Omer (00:11.840)
Welcome to another episode of the SaaS Podcast.
I'm your host, Omer Khan and this is the show where I interview proven founders and industry experts who share their stories, strategies and insights to help you build, launch and grow your SaaS business.
Today's interview is with Steli Efti.
Steli is the co founder and CEO of Close IO, a Y Combinator startup that helps to improve communication and customer management for salespeople.
Steli, welcome to the show.
Steli Efti (00:44.170)
Hey Omer, excited to be here.
Omer (00:47.370)
I've told our audience just a little bit about you.
Tell us in your own words a little bit more about you personally and then give us an overview of your product and business.
Steli Efti (00:55.950)
Sure.
So I'm originally from Greece, born and raised in Germany.
I come from a very humble background, factory worker, immigrant family.
And nobody in my family ever received a high education.
And I was determined to keep it that way because I really hated school.
And with about 17, 18 years old, I decided to drop out of school to start my first business.
And I've been a serial entrepreneur ever since.
A lot of times I joke and I say I'm completely unemployable since I have zero credentials.
And when people ask me why I chose to be an entrepreneur, I usually answer, lack of options.
So I started a couple of businesses back in Europe.
Those were usually very small businesses, but they did really, really well.
And after a few years of doing that bootstrapping kind of small businesses that were not technology related, I had a big idea that was software and Internet related and it was a real large vision that I had.
Since I knew nothing about the Internet or startups or technology or software, I decided to sell everything I had.
I bought a one way ticket to San Francisco about eight years ago now I arrived at sfo actually asking somebody how to get to Silicon Valley.
Just to give you an idea how clueless I was, Silicon Valley obviously is not a city or place, it's more of an area or an idea.
So a nice older gentleman looked at me and puzzled and said, do you mean Palo Alto?
Stanford?
And I said, Stanford, that sounds familiar.
Yes, that's where I want to go.
So I really knew nobody.
I knew nothing about anything really related to Silicon Valley, software or technology startups.
And it turned out to become a really wild ride for me.
My mission really was to be the stupidest person in the room.
And eight years in, I'm still accomplishing that every single day.
And my first venture failed miserably.
And it was pretty crushing.
It was kind of a dead startup.
After Two years and I couldn't accept defeat or failure.
So for another three years I was just pushing that dead horse, trying to push it up a mountain and just struggling very dramatically.
And then eventually I had to actually accept defeat and I wanted to find a job for the first time in my life.
And I kind of stumbled and fell into my next startup and started a company that today, after a few twists and turns and a few pivots, what we do today is close IO very successfully, which is basically very, very simplified sales software that allows specifically inside sales teams so people that sell through the phone, through email, through online demonstration, not the typical door to door salesperson, but really the salesperson that sells from their desk allows and empowers salespeople that do inside sales to sell more, close more deals, communicate better and more.
And now we have thousands of customers around the world and we're a pretty successful, profitable, high growth business.
Omer (04:16.010)
Great, thanks for that.
Now before we dive into more details, we like to kick things off with a success quote to better understand what drives and motivates our guests.
What is one of your favorite success quotes?
Steli Efti (04:28.280)
Yeah, it's a great question.
I'm not sure if it qualifies for a quote, but it's quote ish and it drives a lot of my daily decision making.
And it's something I'm teaching to a lot of other entrepreneurs, specifically when it comes to like what I like to call emotional alchemy.
So turning like negative emotions or emotions that would usually stop you from doing things into empowering states.
So I read this somewhere.
I don't know who said it, but it was basically saying that the difference between a coward and a hero is not that the coward feels fear and the hero doesn't.
Both of them are afraid.
The difference between the two is that the hero acts despite being afraid versus the coward that is limited and stopped by his own fear or her fear.
And that is really a driving kind of day to day force in the way I make decisions.
There's many times where I hesitate, I'm afraid, I feel shame, I am unclear or uncertain and that emotion would usually stop me from doing something.
And then I remember this quote and I tell myself to get over myself and do it anyways.
I reach out to this important person, although I feel afraid of being rejected, go for a big deal or push in a negotiation for a term that is important to me, although I'm afraid that it won't work and just tell myself whenever I try to talk myself out of something, I remember that quote and it really drives me forward.
Omer (06:06.950)
Awesome, I love that one.
Okay, let's start by giving the listeners a better understanding of your current product.
Close IO.
Tell me a little bit more about who your target customers are and what are the pain points that you're trying to solve for them.
Steli Efti (06:25.090)
Yeah, it's a great question.
So to backtrack a little bit.
When we started the business, originally what we were doing was called elastic sales.
And what we offered was an outsourced sales team on demand for technology startups in Silicon Valley.
So what we wanted to offer to primarily SaaS businesses was the ability to tap into an infrastructure and into a large pool of salespeople that would go out there and sell your product to other businesses.
You would be able to kind of control everything that's going on and scale up and down depending on your needs or success.
So kind of thinking like aw, Amazon's aws, but for salespeople.
Right.
And we did that quite successfully.
We work with over 200 venture backed startups doing sales for them and figuring out sales models for them and closing deals for them.
From day one, when we started that services business, that outsourcing business in the sales space, we knew selfishly that we hated the sales software that was out there.
I personally hated all the CRMs out there, all the sales software out there.
So I didn't want to have to use crappy software, honestly for eight, nine, ten hours every single day.
So from day one, you know, I was blessed of having two technical co founders to engineers that were really awesome product people.
And we talked about this idea for the business and we said, you know what, if we do this, let's use technology to help us actually scale that massive sales force and outperform and out compete in the market with other sales teams and also manage the complexity of doing sales for so many different other businesses.
Also, let's build a piece of sales software that's awesome and that we would love to use all day long.
That was kind of the initial idea.
We wanted to use the software only internally and we called it our secret sauce.
And for two years it was an internal piece of software that for the first six to nine months really didn't have any grand vision.
And then eventually and gradually, through our unique vantage point and unique perspective of doing sales for so many different businesses in so many different sales cycles and sales verticals, we actually started really gaining clarity on what we believe good sales software looked like.
So at the very beginning, we believe that sales software at its core is communication software.
Most CRM systems Out there.
The paradigm that they were built on was that they're a database.
And a database where you can put data in about your customers.
So who is a better person to keep doing manual data entry about customers other than the salesperson?
Right.
Well, almost anybody, because salespeople really hate manual data entry and they suck at it because they hate it.
And it really, I think is a misrepresentation to call Most of the CRMs out there sales software, because they really don't help salespeople sell more.
They're more of a tool for salespeople that's they're a tool that slows salespeople down more than it speeds them up.
So we believe that sales at its core is communication.
It's about results driven communication, helping people make decisions to purchase your products or services and do that primarily through communicating to them.
So we knew that good sales software was about helping salespeople communicate better, communicate more.
So we built closeout on top of that paradigm.
What that means in practicality is that we are CRM that has a VoIP system out of the box, so you can make calls and receive calls from the software from the first moment you open up the application.
So you can just click on a phone number on a lead or prospect and our software calls that customer for you.
You can have the conversation using our software.
And because of that, you don't have to manually log or track calls.
Everything is automatically tracked.
You can even record calls.
And you can do a lot of nifty cool things with it and be more productive in the amount of calls you make, the amount of calls you receive from a sales perspective.
And the same thing that we did with calls, we did with emails with very tight email integration.
And we'll allow salespeople to do a lot of awesome things around sales emails.
And so basically all communication through calls, through emails, everything you do is automatically tracked.
You can do it through the software.
And as a result, we see that companies that use our software just have more communication, better communication, they see increase in revenue and sales.
Our customers are people like us.
So entrepreneurs, startups, technology businesses, typically from a five person sales team all the way up to a 250 person sales team, that's kind of a sweet spot.
So more in the SMB.
We don't service large enterprise customers, but we do have fairly big sales teams at big technology companies.
Like as an example example of Foursquare is using our software and some other really awesome businesses.
And 60% of our customers are in the US and 40% are around the globe.
So pretty international.
Omer (11:42.140)
Okay, great.
So you had this idea for effectively an internal tool to help you run the elastic business and your own sales teams.
And then you said that you kept this as an internal tool for a couple of years before you decided to launch it as a product.
Why did you make that move?
What signs were you getting?
What were the indicators that there was a product opportunity here?
And then how did you go about trying to validate that?
Steli Efti (12:17.990)
That's a great question.
So I would love to tell you that it was me, being a visionary founder and CEO, that spotted the perfect timing and opportunity to launch this and made a very decisive, stepped into, made the decision and said, this is what we're doing.
But the truth is not as glamorous as that.
The honest truth is that a couple of things came together.
Number one, as the software became better and better, our salespeople started showing the software to other salespeople, and we started getting kind of outside market validation by having salespeople call us or email us and telling us we want the software.
I just saw a demo from my friend who works at your company, and I want to buy the software.
Our company needs this kind of software.
What do I need to do to become your first customer on the software side?
So we started getting more and more outside salespeople and sales teams reaching out because they saw the software somewhere and wanting to buy the software.
We started seeing more and more of our own customers that were using our services and were renting, quote, unquote, renting our salespeople.
Once they saw the software, they started asking us, could we also use the software?
We want to also buy the software, not just the services.
So we started getting kind of outside validation that not just we thought our software had become a really awesome and really powerful product, but other people felt the same way.
But that was not enough, because the services business, although it was a profitable business and a growing business, was also a very, very challenging business to run, with lots of headcount and lots of complexities in doing all these campaigns.
And as a kind of focused CEO, I was seeing all these signals, and I truly believed we'd build an amazing piece of software.
But I was hesitant to start a separate business or launch the software because it was hard enough to run the business that we had.
And I was afraid, honestly, to start another business on the side.
I pushed back on that initially.
And what happened was that a small team in our company started really lobbying pretty hard that we need to release the software, the software needs to be launched, and that there's a massive opportunity we're missing.
And that team, just.
That small team just hustled me at every single opportunity, you know, at breakfast, lunch, and dinner, at all meetings, every time.
And I would push back as hard as I could.
But at the end of the day, the personal, the group that has the highest level of determination and clarity wins.
And that is what happened.
Eventually, they got me at a weak moment, and I said, all right, okay, we're launching the software.
Go into this room.
You have three months.
Launch it in the next six months.
Let's prove that there's really a market for this out there.
And that's really what it was.
It was not as strategic as you would like it to be.
It was not as.
It was really the world telling us they wanted.
And then a small group in our company really, really championing it.
And in a weak moment, me saying, all right, okay, let's do it.
What the hell?
And, you know, as an entrepreneur, you're almost always wrong, but once in a while, you're glad you're wrong.
And this is one of these cases where I knew we had something special.
But honestly, Amer, I thought that it would take us a year, two, three years to catch up with the revenue that the services business had.
I thought it would take forever, and I was wrong.
Within the first year, the software was outgrowing the services business, and it only had a team of four people working on it.
And it was clear, holy, we really have something amazing.
We need to focus on it.
And that's really kind of the whole background story on that.
Omer (16:09.020)
So how much work was involved in transforming this internal tool into a commercial product?
And what did that first iteration of that public product look like?
Steli Efti (16:27.640)
That's a great question.
We made some funky decisions when it comes to that, and in hindsight, a lot of those were probably right.
At the time, I was frustrated maybe with one or two of them, and that was that the internal tool obviously was not built as a real product.
And a lot of times we just hacked things because we could tell our employees what to do and not to do.
We didn't have to have any signup process, right?
Any user admin controls, a lot of things that a normal product has.
We just never need it.
When we decided to launch the product, the team early on, the product team that was working on it early on decided to actually rewrite it from scratch and actually basically turn a lot of bad decisions that were made early on into good ones and think this through architecturally and make it really A round product.
In hindsight, it was probably the right decision at the time.
What it meant was that I don't know what the exact timelines were, but we didn't keep the timelines exactly the way we wanted it.
We didn't totally mess up in the sense of wanting to launch in three months.
And it took us three years, but it was like, I don't know what the real timeline looked like.
We probably wanted to launch in three months and it took us four or five or something.
So it took a little longer than expected.
And the first iteration of the product really had almost had all the core things that made the product a killer product.
So it had the calling functionality, it had the email integrations.
It was really an amazing tool to communicate, make a lot of sales calls, send a lot of sales emails, have all the communication one place.
But it lacked a lot of really basic things that you would think you couldn't launch without.
So as an example, we lacked any kind of reporting in our CRM when we first launched.
So when you bought closeeye, at first, your sales team now made more sales calls and more sales emails and probably closed more deals, but there was no way for you to know because we didn't give you any reporting on it.
Yes.
Wow.
Right.
And really, that was a great decision because although after the first few months, some customers would churn because they would tell us, we love this product, but we just can't live without reporting anymore.
And although we have that higher churn that we would have if the product was more rounded and had reporting in it, what it showed us was that even when a massively crucial thing is lacking, people still love the software and people still buy it.
And it gave us real motivation, a real outside force to push as hard as possible to build reporting.
Because we had real customers from day one and our customer base was growing.
So I tell people that when is the right time to launch?
Really, really early.
And you can launch so early that you think, wow, my software doesn't do the most crucial, most basic things if people still buy, that's real market valuation.
If your product sucks in certain areas, is really broken in certain ways and people still buy it, that means that you're onto something.
And then it's just about fixing these things as quickly as possible and servicing your customers better and better and better.
And that's what we did.
Omer (19:52.830)
Now, you mentioned that you were concerned about building this business on the side and then having sort of two businesses to juggle and potentially the lack of focus there.
Let's Talk a little bit about the 800 pound gorilla as well.
You know, normally I don't kind of spend a lot of time talking about competitors, but since you mentioned it on your own website, let's talk about Salesforce.
And what concerns did you have?
Concerns that, hey look, we're getting into a market which is already pretty dominated by big player.
You know, do we really have a chance of being successful here?
Steli Efti (20:31.370)
You know what, we never asked that question.
It sounds crazy but it's not like we weren't aware that there's, it's not just the big 800 pound gorilla, there's a million like offerings.
When it comes to the CRM market, there's so many players.
So we knew from the get go this market is crowded and there's a really, there's one really massive player that's the brand that everybody thinks of.
At the same time we knew that most of the competitors product, in our opinion, in our, you know, whatever you want to call it, arrogant or ignorant, but in our opinion it's just those products suck.
So we thought if we think they suck and other people see our software tell us they also think our software is a million times better and they want to pay us money for it, there surely must be a market.
Like I never doubted that we would have a market for this.
What I doubted was how long will it take for, for us to actually gain traction here to educate the market that we even exist, to market this effectively against others.
Those were the things I thought it would take a long time.
I never doubted that we would get there.
I just doubted or I just had concerns how long it would take us.
And as I said, at the end of the day we said, you know what, let's just not overthink this.
Let's just put the software out there and see what it does right?
And the first month was a lot better than we thought.
And then I thought, yeah, but that's the first month.
And a lot of people knew us and we had kind of a nice brand already in the startup and sales space.
So a bunch of people were buzzing around it.
So we're like, alright, the first month was good, let's wait for the second one.
Ah, the second was better than the first one.
Well, let's wait for the third month.
And every month was better than the month before.
And very quickly those numbers grew to something substantial.
And I don't know when the moment was, but very quickly we all started just thinking, this is it, like we're really onto something.
If I had no I think about this a lot of times when people come to me with the ideas and it seems like they want to enter a really crowded market with a really big dominant player.
Usually you tell people, maybe this is not a good idea.
I don't know.
I probably would have told myself that it was not a good idea to go into the CRM market.
And I didn't.
And CRM, we didn't grow up as little kids thinking one day we're going to build a CRM software tool or anything like that.
So really everything happened so organically.
We needed the software ourselves.
We hated everything that was out there.
So we built something we loved and then we saw other people loved it, so we allowed them to buy it.
And then we saw a lot of people bought it and we started thinking, well, this is what we should be focusing on.
Everything happened pretty organically and not as strategically as you might imagine.
So we never worry too much about competition and it never, it has never stopped us from growing and being successful.
Omer (23:30.720)
Okay, so you launch the product, you have these other salespeople that your sales guys have been showing the internal tool to anyway, you have some of your customers who've been asking for this.
So there's already some initial demand and people that you can go and do some outreach with to start using the product.
But beyond that, what else did you do to get the word out about.
Steli Efti (23:59.480)
Yeah, that's a great question.
So really early on I think we decided, when we looked at all possible ways to market our software, we thought, all right, since there's these massive players, there's all this competition, what is the one channel that we can use to market our software where we believe we're better than anybody else or where we can really make a difference.
And we really looked at content marketing and the concept of out teaching our competitors and thought, yeah, we probably know more about sales than most of our competitors do.
We've probably seen more of the like cutting edge sales approaches and methodologies and tactics than anybody else.
With us secret sales lab in the heart of Silicon Valley doing sales for all these different venture backed businesses, we thought that we have a lot of knowledge, let's just focus on creating content and teaching what we've learned.
And that was really our main focus in the early days and still our main focus today.
We don't do any SEM, we don't do any SEO, we don't do a lot of pr, we don't do anything, we don't even do outbound sales.
Like we don't, we have not yet gotten to the point where we wanted to stop the outbound in cold sales engine.
Everything we've been doing since day one has been inbound sales.
All incoming leads from two main sources.
One is our content marketing and the other one is word of mouth, our customers showing our software to other customers.
So we really zeroed in on content marketing.
We started blogging, we started guest blogging, we started giving webinars, we started giving talks and we just increased the amount of content we produced from day one.
But we a whole mantra when it came to marketing and selling our software was let's out teach our competitors because we believe we can.
Omer (25:55.080)
So if a software company is doing content marketing and they do it effectively like you guys were doing, then do they really need a salesforce?
Do they even need companies like Elastic?
Steli Efti (26:10.510)
Yeah, it's a great question.
So I believe, yes, we have salespeople, right?
We sell to our inbound leads, but we just don't sell to all of them.
So we have inbound leads where it's very tiny teams, it's self service, we send you.
We have a lot of content around how to use the software.
The software is very intuitive.
So a lot of our customers don't need to be sold to.
The product sells itself.
They buy themselves.
Whenever they need something, we're there, but we don't really actively need to sell to them.
But there are plenty of our customers that are bigger teams, more complex buying cycles, more complex implementations of the software.
And these people want to and need to be sold to.
So we do call our signups and our leads.
If you come and you sign up for free tile trial and you play around with our software, you will get a call from us, we'll ask if we can do anything to help you and we'll try to understand you as a, as a prospect to see if we need to really engage you in the sales cycle or not.
So I do think that salespeople are important if you're selling at a point where a customer is worth thousands and thousands of dollars to you.
Obviously if our average customer lifetime value was just 50 bucks or something, we could not afford having salespeople.
But we do and we have.
So content marketing for us is just the way we generate leads and the way that people come to the top of our funnel.
But the entire rest of our sales process involves people.
Not just the way we sell to you or having salespeople reach out to you, call you, send you emails, approach you, give you a demo and things like that, but also the way we do support involves just a lot of human touch.
We like to be very close to our customers, we like to reach out to them, we like to be really visible and personable and it has made a big difference.
Omer (28:00.370)
So a lot of software companies, and particularly startups that are very product driven, I often hear them talking a lot about, you know, we're just going to focus on building a great product and everything else will work itself out.
And marketing is often an afterthought, right?
I mean, we'll worry about marketing at some point in the future, right?
And sales is almost a completely non existent conversation.
So just to kind of educate everybody a little bit, how do you make the distinction between what's marketing and what sales?
Steli Efti (28:42.400)
That's a great question and I think an honest and truth observation and it's a bad idea.
If you're a startup and you're listening to this and you're thinking, I'm just going to build an awesome product and I don't have to worry about anything else, you're probably wrong and you should start worrying about other things as well.
The difference between marketing and sales to me, it's very simple.
Marketing to me is about generating leads, generating opportunities, prospects, making not just people aware, but making them aware to the point where they want to engage.
Right?
And then sales is all about helping those that are aware and engaged and interested in what you do, helping them make a decision as quickly and as positively as possible.
So empowering the interested to become committed either to buying or even to not buying, both of those are fine.
So sales is really an end result driven activity, taking somebody interested and helping them through all the questions and all the steps to buying and purchasing your solution.
Marketing is about telling somebody who's never heard of you, never thought of you, and didn't know you exist, that you exist and, and that you might be able to make a difference to the point where that person starts becoming interested, starts becoming aware of you interested and then eventually, you know, steps in and maybe signs up for a trial or contacts you or somehow is not a point where that person wants to learn more and actually figure out if this is something for them or not.
Omer (30:25.580)
Awesome.
So, you know, often I hear people talking about people, people in the tech industry often seem very nervous about selling, right.
I'll often hear people tell me, you know, I, I can't sell anything, I just don't know how to do that.
I hate that.
Yet if you ask them to tell you about a product that they love, they actually do a pretty good job at Selling that product.
Steli Efti (30:59.340)
Yeah.
Omer (30:59.900)
Right.
So for someone out there who's saying, you know, I hate selling, but it's, it's a part of what they need to do just in terms of the product or the industry that they're in.
What advice would you give to somebody like that?
What could they do to be a little bit better at selling?
Actually, let's, let's maybe that's a bit of a longer question.
Let's talk about how, how can they change the way they think about selling?
Steli Efti (31:26.280)
Yeah, that's a great question.
So, number one, I don't think, like, I think everybody can be really effective at selling.
And you're probably wrong about what you think makes somebody good at sales versus bad at sales.
I actually think that engineers can make really amazing salespeople, for instance, and a lot of people find that counterintuitive.
I think that selling at its core is not about being massively charismatic and outgoing and just entering every room and wanting to talk to every person and making everybody want to do everything you want them to do.
Right.
Selling is also not about being like the wolf of Wall street, like going out there and go getter, push people around and aggressively force them to buy whatever you want to sell.
Like, that's not really what it's about.
And nobody who is in a startup environment wants to do that kind of a sale because it's going to destroy your business.
The selling at its core is truly just about understanding another human being, another person, another business, understanding who they are, what their needs are, what their problems, their challenges are.
To the point where they convince you that your solution actually could make a difference.
And then showing them how your solution or software could make a difference.
If you get those two steps right, you're going to be really effective at selling.
All you have to do is you have to first understand.
Which means for a lot of people, it's surprising that to me, selling is more about asking questions than talking.
Asking the right types of questions, letting the other person talk to educate you on who they are, what the business is like, what their workflow is, what their needs are.
Until they get to the point where they've convinced you, holy shit.
Yes, now I truly understand them, understand their business, and yes, our software will make a difference.
Now I'm convinced at that moment you don't even have to sell, right?
All you have to do is you have to tell them, you know what?
After I heard all this, I actually now truly believe we're a good fit.
And I'll tell you exactly why.
Because A, B and C. Here's the one reason why I think our software will work for you and here's what it will do.
It will create this kind of value.
If you can do that, you're already like above most of the people that are doing sales around the world.
Yes, there's things that you can do above that negotiation and your follow up hustle.
Right.
Which is another thing that I try to teach a lot of people, just being a lot more relentless in the way they follow up and so on and so forth.
There's a lot of things that you can optimize.
But if you only do one thing, which is whenever you talk to somebody, ask them a lot of questions and the right questions until you truly understand them, really understand them.
And once you truly understand them, ask yourself, can I really actually help them?
Can our software really make a difference?
And when it does, then convince them of that.
Pitch them why you think your software can make a difference.
And you're already a great salesperson and that's really all it takes.
Omer (34:31.980)
Are you still running the elastic business as well or has Close IO become almost a full time endeavor for you now?
Steli Efti (34:41.180)
No, Close IO is a full time endeavor.
That's all we do.
We shut down Elastic sales and what we actually did is because we didn't need that many SalesPeople for close IO was that we took some of our most successful teams and we place them at our clients as now directors of sales, sales managers, VPs of sales.
There's now seven or eight high growth startups that are crushing it where the sales leadership are ex elastic salespeople and all of them, every single one of them is a Close IO customer.
We were joking that this is the least scalable growth hack ever is like hire lots of people that you want to become your customers later on and then basically either fire them or place them at other companies and then hope that they will turn around and actually buy your software.
But it worked out pretty well for us and we're really good friends with all of them.
But the entire team is fully focused on Close IO right now.
We don't do anything else.
Omer (35:37.750)
When did you launch Close IO?
Steli Efti (35:40.070)
We launched Close IO in January 2013.
So now almost about two years ago.
Omer (35:46.050)
And at what point did you believe that this was the business?
Steli Efti (35:53.410)
I think probably three to six months into it.
So kind of mid-2013, we all knew this is it and then it took us another six months to take all the necessary steps to transition out of the services business into the software business.
So basically end of 2013, we were completely out of it.
So 2013, it was a transition year from the software, from the services to the software.
And 2014 was the entire year was fully focused on the software.
The first year that we were fully focused on the software.
Omer (36:29.690)
Okay, okay, got it.
Looking back at those early days, what do you think was one of the biggest mistakes that you made
Steli Efti (36:39.170)
of Close IO or of the entire company?
Because there's different answers.
Omer (36:44.050)
Let's focus on Close IO.
Steli Efti (36:45.810)
Yes.
Okay.
An early.
Bad decision we made early on.
It's actually a difficult question.
I know this sounds weird because there's so many mistakes we made, but I always tell some people that ask me, and they're like, wow, how have you been so successful with Close IO so quickly?
And we've grown pretty fast and all that.
And I say, you know, all the mistakes we made with elastic sales and all the mistakes we saw our clients make and all the experience we made through doing sales for so many different businesses, all that benefited us quite dramatically.
So when we launched Close IO, we were able to basically benefit from all that experience, all these trials and errors, all these mistakes.
So we didn't make as many mistakes as you usually would.
I think that we should have launched earlier.
We should have, like, the biggest mistake is that it took too long for the team to convince me to make that step and then us to really fully commit to the software.
I think we should have made that probably six to nine months earlier would have been the better time frame.
So that was the biggest mistake.
It took us too long to launch or to decide that we would launch the software.
Beyond that, I couldn't.
I can't think of too many things we did really wrong because we had learned a lot from all the things that we did before that.
Omer (38:08.250)
Yeah, I mean, it does sound great in terms of having launched and then sort of three to six months.
You know, you guys are getting great growth, and you already feel like, okay, this is the business, and you're planning an exit strategy out of the services business.
But in many ways, I think hearing your story, it kind of started much earlier.
Right.
I mean, you had almost two years of just testing this tool.
Steli Efti (38:33.540)
Oh, yeah.
Omer (38:34.500)
Before you got it out to customers and having salespeople out there and your own services business probably provided you guys tons of data and insights to help you build a better product.
Steli Efti (38:48.740)
Yeah, absolutely.
Like, we couldn't have built this.
If we had come together and said, let's build better sales software, I'm convinced we wouldn't have built something great.
But we came together and said, let's offer never again should a great company fail because of sales.
Let's offer startups this amazing platform where they can get amazing salespeople to sell their awesome software.
I truly believe that we were running a software sales lab.
We weren't aware of that in hindsight.
We, we were able to build really amazing software because we were running the services business.
And also to be honest, the reason why we had great content marketing was that we learned all these amazing things nobody else learned and tried all these crazy things nobody else tried in the services business that then benefited us being sales experts once we launched the software.
And I could go on and on and on.
We learned so much about pricing working with all these SaaS startups.
We learned so much about kind of automating our conversion funnel and creating really effective drip email marketing campaigns.
And we did all these sophisticated things from day one, but we learned them in the previous two years prior, two years as we were building the software.
So it's really not a fair comparison to a company that maybe had launched the same month with us but didn't have all the backstory under context that really made a dramatic difference.
Omer (40:16.070)
Okay, let's talk about the business today.
How big is your team currently?
Steli Efti (40:21.270)
We're a tiny team.
We're six full time people and then we have one or two people that work with us remotely on a freelancer basis.
So six to eight people.
All in all, we love being small and we really intentionally work hard.
One of our mantras is that we work hard really every single month, reinventing the way we work in order to stay as small as possible as a team.
Although at the same time our revenue and our growth is pretty phenomenal.
Omer (40:48.030)
So what sort of revenue are you doing these days?
Steli Efti (40:50.430)
So that's a great question.
We're not disclosing our numbers.
It's definitely in the millions and it's definitely on par with a bunch of other companies, SaaS, companies out there that have raised tens and tens of millions and hundreds of employees.
We know that we're growing at similar levels to some of the best SaaS businesses out there.
Although we are a tiny, tiny, tiny, probably the smallest team compared to anybody in our market.
And we love that.
We're really proud of that.
We're proud of being really profitable.
We were proud that we've built a really amazing software and we're going to grow over the next years in terms of people.
We're going to hire some more people, that's for sure.
But we like to Be small.
We like to run as an A team rather than hiring hundreds and thousands and thousands of employees.
So we think small is beautiful.
In terms of team size, are you profitable?
Yes, we are.
Omer (41:47.900)
Now presumably you used the revenue from the elastic business to help fund Close IO.
You guys also went through Y Combinator.
Beyond that, did you guys take any other funding?
Steli Efti (42:04.330)
Yes, we did.
So we started the corporation, the business three years ago.
Yeah, three years ago, maybe now bordering on four.
And at first it was a completely different idea.
Same founding team, a different idea.
We went through Y Combinator, we raised a fairly large seed round for that idea and then nine months into it we figured out that that idea was working and we pivoted to what became Elastic sales.
So we used a little bit of seed funding was still left.
So we used a little bit of the seed money that we had raised for that other idea to kind of kickstart elastic sales.
And then elastic sales became a profitable business and elastic sales basically funded Close IO.
So I always joke that we're both a venture backed and bootstrapped business at the same time because we raised money from yc, from some VC funds, from super angels all the way to tiny angels.
It was 13, 14 participants in our seed round.
But actually the software was funded by revenues of a completely different business.
And today we are being offered venture money every single day.
I get tons of emails from VCs that want us invest tens of millions in our business and we say no thank you at this point.
We might do that down the line, but just right now we're comfortable where we are.
Omer (43:30.460)
What's the one thing in your business that you're most excited about right now?
Steli Efti (43:36.460)
That's a great question.
I mean there's no, there's no like one thing in the sense of I see this big trend and I'm excited about big data or mobile or artificial intelligence or whatever.
There's no, there's, it's really the really.
The simple things are what excite me most.
Showing up every day at work, making a difference in so many businesses, so many for so many entrepreneurs, helping, helping companies succeed through sales.
And we do that through our software.
We do that through our content.
Every day I get multiple people sending me thank you emails both for the software and the differences is made to their success, but also for the blog post we post and the content we put out there and how it made a complete difference and how it helped those companies be more successful.
I'm just excited about keeping keeping the traction that we have and actually do it bigger and better every single day.
And I truly believe that if you take small things and you take care of them and you put energy and effort into them, they grow into bigger and bigger things.
So I'm excited about showing up every day and do what I've done yesterday and do it bigger and better and just serving more customers, more salespeople, more companies around the world.
That's really what gets me going.
I know it's boring.
It's not like this.
I'm excited about sales on planet Mars or something, interstellar sales.
There's nothing like that that drives me.
It's really just our customers and servicing them better and better every day, making a difference, helping awesome companies succeed, that gets me excited.
Omer (45:13.110)
All right, Steli, it's now time for our lightning round.
I'm going to ask you a series of questions and I'd like you to answer them just as quickly as you can.
Are you ready?
Steli Efti (45:20.710)
Cool.
Ready.
Omer (45:22.400)
What's the best piece of business advice that you ever received?
Steli Efti (45:28.000)
That all advice is nothing but limited life, you know, limited life experience and overgeneralization.
Omer (45:36.400)
What book would you recommend to our audience and why?
Steli Efti (45:41.280)
I would recommend to your audience.
I would probably recommend a book called the PayPal Wars.
It's shocking to me that most software people, startup people, don't know that book.
And most people I met have not read it yet.
And it's an awesome book.
And we actually made it a policy to make every new employee read that book because it's awesome, because it's written, it's really well written.
So it's kind of a page turner, it's kind of a story.
So you really get sucked into the story of like the early days of PayPal, especially the days where there was big crisis and how they.
They survived.
And it's not written by the founder or the CEO, somebody like that, but it's written by an early marketing hire.
So somebody that was really junior and grew into a really important person in the company.
And I don't find that there's so many.
Maybe there's not a single book I know it's written about a startup from an employee's perspective, an early employee's perspective.
So I just love that book.
It's really fun.
It's really entertaining.
It's a great perspective.
It's like Silicon Valley history.
And I'm shocked that so many that most people I talk to don't know that book.
So the Paper wars is an awesome book to read.
Omer (46:58.600)
I didn't know that book either.
And it's going on my reading list.
All right, what's one attribute or characteristic in your mind of a successful entrepreneur?
Steli Efti (47:10.910)
I mean, determination is definitely it.
I really don't think there's one formula for success, and I have this every day.
People ask me what makes somebody a great entrepreneur?
I don't know.
And I don't think there's one thing for every thing that I find great about a certain entrepreneur.
I could find you a counterexample.
So I don't think there's one path to do it.
But there's Determination is definitely the thing that no entrepreneur that's been successful that I'm aware of or know was able to lack or not have.
So I think you can I love this quote from pg.
Maybe I should have said that quote at the beginning.
I didn't think of it, but Paul Graham from Y Combinator said, you can be surprisingly stupid if you are sufficiently determined.
And I truly believe that determination is the one thing you cannot lack to be successful as an entrepreneur.
Omer (48:00.250)
Know what's your favorite personal productivity tool or habit?
Steli Efti (48:07.610)
It's a great question.
Tool Productivity.
Well, okay, so two things.
1.
Evernote I love Evernote.
I love it, absolutely love it.
I use it substantially every single day to take notes about everything.
So Evernote is a tool that I love.
Followup CC is a really cool, really tiny tool that helps me get my follow up level up.
And I advise this to a lot of people.
If you really want to have your follow up game up to pro level, just use follow up cc.
In terms of habit, I think the biggest productivity habit that I have is saying no and saying no to lots and lots of things.
No to personal, to meetings, no to partnerships.
I just know what I don't want to do and I always knew it.
But back in the day I would second guess and doubt myself.
So I would do a lot of things that I wasn't feeling great about.
So my day was always cluttered with way too many meetings, way too many things.
And now I say no to 80% of the things that people want to do with me.
And that helps me be really productive and really get the things accomplished that really matter to my business.
Omer (49:22.180)
If you had to start over tomorrow, how would you go about finding that next business opportunity?
Steli Efti (49:28.260)
Wow, that's a great question.
It blows.
Even the thought of doing that blows my mind and my imagination.
I don't even know.
I think what I wouldn't do is I wouldn't try to find an idea.
So I wouldn't say I want to be an entrepreneur.
Let me research the market, let me brainstorm, let me come up with some idea that I can start.
I don't believe every time I've done something to that effect, it wasn't really successful or enjoyable.
So I don't think I would try to find an idea.
What I would try to do probably is just to say, all right, what are my skills right now?
Who can I help?
And I would go out there and try to help, and then I might start right about the things that I do to help either companies or people.
And I truly believe that the idea that presents itself then.
But I would come, I would go about it not from a I want to start a business, but from the perspective of how can I create value in the market today?
What's the thing I can do today immediately to help somebody?
And I wouldn't worry if it's a manual thing or service thing.
If it would be me, like showing up at somebody's office doing something for them, I wouldn't worry about, like it being a product or it being scalable, quote, unquote.
I would just try to help immediately create value right now and everything else sorts itself out.
Omer (50:42.560)
Yeah, I love that.
I think a lot of us get caught up with, you know, just this inertia of like, waiting for this idea to come along.
Right.
I mean, once, once we have that idea, then we'll be able to execute.
But I love this philosophy of just, just take your skills, go and help, and, you know, inevitably opportunities will present themselves every day.
Right?
Because every day we're faced with so many problems.
Steli Efti (51:10.330)
Absolutely.
I think if you are out there and you are hustling and you are creating value, you're helping people and companies and you just trying every day to make a difference.
You can't but, like, stumble over big opportunities or do something, you do it again and again and then discover holy.
All these companies have the same problem.
And I'm doing this manually, but I could totally build software to fix this.
Like, but the ideas are not the problem.
And I think too many of us, I certainly had this disease or this misperception that not only did I need an idea that I liked, I needed an idea I liked and I thought was massive.
Like from the get go, it needed to be huge.
And I really think that's the wrong way to go about it.
I think you do something you don't worry about, is it big, is it small?
You just worry, do I love what I do?
And do I really make a difference?
And everything else sorts itself out and all of a sudden, this little thing grows and grows and then becomes a massive thing.
So, yeah, I love that.
Omer (52:10.300)
What's an interesting or fun fact about you that most people don't know?
Steli Efti (52:16.940)
Most people probably don't know that for a period of like two years or so.
I seriously studied hypnosis and I got certified as a hypnotist, and I was really into it.
Omer (52:30.560)
That's how you sell.
All right.
And finally, what is one of your most important passions outside of your work?
Steli Efti (52:39.840)
Honestly, outside of my work, I don't have too many hobbies or something.
I love to read.
I read a lot.
But I've launched two little baby boys, one two and a half years ago and the other one eight months ago.
So I have two little boys and they really, they are all consuming outside of work.
That's where.
That's what I love to spend my time with and around.
Spending time with my kids, playing with them, hang out with them, being crazy with them.
So my passion besides my business is being a dad.
Omer (53:15.980)
Great answers, Sally.
I want to thank you for joining me today and sharing your experiences and insights with our audience.
And thank you for letting us get to know you a little better personally as well.
Now, if folks want to find out more about Close IO, they can go to Close IO and if they want to get in touch with you, what's the best way for them to do that?
Steli Efti (53:36.980)
The best way to do that is just send me an email.
My email address is Stelly S T E L I at Close IO stelilose IO Like, I say no to a lot of people, but people that I don't say no to are entrepreneurs.
Right.
I have a really hard time saying no.
So if you want help, if you want to brainstorm, if you have questions, whatever it is, if you feel like I could help or I could make any kind of difference to you, send an email.
I'm always happy to help if I can.
Omer (54:07.080)
Awesome.
Thanks again, Stanley, and I wish you continued success.
Steli Efti (54:11.320)
Hey, thanks so much for having me.
Omer (54:13.240)
Cheers.
