SaaS Scaling Secrets
The SaaS Scaling Secrets podcast reveals the strategies and insights behind scaling B2B SaaS companies to new heights. Dan Balcauski, founder of Product Tranquility, leads conversations with successful SaaS CEOs, exploring their challenges, triumphs, and the secrets that propelled their businesses to the next level.
SaaS Scaling Secrets
How Tech Giants are Causing a Marketing Data Drought with Pete Caputa, CEO of Databox
Pete Caputa, CEO of Databox, shares invaluable wisdom on marketing measurement, reseller programs, social media engagement, and the power of data benchmarking. Throughout the episode, Pete provides a wealth of knowledge on leveraging measurement systems to track marketing effectiveness, the challenges in the SaaS industry, and the importance of engaging customers and partners in marketing processes.
Guest Bio
Pete Caputa, CEO of Databox, is a seasoned veteran in the SaaS world and has worked with hundreds of businesses to drive measurable ROI. He's been an advisor to companies like Drift and Pandadoc and led a mastermind group for marketing agency owners for nearly 17 years. Before Databox, Pete was a VP of Sales at HubSpot, where he managed a 130-person sales team and built their reseller sales channel from the ground up.
Guest Links
Connect with Pete on LinkedIn
Databox.com
Hello, and welcome to SaaS Scaling Secrets, the podcast that dives into the trenches with the leaders of the best scale up B2B SaaS companies. I'm your host, Dan Balcauski, founder of Product Tranquility. Today, I'm excited to chat with Pete Caputa, the CEO of Databox. Pete is a seasoned veteran in the SaaS world has worked with hundreds of businesses to drive measurable ROI. He's been an advisor to companies like Drift and Panadoc and led a mastermind group for marketing agency owners for nearly 17 years. Before DataBox, Pete was a VP of Sales at HubSpot, where he managed a 130 person sales team and built a reseller sales channel from the ground up. Get ready as we unpack Pete's wealth of experience and explore his unique approach to sales and marketing and how he applies these insights to scale DataBox. Let's dive in. Welcome Pete to SaaS Scaling Secrets.
Pete Caputa:Thanks, Dan. That was probably the best intro anyone's ever given on me. So thank you. And, it's funny to hear me being referred to as a veteran because it feels like just yesterday, like I started my first SaaS business, but that was, 25 years ago. So, so yeah, I guess I am one of the old guard these days.
Dan Balcauski:Yeah, I was talking to somebody literally yesterday and I was saying like old school SaaS and I was like, well, that's a weird thing to say, cause it's only been around for 15 years. So, it doesn't take long be a SaaS person in this venue. Well, Pete, I, obviously I gave you a little bit of an intro there, but for folks who are maybe not familiar with you and your work, can you briefly just introduce yourself?
Pete Caputa:Oh, sure. yeah, so I'm currently the CEO of Databox, been here for almost seven years. I ended up joining the company as they did a pivot, in 2017, and we've scaled that business to just under 8 million ARR, largely through cashflow. We had a bit of investment in the beginning. but, but really trying to operate pretty lean, before operating profitably was, was either, it was mandated by the economy or became cool, like we were, we've been doing it for a while now. And so we're reinvesting in growth, like, really put a lot of effort into product innovation with large product engineering team, and customer support and customer service and, really just, trying to build the business 1 block at a time.
Dan Balcauski:I would imagine that Peter Drucker rolling over in his grave, understanding that profitability just became cool.
Pete Caputa:yeah, in SaaS it wasn't cool for
Dan Balcauski:wasn't It wasn't cool
Pete Caputa:It's still, there's still,still, I think people arein a hangover phase maybe of like, oh, we could go raise, on a 10x multiple and I'll be millionaires after our Series A, right? Like, but that's just, that's old, that doesn't happen unless you're really, unless you built something really special.
Dan Balcauski:Well, Pete, you didn't always start as a SaaS veteran. I imagine most people have a moment in their lives. I call it your superhero transformation moment. What's the moment for you where the, I'm Peter Parker, a bit by a radioactive spider, go to sleep, wake up, and everything is different.
Pete Caputa:Oh, interesting. Well, so I guess we could go back to the, I have an engineering degree. I studied chemical engineering in school, outer school, ended up doing engineering for like six years at a really big company. But I got an opportunity to like learn how to code there, work on a handful of different projects from robotics to, building e commerce websites in 2000, 1999, 2000. So, so like really early stuff. and then, I was early twenties, mostly just hanging out with friends. I did a lot of skiing and basically, planned this big ski trip with friends and friends of friends, like friends and their friends and stuff. And I realized there was no software to manage that. And so I started my first software company in 2000 with a bunch of buddies. We coded nights and weekends when we all had jobs. And to me, that was like, What I, when I realized that the internet really enabled a company to go to market at a really, in a really cost effective way because you can build networks online and that was probably my eureka moment when I'm like screw engineering, I'm going to go, you're going to scale up this business, tried to do that for a while. Ended up making a living for five, six years doing it, did a lot of events, help people promote their events through our software, and then ended up meeting, through a series of circumstances, ended up meeting the founders of HubSpot and joining as an early HubSpot employee and, in the sales work there. So, so I guess my Eureka moment was like, In my 20s, realizing that the internet was, provided almost infinite scale for going to market.
Dan Balcauski:That's fascinating. And so that was obviously landed in a very good space at HubSpot. And I was curious because you're obviously wicked smart with a chemical engineering background. And I was like, well, how does a guy with such a, such talent end up in sales? But, obviously, you landed at a really good company. it helps, steer them, to success. What did you learn about what the difference is between a good sales organization and a great sales organization? From your time at HubSpot or beyond.
Pete Caputa:I would say and the quality of the selling is what differentiates a good sales org from a poor one. Of course, there's lots of sales management things that need to happen, order to hire and train and, set quotas and, enable the sales team, all that stuff. But I think really it's, you put good sales people into an environment and give them the basics and they can figure it out. It's kind of what we did early on at HubSpot. I was the fourth sales rep. the three sales reps before me were like different profiles. One. Guy had been selling stuff, including running his own software business for like 30 some years. another one, she ran a sales, a small sales org and another software company. Another one sold, digital ads stuff. and then there was me who had built and built a software company and sold, been the primary salesperson in that software company. And so, I think. Hiring different profiles, but people who have had some experiences and training in good sales fundamentals really enabled us a good start. And then as we grew the sales, or many of the early sales people became sales managers and sales directors and, well, sales VPs as we've grew to, hundreds of people. but I think the fact that we all sold. And had good sales fundamentals allowed us to become, or, we were already good sales coaches, which really helped to build, strong selling, strong consultative selling culture. And I think the most important thing to get right.
Dan Balcauski:So I heard a couple things. So I think the complimentary skill sets and sort of the initial team, you weren't all sort of cookie cutter. You all brought your own skill sets to the table. And then you were able, also, I don't know that it's always successful to make that transition from player to coach. It can be difficult. Michael Jordan, I don't know if best coach for sure, but it seems like you guys got lucky there and were able to institute some good process and really scale that organization, quite intensely. When you were at HubSpot, I know you were in charge of reseller sales, which is a bit of a mystery I find with a lot of SaaS leaders. Like they don't really understand what to do with partners or resellers. What lessons did you learn about the nuances of reseller sales during your time?
Pete Caputa:you are absolutely right. Most of them, like, fail to launch a reseller program, like, three times, and then either give up or get it right. I think most SaaS companies, like, they build a cool SaaS product, they sell it to 10, 100, 1, 000 customers, whatever. And then the, they think, Oh, well, we can be more efficient if we get other people to sell it. And why wouldn't they want to sell it? Because other people are buying it. Our customers are buying it. and there's so much more to it than that. and the thing that really worked for us at HubSpot and what I've applied here at DataBox is that we didn't think about how do we recruit someone to go out there and market and sell our product. What we did is we identified a group of companies. who needed help themselves in improving their business, and we could help them do that. and as we grew, we would create opportunities for them. and so, very specifically, what I mean is that we worked with marketing agencies, and at the time, they were struggling with, Cashflow, because most of the work they were doing was project based, small projects. So they'd do a website for a thousand bucks. They'd do email marketing set up for, 250 bucks. they do an SEO project that lasts six months because they're not really creating much content and they're just sending reports at the end of the month and the client eventually catches on. And so there were all these Agencies out there really struggling to grow because their cashflow is so inconsistent. They therefore couldn't invest in their own marketing. They couldn't really hire ahead. and what we realized that we could teach them how to sell a set of services that, they would deliver on a monthly basis that would help their clients grow traffic leads and sales pretty reliably. And so we taught these agencies to like do blogging and later social media. We taught them how to build offers, and landing pages. We taught them how to do email marketing to nurture lists. And we taught them how to connect all that marketing work directly to leads that the sales team would follow up with and track down that down to close. And so they could come to their client and say, we did all these things over the last six months, and here's the ROI you're getting from it, which would then. Encourage the client to renew again and keep engaging with them and keep, working with them on a monthly basis, which allowed those agencies then improve their cashflow. and start investing in their own marketing, hiring more people, et cetera. And so what we did is we really kind of built a business in a box. We taught them what to sell, how to sell it, how to price and package it. how to deliver it, of course. And it just so happened that our software was the best software deliver those services on, right. And Hey, we have sales support to help you sell your deal. Oh. And if you. So three clients and those clients are happy after six months, we'll start helping you generate leads, or we'll even bring you in on deals. and so that was the process that we followed. and it's not as simple as like giving them a brochure and, a demo and them thinking they're going to go out and sell it, you got to give them. How to market it, how to qualify a prospect, how to pitch them, how to structure the contract, how to price it, et cetera. So we did all and that's what really allowed us to scale that scale
Dan Balcauski:that's quite elaborate, of a program. And I'm guessing with a program as elaborate as that wasn't just a sales initiative, did you have support from other departments in the organization at HubSpot to support that? Or were you just directing it purely through the sales organization?
Pete Caputa:I did it myself personally, for a long time, for about a year. so I was talking, I was, I would get leads, marketing team did a good job of generating leads that would fit the of what I could work with. so I would take those leads. Call them, talk to them about their business, talk to them about offering these services, help them sell their first deal many times, until I got to the point where I'm like, all right, this process is repeatable and I'm going to start training the partners directly through webinars. And so I then had a marketing intern that was my first hire.
Dan Balcauski:Mm. Mm.
Pete Caputa:He was an MBA marketing intern, so he was sharp and he was very helpful. Mike Norman. Hi Mike, and, And so we did webinars, and then I started to build a funnel of people who were actually like ready to go almost, it still required a little bit of selling, but, and at that point is when I started adding reps, and I think it was like a year after that when we added a first full time marketing person to support me. They were in the marketing org, but you know, for all intents and purposes reported to me, it took me like two, three years to really get good, get somebody that was doing a good job with that marketing. but we always had a lead funnel of agencies. That was coming in through our overall marketing. Cause you probably know a little bit about HubSpot. HubSpot was coined the term in my marketing and we were capturing tens of thousands of leads every month. And about 15 percent of them were agencies or marketing consultants. we basically just siphoned that lead funnel and then started turning them into customers and then getting them to resell it. So we kind of were in control of our own funnel. We didn't need a whole lot of marketing support in addition
Dan Balcauski:Interesting. Interesting. So what I got from that story, kind of my impression is you were almost a sort of entrepreneur in residence of this program, kind of a soup to nuts, kind of blocking, tackling, pick up the phone, having these deep conversations, it's marketing, but mostly, I guess, hand to hand combat with, in a friendly way, helping these marketing agencies for a year. So there's a lot of. you know, time for the program to develop and then started layering on personnel, because I think that is one of the mistakes I see companies make is they're like, oh, we're going to push to partners, resellers, they put some junior person on it for 6 months,
Pete Caputa:as, yeah.
Dan Balcauski:then they're like, ah, it's not working. And then
Pete Caputa:Yeah. I see two mistakes. Happened quite a bit. One is like somebody in charge says, Hey, let's do a partner program. Let's find somebody to do it. That's mistake number one. If you're looking for someone to go do it, that's mistake. Cause you really need somebody that's driven to figure it out. I was extremely driven to figure it out. personal reasons as well as just like my brain works that way. I want to do something entrepreneurial. The second mistake I see quite a bit is putting a junior person in charge of it. Like I wasn't junior. I had. An engineering degree. I did engineering for six years. I ran a business for six years, which I started. and I got intensive training on sales before I joined HubSpot. I had a 12, I did a 12 month like intense training and coaching program. So like there was a lot of stuff I knew how to do and in order to make that program work. If you take somebody that's got a communications degree, a year or two out of school, that's been doing VDR work, or maybe even closed deals for a little while, they're not going to be able to talk to. Business owners and leaders of large resellers and out in the same level. and know how to handle them. Right.
Dan Balcauski:Well, there was, cause there was a, also what you said much earlier, which I really liked because it wasn't just, Hey, I'm going to blind outreach, to any agency. there was a, really a discovery, a segmentation of the agencies, that were having struck that having a struggle, understanding those pain points and then doing the work, all the work behind it. But it was a lot of customer development sounded like as well
Pete Caputa:yeah, yeah, no, like I, I developed an ICP, right. I had criteria in which I would. Basically tell people no, or yes, like I was choosing the partners through my sales qualification process. So there was, it wasn't like, let me show you what we can do. And you decide it was much more like, let me qualify to see whether it makes sense for you to do this or not.
Dan Balcauski:And I'll tell you one way or the other. and so it requires a different level of selling, I think, most SaaS salespeople, at least, especially in the SMB market. Well, well, these days I can't go on LinkedIn without seeing a post from you. You're highly prolific. what started, you down in that room? why do you post so much? Not that I don't like it, but I'm just curious.
Pete Caputa:Appreciate that. that you don't not like it. sorry if I'm cluttering your feed. I've got friends call me and like, dude, you got to chill out. Like I go on LinkedIn and all I see is your stuff. And I don't even understand half of it. but, hopefully it's most of it's relevant to you at least. I, we are in the middle of. Launch building something that I've been dreaming of building for like more than 10 years before I even joined Databox. And it's what I'm using LinkedIn to do is. kind of figure it out in the open.
Dan Balcauski:Mmm.
Pete Caputa:I don't know if you've ever read, John Batelle is, he wrote, like the first book on Google. This was, this book was probably 20 years ago, 15 but he wrote it out in the open on a blog. Like, he would publish, like, his thoughts and get feedback from other people that were, like, either in, in Google or monitoring Google or understanding how Google worked and all that. and that became the book. And so I'm kind of doing that with LinkedIn. But, and I am writing a book. But it's more in relation to like, we're building a partner program. Here's what our partners are doing. Here's what we're doing. And just here's the way that we're doing it and why you should get on board. it's not sales pitch. Most of my content, as is much more storytelling and instructional and, opinions and things like that. But what I'm doing from it is building a funnel of companies that partner with us,
Dan Balcauski:Is this something that came naturally to you to be so prolific and talk on social media? Because I think the response from most executives is just, it's like, where do you find the time? Like, I don't have say. Right. so like, is this a skill set that you developed or is this just kind of come naturally to you?
Pete Caputa:developed, but a long time ago. So in my first startup, I started blogging for my first startup. back then there was like, there were no startup communities. Boston wasn't known as a startup hub. Like San Francisco was just Google and Google, right? Like there wasn't, and the old tech companies or whatever. So there wasn't really startup hubs. And so the way most startup entrepreneurs. and networked was through blogging. So we would write blog posts about what we're doing and like other entrepreneurs, startup entrepreneurs would like share ideas and we'd leave comments, words of encouragement and give ideas like, and give feedback. Like that's the way that kind of the community was back then. It was a relatively small community compared to the number of companies starting a startup now. And so I kind of developed writing skills and kind of positioning skills and stuff like that at then. While I was at HubSpot, I would write quite a bit. I'd do a lot of webinars that I would author, and I'd do case studies that I would help write, like with partners. So I was always Involved in the marketing. I give, a big speech every year to the thousands of partners that would come into HubSpot's conference. so it was always involved in figuring that stuff out. and then for years I've used Twitter. It was kind of like a personal outlet for me of just like, I need to get this thought out and I need to get feedback on it, like. this is a pithy way of saying it. Like, I think this is, this will resonate. And so Twitter became like a copy testing tool for me almost. and then, then I, then when I said, Hey, I realized like, it's time to go to market with this new program we have, new products we have, et cetera, and really build, like a game changing partner program, at Databox. and I said, all right, well, screw it. I'm going to make time. to use LinkedIn and I'm actually, I completely divorced Twitter for a variety of reasons, but one is that, yeah, LinkedIn is just better. Like the culture on LinkedIn is so much more receptive to ideas, supportive. go there to learn. Yeah, it's not, people aren't there just sitting to argue with you for sake of arguing. and so once I started and I got immediate feedback, like I would get. Responses, I'd get emails, I'd get comments and support for what we were doing. People would reach out to me and say, I love what you're doing. I want to work with you. Like once I started seeing that happen on LinkedIn, I just was more and more motivated to keep going.
Dan Balcauski:That's fascinating. No, and I will compliment you because your content is significantly better than most CEO content that I see. unfortunately for better or worse, there's a lot of content out there. That's like, congratulations. We got this Gartner magic quadrant announcement or, Hey, congrats team.
Pete Caputa:a new office.
Dan Balcauski:Yeah, congrats to the team on a great event, right? and like, I get it, but also, it's not useful for anybody else, right? so, yeah. And it's not even commentable, right? It's not
Pete Caputa:No, like, Oh, congrats new, yeah,
Dan Balcauski:you're not even going to get the thing that you're hoping for, which is engagement and visibility of the thing that you're saying. so, so anyway, I say that to say that anyone, who is listening, definitely go follow, Pete and, map to what he's
Pete Caputa:I'll give you one line of advice, with social media, stop talking at people and start talking with people out in the open and transparently, like, so write a story about a conversation you had yesterday, relay something, right? ask a question. on social media, like you'd be surprised how many people actually are willing to answer that question. so start talking with, leave comments on other people's stuff that's relevant to what you do. and I think that's the piece that most executives miss is it's not a, it's not a newspaper where you. Fine tune an announcement or an article and publish it. It's a networking event where you're sharing ideas and stories and you're connecting with people and helping them as much as you're helping yourself. So that's really what
Dan Balcauski:God forbid social media is actually social,
Pete Caputa:exactly.
Dan Balcauski:well, well, look, we've talked around Databox for a part of this conversation, but we haven't actually described what it is. or so could you for folks, tell folks what Databox is?
Pete Caputa:yeah. We have a lot of hardworking DataBox team members out there and I'm here. Yeah, it's, believe it or not, it's all related, right? the stuff we're talking about already is related to what we do, but DataBox, in its simplest form helps companies pull together all the performance data that they have into one location so that they can report on it better to stakeholders or internal, internally, so that they can monitor it in real time, so they know actually how the company is performing at any time. So they can set and track goals, so they can benchmark their performance against peers. so they can detect when there are issues like sales team hasn't made calls this week or marketing team, the form's broken on the website and not capturing leads or hey, we just blow out our ad budget too quickly, like picking out issues and then predicting how the company is likely to perform. And so the idea is to pull all that data so that. Computers can start doing smart things and the team, all the team members can start monitoring and paying attention to what's happening so they can adopt their plans daily, weekly, monthly, quarterly.
Dan Balcauski:Got it. And so is it specifically useful for, a specific function like, like marketing or is it kind of across the board, be a business intelligence?
Pete Caputa:It is across the board. We have integrations with hundreds of tools and then, developers can push data into the platform from any proprietary system. We can also connect to most SQL databases that know, that a company might use and any spreadsheet. but we have integrations all the way from marketing tools, like SEO and ad platforms, CRM, sales tools, CRMs, right? And then finance and, Project management and all kinds of stuff. So companies use us generally to get a higher level overview, of their entire performance, so either it's the executive level and then different teams will monitor more closely what's important to them, deeper level.
Dan Balcauski:Got it. Kind of tying back, your LinkedIn postings that I've seen, you wrote an interesting post. I can't remember exactly when it was talking about how data driven marketing has become, but I think you're, you also made a point that pointed out that could be a, ultimately a downside. and I correct me if I'm, understanding that, but I guess that's an interesting perspective. For someone who's at a data company, believing in data driven decision making, could you elaborate on what you,
Pete Caputa:Yes. So let me finish the answer to your last question. We do have a lot of marketers that use us because marketers deal with a lot of different tools and data sources. And like the problem is really acute for marketers. Like if they have to log into 10 tools just to see what's going on, they're going to spend half their day doing that. So a lot of marketers use us. And then also 40 percent of our customers are marketing agencies who use us to report or. Report results to clients or help their clients get a better handle on their data. but to answer your question, yes, I wrote a post that, digital marketing has kind of reached, high point of immeasurability or unmeasurability, I think I wrote immeasurability and then I later looked at the definition, I meant unmeasurability. it, and basically what's happening is, tech platforms, have taken over marketing. and. They either don't share their data that they have about how your interactions with your prospects and clients, or, There's no way to get the data out of their system at all. So, so let me give you an example. even Google over the years has limited the amount of search term data that you can see. So when you log into Google and you click how much organic search traffic did I get the 80 percent of it is like. No keyword, meaning that Google just stopped sharing keyword data. So we don't even know what keyword people are typing before they get to our website, right? Let's take, another one would be, LinkedIn. When on your personal profile and you write stuff, they'll show you some stats. But they don't let anyone pull that data from their system. right. So there's no way to connect that data to your CRM to see like which of my LinkedIn posts actually drove leads and customers for our business. Then you have habits of people, right. They might, you might be following me on LinkedIn, but when you wanted to figure out what I was doing, you probably went to Google and type Databox. right? And you ended up on Databox's website, and so Google gets credit for that. Even though the reason you we're talking today, and the reason we have is because you've been probably following me on LinkedIn, right? And so there's this whole thing called dark social that's even worse, like if I'm following on YouTube, LinkedIn, Twitter, Instagram, they don't even let you link out, right? To get a link out from Instagram, you gotta go to a profile, and then you gotta have the company has to have a special page that says, here's all the links. And so there's no chance in hell that most people are going that way. They're like, you're building brand awareness and then people are Googling. And so there's all this dark social, not to mention email, right? word of mouth is happening and you're saying, Hey, go check out Pete's company to somebody. And you said the link that's not tracked as coming from you, right? So so much that's not trackable, directly. And I think marketers are so used to proving their worth. By tracking everything directly. And 10 years ago, it was a lot easier. You got, Google gave you keyword data. Social wasn't as big. You could actually link out from social and they didn't bury that content like they do now. so there's, there were lots of ways to measure everything 10 years ago, and just now there isn't, but marketers haven't changed their mindsets. Execs, their bosses, especially haven't changed their mindsets. And so people are a slave. To their Google analytics data or their HubSpot analytics data say, and they'll look and it's like, why are we doing this podcast? The podcast doesn't get us any leads. Right. Or it's like why are you spending so much time on social? All of our traffic and signups are coming from search. right. Or Hey, this big ad budget is crazy. Let's cut that in half. But then what happens is the organic search traffic goes down because your brand awareness isn't as good as it used to be. so marketers and execs are such a slave to that data that. We need to call attention to this problem and get people to realize that one, we need to go back to older ways of measuring things by literally asking our prospects how they heard about us and what they know about us and using that, gathering that data, either through forums or through conversations and then organizing it. So you can see where you, what marketing is actually working. and we need to use earlier signals. So like, If you were to look at our Google analytics, you would see that LinkedIn is not a big driver of signups for our free product, but I'm spending a shit ton of time as you pointed out on LinkedIn. Now I know that's worth it. Because I'm literally getting leads in my inbox of people saying, I want to buy your software. I want to partner with you. I have two people following up with people who leave comments on my content and they're putting leads in their funnel. So I know it's working, but it's not tracked in our analytics product. so you need to use those early signals. When I publish something, does it get a lot of views? Does it get a lot of comments? Does it get a lot of reshares? Do I get people reaching out to me in my inbox? And you got to use those earlier signals to justify or measure. what's working or not, right? Same thing on YouTube. You can publish a lot on YouTube and never really see much traffic. your volume of, watch time, watches will go up or, the amount of times you're in Google or YouTube search might go up, like your overall watch time might go up. The number of followers you have might go up, and all those metrics are often dismissed as vanity metrics, but in reality, they're sometimes the only signals we have that something's working, right.
Dan Balcauski:so we're,
Pete Caputa:lessons go up, I know that podcast is working, even though I can't tie that directly to, in my Google Analytics directly to a lead.
Dan Balcauski:so we're back to the 50 percent of my advertising budget is wasted. I just don't know which half again.
Pete Caputa:I don't think it's that extreme. I think it's like if you set up the right measurement systems, if you start asking your people where they found you, you can get a much better handle on what's working. And if you're tracking those high level metrics, you can get a much better handle on working. It's not like... Running a TV ad and they told you it got, delivered to this many people and you don't know what kind of impact it had. You, because those people watching that show are going to either, we're going to watch your commercial or not pay attention to your commercial anyways. Right. But they don't have way of knowing that unless they're literally your eyeballs while you're sitting on your couch, which I think they
Dan Balcauski:I'm pretty Google is working on that as we
Pete Caputa:there are sampling tools out there that literally spy on people in their living room, with opt in consent. But with YouTube, right, we can see that The watch titimes go up, the followingso up, so you can still measure a lot. So I would say like, 25 percent of my marketing doesn't work, right? Like, and I know the 75 percent it is, right? so I think it's a little bit better these days, but
Dan Balcauski:I didn't realize about Google not giving you keyword data anymore. It's not my world I play in every day. So, it might not be news to anybody else except me, but that's crazy. And obviously there's been a lot of chatter about Twitter, X, or whatever we're supposed to call it these days. now they've removed direct linking for all the, for all the links in that feed, which has just caused a huge
Pete Caputa:Yeah, the only way to make social work now is to build, write, publish content on the platforms that stands on its own two legs, right? you can't do social media link dumping. It's not a distribution platform for the content that you write on your website or publish elsewhere. It's really a platform for you to publish thoughtful stuff that provokes conversation, on the platform. really the only way you can do social now.
Dan Balcauski:So I love this discussion about metrics. It naturally where that sort of leads me to think about is the idea of benchmarks. Because as soon as are like, Oh, we're getting, X percent conversion from social or whatever the number might be, or the metric or KPI, you're looking at, how do you think about benchmarks? Are there any downsides to the way that people rely or try to use
Pete Caputa:It's funny. I get this question quite a bit. I think it's like a leading question. So you must think there's some downsides. Usually when someone asks that question, they're like, what about this? So they're trying to get, catch me. so yeah, there's absolutely some downsides to benchmarking. If you don't understand that context of where the, how the benchmark was created, right. if you're a. Let's just say you're a 10 million dollar SaaS company and the benchmark is for public SaaS companies. Like the lessons from that benchmark data are not relevant, most likely to your 10 million dollar SaaS company. So I think you have to first understand the context of it. you also have to understand like how your company just might be different. like we're kind of a strange setup for our company. We're a freemium model, but we also have a sales motion. Like it's a complex product, but we've also made it easy to set up. So Like you have to understand the context of your business and how it might compare to other companies before you can say, Hey, this benchmark is relevant and we should be hitting this number. because other companies are, I think that's really important not to cut and paste, strategies. You really gotta. use first principles and think critically about what's relevant, what's not to your business. but as I'm a huge fan of benchmarks. We've invested lots of R& D and years now at this point, building a free benchmarking tool as well as advanced benchmarking features, that our partners use as well. So, so I'm all in on benchmarks. I think it's just important to use the context of them.
Dan Balcauski:Benchmarks are, they're absolute catnip for people. I mean, people love benchmarks, right? so I, there's, yeah, I appreciate the critical eye. I think one of the ones that gets thrown around is like something like net revenue retention and people quote the, all the public SaaS companies. And it's like, it's like the equivalent of asking what is the average height of a person and then only measuring the height of NBA players and being like, Oh, average height of a, of a male is. who's six foot six. You're like, no, it's not like got terrible
Pete Caputa:I always use that example whenever I'm explaining benchmarks to someone. I always say like, because a lot of people actually don't understand benchmarks. I found over the last year, being an engineer and very mathematically inclined, it was like a shock to me. but it shouldn't have been like, cause most of the population is not, doesn't love math as much as I do. and so. Yeah. I always use the height examples. Like, if you take a population of people, there's a distribution of heights, right? So some people are going to be, 4'11 like my mother and my grandmothers, and some people are going to be 6'6 like my brother in laws. and then there's going to be guys like me or 5'8 I am the middle, most popular height is 5'8 and so that's the median of the group. that's not the perfect definition, but there's going to be distribution. So when I explain a benchmark like to a company, let's say they're looking at their website sessions, right? And we're looking at a benchmark of companies that are, under a hundred employees, but over 25. And I say, all right, well, your traffic is 2000 sessions a month. And the median is 4000 sessions a month. that means that you have a lot of room to improve, if you want to be like this group of companies, if you think you should be performing at this level, so, so yeah, you have six more inches to grow, or in my case, my mother, she has nine more inches to grow, to be my height.
Dan Balcauski:Yeah. Well, look, I love benchmarks. I, but I agree with you. I think that people just don't kind of understand the, yeah, I think even you may have lost half the audience, not this smart audience, but with like things like distribution, right? People just don't think in terms of distributions. We think it, we've been taught to think in averages as the representation of the entire group versus thinking in terms of statistically about, distributions
Pete Caputa:Yeah. Yeah. Yeah. Top
Dan Balcauski:I think it
Pete Caputa:quartile and
Dan Balcauski:really throws people off because people then assume, Oh, it's a normal distribution. It's actually, it's bimodal, right? you've got the average doesn't mean what you think it means because it's either on one side or the other. And, it can be, and look, when I think about company benchmarks in general, it's, it can be difficult because oftentimes those are, there's, they're measures of a system. of a complex integrated system that it's like, what is the goals of that company? What the, is it a venture backed company that's trying to build a rocket ship? is the owner running a lifestyle business and really concerned about free cash flow? And so you're at
Pete Caputa:yeah,
Dan Balcauski:reps per, per revenue, right? You're going to get a different number on both of those and not understand that like, well, hold on these two very different numbers, but when you get these data reports, they tend to be all kind of blended together. So be, you just have to
Pete Caputa:So this is why we're trying to build a live data set that's publicly accessible. Now, of course, if someone opts into our benchmarks... their participation is confidential, their data is 100 percent confidential. We don't share it, but we will know characteristics about their company and we are connected directly to their systems. And so when we're calculating a benchmark, it's current data plus any historical data that we had or have access to. and so by saying. Oh, this is a group of companies where the average customer value is over 10, 000 a year. Then we know that if our average contract value per year is 12, 000, then that's a pretty good benchmark, right? Whereas if it was all SaaS companies from with an ACV of 100 a year, all the way up to a million dollars a year. Like then this group of companies may not be a good benchmark for me. If I have a 12, 000 a year ACV.
Dan Balcauski:Look, I'm a total data nerd, if you couldn't tell from this conversation. And I could rap with you about data all day, but we are running up on time, which is crazy. I have a ton of questions we didn't get to I do want to wrap things up. And, we'll wrap up with some lightning round questions. Are you ready?
Pete Caputa:yeah, go for it. Yep.
Dan Balcauski:All right. All right. Well, how do you define success?
Pete Caputa:Oof. to me, my, it's changed throughout the years. when I was in high school, I literally wrote in my yearbook that I wanted to have a, Defender Discovery. It's like a, Land Rover Discovery. Married to a beautiful blonde, two children and be a millionaire by age 30. I am married to a beautiful blonde. and I have one child. I never bought the Discovery. I missed the 30 year mark. so that stuff became a lot less important to me, although my wife is beautiful in the inside as much. And that was just as important to me as I got a little older. but nowadays, where. A little later in my career, and building on successes, it's much more about building the thing that I envisioned in the world, like I am motivated to build. The thing that I've envisioned, which I know will help lots of companies and lots of people accomplish what they want to accomplish. So for me, it's much more about achieving the vision of, building a successful company that helps a lot of people. And we do it in a certain way, in a unique way that no one else is doing it. so that's what motivates me now is just to build that vision
Dan Balcauski:Fantastic. Look, nobody of any success gets there on your own. I view you as very successful. Has there been a close leader, mentor who has really helped you on your journey?
Pete Caputa:for sure. Yeah. Lots of them. And I, they. I wouldn't say they, they come, I wouldn't say they all go, but like they have an impact, right, over, there's period of time where they have a huge impact. And, two people who are related had a huge impact on my life. The first one, a guy named Rick Roberge. In my startup, before I joined HubSpot, I hired him as my sales coach and spent 12 months with him. I learned how to sell, even though I couldn't make that business profitable. but he, taught me how to sell like on a daily basis. I went through training program with him and a guy named Dave Curl and Chris Mott. but he spent time with me every day, pretty much every day after I did a sales call. We'd regroup, I'd talk to him about it, he'd tell me what I screwed up. I'd go back and fix it, and that intensive learning experience was huge. he also introduced me to his son, Mark Roberge,
Dan Balcauski:Oh, I know of Mark. I wondering if they were related. Okay.
Pete Caputa:yeah, so who was the first VP of Sales at HubSpot. similar background to me, mechanical engineer, had a startup before, he joined HubSpot. and, but, just, really thoughtful person, and He kind of gave me space to build what I built at HubSpot, but he also kind of kept me moving in the right direction, challenged me to think a little differently in certain areas, helped me be a better manager and leader, as I took on those responsibilities at HubSpot. And so I owe them both a debt of gratitude and
Dan Balcauski:if you pick one, I'd say Mark or Rick, but could you just tell us like, what is the best piece of advice say Mark ever gave you?
Pete Caputa:Mark, so the best piece of advice was probably to like write down what I was doing. as a first step in management. So, when I started managing a sales team at HubSpot, I was crushing my quota and really confident, many would say cocky. and, I just thought, Oh, I'll just help them. I'll just jump on calls. I'll give them feedback. They'll do it. Like they'll be able to adapt. And that completely and utterly, failed for the first few months. and so his advice was like, you got to get this done on paper. Build a sales playbook that they can follow, right? And so that started me down a path where I started helping create processes, playbooks, sales tools, and all this other stuff. That's, that was an amazing lesson that's helped me scale a lot of different things in my career.
Dan Balcauski:That's awesome. Well, if I gave you a billboard and you could put any advice up there for other CEOs trying to scale their B2B SaaS companies, what would you say?
Pete Caputa:I would say, don't market alone. I think a lot of companies. Think, Oh, I built this cool thing and I got to tell the world about it. The only difference between where I am now and where I want to be from a success perspective is more people knowing about my thing. That's not, it's not that attitude. Just, it's not going to get you anywhere. There's only so much promotion there's only so much that you can do because it's. Budget constraint. Also, people just don't want to hear about you and how great you are. They want to hear about how what you built solves their problem. And so the best way to market is to include your customers, your partners, and your, even your prospects in your marketing processes and create content with them, have them on your podcast. Run a survey and share the data. write an article with quotes from your clients and prospects. Do things that incorporate them, just be social on social. like do things that incorporate them into your marketing and you'll go a lot further than just trying to be a, trying to promote yourself all the time.
Dan Balcauski:Don't market alone. I love that advice. Look, this has been a fantastic conversation. I've really enjoyed it. If folks want to learn more about you, Pete, or DataBox anywhere on the internet, we can point them to.
Pete Caputa:Please, yeah, please, go to LinkedIn and connect with me. I usually accept my connection requests in batch, but pay attention when I'm writing, respond, and we'll end up connecting that way because I usually connect with the people who engage with me first. and then check out DataBox. We have two free products. one, you just go to databox.com, it's a free, tool that gets you started with free dashboards, you can connect multiple data sources and start to set goals and track metrics, et cetera. and the other product, free product is called Benchmarks, it's available at benchmarks. databox. com. there you can go and benchmark your business against tens of thousands of other businesses, by the type of business you are. and the tools that you use. We have benchmarks available for 70 different tools, everything from SEO tools and ad platforms to CRMs to financial data. So it's a free tool. Once again, your, data will be confidential or, and your participation is anonymous.
Dan Balcauski:Excellent. Well, we will include those links in the notes for our listeners, including links to Pete's amazing. Profile and posting on LinkedIn. Everyone that wraps up this episode of SaaS Scaling Secrets. A massive thank you to Pete for sharing his journey, insights, and invaluable tips for our listeners. If you found this conversation as enlightening as I did, remember to subscribe so you don't miss out on future episodes until next time. Keep innovating, growing, and pushing the boundaries of what's possible.
