Here is my interview transcript, minus the interview questions because Substack maxed me out:
Speaker 1 (Scott Salkin):
Yeah, so I've been in high tech sales and marketing my entire career. I started at Cisco with a program called Associate Sales Rep. And I actually moved to Raleigh, North Carolina and learned the ropes of tech, sales, marketing, engineer. I spent time working for Cisco for about a year. And then I joined a small startup that was doing really boring stuff called Active Directory Software, but it was growing, and I had a cool CEO and I got lucky to get into product marketing. And the company got acquired. And as that was happening, we went through three CMOs, and the entire time I was like, oh man, I could just do this better.
And I didn't know anything. I mean - I was like 23. I knew everything and I knew nothing. I didn't know what I didn't know. But then as the company was getting acquired, I was like, I'm going to go start my own marketing agency. I had gotten dangerous enough at graphic design, and I had been a copywriter for a short time, and I even knew how to do some coding in HTML and CSS. So I went and left and started my own marketing agency. I was working with high tech companies, taking the knowledge and experience that I had and ended up doing really well.
I was out there, I was hustling. I was I doing the marketing work myself. I was the one man band. And eventually I grew that, and it turned into a big marketing agency. I went from one person, and within three years, I had 50 people, and we were doing everything, full-fledged marketing campaigns for some of the biggest high tech companies in the world. Oracle, Cisco, VMware, NetApp. And we were not only doing the marketing side of things, I had an outsourced inside sales component of the business where we would actually go and do the marketing campaigns, but then also do the follow up phone calls to try and generate leads.
And that business was doing well, and it was growing. It got to a point where we had one of our clients who asked us to build a partner portal for them. And we built out this really cool custom partner portal where all of their channel partners could log in and view the marketing campaigns they were doing, view sales programs, request marketing funds, dollars, take quizzes and do enablement. And we custom built this thing and then a few other companies started to see it and they're like, Hey, can you build one for us? And so we were building these partner portals, and it kind of hit me that, wait a second, maybe this is its own business.
And SaaS wasn't what it is now in 2000. It was starting to accelerate, but it wasn't what it is today. And so it went back to I didn't know what I didn't know. I had been running a marketing agency at that time for about seven, eight years. And so I pitched it to our client as, Hey, we'll build this portal out, but I want to OWN it as software. Well, at the end of day they turned us down, but I had done these really intense mockups.
I went back to my office, and I reached out to a friend of mine. His name is Anthony Kennada, and at the time he was the CEO of Gainsight, which was another fast growing startup out of Silicon Valley. And I said, Hey, can you just look at this for me and tell me what you think? I'm like, I think I may have something here. I think this partner portal can be a business. I think it's an area that can be disrupted. There are no real players in the market right now. I think I can build something out of this, but I don't know.
He's like, hold on a second.
He's typing on chat to this guy named Mike. And Mike is starting an accelerator program in San Francisco. He's like, you need to talk to Mike. So I was like, okay, cool. So the next day I chat with Mike. I show him my deck, I show him the mockups. I'm like, we have people using this right now as a service, but I haven't sold a real software yet, but there's a market. And so the next day, I talked to the other partners in the fund, a guy named Rowan, who is now the CEO of Five9, Karen, who is running enterprise sales for Apple and a guy named Nick, who happened to be the CEO of Gainsight.
And they're like, yeah, we like what you're doing. There's a market here. We're starting this accelerator. It kicks off August 1st (I had this call in July). We need one of the founders to be in San Francisco. And we'll invest $50,000. It's out of a WeWork on sixth and Market Street, but we'd love to have you in the program.
I’m thinking - Well, that's awesome... But I had a market agency with around 50 employees, and my wife and I just had twins and they were two months old. So it was like, holy cow, I've got these brand new babies. We just bought a house six months ago in Phoenix, and I went home and talked to my wife and I was like, there's this crazy opportunity. And I feel like this is one of those things where if we don't do it, I'll always be wondering. I told one of my employees at the agency - you’re going to run this business for the next six months. I'm moving to San Francisco.
So I literally flew out there, rented an apartment, and my wife came out a couple days later with the twins. We moved in, I went to Ikea, bought all our furniture, and the next Monday, I was in a WeWork in San Francisco trying to figure out how to run a SaaS company. And for the next six months it was figuring out what exactly is this? What can it be? What should it be? How do I go to market? What do I build? What’s a PNL? What are SaaS metrics? I turned it into a product and then we eventually turned it into a company. We called it Allbound.
One of the things that early founders don’t understand well enough are financial metrics - building your own PNL, putting together your own balance sheet, figuring out cash flow and margins and KPIs.
The first thing I do whenever I start a project now is put together a PNL to really understand if we are actually going to make money.
The accelerator taught us customer lifetime value, cost of churn, net retention, things like that, but not PNL. I would go to the WeWork every day, sit down next to other founders and ask - What does your sales model look like? How are you measuring the success of your marketing campaigns and product market fit? You’d go to a coffee shop, and everybody around you was talking about the same thing. Everybody, it's like you're in Hollywood and you want to be an actor someday. And that's what Silicon Valley was. You’d walk down the streets and you'd see all these signs. There's Twitter and there's Twilio. But it was really about being in that ecosystem and having leaders come into the accelerator.
It opened up this entire network of folks from all over Silicon Valley. Someone would email and say - Hey I want to introduce you to Scott. He’s a part of our accelerator program. Or - Hey, we're doing a pitch day. We did two or three pitch days, and we would have this audience of 50 VCs from Silicon Valley. That never would've happened had I just been sitting there in Phoenix. So those things were critical. And then getting the feedback on your pitch decks so you can build a pitch deck that is the right pitch deck.
It was hard to leave. I ended up coming back to Phoenix afterwards because we were living in a 700 square foot apartment with four of us, paying I think $4,200. The inital $50,000 investment paid rent for five months.
And then I came home and I raised a little bit of money, friends and family, like $250,000. And that helped us actually start building real software. And then we sold to our first customer, and that helped me hire someone. And then we continued to sell it to a couple other folks, and I hired a customer success leader, and we just continued to go. And we had, honestly, in the beginning, we'd have months where we'd close one or two deals and then we'd have a month where we closed nothing, and it was like, Oh God.
At the very beginning, I designed the product. I designed every screen myself. I put together our decks and our marketing collateral. I built our website, I wrote our content, I did our design, I did everything. And then I was like, I'm going to go sell this thing. And I did all the selling. My first real hire outside of someone doing product was customer success. And so I went and hired someone. I was like, we need someone who makes sure that these customers are successful after the deal is signed, helps them get onboarded, helps them see outcomes and see value from the products. Make sure that, yeah, it's great to close the deal, but they're not going to churn in six months or a year. And it's interesting to me whenever fast companies don't focus on customer success because to me, that’s critical if you want your customers to sell for you.
Early on, hiring was all about my network. Our biggest competitor at the agency had an account executive who I always thought was awesome. And I hired him to run customer success because he's just so great in front of people.
Someone else in my network connected me to an amazing marketer who was running marketing for a SaaS company in Phoenix. They're like, you got to hire her. And so we got coffee at Starbucks and I was like - when I raise this money, I'm going to reach out and hire you.
Sales was probably the hardest piece.
We didn’t hire a VP right away, we hired reps. And it was like, go hire twice as many as you need because some will work out, some won't. Then we hired a director once we got a couple of deals in to start managing the reps and oversee the SDRs. And that definitely helped us scale a little bit more. It was hard when it was just the reps reporting into me or Jen, who was our VP of marketing. And so we kind of split those things up (sales and marketing) and that started to function a little better. Once we started to scale it, we needed someone who just owns sales process, sales enablement, sales coaching and really put a strategy in place to hire reps. And that was a big difference maker for us as we started to grow. Then we needed to put SDRs in place to handle inbound marketing so that AEs could spend more time closing versus doing everything.
I didn’t think I was ready to sell enterprise. I needed to find companies who already knew channel was important and were mid market. But then the most random thing happened. I got a phone call from an analyst at Gartner who was like, Hey, I heard about you guys. I heard you're starting something. I'm like, you heard about us?? He was like, I want to get you in front of Absolute Software. They're based out of Vancouver. They're a big software firm. They're looking for a solution like yours. I've introduced them to what's out there already. They're not that impressed. Do you want to talk to them? I was like, yeah, I want to talk to them.
I flew out to Vancouver with two other people from my team. We had an in-person meeting, learned more about their business, came home, did our dog and pony show, pitched it and showed them what we could do. And we closed a $180,000 deal. I was like, well, maybe we're enterprise. And that goes into that thing where it's like you also have to be careful of - if your first really big deal is a big company, a lot of your product roadmap is going to be geared towards them. We ended up settling in with deals that were somewhere between $15,000 to $30,000 and realized that was going to be our bread and butter the mid-market. There was a player out there that was a little more enterprise ready than us, and that's who we were looking to disrupt. And we disrupted the space in a really big way to the point that our competitors started suing us.
We were coming in there and we were winning deals, and we were taking customers away from competition and going to trade shows, and they were not happy with it. And so we would run Facebook ads, and they'd try and shut down our ads. And it was the weirdest thing. I went back to my team, I'm like, there's something we're doing right here. And so all that stuff ended up just kind of fizzling away, but it was crazy. Yeah.
When did you know that it was time to step away and do the next step with Gainsight? What did that whole process look like?
This little guy who you just met a few minutes ago (referring to his kid). So it was hard. I mean, starting a SaaS company, I ended up kind of folding up the marketing agency, selling pieces of it. All of a sudden, we had baby number three on the way. We were growing, but cash flow was still an issue. Raising money in Phoenix was hard. You've got to be in Silicon Valley and visiting investors. I just didn't have time to go and do this road show of pitching the company. And I felt not only was I not doing that, but I could tell I was getting burnout. And then when I had baby number three, all of a sudden on the way, I was like, holy cow. Where did the last four years ago, the twins are turning four. All I've been doing is working. It was hard on life, hard on my wife, hard on family. And I was like, I need to hire a CEO. I need to take a step back. I need to hire a CEO to take this to the next level because it's not going to get any easier from here. So that's what I did.
And I hired a CEO, and I actually sold some of my common stock, my equity. I took it on the secondary and gave myself a little breathing room because listen, when you're starting a company, you're also not paying yourself very much. So it was like, okay - this is not like when I was in my early twenties running a marketing agency, which is a cash in, cash out business.
A guy named Daniel out of Atlanta became our CEO. And he's continued to grow the company. And it was incredible to see this thing scale. And what started out as a PowerPoint idea was now valued at over $70 million and sold and had a great exit for everybody. And I was still an equity holder in the new Allbound. I didn't completely go and exit Allbound. I want to stay invested cause I have a lot of faiths to continue to grasp.
I was 35 feeling I was like 55. I was tired. And so I ended up joining the board and I took nine months off. In a weird way, it was detox. You literally have to detox your body from the stress and everything else you've been going through. And that's what I did. And then Anthony, Ken and I - the same guy who I originally talked about, said - Hey, how would you feel about helping us out at Gainsight around customer success and our conferences and everything else? And I was like, yeah, I'd love to. And by that time, I had been an entrepreneur for almost 15 years, and everyone was telling me - Well, once you're an entrepreneur, you can never go work for anybody. People put people into boxes.
I was like - I'm in this box and I've been doing this to myself. And I'd never really had a chance to work for a big company and learn from amazing leadership and actually work for a Silicon Valley based company and get to do that. And I was like, yeah, let's do it. So I joined Gainsight and came on board running business development and partnerships because I had the background building a platform. And then I've been here now for almost four years and it's been one of the best experiences of my life. And I credit Gainsight because the entrepreneurial nature here, the culture here, the vision kind of CEO, it’s great.
On Scott’s wife:
Interesting story. Rachel and I met here in Phoenix. I was working at the startup, and she was in retail. We actually moved to Denver, Colorado because she got a job out there. And that was when I first started my marketing agency. I knew nobody. I had one client. And we spent a year out there. And then I came back and I developed a bunch of clients all over the place. I was going to Chamber of Commerce meetings in Denver. I was going to tech events, I was emailing people on Craigslist. I was doing whatever it took to find clients.
Rachel is brilliant in business. And I was like, why don't you come work with me at the agency and run operations and help me with some clients? She did that. And so she worked with me at the agency from what, 2006 through 2015 - Until the day we had our babies.