By Rob Orchard, Co-founder and editorial director of the Slow Journalism Company
“The great things in life take a lot of work and a lot of time,” says Mark Mader, CEO of Smartsheet, a leading cloud platform for managing and automating collaborative work, and a speaker at YPO Innovation Week. “If you’re trying to build a successful software service, you’d better have the stomach for it.”
Mader was brought on board as CEO at Seattle, Washington, USA-based Smartsheet six months after its inception in 2005, when it was still in a “pre-customer, pre-revenue” period, with a staff of just seven. It was a slow start. “Our first customer came on in 2006 and it wasn’t until 2010, a whopping four years later, that we started to see significant traction,” says Mader, who joined YPO in 2014. “Conversion rates improved, and lo and behold, we had 1,000 customers, then 2,000, then 10,000.” Smartsheet currently has 10 million registered users and 68,000 paying customers across the world — including more than 50 percent of Fortune 500 companies — and is set to hit USD100 million in recurring revenue this summer, when the staff will be 600 strong.
Mader takes a quiet satisfaction in the success of the company and enjoys the diversity of his clientele. “How many jobs do you have where in one week you get to talk to a customer that builds rockets, then another that ran the London Olympics, and another that runs the Washington, D.C. Holocaust Museum?” He’s motivated by providing the best possible results for his customers, whatever their industry. “If you build something that enables someone to have a better outcome or a better experience, that’s actually a very invigorating feeling. If I know I could help you by doing something, then damn right I’m going to wake up in the morning and try it,” he says.
Smartsheet’s success has been built on software that facilitates collaboration, which for Mader lies at the heart of any good business. “The purpose of collaboration is to extract ideas, to surface the innovation, to embrace the things that have a lot of yield for your company,” he says. “My philosophy is to enable not just the top 5 percent of really vocal alpha-type people, but to reach into a company and find the person who would never normally open their mouth but who has 18 amazing innovations in their head. And that, I think, is the crux of high-functioning collaboration: finding the person who would normally not engage and making sure that their ideas are surfaced.”
It’s fair to say that not everyone has shared Mader’s vision. “As we were raising capital in the early days, a prospective investor made the following declarative statement during a pitch meeting: ‘I don’t see why anyone would ever pay for this.’ He was wrong,” says Mader, with a little satisfaction. “I have seen him since that meeting. I always love running into him.”
No substitute for engagement
When it comes to maintaining that vital competitive edge, Mader believes there is no substitute for close engagement with customers and their feedback. “If there’s ever a morning where I wake up and I go, ‘Oh, we’ve nailed it, it’s going so great, we’re just doing everything right,’ I guarantee you that within 13 seconds, I will get feedback from a customer that we could be doing this or that thing better,” he says. “I’m one of these continuous improvement guys — in software there is no finish line, so you need to enjoy the journey.”
Mader also prioritizes close relationships with his team. “Every week I have lunch with seven different people at the company to hear their ideas and recommendations,” he says. “It’s not great for my waistline, but it’s really good for driving achievement.” The company puts huge efforts into its hiring procedures too, looking for what he calls “verbs, not adjectives”. “Don’t tell me about all your values — ‘I’m supportive, I’m committed, I’m driven’ — tell me a situation in which you exhibited that,” he says. “I don’t care about your adjectives. I care about your actions.” Mader has also instituted a more unusual hoop for prospective candidates to jump through. “The final test, which is uniform across anybody who is hired here, is called the Spokane Test,” he says. “Spokane is a city 250 miles away from Seattle. Let’s say I’ve interviewed someone, they’ve killed all the questions, they’re an amazing talent, great experience, and then I think, ‘Could I be in a car with this person for 250 miles and not throw them out the door before we get there?’ That’s the Spokane Test.”
The next few years look set to take Smartsheet to the next level. “We’re fully preparing to build a very substantial, let’s-march-to-a-billion-in-revenue company” says Mader. In the shorter term, he’ll be speaking at the Grand Finale of YPO Innovation Week, and taking some time to get back to nature, which he thinks is vital for maintaining perspective. “Sometimes, especially in tech, we can get so centered on our devices and our machines,” he says. “Sometimes I love to punch out and do something that has nothing to do with it. This summer I’m taking the family and we’re floating the Colorado River 220 miles down the Grand Canyon. I will be off the grid for two solid weeks. And I will love that just as much as I love selling software.”