Building trust through transparency with Metadata’s Gil Allouche
Building trust through transparency with Metadata’s Gil Allouche
Gil Allouche (00:01):
We had no chance trying to fight on a branding part. In fact, we didn't even try. They did such a good job, we were like, "We're just going to ride that wave, but we're going to show the market that what we built actually works, and then they're going to come to us." And that was our strategy
Peep Laja (00:17):
I'm Peep Laja, I don't do fluff, I don't do filler, I don't do emojis. What I do is study winners in B2B SaaS, because I want to know, how much is strategy, how much is luck, and how do they win? This week, Gil Allouche, founder and CEO at Metadata, a demand generation platform which automates and self-optimizes campaign experiments at scale. Since being founded in 2015, Metadata has been named one of the fastest growing private companies in the US, with a 420% three-year revenue increase. In this episode, we discuss how preexisting demand can drive growth in young companies. We look at how radical transparency can set you apart from competitors and build trust with customers. And we talk about the value of competing on innovation if you have the resources to do it. Let's get into it.
Peep Laja (01:08):
When you started Metadata, what was the opening that you saw in the market?
Gil Allouche (01:14):
The reason for starting Metadata was based on a personal experience. I'm a software engineer originally, I coded most of my life. I came to the US with a purpose of starting a company, but my ticket in was an MBA. And after I graduated, I needed to pay for it, so I worked in marketing. And I ended up spending seven, eight years in marketing. As you can tell, I'm no Don Draper, so when I started doing my marketing work, I realized I have a very different point of view on the way I built marketing. I have a quantitative background, a technical background, so I went straight to my comfort zone. And the way I did marketing was, I used a lot of data and I used a lot of technical experimentation in order to achieve my goals.
Gil Allouche (01:54):
After doing it for seven, eight years, I was successful at my job, I was always able to deliver a predictable pipeline for my sales counterpart. I noticed there's a group of technical marketers out there, many of them software engineers in their background, and all successful at their job. I realized there was a pattern here. And I basically had two choices from that point on, either I keep leveraging on that and I open a consultancy or an agency or maybe I just go into the CMO route, or I make myself a commodity. I went the other that way. Basically, I started Metadata with a goal of making the technical marketers a non-necessity and essentially creating a piece of software that will do all the technical, repetitive, quantifiable data task that otherwise a computer can do much faster. That was the goal.
Peep Laja (02:46):
So you spent some time building your MVP, you came to the market. Then what happened? Did it work right away? Did you have to make adjustments?
Gil Allouche (02:55):
Absolutely did not work. The first version was like smoke and mirrors. It was a nice UI, I put together a bunch of things. It was not that different than what I created while I was at pure marketing, but it was a good enough product to get prospects and investors excited. With that, we actually recreated the software three times. I created a first version, it didn't really work. Then I hired a team in Israel, but I didn't really have a founder there, so that didn't work either. Then we started creating it with another team. Thankfully, by that time, Olena and Emily joined the team. Olena is my VP of product and Emily's my VP of engineering. And they actually created a product that worked.
Gil Allouche (03:38):
That took us, I would say, something like three years. We did get many patents on the way. So we have five patents today and a large database of one and a half million professionals. But we had to put a lot of effort into building a truly differentiated technology. Because in sales and marketing, many times, the technologies are not a differentiator.
Peep Laja (04:06):
You can win through innovation or brand, preferably both. In fact, innovation is the most reliable way to quickly grow your market share. To formulate an effective innovation strategy, a company must know all its customers needs, which needs are unmet, and what segments of customers exist with different unmet needs. But in most companies, management can't agree on what a customer need even is. So to win on product innovation, you need to know those customer needs and which of them are unmet. If you manage to build an objectively better product, that's one hell of an advantage, but these are transient advantages. It's something Drift CEO, David Cancel put well in a preview episode of How to Win.
David Cancel (04:47):
I believe that there's these three cycles that markets go through. And that we're like in the third cycle when it comes to SaaS software. The first cycle was about pure invention. That was the early days of the commercial internet. And so your defensibility, back then we would have patents. We would basically be able to hide behind technology through patents or non patents, because just what we were doing was so difficult for other people to figure out, it was so much work that you could hide behind technology like a technology moat. So now, everyone knows how to do technology, so there's no moats around those things. The only moat left in the general sense is to build an affinity with your audience, like in the consumer world, and then have those people choose you for whatever reason over the competitor.
Peep Laja (05:39):
So it took three years to build it to a level that you were happy with. Meanwhile, were you making money or were you living off of VC money?
Gil Allouche (05:47):
A combination. We did make some money enough to survive because we were basically complimenting what the computer didn't do with humans. And so we hired people to everyday do what a computer would do. And every, every month we would take a percentage of those manual tasks that we would do and code it. We didn't really know what to build from day one. We had the concept, but then when we actually started selling and we started selling from day one, then we realized what actually works for the customer and what doesn't. And what worked, then we did it manually first and then brought it into the software, and we did it over and over and over for three years.
Peep Laja (06:30):
In SaaS, typically, the idea or the mantra is that whatever you build, if there's demand for it, they can and will copy you eventually. Most companies I see are taking one or two approaches, either they're investing in brand as their moat because they're going to get commoditized, or they're doubling down on innovation. So which route are you taking?
Gil Allouche (06:53):
I would say we're in the innovation part. The way we think about it, innovation is the huge, in two ways, our product is fundamentally different than all the other products out there. It's more like a real-time game or defense system than it is a marketing system. And the reason is, what we are trying to do is automate all the technical repetitive, mundane task that technical marketers and agencies will do for you. By the nature of it, there is an actual realtime engine that is live all the time that is setting up all of your campaigns, it's monitoring them, it's auditing them, it's changing them, it rips and changes then the creative and the budget, so on and so forth. In order to do that, we had to create a realtime engine.
Gil Allouche (07:33):
We also have this huge pillar in the company and in the product for experimentation. When I did marketing, there were two things that I did that made me successful. One, I had data. The data made sure that I don't spend money or time on the wrong company or the wrong person. So that gave me more money and more time to spend on the right company and the right person. The second part, I had no idea what was going to work. I did not have the intuition of like a grand marketer to make a bet on this particular campaign. I had no clue. So what I did is I basically experimented at scale.
Gil Allouche (08:06):
I put all the creatives, all the content, all the channels, all the audiences, all the campaign types that I thought are possible and are likely to succeed and I let it run. And so when we have new customer, they sometimes have to get used to it. They're so accustomed to log into a channel and spend 45 minutes just to have one campaign up and running. And suddenly, with Metadata, they drop the entire marketing mix and in one hour, they can set up 500 campaigns. It's a very different methodology to achieve the same goal, and that is fundamentally very different.
Gil Allouche (08:40):
We have patents, all the patents are not going to protect you, but keep innovating in such a manner is absolutely going to be a moat for you. And in order to continue that, we have a full team, actually, that is solely aimed towards innovation. They run experiments. Many of them are terrible experiments that will never pan out, but one out of five suddenly becomes a huge feature that is completely changing the game. We're only now starting to invest in brand, but it's only after we proved our value. We were absolutely the underdog. We raised about one-20th, so about 5%, of what our perceived competition did.
Gil Allouche (09:20):
And so we had no chance trying to fight on the branding part. In fact, we didn't even try. They did such a good job, we were just going to ride that wave, but we're going to show the market that what we build actually works. Others can sell the story of the promise, and then people are either going to believe the story and try it and it doesn't work and then they look for us, or they're all going to look for alternatives to begin with and then they're going to come to us. And that was our strategy.
Peep Laja (09:50):
Pay attention to what he said, they chose a big market to enter. They let all the bigger competitors to the hard work of customer education and category creation, what is ABM? What do you use it for? And how? Meanwhile, they just kept focusing on building an objectively better product. Yeah, it took them three years. But now, during the market full of savvy, educated buyers comparing alternatives, they often come out at the top. This is a great example of a clever strategy with clear strategic trade-offs. How was the market going to find out that your product actually works?
Gil Allouche (10:28):
We relied solely on customer word of mouth and later reviews. So the first and biggest investment I did in marketing was a G2 Crowd. If you're familiar with them, they're like the Yelp of SaaS. So our G2 Crowd has one of the most reviews and very compelling reviews. These are all customer generated. And that was our strategy.
Peep Laja (10:53):
Did you incentivize the reviews, meaning like give them credit or Amazon gift cards?
Gil Allouche (10:59):
Yeah. G2 gives you, when you sign up, they'll give you like a $500 credit for gift cards. So if you put a review, it doesn't matter what review, whether it's good or bad, you'll get the gift card. So we did that.
Peep Laja (11:12):
So right now, you have about 200 reviews in there. So are you making the claim that having 200 reviews in G2 is enough to drive sales?
Gil Allouche (11:21):
Absolutely. Especially because our technology operationalizes data from G2, so many companies may just have their reviews out there... Many companies won't invest in their reviews at all. We absolutely invested a lot in having a good review page, but then we also paid G2 for the data, the buyer intent data, because to your point, how do they even know that we exist? What if they don't go to G2? Or what if they go and look at a competitor? So we bought that data. And what we would do is, we would send emails and advertise to companies who are looking at our category, even if it's not on us.
Gil Allouche (12:02):
And we won't even tell them like, "Go buy Metadata." We'll just tell them, "Come check the top three solutions for this category." And then inevitably, because they want to see analysis, the analysis will be provided by us. Although it's objective data, we would be the one paying and putting it out there. Then they will know about our brand and they'll at least consider us as one of the options. And then it's up to us to prove to them that our solution works.
Peep Laja (12:28):
So the category that you're in, is that ABM software?
Gil Allouche (12:32):
That's how it started. So account based marketing is a methodology that is very strongly marketed and advertised, and we rolled that way. It's not exactly what we do, but it's close enough. And so as a young company, we didn't want to reinvent the wheel, not yet, we wanted to write something that is already educated and become the best at it. Our focus, and focus is the most important thing for a startup, our focus was to build, not the best looking, but the engine that works the most, the one that actually gets you the returning in investment. It's extremely clear you put $1,000 here and you get $10,000 on the other end, that's what you to do, and that was our way to win for the first few years.
Peep Laja (13:20):
Preexisting demand is one of the biggest growth drivers for B2B companies. When you have a large market already seeking out what you sell, it's a much easier life, you don't need to spend as much on customer education. But, existing demand comes with established competition. Some markets like email marketing and marketing automation are huge enough where even near identical companies can coexist and make a ton of money. Of course, the top two in any category make the most. If you're in a crowded space and you're not among the top two, you need to focus on differentiation and why the customer would choose you.
Peep Laja (13:57):
Once you've identified your key differentiator, double down on it, optimize your machine to deliver on that promise. Are you faster? Make it 10X faster? Are you cheaper? Go way cheaper, make it all about cheaper. Are you better for some use cases? Make it obviously demonstrably better than anything else out there. So the ABM category, of course, is very competitive. Some pretty well known brands in there, your Demandbase or Terminus, we've got 6sense. And a lot of SaaS companies struggle with differentiation. In the end, every tool becomes basically the same, very similar. Everybody has every feature.
Peep Laja (14:37):
What is your view on the competitive strategy on these top competitors as well as smaller ones? How are you going to remain different?
Gil Allouche (14:44):
I couldn't agree more. It's a shit show, especially in marketing technology, there's like 8,000 companies out there. It's like a big graveyard, too, vast majority of the companies, they die, they disappear, they get acquired. We said we're going to be different in a few ways. Pricing is a nice example. Most of the marketing technology companies, you go into their website, they may have a pricing menu, and guess what? You click on their pricing, there are no numbers there.
Peep Laja (15:10):
You get a demo.
Gil Allouche (15:11):
You get a demo enterprise, talk to a salesperson. We said, we're going to have, it's not going to be expensive, we're not going to cannibalize on sales, but we're actually going to put the pricing out there. That level of transparency, we apply to many other aspect of the business. So our way to differentiate is by telling people exactly what we do, and at the end of the day, forget about the technology, forget about all the bells and whistles, what are you going to get? And what we tell our customers is that with Metadata, there is no sophisticated attribution or calculations that you have to do in order to realize your return on investment.
Gil Allouche (15:47):
If in sales force, you put in Metadata $10,000 hours and you don't get at least, I don't know, 50 and 100,000, some of our customers get like 20 to ratios, one to 20, then don't renew. Within the G2, there are many categories, ROI is the one that we're always at the top significantly, like two to 3X higher. It's the toughest one, but we feel so confident in our technology that we will go and promise that, and if we deliver, we win the market because it's the toughest thing to prove.
Peep Laja (16:17):
So you have a great product, people use it, they get results, they're happy, you are investing in reviews. What else are you doing to grow more customers, increase your market share?
Gil Allouche (16:29):
Well, another wonderful thing that happened is that some of our customers actually became investors, and some of our customers joined us. We're a marketing company that caters as marketers. And so, because we're a no-bullshit, true meet kind of company, many saw that about us and joined us. And one of our ways of growing is continuing that trend. And on all defaults in our marketing team, they have lots of street cred in the B2B marketing world. And so we try to release constant content, very high-value content, not just the one that will make us look good, but very transparent content.
Gil Allouche (17:03):
For example, we released a post, Why Not to Buy Metadata. Truly if you read this, you should not be buying us, you should be doing something else. That content is very real, or every time we go through a process, like we did our first conference, we released the entire playbook of how we build this conference. The way Jason, our VP of marketing does demand. He released the actual spreadsheets that we use month to month to plan our demand and to show our way for our marketing. So when you show the way you do work, when we send an email, it has interesting details about you, we'll tell you all the details we know about you and how we got there.
Gil Allouche (17:44):
Many times we win because of that because marketers see that transparency and they understand these folks are doing the world, but they're also showing how they did it. And because we sell to marketers, it's a win-win because they want to do the same.
Peep Laja (17:56):
Leading with transparency gains trust with customers, it can be a way to stand out and differentiate. What if you ran a radically transparent company, livestreamed internal meetings, made all internal die documents and the like public, nobody's that brave, but you'd have no competition, that's for sure. In his book, Bigger Than This Fabian Geyrhalter discusses eight brand traits of successful brands, including transparency.
Fabian Geyrhalter (18:24):
Transparency. Oh boy, trust, so important. I feel like our trust is broken every hour on the hour. It's absolutely crazy. If you are a startup and you can lead with transparency, oh boy, it's amazing how quickly you can gain traction, but you have to actually be who you pretend you are, you can't fake it. While if you're bold enough and if you can pull it off and if you can say, "I'm going to lead with transparency 100%," you don't even have to do anything yet, you just say it, and this is who you're going to be. And you are going to do that. You have to 100% commit to it fully.
Fabian Geyrhalter (19:03):
If you're a startup entering a space and you say, "I'm the one that's 100% leading with transparency," people are going to prefer you. I'm 100% certain of that. People ache for it.
Peep Laja (19:15):
So transparency as a cornerstone or a value, I guess, in your marketing organization, how did you come to that decision?
Gil Allouche (19:24):
I think many times for better and worse, because sometimes there's some bad things that you bring, it comes from a personal experience. So I personally hated going to website and not having price, it feels like a scam, like a beta switch. And then it's not just my personal experience, I would attract similar culture, similar people to the company. And they would also have the same point of view about this. They would also say like, "Yeah, what is this BS about pricing? Let's make pricing transparent. Let's share everything about our process."
Gil Allouche (19:52):
"Let's share struggles like the political problem sometimes between a CEO and VP of marketing, the VP of marketing and VP of sale. Let's talk about those things and get them all there in a transparent, in real way and it'll resonate. People are looking for that because they experience life in a similar way. To us, we don't have to put the corporate image or the less offending version of it. There's no need for that.
Peep Laja (20:12):
You mentioned that you didn't start focusing on brand and marketing until later because your competitors were better funded and so on. Why did you think that the timing is finally right? Was it about resources or how did you make the decision?
Gil Allouche (20:28):
For many reasons. First of all, I have no idea how to do it, zero knowledge. So I had to wait until there is a good team of marketers who actually have a clue how to do it. So that was the first one. Second one also, we were poor, super poor before, which is also was good because it made us actually be on the path for profitability. So we were able to manage our economics in a very sustainable way, so having more resources. And three, to be honest, we didn't really know. We tackled what we perceived to be the biggest problem, the biggest pain for a VP of marketing or a VP of demand gen in a B2B company.
Gil Allouche (21:03):
We tackled that first, but that's just one part. Over time we realized we know what to build, we know what to bring to the market. Once we matured and once we got the confidence and believe that we can deliver it, and we saw we have like 160 customers, 170 customers at this point who see the success, then we said, "Okay, now we're ready to make a stake in the ground and say, "This is us."
Peep Laja (21:27):
I believe that a strong brand is your best, most sustainable long-term asset in a world where everyone has the same features and capabilities, the brand can be your strongest mode. Every company can be a brand, and brand is not your logo, it's not what you say you are, it's what they say you are. It's the story someone attaches to your product. What does it say about me when I buy you? I'm reminded of the story John Zeissler told before everyone used a Mac, it had a rebellious nest to the brand. Once he boarded a plane and pulled out his MacBook, his next seat neighbor glanced at him and asked, "A Mac guy?"
Peep Laja (22:06):
The neighbor painted a picture in his head about Jonah just based on the product he was using. That is the power of a brand. How people often choose one or another brand, it's based on affiliation, which identity do I buy into? You need to be clear what you stand for, what your DNA is about, but you can cultivate that. Here's Shann Biglione, head of product at Kelp with one famous example.
Shann Biglione (22:31):
I don't think you necessarily buy Nike because they make the best shoes, I think you buy Nike because you buy into maybe the spirit of what they're bringing with Colin Kaepernick for instance. I think you buy into Nike because you believe the expression that this brand has, how it supports, at least makes sense to you. Yet you're still buying a shoe product. It's probably not going to make you jump faster or further, there'll be moments for you to try to be convinced that you're still selecting the right shoe, but at the end of the day, there is a reason why athlete can go and win things with either Adidas or Nike. They don't need one or the other.
Shann Biglione (23:01):
How it makes you intentionally and subconsciously react to that company is a big role of the brand and how it drives your and reasonable desire to spend more money than you should on a product that it's not so different than you believe it is, is ultimately what brand does a lot of work on.
Peep Laja (23:19):
What have been some of your strategic decisions or choices that you have made, whether it's related to sales and marketing or product that didn't pan out, that failed?
Gil Allouche (23:30):
Oh man, most of them. For example in the beginning, I put a lot more efforts into scraping and crawling and trying to create our own data from scratch instead of partnering with the dozens of data sources that are out there and trying to combine them into one graph. That's one bet that was completely mistaken. I probably spent six months trying to hire senior sales talent too early before we had product market fit, colossal failure, absolutely. Not waiting a little bit between getting investment and selling. I wanted to continue the momentum, but truly, it was very hard because the product was not mature, there was no product market fit.
Gil Allouche (24:14):
Selling to anyone. In the first days, I literally sold two people in a garage for $100, no thought behind economics of it, B2C companies, B2B companies large, small, what have you, have money, I'll take it. Those are not very sophisticated decisions that I had to go through, make the mistake, fail, learn from.
Peep Laja (24:39):
I see this all too often, companies are selling to everyone. I get it, it's hard to say no to money. However, if your company's targeting all revenues indiscriminately, it's very difficult to innovate in customer-valued high speed. When anyone could be a customer, it is difficult to decide whom to target and what those folks actually want. The result is an offering that is not compelling to anybody really, and an unfocused sales force. You need a clear strategy to overcome this. Tamara Grominsky, chief strategy officer at Unbounce explain the importance of niching down in the previous episode of How to Win.
Tamara Grominsky (25:17):
#Honestly, the first thing we did was recognize that we had become a bit of a catch-all tool, so we were everything to everyone. And we realized that in order to grow at the rate that we wanted to grow, we needed to choose a bit of a specialization or a bit of a nation. So the first thing we did was really look at our customer segmentation and ask ourselves, who are our best customers? What is the target market that we want to win in? And then how can we start to fortify that market? And we said, we believe that the small business industry needs help. The tech technology that is emerging around us, there's optimization tools, there's building tools, there's now AI and machine learning.
Tamara Grominsky (25:54):
All of them were priced out of the small business market, meaning it was way too expensive for them to get into game or required things that small businesses didn't have. So there's some really great optimization tools, but they require you to have 100,000 visitors to your landing page, not 500, or they require you to have so many different variants that no small business has an enough time to actually build. And we started to see some options that emerged.
Peep Laja (26:22):
How are you defining your target audience or your ICP today?
Gil Allouche (26:26):
We're constantly looking into the ICP, there is a lot of demand for what we do today. We truly get hundreds of inbound demo requests every month. So we have a lot of demand coming in. Today, we analyze the ideal custom profile not by who do we sell to or who do we sell to even a big deal, but today we analyze the ICP by who do we sell to that within three, four, five months they triple their subscription with us. Because we're early, we're still in the early adopter stage. So every customer that we bring in, we want their experience to be phenomenal, the match to be perfect. And so we recently did the analysis based on net retention rates and expansions, and we've correlated those attributes, and then we brought it back all the way to the marketing, to the SDR and to the sales.
Gil Allouche (27:14):
And sometimes we'll get in trouble, but we will tell you, if it's not a good fit, if we don't think it's a good fit because of the technology you have, the stage that you are, the budget, the size, what have you, we'll tell you like, "This will probably not work. Or if it'll work, it'll be like mediocre. There is better ways to do it."
Peep Laja (27:31):
What are some of the things that you're betting on for the future to hit your next milestone?
Gil Allouche (27:37):
I'm definitely betting that marketing is going to become more and more and more digital and that people are going to want to do a lot less technical, repetitive, mundane task. The whole heroism around being the technical person who is doing everything with seven open Google spreadsheet and monitors, that's going away. We're also betting that they're going to be work gardens around every media companies like Facebook, and Google, and Apple, and TikTok. All of those companies are building the all work gardens and you're going to have to work with them individual. The whole programmatic, cookies-based digital advertising is becoming tougher and tougher to do.
Gil Allouche (28:20):
And that was something that we bet on from the beginning. And people are going to spend a lot more time online. And as long as you are targeting the right person, it doesn't matter where you'll find them., it doesn't matter if you'll find them on TikTok, Pinterest, Cora, or Reddit, it's a good idea.
Peep Laja (28:42):
So, what are the three key strategies Metadata leaned into in order to succeed? One, they started out in a market with strong preexisting demand, focused on becoming the best.
Gil Allouche (28:54):
The Coinbase marketing is a methodology that is very strongly marketed and advertised, and we've rolled that way. It's not exactly what we do, but it's close enough. And so as a young company, we didn't want to reinvent the wheel, not yet, we wanted to write something that is already educated and become the best at it.
Peep Laja (29:17):
Two, they made innovation and experimentation non-negotiable pillars of both their company and product.
Gil Allouche (29:24):
We have a full team actually that is solely aimed towards innovation. They run experiments. Many of them are terrible experiments that never pan out, but one out of five suddenly becomes a huge, huge feature that is completely changing the game.
Peep Laja (29:40):
Three, they differentiated by prioritizing transparency.
Gil Allouche (29:43):
I personally hated going to website and not having price, it feels like a scam, like a beta switch. And then it's not just my personal experience, I would attract similar culture, similar people to the company, and they would also say like, "What is this BS about pricing? Let's make pricing transparent. Let's share everything about our process. Let's share struggles and it'll resonate."
Peep Laja (30:04):
One last takeaway from Gil.
Gil Allouche (30:06):
Our focus, and focus is the most important thing for a startup. Our focus was to build not the best looking, but the engine towards the most, the one that actually gets you the return on investment, extremely clear. You put $1,000 here and you get $10,000 on the other end, that's what we wanted to do, and that was our way to win for the first few years.
Peep Laja (30:26):
That's how you win. I'm Peep Laja. For more tips on how to win, follow me on LinkedIn or Twitter. Thanks for listening.
