Building a Fast-Growth Local Advertising Business: Yodle Co-founders Ben Rubenstein and John Berkowitz (Part 4)

Sramana: The company had hit $3.5 million in revenue, you brought in venture capital and a new CEO. What strategic decisions were made to put the company on a faster growth curve?

Ben Rubenstein: This was the time when we were starting to scale. There were a lot of things we were doing in the early days that did not scale. Our early sales strategy and sales model did not scale. At this point we started to hire outside salespeople and open additional offices. We felt we were going to sell in the same way that the Yellow Pages sold. We had the same client base, and we both sold advertising. We felt the best way to do that was to have a bunch of small offices around the country.

At the same time we tested some inside sales to see if we were able to sell over the phone in a more efficient manner. In 2007 we started spending our money on the outside sales model before we pivoted our inside sales model. It turns out that our inside sales model scaled, and that is what we use today. It was a big strategic decision that has been critical to our success.

John Berkowitz: The entire plan that we raised venture capital money on and the long-term vision had us establishing 30 to 50 regional offices with deadlines to get them opened. That was the proven model and we knew the type of sales rep that could sell to local business. We knew that local business sales were all about relationships, and we were hiring sales reps who had proven themselves in that model. We had the intuition to try something different even though our outside sales model was working. We were meeting our projected numbers, and we still went out and tested the inside sales model just to see if we could find a better way of doing business.

In 2007 I was in Chicago, and I did 45 interviews. I was about to move to Chicago to open the Chicago office. The interviews were not great. I found one person who I thought would be fantastic, yet at the same time the results of inside sales were coming back very positive. I ended up not signing a lease in Chicago and convinced the one person in Chicago to come back to New York with me. We never opened a Chicago office, and that was the end of opening up regional offices as a strategy. Our competition continued down the outside sales strategy while we converted to an inside sales strategy.

Ben Rubenstein: In 2007 we also scaled our product out which was another key change. We had a product which was put together with sticks and glue. In 2007 we really built out our product with a formal tech and dev team. We put the product in place with a scalable infrastructure with hundreds of thousands of customers.

This segment is part 4 in the series : Building a Fast-Growth Local Advertising Business: Yodle Co-founders Ben Rubenstein and John Berkowitz
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