How We Started a Revenue
Marketing Automation Tool
Hi! Who are you and what business did you start?
Hi there! I’m Andrus and I’m a marketing pro with 20+ years of experience at various high-growth companies around the world. I started with Outfunnel’s idea validation at the end of 2017 (as documented here) and got an early team together at the start of 2018. The legal body was established in April 2018 and the founding team solidified by the end of 2018.
Outfunnel is a revenue marketing automation tool that integrates deeply with CRMs. It offers features that help sales and marketing work together: automated emails in sync with CRM data, specific reporting, more precise targeting, etc.
What is your personal story and how did you come up with the idea?
Before starting Outfunnel, I was the head of marketing at Pipedrive, a CRM tool, for more than 7 years. During these years at the crossroads of sales and marketing, I noticed that a lot of SMBs struggled to align their sales and marketing. I had a rather vague idea of a marketing tool that should exist but I didn’t want to waste my time (or that of others, for that matter).
I knew I had to be prepared to fail, but if I was to fail, I wanted this to be for a better reason than “oops, that the product we have built is not needed”. So, I started with thorough idea validation, which mostly took the form of interviews with warm contacts I had in the world of B2B marketing. I ended up doing more than 100 of them. Through that, I learned that connecting sales and marketing data and tools is a struggle for most SMBs.
Once I had a pretty good idea of what to build, I shifted my focus to finding people to help me build a prototype. It took us about 6 months to build and launch the first prototype. Fast-forward 2 years: we have more than 500 paying customers now, but I haven’t stopped doing customer discussions as we keep developing Outfunnel.
What challenges did you face when creating your product/service?
My first struggle was getting the first version of the product built. And starting from that point, one constant challenge has been finding great people to join the team, and keeping them engaged. And looking ahead, that also looks to be the biggest ongoing challenge as we grow the business.
If you have a strong team, everything else is easy. Yes you may have growth struggles, but a great marketer will know what to do. You may have issues with development speed or bugs in the system, but a great engineering team will take care of it.
And then, you’re just left with anecdotes instead of struggles. Like my co-founder Markus Leming, repeatedly doing customer calls from the toilet cubicle because all the meeting rooms were busy.
Who is your target market?
Outfunnel is best suited for small and medium-sized businesses that need both sales and marketing to grow. The ideal product-market fit is with companies where sales cycles are longer, not transactional. That’s roughly 25% of all SMBs according to our estimations. Some examples include professional services, consulting, real estate, healthcare.
Because most of our customers are small and medium businesses you probably haven’t heard of them (eg. Caddle, Modea, LearningStone). Businesses that are strong in their niche and region, but who are not usually featured in global/tech media. That said, we have some better-known scale-ups as customers eg. Bolt.
How do you market your business and which approaches have been the most successful?
My view is that for startups like Outfunnel, it’s all about Findability and Recommendations. What this means is that first and foremost, we have to be present in places where our potential customers search to find solutions like Outfunnel. So, we focus a lot on SEO and different partner sites.
Secondly, we focus on recommendations, which is a combination of working with the right “influencers” (e.g. our integration partners, affiliates) and getting customer and product marketing right to make sure we facilitate word of mouth.
Since you launched, what has worked in not only attracting but retaining customers?
We take customer success very seriously and it shows in the feedback and reviews Outfunnel gets. In fact, the other co-founders and I still make time to conduct product demos and reply to customer inquiries. At an early stage, such a close connection to the customers is essential for keeping tabs on the market and customer needs. And of course, as a result, customers get 5* customer support.
Even in the earlier days, we did a lot of the customer onboarding manually! We have published a case study on how we moved from manual onboarding of customers to automated onboarding emails, and what we learned in the process, if anyone’s interested in learning more about onboarding automation.
What kind of culture exists in your company, and how did you establish it?
We have established two core leading values: “get it done” and “be a learning machine”. The first stands for finding the most important things that will make a difference and getting them done. The latter is all about becoming better at what we do, as individuals as well as a company.
To keep everyone aligned, we have a weekly all-hands, and the development team also has a daily standup meeting. We also have a monthly company retrospective to review how the month went and what could be done better.
We’ve also started a tradition of having a company hackathon once or twice per year. It’s a great way to pull the team together and rapidly build a prototype of a feature we think may help the company move forward.
What software, services or tools do you use within your business?
Our productivity toolbox does not have any surprises: Google Suite, Slack and Zoom. When it comes to analytics and intelligence, a few interesting tools we’d recommend to other software companies are Amplitude and Smartlook.
What are the most important lessons have you learned on your business journey?
My biggest lesson has been and will continue to be that it’s all about the team, as mentioned above.
My second biggest lesson is to have laser-sharp focus on the one key pain or need in the market (aligning sales and marketing) and being open to changing almost anything around it. Whether it’s the product, or business model or pricing mechanism.
We’ve been around for 2.5 years and have recently launched the third major evolution of Outfunnel (a revenue marketing automation suite.) That’s come a long way since our first product that was a data syncing app! We are already planning the next major change.
What is your favourite aspect of being an entrepreneur?
Over 15+ years as Head of Marketing in various companies, there was always something about the company that I didn’t fully like. As an entrepreneur, you can design the company almost exactly according to your ideal of a company. That’s been the most enjoyable aspect so far.
What is your LEAST favourite aspect of being an entrepreneur?
I’ve found it hard to let go and to relax, especially at critical points of the company journey. But that’s become easier as the team has gotten bigger and stronger.
What books, podcasts or other resources have inspired and influenced your business journey?
Everyone even remotely involved with marketing should read Alchemy by Rory Sutherland. In this age of hacking growth and chasing numbers, we’ve forgotten that we’re all just hairless animals, and that many things that move companies forward are irrational, even surreal.
For example, if you need to improve public transport service, the rational option is to invest in new roads, tracks, vehicles, stations — and this will set you back tens/hundreds of millions. The alternative is to invest a couple of hundred grand into better displays that tell you exactly when the next train/bus is due. Less anxiety leads to increased perception of quality for a fraction of the cost.
Other than books and podcasts, the one habit that’s been most useful to me is talking to others in the field that have accomplished something. Talking to others has a ROT (return on time. Is this a thing yet?) that’s 10x compared to reading and listening.
Where do you see your business 2-3 years from now?
In 2-3 years, we’ll still be helping companies align their sales and marketing, but we’ll do it 10x better compared to today. If we become the best at solving that problem, then we don’t need to worry about hitting a specific revenue figure or limiting ourselves with a specific employee count. In my view, we’re just getting started.