Stories
Stories
Vision: A Unicorn Evolves
Photo by Cindy Apple
Manny Medina (MBA 2003) didn’t set out to found Outreach, the Seattle-based sales-engagement unicorn. He never expected to become an entrepreneur. When he quit a frustrating role in business development at Microsoft in 2011, he didn’t have a startup idea—and he wasn’t even really looking for one.
“I realized that it’s not about the idea; it’s about the team,” Medina recalls of those early days. It was a revelation that would serve him well.
Medina soon joined forces with product designer Andrew Kinzer and enrolled in the accelerator Techstars, where the duo met developers Gordon Hempton and Wes Hather. The would-be founders then went looking for “a big problem” and a tech-based solution. GroupTalent was born in 2011 to address the challenges of employee recruitment with an online marketplace. But two years later, the company was on the verge of bankruptcy. The robust marketplace they envisioned had not materialized.
In a last-ditch effort to jumpstart the stalled exchange, the team built some software that created email templates and provided easy access to sales-contact data to personalize them quickly, making the task so intuitive that the process could be outsourced. The product sped up the process of creating and following up on sales pitches, which resulted in 10 times more meetings for GroupTalent’s two sales reps, Medina says.
But the influx of interest overwhelmed the small startup, and they were unable to effectively convert the attention into cash. Financial crisis still loomed. As Medina saw it, the company had one valuable asset: the shockingly effective sales-engagement tool they had created. In 2014, GroupTalent shuttered, and Outreach—from the same founding team—was launched.
Success wasn’t immediate. The same recruiting agencies and HR departments Medina and his cofounders had courted at GroupTalent were interested in Outreach’s product, but usage wasn’t growing as quickly as the founders had hoped. Plus, the company faced the challenge of making their software compatible with numerous applicant tracking systems, as there was no dominant company in that sector.
On the advice of some clients, Outreach began approaching sales teams with its software. Like recruiters, sales teams were paid for performance and would likely welcome a tool to streamline their sales contacts and increase the likelihood of scheduling sales meetings. The difference was that, in the sales-tracking sector, there was only one software Outreach would need to be compatible with: Salesforce. “Suddenly we were working around the clock every day. It was exhilarating,” recalls Medina, who also took on the role of CEO at the new company. “That’s when I knew we had found market fit.”
In the beginning, Outreach didn’t have a pricing model: “We just kept upping the price, and people kept paying.” Yet the software, while powerful, was unstable. The team had built it quickly and on a budget, because fundraising was still slow. “People kept breaking the system because they were trying to use it for things we hadn’t expected them to,” Medina recalls.
The software also lacked the guardrails necessary to prevent a user from accidentally deleting important records. One day, a client called with exactly that problem. Medina assured the man that Outreach kept backups and could restore the data in a couple of hours. That solution didn’t satisfy the client, whose sales team would be idle until the system was fixed. That was the moment things shifted for Medina. Outreach had moved beyond the fledgling startup stage. “It was no longer a fear of failure that kept us going; it was a sense of duty,” he says. “People had put their trust in us, and we had a duty to deliver.” The revelation refocused Medina on longer-term sustainability over short-term growth.
The Outreach software—which has expanded to integrate multiple forms of communication from email to text, offer workflow planning and tracking, and provide data-driven insights on customer behavior—is now used by more than 4,500 companies, with over 100,000 weekly users. That’s twice as many, Medina notes, as the competition combined. The 700-person company has raised $289 million, including a $50 million round amid the pandemic, and is valued at $1.3 billion.
The workplace upheaval caused by the novel coronavirus has been a surprising boon for the company, Medina says. Tracking the workflow of employees in their home offices has become a priority for executives, and sales teams that had been slow to adopt new technology have been forced by circumstances to change their processes.
“Outreach really created the category,” says Melissa Fisher (MBA 1998), who recently joined Outreach as CFO to help manage its rapid growth. She comes to the company from Qualys, a publicly traded SaaS security company. “There’s a large, addressable market for sales engagement software that modernizes the workflow of customer-facing reps,” she says. “And with intelligent data in our solution, you have the potential for a winner-takes-all outcome.”
Medina has grand ambitions for the company he never expected to start: “There are 13 million B2B sellers in the world,” he says. “As an entire category, we’ve reached less than 2 percent of the market. There are still 12,800,000 sellers out there.”
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