[00:40] How Michael went from 200K to 6M in ARR at Namely
[03:26] The most challenging aspect of Michael’s first 6 months at Namely
[04:55] The most important actions to take in developing a pricing strategy
[07:54] The moment when Namely’s revenue motion and ICP fell into place
[09:30] What Michael learned from the impressive board he worked with at Namely
[11:24] Preconceptions Michael had and what he learned after experience
[15:14] What got Michael excited about working with Orculus
[16:58] Michael’s professional goals for the next 12 months
[19:00] How Michael unplugs and recharges
Elias Rubel: (01:02)
Let's get onto the episode. All right, welcome back everybody. Today. I am thrilled to have Michael Manny on the line with us. Michael took namely from 200 K to over 60 million in ARR and has done numerous chief revenues since, since then, as an advisor and investor, we met through micro bears. I think it was so, and now you're the, uh, the chief revenue officer as of believe very recently at, uh, Oculus. So Michael, welcome to the show. Yes. Great. Thanks for having me. So let's start, let's start at the beginning like that, that, that 200 K you're at namely it's the early, early days. Normally we focus on the sprint from a million to let's call it 20, but, and the broken up into the two segments, but I think it'd be really fun just cause you know, it's not all the time that you got to talk about what was that early fumbling stage like before you get to the million and kind of cross that threshold of pure product market fit?
Elias Rubel: (02:06)
Like can you talk us through those times?
Yeah, for sure. No, I would love to, um, it takes me back. It seems like a long, long time ago, but it was only about six years ago. Um, so in April of 2014, the first day of April, I remember joining the team and I had been chatting with Matt. I had spent five years before that at a large software HR tech software company, ultimate software, um, and learned a ton there about building great culture, great teams. And I was excited to take over leadership. So I remember chatting with Matt and we reviewed the book of business and it was probably somewhat I'm in my first week. And there was about 25 customers. And I remember looking through the contracts and only like 15 had like numbers associated with it. And the other like six or eight were at max like, Oh, that's just my, like my friend or this agency. I know. Or so it was really like 15 customers. We had a couple hundred grand in revenue about 200,000 plus or minus. Um, and the team
Michael Manne: (03:00)
Was fairly small. So we had our, our business office was in Manhattan, New York city. Um, and our engineering and product team was in Brooklyn, in Greenpoint. Um, and we spent a lot of time, uh, you know, mixing the groups together, but I remember meeting the sales team and, um, and still to this day, I K I keep really good contact with the folks, but there was two SDRs and then Chris Flores being one of them and Kevin Cody who ended up taking over after I left namely as the head of sales, uh, was my first day on day one. And I remember coming in and being like, all right. So tell me a little bit about the deals you've closed and what's going on. And he's like, Oh, today's my first day as an account executive. Um, so he had just gotten promoted April 1st. Um, so I knew we were, we were at the very, very beginning, but it was a wild ride.
Michael Manne: (03:41)
And, um, and we, we ended up going that year 2014, we went from about 200,000 to 1.8, 1.9 million. Um, and we ended up hiring a third account executive. There was, there was two of them and in myself I was kind of player coaching and we just sped. I'll be honest. We spent a lot of time when we weren't prospecting. We were just demoing our product all day, every day. Speaking, spending time, business time with customers. You know, I think even from, you know, the items I've read in the past, it was, you know, the most important thing is during business hours and suspend it with prospects and customers. So we would do five and six demos a day, send all our followup that evening, uh, and just do our best to try to follow up with people timely. And we ended up having a lot of success over those six months.
Elias Rubel: (04:24)
Let me think the most challenging aspect to those first six months was in retrospect.
Michael Manne: (04:33)
Yeah, I think one of the, a couple of a couple of items were pretty challenging. Having been in a more mature company before we really had to dial in that ideal customer profile, we had had 15 or 20 customers and they were kind of all over the map. A couple of people just use one part of the product, a couple were trying to use more, but we were really dialing in on the ideal customer profile. And that's probably where I spent the first couple of months really nailing, like what are the types of companies that want to use namely at that time? And we ended up dialing it into a couple of things. We really focused on those folks who were, you know, small to medium growing technology companies. A lot of them in New York city in the Bay area because they tend to be early adopters.
Michael Manne: (05:15)
So we had folks like Mashable and Birchbox. We really started to land those innovative HR leaders who wanted to purchase a performance and essentially a talent and an HR solution that really spoke to their employee base. So we did a lot dialing in that ideal customer profile. Um, and then we spent a lot working on the motion, you know, what does the sales cycle look like? What are price points that are reasonable? You know, we were, we were more of a nice to have and cause we had not gotten into payroll and benefits yet. So we were more of a nice to have. So we really dialed into the pricing, the ideal customer profile and that sales motion were probably the most important and challenging parts over those first couple of years.
Elias Rubel: (05:52)
So pricing is a big one that comes up a lot. And I think a lot of founders and early all struggle with it in many senses or are sometimes afraid to test even. So can you walk us through what your process or methodology was for honing in on what the right pricing strategy and structure was?
Michael Manne: (06:13)
Yeah, for sure. And you, and you mentioned it, I think what you just said is really important. You gotta be willing to test and iterate. It's super important. Um, you got to go out there and spend time with prospects and customers, the ones who win, but you'll learn just as much from the deals you lose, you know, where did we fall relative to the other vendors, you know, was pricing an issue with why you didn't date or didn't pick us, you know, how important was it in your decision? And we really nailed it. So I was fortunate to have been in the HR space before. So I had a decent idea directionally, but we definitely did a lot of testing and, and it depended on, you know, a lot of people like to use, you know, the number of seats you're using. There's a usage component now these days at times.
Michael Manne: (06:52)
Um, but it's really important. I think that the most important framework from what you mentioned is to test and iterate. Um, you don't want to change it too much, you know, visibly and publicly, but you do want to try to really dial in and then debrief with those prospects and customers, you know, learning, learning from the wins and losses is really important. And we did a really good job. I think when we started at namely our, our base price was something around three or four bucks per user, per month. Um, and we ended up, you know, when I left, we had built a suite that, you know, essentially cost North of $20 per user, per month. So we really matured it over time, but I think you mentioned it testing and iterating, um, and continuing to evolve. It is really important.
Elias Rubel: (07:32)
And practically speaking, I mean, you mentioned it's bad to shock the public with a bunch of changes to your pricing page. So how did you manage to test it without kind of constantly changing your pricing page? What did that look like? Was it a contact us for pricing or how did you, how do you manage that?
Michael Manne: (07:49)
Yeah, in the early, in the early years, we definitely did like a contact sales contact us and we really pushed people. We were much more mid market and mainly so we push people to a demo and wanted to talk about it because everyone's needs could vary. Also, we kind of had two or three stools for the product or feature sets. Um, but I do think if you are going to leave it on the pricing page, you want to pick, you know, you want to look at some of your comparisons and comparables out there, you don't pick a moderate to midpoint of the range. Um, the one thing, you know, you always get coached up is you can always discount. You can't go higher than lists. Uh, you want to keep that in mind. Um, and I coach a lot of early stage founders on like, you know, pick the upper middle of the range. Uh it's okay if you leave a few dollars on the field, especially early on, but you know, you do want to have opportunities to discount, whether it's based on volume, commitment, you know, whatever factors are most important to your business at that time. So I do think it's something where over the first few months you want to test and iterate kind of behind the scenes and then you'll feel more comfortable going public.
Elias Rubel: (08:52)
Was there like an aha moment in revenue where your sales motion and just revenue motion in general and ICP really clicked and fell into place. And then you were able to focus a lot more on scaling and processes there in,
Michael Manne: (09:12)
Yes, I still remember it today. I think, um, for sure there's a couple of inflection points, you know, when you're on a journey, we were, you know, I was there for almost five years, so there's a couple of inflection points. One of them was, um, I remember September of 2014. So we had, um, we had sold a couple of customers, you know, between April when I joined and the end of July and August, but then coming into the fall, we really started to hit that motion. And I remember it was the first month, September of 2014. We did more revenue that month than we had done in the entire, like history of the company. Pretty much. I think, you know, almost, I think we had done some upwards of a couple of, you know, four or 500 grand that month. And, you know, we followed on with August, uh, I mean, sorry with October and November.
Michael Manne: (09:55)
So that was definitely a big turning point. I think we had done a lot and continue to evolve and iterate on the product. And we really started to see the dividends of like that 90 to 120 day sales cycle starting from, from April. So as we started to kick up lead gen, and that was a, that put us on the path we actually raised from matrix partners. Um, David Skok was actually the individual who introduced me to Mark from HubSpot and we ended up raising from them that fall, uh, when we were approaching 2 million ARR. So you had
Elias Rubel: (10:28)
A prolific board. I mean, I can't imagine a board that gets much better from a B2B SAS perspective. What, uh, what are some of the learnings that you took away from working with such a high caliber?
Michael Manne: (10:44)
Yeah, no for sure. And we talked about this earlier. Um, we just had incredible supporters, uh, both, you know, in the namely office, um, on our board of directors with matrix, uh, pack Rady from Sequoia, uh, amongst others to venture scale. Um, it was really incredible. So there was a few things I learned a lot over the years about not just building a great go to market team and organization, but building a great company. Um, you know, all of those firms are famous for building long lasting sustained and great cultures and companies. So I learned a lot about how to think about team structure, people, culture, um, all of those items that had started at ultimate software and continued on, uh, when I got to namely, but learned a ton about that. Um, David is probably, Scott is probably one of the, you know, the godfather of inbound marketing and sales.
Michael Manne: (11:32)
So I also took away a ton of, of learnings on, you know, tactical and strategic learnings on how to build and run a go to market machine, uh, from both a marketing and sales perspective really holistically. Um, and in addition to that, you know, I do think as we started to mature, I even learned a ton about how to build a great product and know Sequoia, talk a lot about virtual cycles of how to build a great product, test it with customers, um, sell, sell a bunch and then continue to iterate on that flywheel. So outside of just generally like, you know, loving to work with that group, very fond memories of what we accomplished. Um, I learned a ton about how to build and run a great business, um, and team and, uh, and that was probably the most important takeaways.
Elias Rubel: (12:19)
So I'm curious now let's talk about the growth stage as that started to unfold. Was this, was your first time with that level of scale and revenue, correct?
Michael Manne: (12:31)
Yes, definitely. My first time I had been an individual contributor term, but you know, very junior manager at, um, at ultimate software, I had never run or scaled anything prior to joining
Elias Rubel: (12:41)
Amazing. So, so what were some preconceived notions you had or
Michael Manne: (12:48)
Expectations that you had of what that next sprint would be like
Elias Rubel: (12:53)
That were just totally wrong?
Michael Manne: (12:57)
Yeah. Good. A great question. So, and I, and I talk a lot and Terry, you know, whether it's current team members are, or, uh, others out in the industry and founders and entrepreneurs, you know, a lot of, you know, one way to think about it is what got you here. Won't get you there, um, at times, and, and you kind of a, for lack of a better word, you have to, you have to disrupt some of your own processes. And as you mentioned, preconceived notions, I think one thing, you know, that I thought was we could just hire, you know, super sellers, um, and they'll figure it out kind of thing. And, um, and I remember as we got to a couple million dollars, I started to see, you know, a little bit of a dip in productivity and, you know, ramp time and Mark Mark, who was very helpful to me, talk to me and ask me all about, you know, what is your training and onboarding and enablement program look like?
Michael Manne: (13:44)
And I'm like, what, like, you know, they come in and we kind of show them how the demo works and, you know, then we let them out. And, um, and it was the first time I was like, is that not like the right way to do it? Uh, and he was, you know, and he very politically diplomatically. It was like, well, like we really need to introduce you. And I remember he introduced me to the individual, had built the training and enablement program at HubSpot Andrew. And they talked all about like having a program in a class and, you know, different types of certifications and walking through what makes a great seller in a sales methodology, all these fun things that probably in hindsight look so, um, like such no-brainers, uh, and I just was, I had never done this before. And so I thought like, Hey, we'll just teach them a little bit about the product and the industry and they'll, they'll be successful.
Michael Manne: (14:31)
So I would say that was by far the biggest learning since then. I, you know, I want always want to make sure we're investing in our team, both in their individual skillset and enablement, but also in just making them a great, a great salesperson or a great marketer or whatever it is. So that was one of the areas. And, and the other thing, um, which I'll, I'll, I'll talk a little bit about. We started to expand, um, at, in 2015 we opened a West coast presence and we had a couple of virtual reps out in the Bay area and they were fantastic, but I also started to recognize how important communication was, you know, if you weren't going to be sitting with people every day, you had to make it feel, and this was, you know, for those who are elicited presume, you know, there was WebEx and joined me, but zoom, there was no easy, you know, hop up a video and in a couple seconds.
Michael Manne: (15:22)
So it has changed, I think, all of our lives on communication, especially in the current times, but at the time that was a little more difficult and had to be really thought out, how are we going to communicate? What are the best ways, you know, written versus verbal and in person, and you know, how often can we meet why, but what could we do in between to supplement that? Um, and it was great. And I think we, we ended up having a great leadership out on the West coast later that year and really built it out, um, a team on both coasts that had some friendly competition also, which was fun, but those are probably some of the biggest learnings in that growth stage.
Elias Rubel: (15:59)
That's amazing, but what an experience. So now I'd love to fast forward, um, because I know we could, we could probably talk about namely in that growth for the entire episode, but I'm curious, you're, you're now with the new company and it's, it's only been three months. What got you really excited about Oculus?
Michael Manne: (16:20)
Yeah. Thank you. Um, yeah, Oculus has been great. I'm a couple months in, uh, there was a huge evolution and revolution and kind of FinTech infrastructure, you know, the things that power and, you know, the stories are now well known everyone from Stripe to plan, you know, of how we interact, uh, with our, you know, with the world of finance and Oculus is doing amazing things on digitizing pretty much all the paper we use today and turning it into digitization, um, API APIs that can be consumed, uh, everything from consumer to enterprise applications and individuals, and we're doing a lot in that space. And it's really exciting. Um, I do believe if, you know, if the beginning of the cloud was kind of in the two thousands and then it evolved Napi eyes, and now we're going to have this whole data layer at Oculus sitting on top of it, where we can tell companies and even down to individuals like who are good credit risks, you know, how do we process a mortgage faster?
Michael Manne: (17:14)
You know, all the big players are trying to make it so much easier and frictionless on the individual to go out there and go through their day to day and whether it's personal or business. So I'm super excited and I know Oculus has a huge opportunity to really be part of that revolution. Um, and so that was what really got me geeked. And outside of that, the team, uh, everyone from salmon, Vick, Sam being the CEO and Vic RCOO, uh, along with all the other folks that have joined, we've built an incredible team around, uh, salmon Vic. And so I was just really excited by the team, the technology, and it was really good timing. Uh, I felt like I was ready for a new adventure and, um, and it ended up working out really great. So excited to do that, uh, at Aquila.
Elias Rubel: (17:55)
So big new role. What, when you think through your goals for the next 12 months, and I'm actually curious both on a personal level, outside of work and at, at Oculus, what are your goals that you're gunning for?
Michael Manne: (18:12)
Yeah, for sure. Um, well, let's talk about the professional side first. I, um, a personal we can definitely get into, but I'm really excited about, you know, we're on this journey on Oculus has done a great job, their initial, uh, footprint that they had landed. It was, uh, in, uh, you know, more in lending, mostly SMB and FinTech lending. So companies like, um, everyone from BlueVine to lending club and those types of folks who do, uh, you know, small, medium business lending. And that's a really important area right now. Obviously the Oculus has done a huge part as far as PPP and this SBA lending program to help enable folks to get, um, to get the right, you know, qualified folks in there and, and to, and to lend to them, to keep their businesses alive. So that was the first generation of the company.
Michael Manne: (18:57)
And we're still doing that today, but we're starting to expand the Tam. So I spend a lot of time thinking about we're getting, we just got into mortgage and we've landed some really great notable customers that we're going to announce really soon. And, um, and mortgage is another area that just ripe for innovation. You know, anybody who's gone and, you know, you get that email if you're going, and I know this will speak to my personal goal, but like going to purchase or potentially purchase a new home, you know, that process is very paper intensive. It still requires a lot of documentation. It has not moved extremely digital yet. And, and that's something we're going to help enable. Um, and you know, even myself, I just, you know, with COVID, I just recently moved slightly outside New York city. And so I'll be one of those people who hopes to leverage technology. Like Acquilus when I go out there to potentially purchase my first home. So, you know, those are the types of things that we're, we're really here for. Um, an Oculus is working on, and then there's a variety of other segments, whether it's healthcare insurance, you know, the world's that have tons of paper out there that we're going to help digitize and then provide a layer of analytics that just helps companies make better decisions.
Elias Rubel: (20:03)
What do you do to take your mind off work? I mean, it sounds like you're, you're like gung ho so full of energy, ready to do it. Yeah.
Michael Manne: (20:12)
What do you do to recharge? Well, you still need the energy. Yeah, that's a good question. So I have two young children by son is five and my daughter is two and a half. So I will tell you, you got to keep that energy up even before and after work. I'm unfortunate there at camp today. Things have just gone back here, outside the city, but we spent a lot. I spent a lot of time with my family, my wife, and my two kids. A part of the reason for moving outside is my son's going to be in kindergarten. So we spent a lot of time with the family. I do love on the weekends, uh, hanging out with some friends also, uh, um, I'm big into grilling, so that's a good relaxing, calming activity. Um, but those are the kinds of the things you don't have a time outside of that.
Michael Manne: (20:53)
I do play basketball at times, uh, when I can get out there and throw up a couple of jumpers. But, um, but not quite as much as I used to, man, I I'm envious of the grilling life. I I've been eyeing a grill for awhile and I need to pull the trigger on it. So, uh, I'll have to get some, some of your recipes. One of these days, it's a no regret decision. It is a great way to unwind and just relax. And obviously even the comforts of hanging out around food is always good. Totally. Okay. So last question, as we wind it down, who are some of the folks in your career professionally who have either inspired you or been mentors, just folks who have really helped you along your path so far? Yeah. Great question. So I, I would be remiss if I didn't first talk about my time at ultimate software.
Michael Manne: (21:39)
Uh, I grew up, uh, around and learned a ton about the Southwest software and technology space from the founding executive team there, Scott, Mark shear, uh, Mitch, our man, and my dad was a part of that group. Um, that was probably where I got my start in tech. Um, and then as I moved into namely, without a doubt, you know, the two biggest influencers and mentors to me were Mark, uh, Roberto's from HubSpot and Carl Eschenbach who's now a Sequoia partner was previously the COO of VMware. And as we started to scale namely up, he was wildly helpful on thinking about everything from operational and finance related, uh, in additional revenue processes. Um, and just being a great ear, uh, to, to ask questions and lean on. So I would say those folks without a doubt, uh, were super helpful to me in my career. And I wouldn't be here without them. Well, Michael, it has been a blast and thanks so much for coming on the show. Awesome. Thanks for having me.