GE 253: How Evan Liang Went from a VC Straight Out of College to Running a SaaS Company Doing Almost $10M in ARR (podcast) With Evan Liang

Evan Liang CEO of Lean Data

Hey, everyone! In today’s episode, I share the mic with Evan Liang CEO of LeanData, software that helps you visually manage leads and drive your sales process forward.

Tune in to hear how Evan discovered his love of entrepreneurship, how LeanData acquires customers, and how the company helps their clients become more account based.

Download podcast transcript [PDF] here: How Evan Liang Went from a VC Straight Out of College to Running a SaaS Company Doing Almost $10M in ARR TRANSCRIPT PDF

Time-Stamped Show Notes:

  • [00:39] Before we jump into today’s interview, please leave a review and rating and subscribe to the Growth Everywhere Podcast!
  • [01:19] Evan started at a VC firm right out of college, which helped him find his passion for entrepreneurship.
  • [02:18] He became a VC straight out of college, because it was the right time (the beginning of the bubble).
  • [03:12] For B2C companies, the way LeanData works is pretty straightforward, whereas the methods for B2B’s is more complex.
  • [04:10] LeanData seeks to deliver a better experience for those B2B companies.
  • [04:00] They use a customer success team as opposed to junior salespeople when it comes to dealing with clients.
  • [05:04] They charge on a per seed basis.
  • [05:15] They are a little under $10 Million in ARR. Their goal is to double that within the next year.
  • [06:26] LeanData worked with Cloudera, a fast-growing company that recently went public.
  • [06:40] Their sales reps were getting too many leads and wasting time following up with the wrong people.
  • [06:45] LeanData is helping them become more account based by making sure that they use matching and contextualization to determine if the lead is worth following up on.
  • [09:20] They acquire customers on a face-to-face basis. They host events in order to bring “industry thought leaders together”.
  • [09:42] They track their own ROI based on pipeline and attribution.
  • [10:30] Caring.com is a site for eldercare resources at which Evan worked for a time.
  • [11:31] Evan helped them build a directory for services and the site pivoted to focusing on that aspect.
  • [13:05] Evan’s biggest challenge at LeanData is knowing when to scale, when to move quickly, and when to slow down.
  • [14:10] Two years ago, when gearing up for fundraising, they hired a bunch of sales reps, but they hadn’t figure out the motion for each rep and they weren’t reaching their quotas.
  • [14:25] When they missed their numbers, the company had to lay a lot of those people off.
  • [15:03] Evan always makes sure to get 8 hours of sleep.
  • [15:20] He also makes sure to takes breaks and check that he isn’t blocking anyone else from achieving their work goals.
  • [15:45] Evan thinks Carta is a useful tool, as they make managing employee options a lot easier. They automated an offline process.
  • [16:40] Evan recommends the book The Founder’s Dilemma.
  • [17:26] He also likes to follow Jason Lemkin on Twitter and read Fred Wilson’s blog.

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Full Transcript of The Episode

Show transcript
Evan Liang: Sure thing. The easiest way to tell the people who don't know anything about the space, it's basically, imagine someone comes to a website, fills out, "Hey, I want to talk to someone at the company." We're the software that figures out who is the best person from some large company out there like an IBM and/or SISCO. Who's the most appropriate rep, sales person, to talk to you to give you a good buying experience? So for our B2C companies, this is fairly straightforward. For B2B companies, it's quite complex. It depends on, "Are you an existing customer? What type of customer are you? What industry are you? What vertical? What region? What product are you interested?" That complexity there becomes hard for larger B2B companies to manage and we're the software that does all the data matching, but also the work flows to deliver that experience.

Eric Siu: Got it. Okay. So let's say, for us, B2B SaaS marketing agency as an example, I'm assuming if we're using you guys then you'll tell us who's visiting ... I might have this completely wrong, but who's visiting and who the right person is to reach out to, right?

Evan Liang: Yeah, it's more like, someone comes in, they're browsing a website, they're looking at a white paper. They've downloaded it, but what if it's an existing customer. If it's an existing customer, you want your account management, your customer success team to talk to them versus a junior sales rep who might try to sell them a product they already have. That's a problem that happens all the time and shouldn't. We help our companies make sure those types of experiences don't happen and they deliver the right experience.

Eric Siu: Oh, that's great. It's like a live sales call right now, maybe it's time to buy it. How do you guys make money, first and foremost, and we'll go a little deeper.

Evan Liang: Sure. We're a SaaS subscription product so we basically charge an annual subscription based on the number of sales reps and users that we're helping.

Eric Siu: Got it. Okay, and then you said, we talked a lot about the numbers a little earlier, but I guess you have 350 enterprise customers right now?

Evan Liang: That's correct.

Eric Siu: And how much is the average monthly revenue per customer?

Evan Liang: Today, it's probably in the 20 to 30 thousand range as we're very focused on the midmarket, but, like a lot of companies, we're going upmarket so we definitely have six figure clients who are managing thousands and thousands of reps on our system.

Eric Siu: Got it. I'm assuming you're charging, is it on a per seat basis?

Evan Liang: Yes.

Eric Siu: Okay, got it. Just before, you talked about the run rate for the company, or not the run rate, but the ARR. How are you guys sitting right now?

Evan Liang: We're still a little bit under 10 million in ARR, but we're definitely trying to, our goal next year is to double that and getting closer to the 220 million range.

Eric Siu: Fantastic. I was doing a little research earlier, and I'll come back to what you just talked about, but lead routing and it talks about you guys' massive, I guess the staff that you had to integrate with, who got BuiltWith, who got Datanyze? Yes, we're [inaudible 00:05:38] SalesLoft, all these different tools. How are you using all that together? Is it just, how are you plugging it all in?

Evan Liang: Yeah, so it's really just trying to give a full-stack, we want to eat as much dog food as possible and enabling our sales team to be productive. Obviously, one of the things that we're really passionate about because our total [inaudible 00:05:57] sales people will be more productive is making sure that we're enabling our internal reps to do that as well. We have tried to stitch together a tech stack for them that integrates all those pieces so that they can deliver a good experience when our buyers come knocking on our door.

Eric Siu: Got it. Okay, interesting. Maybe it's easier for people to visualize like a story or like a case study of where you guys really kicked ass for somebody. Is there anything you can speak to?

Evan Liang: Yeah, a pretty good story would be like a Cloudera. Cloudera, it's a very fast growing company, unicorn recently went public. They had massive lead [balling 00:06:37] so their problem was their sales reps were getting too many leads and they were wasting a lot time following up with companies that were just never going to buy from them. What LeanData does is, we really were helping them become more account-based which is a popular term these days and we do that by making sure that when those leads come in, we do a whole bunch of matching and contextualization to determine should an SDR rep follow up with them. What we found, of the hundred leads that they used to get, actually only 35 of them were relevant.
What's in the other 65, the other 65 are customer leads that they shouldn't be following up with. [inaudible 00:07:12] leads, leads that weren't in their target accounts, leads that were test leads, or leads from the same company that should go to the same rep. By taking the hundred leads that they were supposed to spend five to seven minutes on each one to determine followup and only giving them 35 leads, we increased their productivity massively so that they could spend their time focused on sales activities with the right prospects and close more deals.

Eric Siu: Got it. I love it. Love it, love it, love it. For us, right now we're using one tool tells us who's visiting on the website. I guess this is the exact struggle that you guys address. When we see people [ofting 00:07:48] into our email list, it's Shell gasoline, Audi, Mercedes Benz and all these, but the tool we have right now, it does not tell us who we should be reaching out to. So you guys are closing the loop there, right? I'm triple checking to make sure that I'm not too dumb.

Evan Liang: No, a little bit different, it's you already know the accounts in your system. When Audi or Shell comes to you and you're about to reach out to them, we're doing a lot of manual work to figure out whether or not, "Hey, it's an existing customer," so you might have one person reach out to an existing customer that's different from if it's a brand new prospect and/or if someone else is already talking to Audi, let's make sure it goes to the same rep that's already doing that. Does that make sense?

Eric Siu: Got it. Yep, makes total sense now. Okay, thank you for that.

Evan Liang: Yeah, yeah, yeah. It's not we're telling you who else you should be reaching out from an [inaudible 00:08:40] perspective, it's more of coordinating to make sure the right person, not the wrong person, from the organization is talking to that prospect who has the right context to help them.

Eric Siu: Right, makes total sense. Okay. Great. I'm assuming a lot of the stuff you guys did in the beginning to acquire customers, a lot of hand-to-hand combat. What are you guys doing that's really effective for you guys in terms of customer acquisition today?

Evan Liang: For us really, it's around the customers that use us and know us, love us. We have a huge, high Net Promo score, customers really like it. And so for us, the channels where we can bring our passionate promoters in contact with our prospects work really, really well. For us, it is hand-to-hand. Like events, big time events, we host our own event called Ops-Stars at Dreamforce. We want to bring industry thought leaders together, promote, we sell to sales ops. If we can get those guys into a room with our customers, they sell for us.

Eric Siu: How do you track the ROI of events? I'm sure you get this question a lot.

Evan Liang: Yeah, we track it based on pipeline and attribution. We look at which deals were influenced or sourced by those events and help move those along. Sourcing is, obviously, really easy, but influence is, "Hey, look, that deal probably wouldn't have closed if we didn't get that person in touch with Lars at Cloudera, for example. He helped us move that deal along and convinced them to buy now.

Eric Siu: Got it. Okay. I want to back up a second and go back, I guess, maybe back in time a little bit. Your background at Stanford, were you an engineer or-

Evan Liang: Yeah, I was an industrial engineer.

Eric Siu: Got it. Okay, great. You going to Caring.com, the story I read was that you basically, you made the business what it is today. I guess you can maybe speak to what Caring.com is and maybe the story around the turnaround.

Evan Liang: Sure thing. Caring.com is the leading destination site for the Eldercare space founded by a bunch of folks who had started Baby Center. It was a content and community site all around focused on eldercare. I was part of the team at Shasta Ventures that invested in them. I had made an investment in the company and got to know them. They ended up buying a small site called Gilbert Guide, think of them as the Yelp for senior care so they were a directory business. I came in to help run that division and help grow that. It wasn't so much that ... the company was an existing company, but ended up, the content community site didn't grow as much. There's not as much virality with the content and topics in the eldercare space.
When you get pregnant and have a baby or get married, you want to tell everyone about it. Taking care of your elderly Mom, it's not something you stream out on social media. It doesn't quite have that virality. So, for me, I built the directory business and the company ended up pivoting and that became their main business.

Eric Siu: Got it. Okay. I guess the CRM struggles you had over there, the sales struggles, led to what you're doing today, right?

Evan Liang: Absolutely. Basically, I had an inside sales team at Caring.com, all the directory business reporting in to me, their own sales force. We wanted to increase their productivity so bought marketing automation to help nurture the needs. As we were integrating those systems, I would just say the data was a complete shit show. I had to clean that up, figure it out, in order to drive my business. That was the pain point that I realized, "Gosh, a lot of other companies are going to struggle with this, as marketing automation, or other systems, integrate into your CRM. And if you don't manage the data correctly, none of this is going to work.
So that was the initial pain point that I identified and from there, the products involved based on understanding where do our customers really need to use the data more strategically? That's how we were the first to find account matching and we've been the best at solving that problem.

Eric Siu: What I'm hearing is, you've got to scratch your own itch sometimes and that's sometimes where the best solutions come from, right?

Evan Liang: Absolutely, and then, I think sometimes, it's a problem that's been around for a long time, but because I was a former product manager, I looked at it and it was like, "Hey, I know there's a better solution. It sounds like a small pain point today, but if we address that, I bet you we can lock of value and productivity that sits on top of that," and that's the way it's played out.

Eric Siu: Love it. What's one big struggle you faced while growing LeanData?

Evan Liang: I think it's knowing when to scale and when to go fast and when to go slow. I think I've made both mistakes. If you hit the pedal to the medal too early and hire too many sales reps in particular, when you quite haven't figured out your messaging, you're going to market your product market bit. Are you going to end up spending a lot of money, then [inaudible 00:13:27] your business and may be having to do layoffs and that's extremely painful. The flip side is, if you go too slow, you may be leaving money on the table. I don't know anyone who ever gets that right. Even the fast growing unicorn, sometimes you're just throwing money at it.

Eric Siu: It sounds like it's a fine balance, but maybe perhaps you've built out some process or workflow to prevent you from going too overboard or too slow?

Evan Liang: A little bit. Our technology certainly helps us a little bit, but I mean most of going fast is hiring and bringing people on board.

Eric Siu: Got it. Is there any specific example you can share where it's like, "Man, I moved too quickly and then this cost us six or seven figures?"

Evan Liang: Yeah. Over two years ago, we were gearing up for a fundraise, hired a bunch of sales reps. We hadn't quite figured out the motion for each rep. They weren't quite hitting quota at that point in time and we hired a bunch of reps because, "Hey, we want to look like we're bigger." Misspent numbers and I had to do layoffs and that sucked. So we went back, figured out our sales process correctly and then literally quadrupled productivity quarter over quarter. But that was painful.

Eric Siu: Okay. So you guys didn't have a fully [dollared 00:14:39] sales process and you just added a bunch of people and then that just compounded on itself. Then, boom, numbers don't hit and a bunch of people, what is it, 50-60% of staff or-

Evan Liang: Yeah, 50% of the sales team. Yeah.

Eric Siu: Got it, makes sense. Working towards wrapping up here, I'm curious, you sound like a really efficient person just by the way you respond. I'm curious, how do you structure your day?

Evan Liang: The first thing, there are a lot of COs that ... I make sure I get eight hours of sleep. I do get a full night's sleep so I can wake up in the morning, come in, get here early around eightish and make sure that I have an inbox zero. Make sure that I've responded to everything and all the major issues and then go through and schedule meetings, but make sure that I take breaks. And my goal as CO is to make sure that I'm not blocking anyone else. So most of my day-to-day is making sure that my team, or anyone in the company, has what they need from me so they can do their jobs properly.

Eric Siu: Love it. Okay. What is one new tool that you've added in the last year that's added a lot of value. A lot of people have been saying, "Oh, this Peloton bike is awesome," or, "Evernote's great."

Evan Liang: I'll pick one that was added more than a year ago just because I like the way they solved the problem. It was eShares or Carta that they're now called and they just make managing options, employee options, a lot easier. It's a problem that's been around forever, I just like the fact that it's such a stupid manual process that paralegals used to do, the lawyers don't even like charging you for. They automated it and made it much more simple.

Eric Siu: Wow, never heard of it. Okay, cool. How does that work? How do they charge for that?

Evan Liang: They charge per shareholder, but it's cheap monthly subscription fee. My lawyers used to FedEx me options like, the packages of all the documentation that you would sign by paper and FedEx back to them. That's how it used to be done. The first time I got that, I was like, "There has got to be a better solution for this."

Eric Siu: Wow, cool. Okay. I just got a lot of value from that, eShares. Okay. What is one must-read book you'd recommend to everyone?

Evan Liang: Especially for early entrepreneurs, I really liked Founder's Dilemma because I believe in starting a business is all about trade-offs. There's not right or wrong answers, it's about the trade-offs you need to make. And that book really highlights all the trade-offs you start making at the beginning of starting your entrepreneur journey all the way to, "Should you take VC money? Should you not? Should you start the business? Should you not? Do I need front cofounders etc and they give you data they've compiled." But I like people to think about that as, don't copy the way that I've done it, but think about what is right for your journey and where you are at stage of life.

Eric Siu: Great. Related to that note, is there any blog or podcast that you tune into on a daily or weekly basis?

Evan Liang: Probably, because I'm a Saas space, I obviously follow Jason Lumpkin on Twitter. I like some of the notes he writes and then I'll read Fred Wilson's blog as he sometimes has some insightful stuff on what's going on in the tech industry.

Eric Siu: Wonderful. Well, Evan, this has been great. What's the best way for people to find you online?

Evan Liang: Definitely. Without a doubt, my website or my Twitter handle @evanliang, @ E-V-A-N-L-I-A-N-G.

Eric Siu: Got it. Wonderful. Evan, thanks again.

Evan Liang: Thanks, Eric, really enjoyed it.

Speaker 2: Thanks for listening to this episode of Growth Everywhere. If you loved what you heard, be sure to head back to growtheverywhere.com for today's show notes and a ton of additional resources. But before you go, hit the subscribe button to avoid missing out on next week's value packed interview. Enjoy the rest of your week and remember to take action and continue growing.