by | Early, Marketing, Podcasts, SaaS Product Pricing, Sales, Sales
Ep. 380: Ryan Sandler is the Co-Founder and CEO @ Truework, the company that gives employees control over employment, income and other identity data. To date, Ryan has raised over $44M with Truework from the likes of Sequoia, Khosla, Menlo and from the founders of companies such as Plaid, Seatgeek, Mino Games and Checkr. Prior to founding Truework, Ryan spent 3 years as a Senior Product Manager @ LinkedIn.
In Today’s Episode We Discuss:
* How Ryan made his way from LinkedIn Product Manager to founding Sequoia backed Truework and changing the world of identity data.
* Why does Ryan believe it is such an advantage to sell into mid-market? Where do most people go wrong here? How can startups show credibility to mid-market when they are so small? How can founders use case studies and references to build social credibility early on?
* What have Ryan’s lessons been when it comes to pricing? How does Ryan think about and approach discounting? How does Ryan feel about pilot plans? What elements can founders negotiate on to get the best pricing?
* Why does Ryan believe SEO is the best-kept secret in SaaS? How has Ryan structured his content and marketing team as a result? How can one automate as much of the content creation process as possible? How long should one expect in terms of lead times to see returns on the SEO strategy?
If you would like to find out more about the show and the guests presented, you can follow us on Twitter here:
Jason Lemkin
SaaStr
Harry Stebbings
Ryan Sandler
Below, we’ve shared the transcript of Harry’s interview with Ryan.
Harry Stebbings:
We are back. Welcome to the Official SaaStr Podcast with me, Harry Stebbings. I’m diving straight into the show today, and I’m thrilled to be joined by Ryan Sandler, founder and CEO at Truework, the company that gives employees control over employment, income, and other identity data. To date, Ryan has raised over $44 million with Truework from the likes of Sequoia, Khosla, Menlo, and then also from the founders of companies such as Plaid, Seatgeek, Mino Games, and Checkr, to name a few. And also prior to founding Truework, Ryan spent three years as a senior product manager at LinkedIn.
Harry Stebbings:
That’s enough of these dreary British tones, so now I’m very excited to welcome Ryan Sandler, founder and CEO at Truework.
Harry Stebbings:
Ryan. It is so great to have you on the show today. I’ve heard so many good things from Delian, from Alex, from Keith, from Alfred. The list goes on. So, thank you so much for joining me.
Ryan Sandler:
Thanks so much for having me on.
Harry Stebbings:
Not at all. But context is always king, so tell me, how did you make your way into the world of SaaS, and how did you come to found Truework most recently?
Ryan Sandler:
So, I’ve always wanted to start a company. I started one in college, failed, and decided I’m going to go to LinkedIn and learn how to build real products. And so, I went to LinkedIn. I built a product called LinkedIn Salary, a competitor to Glassdoor. And then I left in 2017 to start Truework. I actually left without the exact idea that I wanted to start. I knew I wanted to start something in consumer utility or SaaS, something that people wanted to pay for and something that also uses large sets of data. I was doing a lot of data science at LinkedIn.
Ryan Sandler:
And I discovered the world of income verification, mostly by talking to customers, people in HR, at banks, and realized how large of a market this is. And more importantly, I became really passionate about the lack of privacy in the market in general. Essentially, every time you apply to a loan, an apartment, get a new job, a ton of sensitive information about you is being shared to a bunch of third parties, your income, your employment, your assets, your credit, your address history. And you don’t know if that information is accurate, where it’s going.
Ryan Sandler:
And starting with income and employment, Truework is putting that data behind consumers’ consent, giving consumers control, transparency into that data, and they have to give consent before it’s released to third parties. And we’re doing this by building a three-sided network between banks, what we call verifiers, the employers, and the employee or the applicant who’s actually applying to the transaction. And so, we’re really a B2B2C company where we sell a SaaS product to employers and to banks, which builds this network.
Harry Stebbings:
Totally get you. And it’s quite shocking just how available the data is and the levels of data that they provide to the third parties. So, yeah, I mean, it’s just astounding to me, and I think not many people realize quite the levels. But I do want to ask, you mentioned that the first company, I’m always struck. And sorry for going off schedule, but hey, fuck it, schedules are made to be broken. You said about it actually not working out, and I’m always questioning like, “Do we learn more from success or failure?” And I’m intrigued, what did you learn from that company not working?
Ryan Sandler:
Yeah. I was studying computer science, and I knew how to build a website, but I didn’t know how to build a website that people wanted. I think when you’re in college, you build things that you might want. You don’t really know what the market wants and also how big of a market that is. And that’s what I think was really missing and where you really can gain a lot by going to a great company and learning from the best.
Harry Stebbings:
Okay. So on that note, you went to LinkedIn. You spent three years there. What were the takeaways for you from that experience? And I guess, how did it impact how you think about running Truework today?
Ryan Sandler:
I really learned a lot, really a lot of foundational. And I think four major things that I learned and I keep with me today, A, I mentioned it before, but I learned how to build products and grow products that people actually want. How do you do research and understand truly if a user’s going to use something before you go and start building it? And then number two, how do you evaluate whether something is big enough? At LinkedIn, we always were only looking at products that can get to a hundred million or a billion in revenue. And it really grows your lens of, is this a big enough idea for me to go start a company or a product around? Third, it was how to actually go to market, how to do sales, marketing, and bring a product to life. And then the fourth and final I would say is how to be a great leader. I really learned a lot from folks like Jeff Weiner on how to practice compassionate management, and really, it’s taken with me in my day-to-day at Truework.
Harry Stebbings:
I’m too intrigued on that leadership element. How do you think about being the compassionate leader today that modern workforces require?
Ryan Sandler:
Yeah, I think to be a great manager, you’re going to have to deliver honest and sometimes negative feedback. But doing it in a really compassionate way and doing it a way that still gains respect from your team is really an art and science.
Harry Stebbings:
Yeah, no, it absolutely is. It’s a combination and a lot of art as well. I’m interested, you said there about the B2B2C component of the business. And that obviously means that you’ve got to start really with a more enterprise heavy sale. And I guess we’re in the midst of the rise of bottoms up and everyone having credit cards and access to purchasing power. And so if we think about scaling from zero to enterprise sales, how do you think about moving up market in a really methodical way?
Ryan Sandler:
Yeah. We always wanted to be a company that services both enterprises and SMBs. We think the biggest companies are built are able to service both, but where do you start is always a hard problem. And many start-ups will find that it’s really hard to just start in enterprise. And so, you have to create a wedge somewhere. Now, every company’s different, but for us, the pain point increases greatly by the size of the company. And so, we decided to start with mid-market on the HR side. And I think it’s something that people often overlook. People often want to go start at the smallest of SMBs and work their way up.
Ryan Sandler:
But what a really small, 10 person company, 50 person company, what they want is very different than an enterprise. So, what a mid-market company wants, a company with 500, 2,000 employees, is much more similar to what an enterprise wants. And the sales cycle is much faster. There may be less security requirements. You can actually close these quite large companies in the early days of your company. And so, I always suggest to people is, take a look at your customer base, of course, and your product, but if there’s demand in the mid-market and you think you can go and acquire customers, start there and then work your way up to the enterprise.
Harry Stebbings:
Can I ask, when you’re starting out and you’re a very small, maybe single digits in terms of employee number, company, what does it take to give them security that you are a trusted vendor and that you’ll be with them for the long run and that they can really kind of count on you as a start-up?
Ryan Sandler:
And that’s the hardest part. I mean, I remember first three months of the startup, we lost to the incumbent at a large public tech company, was the potential customer. And it was really devastating. We were like, “How did we possibly lose to this really old, crummy company?” But it’s because you don’t have those security requirements, and you don’t have the brand. And it’s just a reality. You can’t get bummed out about it. You have to go acquire your initial set of customers first before you go to those public tech companies.
Ryan Sandler:
And for us, some of the first customers are going to take a bet on you. You build a really strong relationship with them, get them really bought into the vision. And they’re willing to take a bit of a leap, know that you don’t have your security certs yet, but you have a really great security team and a great infrastructure, that they’re willing to take a bet and go with you and build your initial customer base. But it is absolutely one of the most challenging things. And it’s really building great relationships with those early customers that matters the most.
Harry Stebbings:
Speaking of them taking a bet on you, can I ask, in terms of that sales process, how much of conversing that sale is selling them on the vision, what you will be, what you will be able to provide to them, how the relationship will develop versus what we fundamentally have today as a product lineup?
Ryan Sandler:
It’s a bit of both. You can’t only sell a vision. The product has to add value today, but it’s in more of the extended functionalities. Some of the features that are missing is where you really sell the future, knowing that this is a really simple product today, but it still works. It still has value. So, I will say it’s a bit of both.
Harry Stebbings:
Can I ask, you mentioned some of the core elements that often are hurdles to start-ups selling into mid-market and enterprise, and you’re in the center of this, where do you think many other founders go wrong who start in selling to mid-market and enterprise?
Ryan Sandler:
Let’s just say, starting with enterprise can almost always just go really poorly because it takes time to get your security certifications and other foundations that you need to go to enterprise. But generally, even in the mid-market, I think some shortfalls people will find is they don’t understand how procurement is done at that company. They really need to do more discovery and understand the legal security, procurement process, who the decision makers are, who all the influencers are on the deal. And it can just be quite challenging if you’ve never done it before.
Harry Stebbings:
Can I ask, in terms of the product itself, product has to change for different segments of market, and so from a product perspective, what have been some of your biggest observations about how product requirements change when scaling or selling into enterprise and mid-market rather than the much smaller SMEs?
Ryan Sandler:
Yeah. So in enterprise in particular, you see a standard list of products and features that enterprises in many different industries want. And what’s been fascinating to us, we sell to both enterprise HR departments and enterprise banks, and these features are very similar. They want SSO sign-on, role-based access control, audit logs, detailed reporting and analytics, change management. Sometimes, they want you to expose a whole API just for them so they can do a lot of customization on their end. And so, what is good is that a lot of these features are pretty consistent amongst all enterprises.
Harry Stebbings:
Totally get you in terms of kind of the consistency. A challenge, and again, sorry for going off schedule, but change management is really tough, especially when they’ve got such ingrained systems. How do you think about change management, onboarding, and just ensuring a really effective transition?
Ryan Sandler:
Yeah, selling a product that is an add on or goes together with their existing tooling today is much, much easier than selling a rip and replace solution. And you hear that, of course, in many products. But that is one suggestion is I push founders to think, how can my product live with the tools that this company already uses rather than doing a much, much longer change management or the ripping out and replacing? And what you’ll find is over time, if the customer’s getting a ton of value from you, they will end up ripping and replacing their other tool. But the procurement process is much, much faster if it’s an add on.
Harry Stebbings:
Do you not worry from a budgetary perspective? Because I always worry that adding a new line on the budget, it’s a much harder sell. They’ve got to find that budget from elsewhere. Do you worry that if you’re an add on to the existing infrastructure, it’s fundamentally adding a line on the budget, which just places a more onerous kind of element on the sales side?
Ryan Sandler:
It’s a great point. It depends what type of product you’re selling. For us, even when it’s an add on, it’s reducing labor costs internally, and so it’s still additive and has good ROI, even if it’s an add on. But absolutely understand your point that you might have to struggle a bit to find that budget, if it’s an add on, and you might have to reduce price a little bit when it’s not a full rip and replace.
Harry Stebbings:
Yeah, no, I do get you there. Can I ask, in terms of finding that budget, pricing is just such a bear to get your arms around, especially in the early days. I mean, it never gets easier I don’t think, bluntly, but especially when you’re looking at it going, “How do I make this work and how do I not disincentivize usage the more that they use it?” So, how do you think and how did you approach pricing? And what’s been some things that worked for you?
Ryan Sandler:
Yeah. The first thing is start as high as you can. You hear that, and it’s easier said than done, but really, is so important. And I see so many people under pricing their product. And it can be hard, right, especially when you’re in the beginning, and you don’t have a lot of brand, and you’re coming up with a really high price. People can look at you like you’re crazy. But at the same time, I’ve never lost a deal because I quoted too high of a price. They’ll tell you that’s out of budget. You have the opportunity to negotiate lower. And so, there’s really not a lot of downside by starting really high. That’s the first thing I’ll say.
Harry Stebbings:
Do you not worry that you’ll burn a lead by suggesting way too high a price? So, say you suggest like 3X more than you normally would, and they’re like, “Whoa, Whoa, Whoa, Ryan, way too much. Sorry, this isn’t a solution for us.” Do you worry that you’ll burn a lead by going too high, and has that ever happened?
Ryan Sandler:
It depends where you are in the sales cycle. We try to have those conversations at least after the first or second call so that we already have established a relationship and they see the value of the product outside of just pricing. Really try to leave pricing towards the end or the last elements. And again, it depends on the market, but what we find, especially when we’re selling to our banking customers, is pricing can be more secondary. There’s just other value that they’re much more trying to get out of the product, like speed, support, SLAs. That pricing can be a bit secondary. And so, I think saving it for a little bit later in the sales conversation so that it doesn’t burn the lead is important, and you already have a relationship with them that you’re able to save the conversation if they do react really negatively to it.
Harry Stebbings:
I totally agree. I think one thing that helps people get over the line on pricing is also kind of case studies and seeing social validity from people around them in their market engaging. How have you guys approached case studies, and what are your thoughts and advice to other founders around them?
Ryan Sandler:
Yeah. Case studies, webinars, any way that you can have your customers speaking for you is incredibly powerful. And we utilize them quite frequently and try and get as many case studies as we can from customers. There’s definitely never too many that you can have. And in addition to case studies, you just want those customers to be references as well. Especially in enterprise, they might want to talk to other large enterprises you have on the platform in addition to the case study that you have. And so just keeping such a good rapport with those companies, especially with your customer is so important.
Harry Stebbings:
Totally with you. Can I ask, final thing on kind of [crosstalk 00:13:23]
Ryan Sandler:
Sure.
Harry Stebbings:
… as you sell into kind of enterprise and mid-market, and it’s structure of the sales team, what does that look like for you today? And how has it changed over time?
Ryan Sandler:
Yeah, our sales team is still super small. We’re an 80-person company and have 10 salespeople. And that’s grown from about five last year. We’ve always had the team really lean and try to have a lot of capacity per person and be a really lean team. We started building out, you can imagine, more enterprise reps as you go more up market like we’re doing in 2020, and it’s not only hiring reps on the enterprise side, but account managers, customer success, the support that comes around it is just as important as your account executives.
Harry Stebbings:
Can I ask, in terms of the reps when you’re selling to SMBs, it’s quite easy to tell in terms of payback periods who’s effective and who’s not and really kind of determine the quality from the not such high quality reps. It’s so much harder in enterprise and mid-market where the sales cycles are just much longer. How do you think about kind of sales rep productivity given the sales cycles being longer?
Ryan Sandler:
It’s hard, and we’re definitely still learning. It just takes more time to see that productivity. You can look at inputs along the way. You can look at pipeline generation. You can look at the speed that it’s moving between stages. But you’re right in that you’re not going to see that full sales cycle until maybe six months later because it just takes so much longer. But everyone is very aware of that, and you plan your year with that in mind.
Harry Stebbings:
Yeah, I totally agree. I think the planning is really important. In terms of kind of filling the funnel for the sales reps to go after though, you said before to me that SEO remains one of the best kept secrets of the SaaS industry. So, I love that, but you left me on a cliffhanger there. Why do you think it’s so underrated?
Ryan Sandler:
So, I can talk about SEO all day. And I’m really glad you asked. Organic growth from SEO, it’s completely free. It’s compounding, and it creates incredible barriers to entry. Trying to compete with someone that has massive and comprehensive SEO rank is very, very challenging. And I know because I did it at LinkedIn when we were competing against companies like Indeed and Glassdoor who are really, really good at it. And so, speaking of that barrier to entry, I’m only really willing to talk about our strategy now given that we’re three years in, and frankly, we have quite a lot barriers to entry because I think it can really be helpful to other entrepreneurs who may be overlooking SEO today.
Harry Stebbings:
What does the strategy look like then? I’m really intrigued.
Ryan Sandler:
Yeah, absolutely. So when you look at SEO strategy, you may be familiar. There are head terms and tail terms. So for, say, a G2 review site, a head term might be software reviews and a tail term might be Salesforce reviews or Slack reviews, right? They’re putting the company name plus reviews, and we call those tail terms.
Ryan Sandler:
And so when you start a company, you realize the head terms will take time to rank. There’s a lot of people ranking for software reviews, but the tail terms, which there might be thousands or tens of thousands of, is where the real meat is and where a lot of people overlook. And so for us, to give some detail, our head term is employment verification, you can imagine. And our tail terms are things like Facebook employment verification, DoorDash employment verification, when someone searches a specific company plus employment verification.
Ryan Sandler:
And you can imagine that we spun up tens of thousands of pages that rank now number one for every single company plus employment verification that you search for. And we actually got this ranking quite quickly because what we realized was that there’s a lot of people searching these terms, a lot of loan processors around the country, but nobody was ranking. And the incumbents didn’t really know what SEO was. And so within the first few months, we started ranking number one and getting hundreds of thousands of MAUs, which is quite a lot for a SaaS company.
Harry Stebbings:
That’s insane for SAS company. But can I ask, do you then just have to build a content engine? I mean, what does that content team look like to spin up so many pages so fast to rank as well you have done?
Ryan Sandler:
And I appreciate you asking because I think that’s one of the biggest misconceptions. We don’t even have a content. This was all automated. And so, you can imagine there’s ways you can pull content from around the web but also content provider of users on how to fill these pages. And that’s the key part of SEO that so many people get wrong, right? It’s not just throwing up a bunch of content, a bunch of landing pages. It’s creating a whole product strategy that’s predicated on SEO. And so when you look at how we built our product, it was really with SEO in mind rather than building a product and then trying to send traffic to it, if that makes sense.
Harry Stebbings:
Well, actually, can you go into that? What’s the difference between the two, and what does that look like in reality?
Ryan Sandler:
Yeah. So with the assumption that SEO will be a large funnel for you, essentially, a lot of our product strategy was, how do we scale and build a directory and tens of thousands of pages in a way that gets users in the first time using it again but really, how they come in is through SEO and only SEO? And so for us, or a G2 as I mentioned, or a Yelp or LinkedIn or Glassdoor, I mean, you’ll see tons of examples of this, that the whole website design information architecture really is centered around SEO rather than it being secondary, if that makes sense.
Harry Stebbings:
It totally does. No, it absolutely does. Can I ask, when so much of it is predicated around SEO and you have leads coming in through SEO, which is a little bit different to maybe more classical ABM if you’re looking at enterprise leads, how does that change the qualification and SDR process when kind of thinking about filtering for marketing to sales?
Ryan Sandler:
The good thing about people with SEO is that they have really high intent. Depends on the company, but for us, our funnel, you can imagine for banks is that they might come in through SEO, use a product in a self-service way, and then become an enterprise user. And so, it’s thinking about, what is the funnel once someone comes in through SEO, and what is the pathway for them to sign up for an enterprise account or get their managers or executives at their company to sign up for an enterprise account? And so, we have basically a lot of automation and filtering that we do to qualify people based on their intent of using the website, how they came in, and a bunch of other factors. But what it does is having such a large universe of leads and comprehensive understanding of the market, it just gives you such a good prioritization of who to go after.
Harry Stebbings:
How does it change the structure of your marketing team? Is it like an… Not an ancillary, obviously, it’s a core channel for you, but is it one of the dominant channels? Is it the dominant channel? How do you think about where it sits in your lead gen marketing stack and how the marketing team engages?
Ryan Sandler:
Yeah, it definitely is our greatest channel by far. And historically, it was built within the product and engineering team. We hired marketing recently the past year or so, and they’re doing a ton of work on SEO as well. But you can imagine some of the more product driven elements of it are living with engineering product.
Harry Stebbings:
Totally. No, I do see that. Absolutely. I do want to move that into my favorite round, which is it’s a quick fire round. So, I say a short statement, and then you give me your immediate thoughts. It’s 60 seconds or less per one. Are you ready to rock and roll?
Ryan Sandler:
Sure.
Harry Stebbings:
So tell me, start-ups are never easy. What’s the biggest challenge today with your role with Truework?
Ryan Sandler:
Prioritization, always. So many things to do. How do we choose what to do?
Harry Stebbings:
You said about hiring marketing for the first time within the last year. What’s the hardest role to hire for today do you think?
Ryan Sandler:
VP of Sales, finding the right person for your exact type of business and your segments, your audiences, is really challenging.
Harry Stebbings:
What angel investor has been most impactful to you and Truework?
Ryan Sandler:
I have a mentor named Eduardo Vivas who has been incredibly impactful and just a really great ear for me to talk to outside, one that thinks very differently than many VC investors. And that’s been really helpful for me.
Harry Stebbings:
What would you most like to change about the fundraising process?
Ryan Sandler:
I think it’s impossible, but if there was a way to really make it a blind auction, it’d be better for the entrepreneur, where VCs inevitably all talk to each other and it’s difficult to keep things close, but ways that you can really create a blind process and force conviction so that’s not investors following each other.
Harry Stebbings:
I don’t know what you mean. I don’t think investors follow each other at all, Ryan. [crosstalk 00:19:56] tell me, what moment in your life has maybe served as a transition point and changed the way that you think?
Ryan Sandler:
So during college one summer, I lived in rural Kenya doing electronic medical records, and it really just gave me a lot of perspective and helped teach me what’s important.
Harry Stebbings:
Final one, what do you know now that you wish you’d known when you started Truework?
Ryan Sandler:
Recruiting only gets harder. Hire more recruiters as early as possible.
Harry Stebbings:
Ryan, as I said, I heard so many great things from many different people before the show. Thank you so much for joining me today, and I can’t wait to see the times ahead scaling Truework.
Ryan Sandler:
Thank you so much, Harry. Great chatting.
Harry Stebbings:
Really some very exciting times ahead for Ryan and Truework. Such an open and nascent market for them to go after. And if you’d like to see more from us behind the scenes, you can on Instagram at hstebbings1996 with two Bs.
Harry Stebbings:
As always, I so appreciate all your support, and I can’t wait to bring you a fantastic episode with Okta CMO, Ryan.
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