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Tyson Quick on moving Instapage upmarket & growing enterprise revenue to 20% of ARR
   

Tyson Quick on moving Instapage upmarket & growing enterprise revenue to 20% of ARR

Instapage started in 2012 as a SaaS solution for easily creating landing pages at scale. Today, they are a company of 170 employees with 4 global offices, 15k customers, and a whole host of offerings to help advertisers increase conversions through post-click experiences.

Tyson Quick, CEO and founder of Instapage, has been critical to the success of the business. In this conversation, he talks with Dave about the origin of Instapage and how he grew the company into a leading name in SaaS. Our conversation turned more interesting and actionable as he specifically discussed the strategy he used to shift towards enterprise customers. These high-value customers have been insanely powerful for revenue growth and the long-term outlook of the business. We hope you’ll enjoy this conversation as much as we did.

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In This Episode You’ll Learn:

0:50 — Introduction
2:02 — The origin of Instapage & where the company is at today
3:03 —Transition from landing pages to a post-click optimization solution
4:16 — How did you get your first customers?
5:40 — Cutting through the noise and turning Instapage into a market leader
7:05 — Moving away from being a landing-page builder
8:15 — The shift to enterprise; selling value instead of a tool
8:30 — Moving from no-touch to a sales-driven culture; pricing is key
10:20 — Just get it out the door
11:57 — Our magic number is “how much do you spend on digital advertising per month”
12:40 — A year in, 20% of our total revenue is from enterprise; and 60-70% of new revenue is from total revenue
13:40 — People want to keep this secret
14:40 — Investors care about gross margin; if you can prove it with services — do it
16:25 — If you can deliver value, do it
18:05 — The salty six
18:54 — SaaStr
19:40 — Pocket app for text to speech
21:06 — High Growth Handbook by Elad Gil
23:52 — @TysonQuick

Full Transcript:

DR: About five years ago in my entrepreneurial journey, I was just getting started, and was running a little Facebook ad agency, helping small businesses do Facebook ads, and I needed a landing page solution to help my Facebook ad campaigns work better. I looked around and ended up signing up for a software program called Instapage, and fast-forward five years from that moment, I still use Instapage over multiple different businesses, and today I’m excited because we have the CEO here himself, Tyson Quick, with Instapage. He’s gonna share his stories. So, Tyson. Welcome to the show, man.

Instapage

TQ: Thanks for having me, excited to be here and share a little bit of my story.

DR: I think you were actually one of the first softwares that I ever signed up for, back when I was starting out as an entrepreneur. I didn’t know anything, but I remember I was blown away with the editor back then, and that was a really sweet experience.

TQ: Cool, and how long ago was that? A couple of years ago?

DR: Yeah, I think it was, like, four or five years ago. Just when I was kind of getting started. When did you guys actually start?

TQ: Well the business was formed in 2012, and then we went to market about 2014.

DR: Okay. So that’s probably right around when you guys had launched.

TQ: Yeah, we’ve come a long way since then.

DR: Very cool. So, I know Instapge for landing pages, but I guess, in your words, tell us:

What do you do at Instapage, and where’s the company at today?

TQ: Absolutely. So, I’m the founder & CEO of the company, so I do a little bit of everything. Mostly overseeing the strategy, business growth, and making sure that our go-to-market and sales strategy is in sync. Make sure we’re prioritizing the road map to the best of our abilities. The company’s come a long way in the last couple of years. We started out as just this software solution for building and testing landing pages faster. And now we’re calling it a post-click optimization solution — it’s really the intersection between scalable creation optimization and personalization. To really empower marketers to be able to increase their conversion rates on their digital ad campaigns, and to do so at scale.

DR: Very cool.

And how many employees do you have, and about how many users do you guys have right now?

TQ: Yeah, so we are at 170 employees, I think just under that, And we are just at about 15,000 customers, and we’re really focused on the enterprise side of things now. So, that’s ramping really quickly. We have a couple hundred enterprise customers, everyone from Verizon, to cool companies like SoundCloud.

DR: That’s very cool. I want to talk more about this post-click optimization and then the shift to enterprise. Because again, when I used it, it was landing pages for anybody, or for little guys like me. And I’ve kind of seen, over the years, the messaging shifting, and I’m just curious what that’s looked like as you guys have grown. But before we get there, you started, writing code om 2012, launched, and went to market in 2014.

How did you guys get your first customers?

TQ: Right, so, we started off just letting a handful of people know that this product is going to be coming. These are friends, family, other entrepreneurs, and they were the first people to use it.

But we gave them free accounts because we wanted to get user feedback and then we got our first round of customers by doing a bunch of content marketing and just social media marketing — letting people know that it’s available.

That, obviously, doesn’t scale really fast right at the beginning, and the company itself didn’t scale really fast right at the beginning, it was really a slow-going slog. We had pivoted from our previous company and had run out of funding. We were operating with a very minimal amount of capital. And so, just me and two other guys, and we just kinda slogged it out for two more years. I’m just doing, like, content marketing, continuing with the social media stuff. And it got to the point where we could start doing some digital advertising ourselves, and sending that traffic to landing pages, and having a really high success rate with that.

DR: When you guys were launching, creating it, what was the landing page builder market looking like? Was it already crowded? Were you kinda the first there?

How did you start to cut through the noise and, like, pull away, and, like, make a niche for yourselves?

TQ: So there is only one other company that started. So Unbounce and us started at relatively the same time — they started about a year and a half, two years before us,

DR: Okay.

TQ: We identified a problem ourselves before we went out and asked, is anyone else doing this? And then we found, oh, there’s one other company doing this, and we felt that it was, it was still very clunky, and you know, at the beginning, we wanted to make something much easier, something that was much faster to get paid ads. Focusing on the smaller side of the market.

Which is completely different today, whereas we’ve moved way up-market and are focused on bigger companies. So we kind of, us and Unbounce, started a kind of, the educational phase of informing the market like, what’s the real important need here for doing this? And how do you go about doing it?

Then throughout the last couple of years, there’s been a whole slew of competition coming out. The main difference is we’ve moved away from being a landing page builder. You’ll never see us talking about landing page builder — you’ll never see that in our marketing pages — unless it’s listing a feature because the landing page building is only a piece of the solution that we’ve built. We like to more refer to what we’ve built now as an advertising conversion cloud.

Even with the building side, we’ve gone much deeper, it’s not about just building things, it’s we have aspects of creation that are scalable. Things like Instablocks, which is our templatized page blocks, that will let you seek content across an infinite number of pages. And so it’s much more than a builder when you are talking about the creation aspects. Furthermore, now we’re building in logic that lets you identify audiences and says “well if from this ad, or if from this geographic region, show this content on the page, or swap that section out.” This is also in line with our move to the enterprise where we’re selling the value more, and not the tool. We’re not saying, oh, it’s a landing page builder. We’re saying, you have a conversion problem, and our solutions here fix that.

DR: From a growth strategy, a marketing strategy standpoint — you guys were a no-touch software, initially, right? You weren’t doing anything, it was just coming to the site and signing up right there.

TQ: Right.

DR: How did you move from that to what, presumably, is, like, a very sales-driven, different kind of organization now?

TQ: Yeah, for sure. So, the first thing that we had to talk about is pricing, um, so, ’cause you can’t have a sales process until we re-thought pricing a little bit.

DR: Mmhm.

TQ: Um. And one of, one more benefit for the enterprise on the pricing side of things is entrepreneurs, like, lose sleep over thinking about like, am I pricing my software right? The nice thing about sales is you can, you don’t tell them how much it’s gonna cost. You just adjust in real time. You’re like, oh, it’s 30k. And you might have doubled the price from someone else you gave it to.

DR: Totally.

TQ: They’re not gonna know, right? And if no one’s buying at that price, it’s like, “okay, well, we’ll give you a discount and whatever,”

DR:  Right, totally.

TQ: And you play around with that in real time.

We had to talk about what are the cutoffs? What value are we gonna offer? So we said, okay, we’re going to make any new features that we add have real value — it’s gonna be enterprise only. We’re going to get a little more restrictive on the limitations — like how many pages you have, how much traffic you have, and create even stricter cutoffs there.

instapage enterprise

Instapage’s enterprise landing page

Once we have that, we’re gonna throw on customer success. So we moved one of our best customer support agents over, to customer success. And we said, this is what we want you to do for success. People that sign up for this — you’re gonna do a demo with them and you’re gonna make sure that you do a one-on-one set up with them. Then they’re gonna be able to hit you up directly, to answer their questions. And we just got it out the door.

When we started, we sold about a million dollar, or, I would say just under a million dollars, with not an enterprise product. It was like we added two or three features— an audit log, and a few other enterprise-y type things.

DR: Like security or, like, team management?

TQ: Yeah, like, a little bit.

DR: Stuff like that?

TQ: Better security, an audit log, and, well like, one other thing.

And the customer success team just started doing it, saying “oh here’s enterprise, and we put it up on the website.” It said “Request demo,” and I put someone on sales.

I hired him, and I was like, look — our whole sales funnel for generating demand, that’s gonna take us another six months. Our marketing team had to re-orient, and build sales collateral — sales decks and funnels to generate leads. Then, you know, downloadable assets. So we can present assets to enterprise. And it kind of doled this whole stuff out.

But I was like, “I hired you now, and it’s gonna be rough around the edges, but just make, make stuff happen.”

We started getting some, some leads. You’ll find that there is a percentage of customers, even that exist now, that want to purchase that way. They want to talk to someone. Now it’s your job to qualify it a little bit, so when they fill out the form you ask who’s this company?

What’s the size of their company?

For us, we found that our magic number is “how much do you spend on digital advertising per month?”

And it’s important because a lot of people think it’s just the size of the team. Well, for us, a lot of agencies actually are only like ten people, but they manage millions of dollars a month in ad spend for their clients. So it’s not always just team size.

That’s really what we did. We slapped something together, and we started doing it slowly, it was slow-going, but we were learning a lot in real-time. And while we were improving the marketing — the sales enablement type of material.

Then it's just kind of, it's been, it's been an increasingly growing system, where a year and a half in, 20% of our total revenue is from enterprise. And like, something like 60 to 70% of our new revenue is coming from enterprise now. Click To Tweet

Eventually, we plan to be enterprise only, and people are gonna be like, wait, what happened here? Like, Leadpages, Unbounce — these guys, stagnated, flat-lined, or went out of business, and you guys are this hundred million dollar company. Because we went deeper on the problem, we increased prices, we built human relationships, and we owned the enterprise side of the market.

DR: Love it, man. Yeah, I remember, it was probably a year ago, I had this, like, big epiphany about Bounce Exchange. I studied them for like a week straight, and I’m laying in bed, staring at the ceiling, and it’s like, what is going on with them? They’re exit-intent, they’re pop-ups…

Bounce Exchange

And then you have people selling it seven bucks for life, and it’s like, what is the difference here? And that kind of started my new journey of being like there are in a different place than this place we’re all hanging out in.

TQ: Yeah!

DR: We gotta figure out how to get there.

TQ: And, as a matter of fact, people want to keep this secret. If you think about, Bounce Exchange, they’re incredibly secret as a company. You can not get info — I’ve tried to get demos with them, and all the information I have on them I had to collect through a third party. Because they know that we’re a software company, and they don’t want people to find out. They don’t want people to find out the business model. It’s really just a streamlined agency, pitching themselves as a technology company.

It is a technology company, but they’re doing, they’re consumers of their technology. The thing about Bounce Exchange that’s exciting is even if you think about services is people think, like, oh, my valuation’s gonna be lower. No one is gonna want to buy me.

That tends to be what I hear from people, and what I thought myself. But, then, I’m like, what’s going on with Bounce Exchange? They’ve raised, like 80 million dollars or whatever, and come to find out, investors don’t care so much about if you have services or not. They care about gross margin.

So if you can create a strong gross margin with services, great! It’s just as good as software. The reason that software as a service has a high valuation multiple is not just because it’s software — it’s because it has a high gross margin. If you can prove that you can do a high gross margin and it has services, that’s fine too. And the thing is they’re able to do that because they’re like, “we know how to use our software really well, and we just created a blueprint of how to do it.

Oh, you’re a media company?

Here’s our media blueprint. And they want to keep that secret, they’re trying really hard. I’ve investigated them a lot myself, too, because we’re moving, increasingly in that direction. Because I think a lot of marketing technologies would better be suited to that type of business model.

Optimizely

Optimizely, by the way, is starting in this the hard way, it’s funny, I looked at Optimizely, I looked at Bounce Exchange. Optimizely is making a little bit more money, but they’ve had years on them, and they’ve had more money raised. It’s funny because Optimizely started as a self-service product, only it got a little more expensive. It got down to just two plans like us, eliminated self-service plans, enterprise only, and now you’re required on enterprise, to have them help you with your first two experiments.

And Bounce Exchange was, is like “Nah, we’ll just skip that entire learning phase stuff and just do it for them because these people don’t know what they’re doing.” They don’t even give you access to the software now. That model is not gonna work for everyone,

DR: Yeah.

TQ: But it suits the rest. It’s just funny, not everyone has to do this, but I think that people are realizing more and more that there’s a ton of money left on the table.

Marketing teams are just overloaded. They’re like, look, if you can deliver that value to me, like, sure, here you go. Like, do it. You know what I mean? Here’s ten times more money, too, but if you say no — you’ve got to do it on your own. Well, they’re like, well, I gotta train someone, I gotta get educated on it, it might be two people, three people, and time is money.

So it’s really, not that they’re not buying your software, they’re buying your software, plus all the overhead and time spent.

And Optimizely is over here trying to educate, like, they have a conference and they’re like, come in, we’re gonna train you on, like, how to have a whole team, a conversion-focused company. Good luck with that. Like, you’re gonna spend so much money educating the market on how to build a conversion team whereas you could probably just be doing it all like they could just be doing fulfillment services and be doing half a billion dollars a year, because everyone wants to increase their conversions, right?

Fortunately for us, our customers see us as not direct competitors against like Optimizely, because it’s specifically advertisers who need the creation component. They’re focusing more on web apps, so it’s a similar market, right? And whether you’re conversion optimization, or you’re some marketing product, most of the time, it’s just, that’s the case.

The Salty Six

DR: Love it, man. Love it so much. I got a lot to do tonight. We’ll wrap it up here, we’ve got what I call “the salty six”, which is just six rapid-fire questions for us to get to know you a little bit better.

TQ: All right.

DR: And hear some of your insights on stuff. So, you ready?

TQ: Yep.

DR: We’ll do that and then we’ll head out of here. Okay, first of the salty six:

What do you do for fun?

TQ: I do a lot of stuff for fun, travel mostly. Mostly traveling.

DR: Where do you travel? Where do you like?

TQ: This year I went to four music festivals, plus Burning Man.

DR: Cool

TQ: It’s kind of my outlet — freeing myself from daily routine and technology.

DR: Yeah, yeah.

TQ: And those are from everywhere, from, like, Michigan, to Nevada, to California, and then we have offices in three countries, so I travel to those a couple times a year, as well.

DR: Very cool.

What’s the best conference you’ve gone to, personally?

TQ: Best conference, SaaStr, I really love SaaStr, I think that Jason Lemkin did a great job, I like being around that many people, they’re also building, uh, similar business models, it’s so business model oriented, that almost all the talks are really relevant, right? You can jump in, learn some stuff about marketing, learn some stuff about pricing, learn some stuff about success, enterprise, like, the list goes on. And then, just, crazy amount of networking that you can do there.

DR: Yup.

TQ: A lot of SaaS companies are consumers of SaaS, I like to joke that we’re a SaaS company running on SaaS.

DR: That’s so true. What podcast do you listen to?

TQ: I actually don’t listen to, I don’t listen to podcasts, actively. What I do do is, I send a ton of articles to Pocket, it’s, like, a mobile app called Pocket, and they have this awesome, like, text to speech system. It’s really impressive how far this technology has come.

Pocket

Pocket’s content digestion app

DR: Yeah.

TQ: And I’ll hit the gym up, and it will just read me out these articles that I’ve saved, so I’ve kind of tailored my own, uh, kind of readable magazine. Or my own, kind of, audiobook, and um, I read a lot of those. I know, last year, it said that I had read enough articles that it was equivalent of, like, 62 books, or something.

DR: Wow.

TQ: And based on that, and it will archive ones after it’s done reading, and just jump to the next one, um, because I’m listening to.

DR: Were they all audio?

TQ: Yeah. Or, like, 90% audio, sometimes I read it. When I’m walking into work, when I’m walking back, like, if I walk my dog, um, all the time, like, I’m just a consumer of information. Not all of it’s useful information, like for personal development. A lot of it, recently, has been, like, politics and stuff that’s interesting to me. But I’m, you know, most of it’s, like, business and stuff, and science stuff, but my interests spread a couple categories.

DR: Cool.

What book are you reading right now? Like, what’s on your nightstand, just as a personal reader?

TQ: Yeah, so I just started, I’m a couple chapters into — I believe it’s called High Growth Handbook, uh, I think it’s High Growth Handbook. Let me think, it’s over here. That is what it is! It’s put out by Stripe. Anyways, Elad Gil was at, like, a whole bunch of companies during their growth phases.

I think, like, Twitter, and a couple other companies, during their, like, big expansion period, and I wish would have had this book, like, five years ago, because a lot of the stuff in there is stuff that we’ve learned the hard way, but it’s so spot on. That’s a really great book. It’s one that you can jump through, too, it’s not, like, exactly linear, you can jump in and, like, oh, what’s some lessons about hiring, or, or structure. You know, the important stuff.

DR: Okay, Michael Jordan or Lebron?

TQ: I’m gonna go with Michael Jordan. Legacy. Sometimes, sometimes legacy, like, is just, it’s like, sometimes, the original movie is just always gonna be the best. Even,

DR: Yeah.

TQ:  Even if it’s, the new one is, like, fantastic, people are just gonna hate on it, right?

DR: It’s like, the guy’s all right, but when we grew up, like, put the posters on the wall, and the jerseys, and, yeah, it’s an emotional thing for me, at this point.

TQ: Yeah, it just seems like, to me, it just seems so, uh, like such a legendary, magical figure, right? Now it’s like so much information, stuff like, there’s a million different personas and people, sports, and whatever.

DR: Yeah.

TQ: It’s hard to pick out, like, an icon, right?

DR: Yep, totally.

All right, last question of the salty six! What’s one person that you’d like to have dinner with, dead or alive, to have an interesting night?

TQ: You know, I would probably pick, probably, like, someone, like I said, I’m interested in politics, I think I would pick, like JFK.

DR: Yep.

TQ: Or Martin Luther King. Because I think those guys are just, honestly, incredibly inspirational, focused on, not focused on business, but just, what can I do to make the world a better place? Right? And kind of, it’s kind of similar to business, but a complex system that is even more complex than a business, right? Like, people and, the thing about politics is, and politicians, is they have to deal with, like, human emotion more than, like, a business does. I know there’s emotion involved in business, but, uh, it’s a whole different ball game, it’s so much more unpredictable. So, I think those guys are, it would be really interesting to

DR: That would be cool.

TQ: Sit down with them. Have a few beers with.

DR: Yeah, that would be cool. Well, very cool, man. Well, seriously, this has been, like, hugely impactful for me, and I’m excited to go implement a lot of this stuff, so, seriously, man, thank you so much for the time.

TQ: Yep!

DR: If people wanna follow you, hear what you’re up to, where can they go find you?

TQ: Yeah, hit me up on Twitter, I’ve been active on Twitter for a long time, one of the original OGs to it, actually. I think I was, like, in the first 50,000 or so people that

DR: Are you just @Tyson? Because you’re, like, the first Tyson on there?

TQ: Well, it’s @TysonQuick, ’cause I changed my name later. I had a different one, it was, like, QuickTyson or something. ‘Cause I never, this was literally before any celebrity was even on Twitter, it was like when Kevin Rose, from Digg, was the number one guy. And I got to the point where, I think I was, like, the top, like, 10,000. And, of course, it’s a long story since then, but, um, but, so I changed it later, but Tyson had been taken, so now it’s just @TysonQuick.

DR: Gotcha, very cool. Well, awesome, man. But, yeah, thank you again, and thanks to everyone for watching or listening Scale or Die, hope you enjoyed this episode, we’ll see you on the next one.

TQ: All righty! Cheers!

This interview has been lightly edited and condensed for clarity.

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