This is the final part of a 3 part mini-series with Russ Heddleston, CEO and Co-founder of Docsend. Russ discusses the pros and cons of San Francisco as a startup city, thoughts on opening an office abroad, the advantages and disadvantages of targeting small customers initially in a B2B SaaS world and whether personal financial stability really counts before an entrepreneur jumps into a startup. “If you do start with self-serve, you have the benefit of being able to move up market, that’s an option too. And you can keep your discipline to have the self-serve always there and it protects you on the downside. It’s hard for someone to come in and disrupt you from below – if you start at the self-serve and then go to enterprise. The downside of going self-serve is that oftentimes it takes a little bit longer to get going and you need a lot more customers. We’ve got 6,000 customers and that’s a lot and it’s taken us a while to get there but … things tend to accelerate once you get to a certain level.”
TRANSCRIPT
Russ Heddleston – Co-founder & CEO, DocSend (excerpt)
“If you do start with self-serve, you have the benefit of being able to move up market, that’s an option too. And you can keep your discipline to have the self-serve always there and it protects you on the downside. It’s hard for someone to come in and disrupt you from below – if you start at the self-serve and then go to enterprise. The downside of going self-serve is that oftentimes it takes a little bit longer to get going and you need a lot more customers. We’ve got 6,000 customers and that’s a lot and it’s taken us a while to get there but … things tend to accelerate once you get to a certain level…
Stephen Cummins
Welcome to 14 minutes of SaaS, the show where you can listen to the stories and opinions of founders of the world’s most remarkable SaaS ScaleUps.
The final part of a 3-part mini-series with Russ Heddleston, CEO and co-founder of DocSend, discuss the pros and cons of San Francisco as a startup city, shares his thoughts on opening an office abroad and the advantages & disadvantages of targeting small customers initially in the B2B SaaS world. And also talks about whether financial stability really counts before an entrepreneur jumps into startups.
1:19 It’s, it’s… it’s very expensive to live in San Francisco and to build a team. It’s a great place for VC investments, but what sort of a challenge do you find there in such a competitive environment – trying to find and cost-effectively build teams in that city.
Russ Heddelston
Well, if your goal is to cost effectively build a team, I think that you might want to move. Because it is an expensive city. I often joke with people that San Francisco is really just a competition of business models – you have to be a really successful company to be able to be based there and more and more businesses are, you know, like Gusto – they have an office in Denver and an office in San Francisco. And that’s a nice way to kinda split the difference between the two – so there’s the cost element. There’s also just the competitive labour market side of it – and you just have to have a really strong culture.
There’s a bunch of things. Like you have jerks on your team, you don’t want to have people who are rock stars but make it a bad culture for everyone else – like that’s just not worth it – people have to enjoy coming into work. You need to invest in your people. And if you don’t prioritize that early. It can be hard to come back from it later. And I think that as a necessity is actually great for San Francisco as a place to work – because the companies that can survive and stay there …. It’s so expensive and you want to keep your people and it’s competitive market …. It needs to be pretty awesome place to work/ And so I’ve found that as a trend that it’s quite encouraging and… and really contributes to it being a wonderful environment to work in …. if your business can afford to continue operations there.
Stephen Cummins
You’ve got a lot of traction and you’ve got clear product market fit … you’re perfecting all the time how you’re going to market and your product. Have you internationalized yet, or are you planning to expand internationally?
Russ Heddelston
That’s a great and apt to question. We were recently looking at some of our numbers. And as I mentioned, you know, most of our revenue is inbound and most of it is still self-serve. We noticed that conversion rates in other countries are much lower – which makes sense because we’re asking you to pay in dollars and it’s all in English, but we can’t control where people are. They wanna use docs and our value proposition is definitely quite universal. It’s also interesting that if you get a DocSend link and the deck inside happens to be a Japanese, like the interface on the viewer side is just a bunch of icons – so it’s a logo that you can swap out and then it’s the content. So it kind of already looks like it’s internationalized. So the thing we’re gonna do first is just let people pay us in the local currencies, and I expect that will drive up conversions internationally. A lot higher. And yeah, we… we need to, you know, invest… invest more and continue to do internet internationalization piece by piece.
Stephen Cummins
Have you got offices abroad? Do you plan to?
Russ Heddelston
We don’t have any offices abroad. And, yeah, I would love to at some point. It’s not clear. Oftentimes companies will have an office abroad either to reduce costs or if they have like a field sales team and need to have feet on the street in those locations …. So we’ll need to have an international office. But yeah, definitely not this year. And we actually have a lot of customers in Europe, South America and they’re able to find and use DocSend and seem not to need an office there. Some things like GDPR we have to support, because people send docs and links globally, we need to be internationalized in the sense of knowing what regulations are out there and are we are compliant. And that’s you know, unavoidable.
Stephen Cummins
I know you’ve got a lot of small and medium sized customers … have you got a bit attraction in the large enterprise space?
Russ Heddelston
Well, this year, we’ve actually got some enterprise interest in those deals, they take a lot longer. They’re not all in the US. They are in other countries. And so we’re going to need to do some travel. Oddly enough they’ve travelled to us so far … and, you know, the size that we’re at, we’ve been very upfront with people like, you know, if you’re going to pick DocSend, it’s because of it’s properties and usability .. there are probably some like very enterprise features were missing – ‘and we’re gonna work with you on those’. But you gotta want it and work with us on that. And like those are the conversations we’re having there. We’ve been pretty thoughtful about how we’ve gone from like self-serve to SMB and up into mid market. And so then we can keep the experience clean and intuitive, useful as we kinda pepper in a more enterprise feature sets that we know we’re going to need to have. And so yeah, we haven’t made it an intentional outbound enterprise model yet. But when people come to us, we’re happy to work with them to figure out how they can give us more money.
Stephen Cummins
6:10 I definitely think it’s better to start with small business and work your way up into the mid market in terms of product development. You have a better chance to get closer to your customers … to keep it a little bit simpler and to hone in better. Do you think it’s better to go that way rather than to try and enter the enterprise world early
Russ Heddelston
Well there are companies that have gone in both directions and been successful … and there are companies that have gone in both directions and failed. And so, yeah, usually if you ask someone what they would recommend – they recommend what they did if their strategy was successful. They say ‘don’t do what I did’ if their strategy failed.
A good view on this is from Gokul Rajaram … who was my boss at Facebook and he is one of our investors and he is his senior on the product side of Square now. He had a blog post talking about how he thinks you should always start with self-serve and he has a good point – that as soon as you enterprise, it’s very hard to go back to do self serve. It’s very hard to have the discipline to try to move down market. And if you do start with self-serve you have the benefit of being able to move up market, that’s an option too and you can keep your discipline to have the self-serve always there. And it protects you on the downside. It’s hard for someone to come in and disrupt you from below.
The downside of going self-serve is that oftentimes it takes a little bit longer to get going and you need a lot more customers like … we’ve got 6,000 customers and that’s a lot …. and it’s taken us a while to get there … but things tend to accelerate once you get to a certain level. And so I’m happy with the path that we’ve taken.
Stephen Cummins
What drives you personally? When you get up in the morning, what drives euros new people who didn’t.
Russ Heddelston
7:57 Well … So it’s nice .. my sisters live in San Francisco as well. I get to hang out with them quite a bit. My fiance Kate is awesome and it’s fun to live in San Francisco with her. A lot of what drives me on DocSend is just the people we have on the team. We invest a lot in them. DocSend is only successful because of the people we brought on board and how hard they work and how smart they are. So, you know, I really don’t want to let them down. I wanna make sure I’m doing my part and chipping in, and making sure that we’re delivering on our shared vision – and you just get such a kick out of having a team like that. It’s very humbling to think that you know, we had an idea .. we got people to agree, it’s going well and they’re like working really hard to make it make the dream of reality.
Stephen Cummins
You do seem quite humble, you’re definitely not a control freak, you’re a delegator. What would you say would be the one personal quality that has been the most important part of you that has led to your success?
Russ Heddelston
Could be humility or optimism … I might probably go with the ability to continue to be open minded. A good analogy is …. We have junior sales people – I have a team now …. I’ve tried to coach them through not being too nervous about failing, because it allows you need to be more honest with yourself and to see like what is or isn’t gonna happen there. And so then you end up making smarter decisions. And so if you’re open minded and able to see sides of something you can make the smart decision and, you don’t let uncertainty or fear or insecurity drive how you make decisions.
So I think for me, I always try to take a step back and consider both sides of things and like, for instance with Pursuit … like we ran it for a year, we raised seed funding and we decided not to keep going. We didn’t spend any of our seed money but, you know, we looked at both sides of things. And we said ‘we think that this was a nice idea in theory, but in practice the evidence was that we should probably not continue forward on this …. which is a hard decision to come to personally. I’m very happy that we didn’t continue on with it. And I got to have a really wonderful experience at Facebook.
Stephen Cummins
That takes a massive amount of discipline to make that decision. There’s an awful lot of entrepreneurs that will crush themselves against the wall to keep trying to make the thing work and not step back. Given that you actually had funds, that’s an amazing decision to take. If you were to give one piece of advice to entrepreneurs that are up and coming, what’s the one thing you’d say to them?
Russ Heddelston
It depends on if there’s someone who’s actively starting a company versus someone who would like to start a company at some point in time in the future? If it’s someone who would like to start a company at some point in time in the future ….I’d say the most common impactful piece of advice I’ve given to people is to make sure you have enough personal wealth. So that you’re not stressed about both personal money and company money. And that’s something that people really don’t think enough about – like ‘the time is now and I’ve gotta go do it!’ And if you’re a beginning co-founder, a lot of co-founder relationships get destroyed by money or because one person doesn’t have money and the other person does have. Or their worried about their personal finances – it just brings out the worst in people. So I mean one rule of thumb might be – you got the co-founder or 2 – you all put in $100K … not in like savings, it’s just money that you’re okay throwing away. And if you can’t do that … if you can’t put enough money that you’re all going to be able to work for a year on the thing, you probably don’t have the personal runway required to give yourself enough time to get it off the ground and it’s just a very slim margin for error. That’s just one piece of advice I would give. I don’t know what the right number is – maybe it’s less, maybe it’s more – but making sure everyone’s on a similar financial footing – and you’re able to lose some money and not get too stressed about it I think is important. Check those boxes before you started a company.
Stephen Cummins
That’s incredible advice. Russ Heddleston – thank you so much for giving your time to 40 minutes of SaaS thank you Stephen.
12:12 Next week we start into another 3 part mini-series, this time with Ireland’s Andrew Mullaney, a former CTO and Co-founder of NewsWhip – a service that tracks how billions of people engage with stories.
You’ve been listening to 14 minutes of SaaS. Thank you to Ketsu for music provided under a creative commons license. This episode was brought to you by me, Stephen Cummins. If you enjoy the podcast, please don’t forget to share it with your network, subscribe to the series and give the show a rating.