Transcript
Michael Litt:
Something happened to me very profound about two years ago. A very high performing individual came to me and said, “I’m going to quit because I feel like I am carrying my team. And there are people on my team that do not care as much about this company and its success as I do.” And I realised in the process of hiring and going from 50 to 200 people, and taking really good individual contributors and making them managers … we didn’t really think about firing. We didn’t think about the negative aspect of that and basically pruning the rosebush. Side note … my wife and I bought this amazing house, our very first house. We loved it. We’ve moved since. And it had this beautiful rosebush. And the second year when spring came, the rosebush didn’t grow back because we didn’t prune it. We killed it. Right. And this is an analogy I use to describe the business.
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 scale ups
Michael Litt:
[00:01:13] The core video platform … again … tracks how people consume content. And that data is very valuable in a marketing context for nurture campaigns. So … [for example] … send an email to someone who watched 80 percent of this video. It’s very useful to sales teams to see what their customers and prospects are consuming. Right on the contact record inside of CRM. It’s very much a funnel vehicle. It’s very powerful for the demand gen marketer who wants to put email in a marketing campaign and have that thumbnail personalised for the recipient and actually have the video dynamically personalised to the recipient as well. The response rates are really, really high.
Transcription, ADA compliance, all that stuff … accessible video is a big part of enterprise strategy. A secure video behind SSL… instead of a firewall for telecommunications. Live streaming. That’s all the stuff we do. The big shift in our business model actually happened about two years ago when we realized there was an opportunity to build a tool that sales professionals, and internal use factors for designing crits etc … that we could actually build a tool to help people create video more effectively. And the two methods we use there were ….1. A webcam recording … So I send you a video in your inbox. It’s asynchronous. You see an animated gif of me waving at you. You’re probably gonna a watch that, because somebody obviously is recording a message for you.
[00:02:34] The other one is a screen recording. It’s very simple, but a screen recording is such an effective communication tool. And think about walking a customer through a sales order instead of just sending them a PDF and letting them discover it for themselves. Right. Or walking a designer or an engineer through crits of a workflow, or some aspect of the UX that you’re building.
Stephen Cummins:
Saves a lot of time.
Michael Litt:
Saves a lot of time and energy. And then using the core architecture we have … telling the person who created the video that the recipient watched it and how much of it they watched right inside of their existing workflow. So we built that product as a chrome extension. And, you know, fast forward a year and a half … it’s got six hundred and fifty thousand users. Well, that was probably a month and a half ago. So probably closer to a million users now. Wow. And is a huge part of our business model. And we can use that strategy to combine kind of the platform … and this this end user product that’s acquired for free and integrated into a whole landscape of solutions to really penetrate an organization and to help them transform the way they communicate, the way they market, they sell, they support, they message with video.
Stephen Cummins:
[00:03:46] That’s so cool. So actually, I introduced you on the scale stage yesterday. You talked about going from enterprise and professional … you were already selling so many licenses using Salesforce … and other companies are a great channel for you, because of the fantastic integration. And I know they’re investors as well. But I’m guessing now … because you can’t hear when you’re behind the stage … that’s when you were talking about on the freemium [Stephen was the MC of SaaStock’s main stage and one cannot hear or see the speakers from behind that particular stage] … So does that mean that you had a good footprint in the kind of mid-market/enterprise, and you were kind of … you’d get accepted in and maybe get a wall of licenses early – whereas now you’re looking at that kind of user-centric word of mouth, a completely different way? Are you looking more at a community then … over time thinking … about the community around the space or … ?
Michael Litt:
[00:04:33] Absolutely! Absolutely. So what we talked about yesterday … some people call it reverse freemium, because we went from enterprise to a freemium motion. I call it product led growth. And I think there’s a couple of nuances to that strategy, right. One, people assume that when you run a freemium strategy, it’s focused on small businesses. But in fact, I think the opposite is true. We sell to all types of businesses. There’s a way you can purchase on your credit card, you know, 2- person startups all the way through to 180K person … small cities and organizations. Right. And what happens is people sign up for the product to solve a problem they have. The reason why that’s powerful is that in the Martek landscape, there’s now 7000 companies or more. I think it’s seventy five hundred in the Martek 5000. A lot of noise. Yeah, a lot of noise. And everybody saying the same thing. Everyone’s calling the VP of sales, the CMO saying …’Hey, we’re going to help you close more pipeline, help you close more pipeline, close more deals faster.
The reality is that the people that are valuable in an organisation are the people that do stuff, not necessarily people who build the strategy. And so if a marketer needs to put a video on a landing page or in an email campaign, they’re not going to run a week and a half long discovery process or an RFP to do that. They’re going to find the thing that lets them do it right now, because the biggest execution risk for an organisation is time, and the time it takes. And so give the person who’s doing stuff the best possible product experience for free. They’ll get value out of it. And then eventually they’re going to hit some type of feature barrier … or whatever … that encourages a conversation. And our sales team loves it because they’re talking to people that are using the product nerdy, getting value out of it.
So we try to provide as much valuable value as possible to those end users for free, and then have discussions about upgrading to other features over time. If they never do, that’s totally fine because they’re using us versus a competitor. And so that’s the strategy that we now enacted. It started by having this free motion on the Chrome extension to record and share videos. And now it’s transcended our entire platform. And our goal is to be the fastest way to either create or upload a video and either send it or put it on a Web site. And that means faster than YouTube, faster than Vimeo, easier than both those solutions – which gets us massive penetration into organisations that are trying to transform their business while using video.
Stephen Cummins:
So it’s viral feed and grow …
Michael Litt:
Yep!
Stephen Cummins:
But it’s also … that virality by definition means you’re seeding evangelism all over the place.
Michael Litt:
[00:06:59] Exactly! The beautiful thing about the chrome extension is that if I’m using the free product and I send you a video, the place you view that video on is on a Vidyard branding page. And if you’re like, hey, that’s cool, I want to do that, too. It encourages you to download the app. So there’s a K factor. There’s an inherent virality built into it. Now, the one thing I’ll say, which is relevant to our prior conversation with BlackBerry is this is us changing our business model … which didn’t come without any risk. The way we engineered and thought about product had to change. Marketing and product now all of a sudden were communicating, and they were never really doing that before – but we knew we need to do this because of the changes we perceived in the buying market. And, you know, this company we were talking about previously in my hometown called BlackBerry didn’t necessarily do that, but they were almost too big to make that transition.
Stephen Cummins:
Yes. It’s harder.
Michael Litt:
Yeah, we reserve the right to be agile … and we have to be! And that’s how we brought the team along.
Stephen Cummins:
Fantastic. And that’s been maybe a two or three-year process?
Michael Litt:
[00:07:52] A year I’d say … but from launching that initial free product, and learning about it and understanding … I think the big transition …. Brian Halligan, CEO of HubSpot, did a session with about 30 executives just a couple of weeks ago. And he asked that group ‘How many of you have made a software purchasing decision in the last year?’ And nobody’s hands went up. And the realisation was that the teams, the executors, are using software that’s available free and impactful …. and then looking for consensus on the purchase. And so executives are just approving purchases they’re not actually choosing. And so, so many companies are going to market trying to target the same on the VP of sales. But really, they should be targeting the salespeople, the director of demand gen, the director of digital, etc..
Stephen Cummins:
Now, I noticed that you’re very high on the video platform grid for G2.
Michael Litt:
Yep!
Stephen Cummins:
Now, you are I noticed that you’re very high on the video platform grid for G2.
Michael Litt:
[00:08:43] We better be!
Stephen Cummins:
Yeah. So do you think that every sane company should make sure that if they know that a customer is having great experience to say … ‘Hey! You know, if there’s any place where you can express that, please do that for us!’ Is that what every sane company should be doing today?
Michael Litt:
[00:09:00] Yeah, well, you know, we talked about a free model, right? People are going to use what’s valuable to them. Yeah, a part of that process is they’re going to do research. And we know that Google is the number one … is the first place someone goes when they’re trying to solve any problem in life … personally or in business. I’m going to Google the thing I’m trying to do …. and I’m going to pick the first few solutions. Now G2 crowd ranks really well in SEO. And so, the best way to validate the decision is a peer validation decision. And that’s why things like Gartner and Forrester reports were so powerful back in the day for Enterprise, because nobody got fired for picking the Magic Quadrant company. Right. Because you could always justify against that … even if it didn’t work. G2 Crowd is the exact same thing. And so, I’m a huge fan of Godard Abel. And I know you’re talking to him later today. I think it’s gonna be an amazing podcast! He’s an incredible entrepreneur.
Stephen Cummins:
I know him well. He’s great!
Michael Litt:
And I think he’s had a massive influence in the way software is reviewed and purchased – and the way it’s impacting the world. And so it’s very important to us … just like this kind of free business model is important to us.
Stephen Cummins:
[00:10:01] Yeah. I mean, I prefer data to magic myself … anytime this week.
Michael Litt:
Oooh! … I bet you he’ll like that one!
Stephen Cummins:
I’ve put it in an article I wrote for him … I know he does … well I didn’t write it for him. I wrote it for myself. But it addresses all of that … Yeah … it addresses the one-eyed giants … possibly going over the edge, and the rise of the customer voice.
Michael Litt:
The one-eyed giants! I like that.
Stephen Cummins:
[00:10:21] And actually …. I noticed in Glassdoor as well … You’ve got a 99 percent approval rating. You know what does … culturally … you’ve obviously got great products … but culturally how does Vidyard tried to ensure employee success?
Michael Litt:
[00:10:41] Yes, great question. We are first and foremost incredibly values driven.
Stephen Cummins:
What are those values?
Michael Litt:
Our values are … ‘Own it!’ …’All aboard!’ … ‘direct and transparent communication’ … and ‘relentlessly resourceful.
Relentlessly resourceful is borrowed from Y-Combinator. It’s a Paul Graham-ism … and basically means spend it like it’s your own. Be resourceful, don’t waste money, yada, yada, yada. And so the way that’s kind of compounded … you know, Devin, my co-founder and I, when we travel, we share a hotel room. Just like we originally did! We try to lead by example. But those values kind of define the experience of being of a Vidyardian. When you joined the company, there’s a document that was originally written by me, and then rewritten by the team. And it talks about the expected behaviours of a Vidyardian that aligned to the values. And if you agree with it, you sign it. If you don’t agree with it, you can amend it.
But once you do that, and you sign this document that everybody before you has signed, you dip your hands in company colours and you press it on the elevator shaft at the entrance to the building. So that every day you’re reminded of your commitment to the culture and the values. Then what we do is we have a strategy map that we build every year that starts with our vision, our mission, our values, how we win big bets for the year, key tactics and KPIs. It sounds complex, but it’s pretty straight forward ….
Stephen Cummins:
It’s a different form of V2MOM
Michael Litt:
Yeah, yeah, yeah, exactly! And everybody in the company needs to know how what they’re doing applies to that strategy map. And managers use that strategy map to open and close every single meeting to ensure everyone’s aligned. And I use that strategy map every time I speak to the company. Last thing we do, and this is a new thing we’ve introduced … is performance management. And I know that can be a bit of an ugly word, but something happened to me very profound about two years ago. A very high performing individual came to me and said ‘I’m going to quit because I feel like I am carrying my team. And there are people in my team that do not care as much about this company and its success as I do.’ And I realized in the process of hiring and going from 50 to 200 people and taking really good individual contributors and making them managers, we didn’t really think about firing. We didn’t think about the negative aspect of that. [00:12:57] And basically pruning the rosebush.
Side note … my wife and I bought this amazing house, our very first house. We loved it. We’ve moved since. And it had this beautiful rosebush. And the second year when spring came, the rosebush didn’t grow back because we didn’t prune it. We killed it. Right. And this is an analogy I use to describe the business.
So now what we do is we plot everybody on a quarterly basis, on axes that represent performance and values …. and based on where you are and those kind of nine boxes, we work to kind of either coach you and develop you … or manage you out, or ask you to leave. And by doing that, the high performers … the people who care … the people who love the values and love what we do rise to the top. And the people that are just looking for a job ultimately get selected out … and pushed out by management and their peers. And building that vehicle … it sounds really not great and not exciting … and even talking about it, I feel a little bit uncomfortable. But it’s so important to making sure that your culture is aligned to the problem-solving and the customers are solving it for.
Stephen Cummins:
[00:14:02] Michael! It’s been an absolute pleasure. Thank you very much for being in 14 minutes.
Michael Litt:
Yes, thank you. Cheers …. Perfect!
Stephen Cummins:
[00:14:16] In the next episode, we’re still at SaaStock in Dublin, where we meet Harrison Rose, Co-founder and Chief Customer Officer at Paddle, a company that has tripled its revenue every year since its founding in 2012.
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 enjoyed the podcast, please don’t forget to share it with your network, subscribe to the series, and give the show a rating.
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Thank you for the artwork to the talented Michael Quill, AppSelekt CTO & CoFounder