GE Ep 56: How Yesware Grew Their Revenue 1,300% Over a Single Year With Matthew Bellows

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MatthewBellowsWelcome to Growth Everywhere, today I’m talking with Yesware CEO Matthew Bellows.

Matthew is a self-described professional startup person who has worked on them in some capacity his entire career. He’s worked in sales, marketing, and on the product side. Today he runs Yesware, which helps sales people and their companies reach their full potential and become more successful, grow faster, make more money, and close more deals.

Keypoint Takeaways:

Yesware focuses on adding sales specific features to help you in places you already work, like email and phone. The company shapes it strategy by asking, “How can we help you with all the myriad tasks of being a sales person”. Today they have about 500,000 users and have signed on some of the biggest and fastest growing companies in the startup ecosystem. Their revenues have also skyrocketed. Yesware has seen revenue grow about 1,300%, or 13x over the course of a single year by the end of 2013. Despite their rapid growth, Matthew thinks they’re just getting started.

I pointed out it all sounds like Yesware just makes you more efficient so you can close more deals. Matthew says that’s true, but it’s something else too. One side of Yesware is is all about helping sales people be more effective, and help them grow the business. The second is to extract the data on their activity and share that with the rest of the organization. The idea is if you can share that information with your colleagues and managers, they can use the data to learn from you or help make you even better.

Matthew says SalesForce was the inspiration, but he noticed while sales people are smart and hardworking, they’re just not data entry people. It was a real pain point and he grew tired of babysitting people and asking them to use it. He realized he could help build and run something better that was a better fit for his sales teams.

First 1,000 customers

Matthew decided to launch the company within the Google Apps environment after realizing it has a lot of good meeting places to discover new applications. They also offered a Chrome browser extension which means they’re listed in the store and got a boost from reviews. Matthew says getting listed in Google Apps marketplace drove fewer people than from their own website, but they were highly qualified people.

All of those steps helped drive numbers, but the first hundred or so clients came from an incubator called Dog Patch Labs. They took a hand-to-hand combat approach and literally went from desk to desk saying, “Would you try this thing out?” The person-to-person interaction helped get the ball rolling and new customers coming in.

I pressed him on what else he was doing that was unique to drive 500,000 people to his product. But Matthew says the main vehicle for their growth is having a great product. “We basically ripped off Dropbox with regard to, “Here’s a great free product. Use it for free. If you really like it and you use it a lot we’re going to give you a message that says, ‘Hey, either buy it from us, use your credit card, no touch revenue, or share it with your friends. And if you share it with your friend and you get them to join we’ll give you more usage of the product.” That basic mechanism is responsible for the vast majority of our new users a day.”

Weird struggles

Ironically one of the biggest struggles Yesware faced was building their sales team, despite the fact they created software for sales people. The New York Times even wrote a two-piece case study on their struggle to develop a sales team. Matthew recognized he was a good salesperson, but not necessarily a good sales manager in the role he was playing. He couldn’t do both jobs as CEO and VP of Sales. Ultimately Yesware used an outside recruiting firm to help find someone and whittled down 100 applications to 5 interviews before finding Bridget Gleason.

Matthew says the key to hiring is not selling too hard, or not selling at all. “Tell them about your company in the best way. I say, “I think Yesware is the best company to work for in Boston and now that we have a San Francisco office, I don’t’ know if I can say the best in San Francisco, but one of the best in San Francisco, I’m very adamant about how much I love it here and how good I think it is, but I’m not going to try to convince you like, ‘This is the place for you.’”

Green shoes

I asked what the deal is with the green shoes his team wears at conferences. Matthew says it’s a relatively new experiment but helps give a single unifying element that people can recognize and remember that goes beyond the traditional polo shirt. “All these tribes and groups have signals that they send outwardly to other people to let them know there a part of a tribe and also inwardly to let each other know they’re all part of the tribe. You see that across all kinds of different human groups and so I think this is one example of ours.”

Links mentioned in this episode

Former Salesforce Director of Sales Shares How He Helped Grow Revenues To Over $100 Million 

Dog Patch Labs

New York Times – A Leader Struggles to Sell Software Meant to Aid Sales

“High Output Management”

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[spoiler title=’Transcript’ collapse_link=’true’]

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Eric: Hi everyone, welcome to this week’s edition of Growth Everywhere where we interview entrepreneurs and bring you business and personal growth tips. Today we have Matthew Bellows who is the CEO of Yesware, which is an all-in-one sales tool kit. I’ll let Matthew go ahead and explain that afterwards, but Matthew thanks first of all for joining us and would love to hear a little more about yourself.

Matthew:  Great to be here. Thanks for having me.

Eric: Let’s hear a little bit about your background.

Matthew: My background. Professionally I’m a startup person. I’ve been doing startups for either my own or also working for other startups for most of my career. I’ve worked at big companies, mostly as a result of selling the startups that I’ve been in to bigger, probably traded companies. So, I’ve done some time in the bigger company world, but I’m really best in the startup world. I think of myself as a startup guy, and mostly on the sales side, a little bit of marketing, a little bit of product, but mostly—we have real houses [ph 00:02:12] on the sales side of things which was very much the inspiration to start Yesware.

Eric: Got it. Let’s talk a little bit about Yesware. What does it do for people? Let’s hear the whole shebang.

Matthew: In a nutshell Yesware exists to help sales people and their companies be more successful, to grow a business faster, to make more money, to close more deals, to achieve their sales peoples’ professional potential. What we really focus on is adding sales specific features to the places you already work. You already work with email, let’s make email better. You already work on your phone, let’s make your phone work better. You already work with CRM, let’s make your CRM better. With that basic approach then we say, “How can we help you with all the myriad tasks of being a sales person” And so far it’s going well. We have about 500,000 users at Yesware. We’ve signed on some of the biggest and fastest growing companies in the startup eco-system, and I think we’re really just getting started.

Eric: Great. If I’m understanding correctly Yesware ultimately helps with efficiency and you can close more deals, right?

Matthew: Exactly. It’s sort of two things. One is help a sales person be more effective, help them grow the business. Two, extract the data on their activity and share that with the rest of the organization. Share it back with the sales person so they get better share it with the team, your colleagues on the team so they can learn from what you do well. Share with the manager so they have real data to help you be better. Share with the VP of sales to understand what’s happening with the deals your working on; all automatically.

Eric: Perfect. I think for any organization that uses anything like Salesforce I think you need something like Yesware to help make your life easier in general. I think it’s easy to really get lost in something as giant as Salesforce.

Matthew: That was a lot of the inspiration. Having been a sales person, I was a sales manager in my career. I got sick of walking around the sales floor and be, “Guys, go get your sales force. Go get your sales force.” and they’d be like, “Well [rolls eyes] okay.” and they’d type all the stuff in and they wouldn’t do a very good job of it and they wouldn’t—naturally because they’re not paid to data entry. They’re paid to be sales people. They’re smart and hardworking, and creative sales people. They’re not data entry people. That was the initial pain.

It was like, “Why am I having to babysit these people? I feel like I’ve got a stick over their head making them type stuff in.” And then on the other side there was that, what they were doing wasn’t helping me do my job as a VP of sales. It wasn’t giving me the data I needed to run the business and figure out what was going on and to be able to predict what was going to happen in the future. Both of those pain points really crystalized for me about four or five years ago. I was like, “Hey, this has got to be an opportunity. This is too big if we’re marketed and too much of a pain point for every company in the world not to actually address.” I called up my friend Cashman and I said, “Hey man, what do you think of this?” and he’s like “I can build that.” So, we got started.

Eric: All right. Cool. Sounds like a fun way to start. You talked about 500K users which is really impressive. Are you able to share any revenue numbers with us?

Matthew: We haven’t released revenue, like a flat, total, absolute number, but I can share that in 2000, the end year of 2013 we grew revenue about 1,300%, 13X year over year. 2014, although it isn’t going to be another 13X is looking very good.

Eric: Nice. Congratulations. In terms of getting Yesware starting up, you had this new idea, I always like to ask the question; how did you acquire your first 1,000 customers?

Matthew: Two things. One is we decided to launch the company within the Google Apps environment. Google Apps has a lot of good meeting places and market places to discover new applications. For us the Chrome Store we have a lower browser extension that are being listed in the Chrome Stoes and getting good reviews there was really helpful. We listed in Google apps marketplace which drove fewer people, but much more highly qualified people, then from the website. Those are three main channels. But the first 10, or 50, or 100 were largely a result of an incubator we were part of called Dog Patch Labs, it’s Polaris Ventures sort of funded. We literally went from desk to desk saying, “Would you try this thing out?” That sort of person to person interaction was really very helpful just getting the base of the product in.

Eric: Right. Hand to hand combat, right?

Matthew: There’s a lot to be said for scaling and putting mechanisms in place to scale, but there’s also a lot to be said for just face to face, one on one, “How does this work?”, taking notes, listening, watching their facial expressions, seeing what they’re actually doing as opposed to what you’re telling them to do. Those kind of experiences can’t be—they’re not scalable, but they can be so powerful.

Eric: Agreed. Do you guys still do that user type of thing today?

Matthew: A ton. A ton. We have a team now of product managers who do that every single week.

Eric: Got it. Okay. You talked about Google apps in the beginning. Nowadays you have 500K users, what’s one thing you guys are—what’s one unique thing you guys are doing to acquire more customers?

Matthew: Honestly I’m not sure anything that we’re doing is particularly unique. I think that the main vehicle we have for acquiring new customers is a great product. We basically ripped off Dropbox with regard to, “Here’s a great free product. Use it for free. If you really like it and you use it a lot we’re going to give you a message that says, ‘Hey, either buy it from us, use your credit card, no touch revenue, or share it with your friends. And if you share it with your friend and you get them to join we’ll give you more usage of the product.” That basic mechanism is responsible for the vast majority of our new users a day.

Eric: That’s interesting because Dropbox is file sharing, something that everyone can use, but this is more of a sales tool and you’re telling me that the referral program actually works out really well. That’s actually really interesting.

Matthew: It’s obviously a more targeted audience than Dropbox, but the mechanism is the same, which is like, “I feel good about this product. I’m enjoying it. It’s giving me benefits. Who else do I know that could use it? ‘Duddut’ [makes send action], so now they know.”

Eric: Okay. Got it. Let’s talk a little bit about—we talked a little before starting the show about the rebranding process for Yesware. Can you tell us about that?

Matthew: Yes. It’s fresh in mind because we just released the new logo and some things have not changed about Yesware, so if any of your viewers have seen the site, it’s green. Green is our color. We love green. That hasn’t changed, but we did redo the logo and put that across the site and the product and—you know it’s fresh on my mind because we just went through it. We had the same logo for four years from the very earliest days. In fact Cashman and I were just searching for it yesterday to find if [there were] other early iterations of our logo. Our logo was basically like a scripty “Yesware” like someone had signed it on the dotted line. In fact there was a dotted line.

Eric: I remember that.

Matthew: None of us ever immediately loved it, but it was good enough and as you know part of the startup thing is; if it’s good enough, ship it, you’re probably a little embarrassed, but move on and tackle the next thing. Our logo was very much like that. It sort of stayed that way for a long time. We didn’t have the resources, or the skills, or the energy to go through the process of redoing it. Redoing a logo is a pain.

Until finally about three months ago, maybe four months ago the marketing team started to come together and we had a designer on the team now and we’re announcing a couple big new features tomorrow actually, so as part of that new feature roll out I felt like it was time, like we could actually take this step. The combination of our industry coming together and becoming more of a thing, the combination of us going from an email only solution to a complete sales solution gave me a sort of impetus to say, “All right, let’s look at this logo question.” It’s much better now. It’s so much better. It’s such a relief

Eric:                 It’s not out yet right?

Matthew: It’s out. You can see it on the web page.

Eric: I guess I need to go take a look.

Matthew: It just came out.

Eric: All right. For people in the audience you talked about timing. We understand the timing has to be perfect for a rebrand. What’s the ultimate goal behind a rebrand?

Matt: I feel like the big issue is, why are you doing this? What’s your motivation? Are you doing this because the marketing department’s really charismatic and they need a project to work on? Or is there a specific and very clear definite reason? For us the reason was; hey, this market, our industry, which we’ve been in, and in some ways, helping to start the last four years, has started; it’s happening now. Now you have lots of interest, new startups every week, some big funding announcements, real competition, and we’re starting to see it develop.

So as part of that we need to think about how we’re going to be perceived in this market place for the next period of time, the next three, five, ten years. I think all of us felt like, as an identifiable mark, what we had as a logo is not sufficient to last us the next five years. That was the real impetus. You know what, we want to do it, it was time to do it, and we can do it.

Eric: Okay. Were there any particular mistakes to avoid the next time you do a rebrand or something like that? Any actionable tips?

Matthew: Yes. I hope we don’t have to do another rebrand, but I’m open to it. I did a lot of research about when companies do rebrands and I think the experience that we had was—okay, I literally came into the office one day and went up to the director of marketing, went up to my co-founder, and said, “Hey, I think it’s time we look at the logo. Here’s an idea.” and I gave him an idea. The director of marketing then and our designer took that idea and iterated on it, and for a while iterated on lots of different very similar tweaks to that one idea.

I think the actionable, our critique and what I learned from it is like—actually what I meant was, “Don’t start with this idea, start with the idea of coming up with a new logo and get 100 different crazy ideas, this being one of them, and then let’s start winnowing them down.” But instead we started with one idea and iterated on that one thing and at some point we’re like, “Nah, this isn’t working.” and we went out broad again and we started winnowing down.

Eric: Got it.

Matthew: Actually the starting point is to say, “Let’s get a 1,000 great ideas, or terrible ideas, just get 1,000 ideas and winnow those down from the start.

Eric: Got it. It’s like a regular funnel, but you started with a reverse funnel first.

Matthew: Yeah, exactly. We started with one idea, pursued that for a week. It wasn’t a bad idea, but it wasn’t as good as it would have been if we’d started with 100 ideas and then winnowed down.

Eric: Awesome. Okay. Perfect. That sounds cool. Can you tell us about one big struggle you faced while growing Yesware?

Matthew: Sure. Ironically one of the biggest struggles that we faced was building our sales team, which is weird for a company that’s building software for sales people. In fact it was so weird and difficult the New York Times wrote a two piece case study on Yesware’s struggle to develop a sales team. It’s bad for me too because I’m supposed to be a sales guy, right? I think I realized a couple things about it. One was that, most importantly, probably, I’m not a great sales manager.

I’m arguably a good salesperson, but there’s a big difference between being a good salesperson and a good sales manager. Secondly, you can have—I couldn’t do both jobs, CEO and VP of sales. You can have amazing sales technology, which we have, but if you don’t have the leadership it’s not going to work. If you look at the small business section case studies in the Times site, you can read all about the struggles that we had, but that was all about nine to twelve months ago, sort of the big problematic period for our sales team. It’s written about in excruciating detail in the Times site.

Eric: Okay. I remember going to one of your talks. We met at a sales conference and you talked about your VP of sales and she kind of—bringing on this star sales manager, it sounds like that who it was, right? How did you go about finding this one person?

Matthew: It was very difficult. At the outset I knew we would need to hire a sales manager just to grow the team effectively. My board was giving me a lot of crap about it, basically saying, “You’re never going to find somebody. It’s always the hardest thing for a technical CEO to hire a head of engineering, that’s always impossible for a sales person to hire a VP of sales, because you think you know what you’re doing.” And it’s true. It actually took about seven months to find somebody. What we did was we hired an outside search firm, a friend of mine named Mark Newell here in Boston, who’s an amazing executive search guy. He went through 100s of resumes and then had probably 25 phone screens, and 4 or 5 in person interviews before we found Bridgett

Eric: Okay. Cool

Matthew: The person we hired is called Bridgett Gleason [ph 00:17:52]. From a basic skills point of view I was looking for someone who had scaled a sales department from $5 to $50 million revenue. She did that. I was looking for someone who was a manager, not a solo producer and she’s run big teams. I was looking for someone who cared more about her team’s success than her individual success, she’s absolutely that person. She’s been amazing.

Eric: Okay. Great. It sounds like you have—I mean you start with 100 resumes and you whittle down to 25, then you whittle down to four or five. Sounds like you do have a fairly sophisticated hiring process. What’s one hiring tip you can share when it comes to hiring a star like Bridgett?

Matthew: I feel this way less and less as Yesware gets traction. I feel like we’re just starting to get to the point where people know about us and want to come work here. But for the first three or four years it was very much; we need to educate them about Yesware and sell them on coming to work here. The temptation in that mode is to try to convince somebody. I think the strength of our hiring process, and I put this mostly at our VP of engineering Matthew Bellantoni, of our hiring process has been we don’t actually try to do that.

We don’t try to sell you. Instead we try to tell you authentically who we are and see if there’s a genuine fit there. We’ve had plenty of people who are amazing candidates who we wanted to hire, but didn’t take the job because they were waiting to be convinced. That wasn’t happening. We’re basically like, “This is us. This is who we are. Take it or leave it.” And I’m so glad we passed on those people or they passed on us because in the end you find people who actually genuinely connect with the culture and want to be here and those kind of people are much more fun to work with.

Eric: Got it. Cool. Just be who you are.

Matt: Don’t sell too hard. Don’t sell. Tell them about your company in the best way. I say, “I think Yesware is the best company to work for in Boston and now that we have a San Francisco office, I don’t’ know if I can say the best in San Francisco, but one of the best in San Francisco, I’m very adamant about how much I love it here and how good I think it is, but I’m not going to try to convince you like, ‘This is the place for you.’”

Eric: Got it. I think it really starts from the top down, meeting you and meeting your team at the same time. It’s not like you guys are really pushy or aggressive. It’s really consultative right? I think it goes all the way down to your hiring process. I think it trickles up from you—trickles down from you, I should say.

Matthew: Or up. Either way. As long as it’s trickling I’m good with it.

Eric: Okay. One other thing I notice is that you guys tend to go to a lot of conferences and you guys all wear these green shoes. I guess the green shoes is more like an add on, but what do these conferences do for you guys. [Matthew shows his green shoes]

Matthew: That really hurt [laughter].

Eric: Sorry about that.

Matthew: What do they do? They work strangely well I must say. It’s a relatively new experiment for us. It’s very interesting how having a single unifying element where everybody in the conference, people recognize, they notice it, and to not have it be a polo shirt or a t-shirt which I think most people have is a little bit quirky, and so I think that helps with the noticeability of it. Also it’s just fun. It’s fun for us. It’s a little clique here, or a group, or a signal. All these tribes and groups have signals that they send outwardly to other people to let them know there a part of a tribe and also inwardly to let each other know they’re all part of the tribe. You see that across all kinds of different human groups and so I think this is one example of ours.

Eric: Cool. I think it’s really unique. It definitely stuck with me. I think it stands out more than anything else. One thing I notice, you’re doing this interview in an open area right now which is something I don’t usually see. Is there any story behind that? Do you not have an office? What’s the story behind that?

Matthew: I don’t have an office. I don’t know if I can do this, but—[picks up computer and shows the open space.] My office is this desk. There’s Cashman [ph 00:22:53] our co-founder, there’s my view. We have an all open floor plan here. We have meeting rooms and we have a couple call rooms, four to five call rooms, but we all out, standing or sitting in the open which means there’s arguably less privacy, but that’s both good and bad. But I don’t feel like any of us should be sequestered away behind a door. Even if you have the open door policy, the tendency is to close the door, or it feels like it’s an imposition to come in. So, we are just open seating.

Eric: Got it. Cool. It’s kind of like the Zappos type of deal where Tony Hsieh and everyone, they’re out working in an open space. I think it helps the culture.

Matthew: Andy Grove from Intel said it too. He had a cube, but it’s a–

Eric: Got it. Okay. Cool. Was there any point in time where the company was on the brink of failure?

Matthew: No [laughter]. On the brink of failure. I don’t think so. Not this one. I’ve certainly been in companies that not only were on the brink, but actually went over the brink of failure, but this one not, thankfully, yet. We had three weeks of cash in the bank when we closed our series A.

Eric: Wow, Okay.

Matthew: So, it was close.

Eric: That’s pretty close.

Matthew: But it was not really the brink. I knew that if the deal didn’t come through I knew we could figure something else out.

Eric: Okay. I like that. Wrapping it up here we have three more questions. What’s one piece of advice you’d give to your 25 year old self?

Matthew: Gosh, I don’t have any regrets about what I did when I was 25. I don’t know. I think I would just say, “Try to treat other people better.” Try to be more thoughtful to other people.

Eric: What’s the story behind that?

Matt: I think as a 25 year old I was not as aware of or concerned with other people. I was more self-absorbed. I guess I don’t regret it. I never did anything that was like awful, but I definitely made mistakes in my relationships with people and I think if I had been more conscious about paying attention to the impact of my actions on other people’s feelings, than I think my net impact at that age would have been more positive.

Eric: Okay. All right. Fair enough. What’s one productivity hack you can share with the audience? I’ll give you an example. I like to leave my phone really far away in the morning so I’m forced to get up when the alarm goes off.

Matthew: I would say use Yesware. You can download it for free at www.yesware.com.

Eric: I can provide a little testimonial that I downloaded it when you first started four to five years ago. I use it to kind of spy on who opened my emails at the time. I thought, “This is pretty cool. This is awesome.” I think that’s fair enough. Final question. What’s one must read book you’d recommend to the audience?

Matthew: There’s a lot of good books out there. The one that I’m most—I’m getting back into right now [holds up a book] is called High Output Management by Andy Grove. I read it before in business school in the late 90s, but I’m rereading if for our upcoming manger retreat. It’s really an incredible book. It’s very hard nose in a way, but super helpful.

Eric: Would you say that’s one of the best business books you’ve read?

Matthew: Yes. Absolutely. Other recent ones I’ve read that I really enjoy is Ben Horowitz’s The Hard Thing about Hard Things. It’s a real joy to read and really helpful and inspiring. Brad Pelt’s book on fundraising is incredibly helpful for people who are wanting to go the BC or Angel Group.

Eric: That’s Startup Deals, right?

Matthew: Exactly. And then there’s a translation of the Art of War by the Denma group, D-E-N-M-A. That is a fantastic new approach to reading this sort of ancient guide to strategy by Sun Tzu.

Eric: Perfect. All really good recommendations and the Art of War is the only one I haven’t read there. I definitely need to check that out. You are actually the ninth entrepreneur to recommend The Hard Thing about Hard Things so I think everyone should go out there and buy it.

Matthew: You can’t go wrong with that book.

Eric: No you can’t at all. That’s something that I make all the people on my team read too. Everyone Matthew Bellows from Yesware. Everyone, make sure you go and check it. It’s free, check it out. Matt, we definitely want to have you on the show sometime again soon. I think there’s a lot we can learn from you.

Eric: Thanks for being on the show.

Matthew: Yes. It’s a real pleasure to be here. Thanks for the opportunity. Maybe after we close our next round of financing I’ll come in and we can talk about financing.

Eric: That would be perfect. Thanks so much.

Matthew: Bye.

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