Something big is happening in marketing.
For decades, marketing teams have been hamstrung by antiquated technologies. While the martech landscape has 7000+ tools, most of the actual work within marketing is still managed within a hodgepodge of low tech (or no tech) tools. Workflow is done in email. Content production is done in Microsoft Word. Calendars are in spreadsheets. Campaigns and briefs are planned in PowerPoint. None of these technologies are purpose-built for marketing.
I’ve often wondered why marketing was left behind? Every other organization within the enterprise has some sort of operational system – sales has CRM, engineering has JIRA, people ops has HRIS systems etc. Up until recently, marketing teams were fairly small, focused on a few channels, and simple to manage. Content production requirements were minimal, and budgets were accordingly limited. But over the past five years, the landscape has changed. The number of channels has exploded, resulting in bigger teams, budgets and expectations. The velocity and quality of content required to power all of these channels has increased. And CMOs are more accountable than ever before. Marketing complexity is now at an all-time high.
As an industry, we can’t continue to talk about marketing transformation until we solve this problem of antiquated technology and old ways of working. Transformation requires thoughtful systems and modern technology that enable better and different ways of working.
I’m excited to announce that we just raised an additional $20 million to solve this problem and go after this massive opportunity. It seems surreal to write that we have now raised over $100 million. I wanted to talk about this journey openly and honestly in the hopes that it helps folks understand us better. Whether you’re an entrepreneur, customer, partner or a curious marketer, here’s a quick inside look at our story.
Let’s be clear. Raising a lot of money is not necessarily correlated to successful outcomes (although it helps). I’d rather build a giant business with very little invested capital. But it took us a few years just to find a viable business model and a big enough problem to solve. During these early years of exploration, we burned very little cash ($1 million over three years!). We spent a lot of time with marketers and eventually found what felt like a really exciting opportunity to build an enterprise content marketing company.
Between 2012-2015, we raised nearly $90 million! Two reasons why: firstly, we were defining a category, which is hard, takes time, and takes capital. We were building and evangelizing our product, while simultaneously spending equal effort and resources in creating the category. But that was just half the story. The second part is that we were growing super fast (100% annually) and we were funding that growth. Unfortunately, that growth wasn’t efficient. We hired like crazy, often throwing bodies at problems. Our priority was not sales efficiency or gross margin improvement (those words were rarely heard around our office).
In 2016, we had seen enough. While the content marketing category is indeed gigantic (which company in the world doesn’t do content marketing?), we realized it was very early in the maturity cycle for our customers. They were still figuring out if they needed a software platform to do content marketing. And for those that invested in a CMP, changing how they created content was hard. Adoption was hard. And as a result, customer retention was hard. We pulled the handbrake and decided to retrench and build a high-quality company instead of simply a high-growth company.
For two years, we focused on improving productivity (we went from $100K ARR per employee and doubled it to $200K ARR per employee). We improved gross margins. We built a hyper-efficient sales team (with sales attainment mostly at 90-100% or better!). We focused on NPS (our product NPS has improved dramatically every year for the past three years). We obsessed over customers, building an incredible success and services organization that was focused on business outcomes and helping our customers increase their maturity. This, in turn, improved retention rates dramatically. We marched towards profitability and had our first operating cash flow-positive quarter earlier this year. In short, it was hard. But we built a really high-quality business that is at scale.
And then something even more exciting happened. Last year, we launched our Integrated Marketing Edition to solve the marketing transformation problem I described above. And it took off beyond our wildest imagination. The market responded eagerly to our vision of building the operating system for marketing. We signed up some of the world’s largest marketing organizations that put hundreds (or thousands) of marketers on our platform.
We have been (and continue to be) relentless about transforming how marketers work: how they plan, create and collaborate on campaigns and content. While work management may not sound sexy, it’s an important problem to solve. McKinsey had a study that showed marketers spent 60% of their time doing work about work. The only way to unleash the potential of marketing teams by freeing up their time to focus on what matters: creating exceptional marketing. And with our IME, we have built technology to solve for the rest.
So that brings us to today. We have an additional $20 million to invest in our people and in our products – both the core Content Marketing Platform and the new Integrated Marketing Edition. Going forward, both editions of our software will be foundational products. We will continue to support and invest in content marketing while adding another 20-30 engineers over the next year to allow us to invest aggressively in our integrated marketing vision. We are the leading player in the space (twice the clear leader in Gartner’s Magic Quadrant for CMPs) and are looking forward to taking a leadership role in additional categories (like Marketing Resource/Work Management). We are already the biggest company in our category, with an existing global footprint and still expanding fast. We are the existing leader in Europe and the now the largest player in Japan with our partners (and new investor) Dentsu and Amana. This year, we are also expanding quickly in Australia and Asia, as well as opening a new office in Boulder. Why Boulder? We’ve just hired an amazing team of sales and customer success professionals from Kapost, one of our competitors that recently got acquired.
It’s been quite an 11-year journey. Candidly, we’ve outlasted all our competition, and that further contributed to our recent growth (side note: outlasting is a growth strategy I highly recommend to entrepreneurs). But outlasting doesn’t just happen. It takes guts and determination. Grit is one of our core company values. And so I must end this post with some words of gratitude. Thank you to each of our major investors, all of whom participated in this round. And thanks to our new investors, Dentsu and Escalate. Thank you to all my amazing colleagues, past and present. Thank you for your tenacity, your brilliance, and your customer obsession. As I always say, working for you has been the greatest privilege of my life.
And finally, thank you to our customers. Because of you, we get to come to work every single day and do what we love. Thank you for the faith you put in us. We will work tirelessly to make sure we repay that faith. Our mission is to unleash the potential of marketing teams, and that means moving mountains to make you successful. We’re just getting started.
Shafqat Islam is NewsCred’s Co-Founder + CEO.
Originally published on Jul 11, 2019 1:30 PM