Ep. 327: John Mellor is Chief Strategy Officer @ Domo, the company that allows you to leverage BI at scale to empower your team with data. Prior to their IPO, Domo raised funding from the likes of Benchmark, Founders Fund, a16, Greylock and IVP to name a few. As for John, prior to Domo he served as vice president for strategy and business operations for Adobe’s Digital Experience business, driving more than $3 billion in annual revenue. John joined Adobe through the company’s acquisition of Omniture in 2009, where he served as executive vice president of marketing, driving all marketing efforts to strategically advance the industry’s largest standalone web analytics business.
Pssst 🗣 Loving our podcast content? Listen to the start of the episode for a promo code to our upcoming events!
In Today’s Episode We Discuss:
* How did John make his way into the world of SaaS over 2 decades ago and how did that lead to his running a $3Bn ARR business line at Adobe and lead to his joining Domo? What were John’s biggest takeaways from his decade at Adobe?
* Why does John believe that COVID will be a bigger accelerant than any other C-level led initiative? For vendors going through that digital transformation with their customers, what is the right tone to adopt that is both empathetic and achieves business objectives? Is digital transformation a technology challenge or a behavioral challenge?
* How will a 100% virtual event environment impact physical events when and if they do come back? What were John’s biggest takeaways from running Domo’s annual event virtually? What worked? What did not work? On a conversion basis, how did it compare to in-person events? How should we structure content for these virtual events?
* How does John think about the role of leadership in a crisis such as this? What is the right tone for the leader to adopt? Where does John believe many leadership teams go wrong in times such as this? How can leadership teams ensure that a crisis is not self-fulfilling and how can one prevent that mindset?
Ep. 328: Romain Lapeyre is CEO of Gorgias. Gorgias is the leading help center on the Shopify platform, and that gives them a pulse into a large segment of SMBs in particular. They have almost 2,500 customers in segments both struggling (fashion, luxury), and growing (electronics, etc.). They are coming up on $10m ARR but aren’t there quite yet, so a lot like a lot of you, or where you’ll be soon enough.
This episode is sponsored by TaxJar.
SaaStr’s Founder’s Favorites Series features one of SaaStr’s best of the best sessions that you might have missed.
This podcast is an excerpt from Jason’s discussion with Romain. You can watch the full video here.
If you would like to find out more about the show and the guests presented, you can follow us on Twitter here:
Below, we’ve shared the transcript of Harry’s interview with John.
Harry Stebbings: We are back in the world of SaaS. This is SaaStr with me, Harry Stebbings, and we’re diving straight into the show today with a first for the podcast, the first ever chief strategy officer we’ve had on the show. And they do not come more respected and experienced than our guest today, John Mellor. John Mellor is the Chief Strategy Officer at Domo, the company that allows you to leverage business intelligence at scale to empower your team with data. And prior to their IPO, Domo raised funding from some of the best in the business including Benchmark, Founders Fund, Andreessen Horowitz, Greylock, and IVP, to name a few.
Harry Stebbings: As for John, prior to Domo, he served as Vice President for Strategy and Business Operations for Adobe’s digital experience business, driving more than $3 billion in annual revenue. John joined Adobe through the company’s acquisition of Omniture in 2009, where he served as the executive vice president of marketing, driving all marketing efforts.
Harry Stebbings: However, that’s quite enough from me. So now, I’m very excited to hand over to Domo’s chief strategy officer, John Mellor.
Harry Stebbings: John, it is such a pleasure to have you on the show today. I’ve heard so many great things from many prior guests, so thank you so much for joining me today, John.
John Mellor: Oh, it’s a pleasure. Thanks for the opportunity.
Harry Stebbings: Not at all, but I would love to kick off today with it a little bit of background on you. So tell me, John, how did you make your way into what I call the wonderful world of SaaS, and how did you come to be Chief Strategy Officer at Domo today?
John Mellor: I got into SaaS before I knew I was getting into SaaS. It started back in 2003, when I joined Omniture, which was an analytics company founded here in Utah. And they were trying to do the very best that they could for customers in helping them understand what was the traffic like on their website, who was coming, how often did they come back, what did they look like, et cetera. And the most natural way to deliver that information to customers was through an online interface, where we would capture all the traffic, all the information, synthesize it, and just deliver it to those customers via a web UI. And little did we know, we were part of the SaaS movement. It was back when you used different words for it, things like managed software or application service provider. And that was kind of my entree into SaaS.
John Mellor: And that year, when I joined in 2003, Omniture did $8 million in revenue. And we later took our first round of VC money. Then, we took the company public and did a secondary, and eventually, sold it in 2009, to Adobe for $1.8 billion. And at that point, the company was doing a little over $300 million in revenue. And then, I stuck around Adobe for nine years. Adobe was a fantastic experience, and we did about $10 billion in acquisitions and grew that business to $3.5 billion in annual revenue. And that kind of gets us to today.
Harry Stebbings: I have to ask, close to 10 years at Adobe at the forefront of really such a transformational time for the company, John. What were your biggest takeaways from the time at Adobe, and how do you think that time impacted your operating mentality today with Domo?
John Mellor: Adobe was a great experience. That company is just phenomenal. The leadership team there is amazing, and we saw them go through a couple of pretty big transformations. Number one is they didn’t really have an enterprise software selling group when they bought Omniture, so that route to market was something they were very interested in creating. So, we saw them and worked with them to develop that enterprise route to market.
John Mellor: But then probably the biggest transition was watching Adobe transition into the subscription business model with its Creative Cloud product as it’s known today. And going through the process of selling boxed software in stores to selling online delivery of the application, it’s crazy. I think it was 2011 when they did the annual analyst meeting, and they dropped their revenue forecast by $100 million. And the stock popped. We thought, “What in the world just happened?” Clearly, Wall Street and the Adobe team knew the benefit of a subscription business model and the transition into SaaS. So, it was great.
John Mellor: I think in terms of the takeaway that I got from Adobe personally was I’ve always been a strategy person. I’m very interested in the big picture, what’s the context in which we’re operating, how is that driven by macro trends, et cetera. And I would build these nice strategic presentations and go in to the CEO and the leadership team and present these. And the CEO would kind of lean back and say, “Well, John, that looks great. That makes a lot of sense. So, what are you going to do about it?”
John Mellor: And that was a takeaway for me because it taught me that strategy that’s not connected to operations is just not as useful, nearly as useful, as it should be to an organization. So, I think my takeaway was strategy is incredibly important, but until you connect it to what the business is actually doing and the operations, then you haven’t created real change in an organization.
Harry Stebbings: Can I dive in and ask, in terms of kind of the connection of that strategy, how do you create that connection cross-functionally across the company? So effectively, what works, I guess, in terms of your experience in connecting with the individual heads of function to imbue the strategic thoughts that you have to them?
John Mellor: There are two ends of it that I found. One is bringing people along when you’re building the strategy. So, you do your best to win the hearts and minds of the folks that are really going to be involved in executing the strategy once it’s baked. And I’m a firm believer that no single person owns strategy. If they do, then it’s probably going to start and stop with them. So, it’s a little bit of a herding cats kind of situation, where you have to bring people along with strategy, and bring the best ideas from various groups, and do your best to synthesize those concepts into a strategy that people buy into. So, that’s on the front end.
John Mellor: On the back end, the way that we structured the team was that I also ran the business operations team. So effectively, my team controlled the weekly agendas for executive staff meetings. We controlled a lot of how the pieces came together and what were the operational metrics that we built to report up to the CEO. And that drove this cadence of alignment on a weekly, quarterly basis that helped us operationalize what we had bought off on on strategy. And we did that on a rolling annual basis. So each quarter, we would reevaluate strategy and hopefully not change it too significantly and keep it for at least a year. But that process seemed to work pretty well for us.
Harry Stebbings: Can I ask another question related to the connection of strategy to the operations? How do you think about and how do you advise founders on when’s the right time to hire a chief strategy officer and how they know that it’s right for their company?
John Mellor: I look at the evolution of how I got the strategy role at Omniture. I certainly didn’t start that way. I started out running marketing, and then I was running the partner ecosystem. And what happened was you started to see all of the value add that partners were delivering or certain technologies were delivering to our platform at Omniture. And that started to inform our roadmap, things that we would work with partners to build, and things that we wanted to go buy.
John Mellor: So, it evolved into the acquisition roadmap. So, we would go buy companies that had been partners for a couple of years, and we had seen proven value. And it became this connection with the CEO where he and I just had a rapport. We were kind of finishing each other’s sentences, but not in a too much of drinking each other’s Kool-Aid way because that tension has got to exist or you don’t move forward. So, I think the strategic role for a founder has got to be an organic evolution.
John Mellor: And a founder just can’t turn over strategies. Founders are where they are because they’re good at strategy and they have great vision. The strategic role has to be an amplification or a way to put structure around the strategy and tie it down to operations.
Harry Stebbings: Yeah, no, no, I definitely agree with you in terms of being an extension and kind of aligned with the CEO. I do want to dive into kind of the macro environment today though, and the Twittersphere is alight with the sectors that will be most impacted by COVID. Largely pronounced by VCs, I have to admit, but when we chatted before,, you said to me that when it comes to COVID, it will do more for digital transformation than any other C-level led initiative. First, why do you think COVID is such an accelerant?
John Mellor: Well, I saw a meme on the internet a few weeks ago that said, “What will drive your digital transformation strategy the most? Is it the CDO? Is it the CIO, or is it COVID?” And that kind of puts a fine point on it, but digital transformation, in my mind, has been inevitable. And it’s a journey that organizations have been on for decades. And the technology simply just catches up and then some kind of forcing function happens to accelerate adoption of that technology. And I think that’s one of the situations we’re in now.
John Mellor: I mean, it’s not dissimilar to a Y2K moment. You think back in the late ’90s, ERP was a bold, if not a risky, proposition for companies. But then as you got closer to Y2K, the imminence of that event and the potential impact of that event drove a massive acceleration in ERP companies. That market grew four, five fold in five years from ’95 to 2000 because you got people out of the intellectualizing of what technology could do to them or for them into the sheer business environment need to compete or to survive.
John Mellor: And that’s where we are now. We’re in a different world. It’s a couple of decades later. But digital transformation is inevitable, and there’s either a carrot or a stick. And you’ve seen a lot of early adopters and companies that are leaders in their markets go through the digital transformation process and get closer to customers through digital interactions, become more personal, do this sort of mass personalization with individuals, or make data more available inside their companies. And that has happened with leaders in their industries because they’ve been ahead of the curve.
John Mellor: Well now, you have this crashing wave of change that it is incredibly clear that if companies don’t change and drive more agility into their business, understand things very, very rapidly, and make changes very rapidly, that survival is a real question, not just thriving, but survival.
Harry Stebbings: So, what core ways do you think we’ll see them drive agility into that business operations into the differing functions within that business? I’m super intrigued by that.
John Mellor: So, I think the first is just the speed with which you have to make decisions, right? And as a CEO or any kind of line of business leader, decision making is a function of information. You have to understand, how is your business working, what are the drivers of your business, what is the operational health of your business? And that is primarily driven a data exercise. And if you think of the simple questions you need to answer as a line of business person, those questions have to be informed by different parts of the organization, different operational systems.
John Mellor: Let me give you an example. So, Pep Boys is a customer that we deal with a lot at Domo. And they are a retail company, have big retail spaces, and they try and drive promotions through the retail. But if you don’t understand inventory and the inventory turns and availability at the store level and then have those store managers be able to report at a regional level, if you can’t then see that at a CEO level, then you’re just blind. You can’t really understand performance of a store in the context in which you need to understand it. And so, I think that the access to information and putting it in the hands of people who can make decisions quickly is one of the key transformations that’s underway right now. And COVID is absolutely driving that.
Harry Stebbings: Yeah. No, listen, I totally agree with you in terms of it being the catalyst for change. I guess with that in mind though and with COVID being the core accelerant, the question being there is, is digital transformation and change management a technology challenge, or is it actually a cultural challenge given the realization that we have with COVID?
John Mellor: It’s probably equal parts. I would say it is 50/50 because the technology is so key to just making the systems work. But it’s a lead to horse to water kind of situation where the technology can make the system available or make the actions available, the information, the decision, support available. But what it can’t do is get the end user to actually adopt it.
John Mellor: So, you see things in companies. We’ve got a large retailer that uses our system to actually gamify the process of unloading trucks at the loading dock. So, you wouldn’t think about that as a business intelligence process or even a data-driven process because the individuals on the loading dock don’t feel like they’re logging into a BI tool. They’re using an app that’s helping them log boxes offloaded off of the truck and comparing their performance against the team that’s coming right after them or before them. And that is a great example of using technology in the right way to drive a behavioral change and a usability change amongst the frontline people who need access to data.
John Mellor: I mean, executives in the boardroom have been pushing transformation for a decade or so. What they haven’t successfully yet done is help the people on the front lines, the employees that are behind the counters or at the loading docks, or driving the trucks around, or restock shelves at convenience stores. They haven’t put the information in their hands in a way that they can actually make a decision that makes their life better.
Harry Stebbings: I mean, I’ve got so many things to unpack from that. I guess my question is, in terms of really getting into the hands of the core consumers, how do you think about the mistakes that people often make when selling to CIOs and then that crucial adoption intersection between the CIO and the end consumer? Where do you think the mistakes that the core vendors make when trying to make that bridge and transition?
John Mellor: I think it’s easy to stay in the boardroom or in the corner office when you think about digital transformation. And the hurdle that people need to get over is that while that is where key decisions and direction need to be set, it’s not really how the business grows. The business grows when employees can make decisions, the big decisions or the small decisions, with data at their fingertips and in a form that doesn’t just look like, “Okay, I’ve logged into a spreadsheet. I can see that margin of product X is better than margin of product Y,” but it’s… Let me give you an example.
John Mellor: So, we have a customer that is responsible for restocking shelves in convenience stores, and the people who do that restocking drive the trucks around with all the chips and soda and thing on the truck. And they have to make the decision of whether to put product A ahead of product B. And the real impact of that decision for that individual is how much commission are they going to make? And the top level office, the corner office, can set commission structures.
John Mellor: But what you really want to do is change behavior and give the tools so that the behavior change is obvious and easy for the individual needing to make the behavior change. So, it’s not just about information, it’s about the apps that you can put on the device, the phone, the tablet, whatever device that individual is using at the moment of time when they’re making a decision. And that’s where you start to infuse the digital transformation as fertilizer, deep, deep into the organizational roots.
Harry Stebbings: Can I ask you, how do you think by the effectiveness of professional services and training days when vendors come in and really spend time with the teams on the ground? How do you think about the effectiveness of those in driving that core kind of bottoms-up adoption, and then I guess, subsequently, should that be charged for, or should that be part of the core offering?
John Mellor: This, I think, gets to a key point about what customers want to buy. Customers want to buy outcomes. In a very real sense, they kind of don’t care how much the software costs versus the services. They just need the outcomes and the technology change and the behavioral change that comes along with it.
John Mellor: The challenge from a vendor standpoint, and just being realistic, is that every customer is a snowflake. And you end up with a situation where professional services may be a very heavy part of one implementation and configuration, and it may be very light in other cases. So, I don’t know that there’s a easy answer from a vendor side other than to say, recognize that customers want to buy outcomes. And don’t make it too difficult to buy the outcomes when you’re trying to price or configure these systems.
Harry Stebbings: Speaking of kind of the customers that want those outcomes, we have to acquire those customers first. In B2B and often in enterprise they’re mostly acquired often by events, and events have been so effective over the last few years. But with COVID, that’s obviously now a real challenge. So I guess from the more macro perspective is, how will a 100% virtual event environment impact physical events when and maybe if they return?
John Mellor: Yeah, I think we’ve learned a lot with digital events. And Domo specifically, gosh, our Domopalooza event, our annual user conference, was March 18th, so we were right in the eye of the storm. We decided to make Domopalooza a 100% online event on February 28th. So, we had 12 business days to make that transition, which was very painful, so I understand the pain of people having to make that transition.
John Mellor: But you learn a lot, and there’s great things that come out of a 100% online event. For example, reach can be extraordinary. You can reach people with these marquee events, multiples of the people that would be able to buy a ticket and take three or four days off of work and fly to the location you’re going. So, that’s one big benefit.
John Mellor: The flip side, the con of it, is you really sacrifice a lot of intimacy, and events give you an opportunity to hang out with people, to go to the bar and have a drink, to have breakfast, to enjoy the entertainment, a concert, or whatever. And in enterprise software, relationships are such a key part of the selling environment that we need a way to maintain those.
John Mellor: And I think we’ve probably got a six to nine month window where things will be a 100% online, and you’ll see the enterprise software companies that have built, have invested, in really great relationships with customers because I think they’ll have the staying power to keep those relationships alive over that six to nine month period without face-to-face contact. But I think after that, we will hopefully be able to return to a physical in-person event environment.
John Mellor: But I think we’ll be able to manage a blend because it won’t be a light switch where you turn it on, and all of a sudden, your attendance goes back to 100% of what it was in the previous year at these events. We will have to have a mix, and I think that mix will be an art that we’ve got to navigate where you try and blend the intimacy with the reach, and you don’t make the distinction of it’s an either/or.
Harry Stebbings: Can I ask, in terms of performance wise, what were your takeaways from the palooza in terms of how virtual events compare to physical events in terms of performance and conversion wise?
John Mellor: We made this decision with 12 business days to go, and so we were faced with a lot of key decisions about how to execute this. And those decisions ranged from, how long do we make the event? Domopalooza had been a three-day event, and we certainly knew we couldn’t have three days of online material. So, you have to make decisions about how long it’s going to be at the basic end of the spectrum.
John Mellor: But then you have decisions around, what personas do I really need to satisfy? And I think most every physical event has a broad range of these personas. You’ve got executive people who want thought leadership. They want vision. They want to see roadmap. And you have the practitioners or the users who want to dive deep into the product. And so, we made a lot of decisions trying to balance those two audiences.
John Mellor: And we felt like, from a performance standpoint, we felt really good about it. We typically have 2,500 to 3,000 people physically show up to Domopalooza, and we had over 12,000 people watch our event. And they didn’t watch all of it. But to have a 4X reach is pretty amazing the day of the event.
John Mellor: And another aspect of these physical events is they tend to be forcing functions from the vendor standpoint. They drive strategic decisions. They drive product to get things done and shipped. They drive big messaging decisions and partner ecosystem decisions and events and things like that.
John Mellor: So, you still want to use them to drive that forcing function and then kind of ring the value out of all that effort in an amplified way where you might have 3,000 people at an event if it’s live. You’re going to have 12,000 if it’s virtual, and you can reach so many more people. And your downstream nurture of that audience can really be tailored based on, what were they interested in when they came to the event, what breakout sessions did they attend, what parts of the keynote did they watch? So, it gives you a chance for a lot of downstream intimacy. The jury’s still out on close rates and ACV creation, those sorts of things. The enterprise sales cycle will take a while, but we’re pretty happy with it.
Harry Stebbings: Can I ask, speaking of that move from physical to virtual, how are you thinking about… I spoke to PagerDuty last week, and they mentioned their shift in marketing spend from physical to virtual. And I guess my question too is, how are you thinking of shifting spend and the strategy around it in light of the pandemic?
John Mellor: It’s a decision that has a little bit of strategy involved, but it’s become kind of a forced strategy. I don’t really have a strategic decision to make about how much I spend on events in the next four months because that decision has been made for me. There just aren’t any physical events to attend. So, you’ve got this balance of the strategy comes into play with, how do you redeploy those funds? So, how do you create the online equivalent of that reach and that intimacy in a completely digital environment?
John Mellor: So, we have shifted significant amounts of the event spend to digital programs. Some of those are webinars, where you’re trying to replicate that in-person, that live experience. But some of it is just in increased ad spend, where you’re doing more search and more display, more syndicated content, et cetera, more email. And so, we’re absolutely doing everything we can to keep lead volume up, to keep the pipeline acceleration where we need it to be because we don’t want to make decisions that would make this crisis sort of a foregone conclusion or predestined.
Harry Stebbings: Yeah, I mean, it’s interesting you said there about predestined. How do you think about avoiding making the crisis self-fulfilling?
John Mellor: It’s such an interesting topic because I lived through the recession. I was working at Omniture when we went through the recession. Our CEO, of course, was there. Our CFO went through the recession at his company. And so, you’ve got this tendency to evaluate scenarios in your head, and some of those scenarios are pretty awful. And the challenge is to not let those scenarios dictate action prematurely.
John Mellor: So, you want to really let the data talk. And so, you start to look at early indicators. You start to dial in your magnifying glass on anything that would be a very early indicator, early, early indicator on your business. What’s your web traffic? What is your lead rate, your rate of generated leads from that traffic? How are those leads turning into opportunities? How are those opportunities progressing through the pipeline? And you don’t have a nine month full sales cycle to watch these. You just do not have that much time. And so, you’ve got to make decisions on early, early indication very quickly.
Harry Stebbings: Totally agree in terms of the speed there. I guess, my question to you is, I speak to a lot of SaaS companies, and they’re going, “Hey, we’re actually not affected by this. Our revenues are looking the same. Our customers are happy.” And I kind of think you will find out most how your business is impacted when it comes to renewals, when it comes to churn and discounting that comes with those renewals. How would you advise founders who aren’t seeing changes as of yet and are kind of unsure because they’re expecting to see negative changes, but the data doesn’t show it yet? How would you advise them?
John Mellor: When I sit with my marketing team several times a week, they read out a lot of data. And one of the questions I ask them at the end is, “Okay, so if you were living under a rock, if you had no access to news, how would you say the business was doing?” And that’s one of the factors that we use in determining whether or not we’re going to increase or decrease spend.
John Mellor: These sorts of situations are so historic because they have no playbook. And the danger, I think, is to apply an old playbook to a new situation that is 100% unique. You can apply some judgment, but to think you can just cookie-cutter a situation from the past and apply it to this situation, I believe, is incorrect.
John Mellor: So, the advice that we’re following is plan for the worst. Get those preparations in place in detail and know what steps you’re going to take when you see the indications that you should take those steps. But don’t take the steps too soon because I think you can predestine your situation in a very self-fulfilling way.
Harry Stebbings: Yeah, no, listen, I totally agree with you in terms of predestiny, and yeah, I think it’s a very negative, cyclical mindset to get into. I do want to dive there into my favorite element of any episode, John. So, I say a short statement, and you give me your immediate thoughts. It’s called the quick fire round. Are you ready to rock and roll?
John Mellor: Exciting.
Harry Stebbings: Okay, so what do you know now that you wish you’d known at the beginning of your time at Domo?
John Mellor: I wish I had known better the complexity of the offering.
Harry Stebbings: Can I ask, what makes Josh the special leader that he is?
John Mellor: I’ve worked with a few founders in my career, and I think founders are just different humans. They’re wired different. Their ability to have a vision to be doggedly attached to that vision is what makes them unique. And that is certainly the characteristic that I would say Josh has got, is he can see things as they should be, have a complete irreverence for reality about why that’s hard, and just keep persistently going after that.
Harry Stebbings: What’s the hardest element of your role with Domo today, John?
John Mellor: The hardest element is simplifying the offering into consumable chunks. There was so much resource put into building the Domo platform, and it’s so broad and so deep that the challenge is it can do so many things. And that’s not what a buyer wants to hear. A buyer wants to hear, how does it solve my pain today, make me revenue, give me business impact? So, distilling that broad, deep functionality into consumable chunks for personas is the process that we are really focused on because that’s where the transformation is.
Harry Stebbings: Can I ask, what’s the optimal relationship between chief strategy officer and CEO?
John Mellor: I think the right CEO-chief strategic officer relationship has a lot of constructive tension in it. At least speaking from my experience, you have to realize that the founder is in their position because they are extremely talented and unique in the ways that create businesses and create ideas and vision. The role of strategy is to try and distill that vision into an operational framework that the business can act on and grow over the long term and do it efficiently. And that tension is a powerful accelerant, so there’s a lot of chemistry that’s got to exist, for sure.
Harry Stebbings: I love that constructive tension. I do want to finish it on my favorite, which is, if you could change one thing about the world of SaaS today, what would it be?
John Mellor: I think from an enterprise software SaaS standpoint, we just got to make it more usable for the end users. It’s got to be simple, simple, simple.
Harry Stebbings: Totally agree with you in terms of the simplicity. But John, as I said, I have heard so many great things, both about you and Josh from many different people on the show. So, thank you so much for joining me today, and this has been so much fun.
John Mellor: Thank you, Harry. It’s been a pleasure.
Harry Stebbings: Such a pleasure to have John on the show there and absolutely loved that discussion on the accelerant of change management. If you’d like to see more from John, you can find him on Twitter, @MellorTime. Likewise, it’d be great to welcome you behind the scenes here. You can do so on Instagram @hstebbings1996 with two Bs. It would be great to see you there.
Harry Stebbings: As always, I so appreciate all your support, and I can’t wait to bring you a fantastic episode next week.