SaaS Startups

The Second-Timers: Kris Duggan of Betterworks: “This Time, I Generated Leads Before We Even Launched”

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Jason Lemkin

Our new Second Timers series has proven to be pretty popular on SaaStr.  You can see our first post on an overview of what the Second Timers are doing here, and a pretty epic post with Nick Mehta, CEO of Gainsight here, on what he’s doing even better this time as a second-time SaaS CEO.

Next up is a good friend of mine, Kris Duggan, CEO of BetterWorks.  BetterWorks was John Doerr’s largest Series A investment since Google, and I’ve been on the board since the pre-revenue days.  Prior to BetterWorks, Kris was founder and CEO of SaaS gamification company Badgeville.

Kris is a pretty interesting CEO.  He’s widely credited with having invented the entire enterprise sales strategy and team at WebEx back in the day, which became the prototype of how so many SaaS companies sell.  He’s also particularly good at creating excitement and demand about his products.  In both his SaaS start-ups, he’s been able to conjure up seven figures in revenue in Year 1 — much of that ahead of any formal launch.

I thought we could all learn from Kris (and he’ll speak more at The SaaStr Annual on these topics):

 

Screen Shot 2014-08-13 at 2.16.45 PMGoing to Market the Second Time Around
By Kris Duggan
 
Screen Shot 2014-12-15 at 12.29.29 PMThe great thing about getting to be CEO a second time around is the opportunity to learn from the first go around. For me, going to market the first time was about listening to others, setting really high goals, and hoping for success. This time, it’s about getting it as close to right as possible and knowing from experience that generally good things happen. If I had to sum it up as lessons learned, I’d say it’s these:
 
#1            Decide What Kind of Company You Are
Focus is the main thing. Slack launched as a free service with paid upgrades because it understands viral marketing. Zenefits and Zenpayroll target SMBs with lower-price offerings. My new company, BetterWorks, is focused on mid-to-enterprise customers because when I was at Badgeville, I lived the problem. I know that mid to large companies have goal management challenges and they need a solution like ours to fix it. As an early stage company, you have a chance to do one thing really well, so make sure you’ve really nailed it. Focus, focus, focus.
 
#2            Target Your Initial Customers
Reach out early and often. Not the company. Not a hired gun. You. The CEO has to connect with prospects. And not just through email. In starting BetterWorks, I leveraged LinkedIn, took advantage of conferences, asked for referrals, posted on social media, and more. Whatever it takes. I’d estimate 100 outreaches result in 10 conversations that result in one deal. Interestingly, we landed each of our first 10 BetterWorks customers from different ways I reached out.
 
Screen Shot 2014-12-15 at 12.28.06 PM#3            Always Be Listening and Tuning
Iterate the messaging. This is critical in the early days, and also after launch. You should balance pitching whatever it is you’re selling with actually listening to what prospects and customers are telling you. It’s always a work in progress, and you need to keep tweaking as you go. You can ask people how they’d explain what they just saw and get some great insights that way on what works and what doesn’t. Also, because people are so busy now, you have to be able to pass the “two-beer” test (how you’d explain what you do after two beers). Here’s our bar version, “Our platform helps companies track and manage goals.”
  
#4            Scaling Requires Inbound Leads
Well before launch, think about how to engage with potential customers about the issue you’re setting out to solve. Blogging, social media, PR, newsletters, nurturing campaigns that let you collect email addresses in exchange for whitepapers and eBooks all worked for us. We saw a good number of leads every day before we launched BetterWorks, which told us that there was latent demand for the product we were building. That’s good for team morale.
 
#5            Scaling Requires Outbound Sales
Two by two is key. When you have a lot of latent demand, you need reps for outreach. And you need to hire reps in pairs because you get a higher quality signal on everything—pricing, positioning, etc. If one rep is doing exceptionally well and the other isn’t, it may be the rep. If both reps are hearing enterprise versus seat-license pricing is preferred, it’s probably true. Two reps will also help you tighten your target market definition.
 
#6            Figure Out the Pricing
Keep it simple and always charge something. Like messaging, it’s good to start out by listening. Early on, questions such as “How much would something like this be worth to you?” can help you set pricing. Over time, you need to master the other elements like per user fees, commitment terms, volume tiers, payment terms, and service fees. If something comparable exists, use it as an anchor. 
 
#7            Invest in Customer Success
Screen Shot 2014-12-15 at 12.36.04 PMThis is probably one of the biggest “ah-has” my second time around. People talk. Investing early in customer success drives referrals and keeps customers renewing. Case studies and references generate excitement. And all the goodwill customer teams deliver comes back in the form of renewals, upsells, and cross-sells. We believe so much in this area that one of our co-founders is leading customer success.
 
#8            Expect Lots of Hard Work
There are no shortcuts. Attracting customers and new employees to join your fast-growing start-up takes effort. And practice makes perfect. In the first quarter of starting the company, I talked to nearly 100 companies. Over the last year, we’ve hired 40 people and I talked with every one of them. Am I exhausted? Sometimes. Am I inspired? Absolutely.
 
#9            Focus on Customers and End Up with Investors, Too
In my case, the adage is true. If you ask for money, you get advice. If you ask for advice, you get money. I spend 10x more of my time on customers than investors. For example, we don’t have an investor deck here at BetterWorks. If a potential investor wants to talk, I show them our sales deck so they know how we talk with prospects. Thinking that way makes me remember to stop ‘pitching’ and keep listening.
 
#10          Set Goals and Metrics
Your team needs to concentrate on getting better all the time. Set goals – including stretch goals – to measure success and failures. Try to be as operationally excellent as possible from the start. It’s important and it will help align your teams toward success. (And see #2), if you use BetterWorks to do it —all the better.
 
I’m always interested in learning from and connecting with others on this SaaS journey, so feel free to add your biggest lessons below. 

 

Published on December 16, 2014
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