Firefly is a “co-browsing” tool that lets a user share their browser screen in real-time without any additional software. The Wharton Journal first introduced Firefly this time last year.
Founded and bootstrapped right here at the University of Pennsylvania by Dan Shipper (UPenn’14) and Justin Meltzer (W’12), Firefly was Dorm Room Fund’s first investment and was recently acquired by Pegasystems (“Pega) in June 2014.
This time, the Journal caught up with not only the founders but also Katelyn McCarthy (WG’14 and Wharton Journal alumnus), who joined as an intern full-time after graduating in May. The Firefly team revealed what they got right and what lies ahead.
Wharton Journal: Our first two questions are for Katy. When we last spoke to Firefly, the team was focused on distribution and gaining traction in the enterprise market. Having gone through it successfully, what was the sales and customer acquisition process like in a startup?
KM: Prior to Wharton, I spent seven years selling to enterprises of all sizes for IBM and Google. So the experience I brought to Firefly was grounded very much in sales processes, as well as some of the art of sales. The Firefly team had developed a strong product value proposition, and clearly understood how it was different from competition, but there was a gap in the team’s sales processes and the rigor with which they attacked sales.
As a result, the lack of structure made selling that much harder on top of the challenge of cold calling as a startup with limited brand recognition and the myriad of other tasks the founders had to do just to operate on a daily basis. For example, the team could articulate revenue run-rate, but they could not confidently quantify pipeline, appropriately size an opportunity, or qualify a customer’s willingness to buy, let alone take the time to make several cold calls a day.
Once we started focusing on the processes and best practices of selling, time was spent much more efficiently with clients and uncovering those clients that actually had a need for a solution like co-browsing rather than the ones who were just willing to listen to a cool startup give their pitch, and Firefly’s pipeline became very well defined. In other words, we had a better handle on the business and better predictability of revenue.
What was your role and why did you join?
KM:About a year in, Dan and Justin decided they wanted to bring on someone with experience in enterprise tech or B2B sales in order to focus on growing the business. Thanks to a mutual friend and former Founders Club President, Carlos Vega (WG ’14), I met with Dan and Justin to learn more about Firefly. I immediately liked Dan and Justin, was intrigued by the Firefly product and the business problem they were trying to tackle. Just by talking shop for a few hours about the lessons I learned as a sales rep, the itch to sell and get in front of customers started to gnaw at me.
As a result, I joined the team in November 2013 to focus on business development and sales. My role was to define Firefly’s sales processes and implement sales best practices so the team could ultimately maximize their time and revenue opportunities. This translated into developing a plan that ranged from defining Firefly’s sales stages to helping the team accurately assign a value to a growing sales pipeline. As Dan and Justin would say, I helped the team put a formal structure that worked and was backed by experience around something they were doing by gut feel for a long time.
Amazing. Justin – with Katy supercharging your business development and sales process, what is one thing you wish you had known or caught you by surprise about revenue growth?
JM: What caught me by surprise was how difficult it can be to sell to large enterprises. As a college kid with zero work experience, I had imagined the process being as simple as explaining the value proposition to a senior executive followed by signing a contract. Little did I know, large companies have defined procurement processes, budgets, politics, vendors of choice, and so many competing priorities that all play a part in driving long sales cycles. Working with Katy to organize our sales approach and learn to properly qualify prospects and efficiently allocate sales efforts was an enormous help to our company.
Pega is a 20+ year old Boston-based software company with a tradition of offering on-premises software. It doesn’t market itself to be leading edge and I would say it’s almost the antithesis of the Silicon Valley tech scene. Why was Pegasystems and Firefly a good fit for each other?
JM: First off I would argue that Pegasystems is, in fact, a cutting edge technology company. The problems they solve may not seem sexy at first glance, but they’re doing incredibly powerful and interesting things for a lot of the most complex and successful companies in the world. Pega’s offering is so robust that it can take time to fully grasp how truly innovative it is. The fact that Pega competes everyday with goliaths like Salesforce and Oracle and still wins so many deals is testament to that.
I think a big factor that drew our companies together had to do with a similar set of values and beliefs. Alan Trefler, founder and CEO of Pega, grew the company to over $500 million in annual revenue without ever raising a dime. Dan and I had a similar methodology – to grow organically and prove a business model with little to no outside funding, relying on just our grit, determination, and the advice from our network of advisors to make things happen. I think Pega respected that. I know that I respect Pega for that.
But obviously, the most important part of the equation was how we fit in with Pega’s other products and their existing customer base. One of Pega’s most important products is called CPM or Customer Process Manager. It’s a very widely deployed CRM product across the Fortune 500 – particularly for financial services, insurance, and healthcare companies (which we found to be our best customers.) Our Co-Browsing is a natural extension of the CPM product because we can allow customer service representatives to more efficiently diagnose and resolve website issues by “looking over” the customer’s shoulder as they navigate the website.
In sum, what excited us the most about joining forces with Pega was the opportunity to sell our technology to the largest organizations in the world – which is exactly the place where we saw it having the most impact – and to remain an independent brand and product inside of Pega’s suite of products. It’s been an exciting ride for us so far.
Any last advice for Wharton/Penn founders? MBAs?
DS: Sell from the beginning. The only way to truly learn what kind of product you have is to sell it to potential customers. Selling will help you zero in on your target market, and also figure out what features are important (or unimportant) to your audience.
Learn to stay focused even if things don’t appear to be going well. Success at an early startup is typically a step function: you stay at one level (in terms of revenue, customers, etc.) for a long time, and then suddenly you jump up a level. This is frustrating because typically you imagine success being a more linear process: you make a little more money, or sign up a few more customers each day. It can be hard to manage your mindset in the face of little “hard” data about your progress, but it’s key to continue to focus and keep selling – even if people want what you’re making, it can take a long time for all of the pieces to come together.
Over the first 10 months we brought in a grand total of $11,000 in revenue. In the 11th month alone we made about twice that total and we continued to grow from there. So scrappy resilience is really key.
KM: After being fortunate enough to work with Firefly and Tesorio, another Wharton-based startup from Carlos Vega (WG ’14), and collecting data points from other founders, there are two pieces of advice that are being repeated over and over again and resonate with any experienced entrepreneur. The first point is to spend time truly focusing on selling and the sales process. So often, entrepreneurs spend a lot of time defining a product, the target market, and what their message will be, but they don’t spend nearly enough time focusing on HOW they are going to get customers to buy their product. By taking the time to define and implement structure around things like cold calling, identifying fundamental data points about a customer’s willingness to buy, how your company will allow your customer to test a product and more, an entrepreneur can more efficiently engage customers and get to deal closure more quickly.
The second point is around being aggressive. This doesn’t mean trying to replicate the stereotypical sales guy who asks for a contract within the first five minutes of an introduction, but this means consistently driving towards an endgame that serves your goals (selling a product for a profit) and the client’s goals (solving a business pain point by adding value). In other words, always be closing for SOMETHING – whether that is getting an introduction to a decision-maker, learning details about a customer’s buying process, or even something as simple as a getting a clear yes or no answer on whether or not your product’s value proposition resonates with a prospective customer, you should always be getting after it in order to know where you truly stand.
What’s Next For the Firefly team?
DS: Both Justin and I are currently Principals of Collaboration Initiatives here at Pega. We lead a team responsible for building and maintaining Firefly as a separate Pega product, integrating Firefly in to Pega’s family of services including CPM, and building out other collaboration related products over time.
Katy is joining McKinsey’s Business Technology Office in September and hopes to one day get back to the technology industry.