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All right, let’s get started. Hey there, freedom fighters. My name is Andrew Warner, and I am the founder of mixergy.com, home of the ambitious upstart, and a place where I do interviews with proven entrepreneurs who tell you how they got here. In this interview, I’m actually going to ask you, the listener, a question. Have you ever felt like you were dragged along from job, to job, to job, instead of finding what you really wanted to do and doing it? Today’s guest says that he got tired of feeling that way and that’s why he launched his start-up.
Timo Rein is the co-founder of Pipedrive, software that helps salespeople close more business by using a well-designed sales pipeline interface. I invited him here to talk about how he did it. Hey, Timo.
Timo: Hey, Andrew, great to be here.
Andrew: You were at one point doing sales consulting. What did your friends say to you about this sales consulting job when they heard that that’s what you did?
Timo: I remember a particular friend that I had not seen for I think about seven or eight years. I told him that this is what I do, and he said, “Really? I didn’t imagine you’d be a consultant. I always thought that you would be doing something.” That, for me, was kind of like, “It hurts.” At one point, it was like, “Damn. How can it be?” At the same time, it was also like a complement. It was a nice thing to hear, but it also made me really look into what I was doing.
Andrew: How did you end up being a sales consultant, then, if that’s not what you were passionate about?
Timo: In a way, one thing led to another, that kind of way. When I was in the university…
Andrew: You’re an ambitious person and you’re smart. We’re going to find out how big a company you were able to build and what you were able to do here. You just found yourself… One thing led to another?
Timo: Exactly. In the university, I didn’t have any idea of what I’m going to do there in terms of a job. I was just doing my first year, and then I think one of the persons that I met there said, “Hey, we have this company,” doing some sort of, I can’t remember what exactly, but it was about evaluating people who were trying to get a job. I said, “Okay, fine. I’ll do it.” From that job, there was another person who said, “Listen, I have this company and we’re doing trainings and would need somebody to develop programs,” so I said, “Yeah, I’ll do it.” It was kind of like one thing led to another, and it took me about seven or eight years, maybe even more, to really understand that, “Hey, hey, hey, when did I really think about what I would like to do?” It happens.
Andrew: When you were thinking, “What would I like to do?” you thought of the problems you guys had at the company that you were working for, right?
Andrew: One thing that you noticed was that you guys were keeping your sales information up on the wall.
Timo: Absolutely, yeah. One thing which I also learned because of this “one thing led to another” was doing sales. I was never imagining myself doing sales, because that was something that I just couldn’t think of myself. Trying to be a good guy, a good person in a company, I learned it as much as I could doing B2B sales. Of course, we needed software of some kind to track sales, to monitor our efforts, and keep all the conversations.
I think we were on the fifth tool that we had, a very, very well-known tool, probably the best in the world, we thought at that time. Yes, that was true. I still managed to keep our sales pipeline on the wall with Post- it notes. For us and for me, that was kind of like, “What’s going on?” One of the moments.
Andrew: You guys were doing consulting for sales teams and you guys didn’t have your software together well enough that everything was in the software instead of up on the wall?
Timo: We were thinking we were doing the right thing. We were using different kinds of software that was around, Target and Act, right at the time of 2000, and then we thought we needed a very good one, so we said, “We probably need to spend a lot of money to get a really good one.” I think the time was then 2004 or five, and Sales Force was doing their first years, but there were other tools around then.
We thought we had a good system, but the problem was that it was very difficult to use, people didn’t want to use it, we didn’t have the correct data in it, and we felt so much better when we looked at the Post-its. We felt in control, we felt this is what it should be and these are the deals that we are taking care of. That was weird, in a way, but in a way comforting to see that all the companies that we ever met were experiencing more or less the same trouble.
Andrew: We’re Pipedrive users here at Mixergy. We use it to keep track of our interviewees and to make sure that someone who is asked to do an interview gets followed up on, does the pre-interview, etcetera. What we were doing was we were putting a lot of our stuff into Excel. We just needed an easy way to visualize how many people were invited to do interviews, did we move them over to the next part of our process, which is the pre-interview? Did they do the pre-interview and then they disappeared because they thought that was the interview, or did they do the pre- interview and then they disappeared because it freaked them out that they were about to be on Mixergy? We don’t know.
We need to clearly see it and then move them over once they book their interview and so on. I get the frustration. I was just surprised that a major company, or a company that does consulting for salespeople wouldn’t have it more together at the time, but that presented an opportunity for you. You were looking for a company that you could start, and you said, “I can solve this.” You’re not a developer, so instead of starting to write code, you started to write spec.
Timo: Yeah. We were thinking we got to start from somewhere, so the other co-founder and I, as we call ourselves, the stupid salespeople part of our core team, we thought that this is the start of things. We had an idea. It was a very definitive moment. We looked at the visual Post-its on the wall, 50K spent, I mean, come on, that shouldn’t be like this. We thought, “Okay, let’s put our heads together. We understand that we need to code the program somehow, so what’s the next step?”
I think somebody said, “You got to create a spec so that you could give it to some developers and they would then code it.” We had somebody who was able to listen to what we wanted to do, and when the job was done, we were handed a 100 page long spec, which quite frankly freaks us out because it was like, “All right.” We were imagining it was different, but when we looked at it, I think it was probably around 2005, we realized that that’s probably a lot more like a bigger thing to do than we thought. Like I said, we were stupid salespeople.
Andrew: When it comes time to communicate to different kinds of people, I think a lot of us become stupid. You as a salesman describing what you want to a developer, it’s not easy. A developer often wanting to describe to a designer what he wants, it’s not easy. There are all these communication issues. I know that many people who are listening to us now have them, too. I want to understand how you got here and then what you did to get out of this mess and actually create clear, easy to manage, easy to follow specs for developers. The spec sheet, is there someone who was charging you who said, “You tell me what you want and I’ll put it into a nice binder and write it up in 100 pages.”? How did that happen?
Timo: That pretty much happened the way you just phrased this.
Andrew: They charge you? They said, “We will write down your ideas and organize them.”
Timo: We were quite lucky, actually, there. We were quite lucky, actually, to have that person with that capabilities that we had hired in a previous company. We weren’t charged for that, but we were in a place where we didn’t know what to do with this. When you asked what we did to really start Pipedrive, we threw that one away, basically. We still have it to this day. It’s sort of like a statement, but we put it aside. I think for a couple of years, we just had our idea somewhere along the clouds.
I think it was just a pure coincidence then, that my co-founder was doing some sales consulting with new tech start-ups in Estonia. He to talking about the things these guys wanted to do and what we had also thought of. They started to click with a couple of guys, and of course, when he told me, “Listen, I met these people that could be interested in doing something like this,” I was quite fired up already because of that. That pretty much was the starting moment for creating Pipedrive.
Andrew: What country were you in?
Timo: In Estonia.
Andrew: Is that where you live now?
Timo: Yes. It has been our home country even though now we’ve relocated some of our company into the U. S,., in California. We’re originally from here.
Andrew: From Estonia, I see. Do you find developers really inexpensively because you’re in Estonia and you can actually manage them?
Timo: Do you mean like inexpensive compared to Valley?
Andrew: Yeah, or compared to any part of the U. S. or the rest of the world.
Timo: You have different parts of the world like India, Ukraine, and different parts. I don’t think we are the cheapest, but compared to the U. S. and compared to the Valley, especially, it’s cheaper.
Andrew: Why did you make them co-founders? Why didn’t you say, “Hey, one of the benefits that we have here of being in Estonia is that we have inexpensive developers.” Instead of paying them the going rate, you gave them a piece of your company.
Timo: Do you mean the original co-founders? Why did (?) like that?
Andrew: Yeah. You met two guys who were developers and said, “We need some developers here because we obviously don’t even know how to spec things let alone build it ourselves.” Why didn’t you take those two developers and make them into employees? Why did you have to make them co-founders?
Timo: That’s a good one. I actually met three of them. We didn’t want the sort of people that would just come in and do the job. We felt that we want people who want to commit into this. They had the previous experience already building start-ups and failing hard. We knew what kind of breed they are. It was a good match.
Andrew: I see. You wanted someone who would have a vested interest in the success of the business.
Timo: Yeah. Somebody who has done it before, who makes a conscious decision that, “I’m going to commit myself to another thing and I feel that there’s something great that we can build together.”
Andrew: Did you pay them, too?
Timo: We started off with paying two of them at the very beginning, sort of like a part of a deal that we had, because we were in a position that we could still finance ourselves by working in a different company. They were just out of their start-up, which was not a success exit, so they were basically on the street. We had that kind of a deal. One of them was working.
Andrew: You’re starting to have some expenses here, but they build it out. How long does it take them to get the first version out the door for you?
Timo: In two months.
Andrew: Two months, that’s pretty fast, huh?
Timo: It is. That was too fast for me, for my standards. I was thinking, come on. I wouldn’t have shipped it. That’s the reason I said we wanted that type of person, that they would have the right kind of mindset that if you have something which is at least something that you can validate already, do you have people who would be attracted to this, or at least to the approach that we have? That’s a great thing that we got it out of the door to our beta testers. I would have probably stayed with it five or six months. It would have been a wrong decision, I think.
Andrew: What didn’t live up to your standards? What part would you have wanted different?
Timo: Well, through the experience of doing the direct sales, for me, things had to be at least a bit more complete in terms of what the real life of a salesperson looks like, and, for me, the software that we had at that time was somewhat incomplete in terms of it didn’t cover the full cycle of sales for me, at least. But I was proven wrong in a way, because, to be honest, there are still things that I’m missing from [??] course and then . . .
Andrew: Give me an example of the first version. What did you leave out? Because it’s hard to figure out what to leave out and what to put in, how to capture the essence of the software that you want. I mean, anyone who has any doubt of it should just try to come up with a single sentence to describe what their business does, and that’s hard enough, right?
Andrew: Because you have all these ideas and all these uses, and you have to sum it up in a single sentence. Well, think about doing the same thing. You have this big vision for a product, and you want to sum it up into something that would be the first version. So what did you leave out that was painful to leave out?
Timo: Maybe I can answer it a bit differently. You can ask me again if you want to. We had a CTO, and one of these guys, and that process now was much more to our liking in terms of we didn’t create the spec, which was written. We did create specs in terms of wire [sounds like] frames, and that was something that we were more excited about. At one point when we were trying to generate the things that we said, “This is important. This is important.” [??] that we were all used to using the different types of software that was out there, and so we started from that end, and I think at one point our CTO stopped us and said, “Hey, hey, guys, it’s starting to become something that you have used, even though I can see how it’s going to be different, but it’s going to be quite heavy.”
And he said that we’re never going to get that out of the door quickly. So he said, “Just pick one thing that you think is the most important, most critical thing. Let’s put that out there and see how it works.” And, of course, both of us just looked at each other and said, “It’s got to be sales pipeline,” so, in a way, we left out everything besides that. So, yeah, that’s my answer to your question. Hope that was good.
Andrew: I see. So an example of something you left out would be addresses. Every contact management software out there does addresses. You guys didn’t have a field for that, did you?
Timo: Yeah, I think we hard coded still to organizations, but the thing is that we were . . .
Andrew: Oh, you did? OK.
Timo: Yeah, we just left it at the very background, so that when people opened it, we didn’t even have a proper first stage, thinking that people should be presented with pipeline immediately. And all the things that kind of were necessary, like contacts and with some of these fields that you mentioned, they were right there, but slightly behind pipeline, so, yeah . . .
Andrew: The key was you wanted people to be able to visually see their sales pipeline, and the way that they use it they create the columns, each column represents a different step in the pipeline, in the sales process, and when they have a new potential customer, they create a card, and they move that customer into the leftmost column.
Andrew: Right? And the person moves further down the sales pipeline, and they move along the columns from left to right.
Timo: Correct. Yeah, because that’s . . .
Andrew: And that’s the heart of what you wanted. Whatever you had on the wall, you wanted to duplicate with software.
Timo: Pretty much. I mean, I think the first text that we were showing to people was our Post-its wall and then what we did build, at least very, very much of the physical world that we felt so comfortable with.
Andrew: Okay. You mentioned you had beta testers who were waiting to try this. How do you get beta testers? How do you get people who even know what this idea is, let alone give you an e-mail address and say, “Timo, whenever you launch, get me on there?”
Timo: Well, luckily from our sales experience we had a few contacts in our address books. I couldn’t remember what I used.
Timo: And since we had the luck of more founders than just two, we added it all together, so we compared our lists just to see if there were duplicates or not, and I think we came up with something that was close to at least a couple of hundreds first, maybe even close to four or five hundred. And we just sent out emails saying that this is something they could try.
Andrew: I see – just all to friends, friends and friends, and business contacts.
Timo: Yeah – business contact, friends, friends of friends, and people that we just knew.
Andrew: Okay. Now, these are professional operations. You’re about to unleash a minimum viable product on them.
Andrew: How do they react when they first saw (?) ?
Timo: You mean, our beta testers?
Andrew: Yeah. I mean, you’re saying to people whose livelihoods depend on making sales, “Hey, trust us with this new software.”
Timo: To be honest, I can’t really remember the first reactions so clearly. but I remember I was surprised that quite a few people took it very seriously. I was thinking that most of them would come up with the same kind of reaction that I had – that it’s looking good but there needs to be work put into this. But I was quite surprised to see that many of them took it that, “That’s the tool, so I can use it. I’m going to start using it.” And I was like, “Hey, hey, hey. There’s parts missing in it.” So, yeah, I think that was one of the reactions that I felt was surprising – that quite a few people, funny, had already used (?), right there.
Andrew: And at first it was free?
Andrew: How soon afterwards did you start charging?
Timo: It was in front of our beta testers the first time, I think August, 2010, and in March, 2011 we launched it as a priced product – so six months, seven, eight months.
Andrew: Why did you wait so long? Why didn’t you start with the paid version right away?
Timo: Well, we didn’t have the system to charge people with first.
Andrew: I see.
Timo: That’s always kind of key. And we knew that, since we wanted to do a (?) subscription based billing, that was going to be quite a challenge. So we were still looking around for what kind of partner to have for that. And then we found Rick Hurley, which was perfect for our needs. And we knew that we didn’t want to spend our focus on doing that. But, besides that, we just wanted to see if we could generate enough, let’s say, active users out of these beta testers so that we wouldn’t end up with just a few, a couple, that would convert, hopefully, to paying customers.
Andrew: And you had a company, a security company, come to you and make you an offer.
Andrew: What did they want?
Timo: Well, they were showing us a lot more money than we felt we would charge people who would become customers, and that would’ve been quite substantial in terms of what we needed to cover our expenses. But they wanted a tool which was to be hosted in their own servers, and for us that was something that we weren’t building at all. So, in a way, that was quite an easy, “no,” for us, because we knew that if we were going to do that then, then we were never going to build what we wanted to build. So I’m really glad that we didn’t have too long conversations with these sort of people. Nothing wrong with wanting that, but we just didn’t want to do this ourselves.
Andrew: I see. You’re saying, at that point, you were going for it. You didn’t take the quick money.
Andrew: You pick the vision that would take longer, that would mean less money at a time that you critically need it.
Timo: Yeah, absolutely. That wasn’t very rational at that time, of course, because we were badly needing money. We were still trying to manage the whole thing, but it felt that if we were going to do that then, who knew where we were going to end up? Definitely not where we want to be.
Andrew: Yeah, and I get the concern of the security company. Frankly, when I signed up, I said, “Is Timo going to see all of my contact information? Is he going to see who I’m about to interview? Does he have it?” And you do have access to it, but I had to say, “Well, who cares? What’s the point?”
Timo: Yeah, that’s the sort of thing which every (?) company kind of goes through – that they have their own regulations of who gets the access to that core data, and it’s very, very well regulated.
Andrew: I think, for the most part, people have accepted some of that. They decide if they trust the company or not, if they trust the company not to look, if they trust the company not to do anything shady, then they go with it, but I understand the security company not being able to say it. Alright. So you’ve given up on that option. You decided that you need customers. Like most people who start with a business, you had a vision. You said, “Hey, it would be so good if we had,” how many customers? What was that number that would make you feel like, all right, this is going somewhere?
Timo: I remember that at first we didn’t have any expectations when we launched it, I think at least we didn’t. We were thinking of let’s put it out there. Let’s see if we can find paying customers. I mean, that was first the main goal, and as soon as we started having them, we were thinking the way of getting them. I mean, we were not reaching them manually. They were just finding us on the Internet.
Then I remember driving back from one of the [??] that we had, and we were playing aloud with how many customers we would have, and I remember saying that, “Let’s not have that discussion again until we have like 500 paying customers. That at least sounds like something that is at least a business that should be taken more seriously. Until that time, we just have a lot of work to do.” So I remember that was the first number that at least I thought of where [sounds like] to get . . .
Andrew: How long did it take you to get to 500 customers?
Timo: Well, from the very start up of the company, we started in June, 2010, and we got to 500 in, let’s say, roughly in a year and a half.
Andrew: A year and a half?
Andrew: Okay. Did it feel like a tough slog at the time?
Timo: I’ll share one other thing. I think one or two months after we had launched, we had about, I think, 30, like I mentioned, 30 paying customers, and then we traded one Excel sheet, a spreadsheet with different types of plans of how many customers we would get. That’s something that everybody probably does. We were thinking that, OK, let’s have a conservative plan, so we had a conservative plan, and let’s have maybe a bit more liberal, and let’s also have a mad plan.
Then we had sort of like three different scenarios, and we took that to one of our advisers at that time and asked him what sort of plan is the right one for us to have. I think he looked at the most conservative plan, or the liberal plan–I can’t remember–but he said, “You should lower that four times, and I think then it’s good.” So I remember that sounded very reasonable. He had good arguments to back it, and I was like, OK, that’s good, but we’re still over numbers that were different from zero, let’s say. But what happened was that I believe that when December came and we reached the point where our spreadsheet ended, we had actually somehow managed to achieve that mad plan, which, for me, that was one of the . . .
There have been other moments in life where I can see that when you have mad plans, and when you kind of like at least dare to think about them, sometimes these things get to be true. So I was taken by surprise a bit, but at the same time it was very, let’s say, thoughtful next time that when we again are doing some kind of planning, let’s just pay more attention to where our mad plan is going to take us, and that could very well be the truth.
Andrew: Aspire to hit that mad plan instead of producing it by a quarter of what it is.
Timo: Yeah. Exactly, let’s budget by our conservative lines, but let’s aspire to the mad ones.
Andrew: To greatness.
Andrew: How many users do you have now? How many paying customers do you have now?
Timo: We made a decision with our founder group that when we reached 1,000 paying customers, which was last year, just one year after we made Pipedrive publically available, that we were not going to disclose the exact number until we get to some sort of a great round number again. So I can say that we have thousands of paying customers from more than 100 countries.
Andrew: Give me a sense of the revenue.
Timo: I’m going to just say what sort of a goal we have for this year. It is to break another $1 million?
Andrew: Forgive me, but…
Timo: Yep? Go on.
Andrew:…another $1 million in revenue.
Timo: Another $1 million in terms of revenue run rates.
Andrew: What about now? Where are you now?
Timo: Where are we now? In terms of revenue?
Timo: Can we not disclose it?
Andrew: Yeah. You don’t ever have to disclose anything here. But I’m just trying to get a rough estimate. Are we talking about now doing $60,000 in sales a month? Are we talking about $100,000 a month? Are we talking more than $100,000?
Timo: Yeah, we’re talking more.
Andrew: And still, when you went out looking for investors, you were turned down left and right. Let’s give off some of the names of investment firms that said “no” to you or the accelerators that said no.
Timo: Yeah, again, we were naive and stupid. We thought that we should apply to all incubators, that was in 2011. Right when we had about 30 paying customers. But, in a way, we had to. Because we were slowly, but surely, running out of our resources. And we thought that an incubator could be a good step for us to get the funding and also learn how to take the company to the next level. Because that’s what they are all saying that they would help me to do.
And so, we applied, coming from (?) if you’re looking at a map. To come to the states, you have to fly, we don’t have a direct flight, but you would first have to fly to Germany, which is two and half hours and then, 10 hours to the west coast, for example. It’s quite a long way from there. But we thought we can apply to U.S. startups, accelerators. And so, we did apply to Techstars, AngelPad, 500 Startups, YC, one seat (?) in Europe.
So, one day in e-mail, we got an invitation from YC, for example. “Hey, guys. You made it to the interview. We expect you here in Silicon Valley” at that time, I can’t remember what it was. And we were saying “Yeah, we’re going.” So, we went there. We did fly out to this 10-minute interview, got turned down immediately. Basically flew back. Did a bit of work. Tried to see what sort of angels are around. So, that was it. And also, Techstars in New York also didn’t work out. So, we kept going, application after application.
And luckily, there were still quite a few things which happened before that. But, luckily, at the end, we were accepted to a few. And we selected Angel Path as our incubator.
Andrew: Y Combinator said no, Techstars said no, many others said no. And it wasn’t until you guys were starting to really run out of money. Even though the business was getting traction. That you said you’ve sent someone to the U.S., couldn’t afford a hotel room for them. So, what did you do?
Timo: Well, we had this discussion. We had a person in the U. S. from our founders team. And he was coming back empty-handed. Got turned down by Techstars. So, we were running out of money to basically do that again. And I remember we had a discussion and said “What are we going to do then”? And we kind of concluded it “Guys, let’s just have you there in Silicon Valley. Stay there as long as necessary. We probably can’t afford you being there for months. So, try to make it as quick as possible. If necessary, take a tent. Sleep anywhere you can.”
In a way, jokingly, but also, men being quite serious about it. “Don’t come back without the money or don’t call us without good news.” So, that was sort of a funny discussion, but it happened.
Andrew: And did he get good news?
Timo: Yeah, that was like two weeks after he went there. I was just trying to start my vacation. Which, I was quite exhausted from the year and I had the sort of a time slot I thought I was going take for vacations. I think, just less than a week that I had had it, I would go in. And then he called and said “Listen, if you come to the States, I think we can raise some money.” And that was like “Oh, my God.”
That was very good news, of course, hoping that could be true. But at the same time, it was like “Oh, my God. That ends my vacation and I have a family here.” So, but, anyway, I just took a flight and then we already did some more things.
Andrew: Okay. You got AngelPad to incubate the business.
Timo: Exactly. We got a change of plans, and we also had a few angels that we met who wanted to invest. So it was sort of like a good package for us to go forward.
Andrew: I met the founder of AngelPad, Thomas Korte. Am I pronouncing his name right? It’s been so long now. And you’re the kind of company he wanted to invest in. He wanted to be as businesses. He wanted to see real money in them.
Timo: Absolutely. It’s one of the accelerators that we felt most comfortable with to join because they were looking for that type of people. Not too many. . .
Andrew: Do you feel that. . .
Andrew: I’m sorry there’s a lag so thankfully you’re recording your part of the conversation so it’s going to make it easier for the audience to hear than it is for me. Shoot I forgot what I was about to say. I interrupted and then I forgot the part . . . That what it was, do you think that there was discrimination because you were in Estonia and not in the U. S. because if you were in the U. S., if you were even living here in San Francisco that within a month with your kind of traction, with your vision, with your background, with the simple idea that you were building you should have been able to get money.
Timo: That’s a good question. I don’t know really because we didn’t feel like it at that time. Now that you’re going to bring it out, maybe there was. But definitely we would have taken it way less seriously because we were taking it with sort of the risk factor, that a company from somewhere, the guys don’t live here, what happens if we missed? These factors are where I am.
Andrew: It is a bit of a sort of hindrance because you and I are doing this now; I’m in California, you’re in Estonia. The time difference alone is a pain in the butt.
Andrew: And that’s just for an interview like this.
Andrew: What time is it by you?
Timo: It’s almost 10:00 p.m.
Andrew: Ten p.m. That can’t be easy for you to be here at 10:00 p.m. It’s almost noon here for me, and you’re a father.
Andrew: You have another child coming up.
Andrew: Let’s talk a little bit about that because I feel we don’t talk enough about family in the startup world. We’re supposed to pretend that we don’t have it so that people think we have no distractions.
Andrew: It was a bit of a distraction, wasn’t it?
Timo: Oh, it was.
Andrew: Talk about that. What was the issue?
Timo: Well, it was the case of having two kids already and then doing the startup. I think during the AngelPad incubator that was a time when I learned that I had another baby coming. To be honest, we weren’t at that time in a position where I could say, “Hey, yes, that’s great. I know how to manage it all.” I was pretty much like, “Oh my God, I don’t even have a certain income yet, which is trying to learn how to make money with this new company.”
We don’t have our founders full-time working with it. We’re testing still different ways of marketing yet. I’m in a different country. I remember a certain moment when I was talking to different investors in Demiday [SP] and Angel Pad.
At the same time I had a phone call with my wife, and she was taken to the hospital because of some things going wrong with the pregnancy. So that was very, very horrible moments, mixed with uncertainty about how it’s all going to play out in terms of whether I can manage it all. So there is a personal side in every startup or every company, I guess.
Andrew: We started this interview talking about wanting to find something that you really enjoy doing, and we always say, “Startups are about living your dream, having freedom, but we don’t talk about the fact that this doesn’t feel like a dream when you’re going through it. And you can’t get any money, and you’re scraping by. It doesn’t feel like you’re living a passionate life when you can’t be with your wife when she’s going through this, right? Were there times when you were feeling that this sucks?
Timo: I mean, absolutely. It’s part of entrepreneurship, I believe, and that’s something that every startup founder goes through. No matter what, it’s going your own way, and you just don’t know. You just have to throw yourself into the future, which is not yet written, and nobody is going to take care of you basically besides yourself. We all . . .
Andrew: Yeah, if you screw up at a job, there’s somebody there who’s going to say, “All right, I’ll do it for you.”
Timo: Yeah, exactly.
Andrew: If you screw up at your own business . . .
Timo: Nobody . . .
Andrew: . . . you screwed other people over, too.
Timo: Absolutely. If you have already employed other people, you have much more responsibility there, and even your co-founders, so, yeah, that’s sort of a factor. But I believe that the fact that you do, or you’re committed to doing, something that you really like, or feel that you have something to give, and you want to express it or create it the way that you feel is good, it has kind of like a very, very good balancing effect, to make sure that at least when you’re not, let’s say, down or challenged with those hurdles, then you should be feeling quite excited. So that’s quite a rollercoaster, of course, but that’s what it’s like for me.
Andrew: And you also had another issue. Not to keep going into the downer part, but one of your co-founders had a medical issue.
Timo: Yeah, that was even before we joined AngelPad. It was something that happens to a lot of people, that they discover at one point during their life the very, very bad news that they have cancer in their body. So with one of our co-founders, the person that I had worked already for more than ten years with, he was diagnosed with brain cancer, and he was scheduled for surgery. That happened right before we got the news that AngelPad is going to accept us and that we can go to accelerator in the States.
So he went to the hospital, and I remember the last discussion we had was just prior to him going. With these sorts of surgeries, you’re not given 100 to 0 that you’re going to live. You’re going to be given some kind of percentages that it’s going to go well, or it’s not going to go well, so he didn’t really know for sure if he was going to survive that, and we weren’t sure. I mean, of course, we wanted it to be that way, but we didn’t know, and he didn’t know.
I remember this. We had feeling that he must’ve had, and we had asked a couple of things. For example, let’s say you’re going to the surgery tomorrow, and we’re asking you, “Hey, Andrew, now listen, this AngelPad accelerator, they have this schedule here. So when are you going to be in San Francisco? What do you think the earliest time would be?”
Timo: And he would say that, “Oh, my God, guys, I’m going to surgery. I don’t know what’s going to happen afterwards. I don’t know how I’m going to recover from that.” And we had to talk these sort of topics with him and him not knowing if he’s going to be there to live it with us, so that was another issue. So luckily he made it through the surgery. He joined us later, after he had some time to recover, in AngelPad, as well, and still had half of his face not working due to some damages to his nerves, but he was there.
Andrew: Has it ever come back?
Timo: It’s slowly coming back. It’s not like 100 percent full as it was before. It’s much better than it was in AngelPad. In AngelPad he was really freaking people out by the way he looked. But, yeah, he wanted it [sounds like].
Andrew: And in those low moments, the way you get over it is by visualizing where you want to go?
Timo: Yeah, pretty much, I think, either this or something else. I mean, I can’t remember all the times.
Andrew: And when you visualize where you want to go, what does that look like?
Timo: Well, for me . . .
Andrew: What’s the vision that keeps you going, even when you can’t be there for your wife’s pregnancy, even when your co-founder is going into brain surgery and could die? What’s the vision that keeps you going at those moments?
Timo: Well, that takes me back to the group of guys that we met when we formed Pipedrive. The first thing we did, really, was we took sort like a medieval house, or farm house, in Estonia. Went there for a weekend. Coded away. We worked with the specs, they did some coding. And, I knew at that time when I looked at the guys, I looked at myself, I knew that individually we are, you know, just good guys. But, if I looked at how we could work together, then collectively I could immediately sense that if we’re going to put our energies to it and remember that we need to respect each other and keep that energy going, then we can build something really great. So for me, that has been something which has always given me confidence going forward. That’s…there are many, many tools around built by many, many people. And, if you narrow it down to, you know, in any aspect of life, like which–yeah, there are many, but which are the top three? Which are the best ones?
Then, even you don’t have to say like, which are the top three? Which are the best ones? And people normally count, maybe up to five. And that’s it. And rest of it–I’m not saying it’s rubbish, but it’s just not there. Not quite there. So, I was thinking, you know, with that group of guys with that vision, we are set to do something which is at least in this top list for many people. And, for me that has given always…
Andrew: Did you have one person in mind, or was it so clear that you said, I would like my old boss, when people ask him what the top five products, I want to be on that list? Or was there some magazine for sales people that you said, when they come out with their list, I want to be on that. Was that part of the vision?
Timo: No, I think we were more, maybe a bit more like, business orientated. As many startups in maybe Europe tend to be. We were kind of like paying customers, number of paying customers will show and speak for itself. That was for us in a way validating that if people can find Pipedrive and probably being, you know, told by somebody else that, hey this is what I found, check it out. Then, you know, this is a very good sign that it’s something which is already going in the right direction.
Andrew: Okay. And it’s getting there. Today you have customers like KISSmetrics, Udemy[SP], Techstars. The people who turned you down, they are now customers of yours. [inaudible] over a thousand over people. Does it feel good that they turned you down, now that they’re loving you? Using your software?
Timo: Well, actually, Techstars in New York turned us down. We were positively…we got a positive reaction from Techstars Seattle, but, you know, we didn’t respond very positively to them because we didn’t want to go to Seattle, I think. But, that’s just how we felt. But, it feels good. I mean, we were, at one point discovering that Techstars is using Pipedrive and then felt that, you know, how–what are they doing with this. And then we started realizing that the process that we had envisioned for pe–to be helpful for people in sales, it has [???] to be helpful, so for people in many other industries and many other professions. Like yourself, for example.
Andrew: Anywhere where you have steps that you need to take people from? People along? Pipedrive helps, because you want to keep track of whose in which part of your process. How many people you have at each part.
Andrew: And to their credit, both Techstars and Y Combinator, and actually all these incubators, I don’t think they’re clearly not malicious when they say, no, we’re not the right fit. But I also think that they’re…they don’t root against you and I’ve actually seen companies that they’ve turned down get help from Techstars. I remember one entrepreneur specifically said these guys turned me down, it didn’t work out. I had a legal problem and I reached out to them and they helped solve it for me.
Timo: Yeah, absolutely.
Andrew: They care more about the entrepreneur then they care about vindicating themselves that they were right to say that you weren’t a good fit for them.
Timo: Yeah, exactly. I mean, that’s a quite understandable process for them. They’re trying to select the best bunch for themselves at the very moment. So…
Timo: …it’s only right for them to make a selection of some kind.
Andrew: Let’s see. I want to do a quick plug here, and then I’m going to ask you a very personal question that I hope you will answer openly, because I’ve been curious about this for a long time. The plug of course is, from Mixergy Premium. And I’m going to give you guys a couple of suggestions for courses if you’re premium members, what you want to follow up on this with. Alright, the first is, one of my favorites, really if you want to get a sense of what Mixergy Premium is about and you don’t know where to start. I would recommend [???] course on how to find what you’re meant to do and what will give you happiness in life.
Since we started off this interview talking about how Timo was looking for something that he could get excited about, and not just wander into a life that he wasn’t into, Callum Newport’s session is fantastic for it, and he has a whole other take on how to do it. He doesn’t say “find your passion.” He says something much more reasonable than that, and something that will more likely, I think, lead to a passionate life. So check out Callum Newport. And of course he has a great book that you might want to check out, also. “So Good They Can’t Ignore You” is the name of the book.
Alright. Two others: Justin Rothmarch. If you’re into sales at all, you either have to take his course here on Mixergy, or you need to go to Ballistics and get his book, or hire him. He is fantastic for showing you how to create a process that increases your sales. And Timo, are you just writing his name down? You should. He’s someone you need to know about. That would be Justin Rothmarch. And then the final person is . . . so Justin, one more time, is for building out your sales.
The final one is Max of What Runs Where, who in his course on Mixergy said he uses Pipe Drive, recommended Pipe Drive. And I went, and I got that, and for me, just getting one tool like that and one insight into how to use it is often worth all the work of putting the course together, even if no one else gets to hear it. Even if there are all kinds of other problems that we can’t publish. When I get one little gem like that, it’s worth the whole course to me. And if you sign up to MixergyPremium.com, I guarantee that with every program that you take, every course that you’re a part of, you’re going to get at least one gem.
And of course, if you don’t, or if you’re just not happy with it . . . maybe you’re not happy with my new beard. Maybe you’re not happy with the color of the backdrop. Maybe you’re not happy with . . . I don’t know what. Whatever it is, you can get 100% refund. You’ll be startled by how easy it is to get a refund if you’re not happy. And I know that many people are enthusiastic customers, and I can make that kind of offer because I know that if you sign up, you will get a lot of value out of it. Go to MixergyPremium.com.
Hey, as a salesperson, I always want to get feedback. What kind of feedback can you give me on the way that I sold Mixergy Premium right now? How can I have made it better, or what was okay about it?
Timo: I liked it. I liked the part that you were . . . you know, part of being confident in your offering is probably the key that I’ve seen, working in many, many areas in many different industries. That’s something that usually people struggle with at the very beginning, and some people find it very hard to . . . kind of come to terms with, even when they are doing the work for quite long years. But it’s just the fact of understanding that it’s not that they are after . . . in a way, it’s like a mind game. That they are not after their customers. It’s the other way around. It’s their customers — potential customers — can be the users of the product or the service, but there’s a prize in what they offer. That’s something that is quite a turnaround.
Andrew: Ah, I see.
Timo: So I quite like the way you positioned it. It made me feel that you’re not after me, but I should be after what you’re offering. So that was a good pitch.
Andrew: I see. Okay. Yeah, you’re right. It is very easy to say, “Come, you’ll love this or want this.” I’m much better off saying, “I’ve got something that you want.”
Timo: Exactly. That’s . . .
Andrew: And prizing it, and making them feel that desire.
Timo: Yeah. That’s very good. I remember . . . there are many, many techniques, of course, for people who do sales and all that, but it’s just having the confidence of saying that maybe it’s not for you. So it’s always kind of like, “What do you mean? What do you mean right now, maybe it’s not for me?” But it could be for you. Like you said, there’s a bunch of people who found really, really good use out of it, and found it very valuable. There’s only one way to find out. So I like that position. That was great. I didn’t really . . .
Andrew: Maybe, it’s not for you. That is a good way to position it.
Timo: I wasn’t very critical, to be honest, in terms of what you were doing, in terms of things going wrong at this very moment.
Andrew: It’s still helpful. You know what? Before I ask you a personal question, you reminded me: I should have spent more time asking you, as a salesman who creates tools for salespeople, how do you get your customers now?
Timo: Well, that was one hell of a decision for us. Always being very driven by our own actions, in terms of . . . and control, and what you can do in terms of enterprise sales, that if I work with numbers, I’m going to get, at the end, a few yeses here or there. So make a decision that we’re going to make a tool, we’re going to build a tool which is going to reach, you know, hundreds of countries, and thousands and thousands, millions eventually, people. We knew that we’re not going to be able to reach every one of them, but we, even at first we felt that we should, so we knew that we’re going to come up with some kind of different model, so we dropped the direct sales model at the very, very, you know, beginning, and we haven’t done any direct sales, of course, for ever since. And, you know, the best thing that we have been able to do . . .
Andrew: Say, we just lost your audio.
Timo: Oh, is it good or not, good or not now?
Andrew: There it is, it just caught up. Okay, you said no direct sales because you can’t reach enough customers, right?
Timo: Exactly, yeah.
Andrew: So you’re not calling up and looking for customers, so what’d you do instead then?
Timo: So what we have done so far is just to make sure first build a product that has the capability of, let’s say, exciting a lot of people who do sales, and also has the capability of customizing so that people can customize it to whatever the needs they have in their business, and/or a specific profession, and just put it out there, make sure that we work with all the potential online directories, online stores, that was the first thing that we wanted to do.
And the second thing was just, you know, start learning the way you should market a product like that in sales business, try to understand how content marketing works, try to understand how all the different aspects of (?) marketing, how it all works. I can say right now that we are still very, very early in terms of our experience to sell (?), so maybe not marketing retards, but still quite something, that is.
Andrew: Let me break down what you said. Online directories helped you, what do you mean, what kind of directories did you work with?
Timo: Well, you know, Chrome web store, for example, and different kinds of lists or directories that people were putting up (?) and get at, you know, different ways of finding out what sort of app should I get for this sort of, you know, this sort of needs. So these sort of directories that people kind of turn to when they are making these sort of purchasing decisions, they’re not just looking out to . . .
Timo: . . . you know, separate webpages of the companies that are producing these sort of things, but what people are talking about, so we wanted to be at the place where people talk about and recommend.
Andrew: Okay. Like software, is it softwareadvice.com, I think, where you pay to be included in the directories (?) commissions.
Timo: No, no, I can’t remember if we ever use that. Well, we just reached out to the directories which had the highest traffic of people going there, looking for different tools for . . .
Andrew: I see.
Timo: . . . different purposes, and just want to make sure that we are up there, we are reviewed and recommended.
Andrew: You also talked about stores.
Andrew: What stores did you want to work with?
Timo: Well at the very beginning, of course, Chrome web store, which was available there and probably the best working sort of a store even though it has a lot of B2B apps there, also, you know, consumer apps, and then (?) marketplace, so a lot of Google tools have been our, you know, kind of like a target of our attention.
Andrew: Okay, and content marketing, how effective has that been?
Timo: Given that we have done it with, let’s say, various speeds during that time, it’s been, you know, doing quite well because it has gotten more people finding out what Pitra is and what it does, and we can do so much more with that, of course, but . . .
Andrew: What’s the most effective content marketing that you’ve done? Is it writing blog post on your site, or writing them on other people’s sites?
Timo: I think it’s fair to say that, you know, guest blogging, writing stuff on other sites which are, have much more traffic, of course, at the beginning.
Andrew: Okay. What about Ad buy, I think I’ve seen you do some Ad buys?
Timo: We have not worked with the paid marketing site, you know, that heavily, so that’s still something to discover, you know, through tests and see how much we want to, you know, put on that.
Andrew: When I go in to my account, I see that there is an option for me to share Pipedrive or to tell other people about Pipedrive and then I get a free month if people sign up or something like that.
Andrew: What percentage of your sales come through people using that ‘tell- a-friend’ system with rewards?
Timo: Not satisfactory but I think it has to do with us being quite retarded in that sense. We have done our job to hide this sort of option quite well, I believe. And so even this week we were just launching our new campaign and a total rebuild of that page. So that is something which is quite marginal in terms of how people come . . .
Andrew: Not significant.
Timo: Yeah, not . . .
Andrew: But you’re doing over $100,000 in sales. What’s been the most effective then for getting that many sales and that many customers?
Timo: Well, we found that people have been talking about and recommending it outside of the application, which means that they have been, obviously, talking sort of real-life conversations much more. And the name is not maybe that tough to remember, either, so people have been doing quite a bit of . . .
Andrew: So it’s a name that’s easy to talk about and, like, Max would tell me, “Hey, you should use Pipedrive,” and then I end up using it and telling other people to use it.
Timo: Yeah, pretty much.
Andrew: That’s not enough. What’s the most active marketing or the most effective active marketing option that you’ve used?
Timo: Oh, my God. I’m going to have to say that it’s still that. I mean, call it luck, call it anything else, but it’s just being present in forums, being present in different directories or online stores, and just having the reach of not just the U. S. market, but being localized in six languages already and being present in South American market, Asian market, not China but India and Australia.
Andrew: What’s the top directory that you’ve used? What directory has sent you the most users?
Timo: Historically, the biggest traffic has come from Chrome Web Store, especially the very early days. That was something that was giving us a lot of traffic.
Andrew: Web Store?
Timo: Yeah, Chrome Web Store.
Andrew: Okay. All right, here’s the final question.
Andrew: I’ve been a customer of yours. I’ve been on your site, on your blog. I’ve emailed you guys. I think a year, maybe, has gone by since I first pitched you to do an interview here and you’ve been stuck in our pipeline for months and months. Why did it take so long?
Timo: That’s a good question. Oh, my God.
Andrew: Be open. This is a question where I said, “Be honest.”
Andrew: There’s no numbers here that you need to hide, no cofounders to consult with. Honestly, what is it?
Timo: Yeah, don’t worry. I mean, when we . . . I can’t remember that it’s been a year that you first said, “Let’s do an interview.” Has it been that much, a year?
Andrew: Maybe not that long, but it’s been a while.
Timo: It’s been a while.
Andrew: Maybe not a year.
Timo: Yeah, I kind of remember it’s been like six months. But even that, to be honest when we first talked about it and did some pre-work, right about that time, like I said, us coming from Estonia to U. S. We have our . . . you know, this year has gone to some serious relocation. So that was during the springtime, right about the times when I was thinking of doing the interview, I was with my, let’s say half of my family in the States, trying to make sure that I can get a home for my family there, finding schools, doing the little things like driving licenses, anything that sort of nature.
And with that much, I really couldn’t have everything done which I wanted to. And then coming again to Estonia to our tech center, taking care of some of the immediate things there. You know, it’s just months and months went by. Even though I had that, “Oh, my God. We should have that done.” So that’s the spectrum of real life things that you try and take care of.
Andrew: Was there any sense that I might ask you questions that you didn’t want to answer?
Andrew: I sense that from . . . no . . .
Andrew: You were okay?
Timo: No, no, yeah, that’s fine.
Andrew: You’re okay saying no?
Timo: Yeah, yeah, yeah, that’s something . . . I didn’t imagine you would be asking something or we would be talking about something which I didn’t want to be part of. That’s been a pleasure right now and I imagine every bit of it to be like that.
Andrew: Well, I appreciate that. It’s been a pleasure to have you on, too. Congratulations on the success. I’m looking forward to hearing what the next big milestone is. And until then, people can check out pipedrive.com and if they want to reach out to you, maybe if there’s an entrepreneur in Estonia and he’s feeling alone and feeling like everyone in the U.S. hates him or is ignoring him, is there a way for him to contact you and say thank you for doing this interview and showing him he’s not the only one who might need to bring a tent to Silicon Valley?
Timo: We have quite a good startup scene in Estonia going, so we do have a lot of connections already.
Timo: But yeah, as we are now in the process of having quite a good portion of our company relocated into U.S. anyway, so we can go on from there in California.
Andrew: All right, so what is a good way for people to say thank you for doing this interview?
Timo: Oh, you mean that? Well, probably they can drop an email. That could be probably the easiest way.
Andrew: What’s your email address?
Timo: It’s very, very simple. It’s Timo, T-I-M-O @ pipedrive.com. Couldn’t be simpler, I guess. And maybe there’s a way for us to connect. Maybe there’s a way to be helpful.
Andrew: All right. As always, guys, if you’re going to reach out, don’t start with your own interests. Start by just saying, “Thank you.” It’s an easy way to do it. People always appreciate being thanked. And then if something comes up, let it happen afterwards, but don’t be forceful. And I’m going to start by doing the same thing that I keep advising everyone in my audience to do.
I’m going to start by saying thank you, Timo, thank you for doing this interview. Thank you for creating the software that we use in our business. And you, the person who is listening or reading the transcript or watching me right now, thank you for watching. Thank you for being a part of it. Bye, guys.
Timo: Thank you, Andrew.