Goodbye steak dinners, hello product-led sales: Meet Endgame
Since our investment last year, I’ve been patiently waiting to share our investment in Endgame. It’s rare to meet a founder as talented as Alex Bilmes, but it’s especially exciting to meet one who’s building a best-in-class solution aligning with a massive shift in SaaS. Over the past decade, we’ve slowly but surely been moving from more traditional top-down enterprise sales cycles (where company-wide implementations are solidified over a year of steak dinners and golf games) to a user-driven, product-led sales era.
When buzzwords like “product-led growth” or “bottoms up SaaS” so quickly move from lingo to standard lexicon, you know something is changing. We only need to look at the most valuable software players of the past decade as evidence of this distinct shift toward product-led, viral user adoption-driven businesses. Slack, Jira, Calendly, Qualtrics, Notion — we all can name (and probably have used) these products that start with solving a real problem for a user in a delightful way, on a trial or freemium plan that users can spin up in a day. These companies trade at higher multiples than companies with traditional SaaS sales motions for a reason — they scale faster and trade at higher multiples (Median Public SaaS at ~14x revenue vs. Qualtrics at 22x, Slack at 26x, Atlassian 28x).
The big daddy in this category is, of course, Zoom, whose meteoric rise from $146M Q2 ’20 to $664M Q2’21 largely came from just 1,999 users who generated more than $100k in revenue. The company still has fewer than 100 users who generate $1M in annual revenue despite an astounding 300M daily meeting participants in April 2021 (most are free or low dollar). Wow! This kind of product-led growth is great because it starts with one person using and loving the product, then inviting others to use the product to great network effect, long before a sales team ever gets involved.
However, traditionally a huge challenge in product-led businesses has been the difficulty in connecting the dots between product adoption and sales opportunities. These businesses have an avalanche of data points — signups, trials, usage, support questions and so on — but no real insights. Sales reps struggle to identify the high-potential conversion opportunities and the key inflection points. Even the most successful product-led SaaS companies are using sub-optimal, custom built internal tools for GTM. Some are a lighter weight mix of CRM tools and marketing automation, while others are more complicated CDPs (customer data platforms), combining customer data, ETLs (extract transform, load), and Business Intelligence tools to make the information “digestible.” Even in the best cases, these solutions are hard to use, hard to scale, and generally not efficient.
That’s where Endgame comes in, to help companies make money by prioritizing the highest value and most empowered individual free users. The platform works by analyzing real-time signals from product usage analytics, transactional data and more, allowing GTM teams to see what’s happening in real time, prioritize high value users and accounts, and take the next best action for targeted, high-potential outreach. It has the potential to be a true game-changer.
The product is currently in early beta with incredible validation from early “design partners” including Figma, Airtable, Loom, Clubhouse, Algolia, among others. In fact, senior executives from these companies and other product-led SaaS companies like Zoom, Notion, Github, MongoDB, Airtable, and Census, have been so impressed with the product and with Alex that they’ve joined us as angel investors. We at Upfront led the Seed Round back in December 2020, with Naomi Ionita of Menlo Ventures recently leading a Series A. Naomi and I got to know each other working together on a board for another terrific product-led company, Fleetsmith (bought in 2020 by Apple) and I’m excited to work with her again. We are also joined in this round by Sandhya Hegde (Unusual Ventures), who used to run Product at Amplitude. To the best of our knowledge, Naomi and I will be the only all-women SaaS board of directors to invest in two companies in a row together having cut our teeth together on Product-led SaaS before the buzz word was buzzing (so far!)
Of course, a market opportunity and a product idea are nothing without an exceptional leader at the helm. Prior to founding Endgame (his second startup), he was the VP of growth at Puppet and many CEOs’ top recruit when trying to build out their “product-led” growth strategy. With Endgame, Alex has essentially productized himself and solved the problem for every product-led company. I’ve been inspired by his vision and leadership so far, and particularly how human-oriented, customer-obsessed he and his co-founder Graham Murphy are as a team. As an investor, I’m much less concerned about what space I invest in and much more concerned with finding businesses that are innovating around real, end-user problems. Alex, Graham and Endgame fit this thesis perfectly. They lives it, breath it with a relentless focus I have to admire deeply. Also, we have fun. Let’s not forget this job can be fun!
And while I invest all over the country, I can’t help but be particularly thrilled that he’s building Endgame right here in Southern California, which in my opinion is continually underrated for building great SaaS companies (ServiceTitan, Crowdstrike, Procore Signal Sciences, Nuorder, Blackline, Open Raven). You’ll be hearing a lot more about Alex, Graham and the Endgame team in the months to come, so for now, please join me in congratulating the team on today’s announcement. And if you or your portfolio is trying to solve product-led GTM, please check out endgame.io!
