Building a Pre-IPO SaaS Company: Chris Cabrera, CEO of Xactly (Part 5)

Sramana: The period over which you have built your company is also the same time as the emergence of SaaS. What was the hardest aspect of scaling on the customer side?

Chris Cabrera: In the early years there was a lot of skepticism of SaaS. In the early days we were relegated to companies that had 500 reps or fewer. Companies with thousands of reps were still struggling with the advent of SaaS. Every year we have seen improvement in that area. We get bigger and bigger customers, and we are going deals with thousands of seats. Our customers are now huge companies like American Express and Salesforce.

Sramana: Where did you get early traction?

Chris Cabrera: Our early traction came, as expected of a Silicon Valley startup, in the high-tech space. During the first three years of the company most of our customers had sales forces of 200 to 600 people. We were not selling to SMBs. We were selling to big companies.

Sramana: When did you start branching out into greater segments?

Chris Cabrera: After the third year, we started to realize that we were getting less and less pushback from the larger companies. We started pushing for thousand seat deals and also went after healthcare, financial services, and other markets. We have a very horizontal app. About two years ago, we realized we were dominating and owning the comp market for any company with greater than 100 reps.

The one place we did not dominate was the SMB space. I did not see someone else to get a foothold there, so we built a separate product on the Force.com platform to address the SMB market. That has been phenomenally successful. These are smaller deals of $8,000 to $10,000, and companies are live in eight hours.

Sramana: Did you sell it through the app exchange, or did you have your own telesales force?

Chris Cabrera: Both. We are on the app exchange and have a lot of activity there. We also have an inside sales center in Denver where the teams are totally focused on selling that product. That product has been in the market for about a year and a half, so it does not account for a huge amount of our revenue, plus the deal sizes are a lot smaller. The SMB product is still a tremendously valuable product for us.

Sramana: What does your competitive landscape look like?

Chris Cabrera: When we go in, we are most often competing against Excel and Access databases. Beyond that we compete with IBM who bought a company that was in our space. We also compete with Callidus. They have found the religion and have now gone down a cloud computing space. It is difficult for a public company to pivot as quickly, and just because you put cloud in your name it does not mean you are a cloud player.

This segment is part 5 in the series : Building a Pre-IPO SaaS Company: Chris Cabrera, CEO of Xactly
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