The dynamic between marketing and sales teams has been shifting for quite some time now. With this shift comes the expectation of transparency, open communication and alignment.
Shared goals between these two teams is key to establishing an effective revenue marketing strategy.
For start-ups, this alignment and partnership carriers even more weight. It’s not enough to simply have a product that sells well – start-ups need to figure out how to be profitable.
Jon Lee, CEO & Founder of DataJoy, is featured in our latest Growth Marketing Chat episode to share his unique experience of becoming an entrepreneur and the steps he has taken to optimize everything around what’s best for the company.
Tune in to learn a little about:
Looking to start your own company? Watch the full interview for a better understanding of what it takes to be both successful and profitable.
CAROLINE: Hi, welcome to Growth Marketing Chat. Today I'm here with Jon Lee, he's the CEO and Co-Founder of DataJoy. Jon, thank you so much for being with me today.
JON: Thanks for having me.
CAROLINE: I'm really excited to have you here. I love interviewing entrepreneurs. And so, my first question for you is how did you become an entrepreneur? What was your journey?
JON: Yeah, so I studied industrial engineering and operations research at Berkeley. And you're typically going into manufacturing engineering, but I took a little bit of a different tack. I went into investment banking for a couple of years, and then I worked in sales, operations, and business operations at Yahoo, where I led business operations for the international search team, helped restructure the team. And, you know, I'd read a book actually called, "Rich Dad, Poor Dad," which I'm sure a lot of your watchers or viewers have read before, and it just really changed my perspective around, you know, why do we work and how do we create systems to sort of work for us and get leveraged from other people and other capital to basically create value and do great things for the world.
And so, I actually started my entrepreneurial journey as sort of a side hustle, so to speak at Yahoo, and I was part of the search team and at the time in 2003, search was pretty new. And I just saw that, you know, there's a ton more money being spent there because of this new media that was sort of capturing people at the point of inspiration and you can pay on performance. And so basically, you know, the person that I hired to backfill a role when I went to a different role at Yahoo had been in another company that basically was, you know, buying and selling leads.
And so, it's was like: "Hey, why don't we do that as a side business?". And so, we started doing that and we were joking like, hey, if we make $30,000 a month in profit, we'll quit our jobs. And we basically started and actually got 30,000 in profit in the first two weeks. So we were actually pretty lucky to actually figure out an idea that actually paid for itself and allowed us to take the profits to fund the business. And so, we also saw an opportunity to build a real technology and real process behind it, to provide some real IP that was difficult to replicate and ultimately to deliver what our customers wanted, which was high volumes of a highly profitable and high intent leads via paid search.
And after that, I mean, I, I just loved it. I mean, as an entrepreneur, I think the most amazing thing is, you get to manifest your own destiny. You know, you've nobody to blame for your success or your failure other than yourself. And I think when you have sort of that gun to your head of like, I've got to make this successful, I got to make payroll, I've got to actualize the vision that, you know, I've promised to myself, to my investors, to my employees, it puts a lot of pressure on you to basically work hard and work smart. And when you work hard and you work smart, you actually make a lot of mistakes really fast, and that's how you learn the best.
And then you start bringing people around you that have more experience than you. And I just love that ability that I could wake up in the morning and effectively, you know, achieve my dreams based on, you know, what myself and the team would actually do. And that was super empowering and scary.
CAROLINE: Yeah, it is scary right? Because when you start, you have no guarantees at all that is gonna work.
JON: That's right. Yeah. Yeah. And I think that's the excitement and it kind of brings the best out of people, I think. Right. You have an objective. You're not sure if it's gonna work and you basically take the best prop way possible and you just face the dragon head on and you try to slay it every single day. And if you get it, you just fall down and you said, okay, what I learned from that? You get up and you do it again. And you know, it taught me a lot as an entrepreneur, not just around the happiness of being able to manifest my own destiny, but it also taught me a lot around, you know, how I think in the past working at a big company, there was so much emphasis placed on failure that you can't fail.
And as an entrepreneur, you sort of learn like actually failures, okay and that's part of the process, right? And for those who are not afraid to fail, they're actually gonna learn more and experience more and achieve more, in my opinion. And over time, what happens is you'll get more successes, you'll get more confident and then you start to believe, hey, I can put, do anything I put my mind to. And that's a really empowering feeling. And I hope everybody gets a chance to feel that.
CAROLINE: Yeah. Yeah. But you need to go through the hard time of getting back up. Right. Because I think as an entrepreneur, you rarely get it right from the first go right? And as you said, you're going to fail, and it takes a lot to be okay. To fail. Not once, not twice, but over and over again until you get it right. And get back up every single time.
JON: That's right. Yeah. Because you really don't have a choice. You have to get back up. You have no one to rely on except yourself and your team. And by the way, your team's relying on you, your investors are relying on you. Right.
CAROLINE: Right, right. Right. Well, thank you for sharing this with us. So now you are the CEO of DataJoy. So, this is your second company. Am I right?
JON: It's actually my fourth
CAROLINE: Your fourth company. Oh, wow. Okay. So, this is your fourth company. Okay. Can you tell us the story behind DataJoy and why you created it?
JON: Yeah, so I'm a pretty quantitative oriented guy. I like creating systems and processes that systematically optimize towards some objective function, right? So, whether it's, you know, making more money or it's building create games or increasing your velocity and win rate of customer interactions and sales, my first company was really around, you know, helping you get more profitable leads, right through paid search. Built a $47 million business in a couple of years, doing that, really using algorithms and mathematics to do it systematically and automatically. I sold that company then built a gaming company, which did AB testing of games to maximize fun and virality, and also in-game purchases and sold that to Zynga.
And then my third company was a company called topper. It's the number one CRM for Google. If you use Google suite. And that company is all about automatically getting data So you have the best data, so you can make data-driven decisions to maximize the effectiveness of your sales team. And so, I've always been passionate about using data to help answer questions towards some very clear goal that also helps you bring your team along with you. Right. You know, what are the leading indicators to achieving that objective and who's responsible for it and what can we do to systematically increase that over time? And so, I scaled my last company to about 250 people, you know, over 25 million in revenue in about four years. And what I found was that as I added more people and executives, I just got more data systems. Right.
And I was just being presented with a ton of analysis. And I just really couldn't make sense of just really basic things, which is like, where are we today? Where do we wanna go tomorrow? And how do I make sure that we're on track to go hit that goal? And so I just wanted a really simple way to be able to delineate what is that objective, right? In this case, it's grow revenue quickly, high quality revenue, right. And how do I understand what the leading indicators are in what every individual on the team plays in terms of effecting those leading indicators that would ultimately drive revenue and how do we systematically identify where's the lowest hanging fruit for us to go tackle such that if we optimize those individual areas over time, we would grow revenue much faster.
And so, I tried to solve this problem by building a dashboard like most people, you know, I wanted something that was connected to a database that was connected to our CRM and marketing automation. So, I could see the full funnel from marketing sales to success expansion, et cetera. And it was really hard to do it. It took like a year and a half. I had to hire four people, cost me about $2 million. And, you know, by the time I got it, it just wasn't what I was looking for. And the business had changed and we had to go back and retune it again. And it was just such a problem. And I just kept thinking to myself, like, why am I spending so many resources on serving internal customers like myself when I should really be deploying those resources towards helping my customers be more successful? And so, I thought, you know, so many companies have been successful like Salesforce, like Shopify, like Zoom, they've all been through this problem of like using data to grow predictably and profitably and repeatably, why are we reinventing the wheel every single time? Why does the company need to invest in the right person who understands the right data infrastructure architecture, and the right team to build that and have to struggle with understanding the business problems that the finance sales ops marketing team want to solve to grow revenue faster.
This has all been figured out before. So DataJoy is really this notion that we can provide you in a fraction of the time and a fraction of the cost, both the data infrastructure and the analyses. To answer the questions that the fastest growing and largest software companies have answered, to grow revenue, predictably, profitably, and repeatably. And so, our notion is to be able to give you an infrastructure with accurate data that pulls into all the different silos of marketing sales and success and product, to be able to give you a 360 view of your entire customer journey. So you can actually optimize for the company's objective, which is to grow high quality, high LTV revenue quickly. And what we saw was, what I saw was, very typical. Marketing only sees marketing data, sales, only sales, et cetera. And so, you saw people basically optimized for what they can measure. And so, marketing would send a bunch of MQLs, but they wouldn't necessarily convert really well in sales, and sales would win a bunch of deals, but those deals might not retain very well.
And so, how do you take your downstream information of successful customers that have high quality revenue, that retain well, that expand with you, they're well within your ICP, and then inform your upstream go-to-market motions in marketing and sales to make sure you're acquiring the best customers at the right level of investment, such that you maximize growth rate and you have a repeatable, profitable model as proxied by a metric, lock lifetime value divided by cost of acquisition or LTB to CAC. And so, that's effectively what we do at DataJoy. We give you this infrastructure, you can plug it in with your existing BI stack, if you have one, you can use a Tableau Looker RBI for visualization. We give you a bunch of out of the box reports. In the play that we've run with our first three customers, Samsara, HackerRank, and Zenoti, all fast-growing unicorns, is basically, "Hey, if you know who your best customer is and you know which channels drive those customers, you're going to increase your growth rate because those customers who have the highest win rates, have the highest ACV, have the highest retention, highest LTV, you're going to focus your team on the right opportunities".
Which is naturally gonna increase your win rate, your average sale size, reduce your sales cycle, et cetera. And then we help people optimize the funnel itself from marketing to sales to customer success, and really breaking down that process, understanding where the bottlenecks are, and being able to systematically AB test different sales programs and marketing programs, understand their impact and be able to create this experimentation culture of, "Let's try this, let's try that. And let's see what the effect is." Thereby decreasing the risk of trying something new. 'Cause you can catch it if it actually hurts your process or identifying something that's good and repeating that across other areas of the business. And then we do things like a lot of forecasting. So we use machine learning models to do more accurate forecasting, help you understand the gap between your sales roll up forecast versus our quantitative forecast. And we identify anomalies and help you explain why certain metrics are going awry, whether positive or negative.
CAROLINE: That's really cool. So, something you said in there about... optimizing for what's the best for the company. And I think you talked about revenue, but also about profitability. Sometimes what sells best might be something, but then if you don't return your clients, or if that also might not be the best product to sell. That may be the least profitable product to sell, but this sells best. Knowing and having all teams align on this data, have you seen... maybe you've seen this firsthand, I'm not sure, but have you seen the dynamic in between the teams change, in between marketing and sales and customer success by having all this data and all this alignment?
JON: Yeah! I mean there's basically... To build a successful company is pretty straightforward. You've gotta identify a big market, an urgent problem that people want to pay a lot of money for, understand the process to get their attention, and to ultimately get them to buy, and then most importantly actually deliver the solution. The biggest issue right now is these departments typically, I find, don't talk to each other. Again, because they only optimize for what they can measure. By bringing all this data together, you basically provide transparency in terms of, "Who are those best customers that grow with us over time?"
And so, it allows companies to, as opposed to focus on just one metric that doesn't take into account the issues downstream, like at sales, from a marketing standpoint to sales to success, you can actually focus on bringing in the customers that actually have, not just the highest win rates, like you said, but actually have the greatest opportunity to provide sustainable growing revenue, in your business. And so, it just opens up everyone's eyes in terms of it's like, "Okay, well, why am I optimizing for the short term, like number of MQLs? I want to make sure they close." Okay, well, now they close. Do they stick around? Do they grow? And then you start globally optimizing around the company's objectives versus the departmental objectives. And then it allows marketing to get closer to the product, sales to get closer to the product and the actual solution, you know, customer success, and it just puts everybody on the same page toward a common goal, which is like, "Hey, we're all owners in this business. We all believe in the mission. We want this business to grow. Okay. How do we define growth? All right. Now, what do I need to, now that I have the visibility of what truly is success versus just some indication or leading indicator of success that's not indicative, I can actually really change my behavior and activity to best support that."
CAROLINE: And I love this because sometimes immediate revenue is really, really different from long-term growth. And, when did you need your immediate revenue, that's the basics, but then... great companies really understand the value of customers that can grow with them and really go out of their way to identify them. I'm thinking about like HubSpot, for example, they have that startup partnership and they actually vet the startups based on how much do they think they are going to grow and how successful are they going to be to figure out, "Am I giving them this discount?" Because, in the end, it's probably going to be some of their largest clients, but having this vision, you can't really have this if you don't have the data, if you don't know, "Well, which kind of companies actually start paying $400 a month and then go up to $10,000 a month". How do you identify these patterns? And what you're telling me is that this is your mission at DataJoy to help you do this. So that's really, really cool.
JON: That's right. Yep! It's using your past successes to inform your future sales and marketing activities.
CAROLINE: Right! Well, I had questions I was going to ask you and we talked about different stuff, but I think it was really great. So... Thank you for participating. I think we covered a lot. I guess, to close out, I just want to ask you, what are some of the most valuable lessons you've learned... as an entrepreneur, or successful entrepreneur, in front of four companies?
JON: Yeah! I think as an entrepreneur, you're naturally attuned to taking control of your life, again, towards that idea of manifesting your destiny, and you have a very clear vision of what you want to accomplish. And oftentimes that personality leads towards micromanagement of your team. You want things done a certain way. "Someone's not doing it. I'll just do it myself." Because you're used to doing that when you're just one person, two people, three people. And I think what I learned the most is what are opportunities for me to really get... a massive change in a positive way in my company.
It’s really bringing in other experienced, creative people and giving the environment to let them make their own decisions and be successful. And that's actually really difficult to do as a control-freak entrepreneur, which most entrepreneurs are. And so, I would just encourage other entrepreneurs who's listening, to really just focus so much on just getting the best people on your team, being very clear what the goal is, how you measure it, and how you'll evaluate solutions, and be open to letting them do their thing and measuring that success, being very objective about it and then encouraging them to take risks. Because at the end of the day, if you want to build a big company you've got to take risks and you've got to innovate and you can't do it all by yourself. So, you need a great team. That's what I've learned.
CAROLINE: Do you catch yourself sometimes trying to micromanage and just being like. "No, no! I can't do this. This is not why you hired this person!"
JON: Yeah, I do, a lot and people don't like it. I've learned through my CEO coach and feedback. Sometimes you have to... But... I think the notion is you've got to think about the long-term. I think, overall, my approach has been, "well, let me figure out what my super powers are. Let me focus on those areas." And then hire and lead great people who can make up for my shortcomings and let them do their jobs.
CAROLINE: That's great advice! What a great way to end this session.
JON: Great! Well, thank you, Caroline.
CAROLINE: Yes! Thank you, Jon, so much.