On Starting A Leading SaaS-Based Event Marketing Automation Company
My name is Joe Davy. I am the founder and CEO of Banzai, the leading SaaS-based event marketing automation company. Our software helps companies host and promote delightful webinars and in-person events. We have about 3,000 customers who range from small businesses to Fortune 100 companies and even a few unicorns.
We launched Banzai in 2016. When the pandemic hit in 2020, our sales pipeline went to zero in a week. We took some risks and worked hard. Our team refocused 100% on virtual events and webinars. In the last year, we doubled in size, acquired two companies, and we landed $15 million in new funding.
What's your backstory and how did you get into entrepreneurship?
I was raised in a small university town in North Carolina. Both of my parents were English professors. I used to interrupt my dad’s class to get candy money after school. The university was very tech-forward for the time and was one of the first in the country to have fiber optics and high-speed internet.
Embrace your strengths and know your weaknesses.
I learned to program on our 386 PC desktop at home using a manual for a Tandy 2000 computer I found in a free book box at my parents’ office. Ultimately that interest turned into an interest in business and entrepreneurship.
Through the university, I became friends with the man who ran the computer information systems department - that was part of the business school. I would find him in his office, and we would talk for hours. Together, we ended up planning a summer camp for coding, and he gave me lots of advice and access to the software I never could have afforded to buy. Whenever we would go to the bookstore in town, I would go to the section with the programming books and sit for hours reading them and occasionally buy a new one and work through all the examples.
I went on to the North Carolina School of Science and Mathematics - a boarding school for high school juniors and seniors in Durham, NC. In an economics class there I met two entrepreneurs who were guest speakers. I became enamored with the idea and what they had built. Later in life, I became friends with both of them and I am still friends with both of them today.
I studied economics at the University of North Carolina at Chapel Hill. I worked for IBM as a software engineer during this time, which ended up being my last time working as an employee. A company I created called EvoApp became quite successful, and I dropped out of school to run it. We won some awards and had some great customers and products; however, the company failed to generate enough profit and we eventually had to sell it in a firesale.
Immediately before founding Banzai, I was General Manager at a company called Avalara, where I ran a couple of businesses, and we grew the company very quickly over several years. I left in 2016 to start Banzai. Ultimately that company went public in 2018.
Take us through your entrepreneurial journey. How did you go from day 1 to today?
After leaving Avalara, I knew I wanted to start a company. I had the idea that the way people buy things was radically changing. Marketing was becoming more important to how people buy. My belief was that buyers would stop caring about feature checklists and RFPs, and start focusing on values, thought-leadership, and relationships.
I called my co-founder Andy and asked him if he wanted to start a company with me. To his credit, he said “yes” right away during that same phone call. We recruited another co-founder who was a great friend but who ultimately couldn’t stick with us because we just didn’t have enough money to pay him. After our 3rd founder left, I wrote the code and made sales. Andy ran the operations, basically faking all the things our product couldn’t do yet so we could test our value proposition with live customers.
We thought about raising money and figured it would be easy because of the success that Avalara had, but it wasn’t. We pitched over 80 investors, and only 2 of them committed, so Andy and I decided to fund the company ourselves. I put in some money I had saved, and Andy and I used our credit cards to pay for what we needed. We paid ourselves $2,000 a month each when we could afford it. Andy moved his family to the Philippines, where we could hire people cheaper and where his cost of living was lower.
The first year was extremely tough because I got married that year. It was very hard being a newlywed and living out of my savings. Allison and I gave ourselves a $100 a month food budget. Andy and I both did consulting on the side to make ends meet. Ultimately because we bootstrapped the company, we both own about double what we probably would have otherwise. And those first two investors are very happy as well.
Over time we grew and added new people. In 2016, there were two of us—four in 2017 and 10 in 2018. In 2019 we hit 50 employees and 100 customers. It was a rocketship once it started to take off.
Just before the pandemic, 87% of our product usage was for live in-person events. When the pandemic hit, our sales funnel plummeted to nearly zero in about a week as uncertainty set in and all events were canceled. The projections we had for virtual events over ten years happened over the next six months. We pivoted fast.
How are you doing today and what does the future look like?
Today, our original thesis has proven to be true. 44% of all buyers have already made their purchase decision before contacting a salesperson. In the future, the companies that win will be the ones that are great at connecting with and educating their buyers. And we believe the best way to do that is through events. Events are engaging, educational, and interactive. Today the average company devotes 30% of their marketing budget to focus on events - about $600B per year - but there is no platform to manage their event marketing. That’s where Banzai comes in.
We’re fortunate to be experiencing triple-digit growth this past year. On Friday, February 28, 2020, we got word that Facebook and Adobe were canceling their major conferences. The following Monday, we had our first meeting with our brand new board. I came into the meeting believing that COVID was going to be a problem for us. The board, by contrast, though it wouldn’t be an issue.
After our sales pipeline plummeted, we found ourselves in a do-or-die moment, we could either staff-down and weather the storm, or we could take some risks and find the solutions our customers would need during the pandemic. We chose the latter, and it worked. We acquired two companies, High Attendance, our virtual meeting platform, and Demio as our webinar solution. Banzai has doubled in size during the pandemic, and in March 2021, we announced $15 million in new venture debt funding to continue our expansion. We’re big enough now that we can borrow money to fund the business, which means the stockholders do better.
In all likelihood, in-person events will begin to return this year. However, I believe we have seen our last purely in-person big event. All large events going forward will be hybrids with virtual attendees and on-demand options. Banzai will be making some additional moves this year and beyond, so stay tuned!
Through starting the business, have you learned anything particularly helpful or advantageous?
The most important thing I learned heading into Banzai was the ability to understand my weaknesses and hire to fill those gaps. I’m not a smooth-talking type of CEO. I’m essentially a programmer, so surrounding myself with people who can bring additional management and people skills to the company was critical. It also took me way too long to learn to delegate and build systems of accountability and trust.
We also have a remote-first culture. That means we have to do better than the average company at communication and clarity. As a company, we set clear objectives, identify success, and have created a system of accountability to ensure everyone is rowing in the same direction. For myself, I believe everyone should have a personal operating system. Routines work well for me, so I make sure to eat healthily, exercise on a schedule, write in my journal, and meditate every day.
What platform/tools do you use for your business?
We use some pretty standard tools like email, of course, Slack for internal real-time collaboration, and Salesforce to manage our sales pipelines. We use Tableau for reporting and tracking KPIs. What’s more critical for us is making sure we’re forming the right habits. Once a quarter, we set objectives and make sure everyone is aligned.
What have been the most influential books, podcasts, or other resources?
Books are great because you can basically download someone else’s brain into your own. The book that I usually credit as having the most impact on me was High Output Management by Andy Grove, one of Intel’s founders. His journey from fleeing the Holocaust in Hungary to leading Intel through the memory wars and transforming it into the largest CPU maker in the world is an incredible story. I read the book at 25 and wish I had read it when I was 15!
Advice for other entrepreneurs who want to get started or are just starting?
Embrace your strengths and know your weaknesses. If you’re not sure, ask someone who knows you well. Be honest about it and don’t take it personally or negatively. The sooner you find this out, the sooner you can begin surrounding yourself with the right people to help you where you need it most. Ego is your worst enemy when it comes to building a great company.
Learn to delegate. If you’re trying to do everything yourself, you’re going to slow everything down. Trust your team; let them deliver for you.
Create a personal operating system to make sure you’re getting the exercise, nutrition, and mental care you need. Being an entrepreneur can be lonely and stressful. You will have to put a plan in place to make sure you keep your head on straight and don’t burn out.
Finally, building the right products is the key to having a great business. And being in a great business is important. If you put the best CEO into Blockbuster, they’re going to struggle. It’s a lot better to be in a business where you have tailwinds. Find a product where you can develop a defensible differentiation in a growing market, and you will probably do well.
Where can we go to learn more?
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