ClearSlide | Interview with its Co-Founder & Board member – Al Lieb
In San Francisco (CA), we meet Co-Founder & Board Member of ClearSlide, Al Lieb. Al talks about how ClearSlide was founded, how the current business model works, as well as he provides some advice for young entrepreneurs.
Martin: Hi, today we are in San Francisco in the ClearSlide office. Hi, Al, who are you and what do you do?
Al: So I am Al. I am the co-founder of ClearSlide and I am an entrepreneur, a lifelong entrepreneur.
Martin: Tell me about what is your background? What did you do before you started ClearSlide and what is ClearSlide by the way?
Al: So I have been an entrepreneur all my life. I came out here to San Francisco in ’97 and right out of the school I started the company. So I started Evite which is an online invitation product, it was popular in the days. And really since that I have started a number of companies, ClearSlide being the most recent. so I have never really worked for a company that I didn’t start myself.
Martin: What is the connector between those different companies?
Al: I think for me; I am excited about companies where using technology to communicate with people. There is a lot of technology that is just for technology sake so a faster hard drive or just to make the technology better. But I am very passionate with connecting to people and the way that you can use technology to tell their story and communicate with your friends, your colleagues what have you. That is something I see as very valuable and it is a thing I can get passionate about.
So Evite was about getting connected with your friends offline and create parties, and ClearSlide is about communicating with your customers but in both cases it is people that are connecting and talking together.
Martin: When did you have this “Aha” moment “Ok, I want to start ClearSlide”?
Al: It was funny actually. So I started with Jim, my co-founder and we had worked together at Evite so we had known each other for about fifteen years. And we started with a different idea actually. We were selling something to advertisers, a media product and we found it very hard to tell our story with these media advertisers. You call them up and they say, “You have 5 minutes to pitch me. That’s it.” They give you very little time, it is kind of very competitive market. And we found that nothing, no technology let us tell the story the way that we wanted to or that was really compelling and so we initially created ClearSlide for our own use. A way to tell our story and we started using it with customers and we found that they were more interested in the way we were presenting. They don’t like actually our product but they ask, “What is that? What did you just use? That was kind of interesting.” And that happened two or three times in a row and we said, “Ok, what is this?”
What we discovered was in the space of sales & sales communication a lot of work could be done around the back office of storing data by your customers but not actually making that conversation better. And so we decided to shift gears and focus on that.
I found too that most of the times the best startups are things you want to use yourself and a need that you discover that if you want to use it and be the customer of your product you can really understand and be passionate about it. Same with Evite, the same with ClearSlide as well, it was something that we needed.
Martin: Did you change the name from your old idea to the new?
Al: We did. It was ShieldMedia before. We changed that very quickly to ClearSlide.
Martin: And did you have some other investors in before?
Al: No, no. So we have been working and it was early so three or four months in and we just started to get the product going so we actually didn’t get that investors in yet.
Martin: And then what was the next three or six months looking like?
Al: That was just very interesting. We had this ShieldMedia product and we had ClearSlide and it was important for Jim and I to really prove that there were customers willing to buy ClearSlide. So, I have been involved in business before where it seemed like a promise but there was not actually anyone that really wanted to pay you. We set ourselves a goal to find 5 people willing to give us money. So this was our goal and Jim arranged some conversations with customers and we went to pitch 5 customers in one day. What we did is we call them up and said, “Hey, here is our product. We are going to be doing a Beta in about a month but if you are interested we need a credit card right now.” And we had 5 out of 5, 100 percent in 24 hours.
We didn’t have anyone to put the credit cards so we were just writing them down on paper. But we proved ourselves that there were people willing to put money behind this. And so for the next three to six months we just worked on building the product and talking to customers and just Jim and myself. I have been involved in business before where we raised money pretty early. But we really wanted to prove to ourselves that we can get customers that want to pay for it. I was just us working away for about nine months before we raised any money and by then we really had customers and we had enough revenue we could run profitably actually and then we said, “Hey, this is really the time to scale the business.”
Martin: Imagine, I was one of those 5 potential clients. You are pitching to me and you need to convince me that I should not wait like for six months or nine months when you have your really good product ready but I should buy it now.
Al: Part of that was to say a couple of things.
One was to say, “Listen, we are looking for people to help guide the product and we are looking for feedback from you. Your feedback is going to be instrumental for what we build”and that is interesting for them because they can early be able to guide it.
The other thing was kind of a ticking clock when we said, “I need that right now and we are only going to be about ten slots in this beta program and so I need a decision right away”. And that urgency drew up a lot in as well.
Martin: So this really mean well in the next two hours or one or two-week time?
Al: In that initial point it was on the call. Jim did most of these pitches and it was basically a full pitch. We had a prototype to show, we walk through the product, walk through our vision because we are trying to do but if you wanted I need it (the answer) now. It worked.
Martin: So you had 5 potential customers. What was the next step?
Al: We had credit cards and we spent the next month or two building the product so we built it an early, early version and we said to those first customers “Hey, it is available, just to get you in” And In the early days we focused on person to person training, so we call them up and say, “Hey let me get you into the product. Let me show you how it works.” And we spent with each individual user to show them how it works which is time consuming but you also can hear what is working and what is not working, what they need and what they don’t need. That created a lot off product feedback early. We just did that over and over and over again.
So in the first couple of months we probably spoke to hundreds of customers just Jim and just the two of us. Hundreds of companies and hundreds if not thousands of users and just over and over again you get them into the product and get them to use the credit card and you learn quickly what they are really reacting on.
I think the other issue, sometimes entrepreneurs have a product, but that willingness to pay means that they (customers) actually value. Sometimes people say, “I like it, it sounds good” but then they actually pay you and so asking for the money early you are able to kind of really gauge what they really value, what they see as interesting. So yes, we were just doing that over and over again.
Martin: How did you find the first customers and made them sure?
Al: Early on we knew that these are sales teams and so we were thinking “Hey, who do we know that are head of sales?” Fortunately, in our previous history we were connected to some folks that were head of sales. And sometimes it was the folks in our network, in James’ network particularly. But other times it was just cold calling. It was just identifying someone who we knew would be a good prospect and just reaching out.
Martin: At what point of time did you say, “Ok, maybe we should raise some external funding”?
Al: It was interesting. So about nine to ten months in we have hired our first employees. We initially thought we have the budget for one, but we were really stretching to hire two. It was well on my first few sales wraps. And we spent a few months and Jim really trained them and we could develop the product or work with them and once we found that they were also having success, meaning that we were able to reproduce the success we had then we were like “Wow, this Is working. We just need to add more people to it.” And at that point we said, “Hey we should raise. We had something repeatable, scalable that resonate with customers. Let’s raise some money behind it”.
Martin: And how long did the fundraising process take you?
Al: It probably took about two days, a couple of days.
Martin: Two days!
Al: Partially though there is a lot of preparation that goes into it. So, first of all it is everything you have done for the company but also those two days were all about researching the best people to talk to, having connections. There are a couple of weeks of preparation before it, so make sure you are talking to the right people and have the right messaging and everything is kind of really tight. And then really in our first or second meeting, where was I and Aydin (our seed investor9, and it was about a five minutes in and he said, “I want to invest. I want to lead this round” And I said, “We haven’t even shown you what we do yet,” and he was like “I have seen enough.”
At that point we said, “Wow, somebody is really excited”. We met a few other people that were great investors but didn’t really click as quickly as Aydin did and so he let a round and we met with a couple of other people. SO it was only a couple of days.
Martin: I would have assumed that it was more similar to the sales experience in the first place “So you got the two days.”
Al: That is right! I have found that when raising money,it is important to have a tight window because investors want to see momentum so it is helpful to keep it really fast.
BUSINESS MODEL OF CLEARSLIDE
Martin: Al, let’s talk about the business model of ClearSlide. What are the typical customer segments that you are targeting and what is exactly the value proposition that you are delivering to them?
Al: We target sales and marketing teams primarily in enterprise companies. So anything from a couple of sales reps to a thousand of sales reps, for example Comcast. Generally, the verticals are any enterprise team, but we are heavy in media and technology but also in healthcare and financial services, kind of traditional enterprise teams.
The value proposition is basically to make you more productive. We are there to help in your conversations with your customers, to make those go better but also to give you insights to what happened both for the sales rep and for the sales leadership to understand: Is my message working? Is my approach working? Can I improve things or as a company could we have better messaging to improve things? So we spent a long time on insights and analytics to drive better results behind the scenes as well.
Martin: So does that mean that you are integrating with other kind of sales funnel management tools? Or is it that you are providing the sales on a management level as well?
Al: We are doing it with CRM primarily which keeps the data from your customers. But we found that we really take over ones the sales rep starts to work with an account. So early in the funnel you have marketing tools that are targeting the customer figuring who the right customer is but they haven’t actually started the conversation. So once the conversation starts we can take over.
Martin: Good, and can you also describe what the ClearSlide product looks like?
Al: In the product is a few main features or functions.
One is around speaking to a customer and that is called live pitch and you can use it over the phone and in person. We have both web technology and mobile technology so when you communicate you can use all your collateral power points or PDFs, your video files and present it to the customer.
We also have e-mail pitch which is for sending content collateral. So after meeting I might send you a deck. And what I do is I send you a link and you will be able to visit it in a web browser or on your mobile device. When you do I get insights that you opened it and you spent time on slides, what was most interesting to you.
Those are really the two key interaction methods either in-person or over the phone or e-mail. But there is also a whole suite on analytics and insights where you can understand both is the customer interested but also you can roll that data to the sales team. So you can say which content is working best, which sales reps are being the most productive. We are actually working on predicting type technology where based on all the data we have we can predict which deals are likely to close or not close so we can help leadership understand what is really happening and be able to manage to coach the team.
Martin: Al, how is the revenue model working?
Al: So that is one of the great things, at ClearSlide we use SaaS in general. It is a very simple model. It is basically per user. It is a subscription model so enterprise SaaS model where we charge per user per year such type pricing. And it depends on various things with the different packages with pricing but it basically scales up based on the size of your team.
Martin: Is it really like on a per year basis or on a per month basis?
Al: When we quote a customer we will say on a monthly basis, here is your cost per month. but generally, most of our contracts have an annual commitment or multiyear commitment. When we started actually in the early days we were more month to month as we started to get the business growing, but at this point it is mostly annual or multiyear commitment.
Martin: Can you give us some insights in the organization? What is the typically the functional split so to speak of the people working here?
Al: In ClearSlide, two biggest teams are sales and technology. Our sales teams are spread across three offices in the US – here, New York and Seattle. We are thinking about international offices as well. We are both inside sellers which sell over the phone and field sellers which sell in person so it is really based on the size of the deal. If it is a larger deal it really makes more sense to meet in person. If it is smaller, we can settle it over the phone.
And then on the technology side we have a lots of development talent, operational talent, IT. Because our product is pretty broad into the technology we offer we do both mobile web, we do analytics and insights, we also do conversion and we do gmail plug ins, our plug ins. There is a lot of technology behind the stack, there is lots of different types of developers and technology people in the company. That was all wrapped into our technology team.
At that point those two teams are roughly similar in size. So I’d say 40 percent of the company is in the sales and 40 percent is in the technology engineer teams and then about 20 percent is in our support functions.
Martin: You seem to have a lot of experience in terms of sales. What are the most important ingredients for a great sales pitch to really close it?
Al: To close it?
Martin: For real in two minutes or five minutes.
Al: I think the biggest thing is to show value. A lot of times people will show the product and show features but it is really important to show the value that you provide to that person. What we often have found is that sometimes sales folks start to a cookie kind of approach and they don’t modify or the type of person they are selling to. If you are talking to VP of sales or CMO or head of finance or CEO those are all very different roles and those roles care about different things. As you begin to customize your approach based on who you are pitching to and the kinds of challenges that they are facing.
For a VP of sales rather than talking about e-mail pitch you might talk about how the challenges in scaling a team, how you are hiring the right people, or if you have one sales rep that is productive how do you replicate that across other sales reps. Those are the challenges, those are the things he deals with every day. And so we start with those and show benefits against those and then show the value, then show the actual product behind that as well. But you have to get really emotionally connected to the challenge or the problem that you are trying to face. And so that is probably one of the biggest insights.
I think simplicity is key. If you are able to pitch it in two minutes or three minutes and have it be effective than that’s where you get to start. You can always make it longer if they want to dig in but you will have to be able to sink the idea in the early days.
Martin: So currently the story of ClearSlide sounds to me like very straightforward. Any roadblocks along the way that you needed to shift around?
Al: I think one of the challenging things for us was trying to figure out the right customer segment and how we sell to it along the way. In the early days we were selling to teams of five or ten or twenty and now we found success at 1000 or 2000. And the way you sell to a thousand-person team is very different than the way you sell to a small team.
And so one thing that is challenging about the business it has been the breath of customer base and to sell over the phone SMB (small & mid size business) it is a lot of different skills and a type of organizational approach and the selling approach is very different along the way. So we were kind of fine tuning that and it has been challenging.
I think there are always people along the way as you grow. Initially as an entrepreneur you try to get that product fit. Once you get that then it really becomes about scaling the people organization and it is really about building the best teams, getting the right people. There are always times when it works or it doesn’t work as you grow and as you grow quickly those things can be challenging at points. I think those two are probably the biggest ones.
Martin: Can you elaborate on how are you currently acquiring or doing the sales for larger customers or the smaller customers?
Al: How are we breaking in?
Martin: Yes, because you said that your sales approach is different between those two segments.
Al: The biggest thing when you sell to small companies is the users, the sales reps and the decision maker are very close. They might sit in the same office. It might be a small company of 10 people and there might be 10 reps using the product and their manager is right there and has a credit card. And it is a more simplified approach or a faster approach. It can be more driven by the users using the product.
In a large company, there may be many levels in between the user and the budget owner. What that means is that you have to sell on multiple levels and you have to be able to get users using it but also get a senior leader understand the budget reasons for doing it and the risks and the rewards and the benefits to that level. So what we have found is it is a sale where you have to at multiple levels and do bottoms up selling and also top down selling where you want to break in high and go low or go low and break in high. If you do those both well everyone up and down the chain is a supporter.
We have had situations where we don’t do that well, where maybe the users like the product but the leader doesn’t know why it is valuable or vice versa the leader likes the product but the users don’t know why it is valuable. And that will create friction because you don’t get buy in across the organization. A lot of times the approach needs to have a multiple layer approach for to work effectively.
Martin: Imagine, you identified the budget owner and you are pitching him so that you convince him. At some point having this really in parallel for me It is quite hard because you first need to get it into their hands and if the budget owns says, “Yes, now you can do it”, then you have some kind of staging: signed off by the budget owner, pushing through all the organization, penetrating the users, and making sure that they are using it. And then have this kind of dual track approach. Or do you see this in another way?
Al: It hopefully starts that way. If you start high and go down is also a great place to start. The problem can be if you can’t get the attention initially and maybe after starting low you can get attention high.
The other thing we found is even if you get the decision makers initially excited we have seen a lot of buyer approach these days where they are very collaborative and even though the leader might like it they really want to see that their team has adopted it and likes it: “So, I am interested, but you have to prove to me that my team will use it and use it well and I am going to see value from it.”
So we often do these trials or pilots program to say let’s get a hundred users using the product and will report back up both back up to the user but also what is the value. Here is some deals we have closed with ClearSlide, this is the value that we drove. And once you meet that you really need everyone on board and those leaders will be looking for feedback from their teams in terms of how effective it was.
Martin: What is the typical time of having such a trial period because for you showing some tracktion and usage?
Al: It varies. It can be anywhere for smaller companies it can be a couple of weeks and for larger companies it can be a couple of months I’d say. And then showing the value really depends on sales cycles. Sometimes they will sell very quickly in which case you have got short deals, in other cases the sales take longer so you can show pipeline. Here is the customers that have been moving the pipeline and here is how we have generated a value.
Martin: Then basically you are doing an A/B test, so here is how you performed before and now look at the sales pattern and the closing rate and so after using our tool it is like that. So here is the value.
Al: Exactly. We show the team how they used to sell or that team and some other teams. What has been great is once you have sales that have gone through the process then they know the value of ClearSlide. So sometimes at that point they just buy it because it has been proven to them. But if you try to show credibility then these are some of the steps that we go through.
Martin: And are you seeing a lot of recommendations or referrals because if you are like you said targeting some sales department of company A and some of the sales reps is leaving the company, taking this experience to another company and then having something like inbound sales?
Al: Absolutely. One that is specific for sales is they are tend to be very word of mouth driven and they very much get credibility value what the other co-workers use or what the other colleagues use or have used in the past. We have very often seen that work very effectively. Actually our program is here to track when users leave companies and where they go so we can then sell to the new company as well. We find that to be very effective.
ADVICE TO ENTREPRENEURS FROM AL LIEB
Martin: Al, you have started so many companies directly after university. What have been the major learnings for you that you would like to share with first time entrepreneurs about really starting and building companies?
Al: I’d say one big lesson I have learned is that in terms of ongoing process – oftentimes an entrepreneur will have an idea and launch the idea whenever the initial phase is. Sometimes that works well, fantastic, sometimes it doesn’t but then ok, it didn’t work. On to the next thing, right, I am not going to do this. And what I have found is that it is very much iterative optimization type of approach where you have to get out there, try something, see what works, listen to customers very well and then adjust quickly based on that and keep that loop between the feedback you are getting and your product very tight and fast. If you do that effectively you can get better quickly and things can go in a positive direction.
I have found that actually one of the biggest drivers of success is the ability to iterate in ongoing way, in a way that really listens to the customer needs more so than anything else.
Martin: And what other type of learnings did you have, especially with problems and situations that are most likely to occur when you are an entrepreneur?
Al: One of the things for starting entrepreneurs is as companies go through different stages the needs of the companies change and the needs of the kinds of people change, and even the way you spend your times changes.
As an example, in two-person company it is all about trying to figure out your vision and the product that you are trying to build and that is all that really matters. Then when you are five or ten and fifteen or twenty, a hundred or two hundred things change and the needs change. One example is what I found is at about 50 people you can know everybody and everybody knows everybody else. There is not a lot of need of process or system and those sorts of things. Once you get 60 or a hundred those things start to break down. Someone gets hired and everybody: “Who is the person that.” And you start to have needing processing more efficiently the channels of how things go through.
I think to be sensitive to what your needs are right now the way you need to spend time as an entrepreneur or co-founder, or your team needs to spend time it can change very quickly. And if you are looking for it you can be effective, but if you are not you can get caught behind it and something that was working two weeks ago sometimes isn’t working anymore.
Martin: And how did you feel once you have crossed like 50-60 people coming to your office and say, “Actually, I don’t know these people. Is this my company?”
Al: I think it started happening around 100-150. Particularly when you are going quickly. Jim and I and other founders definitely wanted in the early days to interview everybody. So up until 50 or a hundred we had interviewed everyone or at least knew it was part of the process. And then there was a point at which you stop doing that.
It is tricky too when you do sessions around the vision of the company and we have meetings where we tried to connect with all new people but sometimes on those meetings you go around and you would ask: “How long have you been working here?”, and they would say: “Four months.” And you are like “How have we not met yet?” It is a weird feeling for sure once you come across that stage.
Martin: Al, thank you so much for sharing your knowledge. It was a pleasure.
Al: It was a pleasure to meet you. Thanks for having me.
Martin: Thanks, awesome!
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