You're in the B2B SaaS trenches. The good news is others have been there before and lived to tell the tale.
Today's podcast was recorded live at our First Friday event War Stories with Legends.
Jared Fuller interviews legends of B2B SaaS, Peter Caputa, and Jill Rowley.
Peter Caputa built HubSpot's agency program before executive alignment was ever established, and Jill Rowley won one of the most important deals in Eloqua's history by partnering!
Kick back and hear how they did it.
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Jared Fuller 0:00
You're over. Okay for the people that are here on time. I won't say what was said entirely backstage. But Jill starts this off with Is this being recorded? And I was like, Yes, of course. And she's like, Okay, I gotta be careful what I what I say. So y'all are in for a fun, fun, fun. Friday afternoon. Thanks so much, everybody for joining us.
Jared Fuller 0:20
Let's see here. Events feed I wanna get make sure I'm in the right chat. I always set up screwing this up. Here's chat. All right, let's roll. So let's see where people are coming in from we'll give it a couple minutes before we start formally. All right. Who do we got in? We got the partner hacker Cruz here obviously. Let's, let's draw some chats and some emojis. Where are people calling in from this Friday afternoon? What do you got going on this weekend? Joe, what are you doing this weekend? Going through some notebooks?
Jill Rowley 0:53
Yeah, well, once I started down the rat hole I couldn't like stop because I've got a couple of boxes of them. But no, what are we doing? Are we going to dinner tonight? I want grilled cheese and tomato soup. I'm just craving it. There's like a, you know, a sports bar close by that. That's our that's our go to when I'm like grilled cheese. And then of course I'm gonna work out on Orange theory.
Pete Caputa 1:16
Tonight before after the grilled cheese. Oh, no,
Jill Rowley 1:18
I did the I did the workout this morning. At 8:45am Girl during the week woman. What are these guns? And then you want to see my belly? Yeah, no, no, no, this is recorded. I forgot. Yes. Okay, yeah, no, I do the 845. Monday to Friday, and then the 10am Saturday, Sunday.
Pete Caputa 1:46
Nice. What's up this weekend, Pete I'm having dinner with some friends my buddy G to and his wife Lena, and my wife and son Oh, gonna go over and hang out with them. He's he's the guy that runs cuz he's a chief customer officer or chief, customer success, something, whatever it helps. But now he built out the international thing. But I've known him we've worked together literally for in three different companies. So I've known forever. And then probably get outside kick the ball around a little bit tomorrow. And I'll probably be doing some work. We have a big retreat. We're doing the Not this week, not this coming week, but the week after with the company data box. And so have some prep work to do still working my slides.
Jared Fuller 2:35
Yeah, of course, the slides didn't get done the day before. Or the morning of maybe. Yeah, week before that. You're, you're an overachiever. At this point in tech, if you're getting the slides on
Pete Caputa 2:48
time new data was given. Right?
Jared Fuller 2:51
Of course. Well, what's up, everybody. Glad to be here. This is gonna be a fun one. So kicking off the Friday afternoon, we'll go and get stuff rolling here. agenda for today. I've realized that I've been privy to some really impactful stories that have really motivated me and moved me and given me some inspiration, whenever I was to come upon an inflection point, like, hey, we need to do something differently here. Or we need to avoid this path or absolutely take this path. And these two individuals today, Joe rally and Pete Buddha have taught me a lot. And I've I've loved some of the anecdotes that they've seen, you know, kind of on the front line of seeing an ecosystem company emerge, you know, so what was kind of happening at those times? Where maybe you were doing something that, Wow, I'm so glad I was approaching it that way. Because that allowed us to get to this next thing that was essential to our next phase. Or, man, I really wish I hadn't done that we could have done so much more. So that's kind of the war stories from the frontline, so to speak, with my two legends and friends here today. So let's hop on in. Gil, I saw your LinkedIn post about the billion dollar deal. I almost want to open up there, but I feel like the story at the beginning of Eloqua too, like ending with you know the deal and closing Salesforce, you know, starts before that million dollar check. Maybe let's start there on how you started to be partner pilled. And you're rummaging through some of your old memories and notes. What were some of those inflection points in Eliquis journey where you felt like going it alone wasn't enough? Yeah, so
Jill Rowley 4:25
I actually backup the story too, when I was a rap at Salesforce. So I was at Salesforce 2000 to 2002. And I covered Canada. That was my first territory. I had the whole country. And Eloqua was this tiny little startup with less than 10 employees. That was my customer. Right that I won the deal. Really like maybe eight licenses, maybe seven?
Jared Fuller 4:54
Quick quick question. Did Eloqua integrate with Salesforce back then?
Jill Rowley 4:58
So that's where it's going. Okay. So, so I was going there, right? I was I was, you know the rep for aliqua. They were my customer. And I, like they showed me the product because they wanted to, you know, integrate with Salesforce. And I was blown away. I'm like, Oh my God, because right back then it was like an email tool and email wasn't ruined. This is pre like spam, Cannon marketing, and now sales and
Pete Caputa 5:28
permission marketing, right? Seth Godin permission marketing was like all the rage that was like, ABM was a year ago. Everybody was talking about
Jill Rowley 5:38
so, um, no, no, but what like, we had article reprints over on the wall at Salesforce again, remember you it wasn't a big deal. So we needed and the Eloqua The first tool was online chat. No one knows. Right? It was tracking scripts on the website to be able to see who was on the web. And then to be able to, you know, via IP lookup, know the company name, send an invite to chat live, like this was like our sales conversion product or site conversion product. And the idea was to connect with the website use it or when they were on the site. But that was like in 2001. Two, and it was waiting
Jared Fuller 6:20
on IRC, like,
Pete Caputa 6:22
was that was aliquots first product, or was first product. So you have to be the first version of drift. That's
Jill Rowley 6:29
exactly right. Right. So you, you need the tracking scripts on the website to see who's visiting the website. And to see who's like, you know, actually clicking through an email and, and to be able to see what pages they viewed. So I'm using Eloqua as a Salesforce sales wrap. And I took all these article reprints and put them into email, HTML templates. And I started sending trackable whether they opened or clicked through the email, emails as a rep, really before Salesforce as a company was doing email marketing. So I'm like doing email trackable as a rep at Salesforce. So what I was trying to do was to get Eloqua and Salesforce actually integrated. Because if you think about it, I wanted the activities in Eloqua to be logged in Salesforce. So as a rep, I could see who opened, blah, blah, blah. So I was actually, Judy, Laura tells the story, in fact, where she found out I given Eloqua, my username and password, she was in marketing at Salesforce, I didn't know like, they were going to use it to log into to the my Salesforce instance. But it was to be able to do like, you know, integration between the two. Long story short, very long story, sorry. I was at Salesforce trying to get them to prioritize Eloqua as a partner, and that was really like before they did integration with partner products.
Pete Caputa 8:10
So you kind of like you were doing like outreach is with Eloqua, like outreach data, or.com, whatever I do whatever it is,
Jill Rowley 8:20
in 2001, that's right. And I was doing it manually, right? Because there was no workflow engine. Like if this then that if this then that wait seven days, like that wasn't available for me as a sales rep to use. And so I was creating these email templates and then creating a task to send the second email. I was doing manual lead nurturing in
Pete Caputa 8:45
that. Were you like logging into aliquot? To see if people opened it? Oh, heck yeah. All the time. And like follow up or whatever,
Jill Rowley 8:51
I would prioritize who I followed up with, like, when to call them based on the activity of the of the email. Yeah, it's crazy. Early days,
Jared Fuller 9:02
people still being taught this stuff today. It's kind of hilarious. You're like I was doing this 20 plus years ago,
Pete Caputa 9:07
I was the most important part of HubSpot in the early days, like 2007. Eight, when when we would sort our leads based on whom, who most recently engaged with our marketing, whether it was our website or or email was later was mostly just our website. But it was the reason they came back to themselves because of marketing emails, of course. And so that would be we go in the morning or log in the morning and like, just sort by that and that's the people we call. So same thing. We just a few years later, of course, and it was it was more automated. But same concept. Yeah.
Jared Fuller 9:43
So in that transition, Jill, so selling into Eloqua ended up becoming an integration partner and then you ended up going to Eloqua.
Jill Rowley 9:52
Yes, that's correct. They weren't Yes, exactly. I went to Eloqua. I was employee number 13 at Eloqua. So I was like the first like The old sales rep hired beyond our founder led selling mark, Oregon. How long
Jared Fuller 10:04
did it take you to close Salesforce as a customer?
Jill Rowley 10:08
3321 days? Yeah. Yeah, we had Alex Schumann, the president of Eloqua when we closed that deal, because it
Jared Fuller 10:22
was a weak leg up good job,
Jill Rowley 10:25
company effort. And just going back looking through my notes again, so many people involved.
Pete Caputa 10:32
When did Salesforce by ExactTarget partner like a year later?
Jill Rowley 10:35
Yeah. Two years later, because we were Ellika was acquired by Oracle, a year and a few months after we signed the Salesforce deal. So yeah, and then no, they couldn't. Another thing aliquot couldn't be ripped out of Salesforce for years, because it was so deeply integrated with their other systems. But even beyond that, Pardot which exact target had bought and then Salesforce bought Pardot Pardot, SMB, Lower Mid market, b2b marketing automation system that absolutely wouldn't meet the needs of Salesforce to use internally for their marketing automation platform. So they couldn't get Eloqua out for many years after the Okay. Yeah.
Jared Fuller 11:36
Oh, my gosh, yeah. Pete, I want to kick it over to you.
Pete Caputa 11:43
Like, stole that was like, all of that story was revolving around. Like, that's when you realize partnerships are kind of key, right? It's like, you realize integration between the tools, which enabled something special for the rep, in your case, to be able to do it. And that that's, that was your original question was Jared, like,
Jared Fuller 12:03
yeah, it will come back to Joe's story about aliquot. Cuz I want to tie in where the different types? Well, so for example, there's I'm gonna go back and forth, so that we just don't have the Pete show and Jill show. So Pete, before you started to HubSpot, you worked at an agency, is that right?
Pete Caputa 12:20
No, well, sort of. I built an agency, which was like event marketing and email marketing. But I couldn't sell the software. So because it's always selling to like small local businesses, and they weren't sophisticated enough to or motivated enough to learn our software. So I was using it for them and delivering marketing services, basically. So I would, yeah, so I built websites, did email marketing, did some SEO did event marketing. So but yeah, sort of,
Jared Fuller 12:46
well, I'll put it this way that it's that experience. If you hadn't had that prior to coming into HubSpot. Right. You might not have thought about the agency world the same way, right?
Pete Caputa 12:56
Yeah, no, I don't think I would have been able to relate to them. Like we I was selling marketing services, largely project type stuff. And as a result, had major cashflow issues in our business. We were really small as like, two full time people. But you know, some some months I'd pay myself and sometimes I wouldn't. And so I was able to relate to a very common challenge in the 2008 910 range of most digital marketing agencies. Were selling small ticket contracts, projects, small low retainers, and they all suffered from cashflow issues. And so if I had related to that, I'm not sure I would have recognized that problem necessarily. And that is the problem that we fixed with for agencies is we help them sell bigger recurring revenue contracts for their services. So yeah, I probably wouldn't have recognized that
Jared Fuller 13:55
I needed. So I had a I had an agency circa 2010 P marketing agency that I did cashflow based projects where I'd go sell out, but like, I just closed the three deals team who all 30 of us, we got work, let's get to work quick and then go work for three months really diligently. Wait, Jared, how we make payroll next month? Let me go sell another one. You know, so I was there? You know, I totally get it. The reason why I'm framing it this way, Pete is as you started to work with these agencies, you definitely encountered some friction amongst the team that like, Hey, is agencies we don't necessarily want this is a customer. And yeah, there were some choices to be made. Whether you push through that and was like, No, I understand there's there is a promised land here for this potential customer type. And, you know, maybe you had the foresight to see the partner, you know, opportunity as big as it was, or maybe it was, you know, kind of there. In that moment, you have that empathy. How do you think you navigated that, you know, appropriately and how might someone else navigate that by understanding their partners, right the project I was just there going through. Yeah. I don't know, internally. But yeah, framing I'm trying to get through.
Pete Caputa 15:06
And I don't know if I've managed it with empathy. But there was a bunch of different objections I had in just just with the idea of like, working with these agencies and also, like, being public about having a program like there was major objections I had to work through. They, they were, they were different objections based on different parts of the organization. But included, you know, Brian, the CEO of HubSpot, he had objections and my goal be the VP of Marketing and the time that leaders CMO, he had objections, VPS services, they all had objections, the only one that was really I say ambivalent about it was Mark Marco Barish, who was my boss VP of sales. Because he saw the also saw, the same thing I did is that it was incremental sales for us a new channel that we could develop. And for him, he was tasked with not just growing this year, but the year after he saw it as a potential to grow. So like, each one of those obstacles was navigated differently. I guess, I don't know which one you want me to key in on? Yeah. So
Jared Fuller 16:11
what do you think that they were each navigated differently? But in terms of your focus, you're like, you couldn't fight all battles? You were focused on What? What?
Pete Caputa 16:23
Sales solves? All right, we've all heard that phrase. So I just, I was a sales rep, I had a quota. And so if I closed deals that no one else, no one really cared as long as they weren't bad deals. And so I was hitting my quota without many leads, inbound leads. And at the time, like, we could size our sales team based on inbound leads, it's the only channel we had. And so the fact that I could go and get incremental sales without inbound leads was, and hit my quota like that, they allowed me to operate that way. Now, I wasn't allowed to launch a partner program, I wasn't allowed to, like cut partners in on anything, I couldn't bring them in on any deals, I could barely get our marketing team to talk to them. So there was really no support for it. But if I could sell them, they were they were fine with letting me do that.
Jared Fuller 17:10
Okay, so that was the first thing is having some empathy so that way you could sell to a new buyer that no one else wanted to sell to no one else wanted to market to.
Pete Caputa 17:17
Yeah, just generally, they wasted the sales reps time and but I knew how to talk to them. I knew what the problems were, I knew how to relate their problems to our solution and, and guide them and really advise them and consult them. In addition to buying software and learning inbound, I taught them how to sell inbound retainers.
Jared Fuller 17:34
Totally, totally. I'm going to kick this back over to Jill because I believe there's an agency story here as well. That ended up being I think a pretty big industry agency story, so to speak, is Gil, we talked about this a little bit on the first time you want to partner up, which was a lot of fun, which was coming out of elico was Dave Lewis, which ended up becoming demand gen.com. And I know Dave influenced me when I was at Panda doc with my like, my VP of Marketing at the time that I didn't necessarily get along with great Pete saw some of that drama. I think you told me gave me similar advice, like grow up Jared said something like that grow up was his one liner to be he was half right. He's half right. No, which means he's probably like, almost entirely right. Jill would, whenever you you'd originally worked with Dave Lewis, when he was at LMA, which was a big, eloquent customer talk to talk to me about, like, the opportunity that you started to see whenever, you know, a product expert, exited the company, right exited their you know, as a vendor, and you know, you know, customer relationship. And when I'm kind of building, you know, a company and my putting my net worth on the line, my reputation on the line, to launch demand gen, which became one of the probably most influential b2b Kind of like marketing agencies and thought leaders in the space. How did that start to affect kind of like the rest of the industry writ large in terms of adopting marketing automation and impacting how you approached, you know, the latter, the the rest of the second half half of your story, so to speak. This is kind of Salesforce Eloqua. And then, you know, a couple others later.
Jill Rowley 19:17
Yeah, so, um, Dave was an early eloquent customer. He signed the contract December of 2004 to 18 years ago today, when he was at Ellie Mae, so he was a very early customer and I remember vividly my first meeting with him when he was at LGMA and be like, hallelujah, we got a smart marketer in the middle. We got someone who understands data and technology and integration and automation. And you know, back then they were few and far Between and not that there weren't smart marketers, but demand generation in b2b data. I mean, all of this email, like all of this was just not something that existed back then. So I met Dave, and I'm like, Oh my gosh, this is like, brilliant. He's so awesome. And then he went on to be an incredible customer, like they, they really moved the revenue needle at LMA, and he got a lot of recognition as he should have. He was very active in the Eloqua, like community at that point sharing, like learnings and stuff. There wasn't any user group, though, there was no formal user group at that point in time, he and I actually, you know, kicked off the first user group that Eloqua had, and that was in the Bay Area, because the lion's share of our customers are actually in the Bay Area. So if you think about it, you know, b2b software selling to b2b software companies, many
Jared Fuller 20:55
of them in that user group was when he was a customer.
Jill Rowley 20:59
Actually, no, that was that was when he launched demand gen. He came to me in 2007. And he said, Look, there's there's, there's, there's a real real here in terms of transformation of marketing, digital, automation, all of that stuff. So he said, I see it, right. I see this coming. And I think I can really build a great business around this helping other marketing teams to modernize. And so I was immediately, yes. Because so many of my meetings were not with someone like Dave Lewis,
Jared Fuller 21:44
right. And that that inflection point, so to speak. If we just fast forward a bit to Pete side of the story, or another chapter of yours, things that came out of this, were things like, you know, hugs, right, so HubSpot user groups, right. So like you, you know, you had mugs, Marketo. User Groups, yep. Right. And who were essential parties to these user groups. I mean, I definitely went to hugs is there were some wildly successful customer turned partners seemed like that was always a part of the story is that there had always been someone that had turned into more than a customer. And it was like whether a company embrace that, or, or not, was a big inflection point. And I actually haven't heard too much talk about user groups, which is kind of ironic. It makes me lead to believe that like, I think HubSpot had some transformative capabilities. Eliquis certainly did for the enterprise, is that there's a lot of point solutions where user group might not be that interesting. You can't really build your entire model off of it. Pete, why do you think, you know, that model that Joe has talked about, hey, here's a successful thing. We bring some people together. You certainly saw that same story at HubSpot. Right?
Pete Caputa 22:52
Yeah, absolutely. Partners. I think we're like, most commonly, our HubSpot user group, like leaders, there was resistance internally, to letting them be those partners initially, but it just like was almost it became irresistible, or came impossible to resist after a while, because they became the organizers. They just the only ones that would step up and say, Yeah, I'm willing to organize this, I'm willing to send the emails up and willing to be the presenter, like willing to organize presenters. So So hosting partners became the de facto user group leaders. And so I think and that, yeah, that became huge. I don't know how many there are now or what but there were hundreds and hundreds of user groups around the world that that would meet on a think monthly basis to talk about Inbound Marketing in HubSpot in you know, in their local gym.
Jared Fuller 23:48
Yeah, John McTigue is on right now in chat, and he just dropped something that I know to be true as well, is that the point of the user groups often was inverted from what their corporate counterparts might have wanted, which was about helping helping them as customers, right. So like, these user groups, or people sharing their own personal stories, and like the challenges that they're facing. And the ones that I went to was there wasn't that much tactical talk of HubSpot. Right. These were business people helping each other navigate the challenges of like, hey, I really can't compete on you know, PPC anymore, right? Like Google's just kind of getting comp competitive out. I really need to think critically about this strategy for me and my clients or for my business. And that kind of change and help is really what drove a lot of that transformation. Not hey, here's where you go learn everything about Eloqua. You know, on the enterprise side early on or HubSpot, the wide market SMB. Yeah. Yeah. Update
Pete Caputa 24:47
of this capabilities of the software enabled conversations about so many different things, right. Yeah. Good job. Sorry.
Jill Rowley 24:54
No, no, I mean it to Jeremy's point, I think there was very little demoing In, in a user group meeting, it was more about, okay, lead nurturing is something that's new in b2b marketing. So who's doing it? Well, right, who's a customer that's doing lead nurturing? Well, who's a Partner maybe that specializes in lead nurturing. So the user group meetings were usually around more of a less about the point and click because that's what training is for. And it was more about like, what are the use cases? And also like, Okay, what did we screw up? What did we get wrong? What do we wish we would have known? So partners were great for that. And customers were amazing for it too.
Jared Fuller 25:42
Right, right. Going to the next phase of this, because I think there is something about bringing people together, that's just a no brainer, being able to bring a trusted person that has some tacit knowledge of your platform really has the industry experience, Hey, I've solved the same challenge is a no brainer, which is why you know, GLP, we've talked about things like community partners and ecosystems, sort of in the same breath, right? You put that wrapper of near bound kind of around that same concept, right? It's, it's working with people who've been to the places that you want to go, right? So as a business, it's always advantageous to like, bring your customers with those people, those watering holes. I've always been a fan of that, whether that's events in this modern sense, where we bring everyone together, or it's something much more intimate, like a user group or a mastermind, right? Like they might have these various permutations. I want to talk a little bit about the internal struggles and get to some of those stories to whatever degree we can act like this is not recorded and see if I can get you to speak out of turn. Pete, you said you mentioned you had five different challenges. So to speak, right? You had executive you had sales, you had success, you had marketing, you had Proserv. What do you think of those five? Which challenge were you budding into in terms of like an inflection point in HubSpot trajectory, that you feel like you didn't navigate correctly?
Pete Caputa 27:02
correctly? Well, obviously, it all worked out. So I don't know. Incorrect. But of course, of course, you could have done better in certain areas, I would say. So I can't work. Walk through that list. Like Brian Halligan got on board relatively quickly, and had like hesitantly but relatively good, because he saw the sales numbers. And he literally brought me into room one day, it was pretty early on. He's like, he drew a triangle, you've probably seen it. But this triangle, it's like, the top of the triangle is the company below. That's the team and then the individual. And he wrote, he drew it upside down. And he's like, this is this is individual, this company. And that's how you're running your thing. But what I need you to do is invert the pyramid, I need you to optimize the company, then the team, the company, I'm like, Well, I don't think that's true, Brian, like, what's the problem? And he walked me through and like, here's my perspective on that. I think everyone else has been optimizing for the wrong thing. So he's like, Well, I don't care, you're always you keep it your numbers, you can keep telling your. So like, for him, it was like, literally have our conversation. There was other types of conversations, but that was, for the most part, he was on board, the one that was and Mike was on board while he was on board, you know, because Brian said, Hey, let's do it. But let's minimize the risk of like, having a lot of partners with their hands out. That's what Mike's concern was because he had a company where that was the case with partners. So we definitely minimize the risk of that. So that was an easy one, the hardest one, I think, was getting alignment on the services side. And I don't want to make it about the people because it wasn't it was really just a mismatch of strategies like the service. job was to prevent churn. And with a partner in the middle, like they just didn't have as much control over that. And we were signing up these really small partners, some of them literally still operating out of their dining room table. So like to the services org. That was, you know, that was a big risk. They didn't have control, and we're relying on an intermediary with difficult cashflow problems. So so there was like just a mismatch in terms of like,
Jared Fuller 29:02
I have a quick tactical question that I want to bring in Jill on this pill. Pete, the services number the partners had that did not in any way impact the head of Proserv their number?
Pete Caputa 29:13
It did, yeah, because his job, their job was retention of all customers. That was there, there was customers
Jared Fuller 29:23
there. What, I'll give you an example of how I was attempting to solve it in a previous function, is I moved a function and a role underneath our chief customer officer and our VP of Proserv, where partner services technically reported to them in terms of like their number and their engagement. Yeah. Do we get you did that as well?
Pete Caputa 29:45
Yeah. By No, no, no, we, we wanted to keep this is where the problem was, there was we wanted to we wanted to build a channel without disrupting the direct process. Everything Direct direct marketing, direct sales direct direct, you know, service. And so there was very little appetite. There was no appetite in the beginning to adopt any of the really any, any functions.
Jared Fuller 30:12
Other than Yeah, so nothing that was overlay to use words that we used to use together in our conversations
Pete Caputa 30:19
completely separate. We even calculated the LTV CAC, separately,
Jared Fuller 30:24
you almost treat it truly like a channel because you had your own at the beginning of hotspots journey. It was truly like a different rep. Different kinds of like marketing initiatives, different success, right? Yeah,
Pete Caputa 30:34
there was yeah, there was no integrate, there's really no integration. There isn't like husband's gradually integrated the channels even though there's still like issues but but, ya know, it for a while we're early on, it was relatively fine. We didn't have like sales channel conflict, because we were going after an SMB market that was massive. And so that was rare that we had channel Comp sales channel conflict in the beginning.
Jared Fuller 31:01
So So Joe, let's pop it over to you then because you are on the inside selling these deals at at aliqua. Tell us a little bit about the services and the transformation that your customers needed. The closer you started to get to people like Dave Lewis, and going to those user groups, you realized, oh, wow, the software is not a panacea, right. Like there's a lot of work and mindshare and knowledge and transformation to be done alongside Eloqua. How did how did you start to think about that with internal services? How did Eloqua approach services versus potentially working with a demand gen or other service partners that kind of begin to raise their heads in the ecosystem?
Jill Rowley 31:44
Yeah, so I'll actually say I knew how hard it was to implement the software, actually learn how to use the software like I have day one we needed we needed help, right? Our customers needed help because it HubSpot didn't exist. How's that much easier to use to get up and running? You can just turn it on and you can start doing something with HubSpot. That wasn't the case with Eloqua. It you know, I'll get back to the question around how to services come about. But I will tell you, when Marketo came, you know, on the scene probably around 2008 P. Would you say when they started? The software?
Pete Caputa 32:30
We saw although we were we still weren't competing that much in 2008? Yeah,
Jill Rowley 32:35
yeah. So they came with a brilliant marketing message of positioning. They're easier to use, they're cheaper, and they're faster to deploy than Eloqua. And they didn't have services. They didn't have partners. And because they told their their buyers that it was easy, so easy, fast and cheap that you don't need help. Right? You can do this by yourself. That was a differentiation, like I wasn't competitive, there
Pete Caputa 33:06
may not have been true at the time.
Jill Rowley 33:10
wasn't true. The software can be as easy as it as it can be. But you're starting to do things that you haven't done before. Like, use automation, you're integrating it with other systems, you're scoring leads, you're building, you know, workflows, you're like, yeah, exactly. Your Thank you. You're aligning sales. Yeah, it just it was new stuff. It ain't even in 2008, it was still really new. So it was a disservice, I think that Marketo was was was to their customers, and I could see future churn, if they didn't figure that out. And aliqua it. The configuration was done by our services team. We had an internal services team before we had partners, right? They were in Toronto, right in Canada, and I was in the Bay Area. And it is there is this like, in especially like a geographic proximity wasn't it mattered and even as we put partners, services partners, we they were geographically dispersed often because we wanted that field coverage to be closer to the customer and also to be hosting user groups and really a little bit like territory focus so that we could align better partner and sales organization because I think we did a pretty good job aligning our partners with our sales team. So but Eloqua it was we did our internal services VC funded so you don't want a whole lot of non recurring revenue on your books that you know back then and even now it impacts your you know your valuation And so and we realized like to scale to, we could scale implementation through partners, rather than adding employee headcount, and salary and so forth. And so what we worked really hard on the Eloqua lessons learned over time, was how do we create these standard deployment packages? How do we make sure that our partners are deploying in a very similar way, like they're doing configurations, based on how the software is designed to work, they're there. You know, there's checklists of what sequence things have to be done. We wanted to help them figure out like, the resources required on the customer. And so our services team did a lot of like that building. And then partners would be certified on it, they would also be able to tailor right to tailor to what, you know, their domain knowledge, etc. But it is I think, you don't want your partners out there in the wild, wild west, you do want to put structure and process and just just yet, if certifications and stuff like that,
Jared Fuller 36:21
it's somewhere between, you know, like a fully controlled services team that's supposedly magically does everything perfect. And then like a franchise model, where it's like, No, you must do everything exactly this way, the French fries must look this way served up this way. Like you do need some standardization in terms of like, what good looks like from a software implementation in order to take that to, you know, effectively enable and onboard and train partners. And this brings up an interesting dichotomy, that it'd be interesting to hear that take, you know, maybe from the Marketo days, Jill, or you know, Pete, your HubSpot kind of days, is the difference between enterprise and SMB. And the dichotomy, what seems to be like if I'm working with an agency, Pete, I'm normally I'm hearing customer outcome language. What do I mean by that is that agencies by virtue of typically their contracts, they're beholden to a customer outcome. Whereas we approach a lot of our things as software vendors using vendor language, vendor objectives, vendor goals, right? net dollar retention doesn't mean anything to a customer, right? Product adoption and usage means nothing to a customer. They're thinking about their outcomes, you know, their totality. How did bringing the partner you know, motion and agency motion, you know, kind of to life and training them and then being beholden to customer outcomes? And you as a software vendor did you start to see that permeate perhaps the culture of HubSpot, or their willingness to, you know, think, think that way?
Pete Caputa 37:49
I think in the early days, there was like two camps inside of HubSpot. One was like, Hey, go sell this really cool thing that we put together, it's cool product, right? Does all these cool things that you need to do, and convince people that you should do it because the future is inbound and outbound. And that obviously was important, right? I don't want to downplay then there was a second camp, which was much more what my camp was, which was, hey, you should do content marketing, you should do SEO, you should do lead capture, etc, because it'll help you grow your business. And if you do all these things, regular recurring basis, you will gradually, consistently grow your business. Like, that's still true today. If you do it, right, and you you're creative, and all that. So with the partners, the latter approach was the approach that that they needed to follow, because you're right, they're sitting down across the, the time, especially across the table from their clients or prospects and saying, Hey, what are you trying to do in your business? And where do you want to be and, oh, I'm buying these new trucks, right for for my fleet, and I need to keep these, these trucks out on the road. So I need new business. Right. And, and so that would relate to Okay, let's talk about why you should do content marketing and, and then it'd be actual numbers that would get tied to that. And so like, Okay, well, you're gonna invest $10,000 A month or probably $5,000 a month at the time on that, and like this should have this outcome by the end of 12 months, and we should see a gradual increase towards that outcome. And so that's the way agencies sold. And I think for a period of time, that was the way HubSpot mostly got sold. I think not anymore. Like now HubSpot is just like, you know, love SMB or mid market Salesforce. And they're a de facto product that you choose. So I don't know that they still sell that way. I'm sure there's still an element to it, but I really just don't know. But yeah, I'd say that that was absolutely imperative. And I think for the inbound marketing agencies that are still out there. That's still the way they sell. I say the HubSpot channel now though, is like there's an element of inbound marketing agencies who've kind of added some sales enablement CRM services. And then there's this brand new crop of service agents, you know, service providers solution partners, they call them that are more on that technical implementation and, you know, customizing HubSpot around your business process similar to the way a Salesforce or an aliquot was probably configured in the enterprise.
Jared Fuller 40:17
Right, right. Jill, oh, over to you. I'll open this up to a little bit of a wider comment. So like things that stick out to your stick out to you or in your mind, as you're thinking about inflection points, and, you know, kind of any of those journeys I mean, when you not that we have to get into Marketo, we could go back to Salesforce if you'd like. But at Marketo, I noticed a market difference after the VISTA takeover and buyout from like kind of public markets sitting there to a very intentional playbook and a gigantic willingness to partner seemingly out of nowhere, right prior to VISTA, it seemed like, not so much. And I'm not really sure what happened. I know you were kind of part of the crew that helped with some part of that transformation. We obviously saw each other in the battlefield on that on the Marketo deal with drift. What are some of those inflection points that stand out is like, hey, partners helped us turn a corner or hit that next unlock? Yeah,
Jill Rowley 41:13
I think, um, I think Marketo I think actually, I have a tremendous amount of respect for the Marketo team, the founding team, and everything that that Marketo was able to accomplish. And they, they you pretty it was a
Jared Fuller 41:29
small period is what I'm referencing, right, they transformed a lot. But there was a stall period,
Jill Rowley 41:33
there was a stall period. It and I wasn't there pre Vista. I got the call from Steve Lucas, who Vista put in to Marketo as the CEO. And he was very clear day one, that preparing the organization for an acquisition. Right. That's that was the path. And when, when we first started talking about a role that I could play. I was I just moved to Charleston, South Carolina, I was actually trying to go into remission from workaholism. I needed you know, to I had like a, it was it was rough for a while. So I was moving to Charleston to get out of the Bay Area, and focus on our youngest to started school here in seventh grade, and didn't have her siblings anyways. He the way that he positioned it was within two years, we will be acquired, and I know this and he he built his executive leadership team based on who could actually from an operations perspective, from a CFO perspective, from a head of sales. Marketing, he built this, this this exact team HR with product it with the how are we going to how are we going to do this? How are we going to grow because with this wasn't a typical private equity, like just focus on EBITA at this for the sake of growth, it was both growth and EBITA. And so what it TK cater he, I you know, we episode number six on partner a podcast, he's told the story of Marketo pouring on the gas of the
Jared Fuller 43:38
3% to 30% partner attach. And like why, like, in like a 12 month period, which is pretty crazy.
Jill Rowley 43:46
Well, if you think about where Steve came from, he came from SAP, and, you know, other technology integrating with SAP, and they built a platform. So, you know, Steve knew the partner play. And if you want Marketo to be a bigger platform, it has to hook more, you know, deeply integrated with at that point in 2017 18, there had to have been, I don't know 4040 500 martec products in Scott Brinker landscape diagram. And the idea was Marketo actually had a lot of quote partners. But it was more a directory, right, a listing. There were some that were more strategic partners. But the what EA saw was the opportunity to identify who the highest value partners were and how to, you know, align more closely. How do you put coal marketing dollars into it? How do you put you know, sales reps, because if you have, you know, several 100 partners, you can't have your salespeople, spending time with the salespeople of several several 100 partners. Was his partner prioritization, it wasn't that Marketo wasn't partner friendly, it was that it wasn't commercially as commercially driven, as Steve knew it could be,
Jared Fuller 45:12
right. I mean, I saw that firsthand. I mean, we drove a lot of business, a lot of business together. And it was really cool to be able to, you know, walk into this environment and throw elbows around a little bit, make a little bit of, you know, a mess on my way in, but walk into a rep, you know, in the San Jose headquarters, sit down at her desk and bring in her colleague and say, we just closed an $80,000 upgrade with Shopify, because they connected our widget into Marketo. Let's sit down and look at your accounts. And she's like, okay, great. Like, you know, that alignment. And I remember, you know, given the high five across the table in San Francisco, whenever we're like, that's it. The thing is, is that CSMs are compensated based on net dollar retention at Marketo. Drift is objectively pumping more contacts. And look what happened when we did with Shopify, right. Like, we got a big upsell. And we scaled that out, too. I mean, I definitely was more on the aggressive side, I actually did sit down at people's desks with them. Like, I don't know, if you didn't know this story P I sat down at every single Marketo CSMs desk in North America. And I got them to pull up their CRM lists, you know, their accounts and make intros to every single account that they got it based on that one based based on that joint value, though, like we were legitimately pumping more contacts in I mean, to Marketo and you saw and HubSpot, I think you were the first people that told me a panda Doc, you guys gotta figure out live chat. Like you guys are HubSpot. We're crushing that too. So like for us to figure that out is just was an inflection point. I feel like in Marketo story, them realizing the value of working with technology partners to drive their net dollar retention, like they would have never let that happen. Hey, for me come in and get all those intros. They didn't believe in the dollar potential. For sure. Yeah,
Jill Rowley 46:59
the behind the scenes is Jared, you and I worked on the Marketo drip partnership. And at the executive level, the it was a build by partner, right. So online chat, conversational marketing, that that was a build by partner decision at the executive level at Marketo. So did we want to partner with drift? Or did we want to go acquire a, you know, small chat product that we could get for, you know, a fraction of the cost of drift? Or do we want to build it internally and products, you know, put a number on what it would take to build? What drift? You know, what were Jeff brought to the table. And the for me, the value proposition of the partnership with drift was drift was quickly becoming a brand key there did an incredible job of making drift seem way bigger than it was. And he made drift, like hot, right? It was it was a company that was lightning bolt hot, and you wanted to be part of your drift. And it wasn't even a product. It was like
Pete Caputa 48:22
we were at the time we were using intercom for a while because intercom has been around for a long time and Jaren as I was advisor Jeff and so we bought drift just to buy drift, even though we started intercom working just fine. So yeah, everybody wanted to use us. Yeah,
Jared Fuller 48:39
totally. We bought a pack. There's definitely a whole marketing mastermind behind that with DG and DC because what they did was pretty magical. I mean, it was the hottest thing and they also had morality
Pete Caputa 48:50
guard for themselves, though. Like, yeah, so but yeah, for sure.
Jill Rowley 48:55
Pete Caputa 48:58
viral viral, like the Power BI drift thing going on? Crazy. Right? That was yeah, that combined with the excellent product marketing that they did, I think yes, made them seem like they were omnipresent. And the obvious choice.
Jill Rowley 49:10
Yeah. And we wouldn't if Marketo had acquired some to bid, you know, chat or build it ourselves. We wouldn't have had that.
Pete Caputa 49:20
created that nice?
Jill Rowley 49:21
Yeah. wider audience. And, you know, a lot of our customers, most of our customers were good drift customers, and drift had customers that would make great new Marketo customers. So I think from the you put them together, it's way more powerful than going and, you know, maybe buying a you know, a small bit chatbot
Jared Fuller 49:43
people people were excited. I mean, you know, we're in a different stage of the market and maturity of martec in general, but, you know, there was some awesome transformation there and it was, it was great to see Marketo enterprise value increased tremendously, you know, from from the inside as a partner in Seeing that mindset shift changed. I mean, I remember in market being told by other VPs of partnership, like you can't partner with Marketo, they are garbage to partner with, right? Like, it's impossible. You can't do it, stay away from them don't touch Marketo with a 10 foot pole, like I'm getting people telling me this, I want to sue such and such. I'm like, What are you talking about? And then it was like, right about that time, though, where we pushed past it and actually got to that value and you know, great turnaround. VISTA did a fantastic on it. And Adobe is doing very well in their Nam structure now. Obviously, HubSpot. I mean, they continue to kick but I just got admitted today, like literally, like a couple hours ago to chat spot, Pete. Oh, yeah. I got into the prize. I've been, I've been playing around with it and been blown away and disappointed at the same time. But like, all these companies are still around, you know, impacting the market today, because of their partner story and a lot of the things that you both saw on the frontlines, so I really appreciate you spending this Friday afternoon with us. And some of the war stories with my favorite legends that I've I've been yelled at and told that I was an idiot to grow up by battlefield.
Pete Caputa 51:07
Mr. Good, and then we're on
Jared Fuller 51:10
now, so thank you so much. We're gonna release this as a live partner up episode as well. So this is going to be a fun one to have out there. Another joint conversation that we released on the podcast network. So everybody, thank you so much for joining us on First Friday, Jill and Pete. I want to say partner up peace out. We'll see y'all next time. Oh, yeah. Hold on. Wait, wait, wait a second.
Jill Rowley 51:32
Oh, so I had to share.
Unknown Speaker 51:35
Gosh, this is the
Pete Caputa 51:37
one that you're not showing anybody's credit card.
Jill Rowley 51:39
No, no, no. No million dollar credit card invoices.
Jared Fuller 51:42
Wow. This actual order form
Jill Rowley 51:45
that I didn't do the whole 999267 Like it was 1 million even rounded it is that's the order form for Salesforce aliqua do so have it in a notebook?
Jared Fuller 51:59
Yeah, so before the call before the episode, Pete and Jill and I were chatting and Jill was showing us she found in her attic that like the old deal notes and notebooks and I'm like Wow, all of us now have like everything in Google Docs and then we lose it whenever we
Pete Caputa 52:15
had to write my notes on a notepad notepad burned on mine from like 2003 on I broke because they I credit like credit cards written down from over the phone. So we would basically take sales notes and then just add the credit card and then fill out a slip afterwards and he handed to somebody to build them. So
Jared Fuller 52:39
Wow. Wow. We're officially dating Our stores
Pete Caputa 52:43
are gone or vo back then.
Jared Fuller 52:47
Yeah, no, totally. There absolutely was not All right, everybody. If you if you're just listening today, you gotta go Come check out the video on the YouTube channel, a partner at gmail.com/partner Hacker of Gil actually showing you the order form because that that is a gangster move right there, Jill, that you still have that? Yep, yep. All right, y'all. Well, peace out. We will see you all next time.