Hello, everybody. This is Cortland from ndhackers.com. And today, I'm lucky enough to have Alex
McCall on the show. Alex is a pretty extraordinary entrepreneur and developer. You never got
a CS degree. Instead, you just taught yourself how to code. You wrote a book on web applications
for JavaScript developers. Well, at the same time you're traveling the world, you created
a popular open source library for developers called Spine. You've worked at Twitter and
Stripe. You just got like a crazy long resume. And today, you're the founder and CEO of an
excellent company called Clearbit. So I'm super excited to have you on. How's it going?
Good. Yeah, thank you so much.
Yeah. So to start us off, can you give us an overview of what Clearbit is and how it
works?
Absolutely. So essentially, we're trying to build the AWS data. So a whole suite of data
APIs that you can plug in to your sales and marketing teams give you more context on your
customers, essentially. So we take an email address or a domain name and turn it into a
bunch of demographic and thermographic data. And then once you know more about your customers,
especially at a programmatic level, then you can start doing things like automatically
qualification and a bunch of automating sales and essentially making your company a bit
more efficient.
And how long have you been working on Clearbit?
So I've been working on Clearbit about two and a half years. And the first half of that,
the first six months was just me working on it. And then we raised some money and hired
out the team. And today, we are just under 20 people.
Cool. And I don't know if you guys share revenue or not. But can you share any sort of metrics
that can perhaps give listeners some context around where you guys are as a company, like
how many customers you have, whether or not you're profitable, etc?
Yeah. So we don't share specifics. But I can tell you, we have over 1000 customers. And
we'd be one of the biggest, if not the biggest companies that you've covered revenue wise.
And we are profitable. We make millions of dollars in profit every year. And that's
very intentional. We can go further into that if you'd like. But essentially, we'd like
to run the company profitable just to have control of our own destinies.
Yeah, I can't wait to get into that stuff. But before that, like I was saying earlier,
you've done a whole bunch of stuff in your career. And I want to go back to the very
beginning, like literally before you even learned to code and ask, why did you learn
to code? Was there something specific that you wanted to build? Or did you just want
to become a developer? Or did you think that you wanted to be an entrepreneur and that
being able to code would be helpful?
I like to code because the school that I was at asked me to make the school website. And
I was good at computers at that point, like good at using computers, but I hadn't learned
how to code. And so I also took this as a chance to get out of other extracurricular
activities like army training. So I basically made the website instead of doing CCF, which
is a combined conduct force. And so I just got a bunch of books on it and taught myself
HTML and PHP. And then around this time, actually, Rails came out and Rails introduced me to
Ruby. And then I've just essentially been using Ruby ever since.
So how long did it take you to learn to code? I know it's not a process that you just finished,
but how long was it before you were able to, let's say, build a website for your school?
Well, I think I started at about 14. I think at the age of 14 started writing HTML. I think
by the time I was 15, pretty fluent in it. And then I essentially started doing consulting
at school for my free time, which definitely affected my grades. And it got to the point
when I was about 17 that it was kind of between grades or consulting and doing this full time.
And I decided to leave school that time and joined a startup in London. Essentially, I
couldn't juggle both school and all this extracurricular stuff. And I just figured that since I was
earning good money, that I could skip out on the whole university side of things because
I'd kind of be back at the same spot in a few years' time.
Yeah. I mean, it seems to have worked out for you. I kind of had the same pool. I mean,
I ended up graduating from university, but the entire time I was there, I was doing contract
work as a web developer. And there's something about having one foot in the real world and
actually making money that kind of separates you from the other students who are, in a
sense, preparing to make that jump. And you're kind of like, I'm already making money. Why
do I need to get this degree?
Especially when you realize you're making more money than the teachers.
Yeah. So the reason I like talking about this particular topic is because I think a lot
of people listening are perhaps aspiring entrepreneurs. They might have ideas that they want to work
on, and they might just vaguely know that they want to start a company online someday,
but they're not programmers. And obviously, being able to code is a tremendous advantage
because it means that you don't have to hire somebody else to code and spend tens of thousands
of dollars doing that.
So what steps did you take to learn to code, and what path did you recommend to somebody
now who wants to learn?
Well, at the time, there wasn't any coding courses or anything like that. I think nowadays,
that's probably the path I'd recommend. There's a bunch of really good free online resources.
At the time, the best thing to do was to buy a book. And so I bought a bunch of big O'Reilly
books I bought and pragmatic programmer books. There's one called The Pickaxe, which is pretty
famous in the Ruby world. So I just bought that and just read them. And then the other
thing was to set projects for yourself. I did a lot of open source back then. I had
a little open source library called Juggernaut, which kind of stream updates to the browser
before this was before WebSockets. And that got a lot of traction. It got picked up. And
that actually helped me get my initial contracts and jobs. So that's the other thing I would
recommend. Do a bunch of open source work to build up your resume.
Yeah. I wanted to say that I spent some time teaching friends to code. I taught my brother
how to code. I taught a good friend of mine from college how to code. And it was always
– there's always this dichotomy between reading and actually working on projects where
if they spent a lot of time reading, then it would be lost on them. They would acquire
all this information and then forget it. Whereas if they spent too much time on projects, then
it's like they would always kind of hack things together using the limited amount of
knowledge that they had and not progress.
Yeah. You've got to use it in a practical fashion.
Yeah, for sure. And I know you spent a lot of time working on a ton of projects. And
you're like me. You learned when you were super young in school, so you had presumably
a lot of time to just spend on it.
Yes. And I was also at a pretty lax school, which really helped. It wasn't a super type
A school, so they gave me a lot of leeway to do my own thing.
Yeah, that helps a ton. And I think if you're listening and you want to learn how to code,
just based on my experiences and the people that I've taught, I've taught two people
and another friend who also kind of taught himself. I took them about six to nine months
before they were able to get a basic job as front-end web developers. And they were all
working pretty much full-time. So if you want to learn, it's probably the most important
thing you can do is figure out how to clear some time on your calendar and actually dive
in full force rather than kind of dabbling on the weekend.
Yeah. And I'm also a strong believer that anyone can learn to code. When I was at Twitter,
I was teaching the sales team how to code for a little hack project. Now, I think not
everyone is going to be like the savant engineer. But I think everyone can get to a point where
they can produce something practical. And also, I think everyone can get to the point
where they can create their own lifestyle business.
I totally agree. I mean, there's... At the very least, you can get to the point where
you understand the basics of code. And then maybe if you hire someone out to build an
app for you, you can look over what they're writing and you kind of get what's going on
rather than it all being magic to you. And it doesn't take as long as you might think
to get to that very beginning point.
On a related note, there's also kind of a learning curve to entrepreneurship, where
there's this dichotomy between reading about it and actually just diving in and starting
your own companies and then learning through experience. How did you learn how to be an
entrepreneur and the fundamentals of business?
Well, by failing a lot. I've had like three or four different lifestyle companies, and
half of them failed, and half of them did fairly well. And so I think it's more trial
and error, to be honest. I think it's even more on the practical side of things than
actually coding. I haven't really read many books about it that have been particularly
useful. There's books on management, there's books on specific things, but overall how
to be an entrepreneur, the best way of doing it is to do it. And absolutely the best...
Do not get a business degree. It is not required at all.
And the best way of learning how to create a business is just to start one. And you probably
fail a few times, but it'll be worth it and it'll certainly be cheaper than a degree.
I've been in the same boat. I've worked on numerous projects that have failed. And probably
the worst thing that I did, I think I would have learned much faster if I hadn't done
this. But I spent a lot of time working on businesses that I never charged money for,
which means that I never really learned any of the lessons that I would have learned otherwise
about creating a product that people find valuable about sales, about that entire pipeline,
which is pretty crucial to a lot of businesses.
Yeah, don't be afraid to charge money. And there's going to be lots of people out there
who are not interested because it's not free, but that's fine. They're not your customers.
And so yeah, pretty much everything I worked on, I'm charged for since day one, but I probably
didn't charge enough.
So today you're working on a company called Clearbit, which you described a little bit
earlier. What's the story behind how you got started with Clearbit?
Well, Clearbit was a kind of accumulation of all the problems, the data problems I saw
at Stripe and Twitter, like the previous two companies that I worked at. And I just noticed
that was either the data we needed wasn't there or it was in some terrible format, some
terrible API. And I just wanted to build a company that would solve that. I thought it
was a really interesting area. It was also a kind of unsexy area, which is what I really
like working on. So the data industry is old. It's not very innovative. Some players have
been around like half a century. And so I just wanted to get into it.
I also wanted to build a company that was developer focused, or at least had really
awesome options for developers because I worked at Stripe and I saw the impact and the power
that you can have when you focus on building a product that is for developers.
In the past, I've also used kind of a checklist to evaluate what I want to work on. And it's
grown since I started Entity Hackers and learned more about business. But it sounds like you
had unsexy problem, developer focused. Was there anything else on your checklist?
Margin. I mean, I would look very closely at the business metrics before starting, and
business model before starting a business. A lot of entrepreneurs jump into businesses
that sound fun, sound cool, but the margins are terrible. And I would look into that for
a clip. We used to buy some of our data at this point. The sell price is 100% marching
for us. And I think that's very important to look at.
You sound like you're speaking from experience. You know people who've done these low margin
businesses, or you yourself have?
Absolutely. I mean, luckily, I personally haven't done them because most of my businesses
have been either selling some kind of online service or just selling bits and bytes. But
certainly, there are a bunch of companies in the real world that have fixed costs and the
low margin. Actually, Stripe is one of those. And it actually makes it much harder business
to run.
Another thing that strikes me about how you came up with the idea for Clearbit is that
it was focused initially on a business problem, right? You didn't say, okay, I've got a product
I really want to build. Who's going to use it? It came about as a result of a problem
that you yourself were experiencing by working at Stripe. Can you go into detail about what
that problem was?
Well, part of it was, this is pretty specific, part of it was OFAC compliance as a type of
financial compliance that you have to do. Or were you checking names against watch
lists? And there's no API for this out there. And I was like, this is kind of crazy. Someone
should just write the API that all these financial services companies can use rather than all
these financial services companies having to create this internally.
The other thing I remember was signing up for an Apple iTunes account to sell on the
App Store. And probably a lot of your listeners have gone through this and applying for a
DUNS number. And that process was just so excruciating. I wanted, I was like, this should
just be Stripe style where a company identifier like an EIN is verified in the background.
And the DUNS number should not be necessary. And those were two of the main motivations,
I think, for starting clearly.
Yeah, I think it's interesting because the problems that you identified were problems
that you yourself had that you probably would not have discovered if you had never worked
at Stripe or you'd never worked in that industry. You never tried to actually push a mobile
app to the App Store. And I meet a lot of people who think, okay, well, I don't have
any actual problems or solving. What would you say to somebody who says that, who's looking
for something to work on, but they're not sure how to do about finding a problem?
No, I just go and work for a really great company like Stripe, and then you'll see all
the problems. Yeah, I think there's a startup mentor, which is like, scratch your own itch,
becomes like your own problems. Unless you've worked at a, you know, high tech startup or
a big organization, I doubt you'll have been exposed to very valuable problems. This is
especially the case in the B2B world. And so I would just go and do that. Just go and
work for a really great company for a few years. And then you just keep your edge to
the ground and you'll see some really great problems that need to be solved. And then
you can go off and do this.
Yeah, I feel similarly, I've always had this idea notebook that I fill up whenever an idea
comes to mind. And the second I started Indie Hackers and I was actually making money with
the company, my idea notebook started filling up like three times faster because there's
constantly processes that I wanted to be faster or more efficient or things that I wanted
to do to make money. But I needed some sort of app or program to kind of grease the wheels
to help me out. So I'll echo Alex's advice. If you want to come up with an idea, put yourself
in a position of a customer, somebody who actually has a lot of money and who could
benefit by having problems solved. And it's hard to do that as a consumer because let's
face it, there's not that many problems that you can solve for a consumer that will help
them make a ton more money. So Clearbit solves a problem that you yourself would experience.
Did that end up short crediting the need for you to talk to potential customers in the
beginning? Were your own experiences sufficient for you to feel confident in building out
your initial solution? Or did you do a lot of research?
I think there's a certain amount of guesswork at the start. Taking a stab in the dark, actually
making something practical that you can then show to customers and get real feedback on.
So there's definitely some guesstimation at the start. At this point, though, we don't
really do that. Most of our new products are directly led from feedback from our customers.
There's a very short iteration cycle when we're chatting to customers and improving
products. But I think initially, you see the problem, you take an educated guess at the
solution, you spend a month or two building it out. Once you've got a prototype, you go
and find your first customer, which for us was Baymetrics, and then you try and sell
it to them.
Yeah, so there's a lot in there. Finding your first customers and iterating on your
product based on customer feedback and getting out your initial MVP. I want to talk about
it in a narrative form. What was the very first thing that you did when you decided
to work on Clearbit? Did you immediately leave Stripe and start working on it? Did you start
sketching out designs or talking to people?
I actually left Stripe and had a lifestyle company called Sourcing for a bit. It helped
you find engineers. I was running this business, and it was actually doing pretty well and
certainly making engineers salary. Then I was like, I want to do something a bit bigger
in my 20s and early 30s when I have a bit more energy and a bit more ambition. I'll
work on this new idea, which has a bit more potential. I sold it out of the business.
Then for Clearbit, I was thinking to myself, what is the one problem that all of these
businesses have? What's the one data problem that we can solve? I came to conclusions.
Everyone has a bunch of email addresses that they want to know more about. This is pretty
universal problem. We could have worked on some more specific data APIs for more specific
use cases, but I wanted to build something broad initially. We started out with the email
to demographic data API. I built out that API. I was actually looking at our early metrics
in preparation for this podcast. It took me about three months to build out the first
version of that, which is a little long. Then I started trying to sell it, chatting to a
bunch of entrepreneur friends that I really had and I knew had this problem. I think in
about December or September of 2014, I sold the first version of the Clearbit to Bearmetrics.
Then within three months, I was at three grand MRO.
Nice. How much of the idea itself when you were first coming up with it included your
initial sales and distribution strategy? Were you thinking, hey, I know all these entrepreneurs
running businesses and therefore I'm going to create a product because I know that I
can talk to my friends and sell it to them? Or was the idea kind of divorced from how
you're going to find your first customers?
For us, the nice thing about being in the data industry is we eat our own dog food.
We know a lot about potential customers because we are a data company. That's what we do.
That was definitely part of the thinking. However, that advice is not applicable to
many other businesses. I honestly didn't put that much thought into distribution. I was
a little naive at the time. At this point, I probably would put more thought into it.
Just try distributing to your existing network. I had an existing network on Twitter. I think
about 15,000 followers at the time. That was pretty useful getting started initially. I've
been building that up for a while with knowledge that it would come in useful when I was starting
my own business.
Cool. Also at the beginning, you mentioned you were basically working alone for six months.
How alone were you? Did you have friends that you were showing your product to and getting
feedback on? Did you have any mentors? Or was it you locked in your apartment for just
six months straight talking to nobody?
It was more of the latter. Obviously, I went outside. It was definitely a lot of hard work,
upfront hard work, not much iteration with customers. I don't know if I'd recommend that.
If it's possible to get more customer feedback earlier on, the earlier, the better. For me,
the product was pretty complex. It's pretty hard to get it right quicker than three months.
That's why I pretty much locked myself away.
It's funny because you've done so many things that now you give the opposite advice for
which I think just goes to show how much of entrepreneurship is learning on the job really.
You started talking to customers in order to make your first sales. Did you learn a
lot in those first conversations that ended up resulting in you going back and revising
your product? Or did the people just start buying immediately?
People started buying immediately. They validated my thesis that everyone needed this data.
The feedback I got was just make the data better and make the coverage better. Better
quality, better coverage, and keep on buying. That was very useful feedback to hear. That's
what I focused on, those two things.
Did you notice a particular type of business that was more amenable to using Clearbit early
on? Because I know the advice I give a lot of people is to pick a niche. Have a specific
idea for what your customer looks like rather than making a product and not knowing who's
going to buy it. Then it's easier to find them online. It's easier to tailor your marketing
copy to appeal to them or tailor your features to appeal to them. Were there certain types
of companies that were using Clearbit early on or was it just everyone?
Oh, it's definitely tech companies. There's lots of downsides to being in San Francisco,
the rent being one of those. One of the upsides is a lot of customers. A lot of people you
can just meet for coffee and just wait to take a chance on you. Just focus on tech companies.
I was actually looking at paying customers today. We're doing a breakdown of what kind
of businesses they are in, what kind of technologies they themselves use, like how many employees
they have. It's kind of interesting. They are almost all tech companies. They almost
all use Google Apps. That's actually a really good indicator, lead scoring indicator for
us that a company is actually willing to experiment and train new stuff.
Nice. It's funny because it's easy to look at Silicon Valley as a huge circle of companies
just selling each other products and services and buying from each other that are not adopted
by companies outside of Silicon Valley to a degree.
Well, that's true. It's part of the magic. You start off in Silicon Valley, you prove
it out. You prove it out with the best, most high-tech customers who are also pretty patient.
Once you've done that, then you break out. If you survive Silicon Valley, then you break
out to the rest of the world.
How do you achieve growth within Silicon Valley and then go on to break out? How have you
grown clear? What kind of lessons have you learned about sales and marketing distribution
from the early days?
Well, in Silicon Valley itself, I think you can just focus on building an amazing product.
You can get away with that for a long time. Certainly, if all you want to do is build
a lifestyle company, you can probably get away with that for a long time, if not forever
if you live in SF or if you come to SF a lot. Just because word of mouth will get you your
customers so that got us our first 100, first 400 customers was word of mouth.
And then obviously, that only scales so far when you have to bring in more conventional
sales and marketing techniques. But initially, just focus on building something really, really,
really awesome that people recommend.
What is your primary distribution channel nowadays, now that word of mouth has kind
of run its course or so it seems?
It certainly has run its course, but it certainly has less of an impact further on. And the
other thing is, it's pretty hard to measure. There's some crazy algorithm somehow that
if you had access to all knowledge, then you could calculate out how word of mouth is going
to increase your business, but you don't have that. And it's kind of disconcerting not having
control over that. So that's why a lot of businesses would delve into more conventional
sales and marketing techniques and they want to scale the growth a little faster.
At this point, we have a number of different avenues. We have self-service, but still accounts
for a lot. We have got very good at SEO, so we rank the top for pretty much all the keywords
that we want to. We've got two books that we've written, one of them which is half published.
You can find it on the website on data-driven sales and marketing. We have some great content
on the blog. We have a bunch of free products. Those really help. So if you look at companies,
really great companies like Zendesk with low sales and marketing costs, the reason for
that is freemium. They pretty much all have a freemium model. It's the only way that you
achieve scale without scaling your sales team with headcount. And so that's what we've
started to do. We've got a bunch of free products. We have 100,000 people using one of our free
products called Connect, just like this Gmail extension. We have a free Salesforce extension,
that kind of thing. So that's definitely helped us.
Yeah, you guys are basically trying everything it sounds like and seeing what sticks, huh?
Yes. We're trying everything. We would rather not lean on conventional sales and having
massive sales team if possible, because like I say, if your customer sells like 80%, which
is the customer sells for a lot of tech companies, then that kind of sucks because you're going
to have to raise a bunch of money to scale your sales team. But for us, we're just trying
to try all the techniques that keep the customer sale really low initially and then we'll go
back to... If that doesn't work, we'll go back to a more conventional model.
Another question I'd like to ask people because I think to this date, I've never gotten two
people to give me the same definition. But how would you define marketing? I think that
the way that people define it is kind of a result of how they run their business but
also affects how they run their business. So it's interesting to see what people think.
Well, what we are trying to achieve with marketing is essentially becoming a thought leader in
the business. So when someone... Marketing is less about harassing people to buying our
products. It's more about impressing them and they're like, clearly has their shit together.
And then when... Sometime in the future when they are making a purchasing decision, then
they'll clear it will become tough of mind for that problem. So that's what we're trying
to achieve with marketing. So we do a lot of thought leadership stuff. Like I said,
we have the two books, bunch of content. And that's been working out pretty well for us.
How did you make the transition from the early days or just Alex to the team now and your
strategies of becoming a thought leader? Because I know as a solo founder, you're pretty much
doing just sales. You're emailing people, calling people, talking to them one-on-one
and trying to convince them to buy. When did you bring on your first salesperson? When
did you first start changing from that model? So after the six months of working by myself,
I was like, okay, well, I'm going to raise a friends and family investment round. And
that actually ballooned into a real seed round and then a big seed round of three and a half
million dollars from some great investors in the valley. And then we've just ridden
that ever since. So as soon as I raised that money, hired a few people. So we hired an
engineer and then someone in sales and another one in sales. And they were all jack of all
trades. So there's probably the best type of hire you want to go for early on. I was
extremely lucky to meet some of the people I did and convince them to try and clear
them up. But you don't want a classic salesperson who's just going to be hitting the phone and
just spamming a lot of people or whatever. You want someone a bit more intelligent than
that who's going to be wearing a lot of different hats, going to be doing a bit of project management,
selling, marketing, whatever it takes to get the job done.
It's almost like your earliest employees are like miniature co-founders in a way.
Absolutely. They were totally miniature co-founders and a lot of them had run businesses before.
So that was another type of person that I was looking for when I was hiring.
How did you evaluate? Because I know a lot of people listening are also in the situation
where they're trying to find an actual co-founder. But if you haven't met someone, it's really
difficult. If you haven't worked next to them, it's really difficult to evaluate, okay, is
this person going to do a good job? Can they really wear all of these hats? Can I work
with them? How did you evaluate the people that you were meeting?
Well, for my co-founders, I just had a trial period. I didn't know them before I started
Fairbit. And the startup advice is only team up with someone that you know that you've
shared a dorm room with at university or something. For me, it wasn't like that at all. I found
some people that were really good, that I trusted, and I worked with them for I think
two or three weeks in the evenings. And then we took the leap together. And we have a very
professional relationship. And for me, that's what's worked much better when it comes to
co-founder dynamics.
Yeah, that's a really cool way to do it. It reminds me of my buddy, Chris Chen, whose
whole philosophy is that you should be a solo founder like you were, and then you kind of
have control and then you can bring people in to work with you kind of in the same way.
Yeah, I think I actually agree with him. I think that especially if you want to build
a lifestyle company, that's the way to do it.
So another topic that you mentioned to me a few weeks ago is what you call data-driven
marketing and sales. What is data-driven sales and marketing and how does it compare to,
I guess, non-data-driven sales and marketing?
So yeah, absolutely. So this is kind of one of the concepts that Cleaver just founded
on. And I've tackled sales first. So data-driven sales is not about completely automating
where your sales team is. It's about making them way more efficient. And so making sure
that any time they spend is with pre-qualified warmed-up leads.
And so a lot of that is small things. So you've got a bunch of inbounds coming into your website
signing up. First, find out more about them. What is their role? What is their senior IT?
What is the size of that company? That kind of stuff. I mean, maybe initially you're chatting
to everyone, but you won't be able to scale that. And some people you shouldn't be chatting
to because you're just wasting your sales team time.
So starting to do qualification programmatically and then starting to do drip campaigns programmatically
where you'll send customized drip campaigns that change depending on the role of the person.
So for Cleaver we have lots of different personas from sales, from marketing, from engineering
signing up. And we can't give them all the same drip emails. And we actually customize
these emails and increase conversion by dramatically, by actually customizing the experience for
each person. So for daily drip sales, it's mostly about giving you more context on interaction,
making every interaction more efficient, more intelligent, and scaling your sales team programmatically.
So what kind of changes do you make to these emails that increase conversion rates? Give
me some examples.
Yeah. So for the sales team, we'll just talk about our Salesforce integration. Sorry, for
sales rep signing up, we'll just talk about our Salesforce integration. We won't go into
any technical detail at all. For marketers signing up, it's the same. It's more about
marketing. For engineers, we'll actually include a snippet of code into the email.
I don't understand why every company is not doing this. It raises conversion rates dramatically.
We've seen it time and time again. Segment did this. Segment.com did this. And it customized
their drip campaigns and increased conversions with crazy emails. So I think that's Sales101.
But it's crazy how many people don't do this to me.
Yeah, it's funny because a lot of the people that I talk to on IndieHackers, when they
start their business, there's kind of this constant story that I hear at the beginning
where it was like, yeah, it was just me as a solo founder and I was reaching out to people
doing sales. And I would research the person I was talking to and send them an email based
on all the stuff I found about them online. So it's like you're manually doing this extremely
customized thing where you know exactly who you're talking to and what's going to appeal
to them. And then you get into the automated stuff where you grow and you start getting
more customers using the same email to everybody effectively and you just lose that whole thing.
So it is interesting.
And then we started to do some really advanced stuff at this point. So for example, we have
our free product. It has credits, which people can run out of every month. And so for example,
the first time they run out of credits, we'll actually programmatically, after an hour,
we'll reset their credits and send them an email from our sales team saying, hey, so
you ran out of your credits. We just reset your credits, you know, as a just a good thing
to do for them. And then then you instantly have a warm lead who is like any response
to that goes straight to our sales team so they can be ultra efficient. They just pleased
a customer and they have a warm qualified lead and that makes a lot of sense.
We do other things. For example, we take our traffic now and we de-anonymize it. We have
actually an API for this. It goes from IP address to company information. And so we
take our website traffic, we de-anonymize it, we de-dupe it against any leads we have
in our CRM. So any customers are already talking to. And then we will actually generate emails
for these companies and send them an automated outbound email. So it goes from a link going
in Slack and some companies Slack and then a bunch of their employees hitting our websites.
And then this whole process happens and we send a targeted outbound to a persona in that
company. And so it's kind of like a warmed up cold email if you see what I mean.
And how do you know who to email that company?
So it is a shot in the dark. For smaller companies, it's a little easier. It might even have been
the particular person that was on the website. For bigger companies, we just don't do it.
So if it's like a thousand employees, we just don't do this. But we pretty much just target
200 to 500 person companies with this approach. And we usually reach out to the head of sales
or anyone in sales ops or marketing.
And so we've been experimenting with this. It's been working really well for us. A segment
I've been experimenting with this. It generates $10,000 in new revenue segment every day.
This is an amazing loop. In fact, if you're interested, if your listeners are interested
in this, we actually put a whole chapter about this in our book that we're writing.
Yeah, it's super interesting to me that more people don't do this. I just talked to Brennan
Dunn who runs DoubleYourFreelancing.com. He's got a lot of personalization going on there.
So he basically teaches people how to be freelancers, find their first clients or charge more from
their current clients. And it doesn't matter if you're a developer or designer. If you're
on your own or you're part of an agency, if you go to his site, he'll start asking you
questions and filter you down and just get you directly to where you need to go. And
it just seems so powerful compared to assuming that everybody is the same person.
Absolutely. I think this is one of the key parts of where sales is going is a customized
experience to each customer. So for example, when you go to clearbit.com, we'll change
the website dependent on the company that you are using in the IP that you're on essentially.
So we'll change the quotes, we'll change the logos. We can customize the homepage to quite
a degree. And we can even change it dependent on the technology that your company uses.
And then once you sign up, then we have even more information. We know your role in seniority.
You've given us your email address. And then like I mentioned before, we can do the Target
trip campaigns, but we can even start changing the interface. And one of the most effective
things we did was actually, to your point, when people sign up now, they actually complete
a little questionnaire. And we asked them, what are they trying to achieve? What tools
do they use? And then that lets us customize the rest of the experience.
Yeah, I think that's awesome. And it's something that I'd like to start doing more of. And
I think in the future, I can't imagine a future in which people don't do this kind of stuff.
And speaking of the future of companies, I want to talk a little bit about Clearbit because
you guys have, unlike most people I've talked to, you have actually raised money. And so
you're not really bootstrapped. So I'm going to get your thoughts on bootstrapping versus
raising money because I'm starting to see a lot more people, a lot more credence given
to the bootstrapping path as opposed to the traditional fundraising series, series A,
series B, et cetera. What do you think about that?
Well, I tend not to be religious about it. I don't think there's a particular right answer.
It just really depends on the type of business you want to build. And I would definitely
would not discount lifestyle businesses. I think lifestyle businesses are great. I've
had ones in the past and they've been fantastic. And there's some sexiness in the Valley to
raising money. Don't fall into that trap. You should raise money for the right reasons.
There's nothing wrong with raising money for the right reasons, though. And so we, yeah,
we raised three and a half million at the start, mainly because I knew that I wanted
to create a bigger company. It definitely wasn't going to be a lifestyle company. But
if it was going to be a lifestyle company, I probably would not have raised any money,
mostly because it's a little disingenuous because the investors are only going to get
a return if you end up being a big company. So if you do want to create something a bit
bigger, then raise some money, but you don't have to keep raising money. We raised three
and a half million initially. We, I think, burnt through half a million dollars to get
to profitability. And now we are adding millions and millions of dollars to the bank account
every year. So raising that initial money basically just made things a little easier,
a little less stressful. I mean, I probably could have bootstrapped the thing. It would
have taken a few more years. And the dilution was probably worth it at that point. At this
point, we're probably not going to raise any time soon. This doesn't make sense for us.
Yeah, I think it's super interesting that you're a pretty rare example of a company
that's raised that much money and has immediately sought out profitability. What went into that
decision-making process? Why not, you know, continue raising money and delay profitability
and in favor of growing as fast as possible?
I think there's a happy medium to be had, essentially. I really, really enjoy working
on this business. And for me, raising another 10 mil, 20 mil, and building a massive team
and doing things a little quicker has less appeal to me because I would rather take my
time about it and be a little bit more thoughtful about it. And I also am not convinced that
our revenues are tied to the amount of people that we hire at. And so I don't think it would
be a very profitable decision to build a massive team. It also increases your chances that
all this goes to nothing. And your investors don't really care that much if you fail. It's
part of their model. They actually want to see you, depending on how good an investor
they are, they actually want to see you fail quicker so they don't invest in your time
energy, more money into your business, or see you succeed in a crazy fashion. And I
try to ignore or see their motivations for what they are, which is fine, but essentially
they, investors are just salespeople. They're selling money. But money is a commodity. All
money is green. And if you can actually use your customers to do a Series A, for example,
then that's a much better, more fiscally responsible way of building out a business.
Yeah, it's funny that you mention investor motivations because I think a problem that
a lot of people run into online is they start reading advice, they start reading books,
and they don't pay enough attention to who the person is that wrote it and what world
that person inhabits and what their goals and incentives are.
So if you're, for example, trying to bootstrap a lifestyle business, you probably don't want
to take advice from a traditional venture capitalist who's going to give you advice for
how you can grow your business as fast as possible or blow out and fail as fast as possible.
And vice versa.
Absolutely. Yeah, I think that's a very important point is when you get a lot of advice from
different people, it'll be a way more useful advice if you understand people's biases and
motivations for that particular advice.
Yeah, totally. Because sometimes it seems like someone's giving bad advice and it's
actually good advice just for a slightly different goal than what you're trying to do. And there's
other advice that sounds good, but it's just bad for you.
Right. And people have their own biases, for better or for worse. I had friends who advise
me that I should raise as much money as possible. And if you look at their history, their businesses
failed because they didn't raise enough money. So people have biases. And that's totally
fine. You just have to take that into account in your decision-making matrix.
Yeah, it's funny because earlier on when you were talking about the idea is that the kind
of criteria that you use to decide to work on a clear bit, I was thinking about my own
list. And it's almost entirely based around my own failures in the past. I'm like, I'll
never make another product or service that I don't sell from day one. I'll never do something
that's B to C. I'll always sell to businesses. I'll never create a product with low retention
rates because that's been a challenge for me in the past. And clear bit seems to naturally
spread around a lot of those issues already. People probably don't churn that high off
of clear bit because you kind of integrate into your code and then it's there. Why get
rid of it?
Yeah, so once people are integrated, it's very low churn, especially if someone has
CRM integration, like Salesforce integration, churn is completely negligible. We do see
churn of people just wanting one-off purchase of data. And that's one of the downsides of
the data industry is that people keep the value when they churn. So it's not great for
building a SaaS business. But we got around that by just building out a batch product
where people who want one-off usage of the product can upload a list and enrich that
list and pay for it as a one-off. And they'll pay more for it. They actually pay five times
as much. But people have to do that to have less for the convenience. They don't want
to worry about a subscription. And then for your customers that do have ongoing data needs
and that will want some kind of integration, then you also have options for that and that's
where you're recurring revenue comes in.
That makes perfect sense. And so we're kind of running short on time here, but I want
to close out by talking about the psychology behind being a founder, by being an entrepreneur
and a builder because you've done like an incredible amount of stuff. And I think it's
difficult for a lot of people to find the motivation or even just the time to work on
that much stuff. What is it that drives you and what kind of productivity hacks do you
have to help yourself stay motivated and be productive?
Yeah. Mostly I just wanted to be my own boss. That was my main motivation was freedom. And
I don't think a lot of people realize how easy and maybe not easy, but how possible
it is to create their own business. It's an option and people don't realize that it's
an option. And so I encourage people to actually think about it. It's potentially like a year
from now, you could have a lifestyle company with money coming in the bank and you wouldn't
have to work nine to five. You have the freedom to do whatever you want. That's an amazing
lifestyle that you can work towards. I think that is pretty amazing motivation. And then
actual founder psychology, I personally find it's better not to get too involved in the
highs and the lows. So when you're building a company, there are going to be lots of highs
and lots of lows. And if my advice is try not to get too affected by those either one
way or another and just try and be fairly pragmatic about the whole thing.
Yeah, it's like a ton of highs and lows. I have a friend and she's working on a business
right now and she hasn't launched yet. But the amount of highs and lows she's had already
just like building out the initial product is crazy. And it seems pretty par for the
course. I think it's great advice to people that something you need to look out for. There's
going to be times where you feel super motivated and super inspired and you just want to work
all day and there's going to be times where you're like, what's the point? Why am I even
doing this? And if you don't expect that beforehand, I assume a lot of businesses die because their
founders get demotivated and stop.
Yes, absolutely. I mean, that's like the reason. And the thing about B2B companies, especially
B2B sales companies, is if you just stick around for a while, you will make money. You
keep iterating, keep improving. It's very hard not to make money. And if you look at
great companies like Buffer, for example, they've just iterated and been around for
a while and then you suddenly get these network effects and the numbers start getting bigger
and the ball gets rolling and soon you're making $10 million and it's just because you've
stuck with it.
Yeah, completely. I think that's why it's so important to actually start trying to sell
an actual product or service from early on because you learn these lessons. You talk
to people and they tell you outright why they're not going to buy your thing and then you can
iterate. And if you stick with it for years, then there's no way you're not going to eventually
iterate to something that somebody will pay for.
Yeah, especially in the B2B SaaS world.
Yeah. Well, anyway, I think it was great having you on the show, Alex. I think that's an interesting
thought to leave people with. Can you let us know where we can find out more about you
and Clearbit online?
Yeah, clearbit.com. That's C-L-E-A-R-B-I-T.com. And I also have a personal website, alexmacore.com,
which is very neglected. So I probably suggest you work at Clearbit.
All right. Take it easy, Alex.
Thank you so much.
If you enjoyed listening to this conversation, you should join me and a whole bunch of other
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