Steven Woods – Co-Founder & CTO, Nudge.ai
Currently co-founder and CTO at Nudge.ai, which uses artificial intelligence to help salespeople find useful trigger events at their target accounts. Letting AI do the heavy burden of research allows sales professionals to focus on selling, while never missing a chance to turn latent demand into active demand.
Prior to that, co-founder and CTO of Eloqua, a company I helped guide to a market-leading position in marketing automation, while growing it to a $100 million revenue run rate, through its IPO on the NASDAQ, and to ultimate acquisition by Oracle.
Passionate about innovation, SaaS, machine learning, and the marketing and sales technology spaces.
Author of the book Digital Body Language about deciphering customer intentions online. Frequent speaker at various marketing, sales, and innovation events.
Tell me about your early career.
It may seem strange considering that Nudge.ai is not my first software startup, but I’m not even originally a software guy. I studied physics in college. However, I was lucky enough to end up in an engineering role at a manufacturing plant early on in my career, which happened to be in the mid-’90s. I’d dabbled a bit with the most basic of web technology, and was able to piece together some solutions that solved real problems we were having in the manufacturing plant. I was hooked on the idea of tackling business problems with technology. The combination of the speed you could go from idea to solution, and the capabilities that became newly possible each passing year, were addictively interesting.
A few friends and I started a company called Eloqua in the marketing automation space in early 2000, and grew that venture for over a decade, taking it public and ultimately selling it to Oracle. We had the opportunity to see every stage of growth and be a major player in the transformation of marketing from a purely creative discipline to a much more analytical, data-oriented, accountable discipline.
After the acquisition, I spent a lot of time pondering what I truly enjoyed. I realized that I loved the early phase of understanding how a technology can change a major area of business for the better.
How did the concept for Nudge.ai come about?
As we worked in the marketing area with Eloqua, we saw a lot of what sales was doing. Buyers had changed so much, and their access to information was so much greater, but sales was still a very similar discipline to what it had always been. We saw a huge amount of waste as salespeople would aggressively go after a lead for a few weeks, but essentially drop it if it wasn’t going to buy at that point. There just wasn’t an ability to manage a sales process that required building trust, growing relationships, and keeping a buyer warm until they were ready to buy. We looked at the technology that was out there, in terms of high-scale machine learning and AI platforms, and realized that we could make a big difference. Hence, Nudge.ai was born.
How was the first year in business?
When we started, we looked very closely at how people buy nowadays. We did this both because we serve people who sell, and because we wanted our product to be optimized to be bought in today’s environment. Because of this, we built the product to be seamless for the end user to try, love, get value from, expand, and ultimately pay for. The first product we launched was a free product for professionals who care about their network, and even today this is the first experience with Nudge.ai that most people have.
Since that product was free, we optimized for user metrics, not revenue metrics. Our goal was not pure user signups, but successful, productive, repeat usage three or more months after they signed up. That means optimizing a lot more parts of the entire flow from marketing to onboarding, to user success.
What was your marketing strategy?
We executed an interesting marketing strategy that was guided by the patterns of user success we were seeing. At the top of the funnel, we did a fairly broad set of awareness campaigns, including content marketing, social, and advertising to seek out folks who were experiencing the challenges we were able to solve. When we saw early indicators of success at an organization, we automatically honed in on that organization to focus more advertising efforts on the people at that business.
When multiple people at an organization are on Nudge.ai, they are able to collaborate and see where the other person has strong relationships. As a team started to develop organically, we were able to see bright spots of the right teams who understood and were focused on, building out a high-quality approach to professional selling and relationship building in long deal cycles. These bright spots formed great high-interest groups for our Team product that we sell to teams who are selling into targeted account lists or existing customers.
How fast did the company grow during the first few years?
The free product did very well and drove a lot of adoption and awareness of Nudge.ai in the first few years. Our ultimate driver with it though was not raw user counts, it was highly successful users, so we would carefully monitor all steps on the path to recurring success. Once we were seeing good success with the core product, we began to build and launch the (paid) Team level. Again, our belief is that success is more important than raw top-line numbers, so we spent a lot of time making sure that all the transition points from free to paid were optimized. Now that that is in place, we’re seeing great growth, both from a “bottoms up” approach with users signing up as individuals and then moving up to paid tiers, and from “top-down” deals with many hundreds of users.
I think there can be quite a bit of unhealthy pressure around top-line metrics that leads to an underinvestment in the smaller things that really matter on the road to success.
How do you define success?
Professionally, we look at many, many things, but one of the core metrics for us is Weekly Active Users. We’ll cut that by cohorts and different user groups, but that’s the main lens we use on how well things are going. It’s essentially a rear-view mirror though, so operationally there are a lot of constituent parts that we look at to see if a user or a cohort of users are trending in the right direction or if there’s something we can do with the product, our marketing, or our team’s efforts to get them back on track.
Personally, it’s all about enjoying the journey. I truly enjoy tackling big, interesting problems with a smart team. It keeps every day interesting and inspiring. The professional metrics of success obviously tie into that as indicators of the market’s response to your attempt to solve the problem, but they are not the most important drivers.
What is the key to success?
The secret to success in business is that there’s no secret to success in business. I truly believe that. At its core, business is really simple: create something people want, and get people to pay you for it. Rinse, lather, repeat. However, that’s clearly easier said than done, and so much of making that happen is continual effort, continual learning, hard work, a healthy dose of luck, and a great network of people who can help out in the right way at the right time, once in a while.
What is the greatest lesson you’ve ever learned?
It’s all about the people. Regardless of how good the technology or the business model is, everything comes down to the people around you who create reality from idea, or who decide whether to help it flourish. People will forgive a lot if they know you care and are trying. Likewise, they will be harsh if they think you’re a jerk. Keeping your relationships strong and healthy is super important to long term success.
What are some quotes that you live by?
I can’t say I’m an inspirational quotes kind of guy. In fact, I probably prefer most of despair.com’s options to the typical corporate stuff. The ones that I connect with are usually the ones that focus on action over planning for perfection. Quotes that come to mind are ones like, “The best time to plant a tree was 20 years ago. The second best time is now” (Chinese proverb) and “Do or do not. There is no try.” (Yoda)
What are some of your favorite books?
A lot of the challenge of building technology is not the technology side. It’s the psychology of how users interact with the technology. I spend a lot of time on that. Some are very focused books like Hooked by Nir Eyal, which is a bit of a bible for product people in our org. At the other end of the spectrum are much more general books – for example, I think I’ve read everything by Steven Pinker – that look at how people really operate and behave. If you’re building technology without understanding the nuances of how humans actually behave, you’ve got a good chance of missing the mark.
Tell me about one of the toughest days you’ve had as an entrepreneur.
Just one? I’ve done layoffs, terminations, and tough board meetings. I’ve had to tell the Eloqua staff in the early days that we were running out of money and might not be able to afford payroll. There are plenty of tough moments as an entrepreneur, for sure. However, I don’t think that’s what ultimately grinds people down. I think the fact that it’s always up, down, up, down, and you can go from feeling like you’re taking over the world to feeling like a dismal failure all within one day is what eventually gets to people. It’s hard to stay on that roller coaster for an extended duration.
When faced with adversity, what pushes you to keep moving forward?
I tend to get myself into situations that lack much of an exit. I’ll sign up for a challenge that I’m not sure if I can complete, but with no exit, there’s no real option other than pushing forward. Inevitably, there’s a dark period, and I find myself pushing into it pretty uncertain of how it all ends, but with no other option than to push deeper into the dark. It often turns out that in the darkest part of the dark is where you’re best able to see the small hints of light that will guide you to the other side. Staring into the dark initially, it would have been impossible to see them, so you just need to push forward into the dark with the confidence that some point of light will appear.
What advice would you give to young entrepreneurs?
People think that being an entrepreneur is risky. Sure, it is, but I think we as a society think about risk in a limited way. The risk of having a single skill set, or the risk of not developing the ability to tackle new areas of knowledge quickly, might be an even bigger risk in the rapidly-changing environment that we live in today.
In the short term, entrepreneurship might be pretty risky, but I think it could be argued that, over the long term, it might not be as risky as “low risk” careers. For anyone considering entrepreneurship, I’d encourage them to give it a shot. If nothing else, it’ll be a phenomenal learning opportunity.