It’s been an exhilarating three years for Marketo.
The American marketing software firm, started in 2008 by Phil Fernandez, Jon Miller and David Morandi, has listed on the Nasdaq and made massive inroads into Australia, Ireland and America.
Last financial year it turned over revenues of $US22 million, up 62% on the year before. That came on massive growth in previous years. From 2008 to 2010, Marketo grew 1486%, leading Forbes to name it one of the 30 most promising companies in America.
Speaking to SmartCompany today while on a two-day visit to the Australian office, Fernandez, now the company’s CEO and president, says it’s been fantastic, but very tricky.
Marketo’s been on a hiring spree, now employing 500 people worldwide, and has plans to double that next year. Fernandez is extremely proud of this. In America, where many are still out of work following the global financial crisis, he says he’s happy to be able to create so many jobs.
But with so many new people in the office, it can be hard to get new recruits up to scratch.
“In the early days, we were all in one office,” says Fernandez. “You’d hire somebody new, and they’d sit with everybody else, ask questions and pick it up.
“Of course, that doesn’t work when you’re 500 people going into 1000.”
A year ago, the company’s managers wrote down their core values. “We talked about being one team, aspiring to be great, speaking the truth to customers and ourselves. Those are the central values we thought we had. We made them explicit. And we’ve hired a sales training professional – her job is to travel the world and teach our salespeople to be productive.”
It’s not just people management that’s become more difficult.
Asked what he wishes he had three years ago to make growth easier today, Fernandez says he wishes he’d invested more in IT systems.
“We got behind on systems and we’ve been playing catch-up,” he says. “I had the company so dialled towards growth and interacting with customers, that we forgot a little bit about the back office.
“All of a sudden you wake up one day, you’re a $100 million company, you’re public, and you’re pushing people to catch up.”
“We’ve been investing like crazy on systems infrastructure in the business, which is amazing. Companies can grow faster than IT departments can grow software.”
Growth was always Fernandez’s goal, and given what Marketo sells, that growth has been its own marketing. Fernandez says the company is a “laboratory” for the sales and marketing software it sells, and can point to its own growth as evidence that it works.
But timing helps too.
“The market is absolutely ready for what we offer. The web, search, social media, mobile devices – all of these have created a world where marketers need tools. The market is hungry and ready, and needs what we sell.”
This means Marketo’s salespeople aren’t focused on closing sales. Instead, they use ‘lead nurturing’, which Fernandez says makes his team “wildly productive”.
“No matter what you sell in the world… all buying these days starts online,” he says. “That means for our buyers, the day the search on Google might be six months before they have the budget or the permission to complete a transaction. So the question becomes, how do you get a buyer along that road from where they express an interest to where they’re ready to put money down? If you stay in touch with that buyer through personal communications – SMS, email, talking to them on the phone – and use that contact to build up a personal record of that customer, they know you as a seller, and you know them as a buyer.
“Most of the buying process happens without a salesperson pushing it along. So a salesperson might think they’re the one who got the sale, but really, it’s all happening without them behind the schemes. Sales are the last part of the process. So we don’t put pressure on our salespeople to close – but rather, to nurture buyers along the path.”
Needless to say, it appears to be working.
Asked what advice he’d give to other businesses keen on growing fast, Fernandez says to make selling easy.
“Create a great website with lots of information, your pricing, what it takes to use the software… when we created the product, we wanted people to be able to use it to get results from the very first day.
“It’s amazing to me how many companies worry about doing everything by the book instead of making it easy for customers. You need to empower your salespeople to say ‘yes’, not ‘no’.
“And then, be relentless about going out and finding customers.
“There were multiple moments where we felt, ‘do we have to slow down? Do we have to put our foot in the break?’ Some of the best advice I got was that if you’re growing and customers like what you’re doing, just keep hiring. Have the confidence that if customers are buying, you should keep going. In my view, companies fail to grow because they get scared.”
“And finally, make your first and best customers successful. Don’t ever skimp on helping them, and harvest their stories. Have them speak on your behalf. The single best asset in growing a business is customers who are promoters. So spend every dollar you can on ensuring that. If you get a virtuous cycle going, well, you’re set.”