Sramana: What is the genesis of Marketo?
Phil Fernandez: My previous companies were million-dollar enterprise software companies. They were classic enterprise software companies with big sales forces. Salesforce had not quite burst on the scene but it was getting started. There was a new point of view that there was a whole new software company being built in the enterprise space where success was the race to 100,000 customers, not the race to 1,000 customers. You can build a velocity business in that environment.
The whole idea behind the company I am leading now was to democratize the CRM process. We founded Marketo to take all of what we learned about building products for revenue professionals, and not just the coming products but real product that had an impact for revenue professionals to enable a velocity business.
I raised some money on Sand Hill Road at the end of 2006. We opened our doors in 2007 and have been building a hot company ever since. We are four years into the company and we have 1,000 customers. Over our first four years we have grown as fast as Salesforce and Omniture did. We are on track with the elite SaaS companies.
Sramana: You said you wanted to democratize the CRM space. What specifically did you have in mind?
Phil Fernandez: We had a couple of observations. The Internet, Google and Google AdWords had fundamentally changed the relationship between buyers and sellers. The job of the marketing professional has traditionally been demand generation. The job of the frontline salesperson was changing, and there are 19 million of them in the U.S. alone. We identified this as a macro trend and determined that we needed to follow in the steps of a company like Salesforce.com to take advantage of the cloud. We knew we wanted to build a SaaS company. We knew it was about velocity.
Sramana: What is the value proposition of Marketo?
Phil Fernandez: The value proposition is that we help our customers find more prospective buyers, we help to deliver more ready to buy leads to the sales teams, and we help your sales teams be five times more effective thus driving 40% top-line revenue. We are all about the end-to-end revenue operations in companies. We have increased the revenue of our customers by 40% of their first two years of Marketo use.
Sramana: How do you do that?
Phil Fernandez: We do it by looking at the end to end process where the buyer is in control. We typically sit behind online advertising such as Google AdWords as well as their traditional media. Google AdWords represents 5% of the average marketing spend in the B2B space. Events and trade shows represent 26% of that spend. We are a multi-channel company.
We start right at the place where our customers meet their prospective buyers. We help their marketing team open up the front end of their funnel. We give them many more names by using the best of the Web, the best of social [media and Internet], and the best of traditional events to capture their leads into a critical new business process called lead nurturing.
Lead nurturing is about how manage a lead from the date you meet them until the date you are truly ready to buy, and how to do that at scale.