Outreach

A determined team that stuck together through pivot after pivot, ultimately creating a multi-billion dollar company.

Hey everyone! Thank you for all the support on my last post, I had a ton of fun writing it and I’m glad you all got so much enjoyment out of reading. 

I've got a fun read about Outreach, a sales-tech company recently valued at over 4 billion dollars. It's a story of persistence and determination - years of building and multiple failures, but ultimately a fantastic product with explosive growth.

The Outreach team began to form in 2005 when Wes Hather and Gordon Hempton met at UW studying computer science together. After graduating from UW the two worked as software engineers for multiple companies in the Seattle area before starting a company together.

The two were accepted into Y Combinator to build Apart, a super-simple, real-time web collaboration tool built for small, remote teams. They worked on this project for nearly two years when it ultimately folded. After Apart failed, they both took some time off from the startup life. Wes went back to a corporate job, working as a flex developer. A little over a year after Apart failed, Gordon and Wes began working on GroupTalent. They began hacking on the product and met up with two other aspiring entrepreneurs Manny Medina and Andrew Kinzer.

Manny had an impressive background studying engineering in Ecuador, then moving to the US to study computer science at Stevens Institute of Technology. He must have been quite the standout student as he moved on to Penn for his master's in computer science and then an MBA from Harvard. Manny went on to work as a product manager for Amazon before working his way up the sales ladder at Microsoft.

Andrew had a background in design. After graduating in 2005, he spent around five years as a product designer, initially in San Fransico and then in Seattle. 

August 1st, 2011 - The GroupTalent Journey Begins

Andrew and Manny met through connections in Seattle. They jived and decided to apply to TechStars. Manny said the initial idea they got into TechStars with was stupid, so they quickly linked up with Gordon and Wes to work on GroupTalent.

"The original pitch of GroupTalent was about getting jobs or getting acquired as a group of friends. That didn't work, because there's no real liquid M&A market for that kind of thing. So we decided to pivot into hiring great talent, and we decided that our event was going to be building better profiles. We build profiles for developers talking about what things they built, a link in their Github repository, etc. That was a fine idea, except that you're now faced with a two-sided marketplace. You have to attract employers with the right jobs, and you have to attract the developers to stick around and sort of connect them. When you do that you become a glorified agency, unless you can get to scale. We were operating as a glorified agency, trying to throw tech at the problem, and the problem would not bite." - (Manny talking to Create33)[https://create33.co/create-seattle/create-seattle-season-one/cofounders-collaboration-and-closing-customers-manny-medina/]

2012

After trying a few ideas, they had a clear vision going into 2012. They were going to build a two-sided marketplace for engineers to find exciting projects. In 2012 they grew from 100 developers on the platform to over four thousand. They had a bit of traction and raised around a million dollars, with the round closing early 2013. This group never seemed to raise a round all at once. They were constantly fundraising and getting checks where they could. I'd guess they got a few investments in 2012, with the whole round finishing in February of 2013.

Late 2013

After a year and a half working on GroupTalent, it was clear things were not working. The team was nearly out of money with no signs of revenues to sustain them or build the basis for another round of funding. They got together at Gordon's apartment to give it their last shot. The problem was simple: they needed more people on both sides of their marketplace. They debated several ways to grow. Their best solution was to send out a ton of personalized emails with follow-ups. They coded a basic engine to start sending out emails, and it began working. Their marketplace began showing some life.

But the companies that Manny was selling to still didn't care about the platform; they were impressed with the flow of engineers. Prospects would ask how GroupTalent was getting so much traffic. Manny would tell them about their email engine. The companies Manny was pitching to didn't want GroupTalent, they wanted to buy the email engine. The basis for Outreach was forming, but Manny had to convince the team that this would work.

"When I called them that night, they were labeling the equipment to sell it on eBay. Because we were that close to just being done, and I think Gordon was tired, I think Wes was tired, Andrew was afraid that the lawyers were gonna come after his house — like it was just like a mess. We were in an emotional mess that night." - https://create33.co/create-seattle/create-seattle-season-one/cofounders-collaboration-and-closing-customers-manny-medina/

Luckily, he got the team on board and got Boris Wertz from Version One Ventures to put in an extra 75k, giving them an additional four months of runway. Boris and Manny convinced their board to put a bit more money into the company. Outreach was born. 

2014

Over the next year, they started onboarding customers and raising Angel check after angel check. 

"We raised about five hundred thousand dollars in angel investment over the course of 12 months, and just by getting like ten and twenties every month and by the end of the year not only we had a working engine, we had revenue that was going up and to the right."

They didn't raise a traditional round and were getting money into the company from whomever they could at this point while they were testing the platform with early customers. Manny noted RelateIQ was a leader in sales tech, and many of the VC firms weren't interested in investing in related companies, so he found success with angels.

Although all signs pointed to their pivot's success, the team still needed to build a commercial product and grow their revenue.

2015

Early 2015 was the public launch of Outreach. In their first four months, they onboarded over 200 customers onto the platform by, you guessed it, sending a lot of personalized cold emails. Manny was also going door to door in Silicon Valley trying to drum up business.

With this traction, in May of 2015, they raised an official seed round for 2.4 million dollars to begin scaling up the small team. They began multiplying their five-person team.

In October of 2015, they raised a Series A for 9.2 million dollars. 

It's worth noting that Outreach had several key competitors at this point-namely Salesloft. They differentiated their product with several features, including a full Salesforce integration. 

2016

Eight months after their Series A, Outreach raised 17.5 million dollars in a Series B. By the end of 2016, they crossed 10 million in ARR. It's incredible how quickly revenue grows when a product catches on. Three years after the company was nearly dead, Outreach was over a 100 million dollar company.

2016-Today

They have raised round after round continuing to expand their team and build out the product. Outreach's most recent round was a Series G. In June of 2021, they raised 200M at a 4.4 Billion dollar evaluation!

Manny Medina continues to run the company. The other three founders have amicably departed to explore other projects.

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As I said, I’ve really enjoyed writing these so I’m going to commit to doing one a week. I’ll be posting on Reddit, but also going to start a newsletter. I want to experiment with a community owned newsletter where early adopters own some of the future profit (if there ever is any). If that sounds interesting, subscribe and I’ll send information as I have it.

Thanks for reading, have a great week!