Schafer: Who needs salespeople? Not this IT entrepreneur

  • Article by: LEE SCHAFER , Star Tribune
  • Updated: September 26, 2013 - 9:39 AM
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Clay Collins, CEO of LeadPages

The software company LeadPages is just getting going and hasn’t gotten around to getting an office. Co-founder and CEO Clay Collins doesn’t have a business card. The company has no sales reps, and good luck finding a phone number to call with questions.

But LeadPages does have a product and more than 6,000 paying customers. That, in turn, got the attention of two venture capitalists that together just put $5 million into its checking account.

How LeadPages already has 6,000 paying customers with no salespeople doing any selling is more than just one innovator’s story. It’s an approach that looks increasingly viable for many technology entrepreneurs. Salespeople, in this industry anyway, are starting to look a little obsolete.

Building sales with no salespeople is “both part of the story of LeadPages and it’s also the trend they are playing into,” said Seth Levine, partner with the Foundry Group, a high-profile venture investor from Colorado that’s making its first investment in Minnesota with LeadPages. “With the Web now there’s an ability to do pull sales, or pull marketing, not just push. What LeadPages is doing is not just taking advantage of that themselves, but they facilitate that for other businesses.”

It’s important to note that LeadPages isn’t three clever thirty-somethings who made a cool iPhone app and sold 6,000 copies at $1.99 each on the App Store. LeadPages is bought by business people to solve business problems.

It’s software-as-a-service used to create a landing page or lead capture page, the page on a website that leads a potential customer to take some action. It may mean clicking through to a reservation form for a massage, registering to hear a web-based seminar or just providing contact information.

At first, LeadPages’s product just built the pages for customers, and features such as the ability to test different approaches and plug into e-mail marketing programs were added as users asked for them.

Casey Allen, the co-founder of the Skyway Fund who has looked into LeadPages, explained that it provides a solution that previously was “something some geeky guy charged you $150 per hour to do to your website. Clay is making it a self-serve model where the website owner doesn’t have to hire anyone. Think about how easy it’s been to set up your own e-mail now on Google versus 15 years ago. [It’s] game-changing.”

Collins planned from the beginning not to use salespeople to help bring that technology into the market. It wasn’t because he had no money to pay good salespeople, either, it’s that he planned for potential customers to find LeadPages.

Collins created awareness through blogs, particularly the company’s own, beginning a couple of months before the January launch of the product. He called it “thought leadership” on the topic of making lead pages better.

LeadPages doesn’t announce the release of new software versions, either, nothing like Apple’s recent launch of iOS 7. Instead LeadPages publicizes and talks up every new software feature, usually weekly. The company also lends a hand to many other technology bloggers, talking about how to improve the sales results from Web pages, and of course working in a pitch of its own.

Collins said LeadPages gets its customers through a “bottom-up” approach. “You start with the person who actually needs the result, in our case it’s the marketer. They don’t have time to go through the IT department to get these pages made. They’re up on a Sunday night and need to get the pages out the door. You make [the solution] a low price point to them, and by the time the use of the product scales up, it’s unthinkable for the company to pull out.”

LeadPages starts at just $37 per month. How the product evolves will be led by users, but Collins said he can envision one day producing far more sophisticated, and expensive, versions for large companies.

That’s the most intriguing part of LeadPages’ story. No six-figure-earning, highly accomplished enterprise software sales rep would sign up to sell $37 a month deals, but will they ever be needed? Will big enterprise users also come to buy LeadPages the same way the small-business owners now using the product have? Collins thinks they may.

Collins comes across as low-key and brainy, and it’s only after he hangs up the phone that you fully realize just how opinionated he is. It was Collins’ pointed advice during a panel discussion on financing at an April technology enthusiasts gathering — whatever you do, entrepreneurs, don’t create a business plan that depends on venture capital — that first got the attention of the other venture capital firm in the just-closed Series A round, Arthur Ventures of Fargo.

Patrick Meenan of Arthur said he missed the meeting but caught the video later, and “our take-away … was that he was incredibly passionate about what he was doing, he had built a product that was getting rapid market adoption and he was doing it all with no salespeople or outside investment. Sounded super interesting to us.”

Collins has been acting on his own advice on financing, and he said the company didn’t need the $5 million it just raised. But he said he could certainly use the help of venture partners, on the board and as advisers.

Collins and co-founders Tracy Simmons and Simon Payne also wanted to bring on board as full-time employees many of the 20 or so people who now work with the company. “It didn’t feel responsible to ask people to move here,” Collins said, “if we didn’t have a notable amount of cash in the bank account.”

And now with the money in hand LeadPages will also get an office and Collins will print some business cards.

“I don’t believe we will ever have a sales force,” Collins said. “But we will have a phone number you can call.”

 

lee.schafer@startribune.com • 612-673-4302

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