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1 Creating the Billion $ SaaS Category Mark Organ Founder and CEO, Influitive
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Creating the Billion $ SaaS Category
Mark OrganFounder and CEO,
Influitive
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1,021 -> 1,128 Members
Slides & Vids:meetup.com/achieverstechachievers.com/tech
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Creating the Billion $ SaaS Category
Mark OrganFounder and CEO,
Influitive
Creating the billion$ SaaS category:Creating the billion$ SaaS category:
Zero to IPO secrets from a serial entrepreneur
February 18th, 2014
Mark Organ, Influitive, CEO
@markorgan
@influitive
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Cloud-basedMarketing Automation
Advocate Marketing
Founded Jan 2000Nasdaq IPO
$871M - ORCL
I helped build the marketing automation category at Eloqua, and the advocate marketing category at Influitive.
Founded Oct 2010
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7
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List, AttentionSpoilage
Deliverability
Availability ofDeep Knowledge
The success of Eloqua and its category sowed the seeds of its own challenges. The marketing automation platform is burning.
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Ideal Reality
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0%
25%
50%
75%
2006 2010 2014F
Dependence on knowledgeable peers in the buying process
(B2B software buyers)
3.5X increase
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What does it mean to create a
category?
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Some B2B and B2C examples of category creators
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-40%
-20%
0%
20%
40%
60%
80%
100%
0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8
Revenue growth (2004-2005)
Salesforce.com
Oracle(incl. PeopleSoft)
SAP
Siebel
Amdocs
Note: Relative Market Share is each company’s revenue divided by the market leader; the market leader’s revenue is divided by the 2nd place company’s revenue; Precise revenue not available for Upshot and Salesnet, figures represent approximate revenue and growth estimatesSource: Gartner (http://www.gartner.com/newsroom/id/493005)
Salesforce.com’s status as a category creator enabled rapid growth several years ago
Upshot
Salesnet
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-10%
0%
10%
20%
30%
40%
50%
60%
70%
0.00 0.20 0.40 0.60 0.80 1.00 1.20
Salesforce.com
Oracle
SAP
Microsoft
IBM
SugarCRM
Note: Relative Market Share is each company’s revenue divided by the market leader; the market leader’srevenue is divided by the 2nd place company’s revenue. Source: Gartner (http://www.gartner.com/newsroom/id/2459015)
This led to a dominant market position today
Revenue growth (2011-2012)
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Tesla currently has tiny share vs. all luxury vehicles – similar to salesforce.com’s broader CRM market in 2002
0
50,000
100,000
150,000
200,000
250,000
300,000
Tesla Lexus Audi Cadillac Mercedes-Benz BMW
Source: Business Insider (http://www.businessinsider.com/tesla-is-not-really-outselling-bmw-audi-2013-5)
US unit sales, 2012
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Tesla is already dominant in the space closer to its category of all-electric luxury high-performance cars
0
1,000
2,000
3,000
4,000
5,000
Tesla Model S Audi A8 BMW 7-Series Mercedes-Benz S Class
US unit sales, Q1 2013
Source: Business Insider (http://www.businessinsider.com/tesla-is-not-really-outselling-bmw-audi-2013-5)
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Tesla’s category creator status and rapid growth drive valuation multiples far higher than other carmakers
Market capitalization per vehicle sold
* Fisker filed for chapter 11 protection in Nov 2013Source: Yahoo! Finance, Corporate filings, Analyst reports
$714K
$60K$39K
$13K $12K $6K $0K$0K
$100K
$200K
$300K
$400K
$500K
$600K
$700K
$800K
Tesla DaimlerBenz BMW VW Ford GM FiskerFisker*
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A Transformational Experience
+
Driven By Disruptive Forces
My definition of a category:
For a distinct segment of the market,
A Revolutionary Business Model
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High-growth, cash-strapped B2B companies largely in Bay Area
Acquire and deploy good-enough CRM successfully in days instead of years
• Monthly subscription by user • Continuous deployment of upgrades
centrally for all customers
Cloud / internet delivered software
Salesforce.com: Cloud CRM, 1999-2004
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Green-conscious, technophile early adopter car enthusiasts
All-electric with equivalent/superior performance to BMW 7-series/Benz S-class
• Custom car ordering online, direct• Supercharging/battery switching stations• Continuous deployment of upgrades
• Lithium-ion battery innovation• Cloud computing
Tesla: Electric high-performance luxury cars, 2010-2013
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Eloqua: Cloud marketing automation, 2005-2013
Process and lead-gen oriented (demand gen) B2B marketers
Automatically nurture prospects, guided by their behavior, until sales-ready
• Monthly subscription, scaled by usage• Continuous deployment of upgrades centrally
for all customers
• Cloud-delivered software• Automated filtering of phone and mail
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Influitive: Advocate marketing platform, 2012 – ??
Advocate marketers and the advocates they serve
Advocate-centered, comprehensive and self-service experience
• Monthly subscription, scaled by advocate activity• Continuous deployment of upgrades centrally for
all customers
• Pervasive social web
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Missionary
Mercenary
VS
Category creators have missionary zeal about their category vision, not just their company mission.
Attract not just customers, investors and employees, but competitors too.
You need competitors! A category of one is not compelling.
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$3.40
$5.60
$1.20 $0.00$1.00
$2.00
$3.00
$4.00
$5.00$6.00
Overall (20) Category Creators(10)
Non-CategoryCreators (10)
Incremental market capitalization per $1.00 of revenue growth
CNN/Fortune top 20 fastest growing companies (2010)
Category creator premium
Category creators enjoy a valuation premium; grow revenue 4x and market cap 6x faster than category entrants
Source: Cambridge Partners in HBR Blog, 09/2011
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= ≠
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= ≠Hypothesis-driven, iterative approach
Vertical niche market dominance
Focus innovation on the emergent hero
Drive the company on mission, vision and values
Invest early in customer success
Iterated MVP is insufficient: emphasize design & quality
Iterated MVP is insufficient: emphasize design & quality
Expand your productization and monetization models
Expand your productization and monetization models
Build for the billionBuild for the billion
Drive leads to achieve profitable, efficient growth
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= ≠
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Use a hypothesis-driven, iterative approach to quickly find
product-market fit
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Pick that niche you want to serve,
document why, and test it
The goal is to build a continuously evolving
model of how you generate maximum
value for users & customers.
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It’s OK if your hypothesis is wrong
If your assumptions are documented, you
know where the problem is and can fix it.
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Pivot quickly!
Early on, CEO should be the
Chief Experiment Officer.
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Eloqua started with the wrong
product in the wrong market
RE worked, F and I did not. So we
found a new segment that had even
more extreme economics than RE.
1.0 2.0
Market
F.I.RE.(Financial, Insur-ance, Real Estate)
B2B Tech
Product
ChatMarketing
automation
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Vertical niche market dominance
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The narrower the better
Even the most horizontal companies
today like Salesforce and Facebook
started off in a narrow niche.
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Your first job as an entrepreneur is not to die
Focus lets you economize on your learning
and your product development.
Plus you can charge for your expertise.
Eloqua was bootstrapped, profitable and
high growth for over 3.5 years!I PROMISE I WILL NEVER DIE
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Focus innovation on the
emergent, under-served hero
Your category is created by your users
and customers, not by your marketers.
Find the under-served hero who will
benefit most from disruptive innovation.
Elevate and celebrate the hero!
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Drive the company on
mission, vision and values 3
Our Vision
Advocates are our guiding light. We define and unlock the full potential of advocacy, for
advocates, the organizations they support and the world.
Mission, Vision, Values
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Our Vision
Advocates are our guiding light. We define and unlock the full potential of advocacy, for
advocates, the organizations they support and the world.
Mission, Vision, Values
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Our Mission for Customers
We will deliver the world’s central platform for advocacy, featuring the best possible experience for all participants, especially the advocates
themselves.
Our Mission for Team Members
Influitive will be the best place for our people to maximize their ability to learn and grow, and with
that, their value to the world.
Mission, Vision, Values
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Our Mission for Customers
We will deliver the world’s central platform for advocacy, featuring the best possible experience for all participants, especially the advocates
themselves.
Our Mission for Team Members
Influitive will be the best place for our people to maximize their ability to learn and grow, and with
that, their value to the world.
Mission, Vision, Values
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PERSONAL CHARACTER
Open, honest and direct We are transparent and authentic with each other, our customers and investors.
The only road is the high road We sleep well at night and hold our heads
high, as we live with integrity.
We all inspire and lead We transfer confidence to everyone who
works with us.
Mission, Vision, Values
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PERSONAL CHARACTER
Open, honest and direct We are transparent and authentic with each other, our customers and investors.
The only road is the high road We sleep well at night and hold our heads
high, as we live with integrity.
We all inspire and lead We transfer confidence to everyone who
works with us.
Mission, Vision, Values
…from day one!
� Salesforce: No Software
� Google: Organizing world’s information
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Drive leads to achieve profitable, efficient growth
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Treat lead gen as a
strategic imperative
Startups win because they can
choose the customers that will
be most likely to advocate.
Plus, generating early revenue
is pretty strategic!
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CEO must help choose
customers strategically
Don’t delegate this. You need to
figure out the message and
offering that attracts the best
customers and can scale.
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Ensure the lead flow is increasing
in quality & quantity
Once you figure out what works, you
can add automation and then solve
for the next segment of customers.
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Use a marketing mix of seeds, nets and spears
Inbound – real thought leadership is a
hallmark of category creators.
Open minds = open wallets.
Outbound – need to target the right
customers that will become advocates.
Advocate WOM – Your goal should be to
generate as many referrals as possible.
Source: Aaron Ross, Predictable Revenue
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Invest early in customer success
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Build happy customers:
they scale really well
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If you have $1 to spend on marketing,
instead consider spending $0.75 on
customer success.
BUILD ADVOCATES
AND
MOBILIZE THEM!
Need new pic
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= ≠
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Iterated MVP is insufficient: Emphasize experience, design &
quality
The goal is to get to the right
experience, not the right product.
We test designs, QA was dev hire 5,
and we pair program all the time to
maximize quality.
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Expand your productization
and monetization models
New, successful SaaS models
emphasize monetizing the end users,
delivering value-add like
benchmarking, best practices and
recommendations.
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Build for the billion
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More long-term focus:
design a business with
multi-billion potential.
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Raise money earlier, but use
disruptive tools like AngelList for
a higher shareholder count
We have 44 shareholders. That’s 44
people to help us with lead
generation, filling candidate reqs and
expanding our network.
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Build a more ambitious
product footprint
Building network effects with our
advocate users and integrating
deeply into our customers’
businesses.
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Hire a stronger executive team
early…
Building the strongest, most talented
team has never been a mistake as
long as hires are experienced in the
company stage.
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…but with room to grow!
It’s good when there is a learning gap: it
keeps things interesting.
The best execs for category creators prize
learning and growth over compensation.
Creating the billion$ SaaS category:Creating the billion$ SaaS category:
Zero to IPO secrets from a serial entrepreneur
February 18th, 2014
Mark Organ, Influitive, CEO
@markorgan
@influitive
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Work at Achievers
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General Announcements
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Bobby BradfordSenior Product Designer,
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