It’s hard to get ahead just trying to stay afloat. But startups that weather the downturn with fewer employees and smaller budgets are finding ways to survive and thrive by relying on a 15-year-old variant of software adoption called “bottoms-up” SaaS.
The idea is that new software tools can find their way into a company by first ending up in the hands of employees. The model is particularly attractive in an economic downturn because it does not rely on a massive (expensive) sales force, but rather on growing interest. Yammer, a type of social network for businesses, started when it was founded in 2008 just before a major financial crisis.
Something similar is happening now, although the wave has been renamed “product-driven growth‘ or PLG, and one startup that fits that mold is MadKuduan eight year old Paris and New York based company behind a customer data platform product.
Founded by Sam Levan and Francis Brero who met at a since acquired Predictive Marketing Platform, they realized that more data science was needed to help sales reps sift through thousands of product users to determine who was ready to buy. According to the company, Levan was soon able to demonstrate that growth teams could quickly double their free-to-paid conversion rate, and he began developing proprietary technologies that would give other organizations “data science superpowers” to seek revenue opportunities to discover . This includes those with severely limited technical resources, which is what many startups are these days.
The decision seems to turn out for Levan. When asked about metrics in an interview with TechCrunch last week, he declined to share anything specific, but said MadKudu has increased its numbers “fivefold” over the past 12 months. He also mentioned many customers whose brands readers will recognize, including Dropbox, Cloudera, Amplitude, Plain, Unity, and Miro.
Levan also said the traction the company is seeing has recently led to a spate of term sheets leading to a new $18 million Series A round involving BGV, Alven, Techstars and numerous individual investors were involved. (The company has now raised a total of $27 million.)
Early-stage company Felicis was the deal lead, with general partner Niki Pezeshki implying he would have been lax Not to notice MadKudu. “I think within a week or two we had two separate board meetings where the go-to-market lead or the CRO said they had just implemented MadKudu and it made a really, really positive shift in their -to-market strategy, especially around PLG. And when you hear that from two different members of high-performing organizations, you definitely pay attention.”
As for using this fresh capital, for now, MadKudu will focus on lead scoring, which helps sales reps understand which leads are valuable and which ones would be a waste of time to pursue. Levan claims that by analyzing its customers’ product usage data to find patterns in their users’ activities, MadKudu now has the “largest PLG dataset in the world.”
Going forward, Levan said last week, the idea is to use his Series A round to triple his 35-strong team by next year — including bolstering customer success and support staff — and more time and to invest attention in improving the user’s experience. This includes spending time creating educational programs that can help market leaders better understand what PLG is all about and how to fully realize the potential of MadKudu’s products in particular.
“We already have the best technology out there,” Levan said, without sounding entirely obnoxious. Now he just wants more people to use it.
Pictured above, left to right, MadKudu founders Sam Levan and Francis Brero.