Summary
This week, Gabriel sits down with software partner and good friend Pete Caputa, CEO of Databox, to discuss opportunities that Databox can provide in a time where it's more important than ever to understand your data.
Listen to the Podcast version of this episode:
Highlights
- Who Pete is - Who Databox is (1:50)
- What does Databox Solve? (3:20)
- Pulling Metrics from Multiple Sources (5:16)
- Understanding how each part of your Business is Performing (6:41)
- Focus on what you can Control (9:35)
- Quantity vs Quality during the current times (10:26)
- Leading vs Lagging Indicators (12:00)
- Giving more to your Customers (15:00)
- Databox adding Services (17:38)
- Custom Integration with Databox (18:22)
- Any advice to viewers and listeners? (21:19)
- New Databox Podcast Episode (24:22)
Mentioned Resources
How to Predict Your Company’s Performance During Uncertain Times (Databox Blog)
Episode Transcript
Gabriel: Hello everybody and welcome back to MarTech Masters! Today I have Pete Caputa, He is the CEO of Databox and I'm very excited about this episode. Hey Pete how are you doing?
Pete: Great Gabe, good to be here as always, love hanging out with my uh my favorite Gabriel…it might be the only [laughter] You might be the only Gabriel I know, but I still enjoy it very much.
Gabriel: Usually people only know one Gabriel and I'm that person, I'm their favorite Gabriel, so that worked out very well for us. So how are you doing Pete? You know these are these are crazy times how's everything going?
Pete: It's going okay. I think we're getting a little stir-crazy here at home. My son misses his friends for sure but as far as business goes we're doing all right, we're doing all right. It was rough, rough in the beginning there for us but I think starting to see the light. I think we're in a fortunate position where companies are actually trying to get a handle on their on how their company is performing and we're in a good position to help them so... I didn't sleep for a few weeks, we certainly had our fair share of bruises, cancellations, and our sales slowdown and all that but but look looking positive so far they're going for it.
Gabriel: I believe a lot of people are going through that and in the first weeks where all the uncertainty didn't help and not that we know a lot more today but definitely we are getting used to certain things and we are adapting and pivoting and all those beautiful words that everybody uses to describe what we're going through which is craziness, but we're making the best and the most out of this.
Who Pete is - Who Databox is (1:50)
Gabriel: So for anybody that doesn't know who you are, we met you as you know the king of HubSpot and how you were running a lot of great things but now you're running - you're the CEO of Databox. Why don't you tell us a little bit about who you are and what Databox is.
Pete: Yeah no as you know we we met when I was running the HubSpot Partner Program. You were early, Nextiny was a pretty early partner there and a successful HubSpot partner. Three years ago I decided to strike out on my own again and lead a company again. I did that, I had run a company right before I had joined HubSpot in 2007 so I was kind of eager to prove myself that I could could run something and so I ended up joining a really early-stage company Databox three and a half years ago now, roughly three and a half, and been running that ever since and really enjoy myself working with a great team. We put the team up to 46 people at this point. We're doing right around three million in annual revenue. A big portion of the team is in Central Europe, the co-founders are from there as well and so we at this point we have a semi-global team. Been operating remotely for a long time now and really enjoying it.
What does Databox Solve? (3:20)
Gabriel: That's awesome and what can Databox do for companies and marketing you know people. You have marketing, sales, customer service, all kind of different teams using Databox. What does Databox solve and who does it solve it for?
Pete: I'd say we're yeah we're a little broader than just martech, marketing technology, because we have integrations with sales software and customer support software and finance software and then our customers can push data or pull in data from databases and spreadsheets and all this other stuff so there's all kinds of things that people use Databox for. We even have some people that have built dashboards to track you know Coronavirus, COVID-19 spread, so uses are all over the map. We do have a heavy focus on marketing applications. We build a lot of integrations with marketing software and as you know we work heavily with marketing agencies, 40% of our customers are marketing agencies, so we are heavily focused there, but the application basically connects to your data. In the cases of things like HubSpot and Google Analytics and Wistia and SEMrush or a HREFs or Google search console or Google Analytics or Facebook ads etc. etc., we have really tight integrations that we built so that users can basically go in and either just grab a full dashboard with a bunch of say Facebook ads data or they can pick the metrics that they want from Facebook Ads and build a custom dashboard and choose their visualizations and things like that. So once they build dashboards they can also set goals, they can also have scorecards delivered by email or Slack, they can send the dashboards to themselves periodically by email as well, but I think the most common use case is people using these dashboards either in meetings when they're presenting them to clients or reviewing them as a team or sharing them as reports at the end of the month or something like that when they're trying to demonstrate the results that you produced.
Pulling Metrics from Multiple Sources (5:16)
Gabriel: And one of my favorite features of Databox is the ability to put multiple sources on one place you know that's that's usually the nightmare that we all go through marketing people sales people it doesn't matter we have 20 tools 10 tools 5 tools it doesn't matter you always have multiple tools and understanding how they connect and actually how data is working from multiple sources is an amazing way to make decisions and get insight from the data...
Pete: That's correct, yeah see correlation. Like we use, use a lot of tools as you might imagine, but we we use Intercom for our chat tool. It's a website chat and chat inside our app and that's how we provide actually customer support both to our free users and our paid users and then but we use HubSpot CRM for our customer relationship management system and so I tracked the number of chats we're having. I also track the number of meetings we've booked and it's really nice to see that correlation in one spot.
Gabriel: That's perfect. So during these trying times people are trying to identify places where they can save resources, optimize and and re-strategize, right? This is the moment to adapt and pivot so how can you know tell me a little bit of what you have seen with your experience on what you're seeing on companies, what you have been doing, what are the best ways to do that?
Understanding how each part of your Business is Performing (6:41)
Pete: Well it's hard to strategize, it's hard to pivot, if you don't understand how each part of your business is performing right now, and so you know different businesses are different.
I know like for your business you run a marketing agency. Compared to us you have a smaller number of clients that pay you a whole lot more than our average client so your metrics might be different than mine, right? But to use say Databox as an example since I do it real well there's a whole slew of metrics that I have that are both measuring what my team does as well as the results that they produce and I think a mistake that many companies often make is all they do is really measure the results that they're producing but not the "outputs" we like to call them, the work that we do or that the team does in order to achieve those results.
Without understanding the correlation between the work that you're doing and the results that you're achieving it's really hard to make decisions about what to do next. I'd also say you know when you start when you're good at measuring both your outputs we like to call them the work you're doing as well as the outcomes, your results, you can start to correlate the two so you can start to see if, and just using the example I just used a second ago, I can start to see the efficiency of my chat. So if we're if we're chatting with a lot of people and we book a lot of sales meetings as a result of it, that means that quality and the efficiency of that chat is really high. If that goes down that means I got to dig in and see what's going on. Is for some reason my chat team my team that's doing the chat not performing well?
So I think that's a necessary first step is make sure you're measuring what you're doing. In the case of marketing maybe that's the amount of content that you're publishing or maybe it's really leading indicators of where where are specific pieces of content ranking, or which pages on your site are getting traffic and conversions and looking at that a historical basis to see what might have changed because ultimately that's what's gonna that's what's gonna impact your sales. So the first thing that I did in the middle of March is started looking at all of my all of my outputs, all the work my team was doing, the efficiency of that, as well as any leading indicators, early indicators of success, so I obsessed over how many meetings my sales team was having, not how how many deals they were closing right?
Because I knew on the week of March 16 and the week after that you know our typical customer fortunately it's still working, it's a b2b company, but they all went from in the office to remote and so I saw that our traffic dropped literally by half and our sign up volume dropped by half so I knew...that people were not buying things that week. So obsessing over the results at that point would be futile.
"Without understanding the correlation between the work that you're doing and the results that you're achieving it's really hard to make decisions about what to do next."
Focus on what you can Control (9:35)
Gabriel: It's something you can't control! So you can focus on what you can control and make sure that that is happening so in the future the outcome comes back right?
Pete: Exactly, exactly. Yeah you've got to I think in this scenario we had to face reality that life was interrupted and work was gonna be interrupted for a little while. Doesn't mean we should just take time off or you know stare at our screens and not know what to do, it just focus on the things that we could control.
Gabriel: And how would you prioritize those efforts too because in a time of crisis there's limited time and we're all working overtime, we're all doing more and getting less, and sometimes obsessing over the wrong things right and yeah I love the idea of obsessing over the things that you can control, the things that you can do. Now how do you choose is it writing more blogs, creating more videos, having more meetings, how do you prioritize?
Quantity vs Quality during the current times (10:26)
Pete: Yeah one thing that, another way we like to look at metrics is we look at quantity versus quality, and we really shifted here towards quality away from quantity and we're doing a whole slew of things across our business in that direction, but to give a simple example we actually cut back on the volume of content, new content, we were publishing and we shifted our focus more towards optimizing that content for both really for conversions but a little bit for search as well because what we saw is our search traffic went down. I'm not gonna be able to control the number of people searching for our solution during a pandemic a global pandemic.
What I can control is if they're searching for that solution that I increase the chances of them actually signing up for our product. So what we did is we greenlit a bunch of projects, new activities, new processes around that, converting more of our website visitors into signups. So a little early to tell how that's working, some of it takes a little bit of time to get live, but what we did do is we made a very conscious decision to cut our new content volume back by half and shift our time towards starting that stuff.
Gabriel: You also mentioned that you know most people are tracking outcomes and usually that also happens too late, right? So would you talk a little bit about that and cadence and when should we be checking not only outcomes but outputs?
Leading vs Lagging Indicators (12:00)
Pete: Right yeah so another way to look at it is leading versus lagging indicators. So I'll give you one that people don't like to talk about in my business but in SaaS, churn is actually a lagging indicator, and it could be 30 days it could be 90 days it could be 365 days, but it's still a very lagging indicator and so what is a leading indicator of churn is cancellations, people actually going and clicking cancel, and even before that of course it's product usage and things like that.
Gabriel: and customer service, if someone says that..
Pete: Yes. I think for a service business especially knowing what your client satisfactions are and what their outlooks are in terms of their forecast in their business that's a that's a key thing. So for us like our cancellation spiked, went higher than than ever, in the middle of March and then every week since then it went down, back down to to the - not last week the week before - it got back to normal.
So we had a few weeks of that where went way up and then came back down and it's basically all of the customers who unfortunately weren't getting a lot of value out of Databox who also are dealing with their issues and they basically said hey we need to cut back on these things and we were the easy thing to cancel. So and you know and I literally wrote an article on our wiki, internal wiki, saying this was gonna happen because it's the same exact thing that happened in 2008 at HubSpot when the global recession kicked in and so I think that's a very typical pattern for SAS, of course every crisis is different, but it's so far that seems to be very similar to my experience at HubSpot in 2008.
And so that leading indicator of cancellations gives me confidence in next month, right? So I know that I have two really good leading indicators. One is that cancellation rate which is back actually below normal and then and then the number of new deals that I'm putting into my sales funnel, which is leading in terms of my sales and that's a record. I actually published this information on our blog, Databox.com/blog, there's an article there... (link)
"In SaaS, churn is actually a lagging indicator, and it could be 30 to 365 days after cancellation. What is a leading indicator of churn? people actually clicking cancel."
Gabriel: We'll share it right here!
Pete: Okay cool! Yeah how to predict your company performance in uncertain times. So, so I shared a lot of that data if anyone wants to see exactly how we think about it.
Gabriel: Thanks for doing that and I know you've done that a lot open you know what you're doing, how you're tracking things, and that has helped a lot of businesses including agencies like us and partners like us. We're where we understand how you're tracking things, you're living the the tracking every day and understanding what's going on every day and that's that's very refreshing to see people that drink their own kool-aid and they actually do what they need to do and what they tell everybody else to do.
Giving more to your Customers (15:00)
Gabriel: One of the things you mentioned in that great article that we're definitely sharing right here [link is in the description!] So the other thing you mention is giving more to your customer so tell us a little bit about that. I think that everybody's kind of trying to do that but what does that look like for you guys?
Pete: Yeah, it's hard like you know certain businesses I think can give, like Zoom for example. They're doing great obviously and I think what they did is they either increased or removed the time limit on their free plan, right? So I was on a call I told my family like let's do a Zoom and it was like the third or fourth Zoom I'm like you guys send the Zoom it's free just go sign up and we got to like 40 minutes, just 40 minutes I was hoping it was gonna be over, just kidding I love my family... But anyways and it's still going I'm like why is this still going and I guess I found out it's it's higher it was higher than 30 minutes or whatever.
Gabriel: It was funny, I had the same experience and they did it great in my opinion that was even better because at 35 minutes it said your meeting is about to end in 5 minutes and then we all got a notification that said your account has been upgraded to unlimited and I thought this is amazing! I loved the product at that moment! They didn't remove it they kept it, but then they told you that you've been upgraded for free which was awesome right? That kind of experience could definitely make people love the tool. What have you done in a completely different...
Pete: Yeah so we don't have a multi-billion dollar market cap, although we have seen some uptick in in usage because of our product I think is important in times like these. You know I don't have millions of dollars in the bank either, largely been running off of cash flow, been profitable for the last year and a half but barely profitable, so it's not like we have a lot in the bank. We have enough to - and we're managing and of course but but I can't just say hey you know here's a 90 day trial or you know everybody gets a month off for free. Like I logged into Gusto which is really low cost anyways but Gusto, which is our HR management tool, and it basically just popped up with things like would you like to not be charged this month I'm like sure, can I not be charged this month.
Databox adding Services (17:38)
Pete: We can't do that so but we did you know evaluate what can we do and we were doing a few things and it's more of a I think of a fair trade than anything. One thing we're doing is we're about to launch services, mostly just implementation services of our product. We had done this a little bit before but we just didn't really have the staff and I probably wouldn't have done it this quarter, probably maybe do it next year or something like that. It's not I don't think it's the best long-term return on our dollars spent or our time spent but what we realized as people certain people just need more help with our product and so we're rolling out services.
Custom Integration with Databox (18:22)
Pete: One thing that we just launched and we're already getting a ridiculous amount of demand is is for custom integrations so basically if you have a software product that we don't have a native integration for we have tools we can use to build a custom integration relatively quickly for you if you're willing to invest in it. That said I'm doing all these services at cost. I'm not trying to make money and it's not our business model anyways so but we're doing these things at cost and that's one thing that we can do. Another thing that we did is you know, we're about to roll out a bunch of major enhancements to the product, many of which will be provided to our existing customers at no cost, and that's one thing we can do. I will charge more for new customers for these things and not every feature will roll into every every price point, but we will roll out a whole slew of new things for existing customers. So I'm not ready to roll those out but what we did do is we for any customer that's willing to pay quarterly or annually, or move to a quarterly or annually plan, we have increased the number of dashboards they're allowed to have on their current price point. So and actually when they move to quarterly or annual payments they get 10% or 20% off respectively as well so those are things that I can do that one I think help us right. If you use more data boards you're gonna have more usage, you're more likely to stick around with us, there is additional cost for us but reasonable and then you know offering the discount for people that are willing to to invest a little more and even just what the quarterly I think it's a pretty generous discount for a quarterly payment, especially given our price point is pretty low. So those are those are the kind of things we did. Like I said I don't feel like I can be as generous as Zoom or Gusto or other companies. I know HubSpot did an amazing thing for their partners, I'm really proud of them for sending out or offering to send out commission checks for two quarters in advance I think and for some partners have been around for a while that is a that's maybe maybe as big a check as the payroll protection program so I know that was a big thing. HubSpot obviously has a billion literally a billion dollars in the bank and multi-billion dollar market cap so they can afford to do that kind of stuff.
Gabriel: Yeah it's different, different companies at different levels, different things but I agree everybody has to do more and give more and come up with probably new services or different services. I know you've had experience with all kinds of different sizes of companies you're running a small-to-medium team now, you were in a huge company like HubSpot before, and you built a whole partner program from scratch in HubSpot, with your experience over the years and your experience with different crises you mentioned you know the recession in 2006, 2008, we're living through through COVID right now, what's your experience first of all on that and do you have any kind of advice either business or personal advice for people that are listening to us on how to keep going and what are the things I need to do?
Any advice to viewers and listeners? (21:19)
Pete: Going back to my original advice earlier on I think focus on what you can control, try to get as much visibility into your your work product, how much you're producing, your output, and the efficiency of your team. Don't stress over short-term results but stress over setting yourself up to do well when maybe things return to a new normal or get to a new normal. I think that that's really the focus and we've done that, we've been doing that since crap hit the fan, and we are already starting to see the benefit like you know I would have never thought that a - first of all we don't usually sell to restaurants - but I would have never thought that a restaurant would sign up for Databox. But as everything's moving online for them and they're doing takeout and they have multiple services, they might have a POS system, etc. where they're taking orders over the phone and maybe they have multiple locations, which is the case in this one, they just you know as the owner who can't go into the into the into the building every day or each building every day they need to see how things are going and so and of course with online advertising and marketing being the probably the main driver for them at this point measuring all of that as well. So I think you know focusing on what you can control doing those things and I think it's to some degree opportunity finds you a little bit if you hustle and focus.
Gabriel: And it has been refreshing to see how Databox is even helping people put together COVID-19 graphics of their area and I agree, you know we've talked about this before, I agree that we need to test more and we need to be out there and the science is important and in being able to track, understand where the cases are, where the deaths are and then make decisions with that is as important as everything else.
Pete: Yeah, for local businesses that data is pretty important.
Gabriel: Very important. Thank you Pete for everything that you've done for us. You've been an amazing partner for us as an agency from the HubSpot years now as a Databox partner, thank you for everything you do. You do amazing things with the partners. All the content that you put together if you haven't listened to Databox podcast you should check it out, if you haven't checked their blog they put together these amazing pieces of content that explain things not just from their perspective but they bring and aggregate 50 sometimes more than 50 experts in each specific area and they put together all the data into one article so it's amazing, you need to subscribe today to the Databox blog and anything else Pete that you want to share with with your audience?
New Databox Podcast Episode (24:22)
Pete: No, I know you'll love this one. We actually, so our next podcast that we'll be publishing is JD Sherman who's the chief operating officer at HubSpot. I knew JD and worked very closely with him for a number of years there and he's like the secret at Databox you probably know I'm sure you know about you know him and you know about him and you know the kind of stuff he does but he's the guy that really runs the business and so we asked him very similar questions that you asked me today so I think if you enjoyed this session that you'll enjoy it...
Gabriel: We'll share it [here] Again Pete thank you very much for everything, for an amazing partnership, for being here today, and let's keep let's keep going and stay safe okay.
Pete: Yeah, you too!
Gabriel: Take care, have a good one, bye bye!
