I'm Timo Rein, co-founder and ex-CEO of Pipedrive. AMA!

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Hey all, I’m Timo. I’m one of five co-founders of Pipedrive, and I was a CEO from 2010 until 2020.

Pipedrive is a tool for making sales (and being very good in it :slightly_smiling_face:). It’s built for staying focused where focus is easily lost. Pipedrive is not ideal in environments where sales are coming in on their own, and the commercial value of products/services is low. Instead, Pipedrive really compliments the performer in complex sales processes with

  • multiple stakeholders,
  • tailored solutions,
  • high prices, and
  • long cycles (i.e. months to close the deal).

Pipedrive currently employs about 800 people in several offices in Europe and US (largest ones in Tallinn, Estonia and Lisboa, Portugal), and it serves about 100,000 businesses worldwide. We raised $90M from investors during the decade, Vista Equita Partners bought a majority stake in the company in December 2020.

I have professional experience in

  • studying psychology (MA from 1999),
  • selling door-to-door (2000) and to enterprises (until 2010),
  • building a local consulting/training business (until 2010),
  • building and leading a global software business (until 2020).

I’ve found the following topics most interesting during the last 2 decades:

  • starting, running and building a globally successful business,
  • crafting a product that would be simple yet useful, and globally well received,
  • finding successful patterns, and scaling these in a business systematically,
  • discovering and empowering human talent and energy,
  • generating capital from customers (revenue) and institutions (investments).

Also, for the past 20 years, I’ve studied and experimented with health and will continue doing so until death. Sports and music fascinate and engage me. I’ve lived in 4 different countries while raising 3 kids with my wife.

I’m not motivated to run to the stage and start talking to others about things that I do or care about in my life. However, I do think I’m a pretty decent conversation partner, so I would respectfully follow your lead with questions to answer. I may not have extensive answers to some questions while I may have plenty to say about to other questions. Staying true to the format, AMA!

I’ll be back on July 1 at 2pm EET to answer your questions.

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Note: This AMA is closed for new questions, but you can check out the existing conversations below.

This July 1st, we had the pleasure of hosting Pipedrive’s co-founder, Timo Rein. For more than a decade now, Pipedrive has shaped what it means to be a truly global SaaS. Founded in Estonia, even two years in, Pipedrive was available — not just the website, but the product and the customer support they offered — in six different languages. That far-reaching a GTM approach (and impact) is still rarely seen. And it kicked-off their enduring eminence in the forever-competitive, CRM space.

AMA Index (Timo’s brain-pickings) :memo:

(Hard-won insights, opinions, and observations; thoughtfully examined and articulated)

— Founding-team-market fit, targeting SMBs, and why Timo wouldn’t do it differently
— Keeping product problems front and centre across the org, not just solutions
— Hiring outside one’s country of origin and why it remains difficult
— Fundraising; “raising money is more about finding than convincing someone”
— Effective remote operating practices at the leadership level
— Figuring differentiation in a competitive space; “the space might feel crowded for some, especially on a high level, but near empty for someone else”
— Sustaining a competitive yet healthy sales culture
— How customer support informs the roadmap
— Beliefs that were the hardest to change
— The many things that must be true for an at-scale business

Further reading/listening/pondering from the interwebz :open_book:/:headphones:

(Other insightful excerpts drawn from blog posts, interviews, and conversations)

On choosing to go global exceptionally early:

The biggest part of it was necessity. There was no other way. When you think of a whole market which is 1.3 million people as a population, and then you get to numbers which are actually there for you as potential customers you’re in a situation where you have to. As far as SaaS SMB goes, we had to look for customers everywhere. That’s outside of our home market.

That’s our story. In terms of benefits we had to, because of that situation, think in global terms of what is the main problem to solve for everybody? It also forced us to think, what makes different regions approachable in a global manner and where localization is almost a must from day one?

I also think that building that organization up that we built, which is able to serve a global customer base, is one of the benefits. We had to do it from the beginning. Last, but not least, you have to test marketing methods which would work globally. There’s no way around it. Even today, I think it gave us a head start and gave us the momentum which we’re using to this day.

Source: SaaStr | 2018

On segmenting goals to create org-wide definition and meaning:

I’ve always kind of felt when we talk about goals in a business, it quite often steers you to think that the goal is financial….That’s revenue. For me what has been helpful is to break it down into three pillars so that I look at setting goals for three different paths.

One is definitely, obviously business. But the one that I think comes before that for us is the product itself. Because that is the driver of the business. And then also what comes before that is the organisation. The team that we’re building.

And having this breakdown, I’ve always looked at them as we should have goals for each, basically. So when we look at the product, we need to understand what we want to build over long term and short term. And then set goals…

And then when we talk about the organisation, we need to understand if we want to build something like this, what sort of people we need, what sort of teams we need, at what points we need them….Understanding what kind of an organisation you want to built, I’ve always felt that we’ve needed goals which are specific to organisation as well.

And then business, obviously. Just understanding what sort of business growth you should be on. I think that’s quite tricky. I think quite often companies are influenced by outside forces. Investors, obviously…
But it’s important to recognise what sort of growth you’re able to produce and also understand whether you’re in a game for 1-2 years and you don’t know what’s going to happen then or you’re building something sustainable over long term…

But definitely this breakdown is one thing that I’d point out, which we’ve done, to make sure that we can have definition and also meaning in goals.

Source: Geckoboard | 2017

On how their support team has remained a conversion engine:

Our support team, they have been our conversion engine, really. Because they have worked with people on trial, answered their questions, and really helped them onboard through the different things they might have had struggled understanding or just getting their data in. Whatever it is.

So yeah, that was one thing that we did immediately. Less than a year into this business, we started scaling the whole support team and they were, I think, in our company, the people who would normally be your salespeople , they were the ones doing customer support in a low-touch model, effectively becoming salespeople.

Source: Rocketship.fm | 2016

On the biggest contribution an accelerator makes:

The biggest thing for me, I still do remember the questions early on from these people in accelerators, was that, here I was, with one other co-founder and we were trying to see if these guys would accept us into their accelerator. And then we were kind of happy that we had about close to a hundred customers already. Very small ones. But like a hundred.

And then they started questions like, ‘okay, guys, so you’ve been able to get to 100 in 5-6 months, how do you think you can get a hundred, like in a month?’

As soon as they asked that question, I was like, ‘yeah, how do you get there, I don’t know. We’ve been barely making this happen in six months. You should tell me.’

But then I realised the power of that question was so amazingly big that you just have to have the right question in front of you at that very moment and then you start to look for answers.

And that’s what I realised that this accelerator time would probably be about. It’s that you’d have new questions, you didn’t have before, maybe you didn’t have the courage to ask them. And then you have people expecting you to find these answers from somewhere.

Source: Startup Sense | 2016

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Hey Timo,

Thanks for taking the time to do this!

Your path to 100K customers is phenomenal. There’s much to learn from the Pipedrive journey, for everyone, really, but especially for founders outside US. I can attest how difficult growth must have been ten years ago.

My question is about a key direction you chose early on. From the beginning it has seemed that Pipedrive has been laser-focussed on serving SMBs. And looking at the current pricing, I suppose that focus hasn’t changed even today.

This looks like a departure from the conventional SaaS move to go upmarket as the business scales. I’m curious to hear how both easy and difficult this decision has meant for growth? Are there things you’d do differently if you were starting out to build for SMBs again?

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Hey Timo,
Glad to you have you on Relay!

In your Geckoboard interview (which I really liked for your clarity on goals and culture), you share how instead of painting everything in form of solutions/functionality that the company is pursuing, you try and record specific problems in all their details and make sure they’re front and centre across the org; literally on all relevant desks.

I would love for you to unpack that a bit. What does the process of identifying and relaying core problems looks like, say, on a quarter-to-quarter basis? And how do you ensure this isn’t just a top-down exercise?

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Hi Timo,

Thanks for taking the time to do this AMA!

Post-covid a lot of startups (Progression included) will be experimenting with remote first ways of working. A big concern with this is maintaining a consistent company culture. This becomes even more difficult and important when you have people in multiple countries. What advice would you have for companies that are starting to hire outside of their country of origin? How do you think about relationship building, culture and the tactics of organising meetups and gatherings?

thanks
Neil

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Thanks for doing this, Timo!

Really looking forward to all your responses. :slight_smile:

My question is about fundraising. Paul Graham has noted how raising money, once you’ve built something people want, is the second most difficult thing that startups do. As it can be such a long slog on a founder’s time, what are some things you’d do differently before raising that first round, if you were to do so today?

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Hey Timo, Thanks for taking the time!

As Pipedrive had already been a globally-distributed team pre-pandemic, I’d be curious to learn what were the key operating practices at the leadership level that helped you most as everyone transitioned to remote work.

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Hey Timo,

We checked out Pipedrive some time ago and was impressed with the product. I’m wondering what was the process you and your team took to come to this point?

Pipedrive is not ideal in environments where sales are coming in on their own, and the commercial value of products/services is low. Instead, Pipedrive really compliments the performer in complex sales processes.

How do you view positioning and differentiation in a crowded space? :slight_smile:

Thanks a bunch for answering!

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Hey Timo

Thanks for taking the time to advise fellow founders.

My question is about managing the sales process and team. What are your tips for building a high-performance culture in sales without making the environment all-work-no-fun? I mean, aggressive targets and some pressure is a healthy thing to have in sales, but too much of that can make the job quite dull and repetitive. How do you maintain a competitive, but still healthy environment when building up a sales team?

Thanks

Alo

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Hi Timo,

Thanks so much for doing this AMA with us. Congratulations on your stupendous success!

I am intrigued by how you made your support team your key conversion engine and have the following questions.

  1. Do your new hires spend time in support as part of their training process?
  2. How big is your support team as a percentage of your business?
  3. How has this focus helped you direct your product roadmap and staying ahead of the competition?

Thanks
Ravi

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Hi Timo,

Thanks so much for doing this AMA with us. Pipedrive is a gold standard for every SaaS founder.

I am interested to understand the journey from moving from SMB → Mid Market → Enterprise ? PipeDrive is predominantly SMB.

  1. At tentatively what growth stage e.g. ARR, Year in Business you think we should make any upmarket moves ?
  2. How should the marketing & sales function change as you made this transition ?
  3. How do we balance the product roadmap for these segments e.g. self serve for SMB from Day1 & customisation / CSM for Enterprise with onboarding & set-ups.

Moreover what will your 3 key advise for a $1M ARR - SMB + Mid Market founder to keep a sharp eye when they do make this transition ?

Thanks
Abhi

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Hey Timo,

Appreciate you taking out the time. What have been your personal challenges/beliefs that were the hardest to change but were most rewarding in your journey as a founder so far? Specifically interested in learning more about your transitions in the 0 to 1 phase to PMF to scaling and hypergrowth.

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Hi Timo,

Thanks so much for doing this. We are long time Pipedrive users, partners and fans at Klenty. Love the simplicity and power of the product.

Would love your thoughts on a couple of questions:

  1. Tell us about how you were able to enter the CRM space with large incumbents, heavy competitive and arguably feature commoditised market like CRM. What sort of product differentiation narrative and GTM were you able to adopt
  2. In the SMB segment which Pipedrive operates, churn is often a huge problem. How has Pipedrive been able to scale (very fast) and build a unicorn in spite of this
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Krish, thank you for your kind words! I think it’s not only a good question but also a good and necessary reflection point for any founder. Who are you confident in targeting? Which approach will give you the best opportunities for growth?

I came into co-founding Pipedrive with more than a decade of personal enterprise sales experience, and so we could have also easily built a sales system and team with enterprise targets. Easier said than done, of course :slightly_smiling_face:. Importantly, over these years, I also had learned the pains and needs of people in sales - salespeople lacked a user-friendly and actually useful tool while executives lacked a tool that would help them forecast results and control people’s efforts.

So, based on these insights and other co-founders experience from attempting to build SaaS products, our decision was to

  • target salespeople (not executives) because that’s where we saw the gap in the market, and we didn’t think there was a quick and quality way to address the needs of executives without solving the needs of salespeople first.
  • approach the global market from day one (because the customers would be predictably small, volatile, and only a large number of them would result in healthy revenues for us),
  • and do so in the lowest-touch fashion possible (because that felt like the right cost-effective way to reach, generate and serve a global base of small customers).

The decision, while it surely was to take us into many unknowns, felt natural and hence, not too difficult to make. It caused weird feelings sometimes (i.e. "can we properly grow without a sales team?, “can we sustain growth without 100% of control of the sales process?”) but those passed as we drafted and executed systems to attract and acquire customers in our own way.

In hindsight, I would not do it differently, given our co-founder team makeup - I think we were primed to build this product and execute this model. Could we have grown quicker with a different target/model? Possibly, especially early on (based on requests from larger companies were kept turning down), and maybe equally later on (based on a stronger brand awareness and reach). So yes, there could have been a way to reach higher ARPA and expansion and lower churn, but we liked our chances with higher mass market potential, lower acquisition costs, and better WOM more. Again, I think our path was better for our co-founder group, which is why I believe a good reflection of experiences, instincts, motivations, and desires is necessary to find and settle on the right model. Funnily, we sometimes, not knowing the makeup of our competitors, didn’t fully understand why they would go upmarket so early on their journey. Then again, that might have suited their makeup much better.

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Hey Rajamaran,

Glad to be here!

Well, you made me go back and listen to this interview because I had no recollection of what I was specifically talking about :slightly_smiling_face:.

What I tried to get across back then was that there’s always a reason why salespeople do things in a certain way (maybe personal preference, maybe cultural pattern, maybe corporate policy), and that there are also recurring problems that salespeople get into when they do their work. Recognition and understanding of these problems provides a much clearer picture of what environment your product will “land in” and what negative feelings it might alleviate or help avoid. So, for example, when referring to ‘taking notes during a phone call’ feature we would look at recurring problems like

  • difficulty to quickly and painfully record notes during a phone call
  • pain of manually attaching (copying and pasting) written notes to right contact in CRM
  • inability to quickly and specifically mark future activity based on exchanged thoughts in a phone call (i.e. time to call back, progress made in the last call, etc).

Identifying those problems was usually a result of hypothesis and educated assumptions by people with personal sales experience in our company, accompanied with analysis of customer cases by product/customers researchers. In short, we tried to have a task ahead of us (i.e. functionality to build) in front of product and marketing organization in the form of specific and easy to understand problem descriptions. Those then helped us also measure if we delivered - did we solve or alleviate the problem for our customers. In our reality, it was initiated top-down and then honed, challenged and tested by the whole product organization.

When it comes to time perspective, we kept certain more general problems in front of decision makers in the product org for years while more specific problems were to be addressed over the few quarters of development. As always, things are more messy in real life than in my description of it, so a grain of salt is needed to imagine what actually went on :slightly_smiling_face:.

That’s my best attempt to unpack what I thought you asked for.

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Hey Neil,

Thank you, it’s a pleasure! Indeed, a very relevant question to many more than before due to what the world has been up to.

A couple of points:

  1. Try to get a sense of the society of the country you’re trying to start hiring in. Visiting as a tourist usually does not help as much as talking to perceptive locals who’ve been around the world, and can explain how their society and national work culture is different from others. Having a local working/living experience (more than a year) yourself would help a lot but that’s usually not the case.
  2. Hire a strong senior recruiter with a soul of your company culture, first. This person, if hired well, will start to weave a web of your culture, and will have a stronger impact than any other method or process you have in place. This is not to say that you should not use your methods or tested processes, to the contrary.
  3. Avoid changing your process and system of hiring too much, based on what locals say. There surely are tweaks here and there that you want to incorporate but overall, keep what’s given you the best fit candidates elsewhere in place.

The remote or “work-from-home” method is a more challenging platform the cultural perspective. For me, it means that everything you wondered about (relationship building, culture) just takes more time, and requires more deliberate efforts. Ad-hoc kitchen/hall convos are out of the picture, so is “feeling the room”, etc. Human beings have more senses than vision and hearing that are needed for video calls for a reason - real life bonds and trust is built by relying on all of our senses giving us congruent (or, indeed, mixed) signals.

I’ll leave the more specific thoughts on it to people with more expertise. I can point you to Sergei Anikin’s post (Pipedrive’s long time CTO) in Forbes: https://www.forbes.com/sites/forbestechcouncil/2020/09/10/three-key-ways-to-future-proof-your-business-in-a-post-covid-19-world/?sh=bcaa7994a4e3.

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Hey Akhilesh,

Great question. There are so many different difficulties involved in raising venture capital. A few I’ve encountered:

  • just convincing someone enough to give you the money :slightly_smiling_face:,
  • being mentally ok with having a shareholder with expectations to report to until their exit (read: for years),
  • recognizing the dilution to all shareholders over time and further rounds, and understanding what it means in terms of required performance to offset it,
  • building an organization that can spend (venture) money in a planned and cost-effective way, so that you can avoid becoming dependent on it, and being forced to raise it on someone else’s terms.

We raised a FFF (fools, friends, family) round first, along with a government grant (2010). Then came an angel round along with an incubator and some institutional money (2011). Third, the first seed round with angels and micro VCs (2012). Then fourth, another seed round with more angels, and proper but still smaller VC (2013). After that came our Series A with a solid VC lead (2015). Once you’ve raised some money, it’s very likely that you’ll raise some more unless you go completely bust or broke.

Two hiccups along the way - not being able to raise any money at the end of 2011 when we ran out, and almost running out at the end of 2014 because of my strict standard for an expected Series A partner. We found our ways to deal with these, first with bootstrapping period of about 6 months and getting cashflow positive, and the second with a bridge round to help us stay afloat before the Series A. So, expect the shit to hit the fan at times.

Now, to answer your question. If I look at the first round as

  • FFF: I would not do anything differently, I think. We badly needed money to get going, and we got it. Luckily, neither of the sources were expecting a return (grant), or a short term return (our founding investor, long-time business partner from the previous business).
  • First angel round: I think a decision to couple it with an incubator in the US was really beneficial for us. Would not do it differently.
  • First seed round: Maybe, for the future perspective, having less investors in the round? Then again, that was the best we could put together at the time - and we didn’t yet want to be exposed to bigger institutional money with higher expectations.
  • Second seed round: Having one lead investor would have been better for the future, we ended up with two, and that caused some stir.

Here are my overall thoughts:

  1. Raising money takes time, customers and conviction of the future. Time needs to be allocated and dedicated, no way around it, customers acquired and conviction built up and a presentation of it all put together, polished and practiced.
  2. Raising money is more about finding than convincing someone. Sometimes, you can talk to an angel or micro VC and there’s nothing you can really do to make them invest (they’re at the end of the fund and consider it too risky, not doing any investments that year, etc). Other times, you have more impact because the other side is also more hungry, willing, and so on. In addition, some people won’t like you or won’t understand your business - money never moves in these cases. Prepare to approach tens and hundreds of angels/VCs and please don’t take it personally that 99% of them will not invest in you.
  3. Money will run out when you’re building something from scratch. It’s not a matter of “if” but “when”. I would make a goal number one to be well ahead of that point in my planning, and raise money when you don’t really need it, yet. I only managed to get to that state of mind after our Series A. Before, we knew it would run out, but I started planning for a round too late. Sometimes it turned out ok, other times it was really risky as mentioned above. Point is, not needing the money yet gives you the best position around the negotiation table, and that’s what I would always prefer over the opposite situation.

We raised other rounds later on but hopefully the first 5 years here gives a good example of difficulties and my thought processes. Does that help? Damn, that was a long answer :slightly_smiling_face:.

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Hey Aditi,

Thank you, it’s a pleasure!

Here’s my recollection of practices we had at place that played an important part:

  • Internal comms tool that was used by all to connect to people in other teams and locations.
  • Monthly town halls which were broadcasted from one physical location and received in all other locations virtually.
  • Goal management tool to check on work progress made. Same with a data analysis tool (and a proper data warehouse) to check on metrics.
  • Quarterly extended leadership sessions (in-person), 1-2 days - to be honest, this became very tough to replicate in remote conditions as we had 20+ people in this group.
  • Executive team meetings (twice a week), already virtual as our execs sat in different locations.
  • 1-1s with team members (once a week in my case with most of my team, i.e. leadership team).

I think our global web of locations helped us as we had had to build all of our key practices to be location agnostic, really. There were a few technical setup changes in some organizations (customer support, for example) but we were able to manage these over a short period of time. Oh yes, an operation of heavy documenting of ongoing and completed work that our teams always did was massively important, too.

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Hey Ai Ching (I hope I’m addressing you in the proper way re your first name)! Thank you for kind words!

Maybe some of the earlier answers also help but here’s how I saw it with other co-founders. We did believe that

  • if we increase the level of simplicity for salespeople, more people will understand it, find it less burdening, use it and less will churn.
  • if we increase the level of usefulness for salespeople then more people keep it in their pocket and feel that it’s an important helper, or even instrumental to their success in sales.
  • if we increase the level of customization that can be applied without IT experience, then more people will be able to feel that “this product reflects how we really work and do our business” rather than “we really try to use it for our work but we have to adjust our real life to fit the tool”.

That’s how we approached it. There were tactics we used a lot, like “let’s mimic our analog world approach to work and tasks on this digital screen”, or “if a quick glance at the screen does not already tell you something about what you should be doing then we’re not connecting with a deeper brain of a user”, but explaining those would require more time :slightly_smiling_face:.

Obviously we benefited from a decade of sales experience ourselves. It gave us a deep sense of what pains we’re solving and it was more difficult for anyone (customers, investors) to distract us from the main pattern we had recognized. So that definitely played a role.

I think it’s important to ask yourself whether you see your space crowded by things that you specifically do. In other words, the space might feel crowded for some, especially on a high level, but near empty for someone else. Depends on what you believe you’re solving.

In our case, CRM market was crowded for years before we came around, and it’s even more crowded now. People in San Francisco in 2011 asked us point blank, “Why would you enter the market that’s so crowded and dominated by Salesforce?”. For us, though, there were huge gaps in geographies, salespeople really didn’t think they had a tool built for them, acquisition models were too expensive for all parties, configurations were time-consuming, costly or even impossible, etc. I sometimes look at FlightAware and it seems that the sky is completely covered by planes but then realize that it’s only at the very high level that it looks that way :slightly_smiling_face:.

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Hey Alo, thank you! It’s a question that could take quite long to answer in detail. Let me try a condensed version.

  1. From what I’ve seen, sales is tough. Probably not too many of us who would sell day after day without receiving any pay. So, the rewards should be there, and usually it’s achieved by aggressive bonus system. Agressive in a sense that if you bring money in, you will be paid, if you don’t, you won’t. 100% commission is tough for many, of course, but so is sales. So, there needs to be a respective driver and reward.
  2. Strong bonus helps hire people that are willing to enter this sort of arrangement, and keeps away the people that look at sales as way to “meet people and make acquintances”. It’s a goal-oriented and a process-oriented job which needs to be executed first, and mastered, second. So, I would hire the ones that would be willing to dive in and develop in that order.
  3. Sales, luckily, looks like a fairly even playing field (at least at the beginning of a month or quarter with everyone at zero :slightly_smiling_face:). This is where competing comes in. Yes, people need to get paid and that alone motivates them in sales. But, so does kicking someone’s butt. I would put together a number of activity and result goals to ensure there can be many winner categories and make sure that the recognition of on-going effort does not go unseen. I’ve seen what a physical gong does in a room of salespeople when one of them goes for a hit after a successful close. I’ve also seen how important it could be to be closing in midway through the week to someone ahead in interim results. People are at different levels of skill and are triggered by different competitions, so multiple metrics to compete on is a great way to engage everyone somehow.

There’s more about each of these things, of course (in terms of detail of how one could build it up), but hopefully it helps along.

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