Hey, everyone! In today’s episode I share the mic with Paulo Rosado, CEO of OutSystems, a low-code platform that lets you develop applications.
Tune in to discover how Paulo helped grow a struggling business into a company with 800 enterprise customers in 43 countries, what the big break was that increased their sales by 60% last year, and the strategies that have placed this enterprise player firmly on the path of high growth.
Download podcast transcript [PDF] here: How OutSystems Went from Racking Up Sales by Going Door-to-Door to Doing $100M in Sales Last Year TRANSCRIPT
Time-Stamped Show Notes:
- 00:33 – Please leave us a review and subscribe to the Growth Everywhere Podcast
- 00:52 – Eric introduces Paulo Rosado
- 01:18 – OutSystems started as a cloud-based, development platform to address the issues of speed, productivity and software change
- 01:53 – Compress by 4x the time it takes to provide apps; subsequently, reduces size of teams by 3-4x
- 02:19 – Analyzing the various use cases and benefits
- 2:19 – Logitech uses OutSystems for their portal, to manage their supply chain and for their dashboard
- 3:12 – Vopak, a Dutch company managing 80+ oil and gas terminals, also uses OutSystems
- 3:26 – A typical system that runs on Java or .Net would take 3 to 4 years; using OutSystems compresses this time to just 7 months
- 03:52 – Pricing and savings
- 3:52 – Makes money by renting the platform on cloud; non-premise offer for bigger companies who want to deploy their own cloud
- 04:10 – Pricing depends on the number of applications and the size of applications
- 04:41 – Pricing starts at $25K per year and can go up to $1 million per year; millions of dollars in savings due to implementation of larger systems
- 05:04 – Has 800 enterprise customers spread across 43 countries
- 05:16 – Sales grew 60% last year; hit $100 million in sales!
- 05:40 – Paulo talks about their long struggle before they gained traction
- 05:40 – Selling to enterprise clients is more complex; the fact that they were 11-13 years ahead of the market made the initial years more painful
- 06:15 – Initially, prospects believed that their product was “too good to be true”; had to water down productivity numbers
- 06:34 – Started in Europe and then moved to the U.S.; it was a mistake to concentrate on multiple regions in its initial years
- 07:19 – Racked up sales in the initial years by going door-to-door
- 07:33 – Introduced the concept of Devops (Development and Operations) in 2001; this concept has become popular only in the last 7 or 8 years
- 08:20 – Has gained traction since the last 3 years; took 13 long years to get there
- 08:46 – Paulo attributes their success to their patient European investor—European investors are typically more patient than American investors
- 09:18 – Since they started in 2001, just before the burst of the economic bubble, they had to sell web applications since people were not in the mood to switch to a cloud-based solution
- 09:41 – Rode the mobile wave that gripped enterprise clients; digital transformation entailed that all portals had to work on smartphones and tablets
- 10:20 – Mobile applications needed systems with extreme productivity, fast change and continuous integrations; traits that OutSystems was already known for
- 11:02 – Agile methods are the norm even in big organizations today; OutSystems works very well in an agile environment
- 11:37 – Got a lucky break when they managed to secure $1 million in funding in October 2001, a month before 9/11; funding dried up for 2 years after this
- 12:12 – Started off in 2001 by taking on telecom players as customers as well as partners; telecom pipeline dried up by 2002 leaving them no sales
- 12:42 – Had to switch back to enterprise which took 6 months; took a while to get back into the black
- 13:16 – Nuances of making an enterprise sale
- 13:16 – A sophisticated, transformational sale; a free version is available onsite where prospects can avail thousands of free trials
- 13:52 – 70% of sales are through partners who want to use OutSystems to build their own application; in the process, they end up pushing their product
- 14:07 – What’s one big change that you have made in the last year that has impacted you? – Learned to delegate
- 15:50 – Manages to hire great people because they have removed the restriction of location; created processes around aligning people to a single, consistent culture
- 16:33 – Promotes culture through an organization booklet, “The small book of the few big rules”
- 17:09 – What’s one new tool that you’ve added in the last year that’s added a lot of value? – The iPad Pro with pencil and Evernote with Penultimate
- 18:36 – What’s one must-read book you recommend to everyone? – The Culture Map: Breaking Through the Invisible Boundaries of Global Business
- 20:46 – Connect with Paulo via email
- 20:59 – End of today’s episode
- 21:01 – Head to our website to access today’s show notes
- 21:10 – Please leave us a review and subscribe to the Growth Everywhere Podcast
3 Key Points:
- Any new, innovative technology that is ahead of the market will face the problem of being “too good to be true”; be prepared to wait it out, as you WILL gain traction.
- Agile methods are the norm in small and big organizations alike; switching to mobile has necessitated the need for platforms to permit quick changes, faster productivity and continuous integration.
- Making an enterprise sale is much more complex than a consumer sale; offer free trials, and PUSH your product in the process.
Resources From This Interview:
- Evernote with Penultimate
- Must-read book: The Culture Map: Breaking Through the Invisible Boundaries of Global Business by Erin Meyer
- Paulo’s e-mail
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Connect with Eric Siu:
Full Transcript of The Episode
And, one of the neat things about that notion is ... another thing that we use and that is this idea of the Magic 8 Ball rule. And a lot of people know about Magic 8 Balls, remember the Magic 8 Ball where it says, you know, you shake and it says Yes, No, Maybe and then it has a couple other clever sayings. The vast majority of the 97%, I don't care what the answer is, I don't care what she wants to do. And many times she's doing things that benefit both of us, but I'm indifferent, I'm happy with whatever it is, I'm happy with what she wears tonight, I'm happy with what she bought, I'm happy with what car she drives, I'm happy with a whole bunch of things.
But, if she asks a question like, "Do you like these shoes or these shoes?" If I say, "I don't care," that's a bad answer. So, we use the Magic 8 Ball rule, which is I give her an answer, but we have to use the Magic 8 Ball rule like the Golden Retriever Rule. So, the Magic 8 Ball rule is I just basically say Yes, No, or Maybe, and I don't care what she does. Like, I say, "I like pair number two better." If she chooses pair number one, totally fine, but I have to say it with Golden Retriever eyes. And anybody that has a dog knows what those eyes are. It's the look the dog makes-
Eric Siu: The loving, caring eyes.
Brad Feld: Loving ... unconditional love, like you're holding a piece of hamburger in your hand and so you have to say Yes, No or Maybe with that look while you're giving your partner the Golden Retriever eyes. [crosstalk 00:04:37]
Eric Siu: So how does she feel when you're using these roles on her?
Brad Feld: Well, she made them up, so she's very happy with them. No, we made them up together. They're a good source of amusement for both of us because when she's asking me whether I like pair of shoes A or pair of shoes B, she's just looking for connection with me, she's not looking for my opinion on what shoes I like better. What she's basically saying is, "Hey, I'm making a decision, pay attention to me," or, "Will you talk to me instead of whatever you're doing." It's like a gentler way of saying, "Hey, pay attention!" And over a long period of time, you learn these little cues from each other as partners, and one of the things that I think we've worked hard at as a couple is having those cues be positive cues, and I think many couples that have been together for a long time ... you think about couples who bicker all the time or it's very predictable the negative dynamics that your parents are gonna be in after they've been together for a long time. What they're doing is they're letting all those cues be negative cues instead of positive ones.
Eric Siu: Right. You know what's interesting, it seems like you've been very deliberate about relationships, about who you invest in, and everything that you do in life in general, so I wonder if there's a story behind that?
Brad Feld: Well, I believe that we get one shot. I'd love to believe that I get reincarnated thousands of times, but I'm operating under this condition that that doesn't happen. I also believe that there's infinite numbers of parallel universes, and I happen to be stuck in this one versus some other one, so I just want to make the best of it. And I know that in the context of life, many, many things are difficult, right? I have a long time family friend whose son got cancer in his early 20's and died. The friend is a very successful CEO said, "Life is a fatal disease." There's a chemistry joke, which is, "Life is a process of continuous oxidation," but it's the same idea, like it has an end.
So, for me, I've learned over time, having made lots of mistakes along the way, that I want to spend as much of my time as possible with people that I'm interested in spending time with, that I want to be with. I know that many of those relationships are gonna have ups and downs, I'm gonna screw up, other people are gonna screw up, I'm gonna do things that disappoint people, I'm gonna make mistakes, there's gonna be things that are exogenous to me that go wrong, that I have to deal with, and that's just part of the experience of life, so why not try to set yourself up for as much positive joy, happiness as you can, against the backdrop of what is this very, very complicated and often very unsatisfying and unfriendly and unfun world?
Eric Siu: I love it. Yeah. And I think all of this starts to connect towards your work with the startup world and just investing in general. So, just so everyone gets a refresher on maybe kind of who you are, can you talk a little bit about companies that you've invested in and then lead that up to your Startup Opportunities?
Brad Feld: Sure. So, Foundry has been around since 2007. I've actually been investing since 1994, I sold my first company in 1993. I made 40 angel investments in the next three years with most of the money that I made from that sale. A company that many people will have heard of that I invested in from that time period, was a company called Harmonix, which made the games Guitar Hero and Rock Band, as well as Dance Central. So, a video game company that had huge success. I ended up co-founding a venture firm in 1997 that turned into Mobius Venture Capital. I then, in 2007, co-founded Foundry Group, which is the firm that I'm part of that my partners and I invest from. We've invested ... some companies that people may know, some consumery companies would include Zynga, we were an early investor there, so if you played way too much Mafia Wars or FarmVille, it's our fault. Or Words with Friends or KeepGoing ... I wouldn't say it's totally our fault, it's partially our fault. We were early investors in Fitbit, which just came out with a new product that I'm anxiously looking forward to getting. We're investors in a company called Sphero-
Eric Siu: Oh yeah, we had them.
Brad Feld: Okay, so BB-8, which was the product that they came out with two years ago around the Star Wars VII, on the movie that just came out, that's coming out in December, they just ... Force Friday's tomorrow. Sphero just announced two more robots, an R2-D2 and a BB-9E robot, which is the evil droid. And another company people may know a little bit also came out with something for a Star Wars product called the Droid Kit, so you can actually assemble droids [inaudible 00:09:21]. And then we've invested in a bunch of enterprise software companies, as well as some hardware related companies. MakerBot, which was one of the early 3D player companies is an investment of ours. So, that's the kind of stuff we do.
Eric Siu: So before we even talk about the book, one thing I want to touch upon ... So, you said you sold your company in '93 and then you basically took all of your money and started investing it?
Brad Feld: Yeah. I made a couple million bucks from the sale. Amy and I moved from Boston to Boulder in 1995 and we spent some of the money and bought a house, and I promised her that we'd never have less than $100,000 in the bank.
Eric Siu: Oh, the rest was all in.
Brad Feld: And I actually had to tell her, I remember very vividly having to tell her that we were under $100,000 cause I'd made an investment that put us under $100,000. But, yeah, yeah, I took ... basically, I made 40 investments, $25,000 and $50,000 at a time, and by 1996 there were starting to be some exits, so the money came back pretty quickly in '96, '97, '98 because it was a particularly good time to be investing in early stage tech companies. And that angel investing activity ended up being very, very successful for me. But from a personal perspective, I was 28 when I sold my first company and my view was if I invested all the money and it all went to zero, my worst case was that I'd just keep starting companies.
Eric Siu: Love it.
Brad Feld: I really wasn't terribly concerned with the specific outcome. The general outcome I cared about, I mean, I didn't want to lose all the money, but I was much more enthusiastic about this idea of learning how to be a good investor, investing quickly, getting involved in lots and lots of things that were new to me.
Eric Siu: Got it. Alright, well, I guess this all leads up to Startup Opportunities. You've worked with a lot of startups, you've invested in a ton, you've started your own, so what is Startup Opportunities about?
Brad Feld: Well, I wrote this book with a guy named Sean Wise, who's a professor at Ryerson in Canada and also an angel investor, with the idea that there's a lot of books that talk about what to do as you're starting to build up your company. Alright, so you've got an idea, you've locked down on what that ideas gonna be, and now you're essentially running the Lean Startup Drill, or you're doing Lean Launchpad, and these methodologies, by the way, didn't exist in 1994, so Steve Blank and Eric Reese, Bill Aulet from MIT who came up with this idea of disciplined entrepreneurship ... like, these methodologies are really, really powerful, and they're extremely helpful.
But, what would happen is I'd get emails from people who would say, "I'm thinking about doing this new business. What do you think of it?" And I'd say, "It sounds good, read one of these books, they'll help you." And somebody would come back with a note a month or two later, "Hey, I read the book and the books really interesting, but what do you think of the idea?" And the problem was that people were getting locked up in this notion of how important, to them, the idea was. And the idea itself is relatively unimportant, it's what you do with that idea. So, what we tried to do was write a book that didn't replace Eric Reese's Lean Startup, or Steve Blank's work or any of that, but instead was the thing you would read before it.
So, you're thinking about starting a company, you're still working or you're working with a co-founder and coming up with ideas and trying things, but you're really kind of stuck with what to do with that. And how to move from that idea into starting to implement on that idea, because you're struggling with is this idea a good one or not? Our view, and it's one of the very early chapters in the book, Tim Ferriss wrote a great essay that originally was in another book that I wrote that we published here called Trust Me Your Idea Is Stupid. And his assertion was it's not the idea, it's what you do with the idea, it's the execution of the idea. And so we tried to get, very quickly in this book, this notion of opportunity, like, take your idea and you say, "Okay, I'm gonna take this idea and build a business around it, is that a good opportunity to go create? What are the characteristics of what could be a really great business?"
Eric Siu: Love it. Okay, so I'm gonna put these books in chronological order. So, we got Startup Opportunities, that sounds like the book before Lean Startup, right, you're thinking of something. Then you got Lean Startup, and then somebody would go read Startup Life. Does that sound about right?
Brad Feld: Yeah, when you're ... or, read Startup Life early on too, it'll give you a good feeling for the ups and downs of the craziness of trying to create a company.
Eric Siu: Cool, great. Oh, so, Startup Life sounds like it could help with somebody dating an entrepreneur. What else do you cover in that book?
Brad Feld: Well, Startup Life is really a book aimed at both for the entrepreneur and for the partner of an entrepreneur. And it also works if both partners are entrepreneurs, because it really is a journey through the experience as a human being of either being a founder, being an entrepreneur and having an entrepreneur life but trying to, in the context of that, have an effective relationship. Or, at the same time, being in a relationship with an entrepreneur and understanding the pressures and the stresses and the dynamics that the entrepreneur is facing.
Now, an important part of this book when Amy and I wrote it was, we didn't want it to be what we started calling just another relationship book. So, it's not a "Here's Nine Ways to Have a Successful Relationship if You're an Entrepreneur." It also caused us, and the phrase work/life balance is in the book, but by the end of the book, we sort of got to this place where work/life balance is not the thing you're aspiring for. I actually don't like the word balance anymore, because balance has this implication that the scales of justice are in balance. And anybody who's an entrepreneur knows that nothing's in balance, it's just a complete freak show almost all the time, right? You're kind of hanging on by your fingernails just to have everything work. And so we shifted this idea from work/life balance to work/life harmony-
Eric Siu: Oh that was you that wrote that, I knew it.
Brad Feld: Yeah, it's more like improve jazz, right? Some days it's over here, some days it's over there, you start playing a different tune and if your partner plays along and it makes beautiful music that's great, and if it's totally discordant, hey, that's still okay because that could be interesting, you learn something from it. And this idea that there's so much complexity in it, we try to give people a sense that even with relationships like ours that are working really well, there are some moments where they're really not.
And we lead the book off, it's an essay that we liked and I'll give one more example in a sec, but an essay that we liked where ... the story of us almost breaking up. So Amy actually, in this opening essay, said to me after a whole series of things, I'll leave the preamble out, we're getting ready for bed, we're getting into bed and she says, kind of under her breath, "I'm done," and it was a Friday night and I kind of thought, you know, I said, "Yeah, a long week, I'm really tired, I'm looking forward to spending the weekend with you," and she turned to me, and she says, "You know what, I mean that I'm done, I don't want to have this relationship anymore. You're not even a good roommate anymore." And she said, "I love you, I think you're awesome, but this relationship isn't working." And that generated a long conversation for an hour because I believe you should never go to sleep ... if you go to bed with your partner and one of you is angry at the other, you should never call it quits, you should talk til you actually at least say, "I'm okay, let's talk some more tomorrow."
And as part of that, I then over the course of the weekend, I gave her my phone and my computer and we spent the whole weekend together and made a bunch of rules. And at first, she says, "I don't want to make rules, that's not romantic, I just want you to be more something else." I said, "Look, I'm an engineer, what we're doing isn't working so give me some rules. And don't think about it as rules, think about it as you're controlling me." And she said, "Oh that's interesting, I like that."
The very first thing she said to me was, "Alright, I want you to start tracking how much time you work each day and I want you to report that to me at the end of the week." And she knew this was a big red button in the middle of my forehead because in my first company we tracked every ... in five minute intervals all the time working, because we billed by the hour. And I said, "I don't want to do that, that sucks, I hate that, you know that that's not ... " She's like, "Hey, hey, I get to make the rules." And I'm like, "You know what? You're right. Fuck it, I'll keep track of my time."
Another story that we tell early on, just to give people a flavor for the book is that we believe only one partner can have a crisis at a time. So, if you want to have an effective relationship, especially in a world where one of the partners is an entrepreneur, only one can be having a crisis at the time, and that can't always be the entrepreneur. And, you think about a relationship that you're in where your partner melts down ... if you both melt down at the same time, it's a disaster, but if one of you melts down and the other doesn't, you can get back to a good place. You can support that person, and if the melt down moves back and forth and you're sort of out of sync in terms of that cadence, I'm doing fine, you're melting down. You're doing fine, I'm melting down, you'll get through kind of anything.
Eric Siu: Got it. Yeah. You know what, we could talk about this stuff forever and I know we're limited on time so I'm gonna make these last couple of minutes more efficient, or as efficient as possible. So, the Startup Life, part of being an entrepreneur, I hear about people who you read about Tim Ferriss talking about depression, you've talked about it before in the past, and I'm naïve, I don't really know what that feels like, so can you talk about that? What did you have to deal with, and how do you deal with it?
Brad Feld: So, depression feels different for everyone, and the best way for me to describe how it impacts me is it's the complete and total absence of color. Everything in my world just loses color, and it's not even that ... I still have black and white and gray, everything's just sort of this bland. That's the color, it's just bland.
For me, I've also learned over time that I can't just get out of a depressive episode, it eventually just goes away and I feel better. There's lots of things I can do in terms of self-care when I'm having a depressive episode, but one of the things that is important to realize if you have never felt depression, or you don't know what depression is because you haven't felt it, is that there isn't a single feeling. There are lots of different things that happen, and I like to lead people into it easily ... most people, most everybody has had moments of anxiety, and you have anxiety about different things. You're anxious about positive and negative things, you're anxious about a health issue, you're anxious about getting a client, you're anxious about taking a test, you're anxious about going out on a date, you're anxious as you're waiting for somebody to call you back or something. Imagine that anxiety level continuing to increase to a point where it's almost debilitating and where you're just incredibly uncomfortable because of the increase in anxiety, and that's one of the things that I struggle with, is I have what I would call anxiety spikes, but they'd be inappropriate anxiety spikes, so it's extreme anxiety that's disproportionate so the specific thing that's going on.
Like, a life or death like feeling of anxiety when I'm just having trouble making coffee, and it's usually because of other issues, right, it's not the specific thing that's going on that's causing the anxiety spike. And for me, personally, eventually, if there's too much of that activity it tips into, or it can tip into a depressive episode, and there's a bunch of other stuff wrapped up in that. One of the things that is the hardest thing for somebody that's struggling with depression to hear from somebody else is, "You'll be okay, it'll be alright, just get over it," because it's almost the complete understanding that the other person doesn't realize what you're struggling with. And, anyway, the loneliness of being depressed is part of the hard thing in it, you're in this place where nothing feels good, whatever your definition of good is, and some people are worried they're going to feel this way forever, and that's an incredibly difficult place to be.
Eric Siu: So how do you deal with it?
Brad Feld: Well, for me, and I've had a number of major depressive episodes, I used to talk about that I had three over the years, and I kinda realize that I probably had a two to eight week depressive episode pretty much every winter between October, November, December, and I used to just explain it as I don't like Christmas and I don't like the holidays and I'm a cranky Jewish kid, and I didn't have Christmas as a kid. But I was probably just exhausted, and I'd have this boom or bust where I'd get really exhausted from the intensity of the year and I just wasn't taking care of myself.
And what ended up happening is now I reflect on it, I focus primarily when I'm starting to feel depressed or tired, which, for me, a lot of times can lead to depression, I really focus On self-care. I do things very systematically that are better for me. I create time for myself, I do the things that I know that are good for me physiologically. I only drink one cup of coffee a day versus a bunch of coffee, so I cut back on caffeine. I don't drink alcohol. Alcohol's bad for me. Like, I don't have an alcohol problem, but it has a very big effect on my moods, even a glass of wine, so I just don't drink.
I used to be the guy that woke up at 5:00 in the morning, no matter where I am, with an alarm clock, every morning, no matter how much sleep I got. Now, I wake up when I wake up, I don't use an alarm clock anymore. I do a thing that Amy and I call digital sabbath, so from Friday night sundown to Saturday night sundown, no phone, no email, just disconnect and I have a life without phones and email. And that doesn't mean I don't do work, sometimes on Saturday's I'll do some work that doesn't require a phone and email. I'm a big runner and I often find that when I'm running less it has a pretty negative impact on how I feel in some kind. Even if I'm tired, I put the energy into making sure I have time and space for that for myself, because I need it. So, I come back to this phrase that I like to use now called self-care, which is different for everyone, but you have to discover it yourself.
Eric Siu: Love it. Okay, so, I have three rapid fire questions for you, you could probably answer them all in one word. So, first off, you strike me as a really efficient person, so what's one habit you can share with everyone, what's something unique that you do every day?
Brad Feld: Throw everything away. I don't keep any paper. I don't keep any emails, I archive everything. My inbox is empty all the time. If I have things that I need to do, I put them on a to-do list. I don't have drawers in my desk because drawers are basically places things go to die, folders are places things go to die. So, I just try to process everything and if I have something I need to work on longer, I make sure it's in a place where I systematically go back to it.
Eric Siu: I'm gonna steal that. Okay. What's one new tool that you've added in the last year that's added a lot of value to your life. Could be Evernote, could be a Fitbit.
Brad Feld: In the last year, probably Todoist, which I think I've done lots of different ways of managing, I have a very short to-do list and sort of manage through things. Again, I don't keep anything, so Evernote is a good place for me to send stuff to never see it again. It's not particularly helpful for me cause I don't keep notes like that. But Todoist has been really helpful because of the integration with GMail, it allows me to have a very tight to-do list, and it's also shareable so I can share individual things with other people without very much overhead.
Eric Siu: That's funny, how do you say that?
Brad Feld: T-O-D-O-I-S-T. And there's 97 different to-do lists, but it's the one I found that I like the best.
Eric Siu: Cool, we'll drop that in the show notes. Final question for you. What's one must-read book, aside from your own books, that you'd recommend to everyone?
Brad Feld: I think every entrepreneur or aspiring entrepreneur should read the book Zen and the Art of Motorcycle Maintenance. It was written in the 1970s by a guy named Robert Pirsig, P-I-R-S-I-G. It was his first book, it's kind of a hippie philosophy treatised journey. The word that sort of came out of it was chautauqua, he's like having a conversation with his son as they do a motorcycle trip across the country, and it's just this incredible treatise on philosophy, product, quality, accomplishing what your goal is, against the backdrop of the narrator, the author, going crazy and having a psychotic break. And so it's this very powerful mix of accessible philosophy, combined with this pretty captivating journey in a book that, again, anybody who builds anything, there's so much in it that's so worth reading and just soaking in, but it's not what you'd expect, it's not a here's how you do it, you have to read it slowly and think about it. So, it's one of my favorites.
Eric Siu: Love it. Well Brad, this has been incredible. What's the best way for our people to find you online?
Brad Feld: Email, [email protected], my Twitter's @BFeld, although President Trump ruined Twitter for me, so now I broadcast on Twitter but I rarely because it's just too toxic. And my blog, at Feld.com
Eric Siu: Great. Brad, thanks so much for doing this.
Brad Feld: Hey, my pleasure.
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 weeks value packed interview. Enjoy the rest of your week, and remember to take action and continue growing.