From $1 to $10M ARR, What’s Changed?

Romain Lapeyre
October 6, 2020
Our CEO Romain Lapeyre sat down with A Players Podcast to talk about hiring techniques and some of the lessons he’s learned growing Gorgias from $1 to $10M ARR. ‍

I started Gorgias out of college, five years ago now, with Alex Plugaru in Paris. Basically, we wanted to focus on customer service because we found the experience was broken. So, we built a customer service platform for e-commerce merchants on Shopify that brings everything in one place. Over the last five years, we went from zero to 10 million annual recurring revenue (ARR) and 4,000 customers. For the last couple of months, we moved from one million to 10 million ARR and a lot of things changed, especially in the team. Throughout our attempt to grow and reach our goals, we gained some valuable insights along the way. 

Focus on Hiring…

When we reached one million ARR, we decided to focus on hiring. There were 10 of us when we first reached one million ARR, now at 10 million ARR, we have around 90 people. Some startups hire for experience but we decided to take the route to hire for potential. We felt this was crucial to maintaining a strong culture. For example, Aasif, our Head of Sales, and first AE at Gorgias was somebody who had tons of sales experience - from selling cars to start-up products. It was really interesting to hire somebody with this profile who could do a great job as an IT, but who could also understand how to build machines, systems, and scale that team. When hiring for potential, we found it was also important to surround ourselves with advisors. These industry “veterans” had experience in startups that were already generating 10 or 20 million AAR and were willing to share their knowledge with us to help us reach the next level.

Now that we’ve reached 10 million ARR the next chapter is to go from 10 to 100 million ARR and we’re expecting tons of change. Just from talking to original people at major companies like Shopify, for example, it sounds like there are two distinct models. The first model is to hire very experienced people who bring a bunch of best practices. While they offer enormous value, the trick with these profiles is that it comes down to what you want in terms of culture. The second model is to hire for potential and get people to grow within the company. 

If you want to have a company culture that’s the average many companies, then you basically just hire people that are going to run their own playbook. If you want a strong culture like we’re trying to have, you need to hire “hungry people” who are willing to innovate. For example, with the business development team, we do a lot of events online. It’s not something that has ever been done in the industry before. So, you tend to innovate a lot more when you have people that are first timers.

For our recruiting process, HireSweet helped us a lot. When we were hiring and looking for our first engineers, they helped us a great deal by scraping through all the platforms and giving us access to numerous developer profiles. This was much more efficient than us having to reach out to developers one by one on LinkedIn. Another way we’ve automated the recruitment process is through the platform HackRank where we score engineers based on their performance levels. But overall, we didn’t want to automate all aspects of hiring because we find the human aspect is incredibly valuable to our company. 

… while maintaining our culture and our values

There’s always a lag to know if you’ve done a good job, so I guess we’ll know in a few months if we were successful in maintaining our culture and values. 

Our inspiration came from the book Principles by Ray Dalio. We make sure to write down our values and make it very clear what our culture is- you can even read it on our website. But if you really look into what culture means, it’s the definition of how people and the company behave. These words you use to describe your values and culture need to translate to various situations. So, the work we are doing right now is on converting these values into very practical, actual items.

So, what are our values today? Our number one value is customer-first. Another one would be “strike for excellence”. We deeply care about hiring people who want to become the best versions of themselves. This relates to our strong culture of ownership as well. Our idea is to distribute power across the company and empower people to make their own decisions. Another value one is honesty: it’s about being transparent and straightforward with customers when we have issues, like IT problems. And the last one is workflow automation. We built and automated a go-to market engine that has been one of the pillars of our growth so far. 

What we learnt along the way

The human feat aspect of the company is very important, and we’re learning a lot along the way. From managing the team, recruiting, leading the team and making sure everybody’s aligned with the culture and the goals. We’ve gained some valuable insights in various areas. 

First, we found it was useful to think of the company as two different engines - and work on building those engines for scale. The core engine of the company is the product and the goal of this engine is to bring value to customers. The second engine is the go-to market engine. Its goal is to get as many customers as possible and to maximize the impact of the first one, which is the product.

Another useful tactic we implemented - which is kind of conventional wisdom in Silicon Valley - is to build an OKRs system to align everybody in the same direction. We established high-level goals at the scope of the company (annual revenue, automate a percentage of tickets etc). And then, each team lead was designated sub-goals. So, for example if you have the goal to add one million annual revenue, the Product team is going to have the goal to generate one million of expected annual revenue in the pipeline. What has been really valuable with this system is that everybody has their piece of ownership. At a glance, if anyone wants to know how the company is doing they can just go on our Asana board, with all the tasks and the subtasks assigned to each person, and see if we are on track. 

We also built a growth engine from the team’s perspective using Segment to create a customer centric database that gives us a 360 view of each customer. The goal of the Operations team is to make sure we have clean data about our merchants-  from what they’re doing outside the company to their interactions within our company. If we take one of our merchants, Marine Layer, we know what they sell, where they are located, what tools they are using, if they visit our website, if they had a demo before, etc,. This way, you can add things to plug on top, which can be the sales engine, the biz dev engine, the marketing engine, and the success engine as well. Thanks to our 360 view of our customers, every team member is able to provide a quality customer experience from the sales calls to the success team calls.  

One final thing we found helpful was the early decision to hold board meetings, every quarter. It created accountability because every department head had to report not only to the CEO, but to the board as well. I am convinced that having these early board meetings was very instrumental to building this executive team that was composed of early hires. They set the company up with the right structure, propelled us to keep moving in the right direction, and helped us understand which department needed new hires.  

What we wished we had done differently

Regarding hiring, it’s much faster to hire people for the go-to market engine versus the product engine because product is generally more complex. We probably should have over-hired on the engineering side to compensate for the fact that it takes time to train engineers.

Another piece of advice would have been to focus earlier on retention and think about how to create a path to upsell our existing customers. Right now, retention is about 100%, so we don’t lose a whole lot of revenue from our customer base. But having this upsell engine is also really valuable.

And one last thing we should have done was to hire recruiters earlier on. We waited till we had 30, 40 employees and by then it was too late. At that time, it felt like a big investment ($100k, $150k on a recruiter salary) but the impact it has on who you’re hiring, more importantly who the next 10, 20 people in your company are going to be, is so huge that I think it’s really worth investing in.

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