I’m a solo runner. While I regularly get asked to go on runs with other people, I almost always decline, as one of my great joys is to run alone.
There is one exception – I love to run with CEOs and founders of companies. There are some great stories about the outcomes from these, like my runs with TA McCann that resulted in our investment in Gist. I’ve run marathons with TA, Matt Blumberg (Return Path CEO), Matt Shobe (FeedBurner co-founder), Herb Morreale, and a bunch of people including my partners Jason and Ryan.
My favorites runs are the impromtu ones with CEOs like the one I did last night with Matthew Bellows (Yesware CEO). Earlier this week, Matthew sent me a note to see if I wanted to go for a run just before a dinner we were having together with Bart Lorang (FullContact CEO). My running goal this week is “three runs of any duration” and by Tuesday I knew the dates were going Thursday, Saturday, and Sunday. So I said yes and we scheduled it at 5pm – after my last meeting, but just before dinner at 6pm.
We met at my office at 5pm. The sun has gone down in Boulder by then at this time of year, but Matthew looked ready to go in his red running jacket and sweatpants. We walked down the stairs to Walnut and were blasted with a gust of cold wind. We headed up the Boulder Creek Path leading up to Canyon and out of town, straight into the cold wind.
We talked non-stop. He had a few things on his mind and I gave him feedback. As the minutes unfolded, I noticed I was doing a lot more talking as I told a few stories to underline my points, but it could have been that he was enjoying just plodding along at my slow pace, enjoying the run.
At the turn around point where the Creek Path starts really heading up the canyon, we stopped for a moment and looked around. Matthew has spent a lot of time in Boulder, including a two year period earlier in his life, and he emits the glow of someone who was touched by living here and always loves to be back.
The trip downhill with the wind at our backs felt a lot faster and before we knew it, we were back at my office. Matthew was going to head back to the hotel, shower, and change but I reminded him we were in Boulder so instead we just walked over to Bramble & Hare and hard dinner with Bart, which was awesome at many levels.
Matthew – thanks for another great CEO run!
Let’s start with a brief history of my investment-led fight against the perils of spam and my never-ending love of SMTP.
We were investors in Postini and my partner Ryan sat on the board. It transformed my life – with one minor change of an MX record some time in 2002 all the spam in my inbox disappeared. Well – it disappeared before it got to my inbox. Or even my server. The awesomeness of Postini was that it was the first cloud-based email anti-spam solution. And it was a beautiful thing that Google acquired in 2007 for $625m.
One of the benefits of our investment in Postini is a life-long friendship with Scott Petry. Scott is the co-founder of Authentic8, which we are also investors in. Scott also sits on the board of Return Path, which is run by another life-long friend Matt Blumberg.
Scott worked at Google for three years after the transaction for Dave Girouard (who used to run all of enterprise for Google and now is CEO of Upstart and on the board of Yesware with me) integrating Postini into all of Gmail’s infrastructure. We continued to use Postini as our spam filter (in front of Gmail) until Google transitioned all of Postini into the Google apps service.
You get the picture. There’s a nice thread through all of this SMTP, email deliverability, and anti-spam stuff in my world, both in investment and relationships. So I generally don’t think much about spam since in the past it just disappeared, or well, never appeared in the first place.
When I came home from my one month sabbatical in Bora Bora, I archived all the 3200+ emails in my inbox. If you missed my vacation reminder during that time, it said:
I’m on sabbatical and completely off the grid until 12/8/14.
I will not be reading this email. When I return, I’m archiving everything and starting with an empty inbox.
If this is urgent and needs to be dealt with by someone before 12/8, please send it to my assistant Mary (firstname.lastname@example.org). She’ll make sure it gets to the right person.
If you want me to see it, please send it again after 12/8.
On Thursday, 12/4, Amy decided to scan through her email so I went to the business center at the St. Regis in Bora Bora with her and did the same. I simply started at the top and “read / archived” each of the around 3,300 emails (using the “[” shortcut). I’m a fast reader so I skimmed the emails I cared about. Mostly I just played a video game with the [ key.I might have had a tropical drink while I was doing this.
I didn’t respond to anything and just ran this drill again early Monday morning to finish up. I then turned off my vacation reminder, had Inbox Zero, and got started again.
Yesterday, I had a weird feeling that I’d missed something that I heard about in another email thread. I was procrastinating from working on the final edits to my new book Startup Opportunities (yes – I’m doing that some more right now, but I’ve got a nice empty day in front of me) so I randomly checked my Spam folder in Gmail. I never, never, never do this so I was suprised when on the first page I saw a legitimate email. I opened it, clicked on Not Spam, and scrolled to the next page, where I saw another one. And another one.
I had 5,500 messages in my spam folder since I got back on 12/8. I went through all off them – it only took about 10 minutes. I found 39 legitimate emails. Not notifications, not email newsletters – but real emails sent to me by people I often get emails from. Here’s a screenshot of the legit ones.
I did my dutiful work and hit “Not Spam” on all of them. I was perplexed and talked to my friends at Return Path who gave me some feedback.
This morning, I had 433 messages in my Spam folder. This time, they all looked like they should.
I’m hoping that this was only a temporary glitch in the matrix. However, I’ll be checking my Gmail spam folder on a daily basis for a while. Boo.
On Monday we had a Foundry Group portfolio company sales summit. We are fortunate in that we’ve got a bunch of amazing sales execs in our portfolio, including several CEOs like Howard Diamond of MobileDay and Matthew Bellows of Yesware who have long histories selling and building sales organizations.
The “enterprise sales software ROI analysis” as a selling tool comes up over and over and over again. And most people blow it, or try to bullshit their way through it, or put together something that is clearly not credible.
So I asked Matthew how he did it at Yesware. Following is his story. Oh, and if you are a Gmail user, check out Yesware.
After spending nearly 20 years selling startup software and services to big companies, I can safely say I’ve seen thousands of “Return on Investment” (ROI) slides. It’s the go-to slide for every enterprise technology salesperson, illustrated with a 4-8 table row, predictably showing that the service in question will pay back the required investment in 6-12 months. Never more (who can wait?), never less (unbelievable).
And like most startup business plans, ROI slides are almost always fake.
The salesperson or their marketing department has no experience to draw on or data from which to extrapolate. Moreover, there’s no accounting for the time value of money, the customer time required to deploy the service, or the risk of time wasted if the deployment doesn’t go well.
Occasionally, a few of the numbers on an ROI slide are based on a previous deployment of the technology. In the rarest cases, the slide has relevant and reference-able data that a potential customer can apply to their situation.
Because of the problems associated with software ROI analyses, we waited a long time to build one at Yesware. And we still failed the first two times we tried. Along the way, we learned that a decent, defensible and compelling ROI analysis requires two key components:
1. Reputable, reference-able customers: The first time we tried to build an ROI slide at Yesware, we anonymously evaluated the data of 40,000 salespeople across a six-month time frame. We were looking for evidence that the people who were using Yesware more actively were making more money than inactive users. Although we found out some great stuff about email open rates and times, and our ROI results looked great to us internally, when we talked to prospects, they were skeptical. Companies, products and industries are so different. No one felt good about applying a broad survey to their specific situation. Lesson learned: Unless a reasonably well-known company is willing to publicly testify to the specific numbers you are showing, you are skating on ice that’s too thin.
2. Identifiable benefits: The second time we tried to build an ROI slide, we worked with one well-known company, analyzing their email and Salesforce.com data. We were blown away by the results – a 40% increase in sales productivity between the active and the inactive Yesware users. It was almost too good to be true.
When we presented the findings to the partner company, they were ecstatic. Not because of our results, but because they just had the best quarter in their company history. They were happy to acknowledge that Yesware had something to do with their success, but a successful product launch also played a big role the 40% increase. Lesson learned: Accounting for your benefits should be easy for both the purchasing manager and the finance evaluator to measure. There shouldn’t be too many variables baked into the results.
We tried again, and this time we got it right.
In our most recent ROI efforts we compiled data from three separate companies to uncover the specific benefits their sales teams have achieved using Yesware. These are all well-known companies that our prospective customers can call to learn more – Acquia,Mimeo, Dyn, and WeddingWire. Each is a leader in building modern sales teams, and has offered to be a reference for Yesware.
With this kind of dataset, a simple survey can reveal incredible results. We discovered that on average, sales teams using Yesware:
- Grew new business (including upsells) by 25%
- Improved response rate by 32%
- Improved overall call connection rate by 32%
There are certainly ways to make our ROI analysis better: We will continue to gather a bigger dataset both in terms of customers and salespeople. We will get data from companies outside the USA. And we will keep trying to better tease apart the various contributing factors to changes in productivity.
But overall, we’ve finally cracked the code on a decent, defensible and compelling Return on Investment analysis. I hope this guide helps you create your own.
Yesterday Yesware announced that Battery Ventures led a $13.5m round that we participated in. A few days ago Xconomy wrote a great article about the very first Yesware board meeting on April Fools Day, 2011. When I reflect on the journey of Yesware over the past 2.5 years it’s a pretty awesome example of a company going from a seed investment with three founders (Matthew Bellows, Cashman Andrus, and Raj Bhargava) to a rapidly growing 40 person company.
On 4/1/11 Yesware had a vision, a crappy prototype (that we threw away immediately after the financing), and a huge obsession around a vexing problem that no one was addressing effectively. Today they have over 300,000 users, a broad product set that includes a recently released deep integration with and between Gmail and Salesforce, and a leadership team and culture that is clear about what it is trying to accomplish and is true to itself.
In March, I wrote a blog post about Shifting My Focus To Scaling Up. When I look at our Foundry Group portfolio of over 60 companies, I see many of them in two distinct scaling up phases. The first are companies like Yesware that are rapidly growing revenue and customers, are in the 30 to 100 employee range, are dealing with balancing resources to accomplish their goals, but have an incredible amount of open ground in front of them. The second are companies like Fitbit that are clear leaders in their market, are on the 100 to 500 person ramp, and pacing the innovation in their market segment. Many of them are companies that aren’t overhyped because they are Silent Killers, a particular type of company we love to fund and work with.
Yesware has now shifted from the startup phase to the scaling up phase. There’s an entirely new level of organizational development, different set of challenges, leveling up of leadership and management skill sets, and massive opening of new opportunities given the resources that the company now has.
I find this a particularly exciting time in the life of a company. And a very challenging one. Fortunately, Matthew continues to surround himself with amazing people, such as his first outside board member, Dave Girouard, who recently ran the entire Google Apps business and is now CEO/founder of Upstart and his newest board member Neeraj Agrawal from Battery Ventures.
Plus, Matthew has a bunch of peers in our portfolio to talk to. We are together with many of them today in another Foundry Group summit – this time for full executive teams across our portfolio right in the middle of Denver Startup Week. Like all of our internal events, our goal is an extremely high signal to noise ratio. We leave the pomp and circumstance to others.
The enormous and powerful conversation around “startups” will continue. But as I turn more of my attention to “scaleups” I believe the next phase is even more powerful.
I’m spending the day working at Yesware. I’ve been an investor from inception and love what this company is doing. I also love the culture – I wrote about it in my post The Monastic Startup. If you use Gmail and Salesforce and are not also using Yesware, take a look at email for salespeople right now.
It’s an atypical day for me. I was supposed to be in DC all day today and tomorrow. I had full days of meetings, including two Startup Communities related events – one with the World Bank and one with a Congressional Caucus on Innovation. I had a few company meetings along with some stuff I was exploring. And I was going to drop in on 1776 and check it out.
Congress decided to shut down for the week because of the pending snow storm so the two events I built my trip around (the World Bank and the Congressional Caucus) were cancelled. So I decided to punt on going to DC and stay in Boston. I decided to have a “work at one of the companies I’m an investor in” day and get caught up on some stuff.
Last night before dinner I had a phone call with someone who gave me a great metaphor about “filling up your gas tank.” We were talking about the introvert / extrovert dynamic and how always being in “give / support mode” drains an introvert like me. He suggested that I make sure I do things on a daily basis that fill up my gas tank. Yup – that makes sense. But then he said something that was a new thought to me.
“Encourage everyone you work with to put some gas in someone else’s tank every day.”
It’s totally consistent with my give before you get philosophy, but it’s got a nice twist. Rather than being random, be deliberate about doing it, but random about how you do it.
For example, when a friend of mine had testicular cancer last year, I called him every day for 60 days during his chemo regimen. While I only talked to him every two or three days, I always left him a message. I was filling up his gas tank a little each day.
Another example is that I try to randomly call a different CEO of a company I’m on the board of every day. I don’t manage to do this every day, but I try. These are short calls, often voice mails that just startup with “Hey – thinking of you – no need to call me back.” I then often offer up an observation about something positive I see going on.
I like to be impulsive when I’m on the road. After lunch (I took out the Yesware team and yes, I paid) I stopped by Kinvey‘s new office on 99 Summer which is around the corner from Yesware. Kinvey went through TechStars several years ago and while we didn’t participate in their venture financing, I love the company and especially the CEO Sravish. I surprised him, gave him a hug, got a tour of the place, grabbed a few tshirts and some stickers, and headed back to Yesware. He sent me a link to a new post they just did titled The Boston Startup Map: Visualizing the City’s Tech Scene so I could do more random drop ins if I wanted.
These aren’t programmed, scheduled calls in that I’m being deliberate in advance. They are just me filling up someone else’s gas tank with some random positive feedback in the midst of an otherwise chaotic life. And it makes me feel good.
So – go fill up some gas tanks today. And tomorrow.
I’ve been using Yesware since the first alpha release. While I’m theoretically not a salesperson, I believe every CEO and professional plays the role of a salesperson. And many people, especially in young, fast growing companies, are salespeople even if that’s not their title. As far as I’m concerned salespeople are the unsung heros of most US companies.
The brilliance of Yesware is that it was conceived and built by salespeople, for salespeople, from the perspective of living in email. Most salespeople I know live in email, hate their CRM system, and are constantly switching between the two while bemoaning the idiocy of the whole thing. The whole CRM thing is for sales managers who want to actually track what the salespeople are doing. But it’s all about email for the salespeople. And that’s what Yesware is focused on.
As a seed investor in Yesware, it has been pretty awesome to watch the product evolve and and the user growth spread to over 40,000 users through word of mouth only. As a result of our word of mouth approach, the product has to be great and responsive to the users.
As an investor, I’ve encouraged the team to push a new release once a week, focus on both registrations and daily active users, and instrument every aspect of the product so we can see what’s happening at a very granular level. While Yesware is only available for Gmail, it’s been an outstanding platform to iterate aggressively on and get this kind of feedback. Now that Yesware has nailed the use case with the seed financing and has a serious user ramp happening, it’s time to go after Outlook.
I’m psyched for the Yesware team and proud to be involved with them.
Last week at our Yesware board meeting, we talked about the idea of “the monastic startup.” This was a phrase that Matthew Bellows, Yesware’s CEO, came up with, and it characterizes the culture they are creating at Yesware. It embodies two concepts:
The monastic startup is a place where engineers do the best work of their lives. This place involves work with long stretches of uninterrupted time.
This idea sung to me. As I sit here in front of my 30″ monitor, working away in the peacefulness of my office in Boulder, surrounded by 10 of my favorite people (the gang I work with), listening to Lady Gaga, and connected to thousands of others via the computer in front of me, I realize that I long for more “monastic startup” time.
When I think about the culture of many of the companies we are an investor in, the definition of the monastic startup rings true. Oblong immediately comes to mind for me. Kwin Kramer, Oblong’s CEO, wrote an awesome guest post on TechCrunch over the weekend titled The Next, Next Thing. Oblong is one of the most monastic startups I’ve every encountered (using the definition above) – even Kwin and his partner John Underkoffler still spend long stretches of time writing code as they do the best work of their lives.
In my networked world (vs. hierarchical world) a monastic approach works amazingly well. I’ve started experimenting with more non-in person tools to increase the quality of communication across my network, while preserving a level of “monasticness.” The Yesware guys use HipChat for persistent chat. I’m looking for others – suggestions? I’m especially interested in things that work well across organization and communities.
If the phrase “monastic startup” rings true to you, what are the other characteristics that you’d expect to have in this environment? And what tools would you use?
Recently my partners and I spent some time discussing three of our recent investments – Spanning, Yesware, and Attachments – which are each applications built on top of Google Apps. Specifically, they are built for Google Apps and available in the Google Apps Marketplace or the Chrome Web Store.
Each company is going after something very different. Spanning is all about cloud backup. Attachments is all about getting control of your email attachments. And Yesware is “email for salespeople.” However, they have one very significant thing in common – they are all deeply integrated into Google Apps. In our thematic definition, they are in the Protocol theme.
The Google Apps ecosystem snuck up on us. We have all been hardcore Google Apps users for the past year and are psyched and amazed about all the easy integration points – both into the browser and the various Google Apps. In the past, we would have been more focused on “email as a datastore”, which would have resulted in multiple platforms, including of course Outlook / Exchange and IMAP. However, the pace of iteration on top of Google Apps, and the ease of integration is spectacular when compared to other platforms.
Notably, when the choice of building for Outlook vs. Google Apps comes up, many people who I know comes down strongly on the side of building for Google Apps. Their mindshare for cloud based business apps far outpaces Microsoft. A decade ago, Microsoft made a huge push with Visual Basic for Applications and the idea of “Office as a Platform” and – while plenty of interesting tech was built, something happened along the way and the notion of Office as a Platform lost a lot of visibility.
Theoretically Microsoft’s huge installed base of Outlook / Exchange users should drive real ISV integration interest, but the friction associated with working with Microsoft seems to mute the benefit. And – if you’ve ever built and tried to deploy an enterprise wide (say – 100,000, or even 1,000 seat) Outlook plug-in – well, I feel your pain. It’s possible that with Office 365, Microsoft will re-energize focus on Office as a Platform, but I haven’t seen much yet.
While Google has been building this all very quietly, I’m extremely impressed with what they’ve done. Companies like Yesware are able to release a new version of their app to all users on a weekly basis. For an early stage company that is deep in iterating on product features with its customers, this is a huge advantage. And it massively simplifies the technology complexity to chose one platform, focus all your energy on it, and then roll out other platforms after you’ve figured out the core of your product.
I expect to see versions of each of these products expand to work with Microsoft – and other – ecosystems. But for now, the companies are all doubled-down on Google Apps. And I find that very interesting.
I continue to be obsessed about email – it’s by far the most significant comm channel I use. And – it’s accelerating, not decelerating, especially as it proliferates across devices as well as other comm channels.
I’ve watched as many of the companies we’ve invested in use email and CRM systems (such as Salesforce) as though they existed in separate parallel universes. I’ve listened to the endless complaints about the complete and total lack of real integration between the two. I’ve watched the workflow, even from very disciplined sales people, and shaken my head in total bafflement at the lack of integration and the perverse contortions the sales person goes through to try to make the two systems work together. And – as I’ve continued to manage the enormous flow of email I get in Gmail, I’ve been searching for more efficient (and effective) ways to deal with it, besides just ignoring it which, while efficient, wouldn’t be very effective.
To address this, we’ve invested in a new company called Yesware.
At the beginning of the year I was kicking around some ideas with my long time friend Raj Bhargava. Raj and I have done a bunch of companies together since we met in 1994. He acutely felt this problem in his most recent company StillSecure as he dealt with the garbage in / garbage out problem of his CRM system. Over a few months we bounced some ideas around until one day he mentioned to me that he’d run into two entrepreneurs in Boston – Matthew Bellows and Cashman Andrus – who were working on something similar. Over a few weeks everyone connected, Matthew, Cashman, and Raj decided to merge efforts, and I agreed, along with Rich Miner at Google Ventures, to provide a seed financing.
A few weeks later we had our first board meeting in Google’s NY office where I discovered Zico Coconut Water. Matthew and Cashman showed us a detailed product road map along with the MVP they were working on and planning to ship in 30 or so days. We spent the entire meeting talking about the product (I’m sure Matthew had other slides but I don’t remember them.) While the first MVP was interesting and an extension of the ideas they had started with, it didn’t feel right to anyone in the room.
Rich and I both suggested – in different ways – that the team delete what they had done so far. We felt they were falling into a classic startup trap as they’d spent three months raising their round and were now anxious to get a product out the door. But they hadn’t spent much time in the previous three months thinking deeply about the product, so their plan was an awkward continuation of their demoware and concept pitch.
At some point in the meeting I said something that Matthew has told me stuck with him. I said, in my most Yoda-like voice, “slow down to speed up.” The seed round was an ample amount of money for them to go for at least a year. Their vision didn’t have an expiration date. Sure – other people were likely working on similar stuff and getting to market fast is always important, but getting to market with something compelling is even more important.
The team heeded the advice, stopped trying to ramp up headcount to work on extending the demo, deleted the product roadmap, and started again. The progress over the next 60 days was awesome as they went very deep with real salespeople on the problem, simplified their product vision, and defined a very clear MVP, release plan, and path to a revenue producing product.
At the time we made our investment I asked Matthew if he wanted me to blog about it. He didn’t – he saw no reason to talk widely about it until the company had shipped something interesting for people to use. That time has come – if you are a salesperson and use Gmail in Chrome, give Yesware a try. And give us feedback.