Hey everyone, today’s conversation is with Timo Rein, co-founder of Pipedrive, a software that helps sales people close more business by using a well-designed pipeline interface.
They’ve got over 10,000 customers in over 100 countries, and have raised over $13.4 million. I’m a huge fan of the work they do, but today we’ll focus on their approach to growth and how well it’s served them.
A Brief History of Pipedrive
Timo is one of five of Pipedrive’s co-founders… a company they got together and started a little over five years ago in the summer of 2010.
To make a long story short, they’ve experienced great international growth, and now serve customers from over 100 countries.
Startups Pipedrive is a Good Fit For
First, says Timo, you have to assess what type of company you’ve got and what kind of customers you’re after.
Pipedrive will be a good fit for the kinds of startups who are primarily B2B and that have a long sals cycle that can stretch into being months long. (You don’t sell anything that’s easily transactional.)
If your sales process requires a person to interact with a potential customer to close a deal, then you’d be a good fit because Pipedrive focuses on helping you know what’s going on in your sales pipeline and the next steps you need to take to get better results.
The Main Driver Behind Their Growth to 10,000 Customers
Even Timo says he doesn’t have the full answer to this question, but he does say that there were a number of ingredients that got thrown into the mix to help them become as successful as they were.
One of the most important ingredients, he says, was getting the right product-market fit. Pipedrive is a CRM, and the CRM market has been very saturated for a long time. So to be one of the tools in the CRM market that gets chosen by consumers, you need to have the feel and functionality that strikes a nerve with people and makes it feel like the CRM they want to use.
To help figure out this fit, they drew on the experience of their sales-based co-founders and created a tool that wouldn’t hinder them even if they were stupid to technology.
The rest, he says, was their approach to marketing.
Since they were founded in the tiny country of Estonia, they knew they needed to have a global level of thinking to get the amount of customers they needed to be successful as a low-cost CRM solution.
But on top of that, they were accepted into an incubator program in 2011 which was really valuable for them to learn from others about how to do growth.
Pricing at a Global Level
From the very beginning, they knew they had to price for international sales since Estonia didn’t exactly have the size of the market they needed to support a successful SaaS product at a low price point.
While Timo admits that it would have been easier to focus on larger companies and build customized solutions for them, they wanted to fully utilize the possibilities of the scalability of a SaaS company, so they figured out a price point that would be low enough to have someone pick up their product, try it, get it running on their own, and then start paying for it on their own without much of Timo’s and his team’s interference.
Finding Talent in Estonia
All five co-founders are from Estonia. The sales co-founders had known each other for the 10 years prior because they both worked in sales management, and the technical co-founders had known each other for 5-6 years and had already built some other startups together.
With five co-founders, they were able to wear a lot of hats at once and didn’t have to find talent immediately.
However, when the time came, finding local talent was not difficult. Skype was founded in Estonia, and there was already a nice tech scene that was fairly strong by 2010, so in the moment, they had everything they needed.
Selling Sales Software Without a Sales Team
The sales model Pipedrive put in place was mostly just figuring out how they could market to and get the attention of small companies around the world.
For this, they knew they needed to be present in searches and have relevant content. So when they did get the attention of those small business, they would sign up for a 30-day trial of the software and then convert into a paying customer after 30 days if they liked it.
The only touch they had with a potential customer during that process was if they reached out to customer support, but even then, the customer support reps never had any goal of making or closing a sale. No outbound tactics were ever done.
Getting Their First 100 Customers
After securing their small group of paying beta users (around 15 companies), they had a rough time getting more customers.
They had some SEO work done by the brother of one of their co-founders, but in their first months, they’d only get 5-15 new signups per month. (The good thing, though, was that those signups were all coming from different parts of the world.)
For their content strategy, they just talked about how difficult it was to start a startup, getting funding, and early struggles in general. This resonated with their readers.
Within 4-5 months, they’d reached 80 customers, and while that was a growing number, they realized they were still slowly but surely running out of their money. So in 2011, they started applying like crazy to different incubator programs and were selected for a few. They chose AngelPad in San Francisco, which Timo said was key in catapulting them past the 100 customer mark.
The key, he said, was a shift in mindset. Since they said they already had around 100 customers, the question wasn’t simply how to get more customers, but how to solve the problem of getting 100 more customers each month… or each day.
The AppSumo Deal
After getting into the incubator, they did a deal with AppSumo that brought them 2x to 3x the customers they had before it. But along with that, the promotion gave them more buzz and movement in the market, which they desperately needed.
AppSumo put the product into the hands of the right people, so Pipedrive got noticed more and experienced more organic growth from word of mouth.
When a Software Crash Felt Like the End of the World
Three years into the business, they faced a serious struggle with scaling and keeping up the performance of their software as they gained more customers.
In 2014, their software actually fully went down and was totally unavailable to their customers who wanted to use it, and they were scrambling to assess the situation and come up with a solution.
To have the minutes ticking away with nothing happening was really hard to handle, says Timo, even though he could see that everyone was trying their absolute hardest to solve it.
They were only down for about an hour total, but in SaaS, he says, it feels like an eternity because that’s a problem that just shouldn’t happen.
Advice to His 25 Year-Old Self
“Just do things,” he says. “Do things that you feel that you’re good at and that you like.”
“Trusting that your natural ability is good enough to create something beautiful or impressive or great.”
His Daily Structure
- 5:30 a.m. – Wake up
- 6:00 a.m. – Group call with the guys in Europe
- 7:00 a.m. to 8:00 a.m. – Taking his kids to school
- Quick morning workout
- 10:00 a.m. – Hiring interviews until noon
- Afternoon – emails, planning, etc.
- 5:00 p.m. to 6:00 p.m. – Goes home
- Family time
Two Must-Read Books
For sales, Timo recommends Albert Gray’s The Common Denominator of Success because it breaks down something that he’s seen contribute to success more than anything else… whether it’s transactional or B2B type sales.
For management, he recommends The Leadership Formula because it has everything that’s important to management in one small book and it’s left out all the fluff.
Resources from this interview:
- The Common Denominator of Success by Albert Gray [pdf]
- The Leadership Formula by Sven Berg
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