Manny Medina, the CEO of fast-growing startup Outreach, is so happy with his company that he gives a fist bump to every employee every morning.
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By desperately trying to save his nearly bankrupt startup, this guy accidentally found a $10 million idea
Hot Seattle startup Outreach began life as a struggling HR startup until it accidentally created a sales tool that saved it.
Outreach CEO Manny Medina stumbled onto a multi-million idea when his startup was nearly bankrupt.
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Outreach employs about 170 people, so some mornings, this ritual can take him nearly an hour.
"All things being equal, the one thing that you can really manage on a day-to-day basis is the energy," he told Business Insider.
Today Outreach counts about 1,200 companies as customers and hit annual recurring revenue of $10 million by the end of 2016, just two years after its sales automation product was released, he said.
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And it all happened because three years ago the startup was on the brink of bankruptcy, with two months cash in the bank.
Back in June, 2014, his startup was called GroupTalent, it sold recruiting software, and things weren't going well.
Faced with a choice of winding down or doubling down, Medina ordered his team to go on a sales frenzy. He launched his career as an early Amazon Web Services employee and then did a seven-year stint at Microsoft and wasn't about to give up.
"It was myself and two salespeople and we needed to execute like a team of 20 to get our sales out of the hole," he told Business Insider.
Medina's cofounders, Gordon Hempton, Wes Hather and Andrew Kinzer, weren't sales people, but they were product people. So they built a work-flow app to automate cold calling, helping the three people find more leads and book more meetings.
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The tool automatically did follow-up emails. Better still, "it allowed us to plug in a set of writers so that they could personalize the emails," he described.
That meant that all the cold calls were written by real people, professional freelance writers who could do things like add a reference to the person's home town or hobbies and such.
The emails worked, capturing people's attention and the team booked a bunch of meetings. But people weren't that interested in the recruiting tool. They wanted to know about those appealing cold-call emails.
"People were like, I don't want to buy your recruiting product. I want to buy your sales tool. And that was the birth of Outreach," he said.
The startup put their recruiting tool on the back burner and concentrated on converting this homegrown thing into a real product. It launched in January, 2015.
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Some unexpected help
Still, the company's current growth wouldn't have happened without another stroke of luck for Medina.
One of those early meetings had been with Mark Kosoglow, today the company's VP of sales. He didn't buy the recruiting product either but he and Medina hit it off, became friends and Kosoglow began to mentor Medina on how to be a better sales person.
One day, Kosoglow offered to come work for Medina.
"I said, I would love to hire you, but I don't have any money," Medina recalls.
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Undeterred, Kosoglow offered to work on commissions only. "Then he turned around and convinced four of his friends to do this job commission only, too. And that was our first sales team. We got to $1 million on the back of that."
And that fast success helped them reel in VCs ready to invest. Outreach has raised $59 million total and is valued at $200 million, according to PitchBook, the website that tracks such things.
Those early years of fighting off bankruptcy made him "very cocky. When you have a survivor mentality, you feel like, 'I don't need your money," he said.
So for his last round, "I had one slide. It was a chart. I said, 'This is our revenue growth chart. We sell to sales people. Any questions?'" he said.
Apparently not. Outreach raised a $30 million round in May, led by DFJ Growth, with participation by existing investor Mayfield as well as Microsoft Ventures and others.
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