Once upon a time, SalesLoft was a hot new startup.
SalesLoft was founded in Atlanta circa 2011, funded with a $US1 million seed round, co-founded and advised by David Cummings — best known for selling his bootstrapped marketing tech startup Pardot to industry giant ExactTarget for $US95.5 million.
SalesLoft was building a ton of buzz on its stated mission of building tools to make life easier for salespeople in any industry by automating the process of sifting through sales leads.
The company was able to ride that buzz to a spot in the acclaimed TechStars accelerator program. Salesloft even placed on the Top 10 Innovative Technology companies in Georgia in March 2012.
There was just one problem: One year after launch, SalesLoft’s product was not good. At all.
“I was failing miserably at building a product,” says SalesLoft co-founder Kyle Porter. “We weren’t able to deliver anything.”
With four employees, the company was pulling in $US50,000 in annual recurring revenue (ARR) after a year on the market. Growth was painfully slow, and even going after venture capital money, already a more difficult process in Atlanta than it is here in Silicon Valley, wouldn’t fix that.
The issue was that Porter, a first-time entrepreneur but an experienced businessperson, was way better at attending conferences, networking, writing blogs with advice for fellow entrepreneurs, speaking at events, and generally being a people person than at actually working with the developers who build the product.
“We were just really good at telling our story,” Porter says.
The TechStars program was great at teaching SalesLoft how to meet with venture capitalists or speak in public, but not so great at teaching Porter how to be a non-technical startup founder who could manage a technical team.
Meanwhile, David Cummings, the successful entrepreneur who founded the company with Porter, was involved in SalesLoft more as an advisor than in any kind of operational role.
Porter remembers landing a $US40,000 deal during this period and handing the list of customer requirements off to his two-person development team. He went back to his office, and another employee asked what they should do now.
“Let’s double down on what we’re good at,” Porter recalls saying. “Let’s go talk about ourselves.”
Eventually, it became clear that this just wasn’t a good strategy. Good salesmanship and marketing could only carry SalesLoft so far. If SalesLoft was going to get any bigger, it would have to seriously reconsider its gameplan.
In early 2013, Porter decided to burn the whole thing down and start over. He laid off the company’s three employees, but kept the name and the mission as he looked to rebuild.
“I made some big mistakes, I swallowed my own sword,” Porter says.
During this transition period, Porter paid for the company’s expenses mostly out of pocket — he rented out one of his two condos and sold his boat to make ends meet. It wasn’t exactly hard living, but Porter was committed to reviving the company.
The new SalesLoft would do three things differently, Porter says.
- First, he would establish “core values” for the company, just to ensure that he was on the same page with any new hires. Those values would revolve around concepts like open communication and personal responsibility. This approach has led to a much more in-tune and happier workforce, Porter says, which results in better product.
- The second thing was something Porter says he had to learn the hard way: Never let sales and marketing outpace investment in the product.
- Third, even though Cummings is still invested in SalesLoft, Porter needed a co-founder who would be “in the trenches” with him every day. He ended up recruiting local startup vet Rob Forman as his COO and Tim Dorr in a technical role, giving them both founder status in the revamped company.
The approach has worked. These days, Porter says the company has 50 employees (up from 11 this time last year), mostly evenly distributed across sales, marketing, product, and operations, and $US4.5 million in ARR, with 800-plus customers, pushing it into profitability.
Last year, SalesLoft went back to winning awards, too: It was named one of the best places to work in Atlanta by the Atlanta Business Chronicle. Porter himself won an “Early-Stage Entrepreneur of the Year” award the same year.
It was enough to raise a $US10 million Series A from Silicon Valley’s Storm Ventures in March, which Porter says is enough to help the company grow and weather any changes in the market.
It’s not quite like the monster triple-digit-million rounds of funding raised by tech darlings like Slack, but as Porter works on building a stable business with solid growth, it’s an entirely reasonable and sane amount.
In fact, he says he’s been struggling with ways to spend the money, which is why SalesLoft will have a $US500,000 booth at Salesforce’s Dreamforce conference.
But given that Atlanta is outside the power chambers of Silicon Valley’s elite investors, Porter knows that SalesLoft has to work hard to keep growing, because money just isn’t as available there.
“You gotta scrap more. You gotta raise capital from your customers,” Porter says.