Freemium startup Yesware grabs $4 Million, after 45 Rejections! Veteran CEO Matthew Bellows tells us how

Welcome to Smoking Hot Coffee, today we’re interviewing Matthew Belos, veteran CEO of Yesware. Yesware is a plugin software that functions within Google’s gmail targeting salespeople. You can easily add it to your email. Yesware’s features includes tracking of emails, templates of emails, and CRM immigration. The whole process is done in mere seconds.

It will save you a lot of time by cutting out copying messages and closing deals, by showing the popularity of certain emails. You can also track when emails or images are opened, which will give you a lot of feedback towards your strategy. It overall tracks your overall email marketing efficiency, and one of it’s newer features is that it can send notifications or reminders. If there’s no reply from the recipient in a certain span of time, users will be reminded so they can touch base.

Matthew’s been around the block and really knows what he’s doing. 45 people said no to the software, but with persistence, Yesware is growing and becoming extremely successful.

Freemium model

Yesware is free, but is definitely worth your purchase. The bigger packages for enterprises is extremely beneficial. Trying Yeswares free software and experiencing it’s convenience and efficiency will probably make you interested in purchasing, as the case for Amul and Jeff.

(first ten minutes)

 

Matthew shares that Yeswares long term strategy really helped the team make it through and get on a path to a successful end result.

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Matthews been in the industry for a while. Matthews been in sales and startups since 1995, with his own company or with others. Yesware is the second company Matthew has co-created. Matthew says that when you bootstrap a company, you own it. He’s a big fan of using customer financing to scale the company. Although slower at first, you own it all. It’s old school capitalism, and pretty much the right way to do things.

Yesware September 2010.

Matthew says it’s important to assess the direction you want to go in. Ask yourself if you’re ready to start your own company, or work for another startup. He suggests that it’s great to work for another startup for a while until you really become aware of your goals and skills.

One of the best ways to really learn about startups is simply by working for one. Matthew worked as an usher to get in for free. Bill Jacobson, interstep (email services company) an Application Services Company. Ended up working for him, doing a consulting  for him. Wrote a business plan. VP sales and marketing for his company. Sold to flycast three months after he joined. Flycast sold to CMGI in Massachusetts two months later. Couldn’t figure out how to build a business model. Round after round of layoff.

Starting businesses in recessions is a great strategy, because it draws people looking for opportunity. Very good teams can be built in those kind of darker times.

WGR Media, based in Boston, fundamentally predicated on idea that people would play video games on their cellphones. (2001 when started), website that had reviews.

WAP first indication that there were network on phones (mobile computers)

Started out writing reviews for proto mobile games like Gladiator, Alien fish exchange

Rabid users more powerful than the carriers. Built up and sold to CNET. Became mobile section of Gamespot.

Matthew stayed in Boston and had twins. (His wife had twins.)

Floodgate, world class game development team in Boston. Helped them make money and sign development deals with Nokia, Disney, etc.

Mostly mobile games, did a couple PC games. Sold to Zynga about 2 years ago.

 

More gamers because of the expanded software’s/ whats the words.

Everyone’s a gamer, whether poker or counterstrike. Consoles have a huge place in the entertainment spectrum, but the whole market is wideining. Exactly as Jeff says, the mass market is increasing to things like even Farmville, which is played by both middle schoolers and adults.

Strategy based on size. Advantages or disadvantages to big size. Old days, scale was everything, you wanted to be big to show.

Feelings/thoughts on ranking, for places like app stores, itunes store.

(25 minutes.)

Why build on Gmails platform?

Matthew has been in sales his whole life, so he definitely understands what a salesperson wants in terms of communication and outreach through email. A generic set of tools isn’t the best for people who need a much bigger outreach.

Started out with the question: How can we make email better for salespeople? Fundamental work flow of email doesn’t work as well for salespeople. It wasn’t designed specifically for salespeople. Matthew took this and added three key features that would greatly benefit salespeople. These three core ideas; template library (easy to create new emails) CRM sync feature, tracking feature (similar to analytics for email.)

Make a big software better for a specific niche, picking a consumer audience and working to improve something for them.

Not always better to compete, but like in Matthews case, working together to achieve common goals for the customers.

Entry strategy, be careful to make enterprise quality software from the start, especially with a smaller team.

How did Matthew decide which platform to pick?

Jeremy Alair, founder of Alair, forget exchange, just focus on google apps, very easy to develop core.

Focus on one thing, but do it well. It’s definitely a good idea to incorporate and make the best out of Gmail as a startup company, in terms of both price and features.

 

(30 min cutoff)

Development challenges and distribution challenges, both should be considered equally. They’re dependant on the other and is so crucial for the success of a startup.

 In terms of publicity, Yesware is completely software focused. Up until early this year (2013) only 10,000 was spent on marketing, and instead that money went back into the product. Users were the word of mouth that was the most effective for Yesware.

Professional tool, want to keep it free for people who don’t use it too much, but do charge for people who use it for work, in higher amounts for people who use the tool.

Within 15 seconds of doing something, joy should be given to the user.

September 2010 started, raised two rounds of

million dollar steve round? Google Ventures

40:00 mark

Rich Minor is the partner

Giving feedback/advice from the start. Important for them to get Google Ventures involved because of Gmail.

First approached him when the software was a concept. Started building a workable prototype from there, based on the mockups. Paying for development out of own pocket. Got it 80% at some point.

42:05

Talked to 45 different people. Don’t take it personally. Take the feedback, but don’t give up. Totally doable to build a great business, don’t necessarily need funding. Professional investors have to pass on many many deals. Tenacity is key.

Not the final state of industry, suffer from a very garbage in garbage out.

Not a good way to collect data that business is run on. Discouraging to not immediately get support, clarity of vision is important. Seeing your own opportunity in your market and believing in it is really important.

47:31

Ideas are cheap, but execution is key. Built an 80% functional prototype already. The prototype built was a standalone web based email plan. Trying to get people to switch. Difference between Yeswares investors and the 43 people who based was that the investors weren't focusing on the final product, but on the potential of the

team who built the software from their vision. Investors – love what theyre doing

49:50

Huge pivot. First meeting in Google Offices of New York. 150 slides about products future, roadmap, etc. Three hours of point by point questions, why this, why that. At the end of it. Why don’t you take 30 days. Don’t write a code, just think about the product. Don’t let the momentum drive you over a cliff. Don’t waste the money given to you by bringing a product to market that you’re not 100% confident of. Sometimes you need to slow down to speed up. Don’t have to always worry about selling all the time.

Smart money is determined by the level of devotion that the partner is willing to give to your project. How much time and energy are they going to think about you.

1:15

First best answer is a yes. Second best answer is a quick no. Goes for customers, clients, partners, sponsors, employees, etc.

Last piece of advice for those with a great idea but are having some trouble starting, either financially.

If you believe in the struggle, set a date for your self for reassessment. Do everything in your power to get past that date.

The amount of time people spend throwing themselves against the walls of the venture capital community is disproportionately ineffective compared to getting more signed customers.

Would not wait for investors in any case.

We hope you enjoyed this cup, and learned more Matthew’s amazing persistency, as well as having gained some useful tips and advice for your startup.

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