Danielle Morrill opens up about how she built Mattermark

Today I have Danielle Morrill with me.

She’s the founder of Mattermark, a deal intelligence platform that uses publicly available data to help investors and other deal-makers make decisions.

Danielle Morrill

Danielle Morrill

Mattermark

Danielle Morrill is the CEO of Mattermark which is a data platform for venture capital companies.

 

roll-angle

Full Interview Transcript

Andrew: Hey there freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart. I’ve been trying to do this interview for a long time because frankly I’ve been hearing a lot about this woman and about this company, and I have to admit that it’s because I’m in the start-up tech space and this is the company that people in the start-up tech space know about and talk about and are curious about. So since I have this platform and I because I bought this expensive mic, I get the opportunity to ask questions that I’m curious about and get to meet the companies that you and I are talking about.

Let’s talk about who this guest is. Today I have Danielle Morrill with me. She is the founder of Mattermark, a deal intelligence platform that uses publicly available data to help investors and other deal-makers make decisions. Danielle, how am I doing with that description? I feel like describing what the company is has been a challenge before we even started.

Danielle: Me too. It’s been evolving quite a bit, so I think that was great and I think we’re always kind of catching up to ourselves.

Andrew: The way most people have described you to me is “Mattermark is like the Bloomberg for start-ups.” You don’t like that anymore, do you?

Danielle: No, I like it, it’s great. Bloomberg is our customer, and I don’t know if they like it quite as much.

Andrew: I see [laughs].

Danielle: That was a metaphor we used about a year ago when we launched. Since then we’ve made a lot of other discoveries that have moved us and our vision along.

Andrew: I’ve been reading about you since Referly. Referly was what?

Danielle: Referly was social commerce. You could recommend products to friends and they could click on the link and buy them and you get paid. Affiliate marketing for everyone.

Andrew: I’ve seen these kinds of products for years and the challenge with that is that there isn’t enough money for the individual to share a book on Twitter and make a cut and feel worthwhile if they’re going to tweet it out. Is that the issue?

Danielle: Yeah, it’s not a life-changing amount of money. You can’t quit your job. Maybe the most famous bloggers can do that but there’s only maybe a couple hundred of those people out there.

Andrew: So it’s a smaller market. Do you remember what it was about the business that got you into Y Combinator? They don’t just back anyone. They back only the smartest people out there. They make sure that the ideas makes sense. What was it about this idea about Referly that they liked? Referly is the business that you eventually not so much pivoted into Mattermark from but that you switched to, so what was it about Referly?

Danielle: You basically killed it entirely dead. I don’t know what it was for them. I have a hunch it has a little less to do with the idea and a little more to do with the fact that we had this prototype and revenue. I think there is this interesting insight which is that on social media there are billions of links being shared that don’t have monetization so people are effectively writing their own custom ads. When I tweet out the link to this podcast later I’m effectively creating this very personal ad that’s way better than any ad that anyone could ever write because it’s tied to a person and it has soul.

So I thought that was interesting and I think when we refer things to each other, like if I recommend the book to you for example, it really means something to me. If you read it we’ll share an experience. I think there’s something there. It’s not necessarily about me making money. There’s something powerful about people curating products for each other and leaving the advertiser over on the side.

Andrew: One of the reasons why I thought this time would be different is social media was different in 2012 when you started the company. The idea that someone could start a Twitter account and end up with a hundred thousand followers of people who really care who will accept that the person is making money for referring books seemed to make sense. Was that it too?

Danielle: Yeah, I think that’s definitely part of it. I don’t know if this is a terrible idea for someone or if it wasn’t executed in the right way, but I still do think there’s something incredibly powerful about being able to amass a following like that.

Andrew: You said “executed the right way.” Was there something that you think you could’ve done differently?

Danielle: I think the fundamental dynamic around money is always difficult so if I say, “If I recommend this book to you and you buy it I get five dollars”, you start wondering, “Is she doing this for the five dollars or is she doing this because this is a great book?” I think there are other ways to monetize recommendations that are not necessarily such an open marketplace. It’s almost as if the fact that it was so transactionally transparent was actually a detriment to the model. I think there’s probably more nuanced things you can do. Pinterest is arguably monetizing in a similar way.

Andrew: Yes, Skimlinks?

Danielle: Yes.

Andrew: Do you remember the day you got into Y Combinator, when they said, “Yes, we like you, we really do.”

Danielle: Yeah, I definitely remember. I was driving back on the 280 in really bad traffic in San Francisco and [??] called me up and they tell you on the phone. I think I said something feisty. They have a standard percentage they take of your company and I said,

“Is this negotiable?” and he’s like, “No”.

Andrew: [laughs]

Danielle: I was so excited but at the same time there are these things that become institutions in Silicon Valley and YC is certainly one of them. So I always felt a little bit like, the need to push back against that a little bit. Just because, like, I didn’t want to completely buy into the system, but I was so excited. You know, I felt like maybe that’s what it would feel like to get into, like, [??] your dreams or something. It’s pretty exciting.

Andrew: What do you think it was about you that made them say, “She’s got it?”

Danielle: Probably…Well, I’m extremely aggressive so I would assume that that came across. I think I kind of took over their interview, probably.

Andrew: Really?

Danielle: I’m going to try not to be that here, but yeah [??] [laughs].

Andrew: You know what? I don’t want you to not do that here. I mean I’ve got an agenda here and I’m still moving around that agenda [Danielle laughs] , but I don’t want us to be limited by the pre-interview notes, by the agenda, by the outline. I want you to be yourself, even if that means, as I told you before, to tell me to shove it at times, because your personality, your story is more important than anything else.

Danielle: Well, the good news is, is I can’t help it.

Andrew: You can’t help but push things around?

Danielle: Yep.

Andrew: What did you push them around in the interview? What did you say? How did you take control?

Danielle: I don’t know, I think I just…I remember I walked in with my laptop open, was like, “Here’s what I made!” Like, “I don’t really want to hear your questions.” I mean, this is the recommendation I’ve gotten from other founders: walk in with your product and lead with what you’ve done, and don’t let the dialog just become some random questions selected from a list. Actually, take the conversation where you want it to go. I just wanted to show them what I had built and what I had wanted to do. I just know the interview went extremely fast. I felt some sense that I had talked too much, but also that maybe I had picked better things to talk about than what would’ve otherwise come up if I had left it to chance. So you always have that sense of, “Oh my gosh, did I do that right?” Well, we’ll see. It was very exciting but the interview was very short; five minutes, three minutes.

Andrew: I know! I can’t believe they could make a decision based on five minutes.

Danielle: Well, the odds are interesting, right? You don’t have to have a ton of winners in the batch. They just need to have a collection of people that they can create. Like this healthy mix of individual personalities. So I don’t know if they’re picking everyone, because I think they’re going to build a billion-dollar startup. I think it’s more like picking a bunch of people who should go to summer camp together.

Andrew: [laughs] And then see what comes out.

Danielle: Yeah!

Andrew: One of them is likely. For summer camp in Silicon Valley, one of them is likely to be a big winner.

Danielle: Yeah, and the other ones will support them, and I’m still really close to a lot of my YC batch, and that’s one of the things I didn’t totally realize I was getting, but you’ve made a ton of friendships that, I don’t know if there’s any other point in my adult life that I’ve made so many new friends. It’s not necessarily something you do as much for some reason when you get older, so I think it’s really cool.

Andrew: Just watch out with the mic on your headphones. We’re intentionally using this mic because you’re in an environment with a lot of people who are making a lot of noise and we need the headset. How about this: you told Jeremy Weisz [SP] in the pre-interview that when it shut down, you got depressed. I love when entrepreneurs get open about the emotions of running a business. How did that express itself for you?

Danielle: Yeah, I think you just…Initially there’s this loss, you lose time, right? So I think we ran for three years as a side project, so that wasn’t wasted time really. But then the 10 months that it was a full time business, you’re just like, “Oh, I could’ve done so many things with those 10 months. That’s my life, I don’t get it back.” So I think that’s depressing and you sort of begin to question the meaning of life a little bit. What am I here for? Your identities become really wrapped up in this company. So who am I? These are big questions! And then like, also you don’t want to have to explain to other people what’s going on. It’s sort of like you don’t really know what is going on yet and so, there’s no nicely packaged story that you can give friends or family or [??]…

Andrew: [??] if they say, “what happened?” You don’t know yet what happened…

Danielle: Yeah. Exactly.

Andrew: …and you don’t know yet what’s going to happen because you’re still figuring it out.

Danielle: Yeah or if you know, they’ll say, “What are you doing next?” And you don’t know, you’re still processing. It’s like someone died and they’re wondering. It’s like if your spouse died and then they said, “Well, when are you going to start dating again?” Not an appropriate question, right? But somehow it’s an appropriate question when they’re talking about startups.

Andrew: But for you, was there one thing that stood out that made you say, “This is just awful?” But, I know for me it was one guy who told me, “You shouldn’t even make this thing work.” I remember I was at a barbecue at his house, so he said, “This is never going to work out.” And the thing that sucked about closing the first version of Mixergy publicly, was having to admit to him, in my mind, that he was right. In no freaking way did I want that.

Danielle: I think the scariest thing was picturing my life if I continued down the path I was on. So it wasn’t like any day was particularly terrible, because we were actually growing. Right up until the end from a… You pick your metrics, right? So we were growing by all the metrics that mattered, but I started to imagine the kind of person that I was going to be and the kind of internet that would exist if this was really successful. And I didn’t really like the future that I could see. And I… It’s very hard to work for a future that you’re not excited about. So I think that was more of a deep, philosophical moment, like if I just keep on getting up and doing this every day, something would happen. I may be successful, I might not, but if I don’t like it, then, certainly, I shouldn’t continue. I should probably not have other people do that either.

How can I ask other people to do this if I think, am I rebuilding a really shitty version of the [??]. Excuse me.

Andrew: Because everything online suddenly if you succeed becomes a paid link for the person who’s sharing the link.

Danielle: Right. And I think, also the economics of it weren’t great. To build that business would’ve been extremely low margin. Just because, as you approach the maximum amount of traffic that you can drive through these affiliated links, affiliates don’t continue to pay you the same percentage.

You ultimately…Amazon does not want to give over their distribution channel to the public. It’s very scary and dangerous for a business.

Andrew: They help you out in the beginning and then afterwards, when you get big enough, they don’t want you to start skimming off all their sales, so they start to reduce it until they pull it out from you.

Danielle: Exactly. Attribution is a huge problem. Did that sale come because of you or did it come because of some ad they’ve already paid for or something else? That’s a big problem.

Andrew: You’ve [??] where you ring your hands like this, right?

Danielle: Yeah. Like this.

Andrew: How much and why?

Danielle: I think I do it for a couple of reasons. Probably from stress and then also…stress is an interesting word. It can be negative, but also being very intense, being very emotionally charged. How much ranges depending on how stressed. Sometimes I won’t notice that I do this, usually, but I can tell by how bad the calluses on my hands are.

Andrew: [??] Calluses?

Danielle: Oh, yeah. And they drive skin on my hands. It’s pretty weird.

Andrew: You’re very intense person, you’re the kind of intensity that I have sometimes, but I scale it back, and you push it forward.

Danielle: It’s interesting. I can’t say that I can temper down that much, so it’s interesting to experience the opposite, which is what would you use it for. It’s all lean energy in a person. It’s probably good for some things. It’s good for…I’m getting people excited or processing a lot of feelings very quickly or I don’t know.

Getting people excited is a big one, actually. One thing I’ve realized becoming a CEO is that it’s a big part of the job. Getting people pumped up. Sometimes, I think people come off as very cold about business schools. I might feel like, it’s hard to get excited about a Coach shoes, not seemingly excited. I try to channel into things where people can feel that things are important. It’s not just words on a page.

Andrew: I see what you mean. Do you have an example of a time when you got your team excited because of this intensity?

Danielle: I think that right before or after sales calls, I love to play through, like what happened on the call, [??], or what parts. I’m like, “Oh, I knew I had him at that moment.” And people love that, because they love stories. Stories are very instructive. Once someone hears how you got someone excited about [??] and sold [??] of product. They’re like, “I want to be like that. I want to be able to have stories to tell.”

Replaying experiences that otherwise would only…

Andrew: What’s your best sales story? I know one of the things that I’ve been told that I should talk to you about is your direct sales. You guys don’t just up a web page and home people come and buy. Give me your favorite sales story, even if you don’t include the person’s name.

Danielle: Favorite sales story. Gosh, I’m having a really hard time coming up with a specific thing. It’s never the whole sale, it’s just some part of it. It’s the moment when they go like, “You’ve already got me.” I feel so good or when people say WOW on a sales call. You do demos over go to meeting a lot and the first time someone says, ” Oh my gosh, I’ve been building this in a spread sheet for the past X years,”…

Andrew: What’s the one thing you know if you show them that, they’ll say Oh my gosh?

Danielle: It’s usually the way that you do search inside the [??] marks. You get to do this very faster than search, we could say, “Show me all the companies in New York that haven’t raised money in the past 13 months, and have grown employee base at least 10 percent month over month for a year.” That will return a lot of companies, but the companies that return are really exciting and sometimes…

Andrew: The reason that’s exciting is they can keep hiring, which means the money is coming from somewhere. It’s not coming from their investors. I see.

Danielle: People will say, “I would have spent however much time to be able unique, just trying to produce this list.” There is that sense of Oh my gosh, I have to go just on this right now. I’m literally, people on the phone… One of my favorite things is, “[??] I’m not even listening to you anymore, because I’m too busy doing stuff on Mattermark.

That’s the best. That’s probably my favorite thing to hear.

Andrew: Your sales, am I right, that they mostly come from direct sales? You hire sales people, they make calls, they do show and tell, and they get people excited.

Danielle: Yeah. The leads a inbound, primarily, there is an inside sales component, but we do…Every person who sign up for Mattermark we have a call with them.

Andrew: If I go and I sign up for the free version, am I going to get a free version, or first I get a call?

Danielle: You’ll get the free version right away, or first I get a call?

Danielle: You’ll get the free version right away so you can start playing, but we will get in touch with you within the first 48 hours or so. The first call is usually just about understanding you and your business and, then. giving you a very lightweight demo. Some people, though, I just end up talking to them for the whole call. We don’t even do the demo because most people know how to use SaaS products. People just want to talk about their business and explore what’s possible so we spend a lot of time just building relationships.

Andrew: Okay. What are your sales, right now? How many people? I mean, how much revenue a month?

Danielle: See, you guys ask me that question without pausing so you guys get me to say the answer.

Andrew: You know what? You’re right. I don’t know why I suddenly stumbled on it, but I don’t care. I have the numbers here.

Danielle: I can’t tell you. I think I might have. Did I tell you in the pre-interview?

Andrew: Yeah.

Danielle: Did I tell you could not say them on the air?

Andrew: You didn’t say we could not say it, which would’ve had me tell everyone in the intro, but it doesn’t seem like a huge secret.

Danielle: You can reveal whatever you know, but I think things are growing really fast right now. The key is really not about the sales we have today because we’re a pretty small company. it’s really about the massive opportunity that we have out in front of us, which is just more than just to DC. We kind of talked about this in the pre-show, right? We’re kind of thinking “Okay, what else is there beyond that DC Market?” The revenue opportunity is huge.

Andrew: Can I say the number that I have here in my notes?

Danielle: Sure.

Andrew: Okay, I’d never want to reveal anything that…

Danielle: You can have any number that you want and then we can play, the like, my reaction game, too.

Andrew: One point two million.

Danielle: That’s pretty close.

Andrew: Yeah. A year.

Danielle: Yeah.

Andrew: A hundred thousand a month. I want to dig deeper into the issue with venture capitalists because there is a huge problem, that I discovered, that, I think, you bumped up against it. Let me understand how you came up with this idea first. The idea, where did it come to?

Danielle: So, when we first wanted to start this company, we thought we’d build a media site that would kill TechCrunch because we felt like there was this captive audience reading a bunch of garbage. It was mostly just press releases about product launches and funding grounds.

Andrew: Why do you think it was garbage? You have tremendous respect for Michael Arrington. I read that you read every freakin’ blog post that he wrote and I do, too. I thought he was leading this industry until he disappeared. Why do you think that it’s all garbage there?

Danielle: Well, I think that it’s just not very much substance for the time it takes to read it. I mean, for a funding story or a press release around a product launch, you can read the headline; That’s kind of it. What’s great about Michael Arrington is that he has an opinion. I think that people don’t always agree with them, but that’s not really the point. The point is to make people think. I think, what made TechCrunch great in the beginning was that challenged people to accept products they thought were crazy or to question why one company would raise and another one wouldn’t. I think those types of questions are really healthy, but I think the press release churn, that now exists, it used to benefit start-ups and get them customers, but now I think it just gives you some false sense of achievement.

Andrew: That you’ve got the press release into this stupid blog that everyone’s talking about.

Danielle: Yeah and you’ve got all of this traffic and you think that, like, oh I’m going to get some. Those people are not, probably, your customers. They’re early doctors, that’s great. They might be able to help you find your customers, but for most people, the volume of customers they need is so beyond the readership of TechCrunch that it’s not even relevant.

Andrew: I see. You said “Hey, you know what, there’s a big opportunity here. I’m going to jump in. If I could just sit here and write posts based on what I read is launching, but have an opinion that makes sense and lets people understand how I analyze it, it’ll be more interesting and it’ll be more useful. I could be the Michael Arrington and crush.

Danielle: Almost. The only thing we needed, though, was we needed to make calls before other people. I wanted to figure out “How would I find out some company was blowing up before anybody else? How would I figure that out?” That’s kind of where the matter mark score is and this idea of tracking change over time of things like Twitter, Facebook, Links, and mobile. That’s what I really believe my help me see these companies before anybody else. If someone was just trending upwards week after week after week, but maybe they’re in a boring space or they’re not in the Bay Area, then maybe I’d be the first to know. Then, I could make a call, based on data and say “Look at all the things that are happening with this company. It’s really exciting. We dug in and here’s what we found.” More substance based.

Andrew: I see. That’s why you put together that spreadsheet.

Danielle: Yeah.

Andrew: What was in the spreadsheet?

Danielle: There were two. One is indexing a bunch of different things. We indexed Y Combinator Start-ups to try to figure out which ones actually were growing. They go through this thing called an accelerator, but it turns out not everybody gets accelerated. It’s interesting to figure out who was, but even before that I actually did a post on something different. We took data on venture capital activity out of CrunchBase. We were able to say which of these funds is actually active and which of these funds is, actually, probably dead because they haven’t announced around in a long time.

Basically, wrote a post saying “Hey, if you don’t want to waste your time as a founder, you probably should meet with firms that are active.” The firms that we listed as inactive were not particularly happy about that, but it was a really great way to start talking to the entire industry because, I think, about a hundred people called me and were like, “Hey! You got that wrong and my [??] aren’t very happy with you. So here’s my entire portfolio history. Can you update your spreadsheet?”

Andrew: Oh really? Oh great! So then you gave them an incentive to update your data…

Danielle: Mm-hmm.

Andrew:…and make it fresher?

Danielle: Mm-hmm.

Andrew: Did Y Combinator companies or Y Combinator itself get a little bit upset at the way that you were talking about them? That you were saying that they were an accelerator but a lot of people don’t get accelerated?

Danielle: No. I think that’s why Y Combinator exists. I think there’s a lot of accelerators the size of Y Combinator out there. So, one study we did was actually comparing 500 tech startups and Y Combinator. One question founders always have to ask themselves is, “Which of these should I do if I’m going to go after one?” Should I try for a YC? Should I pick something local? No. I don’t think YC really cares. I don’t know about the rest of them. I think that…

Andrew: I happen to know that there was someone out there who put a report together that included Y Combinator and tech starts and a couple of others together and they got a call from or an email from Paul Graham, directly. The founder of Y Combinator saw the report. And he didn’t just say, “Hey there’s data out there on the internet.” He said, “I care about this company (Y Combinator). I’m going to correct any information that’s out there that’s wrong.” So I’m surprised that you didn’t get…

Danielle: Yeah. Well we had most of the Y Combinator companies and data…I mean, so the important thing about what we were doing is that we don’t care about returns. We’re interested in momentum. So most of these companies actually haven’t had an outcome yet. So what’s important is actually understanding, “Do they have any momentum at all?”

Andrew: Okay.

Danielle: Are they going to die? Yeah. I can’t remember if we ever had an interaction with P.G where he was not happy. Because there wasn’t a lot to correct. There are a lot more accelerators out there than those three, as it turns out.

Andrew: I know.

Danielle: So a need for a much broader port which could reveal some interesting outliers and stuff.

Andrew: Okay. So you’ve got this spreadsheet. You end up at TechCrunch with it, right?

Danielle: Oh this spreadsheet. Sorry, TechCrunch. I’m confused.

Andrew: Sorry. We’re going back to the launch to Mattermark.

Danielle: Oh! Oh!

Andrew: So you said, “I am going to create my own data so I can beat all these other sites with my own data so I can report before anyone else does.” Then you end of up with this spreadsheet that people are interested in. And what happens next?

Danielle: Oh. Yeah. So then, pretty quickly we realized that the data was the valuable part. So we wrote…These are posts right? People are asking us “Can we just have the spreadsheet?” We were like, “Interesting. Would you pay for the spreadsheet?” And it turns out that this is very similar to what a lot of associates are doing manually. So people offered to pay for this spreadsheet. So we had really no way to sell it to them. So, we didn’t really want to give them a physical file. We wanted it to be something that was web based. Cause it was dynamic data that was changing all the time. So quickly whipped up a prototype. It was like a single page product with a single log in. I think it was like, “Demo.” Username? “Demo.” Password? There was no user system. It just made it feel like there was a user system.

Andrew: Mm-hmm.

Danielle: I think it was HT access. And, yeah, we just started selling people access to this web page. And um…

Andrew: It was a customer who told you …you told Jeremy. Was it Chris Howard who became the first person to use it? And then…

Danielle: Yeah. I think Chris was like, “This is really useful.” Actually, I think [??] at NEA were probably the first. Pretty close. I don’t know which one. Probably in the same day. Cause we got the prototype working. I mean this is all…I think I should point out that this is all happening in a short period of time. We shut down Referly at the end of March. We went into some soul searching in April. We had a prototype, like, the first of May. And we launched the product the 1st of, like the 3rd of June. So got this prototype together. We showed a bunch of our investors. Cause they’d been kind of wondering what we were doing. And several of them agreed to pay us. So Chris Howard was a really early customer. Jon Sakoda at NEA. Albert Wenger at USV. And Bloomberg Beta were some of our first customers.

And so from there we were like, “Well, we need to make sure that everyone in the valley has access to this because we don’t want anyone to feel that this is an NEA project or a Bloomberg project. We want people to feel like “All my competitors have this and I better get it before I’m screwed.” So we basically… that’s where the direct sales piece came in. So we started knocking on doors. And this is all before we launched officially. And then Lena Rowe, who was at TechCrunch, she’s at Google Ventures now, wrote a piece on the quantitative VC trend in TechCrunch. And that was really what encouraged us to launch with this crappy little prototype. Because we realized she ..at the last paragraph she said “Maybe some clever startup will go solve this problem.” We were like, “That’s us! We’re right here!” So we just called her up and were like, “Can we just give you an exclusive? We just want to launch. You basically called for someone to build this and we don’t want anyone else to do it.” So…

Andrew: That’s the article that you were just talking about.

Danielle: Yeah. Yeah. So that’s how we got to that moment.

Andrew: How did you decide what to charge?

Danielle: It was pretty arbitrary. I think Albert was the first person who offered to pay us and …oh, my co-founder is my husband, our CPO. I think I woke Kevin up, like 7:00 call, because Albert’s in New York. “Kevin, wake up, wake up. We have to make a stripe form now,” like, “We have to get paid now.” I think two hours later he had put in his credit card.

We charge $499 a month. Sort of, it was the first number I threw out to Albert, and the reason I like that number is usually in companies, anything below$500 doesn’t need the same amount of scrutiny on expense reports, so I just figured this is something where, if you’re an associate, you could just pay for it on your personal card and expense it, and it probably wouldn’t be an issue. It really reminds me of Sales Force and how they originally started getting individual salespeople to sign up, and then, eventually, the company found out, like, “Oh, we’re actually paying for 10 licenses, maybe we should just buy them all together.”

Andrew: The thing I was saying about venture capitalists is they seem to be cheap, that they don’t spend on a lot of things. In fact, before we talked, a called an event organizer, a well-known event organizer, here, in San Francisco, and I said, “What are you hearing about Mattermark?” He says, “Oh, I hear venture capitalists use it, but they all tell me that they’re on the free version.” And then he talked about. . .

Danielle: Well, there’s not really a free version, exactly. You can have it free for 30 days, but. . .

Andrew: Have you been making exceptions for some investors so that you can get them onboard?

Danielle: We did in the first year, and we’re not really doing that as much anymore. I think in the beginning it was really valuable to have some of the larger firms, especially the ones who bridged us and were involved in our round, but at this point, we feel like there’s very fair value if you discover a win one deal the whole year, using Mattermark, you definitely have justified its costs.

You know, these things are, I don’t like the word cheap, I think that there’s a lot of things you can do with $500 a month when you’re talking about founders. We don’t need very fancy dinners. You can take a lot of founders out for coffee. It just kind of comes down to what do you believe creates value? Since there weren’t great tools before, it’s just not something a lot of these investors are used to paying for. So, who cares if there’s no budget right? I think the most important thing is to get value in the hands of people, and so, sometimes we gave people some free access early on, but haven’t really had. . .

Andrew: Do they still have that access?

Danielle: No.

Andrew: No. Oh, I see. So it’s gone.

Danielle: That’s pretty much gone away.

Andrew: Anyone who has an account now is either on the 30 day free plan, or they’re paying?

Danielle: Yeah.

Andrew: Wow. You know, I’m curious about you and this whole intensity. Before we continue with how you built up the business, there’s something I wanted to ask you. You were financially independent when you were in high school, and you did it for a reason. What was going on? What’s the reason?

Danielle: I had some issues with authority. I’m really close to my parents now, but when I was a senior in high school, I had a lot of jobs, and I didn’t get along with my parents very well, even though I worked for my dad. I was not working with them, but going to the office. Yeah, I just needed to be independent. I think that’s just a general thing for me. I really need to do things my way. I’m very stubborn. Anyone that works with me knows that. . .

Andrew: Wait. This is fascinating. I didn’t realize you were still working for your dad, the guy who you were building spreadsheets for, who you were coding and learning to. You still continue to work for him, even though you’re upset with your parents, you continue to work for him, and you moved out?

Danielle: Oh, I mean, I still saw them all the time. I just couldn’t live with them.

Andrew: I see. Wow.

Danielle: I mean, I think a lot of people feel that about their parents at different points in life, I just experienced it a little bit early.

Andrew: It sounds like it was more than just I had problems with authority. You hated them. I hated my parents at times. I couldn’t afford to move out, or else I would have. That’s what it was.

Danielle: Yeah. I don’t know. In retrospect, it doesn’t feel nearly as painful as when you’re a kid. But I think when you’re 17 or 18, and you’re trying to figure out what your identity is, and that feels like this crisis that you’re going through, and you want so much to be something, it’s very hard to fit in someone else’s box. So I think just having your own physical space. . .

Andrew: What was the problem with them? Get open with me. What exactly was it that made you feel like you couldn’t live with them?

Danielle: I just wanted to do things my way. I mean, it was literally like, “I don’t want to clean my room.” It’s really stupid shit, looking back, but in a way, it’s just like time. . . The minute you discover your time is valuable, you don’t want to give it up to anyone. I think when family structure breaks down, it’s like when you’re not sure if you’re an adult or not. But the minute your time becomes something that you value, the way you value money, I think that’s probably the minute that. . . Maybe you’ve got some long-term thinking, it’s probably very limited, I think that just, at that moment, I didn’t want to be told how to use any minute of my existence anymore.

Andrew: I know what you mean. My parents used to have Friday night dinners and parties, like, any reason for a dinner. Week’s over, let’s have people over for a dinner. I hated that because I didn’t want to be around their stupid friends. Their friends had nothing interesting to say, they would always talk about the food.

Danielle: And they have their own lives, [??]. The issue really is that they have their own values in life, and you have yours, and they don’t have to be the same. I think that’s the huge realization, it’s like oh, maybe I’d prefer to have a mattress on the floor, a broken mirror, a crappy couch and spend like, 8 hours a day just reading I don’t want someone to interrupt me.

Andrew: I’m wondering, where does this motivation coming from? I’ve talked a lot on [??] My motivation came from the fact that I couldn’t relate to average people, I felt like a looser because I couldn’t get a date, and I was walking through the streets of Manhattan where everybody seemed to be autographing the skyline, right? You see Harry Helmsley businesses and tall buildings, you see Bear Stearns which is gone today. They had this huge building with Ace Greenberg who was like, the man of the investment world. And you see all these people who everyone knows about, are making a difference in the world and building things bigger than me. I want to be like them I don’t want to be like myself now and that’s where my intensity came from. Danielle, where does this come from for you?

Danielle: I think it comes from just wanting to figure out the truth about certain things. And that takes a really long time.

Andrew: Really.

Danielle: There were a lot of books to read, there was a lot of things to learn, there was a lot of things to build.

Andrew: Who do you love that made you think that this was the kind of truth I want more of my life to have?

Danielle: Thomas Kuhn, “History of a Scientific Paradigm?” It’s a great book. My dad was an economist, so it’s a great bookshelf in our house. And I remember reading this book, I think I might have butchered the title just now, but I think when I started to read about the way that other people when through the world discovering things, it made me realize that there were probably a lot of other undiscovered things. And it seemed to me like, there’s another good book called “Intellectuals” and is just goes through a bunch of philosophers and how they came to a lot of their conclusions.

It just seemed like you needed a lot of time, by yourself, and you needed to spend a lot of time making sure you got caught up on all the other amazing things other people have figured it out. And since our world is so modern, and we’ve gotten so far, it’s just a lot to catch up on. And I just felt like that was more important than doing chores, or being home for dinner, or doing homework; I mean I barely graduated high school, because I basically didn’t go. And it’s funny because I valued information and knowledge so much but it’s really different from school, for me.

Andrew: Yes!

Literally the only thing I owned was books and a computer and I spent a lot of time just kind of trying to get caught up on all the things that other people had figured out were true. Because it’s like, how are you going to go figure out and discover something of your own if you haven’t taken the advantage of standing on all those other shoulders. I think I was very bookish, I think I…

Who did you admire? I remember reading about Cornelius Vanderbilt. You see his big statue every time you go to Grand Central Station. Most people don’t even notice that it’s there but you have to pass him, and pay homage to his statue. But they guy earned it because he really changed the way people connect in this world. So who is your Cornelius Vanderbilt?

Definitely, Thomas Edison. I think one interesting thing about Edison is that people think they know about his inventions but what’s great about him is actually all the things he didn’t invent where he was iterating on other creations. What do you mean?

Like, for example he did a lot of work on the telephone. The telephone had a bunch of issues with not having a lot of great audio, so they could never really get the sound to be loud enough. And, there’s thousands of things, he did work on the typewriter, he did work on the telegraph. He did things where they had already been invented, but they really hadn’t been perfected or commercialized. What I love is the idea that they are not too proud to go work on someone else’s invention. You see something that’s great and you want to make it better, regardless of whether or not it was your own idea.

And I feel like that is just very powerful because you’re really keeping focus on people in the world. Its, not just about you and your ego about being the first to make it. It’s about, oh we’re going to have a telephone? Let’s make it a great telephone and have it be useful. Or, we’re going to have a typewriter, let’s have keys that don’t stick, or a telegraph that lets us telegraph more than 1 message on the same line. Those are some of his simple innovations. And I always just found that he gets credit for being a great inventor, but I think; it’s a great story, but it’s a bit long, that how he discovered that he should work on things that people actually wanted, but I feel like his story is great. Because it’s not just about him, it’s actually about all the other inventions that he touched. And also he had tons of other innovators working for him in his lab, and they built things too, and so it’s not just about a single person, it’s about this army of people trying to do move things forward.

Do you ever look at what you’ve done, the way I do frankly, and I think a lot of other people do, do you ever look and say, Thomas Edison is who my hero is, look at how far I am from what he has done, what is wrong with my life?

Well, I don’t look at it that way yet, maybe when I get older. But right now, the thing I really think about is… Am I doing things that I could do forever? So I don’t think Thomas Edison as he started out in his life, “I’m going to create more patents and more value than anyone else in my time.” I don’t think people set out that way. I think he set out saying, “I want to go make interesting things work better.” And I think for me with Mattermark, excuse my own company. I’m really interested in giving people their time back, like there’s questions that should actually have answers that are really hard to get at right now.

And I feel like if I spent my whole life working on that, I’d probably accidentally do all sort of cool things in the process. So try not to focus too much on counting up the number of rule things as much as is the big thing the right thing.

Andrew: I see. And if you were to express the big thing behind Mattermark, what would that be now?

Danielle: I think it’s that there are questions people have that actually have answers, and you don’t need 10 blue links to get the answer. You can actually, for some key questions in the business world, at any given moment there’s an answer. It’s kind of like in the stock market there’s a price. The price is the answer to what is that worth right now.

And there’s just so much we know and information moves so fast that I think that there are more things that have clear answers, like what’s the total addressable market for this or what are the odds that these founders are going to have success? Some of these things should have, maybe not perfect answers, but more than just go read this paper. Or go pay Forrester $500,000 or go hire McKenzie. You shouldn’t need to do that. People are so smart and capable of taking information in the world and getting real answers.

Andrew: Here’s what people have said to me about the product. One person specific right now says, “Yes, Mattermark has data, but CB Insights has analysis. So what you’re saying, they’re saying the opposite is more important. People don’t want the data that can come to their own conclusion from. They want an analyst who can put together the conclusion for them. What do you think of that?

Danielle: I think that they want both. The person that is a customer of ours is probably an analyst. Maybe CB Insights will be a customer of ours someday. I think it’s a false dichotomy. People and computers have a really interesting relationship. You can’t replace people with computers completely because the analyst, that human being, has really unique insight.

I think our job is to empower those people to spend more time using their brain power for that and less time being spreadsheet monkeys. So I feel like CB Insights are like another other tool on there that provides analysis. I think we are very much in the line that it’s just a question of where in the stack of truth are you solving a problem, and we’re in two different spots.

Andrew: How many people now with the company?

Danielle: Ah, 25.

Andrew: Twenty-five. How do you get to 25 people with about a million in sales?

Danielle: Well, honestly finding the right people is much harder than finding the money. So I’m more funded and we have recurring revenue. Recurring revenue is a wonderful thing. Compounding is awesome. So that is really . . . We’re venture backed though so we certainly are not profitable.

Andrew: How much money do you have?

Danielle: So we’ve raised over a little more than $4 million in total.

Andrew: Do I just lose you?

Danielle: No.

Andrew: Here’s the other thing that I heard you do really well. You do interns and college students really well, and you’re in an area where there are a lot of smart interns and college students? Do you pay your interns and college students? You do?

Danielle: Yeah, I strongly believe in paying.

Andrew: So you pay them, but you don’t have to pay them as much as you would have to pay a full-time post college person.

Danielle: Not as much, but it’s kind of shocking actually how expensive it is to live in San Francisco. So you have to pay them a fair amount.

Andrew: So what do you have to pay an analyst?

Danielle: An intern?

Andrew: Sure. An intern who does analysis, not one who does copies.

Danielle: I think the basic thing in San Francisco, it’s very hard to live the way a college student expects to live based on the way their parents were living for less than like 60K a year in salary. So that’s pretty much before . . . if someone lives outside the city, maybe go with something a little bit lower but the problem is the market, right?

We just had a wonderful intern out of Waterloo who just went back to school, and the thing is it’s not about how much it costs to live. That guy can go get an internship at Facebook or Google or Dropbox or [??] or any other startup. So actually the money is just one other enticement to try to get them to choose your no name startup over those guys.

Andrew: Wow. I thought maybe you were getting a deal with them.

Danielle: No, I don’t. Maybe that is a deal compared to a full-time post college engineer.

Andrew: Yeah, that’s true, right?

Danielle: The market is crazy right now. I think prices have gone up the past year.

Andrew: You were working out of a penthouse apartment. What’s the tallest building in San Francisco?

Danielle: It’s called One Rincon Hill. It’s an apartment building.

Andrew: Yeah, it’s right over here across the street from me, right?

Danielle: It’s beautiful.

Andrew: It’s stunning.

Danielle: We got a deal on an apartment there, so when we were figuring out what we were going to do, it was just myself and my two co-founders and, and we made this crazy decision which only looks good because the company’s doing well, otherwise it would look really bad. But we would get this apartment that we could all live in for a year. So no matter what we would have this apartment and we would stay together for the year and try to figure out something to do.

And because it’s in this penthouse, which is really interesting that building has a really interesting story around just, it was built in 2008, it didn’t get finished it just kind of sat there unfinished for a long time. So no one’s ever lived in this apartment before even though it’s been standing there for like five years. And I totally think that that space changed us because you can’t look out on an entire city every day and not want to build something big.

Andrew: That’s what I’m talking about living in New York, yes.

Danielle: It totally, it felt like imagine living in New York, imagine standing in one of the tall buildings looking out and none of that’s there yet, but you know it’s going to be. That’s what San Francisco feels like right now, is that a lot of stuffs not built yet, infrastructure, buildings, companies, and all this stuff. But there’s so much potential and so it just made wonder like who’s going to measure all that. And who’s going to like, who’s going to count it, and who’s going to help us understand it. And I want to do that.

Andrew: And how, whatever’s there, you look out the window at this building and it’s just inspiring going up the elevator in that building makes you feel a little more inspired. Sitting down at that wine air. So the guys from Underground Cellar apparently are doing what you’re doing. Do you know them?

Danielle: No.

Andrew: They happened to find out I live . . . that I work here just across the street from them. They brought over some incredible Scotch because I’m not a wine drinker, and they invited me to their place. I looked out the window the things inspiring. And it’s just a handful of those guys who were sitting into here working and living there. The deal makes sense if you’re going to work and live. How much did you guys pay for the penthouse?

Danielle: Oh, I think like $9,000 a month, which honestly is a really good deal compared to an office.

Andrew: How many people were there?

Danielle Morrill: It was a three bedroom, and we . . . I think the max people we had working there was 12 before we got our cease and desist.

Andrew: Why did you get a cease and desist?

Danielle: Oh, you’re not supposed to work in the apartment buildings.

Andrew: Oh, forget about it the guys from Underground Cellar actually lived there, they worked somewhere else.

Danielle: Yeah no, we actually worked there. I think just a lot of people coming and going, 12 people is a lot. And, you know, at that point we actually were doing quite well so we got . . . we called up some friends and we’re actually in a warehouse right now, in Mission. So we just called up some friends said, ”He guys I know it’s like a day after Christmas but we just got kicked out of our apartment. So you know, you just got that new space can we like have a corner?” And it was just the 10 or 12 of us. But now we’ve grown a lot we’re actually looking for more space. It’s because they’re growing too. It’s great to be around other startups that are also successful.

Andrew: Yeah, it is. So revenue now $100,000 a month. What was it say, two months ago? To give me a sense of growth.

Danielle: I don’t know the exact numbers, I think the average gross rate month over month 15%.

Andrew: Fifteen percent.

Danielle: So not crazy but definitely healthy, and recurring revenue is . . . I’m discovering I was not a stats person before. So having . . . yeah it’s just the best thing ever, recurring revenue.

Andrew: Yeah, it really is especially if you’re a recurring revenue to a business. I’m still paying Wufoo for years. And I’m glad, I’m never going to stop, what I am going to do to get rid of Wufoo from my site. I’m going to have to go and hunt down all those frickin’ links or pay someone internally why more money then I’m going to have to pay Wufoo, I might as well keep going.

Danielle: I think the big function of our growth literally how many phone calls we can do so that’s [??].

Andrew: Talk to me about that. So how do you get someone at the top of the funnel before the sales call, before the recurring revenue comes in. How do they come up to the top of the funnel?

Danielle: So we have a couple channels that we really focus on. We don’t have a marketing person, so we tried to just pick a couple things and be good at them. So one is our email newsletter and the other is social media. So and really it’s just Twitter because the other ones don’t work. But our email newsletter is a daily newsletter and it just creates the best. . .

Andrew: Articles that are on line.

Danielle: And it adds little bit of snarky, or like a little bit of commentary, but very light and it’s quick read. And then we like highlight interesting data from time to time.

Andrew: How many people in that news list?

Danielle: I think about 20 thousand readers.

Andrew: How do they get onto . . . wait how many subscribers?

Danielle: That’s what I mean, 20,000 subscribers.

Andrew: How do they get into the list?

Danielle: So initially it was actually just a list I was making for our customers that was getting forward around. It took us a couple month to realize we should probably have like a way to subscribe to it because people just kept emailing us asking to get added. And now they just come to the site I mean, it’s mostly word of mouth we’re not super interested in growing it super-fast. It’s much more about the people who get it tell us it’s the best thing they read every day and we’re really in-tune with that. We have about 70 to 80% open rate. So it’s something people set aside, we send it at night. So a lot of newsletters go out in the morning, we send them around 5:30 or 6:00. So it was winding down your day.

And maybe you’re commuting home and it gives you a couple of really high quality links to read on the way, and so what happens is that people say if your product is as great as your newsletter than I definitely want to try it, and so that’s really been a key channel for us. And then the other one is we are very active on Twitter, so we tweet with our community of, like we tweet with investors, we retweet them. One of the things people don’t realize is that investors only recently have started doing P.R. for themselves, a lot of times in the past they would kind of hang back, so we kind of try to, anytime we someone promoting what they’re doing in a substantive way, we try to reinforce that because a lot of founders don’t know who these guys are, and so those are our two main channels. And then I think there’s an incredible network effect among our customers, they all talk to each other, they’re all competing with each other for deals. So that’s also I’m sure a way that we get a lot of signups, but we live primarily off [??] leads.

Andrew: So a person comes into your site and I see, subscribe to Mattermark daily, enters their email address, hits subscribe, they get in the top of the funnel.

Danielle: Yup, or they also can just straight up be like, I want to skip all that, I’m going straight to the free trial and to my credit card and start.

Andrew: And then you call them up.

Danielle: Then we call them up.

Andrew: How soon after does the call go out?

Danielle: Usually the same day, unless it’s later in the day.

Andrew: Okay, so someone gets an email or what, a cell phone alert, and then they call?

Danielle: Yeah, I mean, actually everyone has this database access here so they can just go and refresh the database and see all the new signups, I know it’s very, very start-upy, but yeah and so you know, it’s okay, this is Danielle and I saw that you signed up and I would love to give you a quick walk through and make sure that whatever you’re hoping to get out of Mattermark, you can actually find it. I’d love to just learn about your business, and we just spend 20% of the, I’m sorry, 20 minutes out of the 30 on the phone just talking about their business and what they do and I just try to really dig into that, and then the last 5 I answer a couple of questions and then usually there’s a little bit of product, but ideally by the time they look at the product they’ve already had a deep enough conversation about what they’re doing where everything kind of naturally flows to the product demo, because it’s not really about us, it’s about them and their relationship so that’s what we focus on.

Andrew: You just walk them through it and then you have another call go out afterwards, so you schedule the next call, so you say, hey now I’m going to let you play with this and we’ll schedule a call? You do.

Danielle: Yup, absolutely, so usually it’s, I’m going to let you play with this. We have some automated emails, we have an A.I. named Hilda, Hilda sends all of our email. So she is setup to send a different set of nurturing emails depending on what you have or haven’t already used out of all of our features, and then a couple weeks later we have a follow up call to get product feedback and referrals and we talk about whether or not you’re committing. And because it’s investors it’s also very nice because you can just straight up say like, we want to know if you’re going to be a paying customer or not, and that’s basically how you close people, so I’ve spend a lot of time before the closing conversation just making sure that all the different ways of getting value have been uncovered, that’s really, that’s how we win.

Andrew: All the different ways of getting value to them have been uncovered. By the way, anyone who is listening to this will now understand why it is that I got a hate mail from James Kennedy who said look, all these guys that you’re interviewing talk about how they use the phone to close sales and all you walk about his how the webpage can increase conversions, there’s a disconnect here. And then he complained to me and said, I can show you and your audience how to do this right and he did a course of Mixergy, if you guys just do a search for the word telesales Kennedy, he’s basically saying to do what you’re doing but he’s putting a structure around it. He says, look, I’m not a sales guy, look at me, if you see the way I code, I’m not a sales guy, but I understand that there’s a process that I have to go through that will get me sales and one of them is just call people right when they use a product, and then he said, schedule a follow-up call and when you do that and follow through, the person is so amazed that you’ve practically won the battle at that point.

Danielle: Also, those calls are product feedback, so if you’re a product person or a developer then, yeah, you’re not a sales guy but you’re getting that feedback without any.

Andrew: What did you learn? What’s one thing that you got from talking to customers that way?

Danielle: Well I mean, the biggest thing is just usability issues where you’re, so one thing I pride myself on, I can demo to someone and just talk them through Mattermark without seeing their screen and that’s how I know if the usability of something sucks, is if I’m like telling them to click a button and they can’t figure out where it is, and I don’t have the ability to just take their cursor and move it. So a lot of it is, it should be so easy to talk about it that you don’t actually need to look at it.

Andrew: I see.

Danielle: So it usually just reveals things where things are confusing, where you just would never really realize, it’s like reading your own writing out loud. So a lot of small things and then I think also metaphors that don’t work, so you’ll say, oh it’s kind of like a spreadsheet that you [??] the files in and another person will say, well the headers don’t filter like a spreadsheet, and you’re like maybe I need to stop using that metaphor because, so it’s sort of, half of it is testing your product and half of it is testing your marketing.

Andrew: That makes sense. What about this, let’s suppose that venture capitalists aren’t as cheap as I think they are, and there’re into this product. There are only so many venture capitalists in the world, there are only so many angel investors in the world. What do you do once you exhaust that potential market?

Danielle: Well first I want to celebrate.

Andrew: Okay.

Danielle: But after I am done with that, we’ll probably have about 40 million dollars, a year. So then…

Andrew: That doesn’t mean that they’re all signing up. It means that you have addressed as many of them as possible.

Danielle: Right. So…That’s true. So let’s say, I’m sorry, about 20 million dollars.

Andrew: Okay.

Danielle: So after we celebrate that money, I think… well, not after…I just need time…there’s a bunch of other market circles. So…corporate development. So there’s a couple different flavors of this. There’s the guys inside these companies like google or yahoo or Facebook. They’re looking for stuff to buy. There’s also investment bankers that are going out. And they’re looking for things on the sale side that they can go and they can bring to their clients. So all of those people definitely don’t know about all the companies that are out there. So all of them we got to get those guys.

Then we got to get all of the hedge fund guys. Because they’re feeling like the public record is really picked over and they want in on all that alpha on that on the [??] startups. So then we got to get those guys. And those guys are starting VC arms too so it’s like a double sale because you’re selling the hedge fund guy on the companies that are about to go public. Then you’re selling the VC arms on the stuff that’s new. And those VCs don’t look like the VCs that you and I are used to. They actually look like these crazy hybrid multi-family offices. Then there’s family offices which no one talks about but tons of them invest in startups. Like the Winklevoss capital firm that’s been created recently by those guys. That’s a family office. There’s so many of these. They’re like super angels. Family wealth.

Then you have the angels that are starting all of these angel funds. They’re not VCs yet but they’re going to be. So the fund is looking bigger. Then you have all the people that are trading in the public market. So the Hubspot is going public. I think they just put out their S1 and it’s got all of this interesting data [??] There’s not a lot of good comps for Hubspot in the public market. So all of the people that want to understand the public markets are going to have to actually look at the private market.

Andrew: See we’re going to have to compare, how is Hubspot doing relative to all of these other…what do they compare to?

Danielle: Maybe they would try to look at Partop before it was acquired by Salesforce. Or they would try to look at… I mean there’s tons of marketing automation systems out there. Eloqua, which is really, really big. They would start saying how does their growth tract to these other companies? And right now if you read an S1 you might get three years of financials but financials don’t tell you everything. Seeing an overall holistic view of growth can tell you a lot of other interesting things like how well did the team grow or things like that.

Andrew: You know what, I’ve got to admit. I pulled that question, I would have had that question anyway, I pulled it out of your notes because that was a concern you had and you’re not talking like it’s a concern.

Danielle: Well I think that any concern is just an objection that you have to work on. The reason it’s a concern is because it comes up…people ask VCs in your customers means they’re constantly asking you the questions which have nothing to do with if they’re going to buy your product. So we have to practice a lot. The other thing is people are using Mattermark for cool things that we weren’t expecting. So we’re very optimistic about the opportunity. And people ask questions about businesses that I just don’t know about. We’re not VC experts at Mattermark. We’re really, really good at building software and mining data. But people who are using Mattermark are basically telling us about all these other things that we should go build. So it makes me very excited.

I think most recently I think the management consultant in this case is probably the biggest and sexiest one. It’s just this idea that if you hire McKenzie to go and answer this burning question that you have…it’s probably not the first time McKenzie has answered that question. But you better believe they’re going to charge you like it’s the first time. So a lot of people can’t even buy those kind of services. So there’s just a lot of burning questions out there as you go deeper and deeper you get more and more data we’ll be able to answer more of them.

Andrew: Were you profitable in July? That’s what I heard.

Danielle: Yes.

Andrew: You were. Are you profitable now?

Danielle: No.

Andrew: No. You don’t want to be profitable.

Danielle: You want to like flirt with profitability from time to time.

Andrew: Ah.

Danielle: Honestly profitability is a lever, like any other lever. If I was fundraising I would try to be profitable just because I would have more control. But the truth is the money we’re making right now should really be applied back into growing the company and hiring. So I always try to keep a percentage of profitability so a percentage of costs that’s coming by revenue. It’s usually only between 50-70%. Because if you think about profitability it’s really just a question of how many difficult choices did you have to make to become profitable if suddenly all sources of funding were to dry up so how many months would it take to make us profitable if I had to?

Andrew: You have 25 people on your team you said?

Danielle: Mm-hmm.

Andrew: $100,000 in sales that means you’re paying $4000 on average a month to each person?

Danielle: It’s a little more complicated than that but yeah, so one of the great things about our business is that sometimes people pay for the whole year upfront.

Andrew: Oh, I see…

Danielle: That’s really helps a lot.

Andrew: So it may be profitable on a cash flow basis.

Danielle: Mm-hmm. Well you don’t need to be profitable. I totally agree with you on that.

Andrew: I am fascinated by you. I know what it is. It’s the way you think on those blog posts. I can’t capture what it is but I have read your posts for a long time and there is something very open and very analytical and very determined about your posts and that’s all I’ve got. That’s why, when you come up in conversation, which you do a lot. I always dig in. I even know that you, apparently, you went on some kind of retreat. You rented people houses.

Danielle: Yeah we did it for a whole month. All of August. We just got back.

Andrew: Oh for the whole team?

Danielle: Yeah.

Andrew: Unreal.

Danielle: It was awesome up there. It was really cool.

Andrew: Was that expensive? What did that cost you?

Danielle: You’re such a New Yorker, by the way. $50,000 I think for the whole month.

Andrew: Oh, I thought it would be more. What makes that a New Yorker question?

Danielle: Oh I just like it, love it, it’s direct.

Andrew: Okay.

Danielle: It’s just, that’s not the San Francisco way. They haven’t come around. I think I fit in more with the New Yorkers.

Andrew: Where are you from?

Danielle: I’m from Seattle actually. So, definitely passive-aggressive central.

Andrew: I like how open you are too. Refresh, is an abso…I use everything for research.

Danielle: I love that app.

Andrew: It’s fantastic, right? Rafael Coralis [sp] is an investor in the company and he said you got to try it out when he first invested. I checked it and it told me all kinds of information about you. More than any other guest that I’m interviewing because you’ve been so public online. One of the things it told me to ask you about was your husband. I go, “I never ask about that stuff”. Especially because you’re a woman entrepreneur I don’t want to say, “What about your better half, the guy that really runs the company?”

Danielle: Oh, It’s cool.

Andrew: And frankly most people who work with their co-founders don’t want anyone to know. You told Jeremy, I’m going to be very upfront. I work with my husband. I freaking love that. The question I’m supposed to feel very uncomfortable asking you go, “Here it is. I work with my husband”.

Danielle: Well we just celebrated 7 years of marriage. So, our start-ups been around for 2 and it’s like that’s a much bigger start-up for me so I feel like it’s a big part of my life. It’s great to work together on our company because you have to spend so much time when your building something. You know this. So, why not, if you really love the person that you’re with it’s kind of a bummer that you can’t spend that time together.

Andrew: I really love the person I’m with. I couldn’t work with Olivia all day. I’m impressed that you can do it.

Danielle: Yeah, well I don’t know if we knew for sure that it was going to work. But, I asked Kevin to join after I had already gotten to Mattermark so it was kind of like proposing to him a little bit. He was actually working on something else. I was definitely very nervous like maybe he’ll say no; maybe he’ll say it’s a bad idea; maybe he’ll tell me that I’m crazy for even considering it but he said yes.

Andrew: All right. Congratulations on the success. Congratulations on being able to work with your husband so closely. What’s the best part of having made it? Is it me talking behind your back about what you’re doing to all my friends or is there something better than that?

Danielle: Have I made it? I don’t know if I’ve quite made it yet.

Andrew: Let’s not say made it. You know what actually, not made it like across the finish line, but frankly you’ve gone through a lot of trials and tribulations. You’ve rubbed your hands raw but just getting anxious and nervous. You’ve had a situation where you had to close a company. Most people don’t recover from that. They go get a job and say, “maybe this thing isn’t for me”. You maybe haven’t crossed the finish line but you’re in a good spot. What’s the best part of being in this good spot?

Danielle: I mean, I think it’s just that I get to do what I want with my life. I don’t get the time back. So, I don’t feel that I regret how I spent the time; even the things we screwed up. I’m just pretty peaceful. I plan to continue doing that and like I would probably fight very, very hard anyone who got in that way of that. So, I’ve realized, I’ve discovered how valuable it is and that’s a pretty awesome lesson to learn.

Andrew: All right. I think we’ve given people a very good interview here and I’ll tell you why. A lot of the BS about entrepreneurship, and I see it on Facebook, is if you’re an entrepreneur you don’t have to work on the weekends like me. Look at how I’m partying on the weekend. That is not what being an entrepreneur is about and that’s not the freedom that you’re really looking. The freedom that we want is that one that you expressed earlier where you said, “Is the world going to be a better place with what I’m doing and am I going to want to stick with this thing, am I passionate enough about it, to do it on a regular basis until I have my impact on the world?” and that’s the best part. That you can have that vision and you can execute it and you can execute it with a group of people in houses that you rent for them and create your own little together. All right. Congratulations on this interview. It’s great to finally get to meet you.

Danielle: Yeah. Great to meet you. Hopefully, next time it will be in person.

Andrew: I would love it.

Danielle: Awesome.

Andrew: All right. Thank you all for being a part of it. If you have anything of value to add to this interview please go work for Danielle. You guys are always hiring right?

Danielle: Yeah. Mattermark [??].com/app/jobs

Andrew: I especially urge anyone who is fresh out of school, or frankly in school, to find a way to connect with Danielle. I think that openness…

Danielle: Danielle@mattermark.com you can just email me. Email me. Get a job.

Andrew: What’s your email address?

Danielle: Danielle@mattermark.com.

Andrew: There you go. Even the transcribers have a chance to get that right. Thank you all for being a part of it. Bye guys.


12 thoughts on “Danielle Morrill opens up about how she built Mattermark

  1. Nick Prudent says:

    wOOt! My head is still buzzing from all the juicy content from that interview. Listening again. Easily my favorite ever! Listening to Danielle makes me want to stay up all night working on 10 startups at a time! Andrew outdid himself on that one. Congrats!

  2. rickmy says:

    Great interview.

  3. Arie at Mixergy says:

    Thanks Rickmy–what did you like about it?

  4. I agree with Andrew. Danielle is fascinating (and energizing)!

    Awesome interview.

  5. I really liked (and related) to the part about not liking what schools where “teaching” and instead gaining knowledge from books.

  6. James says:

    Interesting and engaging interview throughout, with insight on issues like preparing for YC interviews, the pain of closing down a company, sales calls, VC, and many more. In particular, the parts starting at 8:30 and 28:15 particularly resonated with me.

  7. Dustin Dell'Era says:

    Great Interview! Thanks Andrew and Danielle! Crazy timing, I litereally discovered Danielle yesterday while finding her article on Startup Burn rate, something I talk to founders about, then later looked at Mixergy podcast que and there she was! The thing about her business model that resonates the most with me is picking up the phone to engage the prospect. Ive been recently evaluating CRMs and signed up for several trials. The one Im going with is the one that called me to understand how I wanted to use it and to show me around!

  8. Loc Nguyen says:

    Thank you for this, exceptional interview!

  9. Aljosha Novakovic says:

    Great interview, inspiring to see someone who barely graduated high school so successful. Loving the energy and the confidence (doesn’t give a sh#@ about what others think, keeps at it)

    However… Tesla > Edison, just saying.

  10. Andy says:

    I dont understand why one doesn’t want to be profitable?
    Is this because the company is outside funded?

    Thanks in advance, great interview by the way.

Comments are closed.

Who should we feature on Mixergy? Let us know who you think would make a great interviewee.

x