International Business Environments and Operations 16th Global Edition test b...
Mattermark Case Study - Inbound 2015
1. INBOUND15
Mattermark
A Harvard Business School-style
case discussion
Jeff Bussgang
General Partner, Flybridge Capital
Senior Lecturer, Harvard Business School
2. 1. Context for the story
2. The story
3. Three decisions that need to get made
4. Take aways
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1 What Is A Harvard Business
School Case?
(…and who am I to teach it?)
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• Day job: venture capitalist (Flybridge Capital)
• Former day job: entrepreneur (Upromise, Open Market)
• On the side: HBS professor
• Teach Launching Technology Ventures to MBAs
• Full disclosure: invested in Mattermark
• Full disclosure: didn’t invest in Hubspot (doh!)
Who Am I?
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• Educational innovation pioneered at HBS
• Present a challenge, constraints, incomplete information
• Put student in role of decision maker
• Analyze, debate, discuss, defend – no simple answers
• Usually: read beforehand, do some homework/analysis
• Today: make it up as we go along
Case Method
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Danielle Morrill
• Community college drop out
• Startup geek, hacker, blogger
• Ran marketing at Twilio
• Started Refer.ly, YC, shut down
• Pivoted to Mattermark: mid-’13
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• Raised $2m seed round – June 2014
• Closed $6.5m series A – December 2014
• Board meeting with new investors: tomorrow!
“Nothing focuses the mind like a hanging .” – Samuel Johnson
The Dilemma
• Pour money into sales and marketing for VC market?
• Invest in product to expand beyond VC market?
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10. INBOUND15
Sales team hitting quota
Sales cycles short
Product usage high, growing
40% test – if product disappeared
LTV : CAC > 3
MRR growing > 10% MoM
Churn < 30% / year
NPS > 20
Criteria for Product Market Fit
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$0
$20
$40
$60
$80
$100
$120
$140
NPS (50) and usage high
MRR growth ~ 10% MoM (founder selling)
x MRR growth = flat (new VP sales hired)
x LTV : CAC = ~ 1
x Gross churn = 50-60% / year
Mattermark’s Data
MRR
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~ 500 Active VCs
x $20-30k/year willingness to pay
$10-15m / year market
x 30% market share
$3-5m/year
How Big Is VC Market?
Tiny!
Other Benefits?
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10x revenue
> $1B
Recurring
> 50%/year
< 20%/year
strong
2x revenue
< $100M
One-time
< 30%/year
> 30%/year
weak
How Valuable Is VC Market?
Market size
Business model
Growth rate
Churn
Network Effects
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• Founders had done all the selling – got to $1m ARR
• Then hired “grown up” VP Sales from industry
• He failed miserably – big company culture, didn’t dig in
• Now have 5 person sales team but no leader
BTW, Sales Leadership A Mess
• Hire a new VP from the outside?
• Promote from within (and keep founders selling)?
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Sales Leadership Considerations
Hire New Leader
Bring a playbook
Provide exec leadership
Bring a team
Promote From Within
Playbook is unique
Positive signal to staff
Keeps founders selling
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• hire inside sales vs. outside sales?
• more reps vs. more marketing programs?
• invest in content marketing / inbound vs. outbound?
Invest in Sales or Marketing?
• Ramp up sales team?
• Ramp up marketing team?
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