Pieterjan (PJ) Bouten is Co-Founder and Co-CEO of Showpad, A Marketing and Sales Enablement SaaS Startup, originating from Belgium, that’s seen tremendous growth in a short space of time and can now call itself a Scale-up. PJ joins Alex Theuma on this episode of The SaaS Revolution Show to give insights and lessons in scaling a fast growth SaaS co.
Alex Theuma: Welcome to the SaaS Revolution Show. I’m your host, Alex Theuma.
I’m super excited to be joined today by a SaaS entrepreneur from Belgium who is co-CEO of one of the fastest growing SaaS startups of the European origin at the moment. Welcome to the show, Pieterjan Bouten, co-founder and CEO of Showpad.
Pieterjan Bouten: Thanks, Alexander. Happy to be on the show.
Alex Theuma: It’s great to have you on the show, Pieterjan. And as you have kindly given me permission, I’m going to call you PJ from henceforth, if that’s okay?
Pieterjan Bouten: That’s perfect.
Alex Theuma: Okay, cool, PJ. And we met actually I think in person for the first time earlier this year, not so long ago at the European Growth Stars event. You were the growth star, not me, unfortunately.
As we’re coming to the end of 2016, has it been a good year for you and for Showpad?
Pieterjan Bouten: Yes, it’s definitely been a good year. I mean, obviously we had our Series C raise this year. So with Insight Venture Partners we raised $50 million. That’s a major milestone, of course. But I think aside, and I think you don’t build a business to raise money. You build a business to grow a business, to get new customers, to build a product, to build a team and, on that level, it has been a great year for Showpad. We’ve launched a lot of new features in our product, we welcomed a lot of new customers, and we doubled the team from 100 to 200 people both in Europe and in the U.S. So that’s been really exciting for me.
And it looks like we’re going to be very close to our revenue target, so that’s also really exciting. Because we’ve been growing 100% year over year in the last 5 years and we’re going to be super close this year again, so that’s really exciting.
Alex Theuma: Excellent. I’ve got some insights since your revenue targets at that event. We’ll come back to that in a few questions’ time.
Let’s get to know you a little bit better and Showpad as well. Who is Pieterjan Bouten?
Pieterjan Bouten: I’m born in Bruges so I’m Belgian. I’ve studied in Brussels in Leuven, Master in Communication Sciences then Economics. Spent a year in Barcelona doing Erasmus and then I actually started my career in consulting at Accenture, CRM implementations. After 2 years, I was bored of wearing a suit every day. Although I worked, but I learned to work really hard and with some very smart people there.
Then I wanted to join a startup and I joined Netlog.com, one of the, at that time, fastest growing social networks in Belgium. I was one of the early employees there, built out the business development team. I was at a company that had tremendous growth and then crashed because of Facebook, and it was a great experience. I learned a lot.
Then that’s when I started my first business, In the Pocket, a mobile agency focused on delivering mobile apps to media companies’ brands. And from that we spun off Showpad.
I’m 35, I’m married, I have two kids. I live in Belgium. Belgium is my home base but I spend a lot of time travelling. I lived for a longer period of time in the U.S., in San Fran as well for 6 months last year doing the fund raise.
All in all, I think I’m a guy that loves tech, loves to build businesses, loves to work together with people. Yeah, that’s about it.
Other than that, I try to do some sports now and then. I did my first triathlon this year and want to do some more next year. And yeah, just love travelling and spending time with my kids and wife.
Alex Theuma: Great background there and interesting, as you say, that you spun Showpad out of your agency that you’d started up. Tell us a little bit about why you did that and lead that into what is Showpad.
Pieterjan Bouten: Yeah. So basically we started the mobile agency about 7 years ago. At that time, smartphone penetration in Europe was about 10% so it was still early days of smartphones. IPad just launched about then.
We started that agency with the focus of, okay, there’s going to be such explosion of these devices and a lot of companies and businesses will need to have solutions and services built for those devices, either mobile optimised sites or apps, so let’s just get the best mobile developers we can get and build a company from that.
And only a couple of months into the business, I had a friend who he owns an artificial grass company. They do about 20, 30 trade shows every year. So basically, every two weeks they have a trade show somewhere else in Europe. They had like a whole team travelling, sales guys. They needed content to present and to engage with people at the tradeshow. Basically, he was complaining what a mess it was to print all of those materials, to ship them around, that he couldn’t actually know what all of his efforts in marketing if they actually paid off because if you share a brochure or a flyer or something, how do you know that things get, you know, that that customer actually comes back or becomes a customer.
So I said, look, why don’t you start looking into something more mobile which you can track, where you can centralise the content, where marketing can have more control, where your sales are more productive. And I started thinking about the idea and that’s how we came up with Showpad. We built him a first version and it was so successful that we decided, okay, this has a lot of potential as a platform, as a product.
Then we also saw that building a product company is something totally different than building a service business. And that, to be successful, we had to like split both companies and give the Showpad idea and kind of the Showpad product all of the opportunity. But it took us, in all honesty, it took us like 2 years to fully separate, Louis and myself. Because Louis is my co-founder, co-CEO, to separate us from the agency because, of course, the agency it was very addictive in terms of we were doing very well, you make a nice margin. If you do well, you make some good money. But on the other side, it throws away all of the attention of the product you want to build.
And it’s quite hard because we only have 24 hours in the day and we also have employees in the first company and you need to attract new people into the other company. It’s kind of like the first 2 years were difficult just in the matter of focus.
But once we raised money and did our first round of funding, the good thing was that at that time we were ready to do it from an organisation’s perspective. And then when you have VCs into the company, there’s no other way. They want you to focus 100% on what they just invested in. So that also helped then to really focus 100% on Showpad. That was 2013.
Alex Theuma: You’ve been working on Showpad for almost 6 years but really 3 years all in once you’ve had the VC money. Who was the first investor and how much have you raised then since 2013?
Pieterjan Bouten: The first investor was Hummingbird Ventures, a European VC. A small team but great people. Barend Van den Brande came in on board as our first board member and VC. So we raised €1.6 million, so about $2 million in 2013.
Then we raised another round with the guys from Dawn Capital who were based in London. That was about $8.5 million back in 2014.
And then we raised about $50 million with the guys from Insight Ventures in May of this year.
Alex Theuma: Okay. So roughly like $60 Million-plus.
Pieterjan Bouten: Yeah, roughly $60 million. Something like that.
Alex Theuma: A nice war chest there to help you scale for the future. I’m assuming most of that $60 million is still in the bank. Correct?
Then at the Growth Stars event earlier, you shared in terms of what your revenue target is on an ARR basis for 2016. Are you kind of happy to share with the audience what you’re expecting to be at by the end of this year?
Pieterjan Bouten: Yes. We started the company 2011. So since then we’ve been focused on always doubling our revenue. We started the year with about $10 million in ARR and we’ll end the year, it’s not going to be 20 but it’s going to be close to 20. It’s going to be somewhere in the 18 neighbourhood, but 20 was super ambitious. So we’re going to have about 80% growth, something like that. That’s where we’re focused on.
I think, at the end of the day, it also depends. You can have extreme growth but it also depends on how much you’re going to burn, right? I think that’s something you want to just keep in balance as a company. That’s been our main challenge this year in terms of we’ve been growing very aggressively.
Throughout the year, we started the year with focusing really hard on making sure we get enough… you know, if you grow so aggressively, you’re adding so much ARR. You need to scale aggressively your customer success team because you’re onboarding so many customers. Then the renewals kick in and you also realise there’s so much renewals that we’re going to do not only this year but also the year after that. Those people need time to ramp, need time to understand the product, the market. So then you’re very aggressive on the customer success hiring, you’re very aggressive on the sales hiring because it takes anywhere, depending on the segment, 6 to 12 months before sales rep at Showpad is fully ramped.
So that kicks in and so you start to do very aggressive hiring and then, not to forget, you need to build product. There’s a lot of focus then is spent on building our engineering team and building our product team. And that’s what we’ve been doing this year
I think if we look at the ratios of Showpad in terms of cost efficiency, in terms of the growth we have, in terms of how much we spend on marketing and what our churn is, yeah, then we’re very happy. I think it’s been a very exciting year for us.
And 2017 even looks… I believe there’s going to be more growth because the average time a person has been under a company today is about 9 months. So if we take the average tenure of everybody at Showpad today, so if they got 31st of December, for example, it’s going to be 9 months. So it means a lot of people are not yet at their peak of productivity and there’s so much more potential there. So that’s what really excites me.
Alex Theuma: Okay. So you’re going to hit $50 million by the end of 2017.
Pieterjan Bouten: Yeah. I still have to do board meetings and finalising the budget so I’m not going to say how much we’re going to do in 2017. So we’re looking into that right now, where we end the year. That’s obviously an important benchmark. And then let’s see how that translates into next year.
For sure, aggressive growth. For sure, we want to remain a top tier SaaS company. And then we need to show aggressive growth numbers. And aggressive growth, for me, that’s anywhere in between 70-100%, or more, of course, growth.
But we’re also an enterprise SaaS business. It’s not consumer-based. We’re dependent on the sales and marketing transformation that is going on. We’re dependent on kind of like sales enablement becoming more of a topic at more companies and that’s a market that is maturing. There’s some big players emerging there. Showpad is one of the leaders there. But we still have, again, a long way to go, but that’s also why we raised considerable amount of money.
And we really look at it from the long-term. We never took any real shortcuts in terms of building the company. I believe as well, as an entrepreneur, you need to have some patience sometimes. It’s hard for entrepreneurs. I don’t have much patience but building a business is just it can take time and it’s quite hard in terms of, I think, the people aspect. The bigger you get becomes even more and more important. Like how we organise a team, the executives that you have on your team, how you set vision for the company, how do you manage multiple locations, stuff like that. That becomes increasingly challenging. That’s why you need to also attract the right experience.
Alex Theuma: Talking about in terms of setting up the team, actually when you set up the company, as we mentioned, your co-CEO. And I’ve seen this a couple of times. I mean, I know Typeform they have co-CEOs. I can’t remember. I’m sure there’s another couple of examples and great examples and it’s working.
Why did you make this decision for you and Louis to become co-CEO rather than one is CEO, one is COO or whatever? How does this work for you?
Pieterjan Bouten: Originally, when we started the company, I was CEO of the company. Louis was more focused on… I actually don’t remember what his exact title was but he was a bit more focused on, that time, definitely more to the sales and also a little bit the product side, although we both did a lot of product.
Then when we started to go into the U.S. and Louis, my co-founder that time, moved to the U.S., we decided to really officially switch to co-CEO titles because he would effectively run and build the U.S. operations. I also spend a lot of time there but if you want to attract talent in the U.S. as well, people like to work for somebody who’s in charge and who has that title.
At the end of the day, Louis and myself all important decisions we would take together. So I wouldn’t take any major strategy decisions or decide anything in Europe or maybe even globally in the product or every other thing without discussing it with him and vice versa.
So historically, we’ve been working together with kind of like… there always has been kind of like some vagueness about where does one… it was not like that we fully put on paper or aligned or made it very clear to the company PJ does this, Louis does this. And actually, we have good collaboration between Louis and myself and then also with your team it really helps, because people can if they’re talking to Louis, they’re talking to me. If they’re talking to me, they’re talking to Louis. So it’s kind of like if you really have a great way of collaboration with you co-CEO, that can work.
Now that Showpad has come to a certain size, we’re contemplating 2017, we might make some small changes on that. Louis will probably focus a bit more on the product, I will focus a bit more in the operational side of things. Maybe be kind of have more CEO role and Louis will have more Chief Product Officer role, and we’ll define it a bit more. If you’re a 200-people company it’s needed.
But definitely, the first 5 or 6 years we found it very powerful. But you have to, again, have complete trust with each other. You have to have complete transparency with each other. You have to dare to have the tough discussions with each other.
Louis and myself, we weren’t friends before we started the business, and I think that’s been really powerful for us in our co-CEOship. Louis was a colleague at Netlog. That’s where we met. We started our first business together because we saw that we shared the same passion for technology, because we both had the entrepreneurial kind of spirit and wanted to build something of our own. And we like to work with people and we were able to convince them of our vision and attract them. We could both do that.
Louis is both very good in sales and product and marketing and strategy and we actually have a very similar skill set. And that’s maybe unique in the co-CEOship thing because usually you see one technical co-founder and one maybe more business oriented person, and they will have maybe also a co-CEOship role and really have clearly defined responsibilities as an individual.
Louis and myself had clearly defined responsibilities as co-CEOs and that’s setting the vision of the company, attracting the best talent, making sure we focus on having a good roadmap, making sure that sales… and if Louis would be in the U.S. he’s of course more close to the U.S. sales teams and I would be closer to the European sales team or customer success team. But at the end of the day, the first 5 or 6 years of Showpad, that has been our strength.
Right now, we both feel that we’re at a stage where we do have to more clearly define things because of the size of the company, the footprint of the company in 2017, so that there will be some small changes there. But fundamentally, nothing will really change in the fact that we take all important decisions. We’ll just talk a lot about them and take them together.
In the last 6 years we never had a situation where we disagreed on the most important topics in terms of strategy, roadmap, go-to-market, hiring. Again, you can have really intense discussions as co-CEOs and I think that’s good. If you don’t have them, I think probably you have the wrong partner or a wrong co-CEO or however you want to call it if you’re working in a certain setup.
And also when building a company with somebody else, I do believe that you need to have those tough discussions or else, if you agree too much, that would be strange. But, at the end of the day, the most important thing is then usually good things come out of it. And Louis and myself, not being friends in the first place, would be more colleagues. Business was our first like trigger to work together. Of course now over the last 5, 6 years we’ve become very close friends and we spend a lot of time even in the weekends or with our families together if I’m in U.S. or he’s in Belgium.
But still, during the day, a lot of our discussions even if we’re just hanging out, we’re going to talk business, we’re going to talk strategy, a roadmap of Showpad, things like that. So to create agony of our lives, of course.
Alex Theuma: And your role or, just in general, the role of the CEO evolves as the company grows, right? So your role as CEO next year will look maybe a little bit different than it did this year.
But what did it look like as you were going towards your first $1 million ARR? What were you doing as CEO? Was it sales? Was it hiring? Was it kind of everything? What did you do to get the first million?
Pieterjan Bouten: It’s really kind of everything. Like more a lot of time on the product. Louis and myself we closed pretty much the first $500,000 in ARR. We both did all of the sales meetings. And so all the first customers we closed them usually together. We were on the road a lot with our car driving around selling Showpad. We did a lot of face-to-face but also even like the WebExs or we had some of our first customers were in the U.S., Louis and myself basically did all of the demos and the selling ourselves.
So it was everything from the website to the messaging on the website through thinking, creating the one-pagers to presenting conferences or… again, even during that we didn’t have like an internal finance person. So I would just do it together with our accountant. So from finance to signing the payments every Friday and making sure everybody gets paid to even buying the furniture or even putting the furniture together. So we’re pretty much, again, very broad background, I think Louis and myself, and very broad skill set. Which sometimes also makes it…
Again, as you evolve, you of course have to have a bit more focus. You have to also learn. I really had to learn to delegate more, focus more in giving the right feedback instead of try fixing things yourself. Still that’s sometimes a challenge. I’m a guy who also sometimes likes to dig in. I think that’s needed as well but sometimes you also have to be able to zoom out. And then make sure you can give proper guidance and you set longer-term goals and can motivate people and encourage them and give feedback. That’s something as a company grows and goes through these different growth stages, you just keep learning.
I feel like I’m never there in terms of like how we manage the team, how we communicate. If you’re building a company for 5, 6 years that’s a very intense period of time or that’s a long period of time to be really working very hard. So you have to make sure as well to see it as… in the beginning, I saw it too much as a sprint and like you work these 20-hour days. I skipped some nights again, but over 6 years that’s harder to maintain. So at a certain moment, you start to focus a bit more on building the team around you that can finance check, marketing check, sales check. Just have somebody who owns it.
But of course you still have to give feedback. Even if you hire extremely talented and savvy people who know marketing or sales or customer success way better than you, you’re still going to have to give them feedback, give them guidance. Even if they’re 15 years older and have seen maybe a lot more things it’s still important to align them with your vision, your view on how the market will evolve, your view of the company you want to build, the values that you think are important.
And you just learn that by making a lot of mistakes, making… on the hiring, I think that’s the toughest part. I think that’s probably one of the most important things as a CEO you can do is make sure you hire extremely good managers, good executives around you, and then make sure as well set the standard very high to the people that they bring in.
I’m still involved in, and Louis as well, every… I mean, we’re only 200 people. So we interview a lot of people, but in the later stages of the interview process I always like to be involved. To have a chat with the people and make sure you ask the important questions. It’s not the important questions but try to make sure, from a cultural perspective, you have a great person from…
Usually when a person gets to me, I’m pretty sure that from a skill set perspective it will be checked then and people will have challenged that person and have scrutinised him or her. But at the end of the day there’s also something like gut feel and kind of like trying to probe if this person will be a good fit in the team. That’s something I still believe having interviewed almost everybody here. In Europe, for example, I can quickly know if somebody will be a fit or not.
Alex Theuma: So has then, as you say, has hiring been one of the major challenges of scaling Showpad? Would that be fair to say?
Pieterjan Bouten: I think hiring probably for any startup, a fast-growing startup, will be a challenge. It’s definitely a challenge in terms of the speed. We hired 100 people last year. That means to hire 100 people we generally did… I should check the exact numbers but we had a couple of thousand people applying for a job at Showpad. Eventually, you hire 100 there’s a lot of CV reviewing, phone interviews, interviews with people. So as an organisation, you spend…
For a lot of the hiring, we don’t have a very big HR. We call it Employee Success Team. So for a lot of the hiring, you’re dependent of your managers and the team there. But those managers also have to deal and try to get through your targets, to scale the team, to bring more process, to make sure that customers are served. So it puts a lot of pressure on the organisation in terms of time that you spend on hiring. That’s why I think it’s really important.
We implemented greenhouse, which helped us a lot in terms of building some process, building interview guides, building scorecards. We focused a lot on building more process around our hiring so that we can have a clear view of the pipelines, see how people are moving through, make sure that we ask the right questions, that there’s notes, that there’s history. And then at the end of the day, it comes down to are you able to attract the very best talent. So I believe for every startup that’s a challenge.
Another challenge in our domain is sales enablement as a category. It has been around for quite awhile actually. Already there’s sales-enabled companies like _____ [unclear 27:31], for example, who’ve been around I don’t know how long but like at least more than 10 years.
But for us as well, it’s kind of the maturity of the market. We’re not at the stage where people wake up and say, ooh, I need a sales enablement solution. There’s more and more companies looking into it and understanding its category and understanding what the benefits are. But we are still very much in a phase where we have to do quite a lot of education with our customers, what our solution is about.
That means that we also have to train and educate a lot of our own people and getting them ramped up is also a challenge. But there’s all these great things you can do to speed that up. For us internally, we give a lot of training. We try to expose people a lot to sales and marketing leaders.
Then in the market, we just try to be the leader, the talent leader. Get more of our message out there, work with analysts, work with industry leaders and experts to make sure that your category is growing. And you can clearly see sales enablement as such and sales productivity, scaling sales excellence is a major, and aligning sales and marketing is becoming increasingly important. Because the last 10 years a lot of companies spent optimising the marketing side of things.
So they implemented marketing automation, they implemented Marketo, HubSpot, all of these great solutions. They have Google Analytics, they have all these conversion numbers and track what’s happening online. But the moment there’s human interaction in terms of a salesperson, bottom of the funnel, either you’re selling complex products or you sell something maybe simple but that needs to be decided by multiple buyers. Or you sell a combination complex products to a complex buying or decision-making unit.
A solution like Showpad there has really helped because it makes sure that marketers understand what’s happening, have more control of the message, and that sales reps can really have the right information, have better conversations and can be more productive. But to get that demand from the market takes a combination of building the market for yourself, owning some of the messaging there, becoming a thought leader. I think that’s where many companies are really challenged depending on the maturity of your market. And that’s why you have to have some patience and combine it with relentless execution of the product side, make sure you have a product that delivers value especially in the enterprise. If you can do that a lot of the magic happens.
I’m not going to say by itself but we have very much a Learn-and-Expand model. So we know the most difficult thing for us is finding the customer or attracting them. But once we close them or once they enter our pipeline, we have a very high close ratio and we grow them very well. So for us, the challenge is really just get more customers into the pipeline because it’s basically a green field.
In many solutions it’s not super competitive yet. And we have very high close ratios and great product and we already have proven it last year. We can grow them and we knew them. So the challenge is really on the marketing/demand gen side, I would say, aside from the hiring.
Alex Theuma: Okay. And we’re coming to the final two questions for the show. So can you maybe share some mistakes that you’ve made in scaling the company, maybe for those that are listening that they could avoid? Are there any that kind of spring to mind that you’re happy to talk about?
Pieterjan Bouten: Yeah. I would say it’s a long list. I think it’s usually like you make… I think people need to learn to fail small and then quickly… you can fail very big but then if you fail in a big way and it’s like threatening the existence of your company, it can be very painful.
So I think at Showpad, we never had any really big failures. But I can list a couple of things where we really learned some lessons the hard way. So one of the first ones was, when we started Showpad, we really believed that it was actually a channel. We believed that we would build our solution and then other agencies, content agencies, creative agencies would resell us and that they would be the sales engine of our growth. And after one year of doing that, we had actually several resellers that were selling Showpad.
In a good way, we were making money. But we did also some direct sales. But the problem was that our product was changing so fast that the customers were unhappy because they were in service in the right way, because all of the communication and service and sales ran through those resellers. And so that _____ [unclear 32:39] like on paper, resellers or indirect models look really great but you need to have quite a mature product and really good communication and documentation flows around that. And we didn’t have that and so we had to change that and it cost us quite some money because we had to buy away all of the contracts from those resellers and stuff like that. So that was like a small near-death experience already in the early stages of our company.
And the second lesson learned was, the second big mistake was we didn’t spend enough time and focus on, it was a very basic mistake that we didn’t register all of our trademarks and brands in the proper way. We thought we did, we had done so, but we took a cheap lawyer that didn’t give us the right advice. And we ended up eventually somebody snagged away our original trademark. We had to settle with him. Again, it cost us something like 50,000 or 70,000 but, at that time, we hadn’t raised any money yet because the first 2 years, Showpad just we financed it ourselves with profit from our first company. So we were paying that with our own dollars. And at that stage, again, that was like really a very, very tough lesson. Like oh, damn. Like why didn’t we spend more attention to that?
And the third, it’s not a big mistake but it’s something that also happens and shows that you can make mistakes anyway. I think it’s how you fix them and how fast you fix them as a startup that really makes a difference. And our first 2 years off this, for example, was in New York. We hired about 3 to 4 people there. Actually, really good people.
But the problem for Showpad was that, for some reason, we didn’t get the right traction as a company there. We weren’t in a certain… in terms of customers in New York, we didn’t find the right vibe, in terms of then growing the teams and making the right connections into like where we could see our company grow and scale there. And for some reason, New York wasn’t a fit for us.
And after 3 or 4 months, we said, okay, we hired some great people here but, longer term, we don’t see it happening here. We were spending more time on the West Coast. There were more enterprise SaaS companies there that were closer to Showpad and more close to our sales and marketing ecosystem. And so we decided, after 3 months in New York, to close our office there and then move to San Francisco. It was tough because we had to let go of some really good people, actually, after only working together with them for a short amount of time and move the office.
So those are some of the things and, for me, lesson learned. It was a tough call at that time. A wrong decision to go to New York for us but, eventually, we ended up in San Fran where it’s even more expensive in hindsight. But we really were able to attract the right talent for Showpad, it was a great environment from a partnership perspective and ecosystem and like other entrepreneurs and people who are just working more similar things like Showpad. It was just a better environment to be in.
Alex Theuma: Well, I think on that note, really insightful answer there and really interesting to hear about those three different mistakes and the impact on your business at the very different stages.
The last question was going to be what are your kind of hints and tips to SaaS founders out there? But I think throughout the podcast, there’s been lots of hints and tips and lessons on how to scale the SaaS business. So on that note, I think we’ve come to the end of the show, PJ.
I just want to thank you for being an awesome guest. It’s great to learn about you and Showpad and your scaling story to date and say you’re one of the growth stars. And we’re expecting to follow your path to $100 million ARR in the next couple of years.
Pieterjan Bouten: That’s where we want to get.
Alex Theuma: That’s it. So come back on the show, assuming we’re still doing it, when you’re doing $100 million ARR. We’ll see how long it took you.
But thanks for being such a great guest. I hope you close out the year strongly and round up that $18 million to $20 million ARR.
So thanks, Peiterjan Bouten, co-CEO of Showpad, for being a great guest in the SaaS revolution show.
And for those listening at home, if you liked this episode of the podcast, we’d love it if you’d rate and review us on iTunes and we’ll see you next time.