Building a Fast-growth SaaS HR Technology Company: Justworks CEO Isaac Oates (Part 4)

Sramana Mitra: Who were you dialing? What was the process of targeting and positioning?

Isaac Oates: I always think about what I would do differently, I would say that we probably brought on a sales team a little bit later than we could have. We had a website and people could come in and sign up. We had a database of hundreds of companies in New York who had heard of us one way or another. Those were the people we started calling. Once we exhausted that, we looked at what we were succeeding with.

The companies we were succeeding with were small tech startups. They’re early adopters. It always resonated with them. The size was really important because the product wasn’t that sophisticated. It worked really well for companies with less than 10 employees. That was our initial target. The other thing that would happen is that our sales team would go to a lot of events here in New York. They’re out there meeting people.

Sramana Mitra: What were you charging for that product at that point?

Isaac Oates: Initially, our pricing was absurdly low. It was $30 a month per company, which is not even enough to cover the cost of operating. We learned our lesson pretty fast. We are now charging about $75 per person per month. That’s pretty close to our pricing today.

Sramana Mitra: How did 2015 go in this mode? Once you got the product going and sales team, how long did it take you to get to the million dollar run rate?

Isaac Oates: I think we hit that point in June of 2015. We grew about 7x that year. We were at this point where we built a sales team. We had people who had at least some experience in the company and we knew how to sell it. We built enough functionality into the product at that point that we could make a halfway decent sales pitch. We had enough credibility here in New York. We started to make a dent. 2015 was completely insane and a lot of fun.

Sramana Mitra: Did you raise money again in 2015?

Isaac Oates: We did. We raised $6 million Series A in September of 2014 right before things started to take off. We raised a $13 million Series B led by Bain Capital in April of 2015.

Sramana Mitra: This is a very substantial amount of funding in a very short period of time. What metrics did you show to the investors to raise that much money that quickly?

Isaac Oates: I think there were a couple of things that were really appealing to them. The first thing is that HR tech is something that had been growing quickly. We also were growing at these explosive rates. We hadn’t really proved out all of our unit economics yet, but people loved the product. If you have a product that people love, then this is probably worth backing. The other thing that’s so important is the chemistry between founders and the investors. I think in all of the cases where we’ve raised, we’ve been able to find investors that just saw the opportunity that we saw and were willing to make the bet.

This segment is part 4 in the series : Building a Fast-growth SaaS HR Technology Company: Justworks CEO Isaac Oates
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