Today we announced our Series C: a $60M round of funding led by Sequoia Capital. You can read the full announcement if you’re interested in the press release, but I wanted to take a few minutes here to talk about customer experience and the future of Conversational Marketing.
I’ve always been obsessed with the customer experience.
I feel it every single day in my personal life: I want to buy from the businesses that make it easy, enjoyable, and treat me like they care.
But my obsession with customer experience is not just because it feels nice to get great service as a consumer.
It’s because history tells us that customer experience wins.
Just take these three quotes from Sam Walton, Steve Jobs, and Jeff Bezos:
“There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.” (Walton)
“You’ve got to start with the customer experience and work backwards to the technology.” (Jobs)
“We’re not competitor obsessed, we’re customer obsessed. We start with what the customer needs and we work backwards.” (Bezos)
The greatest founders of all-time have been maniacal about the customer experience, and that’s why those companies — Walmart, Apple, and Amazon — disrupted their respective industries, ran laps around their competitors, and have delivered incredible results year after year.
But in B2B, we have been operating in an alternate reality.
In this world, the experience is typically everything but customer first. From lead forms, to gated content, to endless unwanted emails, B2B companies force every potential customer to jump through hoops just to talk to someone.
But it’s not that businesses don’t want to talk to potential customers and give them a great experience — it’s that they can’t. Because the marketing and sales tools that they have been relying on were built for a world that no longer exists.
Today, all of our lives run in real-time.
We use apps like iMessage and WhatsApp to communicate with our friends in real-time, and apps like Slack have changed the way we work, allowing us to talk to our teams in real-time, from anywhere. And on top of that, we can order everything from hotel rooms to cars to food in seconds, right from our phones.
As a result, our expectations for how we communicate with businesses have changed: we expect answers from them in real-time too.
There’s also an infinite supply of information out there today. If you want to learn something about a business, you’re going to do a Google search, post a comment on LinkedIn, ask a few friends, or comb through some G2 Crowd reviews before ever needing to talk to someone at the company.
As customers, we have all of the power today, and that’s why we put a premium on how we’re treated. That’s why forcing people to fill out forms and jump through hoops in order to talk to someone at your company will be a recipe for failure.
Businesses need to adapt to this shift in order to thrive today, and that’s what we’re focused on at Drift.
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The Rise Of Conversational Marketing
When we started Drift, we set out to build the first marketing and sales platform that was built around the customer experience. We didn’t want to build another selling platform built for the company — we wanted to build a buying platform, built for the customer. We needed to reimagine the B2B buying process.
So in April 2016, we made the decision to ditch our lead forms and prioritize customer experience over lead generation on our website. And the second we did that, the number of leads we were generating skyrocketed. Instead of only talking to the small percentage of people who filled out forms on our website, we were now having conversations with about 20% of the people that visited our website every day.
From there, we launched our chatbot so customers could get answers and book demos 24/7 — regardless of whether someone from Drift was on the other end. And that’s when things really started to take off.
Putting Drift on your website became like taking your best salesperson and having them greet everyone that came into your store (and they never got sick or took a vacation).
And what we learned was that people just wanted to have conversations. They didn’t want to fill out forms, because they often had a few very specific questions in mind, or were looking for some help. Marketing became all about having conversations again, and that led to the creation of Conversational Marketing.
A sale doesn’t get made until a conversation happens. So with Conversational Marketing, we created a new way of doing marketing and sales that removed the roadblocks and hurdles that can get in the way of someone talking to your business. This creates a better customer experience, makes it easier for people to buy, and ultimately creates a faster path to revenue.
We’ve felt the faster path to revenue first-hand. Our revenue is up more than 10x compared to the first quarter of 2017, and Drift is growing faster than B2B unicorns such as Salesforce, ServiceNow, Workday, and Zendesk were at this stage. And it all started with the decision to get rid of our lead forms: over half of our pipeline is created thanks to a real-time conversation on our website, and our sales cycle is about two weeks long, which is unprecedented in the B2B space.
And we hear stories from our customers daily saying the same thing — like Richard who runs a marketing agency in Manchester, England and cut his sales cycle by 33% after switching to Drift, and Andrew, who increased opportunities by 170% at MongoDB by offering Drift as a “fastlane” in addition to forms.
Overall, there are now more than 50,000+ businesses from around the world using Drift, including companies like AdRoll, Cornerstone OnDemand, Dyn, InVision, Vidyard, and Zuora. But this is just the beginning. We don’t have all the answers. And we’ve barely scratched the surface of Conversational Marketing. We have so much more to deliver to our customers — and that leads us to today and announcing $60 million in Series C funding led by Pat Grady at Sequoia Capital.
The Future of Drift: Reimagining How Businesses Buy From Businesses
Just seven months earlier, we raised $32M for our Series B. We haven’t touched that money yet and had no near term plans to raise more, but when Pat approached us about leading the Series C, I was reminded of a lesson from Warren Buffet, who once said this about Berkshire Hathaway:
“We never want to count on the kindness of strangers in order to meet tomorrow’s obligations.”
That’s exactly how I feel about Drift, and it’s why we decided to do this round. We are here to build a pillar company, and we know how much money that will take. We are not going to sell Drift. We are here to build a global brand that will change the way businesses buy from businesses and last longer than we will.
We had an opportunity to raise money and work with the people that we know and trust — from Pat at Sequoia, to Izhar Armony at CRV and Larry Bohn at General Catalyst, who have supported us from the beginning.
We now have over $90 million in cash in the bank that we can put to work toward expanding the category of Conversational Marketing, and helping every business in the world deliver a world-class customer experience and make it easy for people to buy.
We are not here to build another marketing automation platform or create more tools for sales reps. We’re on a mission to build the most customer-centric company in the world, and make B2B buying as easy as buying from Amazon. The Series C will allow us to pull forward our investments and step on the gas. Here are three places you can expect us to double and triple down on this year:
#1 Customers
Above all else, we’re here to serve our customers. That’s always been the case, but the Series C allows us to make investments we wouldn’t have made otherwise at this stage. We want to create a customer experience that feels like the Four Seasons or the Apple Store — not a B2B software company — and this funding will allow us to stay laser-focused on doing so. You will see us increase our investments in customer support and customer success right away while launching new programs around services for bigger businesses, trainings, certifications, and more in the near future.
#2 Product
It’s been a busy year shipping new products at Drift. We launched a new marketing email product, Drift for account-based marketing, our developer platform, revenue reporting, a new program for early-stage startups, and Drift for Sales, which includes meetings, a personal home page for every sales rep, and sales sequences. There’s a lot there — and we will continue to make it better. We will keep prioritizing speed and shipping updates to Drift daily based on your feedback and most-requested features. This funding will allow us to move even faster. But on top of speed, we’re also going to expand our product offering. Email and messaging are the two channels that Drift customers can use today, but in order to reimagine the entire B2B buying process, there’s a whole lot more left that we need to build, like voice and video. You will soon see us expand Drift into both of those areas.
#3 Expansion
On top of expanding our product offering, we also have big plans for expanding the team. This has already started, with new office locations in Boston and San Francisco, and aggressive plans to grow our teams there — but it also means expanding our presence outside of the U.S. for the first time. Despite the fact that we’re headquartered in Boston and our only offices are in the states, more than a third of our customer base is located outside of the U.S. today, and we have plans to go there with them and begin our international expansion this year.
This Is Just The Beginning
So to those who have been a part of this journey with us so far, thank you. We would not be here today without the support of our customers, partners, investors, and advisors.
But we have a long road ahead.
This is just the beginning, and we are going to invest every dollar in getting better, and building a product that helps our customers create an amazing experience for their customers, and delivers extraordinary results.