For our latest Secrets for Scaling interview, we talked to Steli Efti, Co-Founder and CEO of Close.io. An inside sales CRM platform, Close.io has gained great popularity (and made millions in revenue) even though it operates in a crowded market.
We’ve always respected how Close.io approaches business and marketing. They default to being authentic and genuine in everything they do, and that goes a long way in a competitive industry. For a glimpse of what we’re referring to, check out their blog. Needless to say, we were excited for an inside look into how they got to where they are today.
Without further ado, here are Steli’s insights on product development, sustainable growth, metrics, culture, building a team, founder mistakes, and founder lessons.
Close.io was founded in 2013. How big is the company now and what has your growth journey as a team looked like?
We’re now a team of 20 people but we started the year with ten. This was by far our fastest growth year, considering that we were six people for the first two and a half years.
I love small teams, I believe in small teams. I believe in hiring slowly and deliberately - in asking yourself, “how much further can we grow this business with such few people?” We’ve reached millions in revenue with a small team, which I’m proud of. We’re making just as much as some of our smaller competitors who have teams of 100-120.
That said, we didn’t hire enough in the first two years and stretched our team too thin. We hired too late and too little at first and are making up for it this year. Growing our team is now a priority and we’re making the necessary investments for doing so strategically.
What metrics are important to the success of Close.io?
As a SaaS business, we track your typical SaaS metrics - traffic, referral sources, trial signups, conversions, new revenue vs. recurring revenue, upgrades vs. downgrades, etc.
But our number one metric we track is new monthly recurring revenue (MRR). Each team has its own 2-3 key metrics, such as trial signups (marketing), conversions (sales), etc. that contribute to and fall under MRR.
How do you communicate those metrics with your team?
We have a dashboard with our high-level numbers and metrics, as well as any number you’d want across departments. It’s available to the entire team at any given time and includes revenue, bank account numbers, etc.
We also have weekly and monthly meetings where each team shares their key metrics and results, as well as the context behind them. They cover what’s working, what isn’t, and why.
Every team owns their KPIs or key metrics and has the responsibility to share them.
How have those metrics impacted your hiring strategy?
I wouldn’t say those metrics directly impact our hiring strategy but revenue creates budget. We look at how our revenue breaks down in terms of growth to spot patterns and identify where we need to invest.
Our product is the heartbeat of our business. It’s the delivery mechanism for value to our customers. So, it tends to drive our hiring decisions and strategy - beyond just the product or engineering team. We ask questions like “how many people do we need to fulfill our product pipeline and revenue projections? What do these roles look like, what functions do they fulfill?” This could be in product, design, marketing, or sales.
What is the most important thing you look for when hiring? What does your hiring strategy look like?
The most important thing is culture fit - whether or not we’ll all enjoy working together. We ask, “will this person make our work environment better?”
The second thing we look for is skill. Will this person raise the bar and inspire us? Will simply being around them push us to do our best work?
I love that our team is a unique collective of humanity from all different backgrounds and walks of life. If you look at even myself and my two co-founders, Anthony and Thomas - we’re all very different people with different interests, but that’s what makes life interesting. Although we’re a diverse bunch, we all share the same level of ambition and the same values, the same ethics. We seek to hire people who inspire us, who wow us.
Now everyone says that, and it all sounds very utopian. The hard part is to act on these hiring aspirations. I’ve learned that we have to overcome the impulse to make a compromise on culture fit or skill. I rather pass on a great hire I’m not 100% confident about than make a horrible hire. If we all can’t enjoy working together, nothing else matters.
A hiring strategy requires constant tweaking. Like everything else in life, it’s not binary. Through a constant process of re-evaluating your hiring strategy, you become more decisive and get better at spotting red flags - at least I have. In my last company, I wavered back and forth when considering candidates all the time. But now, if I have any doubt about someone’s character, I’m happy with saying no and moving on. With more data and experience, comes more confidence in making hiring decisions.“With more data and experience, comes more confidence in making hiring decisions.” - @Steli
How would you describe Close.io’s culture?
One of our core values is to build a house we want to live in. We want to build a product we want to use; to market in a way we want to be marketed to. Everything we do is to create sustainability. To create things for a world we want to live in.
For marketing specifically, we often ask ourselves “do I find this funny?” Even if we know not everyone will, we’re ok with that. We’re not trying to sell to everyone, but rather to the people who find value in our product and the way we do business.
Because of this, no one in the company does anything for short-term reasons. We don’t implement a clickbaity growth hack to drive a bunch of sign ups if it’s not true to our product or the way we want to be marketed to. No one at the company takes shortcuts to get ahead.“Everything we do is to create sustainability. To create things for a world we want to live in.” - @Steli
For example, our approach to customer support is very unique. One of our co-founders was doing support full-time for a long time. Our support team is very technical, very knowledgeable - and staffed with influential decision makers. We also take a no bullshit approach to support. We honestly admit it when something is wrong when a customer bring an issue to our attention. We’re also honest when a feature request is not in our pipeline. We rather those people find a product that’s a better fit for them than lose them as a customer later.
Many of your employees are remote. Any tips for making that work, especially as a growing tech startup?
Almost our entire team is remote. There’s a lot already out there about effectively managing a remote team - and we follow a lot of the basics. For one, it’s important to over-communicate - way more than you would if you were in the same office. We record every video meeting we have and send around a write up internally. We also have a company-wide retreat 2-3 times a year where we fly all of our team members to one location to meet face-to-face and experience cross-departmental interaction.
One unique thing we do is use Snapchat. It’s a unique channel to have fun internally as a team. Our sales team share wins and virtual high-fives. Our content lead, Jo uses it to call me out to the team if I’m past deadline on a blog post. I like to share snaps of the crowd at conferences I speak at, or of the office of clients I visit with the team.
Snapchat gives us a look into what each other’s lives are like. Sometimes we’ll even share where or what we’re having for lunch. Anything to make us feel closer. We’re on a constant quest to make our remote lives better.
You’re a sales jedi. If there were three sales metrics a founder could track, what would you recommend they were?
My best piece of sales advice is to keep your sales metrics simple and focused on three core things - what we call the AQC framework:
- Quality of activity
For example, if you do a cold calling campaign, how many numbers you dial would be your activity. You’d measure quality by how many people picked up, and conversions by how many people took the intended next step - whether it’s to purchase, sign up, etc.“The AQC framework puts you in control of your sales results.” - @Steli
This gives you a full picture of the funnel. It allows you to see what the problems are and how to fix them. If you’re calling two people and only one is answering, the problem is that you’re not reaching enough people - so you need to increase activity. If you increase your calls to four and only one person is converting, the problem is the quality of your leads (who you’re calling). To fix this, you need to identify where the quality opportunities are. The AQC framework puts you in control of your sales results.
What other advice do you have for founders in the trenches?
I have two piece of advice. The first is on the sales side. Think of sales as an iterative process - you’ll always have to pivot, adjust, or change your strategy. Take an iterative and experimental approach to sales until your desired results are predictable and repeatable.
My second piece of advice is that you have to lead from the front. If you think you need to invest in sales, then you need to do sales first to gain the insights and knowledge necessary to lead and empathize with your team. The same holds true if you want to make a change. If you want your sales team to make a huge shift, you need to parachute in and be a part of it.
Do you have a story to tell?
Do you have a growth story to share? We’d love to talk. Let us know in the comments below!
If you want more scaling secrets, check out how Mention.com grew their MRR and team by 4x in two years!