Bootstrapping to $200 Million: Jorn Lyseggen, CEO of Meltwater (Part 5)

Sramana Mitra: In terms of customer traction, what did this altered process yield for you? Let’s say the first year of this altered process, how much did you sell?

Jorn Lyseggen: Our sales was probably half a million dollars.

Sramana Mitra: What was the pricing model? How were you charging?

Jorn Lyseggen: It was a SaaS model. It was also part service.

Sramana Mitra: Half a million dollars from how many customers? What were the average deal sizes?

Jorn Lyseggen: The size was actually pretty nominal per client. Each client was probably $2,000 to $3,000.

Sramana Mitra: $2,000 to $3,000 a year?

Jorn Lyseggen: Yes.

Sramana Mitra: How did the revenue ramp from there on?

Jorn Lyseggen: Then we grew very quickly. The second year, we ended up with $3 million. We were $6 million in the third year. After that, we doubled for many years. We grew between 50% to 100% for the first 10 years.

Sramana Mitra: The other question is the distribution of clients. It sounds like you started with European clients.

Jorn Lyseggen: Correct.

Sramana Mitra: Talk a bit about how you built your sales channel and customer acquisition strategy.

Jorn Lyseggen: Because of the importance of understanding the clients versus the product, we were very careful in the way we were hiring sales people. We went through a very rigorous recruitment process because we wanted people who had the smarts and attitude to speak intelligently with business executives many years their senior. They needed to be business savvy and communicative. They needed to have strong intererpersonal skills becuase you need to build rapport. Early on, we knew that we wanted to use a lot of sales over the phone because it would be much more efficient.

To have people to connect with the executive in a very short time is very challenging. Imagine you’d call up the Marketing Director of Coca-Cola and try to say something intelligent about branding and how to understand branding within the first 30 seconds. In order to get to that point, you need high-caliber people. We focused on top university graduates who had the smarts, attitude, and drive. That turned out to be very successful for us.

The key focus of building our sales organization was to develop sales leadership. The thinking was one sales person could only sell so much. If you build and develop programs to continuously develop sales leadership, each sales leader can recruit, train, and develop sales people and build us a strong sales team. It scales much more and much faster. When we built the sales organization, it was primarily with the focus to develop sales leaders. That was the number one priority. We typically said internally, “Our bottleneck to grow is really our ability to attract, train, and develop sales leadership.”

This segment is part 5 in the series : Bootstrapping to $200 Million: Jorn Lyseggen, CEO of Meltwater
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