand.
Step 11 – Buy People’s Software Then Get Them To Link To You
Obtaining a “do_follow” backlink from a DR (Domain Ranking) 92 domain is no easy feat.
You could spend 000’s of dollars building out a content team, hiring an SEO agency and doing all the SaaS link building outreach you like… but that still may not yield a result.
So how did Outreach obtain this bad boi from Zendesk?
Check it out:
https://www.zendesk.com/customer/outreach
It’s a customer testimonial.
They paid Zendesk for their help desk software and they got the backlink.
Which may well end up costing less than building out the team…and of course they do now get to use their “best in class” help desk software.
Now I’m not saying that there was any shady negotiations from either party to get that backlink included – I’m simply saying that next time you are asked by a customer to provide a testimonial, instead of ignoring the email until the 4th chase, it could be worth it for the SEO juice.
LEARNING 11 – Which high DR businesses are you paying? And can you provide a testimonial in exchange for a backlink?
Step 12 – Bust Churn By Facilitating Friendships
As Nathan has said maybe 55 times on The Top “churn is crucial in any SaaS business”…
How do Outreach manage churn?
Now obviously there is a whole heap of product sculpting that Outreach have done to make it very hard for a sales development representative to live without their software.
And their whole implementation, onboarding and customer support process has been optimized for adoption (see Step 5)… and therefore to reduce churn.
But no…
I think there is something else going on… it’s all down to Outreach Peak.
Kind of joking but kind of not:
Outreach invite each and every customer into Outreach Peak – their customer community.
Why would a customer join?
They get to make friends. They get to form “peer-to-peer” connections with other Outreach customers.
It’s subtle, but this community enables Outreach to start building the famed “network effect” that all Silicon Valley investors drool over.
(Check out Step 16 for Outreach’s other push towards network effects with the Outreach Galaxy)
Every SaaS CEO or product person is always looking to make their product more sticky… but what about the people side of churn?
How much less likely are you to churn if you have 5 valued, mutually beneficial connections in an online community connected to a SaaS brand?
Significantly less I think you would agree.
LEARNING 12: Creating a community may cost a whole lot less than building that extra feature that your customers may actually not use… and will reduce churn whilst increasing your learning.
Step 13 – Throw A Massive Party (And Get Other People To Pay For It)
It’s very on trend for a SaaS business to run an annual conference:
- Hypergrowth by Drift
- Subscribed by Zuora
- Dreamforce by Salesforce
And now, Unleash by Outreach:
As a SaaS business hosting your own conference, you get a chance to:
- Share your bold vision
- Build relationships with customers
- Solidify relationships with partners
Oh and they have 26 sponsors, likely paying between $5-30k each:
And charge a minimum of $995 to attend:
And if you need help convincing your boss that it’s a good investment? They have pre-written the following email for you to copy, paste and send:
Dear <boss’ name>
We can both agree that it’s critical to our success to stay on top of sales trends and technology.
To that end, I’d like approval to attend Unleash, the annual sales engagement conference sponsored by Outreach April 7-9th in San Diego.
At Unleash I’ll have the opportunity to connect with and learn from over 2,500 top performers and thought leaders to gain insights into how they’re achieving success and learn new techniques to help us drive better performance.
Not convinced? Here are a few reasons why my attendance will benefit our company
- Best Practices. I’ll bring back knowledge about best practices in using a Sale Engagement Platform to drive performance.
- Playbooks. I’ll capture playbooks that other companies are using to create predictable and measurable results.
- Connections. I’ll create connections with other sales leaders and pros that will help me grow my knowledge and skills long after the conference.
- Advice. Lastly, I’ll gain practical advice from leaders at companies like Zendesk, TOPO, Snowflake, DocuSign and Pendo.
I commit to leaving Unleash with an action plan for applying my learnings to benefit our team.
I’m confident in the ROI we’ll achieve from my attendance.
Here’s what I’ll need to get there:
Airfare: $XX
Hotel: $XX
Registration: $XX
Total: $XX
I’ll put some time on your calendar to nail down next steps. I’d like to note that the price for the conference increases after January 20th, 2020, so I’d like to act fast to save on cost.
Thanks,
<your name>
They also use social proof incredibly well on the landing page:
And who said Outreach weren’t good at marketing?
I think we can safely say that Unleash is not a cost centre on the Outreach P&L, and on top of that the intangible positive impact of bringing together customers, partners, sponsors and employees is hard to quantify, but definitely significant.
LEARNING 13 – It doesn’t have to be a full conference, but when can you get your whole team, customers and partners together to bond around your common cause (and get other people to foot the bill)?
Step 14 – Turn Employees Into Authors
Businesses are finally coming round to the fact that people trust people more than they trust businesses.
They are also realising that with the rise of social media, each employee also has their own brand, network and circle of influence… and that it can be profitable to empower employees to create and share content with their network.
Check this section of the Outreach blog:
Outreach empower each employee, regardless of department to publish written content related to their brand.
Today, Outreach has over 450 full time employees.
I would go as far to say that unless you are the Stephen King of your niche, you need to build distribution into each piece of content, or you will get zero exposure. Outreach know that each piece of content posted on the “Outreach On Outreach” blog, will be shared with a targeted audience (the connections of the author).
And I suspect this is:
- Boosting qualified traffic – Assuming these employees share their post on Linkedin
- Increasing employee referrals – As the employee network becomes more aware of who their employer is
- Increasing employee retention – As this will increase trust in the relationship between the employee and Outreach
LEARNING 14 – How can you empower your team to create content that will attract their Linkedin connections to your SaaS?
Step 15 – Get Wall Street To Pay Employee Bonuses
Manny has publicly stated that he expects Outreach to go public in the next few years.
Why?
I mean… why bother with the extra scrutiny when the private markets are awash in an ocean capital?
Because Manny wants to take a leaf out of his previous Mr Bezos’s (his previous employer) book. He wants to incentivize his people heavily with share options, enabling Outreach to save capital whilst still attracting the best talent.
Just like Amazon who strategically pay above market compensation for all employees, but only through equity. They pay below market cash salaries and then add equity bonuses, that vest over the long term, on top.
As you can see, it’s working:
This compensation strategy has enabled Amazon to cultivate ownership within its workforce and make longer term investments.
It creates “wealth leverage” with management as a significant about of the net worth of each manager is tied to the success of the business. Jeff Bezos himself pulls an $80,000 salary – it is one of the keys to Amazon’s success.
And when the company performs well, Wall Street ends up paying for employee bonuses, not Outreach.
Here’s the flywheel:
- Outreach performs well
- Outreach shares rise as profit forecast is better than expected
- Outreach employees increase net worth
- Outreach employee productivity increases
- Outreach performs better
This flywheel turns despite the fact that Outreach employees may have salaries at or slightly below market rate – saving cash that can be invested directly into growth.
The incentives are aligned for investors, management, employees AND customers.
LEARNING 15 – How can you make your team more engaged with your journey (ideally with someone else footing the bill)?
Step 16 – Capture The Data Then Become The Platform
One of the many SaaS businesses I’ve attempted to build over the years was called Sneez.
Sneez was a Shopify application that helped brands find and display user generated content on their Shopify product pages.
Things were going really well – we got 20 early customers and then Shopify started to put on the pressure…
We could only list on the Shopify App Store if we used their payment processor and if we didn’t… a newly installed customer would get a message from Shopify saying we were an “unapproved partner”.
We were building a business on top of a business that had its best interests at heart – it didn’t last.
In short, we were completely reliant on Shopify to find our customers, get us paid and dictate what we could or could not put on our product roadmap.
For us, it was a bad place to be… for them, it was glorious.
Shopify were taking 15% of all our revenue and there are now 1,781 apps in their store – you do the maths.
But it gets better…
Choosing which new features to build as a big SaaS business is hard. It’s very hard to predict how your customers will react to and use new features, and if you get it wrong… you stand to waste hundreds of thousands in development costs.
Shopify were infamous for observing usage of apps in their App Store and then building out new, core product features to compete with the most popular applications.
E.g. they let their third party developers do product research for them… and then they destroy their business.
OK a little harsh, but you get my point.
Anyway, we’re not here to talk Shopify… we’re here to talk Outreach.
Look what they just released:
Outreach Galaxy.
Again, if a SaaS business is able to collect enough valuable data:
- Think Salesforce for enterprise
- Think Shopify for eCommerce
- Think Apple for mobile phones
It can attract third party developers that want to access this data to build products on their platform:
- Salesforce AppExchange
- Shopify App Store
- Apple App Store
This is another network effect for Outreach, one that could become considerably stronger than Outreach Peak, their peer-to-peer community we covered in Step 12:
The more apps that build on the Outreach platform, the more valuable it becomes for customers… and the flywheel continues to turn.
And of course, there is the additional revenue stream through commission collected on customer payments and additional product research that their 500 third party developers will be undertaking for them:
LEARNING 16: Can you give third party developers access to your data to innovate on top of your SaaS?
And there we have it, what started as a piece of software to make internal sales people more productive, has ballooned into a unicorn with 3,100 customers, close to $10m monthly recurring revenue and consistent 100% YoY growth.
Let’s recap what we learnt:
- LEARNING 1 – Look to the market to understand if you are building what you should be building.
- LEARNING 2 – In the early days, hit the streets to gain the initial learnings AND cash that you need.
- LEARNING 3 – In the early days, choose your growth engine and focus on it relentlessly.
- LEARNING 4 – Who or what is slowing down your release schedule?
- LEARNING 5 – Which growth metric is a leading indicator of the success of your customers?
- LEARNING 6 – Name your category, and then write a book about it…
- LEARNING 7 – What is the mission of your SaaS and how does that manifest in your business and product?
- LEARNING 8 – Customize your outbound process first by persona… and then by industry.
- LEARNING 9 – Go back to basics with some competitor search bidding straight to your homepage, product page or demo page.
- LEARNING 10 – Start building you own, independent media brand.
- LEARNING 11 – Which high DR businesses are you paying? And can you give them a testimonial… in exchange for a backlink?
- LEARNING 12: Creating a community may cost a whole lot less than building that extra feature that your customers may actually not use… and will reduce churn whilst increasing your learning.
- LEARNING 13 – It doesn’t have to be a full conference, but when can you get your whole team, customers and partners together to bond around your common cause?
- LEARNING 14 – How can you empower your team to create content that will attract their Linkedin connections to your SaaS?
- LEARNING 15 – How can you make your team more engaged with your journey (ideally with someone else footing the bill)?
- LEARNING 16: Can you give third party developers access to your data to innovate on top of your SaaS?
How long can Outreach sustain this growth?
I’m not sure… but I will leave you with this:
When asked by Nathan if he would take a $500m acquisition offer from Salesforce CEO, Mark Benioff…
Manny responds:
“Only if I get to run Salesforce.”
Sources:
- https://www.businessinsider.com/outreach-founder-created-10-million-business-saving-nearly-bankrupt-startup-2017-6
- https://www.outreach.io/blog/announcing-our-series-d
- https://www.outreach.io/blog/series-e
- https://www.outreach.io/blog/outreach-series-a
- https://www.outreach.io/blog/announcing-outreachs-30m-series-c
- https://venturebeat.com/2019/04/16/outreach-raises-114-million-to-automate-repetitive-sales-processes/
- https://medium.com/authority-magazine/5-lessons-i-learned-when-i-created-my-saas-with-manny-medina-ceo-of-outreach-mitch-russo-2711bae4e0c6
