Bootstrap First, Raise Money Later: Wrike CEO Andrew Filev (Part 5)

Sramana Mitra: I understand that you constantly test and experiment but there must have been some kind of institutional truths that were emerging in terms of your pricing and business model?

Andrew Filev: One of the big things that we found is this switch to packages in the SMB digital space. We tested and we’re like, “Wow! This is great!” Another interesting observation that we learned pretty quickly is to optimize for the right things. One example is credit card trials. Back in those days, most companies required credit card trials. You could remove that, which would absolutely improve their conversion from being visitor. But then people are less committed. Fewer of them convert from trial to paid account.

When you’re testing like that, you have to optimize throughout the conversion. It’s not just the first step. If you’re just looking at the first step, you’re being short-sighted. There’s a similar example that runs much deeper in how the market operates. If you remember online marketing, the whole dot-com bubble burst around their revenue model of advertising, which was CPM model. The big revolution that Google came up with was cost per click. Everybody was excited.

As the industry progressed, people realized, “We’re not getting paid in clicks. We’re getting paid in money. Maybe it’s not about clicks. Maybe we need to go deeper and measure their conversions in trials or purchases.” Then you go deep into the funnel with the CPA model, which Google picked up pretty early. This was a huge transformation in how the market operated. Then you go even deeper. You can monitor paid or you could use predictive analytics which we built in-house very early. Right now, there’s a whole industry and there are many great products that allow companies to build predictive analytics. You sign up and they try to tell you if it’s a good trial or a bad trial before it converts. It ultimately shrinks the time to the signal which allows you to optimize so much faster. It was very scientific and thoughtful.

I’m not saying we got everything right. It actually took us years to build their marketing machine. Right now, there’s a lot of learning. Sometimes, it takes data to learn something. One of the big transitions for us was from their trials to what we call marketing qualified leads. It was triggered, not just by a random brilliant thought, but by the actual outcome. At a certain point, we scaled our marketing and generated more trials. Then we looked at the revenue and it didn’t seem to correlate. There was a lot of learning on the way.

Sramana Mitra: I imagine you used some of the off-the-shelf tools for A/B testing. What was the portfolio of tools that was most effective for you to run such a rigorous scientifically-tested marketing machine?

Andrew Filev: I don’t remember all of them. I know we used Unbounce a lot. We used Google’s A/B testing tools for deeper tests. We probably used other tools.

This segment is part 5 in the series : Bootstrap First, Raise Money Later: Wrike CEO Andrew Filev
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