One Sales Lesson That Saved Christmas and Sparked a $100-Million Company

One Sales Lesson That Saved Christmas and Sparked a $100-Million Company

This post “One Sales Lesson That Saved Christmas” appeared first on Inc.

When Michael Litt came up with the idea for Vidyard in the winter of 2011, he knew that his concept—video management and analytics software—had the potential to be massive. But he also knew that to realize the full potential of his idea, he would have to avoid the mistake he’d made with another company he had started.

Learning the Lesson the Hard Way

In 2009, Michael and a friend, Devon Galloway, started a video production company called Redwoods Media. In 2010 they set themselves a goal to generate $50,000 of revenue by Christmas—Project Christmas, they called it. If they failed, they would have to find jobs.

By late fall, they were nowhere near their target. The problem was: although they had a well-designed website and an impressive portfolio of videos, hardly anyone was visiting their site or expressing interest in their services.

Michael knew there was only one way to salvage Project Christmas—get on the phone and start selling. So he and his team did everything they could to find people to talk to—asking for referrals, running events to get names, and cold calling companies. They spent as much time as they could on the phone, and on Christmas Eve, they made a $12,000 sale that put them over the edge.

In the months following Project Christmas, Michael noticed that many of his clients were asking him for a place to host their videos and for a way to tell if their investment in video was paying off. This is when Michael began to think that he could sell hosting and analytics services on a monthly subscription basis—and not just to his clients, but to the millions of companies around the world that used video. YouTube for corporate use was taking off, so he thought maybe he could catch this huge wave early. Michael and Devon would co-found Vidyard based on this new business idea.

Start Selling—Right Away

As Michael thought about the vast potential for Vidyard, the lesson from Project Christmas lurked in his mind—he’d waited too long to start selling Redwoods. So, when it came to Vidyard, instead of building the service first and then selling it, Michael would start selling Vidyard right away. Yes, even before a launch! Michael would apply this sales-first approach throughout the various scaling phases he has taken Vidyard through. How he did that is something every entrepreneur can learn from.

Phase 1: Find Potential Customers Before Launch

While Devon focused on building the alpha version of Vidyard, Michael began following people on Twitter who had expressed an interest in videos for business. Michael also used a web crawler to scour a massive online business directory looking for businesses that had a video embedded on their homepage. From these and other tactics, Michael built a list of over a 100,000 prospects.

Phase 2: Generate Qualified Leads Before Launch

By actively engaging with the Twitter audience, Michael drove 500 people to a landing page where they signed up for the upcoming alpha version of Vidyard. He drove another 700 signups by emailing and cold calling people from the crawler list. As Michael had learned while cold calling during Project Christmas, the key to a successful call was to educate, not to try to sell. While calling about Vidyard, Michael would talk about the coming trend in video marketing and what Vidyard was trying to achieve, positioning his company as a thought leader. Lots of people wanted to be on top of the trend and eagerly signed up.

Phase 3: Establish a Customer Base

After the launch, about fifty people starting using Vidyard. Michael began to onboard them by getting on the phone. Just as he did during his cold calls, Michael took an educational approach. But this time, he focused on what his customers could teach him–about how they were using the service, what they hoped to achieve, and what they felt was missing. Michael took what he learned and built that into the product. Sell it, then build it! Then repeat.

Michael then called the other 1,150 sign-ups and encouraged them to use the service. During this phase, Michael was making upwards of 100 calls a day, and within a few months, several hundred customers were actively using Vidyard.

Phase 4: Leverage Sales Success to Begin Scaling

Michael wasn’t selling just to generate sales. He was selling so he could prove to potential investors that Vidyard was viable, which would help him raise the funds he needed to scale the business. During a Demo Day at Y Combinator, Michael impressed potential investors with the solid growth in sales from the initial cohort of users. The result: $1.6 million in funding.

Now Michael could begin scaling in a serious way. Sticking to his sales-first strategy—instead of building out marketing, support, or customer success—he started hiring salespeople.

Phase 5: Create a Sales Engine

Once this initial team of sales reps was up to speed and generating business, Michael built out the marketing team. Their main purpose was to supply sales with a steady stream of high quality leads. Michael envisioned the two teams working together as one unit–a complete sales engine that would drive Vidyard’s growth. Eventually, the stream of leads would reach the point where the sales reps no longer had to cold call. In most organizations, this is the point where the ability to make outbound cold calls disappears from the organization. But not at Vidyard.

Michael knew that the loss of the ability to cold call would leave Vidyard vulnerable if the flow of leads ever dipped. So, junior sales people would continue to cut their teeth with cold calling. Even if they never had to resort to it, the experience of getting on the phone with cold leads would give the sales reps more confidence when talking to warm leads.

To $100 Million and Beyond

By the end of 2013, the sales engine was firing so well that it was consistently growing the number of customers by 15 percent month over month. Based on this sales success, Michael raised $18 million in a series B round in 2014, which, according to the Wall Street Journal, put the company’s valuation close to $100 million. One of the first things he did with the money: develop a sales training program to ensure the sales muscle that took Vidyard to the $100-million mark carries it to the next milestone and beyond.

The 7 Most Shared Stories of 2014

The 7 Most Shared Stories from 2014

The 7 Most Shared Stories of 2014

In this roundup of the most shared stories from the ClearFit Blog, 2014, you’ll discover the surprising strategies some of the world’s best entrepreneurs have used to scale their sales teams, how some of our customers faced down some tough business challenges, and more…

Read on below for these and other enlightening business stories…divided by category, and in no particular order.

Scaling a Sales Team — Lessons From Top Entrepreneurs

We asked several top entrepreneurs how they managed to scale their world-class sales teams. Here are four unique stories of success, with lots of lessons for anyone who wants to build a successful business.

Mark Roberge: How an Engineer Scaled HubSpot’s World-Class Sales Team

Before joining HubSpot, Mark Roberge had no experience running a sales team, but he had something in his background that he would use to scale a world-class sales team and help make HubSpot one of the fastest growing companies in the US.

Mike McDerment: Great Service as an Unstoppable, Scalable Sales Strategy

FreshBooks founder Mike McDerment shares how he turned outstanding customer service into a powerful sales tool to become the world’s #1 cloud-based accounting solution designed exclusively for small service-based business owners.

Paul Jackson: Why Agility Is the Key to Method’s Sales Success

When Method Founder and CEO, Paul Jackson, set out to build a sales team, he made a costly assumption. Turning his software solution into a top-rated app would require Paul to turn that assumption on its head.

Mark Organ: Building a Better Sales Team

Mark Organ co-founded Eloqua and eventually sold it to Oracle for $871 million. That experience taught him a lot about building a sales team. Discover how he’s applying what he learned to his new venture, Influitive, to do it even better this time.

Customer Stories — Hiring for Growth

The junk pile of resumes, hiring people who don’t even show up, missing out on top candidates… these are just a few of the challenges most businesses face when it comes to hiring. Here are a couple of stories from our customers about how they solved some of these thorny challenges to break through to new growth.

Got junk? How Converting Technology found great employees in a sea of unqualified, unmotivated applicants

Steven Wieske, Operations Manager for a Wisconsin Manufacturing Company, used to be drowned in resumes, and his office was a revolving door of applicants. Discover how Steven closed that revolving door and maintained a 95% success rate.

The Star Employee Jeff Greenberg Never Would Have Hired

“I never would have hired one of my star employees,” Jeff said. “That actually has me a little rattled. It’s also taught me something I’m going to use to help me build a great business.” Read on to discover what Jeff learned.

Hard-Fought Business Lessons

Not everybody is willing to share the mistakes they’ve made and learned from, which is why we recently launched the first in a new type of story-based post where we explore some hard lessons, while protecting the innocent.

The Halo Effect: The Trap That Makes You Hire the Wrong Person

The halo effect is a common psychological trap that causes you to hire the wrong person. We are all susceptible to it. Learn three keys ways to avoid this trap.

Breaking News

Okay, it’s not a story post, but one of the other things we do on the blog is announce new ways you can use ClearFit to help you find and hire employees that succeed. This year, many of our customers enjoyed learning how to read a ClearFit Profile like a pro so they could discover insights about their applicants that they can’t get from reading a resume. We ran a couple of popular webinars on the topic and published this post.

Mark Roberge Scaling a Sales Team Featured

Mark Roberge: How an Engineer Scaled HubSpot’s World-Class Sales Team

Mark Roberge Scaling a Sales Team

When one of the cofounders of HubSpot asked Mark Roberge to build the sales team at their startup, Mark said yes. Problem was, he had no experience running a sales team. But there was something in his background that he thought he could draw on to build and scale a world-class sales team and help make HubSpot one of the fastest growing companies in the US.

HubSpot was the brainchild of an MIT classmate of Mark’s who saw massive potential for a software solution that automates inbound marketing for businesses. Mark was asked to join in 2006, a year after it was founded, on a part-time basis. After working one day a week for a year, Mark had helped bring in the company’s first 50 customers. At that point, with the number of businesses going online and HubSpot’s opportunity rapidly expanding, Mark joined full-time as the SVP of Sales.

Scaling in the Digital Age

As Mark saw it, the big risk for HubSpot was losing out on the chance to dominate the inbound marketing space. To reduce that risk, Mark’s priority became scaling a sales team as rapidly and successfully as possible. Because he had no experience doing that, he decided to draw on his non-sales background—engineering training from MIT—and look at the problem the way a scientist would. His approach, which would emphasize rigorous attention to metrics and analytics, would not only transform HubSpot into a market leader, but would also set a new precedent for how others could scale a sales team in the digital age.

In this post, we’ll look at three critical phases in Mark’s approach.

Phase 1: Coding the Sales Model

To scale, Mark knew he first needed a model for how sales were made at HubSpot, so that every sales rep he hired would have a process to follow. Because Mark was the first and only salesperson at the time, he created the prototype based on his own selling experience.

Mark examined everything he did, carefully mapping out the buyer’s journey, the sales process, and how leads moved through various qualifying stages. He broke everything down to finite steps. And then he measured all his activity—obsessively. Mark knew exactly how many dollars he made a day, how many prospects he connected with, how many presentations he made, and how many prospects he closed. This became the model for success.

By measuring every rep he hired against the model, Mark could easily see how well they were replicating his success and which skills they needed coaching on in order to close any gaps. (More on how Mark designed coaching success coming up.)

Hard Science Frees up Soft Sales Skills

Another key way Mark engineered for scale was to make the model as efficient as possible. He did this by investing heavily in customizing their customer relationship management software so that all tasks, like sending emails, could be done in the fewest clicks possible. In this way, Mark used the hard science of engineering to create the conditions for the soft skills of sales to have the most impact. Instead of trying to figure out what steps to follow to move a lead forward, or spending tons of time managing and tracking activity, sales reps could focus the bulk of their energy on things like creating trust or building rapport with prospects—the exact experiences that were core to HubSpot’s brand. HubSpot has recently commercialized some of these technologies into its free product.

Phase 2: Cracking the Hiring Code

With the sales model in hand, Mark turned his attention to the next key phase—hiring. The problem with hiring, as Mark saw it, was that traditional hiring decisions usually come down to a gut decision. That’s not scalable, because it’s not a way to ensure you consistently hire candidates who are going to succeed. So Mark’s strategy here was to create a hiring system that relied on quantitative analysis, not gut feel.

Mark’s first step in the hiring phase was to define the 10 criteria, such as curiosity and work ethic, that he thought would be most important for sales success at HubSpot. He then developed a 10-point scoring system, carefully defining what each point along the scale meant. Then he started scoring every candidate he interviewed using this system. After he’d hired several people, he began to analyze the performance of every salesperson and compare their results to his interview scores. By doing this, Mark could identify which criteria mattered the most and revise his system to improve hiring decisions. The formula helped him bring on rockstars who would not only deliver exceptional results, but also raise the bar on the hiring criteria.

Analyzing the Data to Predict Hiring Success

After a year—with 20people on his team and hundreds of documented interviews—Mark had enough data to ratchet up the science, so he ran a regression analysis and created an index that allowed him to predict sales success at HubSpot based on a candidate’s interview scores. He would run an analysis every year, fine-tuning the system. One key change Mark made, based on his analysis, was to include coachability, a trait that didn’t appear as a criterion in his original list. Coachability would become the main trait he focused on, which leads us to the third phase.

Phase 3: Designing a Leadership System

Once the number of sales rep grew to 20 or so, Mark began to focus on creating the structure and systems to develop the reps for optimal performance. For Mark, the main goal here was to put leadership and coaching front and center, and to make it consistent and repeatable by relying, as he had with the other stages, on metrics and analysis. When it came to choosing who to promote to managers, Mark analyzed everyone’s performance and selected reps who were competent across the broad range of criteria. He did this rather than simply promote the top sales reps, because those reps often excelled in certain areas, while lacking in others. By choosing reps with a broader range, he was able to eliminate the risk that a manager would focus their coaching efforts only on the skills they personally excelled in, which wouldn’t be effective or scalable.

Standardizing Leadership

To further ensure that coaching was consistent, Mark put managerial candidates through a 12-week leadership course with a standard curriculum, which he built specifically for success at HubSpot. Once someone became a manager, they would spend as much time as possible coaching, rather than on things like forecasts and pipeline management, which were largely handled by systems. Again, it’s an example of Mark using the cold science of engineering to optimize soft skills.

However, when it came to choosing what skills to coach, something that is often left to instinct and guesswork, Mark turned to metrics. Every rep was measured against the sales model to accurately identify where they were weak. Managers would focus their coaching on these weaknesses, ensuring they didn’t waste time on skill development that would have no impact on results. It was a system designed to bring the best out in people—and it worked. A rep who started at HubSpot was constantly growing and improving their performance—something that provided personal fulfillment while also benefiting the organization.

$90 Million

So, where did Mark’s scientific approach take him and HubSpot? In 2010, Mark was awarded Salesperson of the Year at the MIT Sales Conference. In 2011, with a three-year growth rate over 6,000 percent, HubSpot would place #33 on’s list of the Fastest Growing Companies in America. In 2013, his team numbered 450 people and the revenue run rate reached $90 million. Today, HubSpot is the world’s leading inbound marketing and sales platform with more than 11,000 customers.

Mark’s success at HubSpot is a clear indication that no matter what size your sales team is today—even if it’s only you—using metrics and analysis as early as possible is key to both preparing for scale, and ensuring you’ll scale successfully.

Mark is now Chief Revenue Officer of the HubSpot Inbound Sales Division. Today he is spearheading the effort to bring to the world many of the technological innovations HubSpot has created to make a salesperson’s job easier. One of those solutions is available for free at, an app that shows you who opens and clicks in your emails, where those people are from, and what device they used.

For more ideas on how to build a leading sales team, see:

The unique strategy Paul Jackson used to build his top sales team at Method

How Mike McDerment dramatically increased sales at FreshBooks

How Mark Organ discovered sales success at Influitive