{"id":40816,"date":"2020-05-05T07:53:31","date_gmt":"2020-05-05T07:53:31","guid":{"rendered":"http:\/\/icloud.pe\/blog\/?guid=ff0c0acc258b856805b326849c6db8d8"},"modified":"2020-05-05T07:53:31","modified_gmt":"2020-05-05T07:53:31","slug":"outreach-the-startup-that-came-back-from-the-brink","status":"publish","type":"post","link":"https:\/\/icloud.pe\/blog\/outreach-the-startup-that-came-back-from-the-brink\/","title":{"rendered":"Outreach: The startup that came back from the brink"},"content":{"rendered":"


\n Bobby Hellard<\/a><\/span>
\n <\/span><\/p>\n

\n
\n
5 May, 2020<\/span><\/div>\n<\/p><\/div>\n<\/div>\n

\n<\/a><\/p>\n

\n

By 2015, Manny Medina had reached a point where he felt the only way he could save his failing business was to sell all his office equipment. His company, Outreach, was struggling to find buyers for its <\/span>recruitment software<\/span><\/a> and after just one year of operation, it didn\u2019t have enough cash left to cover legal fees.\u00a0<\/span><\/p>\n

Out of desperation, Medina and his small team began tagging things on eBay, calculating how much they could get for their computers. They quickly realised the answer was \u201cnot much\u201d.<\/span><\/p>\n

\u201cIt was one of those moments where everybody is shaken and freaking out and not thinking rationally,\u201d Medina, who co-founded Outreach and remains the CEO, tells <\/span>Cloud Pro<\/em>. \u201cNobody wants to do it, but we\u2019re all thinking \u2018what? We fold and then go get <\/span>jobs at Microsoft<\/span><\/a>?\u2019 No one wants to do that. That\u2019s when we sat down and talked through giving it another shot.\u201d<\/span><\/p>\n

What happened next is the startup version of the phoenix from the flames \u2013 or <\/span>unicorn<\/span><\/a> from the flames, if you will \u2013 as Outreach moved to a new business model and, five years later, is worth over a billion dollars.<\/span><\/p>\n

The pivot<\/span><\/h2>\n

Originally Outreach was an <\/span>online recruitment business<\/span><\/a> using used technology to search the marketplace for IT and digital talent. While the tech side of it worked, according to Medina, both the sales and the marketing teams struggled to get the company going and within a year it was almost out of money.<\/span><\/p>\n

\u201cWe were about two months away from being out of cash,\u201d Medina explains. \u201cThe co-founders turned to each other and were like, \u2018we shouldn\u2019t be using tech to solve the marketing problem, we should be using tech to just drive more demand\u2019.\u00a0<\/span><\/p>\n

\u201cI have a background in sales, so I voted for using direct sales as a way to generate traffic. We decided if we drove 10 times more meetings per representative we could dig ourselves out of the problem.\u201d<\/span><\/p>\n

The company didn\u2019t have the resources to throw more people at the problem, however, and its three employees needed to sell as much as a team of twenty to bring in enough cash. To help, Medina and his team built an <\/span>AI engine<\/span><\/a> that could send out emails with personalised messages and then follow up on any response it got. Before long, they realised the automated call system was generating ten times more potential job interviews and pulling in a reply rate of almost 50% on cold emails.\u00a0<\/span><\/p>\n

\u201cThat was pretty unheard of at the time,\u201d Median explains. \u201cThe problem with that is we didn\u2019t have the capacity to follow up on all those meetings and actually close business. So I started talking to agency recruiters, telling them, \u2018look, I can sell you meetings instead of candidates\u2019.\u201d<\/span><\/p>\n

The agencies Medina reached out to were sceptical at first, questioning why he would do that, but also curious as to how he was able to generate so many? When he explained the <\/span>AI engine<\/span><\/a> and how it worked, no one was interested in paying for the meetings \u2013 they wanted the software.\u00a0<\/span><\/p>\n

Venture capitalists\u00a0\u00a0<\/span><\/h2>\n

The initial business model struggled to attract <\/span>investment<\/span><\/a>. Although Medina managed to source enough to get going, there was a lot of rejection from potential backers. Rajeev Batra, a venture capitalist from Mayfield, was one of those who weren\u2019t keen on the idea and suggested it wouldn\u2019t work based on his experience of the market \u2013 but he was left impressed by Medina.\u00a0<\/span><\/p>\n

Batra was even more impressed after Outreach pivoted, but by then, the company had grown profitable so quickly that Medina considered not raising capital at all. Batra was persistent, sensing that the team was onto something with lots of potential and eventually wore Medina down in August 2015.\u00a0<\/span><\/p>\n

\u201cI convinced Manny to accelerate the product roadmap and GTM of the company by capitalising it properly and partnering with us to go for it,\u201d Batra tells <\/span>IT Pro<\/span>. \u201cI felt they could build a platform company. We made a compelling offer to him and the company with the promise that we would do everything we can to help them succeed.\u201d<\/span><\/p>\n

For Batra, partnering with Outreach was one of the best, and luckiest, decisions he ever made. For Medina, getting rebuffed for the initial idea turned out to be a financial blessing in disguise.\u00a0<\/span><\/p>\n

\u201cIt could very well have been that if we were successful as the original company, we could have been like [hiring marketplace] Vettery, which was sold to [HR consultancy and hiring firm] Adecco for $100 million,\u201d Medina suggests. \u201cWe\u2019re now worth $1.1 billion (\u00a3883.6 million). Even if we had a good outcome, it would have been ten times lower than what it is right now. Life is perverse that way and now Rajeev thinks we should thank him for not previously investing.\u201d <\/span><\/p>\n

\u00a0<\/span> <\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

Bobby Hellard<\/p>\n

5 May, 2020 <\/p>\n

By 2015, Manny Medina had reached a point where he felt the only way he could save his failing business was to sell all his office equipment. His company, Outreach, was struggling to find buyers…<\/p>\n","protected":false},"author":403,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-40816","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/posts\/40816","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/users\/403"}],"replies":[{"embeddable":true,"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/comments?post=40816"}],"version-history":[{"count":1,"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/posts\/40816\/revisions"}],"predecessor-version":[{"id":40818,"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/posts\/40816\/revisions\/40818"}],"wp:attachment":[{"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/media?parent=40816"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/categories?post=40816"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/tags?post=40816"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}