Outsell for Startups CEO Q&A: Erik Matlick of Bombora

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Bombora is a leading provider of B2B demographic, firmographic, and intent data. So how does this all work? Let’s say I’m a company, and I am researching heavily around A.I. and machine learning because my company is interested in adopting that technology. Now, anybody that is selling to my company would find that information very, very useful. That’s what Bombora provides. It enables sales and marketing teams to have a holistic view of what a company is interested in, so they can provide a more valuable, more direct solution.

I was actually really curious about the name Bombora, so I looked it up. It’s an Australian aboriginal word that means a wave that forms over a submerged offshore reef or rock. The name is fitting given that Bombora uses surge data. If you go to Bombora’s website, it’s covered with surfing, and they actually support the Surfrider Foundation.

I had a fantastic conversation with Erik. We dive into his background, the companies that he’s founded, what he’s trying to accomplish with Bombora, and even what makes a successful founder and a successful company. I hope you enjoy this conversation as much as I did.

Key metrics

Founded: 2014

Number of employees: 100

Going through your Linkedin, you’ve started two or three companies now. How did it all begin for you?

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Erik: I started my career actually at Ziff Davis, which is a publishing company that primarily focused on B2B and technology magazines back in the day. When I was there was at the very beginning of the internet, we started using email and then we had our website. I saw it as an opportunity. I’ve always had an entrepreneurial bug. Just in growing up, I was fortunate enough to have met some entrepreneurs that did quite well. I was always intrigued by that and eventually noticed an opportunity with the internet. I happened to have been in a great spot because of the company I worked for was at the crosshairs of advertising, being a magazine publisher, and technology.

I came up with a concept for my first company called MediaBrains. To give you a perspective on when this was, this was around March of 2000. We raised a bunch of money, and I think that everyone knows that 2000 was sort of the first bubble. It was a great experience. The model wasn’t nearly as scalable as I would have liked, but it got me out. It got me working on my first business and introduced me to working with publishers and advertisers.

I then spun out and started my first successful business called IndustryBrains in 2001. I grew that very quickly to about a $15 to $16 million a year business, and sold it to a public company on the west coast called Marchex. After that I started Madison Logic, which was another business that focused on B2B and advertisers. We worked with a lot of publishers as well, and sort of were in-between the publishers and advertisers. We provided a lot of performance-based media. We had a platform, and built that business up to about $60 million in revenue, and sold it to a private equity firm called Clarion.

Somewhere before I sold it I actually had this concept, which became Bombora. The concept was to build this B2B data co-op. The reason that we thought there was a need in the market for a B2B data co-op, was that we knew from our own experience that when you know more about your users, everything you do is more effective. Whether you’re serving a display campaign and you’re looking for click-through rates, or if you’re sending out emails and you’re looking for open-rates. Everything is better when you know more about your users and you know what they’re interested in. So, we had this idea of, wow, if we had more data, if we had more intelligence onboard about what the buyers were interested in, everything would perform significantly better.

So, we started the concept inside of Madison Logic. We started talking to the publishers about joining this co-op and building this co-op together. Almost every publisher said, “This is a great idea, we all believe in what you’re saying. The problem is that we just don’t want to work with a media company, because you’re going to compete with us once you have our data.” So, we realized very quickly that the concept and the idea of aggregating a lot of B2B behavioral data made a lot of sense. We knew that we were going to have limited success unless we spun it out as a separate entity, which is what we did about 3 years ago.

Do you remember that specific moment at Madison Logic where you spotted the opportunity? Where you actually had that moment of realization ‘This is actually a problem that I think we can solve.”

Erik: So, there’s sort of two very big moments early on, and I think that was one of them. Just looking at the results. I think we were doing an email campaign actually, and we did some testing. I do remember looking at if we sent this email blast out to group A the way we were currently doing it, really knowing very little about the users. We knew their job title, maybe even knew their job function, but we certainly did not know what they were interested in at that moment; or if we sent out a separate blast to people who that we knew were interested in security, for example, and we sent them a security white paper.

The numbers were literally off the charts. There was a 300% to 400% increase in every metric: open-rate, click-through rate.

The second thing that happened, and this is just fortuitous, and you know timing is everything. We had the co-op up and running for six months or so, but we weren’t a separate company yet. So we had some data, and we were starting to get a little bit of traction. All of a sudden, there was another company that was in the space, that was not doing the behavioral side, handling the B2B demographics side called Bizo. They were acquired by LinkedIn. That was that fortuitous moment where we said, “Oh, there’s a void in the market. Now is our time, now is our time to accelerate.” Sure enough, Oracle actually called me within 24 hours, and told me that they needed to replace their current B2B data provider. We knew it was real at that point.

In regards to what Bombora does, as an example: I’m looking at a lot of A.I. research, doing a lot of A.I.-driven searches and Bombora picks up on that. If somebody is trying to sell to me, they can use that Bombora data and go, “Oh, Ben’s interested in artificial intelligence, we have a white paper we can send him. Our conversation is gonna go way better because of that.” Is that, essentially in a nutshell, what Bombora does?

Erik: It is, but we try to look at in on a company level. So, it’s not as interesting to us if it’s Ben, and only Ben, right? Because that could mean anything. It could just mean that you’re doing research, and that’s what you like to do, and you have a personal interest in A.I.. Right?

What’s interesting is that you work at a company called Outsell, which has X amount of employees, and there seems to be more research in A.I. this month than before, which means that you may be interested in an actual project. So, that would be of interest to someone who sells products like that. Right? So, that to us, is more interesting than the individual.

There’s a number of use cases. The two biggest use cases are lead scoring and digital advertising. So, on the lead scoring side we have publishers like 1105, and CBS, and QuinStreet, and many, many, many others who contribute data in to the co-op. What we give them back is a better picture of when they generate a lead, is it a lead from a company that’s surging on the product or service of their marketer, or not? If their client is a tech company that sells routers, and they generate a bunch of leads off of a content syndication campaign, when they deliver those leads to that company that sells routers, they could show them out of these hundred leads, here are the twenty leads that are surging on that particular topic.

Sorry to interrupt… What triggers a surge?

Erik: We build propensity models so that we can look at every single company in the world that we monitor, which is over a million companies worldwide, and we build a model against every single topic that we track, which is about 3,500 topics. Essentially what we look for is a pattern where it’s not just the number of people in a company, but how many articles they’re reading, what their scroll velocity is, how much time they’re spending on a page on that particular topic. If we notice that they’re doing more of that this week than they have in the rolling average over the last 2 to 3 months, then we identify that as a surge. There’s a score. We can tell you that, “Hey, you know Boeing, in Seattle, is doing a lot more research this week than usual on routers.” Therefore, we believe Boeing, in that particular office, is on a research surge on that topic.

Is it a subscription-based model? Do I subscribe to Bombora?

Erik: That’s exactly how it works. We sell it as a subscription, and then we also try to deploy what we call “Company Surge analytics.” We try to look at the different tools that you’re currently using, your marketing tech stack, etc. We try to find an easy place for you to start using it; it could be integration at the CRM. So, your salespeople might want to be keying off of companies that are surging. It could be in to marketing automations; maybe your email marketing team would like to use this data to serve and to send emails to companies that are interested in what you sell. It could be for your ad agency. Your ad agency might be interested in serving programmatic display advertising to companies that are interested in what you sell.

So there’s a number of ways to integrate. Each one of those that I just mentioned has its own set of channel partners. So, we could activate it in a number of ways. You kind of look at how we sell. It is a subscription, but once you look down at the next layer, it actually gets a little complicated as far as how do you want to implement it, and which of the channel partners that we’re working with is best in order to integrate it for you.

I noticed you guys are integrating, like you said, in a number of different areas. I also noticed that you guys integrate with Salesforce. Congrats on that deal. With a deal where you integrate with a CRM system as big as Salesforce, how much growth do you forsee that one integration driving for your business? What’s the impact of one deal like that for your company?

Erik: That’s a really good question. It’s early days for us. We’re setting up channel partnerships today still, and that’s a big part of our business. We have 55 channel partners today, Salesforce being one of them. Obviously, they’re a very large business, but we have more recently been focusing on is building out what we call a “customer success team”, to focus on those channel partners and to help them be successful. So, I think it’s a bit of a misconception that you build an integration, you print out a press release, and it’s just going to scale and be huge. Right? Underneath that, there are salespeople and customer success people on the other side that need to be educated, that need to work with their customers, and you need to work together to make those implementations successful.

To answer your question, the simple answer is yes, we think that that is a huge opportunity. If you look at the marketing budgets, you look at advertising budgets, and then you look at sales budgets, sales budgets are actually infinitely bigger than the other two combined. So, we do think that CRM integration or Salesforce integration is a very large opportunity for us.

One more thing is that today we’re growing extremely well, we’re growing at over 100% year over year, by both top-line revenue, as well as employee growth; but we’re still a small company, as far as enterprise B2B companies go. We’re at just under 100 employees today.

The channel strategy, we think, is really a better strategy for us because, number one: We’re building an ecosystem, and everybody wins. We want to support our channel partners, and we want to support our co-op members. So, the idea of us going direct and selling direct to every single customer prospect out there is really not in our best interests, nor is it something that we can afford to do. We’re not going to build a sales force of 800 people, or 1000 people, or 1200 people. Right? The channel partnership has been a great way for us to grow without having those salespeople, so we’re really sharing in the sales and marketing expenses with a lot of our channel partners.

On the flip side of building a program around channel partnerships, is there an opportunity for developers to build off your platform? Can I build an application that works with Bombora?

Erik: We don’t see ourselves so much as a platform. We’re really a data provider. We have a data science team, and we’re not just aggregating data and organizing data and pulling it from our co-op, our collective of publishers and marketers that are contributing that data, but we’re putting that data in a form and a format that can be used. Part of that is A.I., as far as identifying companies that are interested in certain products. Right? So that’s our core competency. Building workflow and software tools and platform isn’t necessarily our focus. Now, we do have a UI, and we have that UI a lot of the times because we like to demo what we do, and how our data is used in action; but it’s also used for our audience solutions business because there was a need for agencies, and marketers even, to log in and create these audience segments, but then push them into their trading desks, or wherever they want to execute the media.

So to answer your question, there are many software providers out there, or platforms out there, workflow platforms especially, that are integrating our data into them, and building products around our data, if that makes sense.

Thinking of Bombora as the data warehouse or the data provider, do you ever have issues around quality control? Or how do you handle quality control? You have a data science team, you’re implementing these A.I. solutions, and as a result you’re collecting a lot of data points. How do you make sure that’s controlled?

Erik: That is a big focus of ours, and there’s a lot of noise out there. That absolutely is part of our role, is to identify what’s noise, what’s not noise, what’s valuable, what’s not valuable. I’m not going to tell you that we’re perfect at it. I just think that we’ve been doing it longer than anyone else in this space right now, and we have a big, big headstart. It’s an area of focus for us, and that’s another add-value that we give to the market.

What does the competitive landscape look like?

Erik: Good question. If you look at our business today, there are really two areas. The first is what we’ve been talking about, which is what we call “Company Surge analytics,” which is where we identify the companies that are surging on a particular topic. We do sell it as a subscription, so that’s one area for us. The other area is selling B2B data in the digital side of things we call “audience solutions”; where marketers, or agencies rather, will create a campaign on behalf of their customer, and then they’ll execute a digital or display advertising campaign programmatically. They are related and complimentary, but they are different competitive sets to what we have in each of those, is why I mention it.

On the audience solutions side, where the agencies are buying data for campaigns, we tend to be compared to or compete with offline data providers that are providing mostly demographic or firmographic data. They’re company-sized, job-function-type data. It’s fairly generic, the type of data. It’s offline, which is worth mentioning. It’s data that’s usually older by nature, to collected offline, and then they have to bring it online. So it’s very different than what we do, but that’s, generally speaking, where we get compared to because we do have some firmographic, demographic data.

We focus on the behavioral side, the intent side. We really are unique there. Also, all of our data emanates from online, it’s starting online. So we have a big advantage there. We have a lot more scale than anyone else. But that is where we get compared to there. On the analytics side of our business, where we’re selling subscriptions, we really don’t have competition. We have lots of channel partners, and sometimes that gets confused, and some people will say, “Oh, it’s just like so and so.” And we’ll say, “Well, that’s our data, it’s inside of what they do. They license it from us, and then they bring you this product.” So, it’s really more confusion in the market at this point, which is part of what we’re working on with our channel strategy is clearing up those lines of communication, and being more clear about it being Bombora inside. Not just through press releases, but working more closely with their sales team and aligning them with our vision.

So you’re doubling in size every year. What would you say is currently the greatest challenge that the company faces?

Erik: I think if you asked me that question a month ago, I’d probably give you a completely different answer than I would give you today. I think it evolves, and it’s changing, and it’s always changing. I think a year ago, I would say it’s a nascent market. We couldn’t be doing what we’re doing today if it wasn’t for a few things. Number one: embedded, the technology that’s currently embedded. The marketing and technology stack didn’t really even exist 3 years ago. The Marketos and the Eloquas, and those kinds of companies, just weren’t as big as they were 3 years ago. Now, it’s actually a great thing that the infrastructure is in place. We only work once the infrastructure is in place. So, that was definitely a challenge. In the early days, people would say, “Great. We’d love to have this data, it’ll make what we do better; but, we haven’t figured out what we’re using for market automation yet.” So, that’s where we were. “We don’t a DMP yet,” or that kind of thing. So, those were the challenges that we had.

The market has matured and we’ve gotten much better at identifying who we should be selling to. That was another challenge of ours, even six months ago. We realized, “Hey, there’s 5000 companies that actually qualify and want our data, but that doesn’t mean we should be selling directly to 5000 companies.” We reorganized around about 120 key accounts that we’ll have a relationship with, and we’ll push them towards embedding our data into the ecosystem and the technology that they have embedded. The other 5000, minus 100 or so, we will refer them and work with them via our channel partners.

So, that was definitely a distinct challenge that we had. We think we have a great plan, and it’s working. Our channel partners love it as well, by the way, because it gives them more leads to work on, and follow-up on, and sell; and we work together with them on that. We’ve also realigned those partnerships, the details of those partnerships, so that they’re incentivized to sell those customers, and we’re incentivized to bring them those customers. There’s a bit of give and take there, so that took some time.

Today, our challenges are maybe a little bit different. More organizationally, when you get to any company that gets to over 30 to 50 employees certainly has structural, organizational growing pains, if you will. All of a sudden, you go from a flat organization, where everybody reports to one person, to ‘Okay. We’re a big company now. We actually need an HR department. We need to have certain policies and procedures in place. We’re just too big for one person, or even five people, to manage everything that’s going on, on a day-to-day basis.’

What does the composition of the team look like?

Erik: Again, a year ago it looked very different. Much more heavy on product engineering and R&D. We call it data science included. That was the largest group in the company. Looking at 2018, it’ll be much more evenly distributed. We have made a bigger effort on the sales and marketing side of things. When I say sales, I’m including customer success; I’m including our channel sales team even though they’re not selling direct to customers, they’re still selling their working with the channel and helping them sell customers. That is a much bigger group than it was a year ago; in fact, some of those groups didn’t exist a year ago. So, that’ll be pretty even with product and technology.

To support your growth, was the company venture-backed at all? Was it bootstrapped?

Erik: Interestingly, we’re not venture-backed. We haven’t decided to go down that path yet. We’re funded by myself and a group of angels. We’ve basically been operating in a bootstrapped way, but we’ve been operating at a slight profit for the last year and half, or so. Investing everything that we can back into the business, but that’s how we’ve been managing so far.

That’s really nice.

Erik: It is. One could say that the stage we’re at today, we probably could use an infusion of some capital, just to accelerate the growth; but, what’s great is that we’ve gotten to where we are without that, which allowed us to really focus on what’s right for the company, the employees, and most importantly, the customers. We’re building products that we believe are right for our partners, rather than based on some timetable that an investor set for us, if you will.

Also gives you the time to focus on the company, rather than getting out there and taking on another full-time job, which is just around raising funding and dealing with those relationships.

Erik: You know, a lot of people don’t realize that; but even if you just raised money, and you think you have enough money and you don’t have to go out there and raise more money, just managing the investors and doing the board meetings and whatnot, can be very time-consuming and distracting.

We operate like we’re a public company. We’re audited, we do everything that a venture-backed company would do. We even have, we don’t call them board meetings, they’re manager meetings. We do them every month, and we run through our KPIs, and we’re meticulous. We do it, we enjoy it, and we learn a lot from it; but we’re doing it for the right reasons. What’s great is that now that we have those metrics and the business is more predictable, we could decide to raise money, and we’d be able to do it on our terms; and we’d be able to probably put that money to use, because we know a lot more about the business than we knew 2 years ago.

This company is growing fast. How would you describe the culture? Is there surfing involved?

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Erik: There is some surfing. I don’t know if you noticed on our website, we’re contributors and we support the Surfrider Foundation, which everybody thinks of it as some surfing thing. It’s not really a surfing thing. They’re one of the largest protectors of our waters, our oceans, in this country. We even did a beach clean-up about three weeks ago, where we took the whole company out to Rockaway in New York. We did a beach clean-up for a couple of hours, which is really very educational. We like to give back as well, and I think it’s great for culture. It kind of hits on both things there. Culture is tough to manage when you have offices in multiple locations, because you tend to have different cultures in different places. So, we work pretty hard on that. Installing video conferencing, and trying to do a lot of team meetings, and some off-sites where we bring everybody to one location, and some team building activities, and things like that.

Where do you see Bombora in a year?

Erik: We’ve come a long way in a few years. I think this next year, for us, is really about starting to accelerate. I believe that everything in sales and marketing needs to be measurable, so that’s a big focus of ours, is measurement. For us anyway, that’s kind of what we’re focusing on right now.

Do you have a vision of what the company’s going to be like in five years?

Erik: Everything that we’re doing is starting to really fire on all cylinders right now, so there’s a couple of big areas for us. You look at, it’s worldwide opportunity. We have had already some great success in our media office in London. So, it’s repeatable. Our customer base, if you look at them, they’re multinational global companies. Your IBMs, your Ciscos, your HPs, your Salesforces, they are looking for a global provider to help them align sales and marketing. Right? We do see international expansion as a pretty large item on our horizon, over the next 3 to 5 years.

The alignment of sales and marketing should be noted as a separate … you know that’s our vision, is really aligning sales and marketing. We do that through being able to aggregate data at scale, and put it in to action. Put it in to action globally. So, that sort of addresses those two. That’s kind of how we see, not just our vision, but that’s what we’re trying to do. If you ask me what does it look like in 3 to 5 years from now, we want to be working with the largest global brands in the world, and helping them identify who they should be selling to, marketing to, and advertising to.

If we go back, you mentioned March of 2000, you’re starting your first company in a very bubbly environment. Are there any parallels to the world that we’re living in today?

Erik: I think there’s parallels in certain markets within the market that we’re in. The difference is back then, companies were going public based on their vision statement. They didn’t have revenue. They would be raising money from VCs, and while they were raising money, they would finally go public. I mean, literally, they were filing S-1s while they were doing that. There wasn’t much substance behind those businesses, they were just hoping to grow in to something, and the markets were frothy enough to support that. Software tech in general, that’s not really the case. There’s still fundamentals today that are based on EBITDA multiples, or that are based on some kind of revenue multiple. Historically, they’re not at all-time highs. I will say … what I would draw the parallel to is maybe cryptocurrency. The amount of ICOs that are going on right now, without any use case for the currency, that does feel a little bubbly to me.

You could have gone into any space, and you chose this one. Why did you choose the sales and marketing arena?

Erik: You know, you do what you know, I think. I’m comfortable … we had tried a few different things. Quite honestly, in the beginning, we knew the data was valuable, and that part hasn’t changed. First, we tried to use it for email marketing, and the product wasn’t designed perfectly for email marketing at the time. We got that fortuitous call, and, all of a sudden, it was applicable to the audience solutions space; and that started growing extremely quickly.

Then we had a customer say to us, “Hey, can we use this for sales? What do you think about that?” So, once you have customers, you start getting feedback, and you have to be smart about, ‘Does this feedback make sense? Is it scalable? Does it beg space?’ It’s a little bit of, A. I knew the space, and B. our product and data system taking us into those arenas.

What would you say is your greatest learning so far? If you had one lesson that you learned, what would it be?

Erik: There’s a lot there. I think … to me, it always come back with persistence. I’m a big believer in that. When I look at business plans, and people who are raising money … as sure as they are about how they’ve nailed it and it’s exactly how the play’s gonna go, I like to think it’s not going to go like that, because it usually doesn’t. There’s usually a pivot somewhere. Almost every successful business I know, the reason that they succeeded was because they were persistent, and they were able to make that pivot. So, I think persistence is really the key that makes most companies work; and most CEOs who are successful are able to pivot because they can, they can understand that they need to, and they’re not going to give up.

Thank you for reading this CEO Q&A interview with Erik Matlick . This write-up is only a portion of the full interview. To hear the full interview, please listen to our podcast “Outsell for Startups”. It can be found on iTunes, Stitcher and Sound Cloud. You can also find more information on Outsell For Startups at our website. Thanks for reading!