“5 Dos and Dont’s Lessons From My Bootstrapping Days” Wrike Founder and CEO Andrew Filev (Video + Transcript)

Starting a company can be daunting, exhausting, and expensive, but with the right focus and idea – extremely rewarding; take it from Andrew Filev, Founder and CEO of Wrike. In this session, he will outline the do’s and dont’s that he learned bootstrapping Wrike. Where it makes sense to invest your precious resources when to outsource, and how to save yourself money without cutting corners.

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Andrew Filev | Founder/CEO @ Wrike

FULL TRANSCRIPT BELOW

My name is Andrew Filev. I’m the CEO of Wrike. I wanted to give businesses that visibility, complete visibility into what’s going on. When you’re running something at scale, at least 70% of that work is repeatable. I need to be able to act quickly.

And to do that, I need that information. The whole category and the whole market is a hundred times bigger. We continue to grow rapidly. There’s always both opportunity and need to continue to optimize and evolve. It’s never the end of the journey. All right. Good morning everybody. How many of you here are fellow founders? Raise your hand. That’s amazing. I affectionately call you fellow grinders. I’ve been running Wrike for about a decade right now, which dates me. And about half of the journey I bootstrapped the company, so there are plenty of lessons learned. I’ll try to summarize some of them in the short 30 minutes that I’ve got. I’ve got plenty more. So feel free to come back after the session and later half of the journey we actually raised money from some of the world’s best investors. So I had the pleasure of having on my board he was in Box and DocuSign and many other iconic SaaS companies. And then in the last chapter that we started recently, we actually raised money from the biggest and most successful software investor in the world, Vista. They got $40 billion dollars of money under management.

So incredible journey. I’ve been humble to go through that. It had plenty of ups and downs. Those of you who’ve been doing it for quite a while know that it’s never smooth. It can be up into the right, but at large, at micro you always have your surprises. You got to learn to cope with them and kind of grow a little bit of a thick skin as you go through a journey. So, a couple of words about myself, right. I’ve been in the Valley for about the same time that I’ve been building Wrike. Fun fact, actually, the first time world saw Wrike was in Paris, though some of you might remember there was a corner for, it’s called raise your hand. All righty. I date myself even more. So anyways, I presented Wrike to the world there.

Got the award for the best BDB start up. That was the first time the world officially seen it. So it’s good to be back now after 12 years and with some, some good traction under the belt. And as I said, we bootstrapped for about six years and when we raised our first institutional capital, we already had thousands of paid customers. So I had our pleasure to do Boston. So first question, why bootstrap in the first place? I think for me it was a, what you could call her mutual decision. So as a person who teleported into the Valley and around Oh six Oh seven I didn’t have any. Your typical Silicon Valley profile. I was not our ex Stanford ex Googler kind of guy. I did have a business experience before, but it didn’t count. I also used to say funny things.

I still do. And then there are other part of the story was that our market was a bloodbath. Eight of it is, it was a, and it, it will continue to be, they’re short of that stories that our product is potentially applicable to every single company in the world. And so there are a lot of other companies that are going after the same market. They’re, this is from the smallest of the startups to the largest of the corporations. And for their venture investors, it’s a very, very hard bet. It’s the market that’s not differentiated enough, at least at the surface unless you’re deep in in it. I was deep in it so I knew why my product was better. Otherwise I wouldn’t start the company, it would be suicidal, but it wasn’t obvious for investors. And they’re always looked for like the next step of the traction.

You know, you get to your first revenue and they’re like, okay, could you be a little bit bigger? And then you get to the next site and then can you be a little bit bigger. And then, you know, like could you get through 10 million error? You’ll probably collapse. And then you get, well maybe you could get, could you, could you not get to 20 you get there and by the time they wake up you’re like, Oh sorry, I don’t know. I don’t want your money. Right. So it’s, and again, it was a good decision on the investor side. The market is too competitive for them to kind of know it at the surface level. And then on my side, I didn’t want to spend all the time in the world just fundraising. I was actually 10 times more passionate about solving customer problems. And so while I did kind of dipped into fundraising and early years, I was always more passionate about building something that solves customer pains and also building the right team behind it.

So my first lesson is it related to that your customers are your most important investors. And that’s the lesson that I learned through bootstrapping and that I passed on to my team. And that’s why for us or for our company, those bootstrapping years were invaluable. We now again operate with their largest software investor behind our back. But we build the right culture from the day one and that stays with us as we continued to grow as we have hundreds of employees all over the world. That culture stays with us. And as if you, if you grow companies for quite awhile, you, you know and understand the value of the culture, it’s extremely hard to change. So what you sat up from there, get, go cherish that and, and, and, and grow that. So the lesson number one is again, I, I was more leaning towards customers in the bootstrap and by itself forces you to treat your customers best.

And a couple of things there that, that helped me. So I was personally our first support rap and while it sounds kind of funky, you know, now running the company you would have like 50 people in support and things like that. But in those early days while it was made, it was done out of necessity. Looking in the rear mirror, I think this is one of the best thing that could happen to us cause my background is engineers. So by default I’m leaning more towards product and you know, user interfaces and all those school technologies and things like that. But being on the front line with the customer forced me to understand their pains and joys in the most kind of visceral way. I felt their pain. I’m a very affectionate person. And so that helped me even resolved doing separate stand alone customer discovery, customer research that helped me have that contextual understanding of what the customers need need the most.

And then whether you do that or not, I I’ve, it’s extremely important that you spent that extra time with the customers. First of all, when you just started your company, that product market feed is literally critical. Think of it as they’re of like this second derivative of your growth trajectory are. So slight changes in that compounded over five years would mean whether you’re sort of Buster billion dollar company. So it’s extreme and those that, that, those things are set in the early days through the product market feeds. So that customer discovery is extremely important and very simple advice there. Is that a once a week or give a call to a customer who either loves you or hates you, right? And mixed both, right? So, so cold to your best customers and understand why did they buy you, how are they using you, what do they like and why did the PQ rather than competitor.

And then also called the customers who did not either in their upfront, so kind of look through your funnel or they kind of picked you and then churned and do one call a week. And that knowledge will help you. You will continue to build the understanding of your customer base. And the more calls you do, the less biased it will be. And so that will set a good foundation for you on the, on the product side. And then the other lesson from there, a little bit of a counter lesson is that you should think if you’re building the business at scale. I knew that I wanted to build a large company, so while I was bootstrapping the business, I was not building kind of our sideline for for income. I was building a company. I will do them in product that I wanted literally millions of users to use and if you do that, you need to avoid the trap of becoming a custom dev shop for a single or a large customer.

Because our go to market, we were spared that, but if you go to market is very high touch sort of enterprise field sales, you will be under incredible pressure in the early days to become that custom. They’ll shop for your, your largest customer or your largest product and so it will take a lot of God to avoid that trap and still try to force sort of less biased approached the product market fit. The other thing, and this one I did step into is that when I was in the very early days, one of their fellow very successful founder told me that he doesn’t believe much in partnership and I didn’t understand this at the time. And so in in the early days, there’s a tendency to believe that, Oh, if you just list your product here or there, it’s going to make make your day. So we invested over the years into multiple partnerships that ultimately brought us literally nothing.

And all of them had great promise premises. Like in one case it was a company with where we were the first and only at least in productivity category and they had like a 50 million users or something like that. But, but there are three kids that there was no feet with the audience. And again, going back to that product market feed, unless you have that great feed, it doesn’t really matter. And I have at least four stories like that for you. So again, this is nothing that I say is an absolute truth. I know there are stories that are completely opposite of mine. I’m just sharing, sharing my story. So my story are, one thing I learned is that your best bet is is yourself. Once you grow to a certain scale and size, then partnerships are extremely important. We have our full blown BD team, we work with strategics, we work with smaller companies, we work with workers, integration partners, OSI.

So once you get the scale, partnerships become very important multiplier. But when you’re small, I would take a hard time betting on like a single partnership as there as the main driver. And then the other three that I’ve seen with other people’s companies is sometimes founders are a little bit scary to test, to truly test the market. That’s kind of a little bit of a fear of rejection. So some companies go too far with just the freemium model. Freemium model is amazing too to get to spread the word out, but it also delays the time when you truly test whether or not your product delivers the value to your customers. So this one we were pretty like, we had our pretty capitalistic philosophy you write from the day one and we said, Hey, if our product delivers value to the customers, they should be willing to pay for it.

And we went even further back in the time when I started the company, one of their most popular project management tools was base camp and so it was all the rage. All the media wrote about it. And so people ask me things like, Oh, why? Why is your product of, why do you charge more than base camp? My answer was very simple. We deliver more value, right? People ask me to some weird questions like why is your product different than base camp? I was like, well, because there is a base camp, if I like, why would I build something similar? There’s already not just the base camp but about hundred of clones that looks exactly like it. I like, I’m not in that sort of business. I’m building something that solves a more scalable problem and has a different different audience and has, in my opinion, more value for the, for the Nordion.

So just avoid that freemium trap of people. The sooner you get that feedback loop, even if it’s harsh, they’re quicker, your learn and they’re the bigger, you’ll ultimately become a lesson. Number two, a failure comes from anywhere. Success always comes from people. So in terms of that you can come from diamond, you can have incredible idea and fairly good product to just at the diamond might not be right. It could be product market feed, it could be something else. But your success, you can all at least I can always trace to the right people in the company. And so I always over invested in hiring the right people. My hiring playbook is very simple. I’ll share it with you. It’s not proprietary. I love working with smart people and by smart I just, I don’t mean just like you know, academic IQ, I mean also kind of street smart and being able to apply that smarts, the work.

I love working with people who are fired up and motivated and can sort of go that extra mile and who become the have that sort of good energy around them who can work with you. And multiply your energy. And then I like working with people who get shit done. I’ve had unfortunate pleasure of interviewing people who knew how to talk the talk and but did not, did not kind of know how to walk the walk. And I’ll, I’ll share some tricks on that side. And then my personal one, they’re one of the defining characteristic of a good Wriker is that high ambition but low ego. So we prefer to not hire jerks. They, they become toxic for the company. And so even our most senior people are eager to learn. I just had our call for example, was my CRO yesterday and we were discussing some, some adjustment to the sales model.

And he was the first to say, Hey, in all my career I’ve never done it, but it’s an interest in idea. I’m gonna kind of seek out some benchmarks to see if we should try. So you should look for people who are, regardless of their level of seniority, are always eager to learn, get the feedback and can, can take it constructively. And then so in terms of getting an understanding, if, if people have, if people have those qualities and not specifically can they walk the walk a couple of tapes, one of for almost every position I like to do deep dive, the form of that deep dive might be different. So for example, if it’s our content marketer, we’ll give them a written task. If it’s our a marketing, if I’m hiring a see more, it will be very different. I will ask them very better.

I still will ask them very specific question. We’re very transparent companies, so I’ll give them under NDA access to any data they need. But then I’ll, I’ll, I’ll ask them to come back and whiteboard with me and present the solution to a fairly tough problem. And, and I’m not looking for a perfect solution. There’s no, it’s like it’s not a multi choice answer. There’s no right or wrong, but I will be looking to understand how they think, how they operate and, and not just on the idea level, but also what’s their management style. How do, how do they operationalize things even that doesn’t always solve it. Again, I had unfortunate pleasure of doing a couple of references. Were you extremely impressed by the candidate and you call their previous employer and they tell you, yeah, they’re telling a great story. They’ve been telling this story for me for six months straight and nothing was done.

That’s a rare occasion, but I did have at least three or four of those and so, so be be careful, I still have big delivered that the references are one of the most important parts of the interview process. At least that they’re referenceable lemme like your individual contributors might be harder to reference, but your executives, they should be very referenceable. And then when hiring that is, that last thing is especially common when people are coming from larger companies. So it’s not about them, it’s more about how they used to operate. So they may be very smart, smart, and Goodwill and it just, it’s a different culture in a very large company. They’re hired to run the existing playbook rather than do a transformation, build the playbook. And so if you’re hiring somebody who only worked at large companies, one they can make a great hire but be careful and figure out your, your, your way to test that culture fit.

Cause you don’t want it to kind of to learn three months in that they, they’re operating at a different cadence. And then in terms of selling your jobs, you have something unique that nobody else has a, there’s a value of equity is you should definitely hire people who are fired up by emission. They really want to join the company, they want to take charge and they want to take their bigger equity and participate in the upside. And a lot of them also come for career growth. So for example, they might’ve been a director level person at LinkedIn and there might be another thousand directors and then they come in into your company to be your next hat off marketing a product or something like that. So for them it’s an incredible opportunity and for you it’s an opportunity to hire somebody who on one hand seen the movie, but on the other hand you can still attract them. With your, frankly, smaller comp package than they got before.

Right. So next lesson are, use your size as an advantage. As I was briefly mentioned, I train in Brazilian jujitsu, right? And my coach who is our 12 times world champion, his favorite phrase is conquers all right? So it’s not about overpowering and you definitely cannot overpower Oracle, SAP, Salesforce, Google, what have you. Right? So your sizes, your advantage. In my first company before I had and printed on the wall, the word velocity printed three times. So like velocity, velocity, velocity, that’s something that larger companies don’t have. Even at the right scale, right? Was 800 employees. I still try to keep that high velocity startup culture, but I do know that we don’t pivot, move and adjust as fast as when we were a 10 people company. And we’re also frankly not interested in some small opportunities. Right? So there are some opportunities where I know we could make $1 million, but at our scale that doesn’t make or break our annual growth plan.

So if I distract my team on that small opportunity, I actually, it’s not a good thing I can miss their, the bigger goal. It’s very hard to maintain high growth rate at a scale, so you’ve got to stay very focused and so there are plenty of opportunities on the sideline both in terms of product and in terms of go to market that larger companies are North and shall not be interested in. And if you tap into those opportunities, it gives you a very good growth rate in it. Also frankly sets you up if you’re interested in exit sets you up for good exit because then if net opportunity tends to be bigger than every antibody expected, then the easiest way for a large company to source it is to acqui-hire or acquire you and kind of get that into internet portfolio. And then when you’re looking for those opportunities, definitely focused on something that’s differentiated at you’re.

Again, you’re not trying to out Microsoft Microsoft that that’s suicidal, don’t, don’t, don’t do that. So think about things that are truly different. Let’s think about things that customers are seeking out and not finding an existing vendors and use that to your advantage. And then I’m a big believer in execution as a big part of our success. Even in my early days, I learned very quickly that the ideas are dime a dozen. I literally woke up everyday was a new idea and my business partner back in the days taught me that it’s not productive. Like you got to stick to something, you’ve got to focus, you’ve got to operationalize and you gotta get to those goals. So we’re, I’m very big on goal setting. I could literally talk for 30 minutes about the importance in threes and chiefs around that we use objectives and key results.

If you never heard about what it is, please read up on that will save you years of your life. And I’m very big on measurable goals. I will keep pushing my team until they come back with something measurable so we can set up sort of our progress tracking for that. I’m also a big believer in templatizing and automating the work. There’s only so many hours in the day. If you get the scale, I know a good solution for you, you can guess what it is later. And then it’s also extremely important for for me is there was a founder, especially in the early days, to get visibility into our most important initiatives. I’m not a micromanager, but I like to understand my business and I like to know what’s going on a second better connected people and I can adjust early rather than late lesson number four. I’m an AGL guys through and through.

Raise your hand if you remember what’s extreme programming. All right. Again, I dated myself even more so it was the first popular agile software development process. It was kind of kind of funky. You were supposed to program together in pairs but, but it set the set in the motion, that agile revolution scrum came after that and I’m throwing through HL guy, not just in software development but across the business. So I carried that into marketing. I was our first CMR, if you will, for the first eight years. Not officially but I was a big part of building our marketing machine and I applied yearly S kind of engineering and Quanta approach to that. We AB tested everything. We optimized everything that again, art of goal setting is extremely important and I can tell you about some tricks that we did early in the days where we built predictive revenue, the machine that like later there’s, there’s a whole category of tools right now with the company’s trying to do that so that a scientific approach, an agile approach to marketing was instrumental for our growth.

I think it’s foundational for any digital marketing programs that you do and I went as far as literally testing the sales process. I didn’t have sales reps until again, we had thousands of customers and the way I approached it, very unconventional. You’re your more conventional approach. You hire a VP of sales, they hire a bunch of sales reps, you set the comp plans, targets and so on and so forth. I think the couple of folks from customer success, I didn’t give them any foam plan, said, “Hey, here’s a bunch of trials. Go call them. Figure it out.” And I baselined it was the trials that were not given to them. So it was was a pure AB test and I did the math or as I call it, or the proper word would be economics. And it turned out that the money I paid them versus their uplift that they got in conversion and deal sizes, their ROI on that was positive and that’s before they had any sales plans or training or anything like just purely putting them on the funnel made a difference.

And that to me was an answer. And from that point on I did hire proper sales reps and proper VP of sales and CROs. And we’re at the point now when we have more than a hundred quarter carrying reps and very sophisticated machine. But it all started with a very simple AB test. And then last but not least, at some point you got our switch from growth hacking into building sustainable machine that is very predictable in the revenue generation. Right? So, and you will still have to start thinking about things that are scalable. If when you’re bootstrapping you still have to do a bunch of one offs just because your bank account can not go negative. So you still need to be able to make the money and process the payroll. But at some point you got to start thinking bigger and think about how to build things that, that scale and that are predictable.

And last but not least in terms of fundraising, again, I had a very successful journey there as well. Their biggest lesson that I learned is that it’s easiest to raise money when you don’t need it. I know it sounds like a harsh through truth, but it is the case there, investors are not a charity, they come there to make money. So the easiest way to raise this, to come to them and show very provable model of how they can put one dollar into the business and get three out and hopefully it also scales up at least till the next round if you will. It’s not kind of fully saturated yet. So that was my lesson on the fundraising. As soon as I get to that predictability and as soon as I get to that traction, I was able to literally name the terms of the fundraising.

It became my teaser. And even there, going back to that angel thing, it’s something that I personally call angel financing. So every round I did, I raised less than I could and I tried to raise as little as possible like a lot of people try to raise as much as possible. I try to raise as little as possible. If you, look at our revenues size to the amount of capital we raised in burned, we were usually three acts better than direct comparables or competitors. So we built that culture of efficiency that allowed us to in one hand to retain more equity. On another hand, what is it even more important? It just build the right set of economics and the right culture that ultimately worked best for for everybody, for our customers, for our investors, and for our employees.

So I’m almost out of time. Just to summarize, the first and most important lesson is to focus on the product market fit. Talk to your customers, use your agility and velocity to to quickly adjust and navigate. I don’t like the word “pivot.” If I look at our product it gradually evolved over the years. So I like to say that I like rapid evolution as opposed to a revolution. So, those very quick agile adjustment can actually carve your path in a different direction than you originally thought about. Focus on hiring the right people. This will literally make or break the business I told about the good stuff. But there’s also some scars, kind of, earned in the journey. I like some of their toughest things also come from your team. So there I cannot emphasize how important it is to hire the right people up front and invest enough time and effort into that differentiate and leverage your size for that. Invest in what works and test it and do that very rapidly. And then when the time is right, turn that traction into the value. Thank you. I’m two minutes ahead of time.

Published on August 29, 2019

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