Romain Lapeyre, CEO @ Gorgias. From $1 to $10M ARR, what changes?A-Players - The top startups' recipes to build teams of top performers
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- 29 Sep 2020
Gorgias grew from 20 people to 90 people in the last 12 months, one of the fastest ramp up we've seen, right in the middle of the Covid-19 crisis. Romain is one of the most impressive entrepreneur I've met - and a long-time friend. In this episode, he shares his personal experience on going from $1M to $10M ARR. He shares his view on building a team of executives (promote the most promising existing employees), on keeping a strong team culture while growing the team 5X (write it down), on the advice he'd give to his $1M ARR younger self (hire engineers earlier) and a lot more!
Talents win schemes for teamwork, wins championships. Welcome to eight players. But guess what? We'll tell you how to target, hire, retain and train top performers for your team.
We have those two missions, products go to market and three are focused and focused on hiring. It's much faster to hire people for the go to market engine versus the pretention because product is typically more complex than you need to understand the base. You need to understand how the company operates and then you can start shipping features. So I think something we should have done earlier is to over hire on the engineering side to compensate for the fact that just takes time to have engineers graded.
And Robin shows you at higher suites and we are sourcing automation software that helps Ninan that tech companies hire the best types at me. And follow me now on LinkedIn Qwant to keep an eye on this. Cool. So today we're having Haoma from Gaza City, a gorgeous woman is one of my favorite entrepreneurs. We've been following him for a few years now, back in 2016, I think. And hopefully we'll follow you until the end of the journey.
What is it?
IPO, your goal. So I'll tell you today, what can you tell us more about yourself and about Garcés before we start? Yeah, for sure.
I just wanted to start by. Yeah, I'm really excited to be on this podcast because a few years ago we were roommates in Shanghai College. So it's kind of crazy to see that we both got to start life and we're doing this. But just today. So yeah. Really about that. Yeah. And so, yeah, I started out of college five years ago now met with my co-founder at the time in Paris and basically started focusing on customer service because we found that the experience was broken.
You had to go between different screens. So we built a customer service platform for e-commerce merchants on Shopify that brings everything in one place. And so we went from over the last five years went from zero to 10 million. They are. And four thousand customers. And so, yeah, I'm really excited to be on the book yesterday to share some of the learnings that we've had along the way. Cool.
And what I found very interesting is that when we talk, you often see that there's a huge gap. When you move from one million they are to 10 million. And a lot of things change, especially in the team. Can you tell us more about that? Yeah, of course.
So first of all, I just wanted to start with a disclaimer like Baidu. It means what I'm going to say is the right thing or the best thing to like is just attempt to grow in the right way. So I just wanted to share that at first. But yes, it's been kind of two different chapters for that for the company, like one was from a zero to like early revenue and then from early revenue to a major in the army and then one, two to 10 that we just been through now.
And so, yeah, when we go to one million so first, like, we we have like a team celebration and I think we were 10 at the time. And so that was great. We had a good time. And then after the celebration, you're like, okay, now what's the next step? How do we play by 10, our revenue and customer base? And in fact, we have on the on the e-commerce system. And so there were two results we could take.
So either we did more of the same. We like, say, merchants, and we try to get more and build a growth machine to reach more. And I think that's 80 percent of what we did. And the alternative is to say, hey, OK, like we've done some things to to get to a leader. Now, let's let's add on top of this additional revenue streams. And so we've done this a little bit as well. But the bulk of the growth for us was going on in on trebuchet that has been growing like crazy during the pandemic and build a go to market engine to increase our impact on this ecosystem.
So you said that you were 10 people when you hit one million they are in today. How many people is there in the team? About 90, 90 people in the team. Nice. So how many people did you hired over the last 12 months?
So the last 12 months, I think about like 70. Got crazy to say that it doesn't feel like 70. Like you'd say, it's a big number. But the way we've looked at it is that it's been really interesting because when we had about 10 people on the team, so we definitely hired full potential, like some sort of higher for experience, like most of the shell or which would be relatively high profile potential. And I was chatting with some early folks at Shopify and earlier this week, and they told me they had a similar approach, which was interesting because these companies have strong cultures.
So I think one of the aspects that was that helped us build a strong culture was to hire full potential. And so these 10 people we had on the team about all of them are Teweles today. And so what they did is that, for example, one of them started as an intern, now should build a team of five people to four operations. Another example is as if I was the first lady who was somebody who had experienced like selling in many different ways, actually sold cars.
He sold like start ups products. And he had an interest in things like built mobile apps. And so that was really interesting. To hire somebody with this profile could be doing a great job as an nation, but could also like understand how to build machines and systems to scale.
That's OK. And so basically what you're seeing is what you're looking for when you hire someone is potential for growth, right?
Yeah, 100 percent have two approaches. Like, you know, you hire veterans who have done it like five times. And so this way you reduce your risk. The second approach is to say, hey, I want to hire people that are going to be like sponges for knowledge. And so when they do that, obviously like the business, actually good examples of this provide because we don't have a whole lot of experience like this software startup. So when you do that, since you don't have the experience, you kind of have to make it apart.
And so the way we've done it is that you surround yourself with five, six people that have that I've been attending in the are twenty minutes. They are sort of like coach you on one of the tricks to to get there. And so this way, that's kind of how you get to the next level by being with your your social work circle with people are. The next steps so that you can take your company or your team to to the next step as well.
So these people are advisors right now.
So maybe I can give you a couple of examples. Like right now there's Nicholas Famiglia beyond me, and they are. So he's been very helpful to share tips on how to structure the team. Another one has been the who was given for the full name. And so he was addressed in segment before. And so, like the scale, it's like 20, 30 million. They are so kind of like wrote us the they just want you to run like hell to build the growth engine to to get there.
So those really helpful. So we could apply to get to the majority, which they are.
And do you expect that moving from 10 to 100 million? Because I guess that's the next step you will need to hire more specialized people and more and more veterans.
That's a really good question that I'm trying to figure out right now. And so the first thing is that I don't know what it looks like from ten to one hundred. What I know is that from zero to one and one to 10 was slightly different in many ways. So I'm expecting another change. And so I've been yeah, I've been chatting with a bunch of people, too, to see how that worked. And so it sounds like you have two models, for example, like what I did when they were like five years into the journey to to us maybe a little later is that they hired a CEO from a Google.
Her name is Claire. And so she brought a bunch of best practices in terms of career path for employees, cost structure, compensation plans across the team, opening up a satellite office or a second office. I think that is an issue for Europe and Dublin. So one way is to say, hey, let's go get these people who are really experienced and who can produce what they've done before in an efficient way. I think the trick with these people is that it depends on what you want in terms of culture.
If you want to have like the average of the culture of many companies, then you basically just hire people who are going to run the old playbook. If you have a strong culture like a straphangers or like we are trying to have as well and need you hire execs that are still scrappy and you can get into the weeds, for example, like when you work on a given problem, like they can really analyze the data themselves. They can do support to get themselves.
They understand the product themselves. So this is really valuable. And so I think if you go this route of hiring veterans, you need to have people that are still really, really important. What I've seen that has been interesting with our team is that we we saw the second round so far, which is to hire for potential and get people to grow with the company. And in many, many ways, like we've done things in new ways, for example, with business development, like we we do a lot of events online and we feel like something that is very repeatable where we do like four or five thousand people, events switch.
And so it's not something that has been done in the industry. And so you tend to innovate more when you have people who are first timers.
So you move from 20 to 90 people in the year, I guess. And you mentioned that you have a very strong culture. One of your biggest challenges must have been maintaining and building that culture, right?
Yeah, I think it's the most important thing. And the how did you go about it? There's always a lag to know noise.
You've done a good job. So I guess we'll know in a few months. Some of the ways we've done it is. Yeah, first of all, write things down and make it very clear what your culture is, something that we are doing right now that is actually pretty interesting. There is a book by a guy called Ray D'Alessio who built the largest hedge fund in the US. And this book is called Principles, and it talks about the way they roll down the culture.
And typically when you go on the website, if you startup, you want to see where the culture is all about three to five values that are on the website. And that's that's what culture is actually stuff on the outside. But if you really look into what culture means, it means like it's the definition of HubSpot, behave your social circle and company. And so in these three words to translates through like very simple situations. And so the work that we are doing right now is to say, hey, in our case, we have to teach values.
And so we are working through that, converting these values into like a very practical action items in terms of how you should behave. So typical thing that we do is that we have an idea. So, for example, let's say you brainstorm about a topic, it's going to be like six, seven ideas around the table. And if you don't have an idea of meritocracy to the most eloquent person is going to tell you like, hey, this is what we should do and people are going to follow because the person speaks well, basically on our side try to do is that when the idea comes out, we force ourselves to score the idea in terms of how much that is going to have on the, let's say, sign up rate or Demeritt or if it's product like how much it's going to reduce the first response time of the year or two.
And so this way we are able to have all the seminar ideas that came out of the brainstorm and pick the ones that have the most impact and that that we should focus on. So that's an example of how we apply the customer first value or decide just using data value to like the the day to day operations and what you value today.
So you mentioned the site first using data customer first, right? Yep.
But big one is strive for excellence as well. We try to hire people who want to become the best version of themselves. Really important. We have a strong culture of ownership as well, so the idea is to distribute sort of power across the company to empower people to make their own decisions. Another one is honesty and transparency and being straightforward with customers. When we have issues like problems like we just share. But what's what's the actual situation? And the last one that has been really interesting is the way we built the companies to automate your work and so we can talk about this more.
But we built an automated go to market engine that has been, I think, one of the pillars of our growth so far.
Yeah, I heard about this one. And you mentioned that you like to automate things. Did you try to automate part of your recruiting process as well? Oh, yeah.
I think you helped you helped us be doing this right. So I remember like five years ago and we were hiring. There were two and we were looking for the first engineers. And you helped us a great deal breaking the tub and all the other platforms to get access to all the profiles of developers instead of reaching out to them when they were not meeting. So that has been like, yeah, once you go away, we've automated some of the recruiting work.
I think recruiting like the test for engineers, like we have a platform called the Hacker Rank where we saw the performance of engineers. So that's another way we've automated. But I don't think it's the you want to automate everything in hiring because it's very much of a human aspect of the company. So it's reported that you also spend the time to build the relationship with the person and see if it's going to be this much of it.
And can you tell us more about the main things that you learned along the way, scaling the company up to that time today and which will probably grow even more? What on the main learnings, if you have any, that you can share with our audience that they can use as well? Bits in the team, how you manage the team, recruiting, just managing, leading the team, making sure everybody's aligned. Keeping that culture is a very, very actionable tips and a few tips.
And so tip number one is that you need to think of your company as two different engines. Engine number one is the product. And typically you have this engine up and running from zero to one minute. They are. And the goal of this engine is to deliver value to your customers. And that's that's the core engine of the company, extremely valuable. And so you have your product in your engineering team will work on this engine. The second engine is the go to market engine.
The goal of this engine is to get as many customers as possible and to maximize the impact of the first one, which is the product. And so I think it's pretty valuable to think of your company as these two engines because you want to build this to scale. And so, yeah, that was really interesting because at first, look, when you were when you're founder and in my case as a CEO at first, yeah, I worked heavily on the product with my co-founder.
And then as we started getting early customers, I started getting these these go to market. And at first this like the founder of Demos yourself, you you are interacting with customers. And then as you get more and more customers, you try to extract yourself from this day to day of the go to market engine. And then you're like, get what is a sustainable way. We can get leads every month. So we build another machine. Business has to guess about it.
We built like a business development engine that's partners with agencies or with. We have been going to a lot of events. So yeah, I think the number one thing is they try to build those two engines and think about them as two things that you want to scale. So that's one. Another one that we've done pretty well is that it's kind of conventional wisdom in Silicon Valley. But we've built a new car system. So objective results from an Andy Grove at Intel in the 80s who kind of created a theory of arms.
And so we have goals and the scope of the company, which is at the specialty hour, get to forty employees to the percentage of gets. So these are kind of the high level goals we have. And then we have each team will have set goals. So for example, if we want to have a goal that is at the end of the year, my team's going to have a goal of generate one million of expected our pipeline sales. It's going to have a goal to close this.
And then you can trickle down one level, you know, and say, OK, look, on the album channel, we want to generate a hundred K for the elderly. They need to close a hundred. And so what has been really valuable with this system is that everybody has that piece of ownership, which is wonderful value of the goal of the company. And so that's great to align everybody in the same direction. And so something that we've implemented as we transition from one to ten million, the answer is that we we say working with these acquirers, having everybody update every week with the numbers automatically updating on a screenshot of that, the sweetness of the book.
And so as a glass, anybody who wants to know how the company is doing can just go on the board with all the test is of the essence of this that are saying to each person and then see how we interact with this all part of our growth. Yes. And then the some of the small parts gives you an idea of where we're heading with the whole company. OK, so us and.
OK, and everybody on the line, and then you're able to just quickly grow from 20 to 90 and make sure that everybody knows what they have to do.
Yeah, that's the key parts that you need to empower each person to focus on that goal and have ownership on reaching the goal. The last thing you want is somebody part of the company that has no order, no goal. And that's going to show, you know, in a gray area.
I like the first advice because I guess most especially early stage companies focus a lot on the products instead of the of the growth machine. I know that you said a lot about the growth machine that gorgeous in that you did a lot of. But that's not the topic here. But can you tell us about how you built this engine from a team perspective? How many people is there? What do they do? How did you hire them?
Yeah, so I'll start with what it's composed of. So one thing that we have is a customer centric database. So basically we can if we take one business, for example, or Relayer brand in San Francisco, like we know what they sell, where they are located, what tools they are using, if they visit our website and they had a demo before, etc.. And so we have this database that is using the segment personalized and it gives us this 360 view of a given customer.
And so there's a team who is responsible for this. It's an Excel with the operations team, and their goal is to make sure we have clean data about what's going on both outside the company. So like getting information about what this merchant is doing and then within the company, what is the interaction we have with the merchants? So that's kind of the backbone of the growth engine, is to have this customer centric platform that gives us information about merchants.
And then you have the things that plug on it, which is the sales engine is the engine and the marketing engine and then the success engine as well. And so at first we had like one leader for all of these teams and then the progressive group. And so what has been really interesting, having this 360 view of the customer is that, for example, during a sales call, we would record the sales school and we get to the point where the conversation topics and the convention and the on Zendesk.
So when they end up talking to the success team, we know that we have to re-import their thoughts in this case, for example, that having to ask the customer all over again, hey, look, what do you need? What do you want? We basically try to gather all the information that is necessary to provide a good customer experience. And then we don't have to ask again, like we just give them the best customer response we can, OK?
And what's interesting is that. So previously on The Players. We had the Taesan from outside and he talked a lot about building a team of executives as soon as possible. And for them, he was when they hit too many people, when they found that they had put up market seats. Do you have an actual team of executives? What's your point on that about hiring executives early on or later on?
Yeah, so we have heads of departments. And like I said earlier, and most of them are or employees. And there's been a really good exercise when we raised our second seed with which is an engine game A as a board member. And it was like, hey, guys, look, I think it's valuable to do both meetings every every once in a while you decide on the frequency. And so at first we were like, hey, look, we super early like this much administrative burden, but it turned out was really, really valuable because we had the we decided to do them quality.
And so that created this motion of saying every quarter, are we going to report on our progress to somebody which is great for accountability? And two is that the heads we're also reporting on their progress through somebody else, that only the CEO on a weekly basis, but through the board. And so I think having this early board was very instrumental in building this exact team, which is composed of, yeah, like you said, early hires and through said the company with the right structure, with a team like ours to see which direction we're moving.
And then you can easily spot if you have this exact team. Today, we are missing one executive who could help with people, operations that are so you can easily spot where where are your blind spots.
And we also had Jason I'm a big fan. He talked a lot on the podcast about building a sales team. So I guess he helped you build your own sales team. Curious to see what it meant in practice. How did you build the sales team yourself? And did Jason help, by the way?
Yeah, I think it's kind of interesting because Jason has a lot of experience building Charleston for sure. So he shot a good amount of advice. So you gave us sort of the SAS playbook that you can find on Chester. That's pretty good about how to structure compensation plans, how to hire your sales, et cetera. Our sales team is kind of specific because our is so average contract value is about two to three thousand dollars. And so if you want to spend some time with a prospect that is three thousand dollars, that you can really spend ten hours on the phone.
And so the way we structured ourselves to that first is that we noticed that since we're only focusing on our Shopify growth, it wasn't like the twenty three percent. So pretty high. So we're still worth spending time with our customers that we're small like let's say a thousand dollars a year. And so the way we structured the sales team was to say, hey. We want to minimize the time that the executive has to spend on each deal, and so we want to make as much as possible.
So basically what we've come to so far is that the role of the executive starts with the demo. So somebody creates an account and then they haven't looked the demo yet. We don't have the reach out to the customer to to do the demo, which we do that we have a bunch of automated sequences that try to be as relevant as the account executive could be in reaching out to these customers. So this way, when he starts the demo, they haven't done any work for them.
Then they have a bunch of information about this customer. What do they want, what platform do they use, etc. and they can just be as efficient as possible during this demo time to minimize the amount of the number of actions they have to.
And how many people is there in the sales team today about? OK, cool.
So we almost at the end of the broadcast, it was great having you. I probably have one last question. That is, what are the things that you wish you had done differently on the way to 10 million? They all know that you're there. What's the advice that you'd like to give to your younger self?
Yeah, yeah, that's a good question. I think a few pieces of advice here. So we have those two missions product go to market and we are focused and focused on hiring. It's much faster to hire people for the go to market engine versus the product engine because product is typically more complex. You need to understand the code base. You need to understand how the company operates and then you can start shipping features. So I think something we should have done earlier is to over hire on the engineering side to compensate for the fact that it takes time to have engineers.
That's just the way it is. So that's one piece of advice, another one that they make when you are what they are. You like, how do I get to the end? Do I do more of the same? Do I do things differently? In our case, most of what we did was more of the same, something I would have done differently. I think it's true to focus earlier on on a on retention and say, hey, look, how do we create a path to excel in customers?
Right now, retention is about one hundred percent, which is good. You don't lose a whole lot of revenue from our customer base. But having this Excel engine is really valuable. Like Shopify is a I think one hundred twenty percent retention, maybe the hundred forty percent. So when you once you have this like you sort of have two growth engines, which is like getting new customers and then expanding the existing ones. So I think this is also something we should have done differently.
And I think maybe that's what learning is, that you can focus on different things. You can say, hey, I'm going to put like 70 percent of my resources, like hiring time on a getting more customers and then focusing on let's let's build a significant success team. That's the only parts of the product that can trigger Excel. That's, I would say the second piece of advice I'd have. And the last one is that we hired recruiters, I think.
Thirty 40 employees and it was too late. We should have done this probably 20 employees, because, yes, it's very sort of scary to say, hey, look, we have a few employees I'm going to put like Warroad on Tuesday on a salary. It's like that's a big investment and it's going to increase your burn. But the impact that it has on who you're going to hire to work these next 70, 80 people are going to be is so huge that I think it's really worth investing area.
And they can help you solve, number one, advise that is hiring engineers.
Yeah, yeah, yeah. 100 percent. One percent. The other thing is that, yeah, it's valuable to start building your employee brand. So that's something we like to work on right now. Yeah, probably something else. We should have done the audio to help with the engineering hiring. OK, cool. Thanks a lot.
I was great having you today. This is the end of the podcast and talk to you soon then. Thank you so much.
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