Good morning everyone and welcome to, we're here in Gran Via, Madrid with Carto we're here with Miguel Arias. Good morning Miguel, how are things this morning? Very good. What we're interested, Miguel is the idea of scaling up, the idea of the difference between a start-up versus a scale-up company. Maybe you could start by telling us a bit about Carto and also bit about what you do in Carto. Carto is a location intelligence platform. Let me tell you what this means. We help companies to understand the value of the location data and it's a very good thing for us is that everything happens somewhere. By using the location vector, we can correlate these prey data sources like where people live, demographics, where people spend their money and they understand how businesses should behave. Brilliant. Now, and tell me, do you guys still see yourself as a startup or as a scale-up or as a proper enterprise company? How do you see yourself? I think we are still a start-up. When you try to disrupt a market in a very rapid pace, then you're still a start-up no matter what is your size, but it shouldn't be different from where we started like five years ago. Okay. Talk to me about some of the differences between when you first joined and where you are now. I joined Carto almost four years ago now, full-time. I was advisor before to the company. At the time, we were like 12 people when I joined. It was mostly a technical team, engineers, designers. They had created this amazing product. At the time, I think Carto was the start-up with the biggest development arm, but probably one of the weakest business arm in the ecosystem. I joined to try to fill in that gap, to build the non-technical part of the business. That's what we've been trying to do for the last years, building the sales and marketing operational part of the company. Talk to me a bit more about how that's been, trying to hire sales guys, where did you go to get them, marketing guys, who wins between sales and marketing, talk to me about that dynamic. At the very beginning, it starts with yourself. It's you as the CEO, you are the key sales person of the company and it should be like that for a long time, I would say. First it was, how can we sell? But the way a founder sells is very different, like a sales person. The founder sells the dream, you need to have everything ready. You can't just sell on maybe the concept and what you're going to be building. For sales reps, you need to have a scrape, you need to have sales collateral, you need to have a much more defined sale strategy. I'm not saying you need to have everything ready at the beginning. It was an iterative process. We started by initially defining which were the key tools you had to have for selling, which means the presentation, the website, the demo as well. What is the pitch you're going to be doing, right? From then, we moved into talking a bit more about the positioning. What we sell? What we do differently? I would say that's the key point. For having your sales reps to be successful, you need to have a very clear idea of your differentiators. Okay. Did you look to other companies for examples or inspiration or did you talk to other entrepreneurs, or how did you acquire knowledge? I think you always need to do that. You need to talk to others who have done the same thing before. There was one guy I was talking to, one of the key persons of the Samuel Brothers. He told me that for him, scaling up is like skiing. You go down the slope, and a few people know how to brake on time. If you know that, then you can go very fast. If you don't know how to go slower, you need to go very slowly to the end of the slope. That's what we try to do, how we can accelerate by learning how to brake when it's time to do that. We talked to people who had done B2B enterprise software in the past. They talked to us about differentiators, things about the strategy. One important piece we learned is about when you try to sell enterprise software, it's about how you orbit in the ecosystem. You do think when a small startup you think, I am Carto, I will just go in, sell and displace everything else because I'm disrupting the market. That's never the case in enterprise software. You need to know which are the big planetary giants, which are in our case, the BI vendors, where are the database vendors. What is your play orbiting around them because you're still Carto the small company? You want to penetrate that market, you need to understand those dynamics. Sure. I guess as a company who's familiar with data and data is your raison d'etre, talk to me about how you manage the company in terms of dashboards, KPIs, that kind of stuff. We have a few too many. First of all, we have one Carto dashboard. We're able to see ourselves, but particularly in countries where we have more churn, less churn, and look at this from a location perspective is very relevant for us. We have now 1,200 customers in 67 countries, so understanding where are our users, where are our customers, very relevant. But then we try to define which are the key KPIs for each of areas from operations, from sales, from marketing, from product here. Uptime, how much time it takes to deliver a bag, how many times we actually do deployments on productions per day, all of that. We end up with a huge spreadsheet of over 200 KPIs. Well, actually I would say more than a 150 of them we track and we make them public to the whole company. The whole company knows how much money we have in the bank, how much we sell, how is the numbers of the month going, etc. But now the reality there, the key learning for me is that you need to track a few KPIs, but just a few that a whole Exec can be losing their sleep on and that was a thing that we learned over time. A 150 KPIs, great, you can measure that, but it will not change what you're doing. We're not talking mostly about a five to ten KPIs that we can review every week in our Exec meeting, every month in our monthly review and the whole company knows about how much MRR we have, just a cloth or last month, how many marketing qualified leads we are generating and not too many more. 5-10 key KPIs and 150, if you want to go really into details. Key companies that we looked at in this course have this thing called the single unifying metric. Once single [inaudible]. Yes, some people have two, but this is the idea. It depends on the complexity of your company. For instance, Netflix have number of hours watched, something like that, and your YouTube had something the same. Other people have sales targets. The idea of being a billion dollar company or a 100 million in sales or something like that. But they use that as a kind of a mission driver in order to make people go, and it also means that everyone becomes aware of their contribution within the company, which is one of the things in the companies we've studied, is the idea that you have to make every employee conscious that what they do matters. That applies whether you're in Ryanair or that applies whether you're in CARTO or whether you're in Netflix, or whether you're in [inaudible] hotels, the idea that every employee must be other what they do matters. And if any one person doesn't do that. Something we've talked about in previous times we've met is the study of culture, and how have you worked hard on creating a culture? Right from the time you interview somebody to the time they joined, to the time they kind of their performance is viewed and how important is culture in your organization? Let me correlate that to your previous comment about the common target for the whole company. When we overpass our monthly growth goals in sales, we do mojitos. The last Friday of the month. Mojito Friday. Is mojito Friday if we are on target for the whole company and it's when sales funds the rest of the organization because of that, they met the goals because the rest of organization was the support in that. From development to marketing, etc. It's a very good moment to just acknowledge that we're in the joint mission, so that's important. Talking specifically more about culture, I have the feeling that in this startup war or startup circus, we talk too much about the perks. It looks like culture is to have beautiful offices to have the ping-pong table or to have free days every few weeks. I think culture is not about the pros, culture is about the mission and about the beliefs that the whole organization has. I would say we had a clear understanding around that at cutoff in the beginning. Carto's a company with a purpose, why we try to make the world a better place by helping to make decisions which are based on data. It's not just like that cheesy word you do that, it's a CARTO started to help to fight climate change and to foster biodiversity, that was the initial goal. These two permits and the fact that we don't work with the military, we don't work with the online gas industry, and this seems like banal statement no, that's 50% of our industry. It's not done, these decisions impact you. It's not just the perks, it's the beliefs you can transmit and what the company believes in and ask me what you do and what you don't do. The decisions you make in a coherent way from the top to the bottom, so that the whole company behaves in the same way. I think that, that's something clear in CARTO. But when we grew from 25-100 people, then it started to be a bit diluted. It's not that easy, but you don't have any anymore, the founders to explain that to everybody. They don't see the role model of the finders so much more or the other first impurities. What we understood is, and we got this advice from some of our board members that if you want the culture to really permit a course organization, you need symbols. Symbols are a good way for people to understand, to learn, and to remember. A few symbols, we have at CARTO, maybe you've seen them around the office are some small snippets with information. One important one that you see where you pass our first employee. Heavier, it's free hugs, is the hugs corner because we hug a lot in the company. Which way we are a family, we support each other. That was asked on an issue in American offices. Hugging in the US offices is not so usual. I do that every time you go to the US and I go once a month, I hug everybody. It seems like a small thing, but it's important because you closer to people. I have to explain why I'm doing that. Another interesting piece of the symbols are the Carto cultural bible. It's like a show document, eight pages where we say what we do, how the company started, what are the beliefs of the founders, what are our principals, etc, very bright to understand. Another thing we do is that the first two weeks of everybody who joins the company, they have to go to one of the two hubs, which will be New York or Madrid, to spend out a full one week or two weeks and get imprinted about what it means to be one of the key location of the company. Interesting. That's absolutely fascinating to hear. It's interesting that you've written down. Not everyone does that. Everyone says that we have these things, but you need to write them down. You need to. I guess the other thing that you've made that we've covered in the course is that it's in the middle is hard. When you get to be really big company sometimes it's easier, but the really hard thing is when you're going to 150 because people are used to formality are in for like to be able to know everyone and then suddenly they can't and they find that difficult. Then when it becomes a big company, they understand those kind of structures. One other thing I'm interested in is the things you've done well and I think companies you shouldn't have any difficulty saying that. Talk about the things you've done well. Then I'll also going to ask you for the things you're still struggling with. The things that you feel you haven't quite nailed and it'll maybe take another 12 months or something. Maybe you might tell us a few things you think you've done well and then contrast them with the things that you continue to struggle with. Well, I think we have had our certain share of success. It's still small and we tried to be very humble. The things that I think we did well is one is, keep this culture in the company [inaudible] even with growth. Another piece I didn't mention was that you have smart frugality. The idea that you can grow with having to spend an enormous amount of money. You can have people feel whole with a hand to just again, being just crazy about expenditure. Keeping the culture as we grow is a thing that we did great. Another important thing is that we kept the flexibility at the development level so that we can still pivot and we have pivoted in the past a bit so that we can really keep on looking for our best product market fit. This is always an ever-growing process, not that you just find that once and that's it. You are continuously changing yourself and seeing what you could do. We did very well the last months, I think the rebranding, repositioning, moving from CartoDB to CARTO. It was internal works and it was well praised by everybody and we were able to grow a lot without a structure. Usually there is a saying that you will reach your plateau in sales in SaaS, in software as a service, around two million annual recurring revenue, two million ARR. The idea is that you cannot fake it anymore after two million. It's not the two or three founders or the CX-people. A few are people selling your key sales rep, they cannot sell much more than one, two million ARR a year. After that, you do not have the machine working, you do not have the marketing funnel working, you do not have a great sales rep, you don't have a great enterprise rep. If you do not have that, you can't scale anymore. We were able to grow much more than that without the structure. We did that well, but then and just lining that with the things we didn't do that well, it came to us. I mean, every SaaS startup goes through what is called the 12 months of hell or the year of hell and it happens when you reach that plateau where you're not doing enough new leads because you do not have the marketing machine. I use sales rep, I'm not able to do all by myself. At some point you grow more than 5, 6, 7, 8 million ARR. That is one of the things that we learn of the last year. That you really need to focus on getting in doing less things but better and getting the foundational pieces in place. That goes from product. How enterprise really are you for the big leagues because they're going to ask you for a lot of very specific features, you may not have. Is it around marketing? Do you have the funnel? Do you know which channels provide better sales qualified leads and why? If you don't have it, then you're just guessing still. You have the right sales reps, which takes 3-4 months to be ramped up. That can take all those leads and close it without selling the rim as a founder but really with that methodological process. If you don't have these three things, it's very hard to grow up at the party champions league. We talk a lot about that, about doubling and tripling and quadrupling down within a certain thing that's working. It's almost like a sporting metaphor. You find weakness and then you pour everything onto the weakness. That's something we've seen again and again and again. Maybe then just some more personal questions if you don't mind. This idea of personal productivity and energy levels, we tried to cover in this course, though this area has an important thing. How do you manage your energy levels? We say that if you're constantly tired, if you're constantly don't look to peak for certain times, if you think you can work for 20 hours a day. There are people who do this and maybe in a startup context it's necessary, but in a scale of contexts, what we're seeing is that the clever founders peak at certain times. Has that been your experience? Do you think of what you do in that way? It needs to be sustainable. If you're not able to just understand when you're going to be burn out, then maybe just lose it, and it's very hard to recover when you've gone too far. Let me put things in context. Right now on CARTO, around 100 team members, two key offices and other three for different outposts around there. As COO, I have right now more or less around 45 reports. Not direct reports, but it was like that. I had almost everybody reporting on my end, just to me. One important piece is you need to also establish some layers of middle management. That helps you to delegate and to be able to accomplish much more. To put that in context, I have to do almost a biweekly commute, Madrid, New York. I spend 20 days in Madrid a month, 10 days in New York. To finish the context, I am married, I have two young daughters. Yes. That's a very important part of my life, and that's my most important startup project. How do you balance all those ingredients? How are you able to travel 10 days a month, etc? What I understood is that family time is precious. So you need to maximize your focus and attention when you are with your family, which means I try not to work on weekends, or at least I try not to work when the girls are awake. Okay. Very important part. I try to minimize the weekends I'm out of home. When I travel, I do just Monday to Thursday, five days a week, after spending one weekend out of my place. But trying to be as much as possible with my family. That's one important point. Because if not, you're marriage points will start to reduce dramatically, and it's very important if you want to be successful on a business perspective, you should be successful on a personal perspective too. I would say by having to be spending almost two weeks outside and two weeks here, I live what I would call asynchronous lives. There is one life I live here in Madrid with family, wanting to be very cautious about which time I spend at work, which time I spend at home. Then another life in New York which is a bit different where I get to be much more flexible, I would say. It's important for productivity to establish patterns, and I do that a lot. I block my time to be when my girls go to sleep. I need to be at home at that time, so I block that time. Then I can maybe retake a meeting with the US later on, but this time is sacred, I need to be at home. I also started to also block the same idea to have time to go swimming twice per week in Madrid. Blocking time, and lately I've also been blocking time for reflection time. Let's give me at least 30 minutes a day because if not, everything will be back-to-back meetings, so sometime for me to think about what I'm doing, where things are going, etc. I would say, don't let everybody else to manage your time. But I'm now, and this is an advice I got from [inaudible], it's essentialism. The art of doing less things but better. I try to say no more. Say no to almost any meeting if there's not a clear purpose on it, why we're doing that, and be very cautious about how my calendar gets filled up because if not, with all these inputs, it will just get filled up completely 24-hours a day. It's funny, I've copied some things you've written on your vlog for my own life. You said something once, that I don't go to any event that doesn't actually require me to be there. Yeah, that people will not feel disappointed if I don't attend. That's the key part. I do that as well. Then finally, just the final thing is, what's the future, 18 months, how big do you think this can be and what are the things that could cause that not to happen? What are the risks? What are the things you're worried about? Yeah. After raising our Series B [inaudible] by Accel Partners and Salesforce Ventures one year and half ago, we got the privilege to play the Champions League now. We can scale a team, we can deliver the product globally. Now it's are we going to be able to make a dent in this universe, not in the whole universe, but in this small enterprise SAS software universe? Over the next 18 months, it goes from being teenagers to being young grownups. We're already in the table, I would say. We are already in the table with the big guys. We compete with people who have three, four billion market cap, who have 1,000 employees, and we are a choice that has head-to-head been compared. That's already a privilege, we feel proud of that, but can we become a very relevant player? That means many things. It means how we are able to have [inaudible] be even more enterprise ready because we're going to be having much more request around that. Are we able to have a scalable sales force that works without us even noticing in many regions at the same time? Are we able to build a very strong partners network? Because we now have a small partners level. Can we grow that so that we can really go where we have no presence like APAC, etc? Are we able to do that in a sustainable way? Do we need to raise more funds? Are we going to be able to reach break-even or not in the process? That's our key challenges of the next 18 months, but I think we are in a good position to accomplish those. Brilliant. Okay, and we've got, in memory or guess to note the fact that hugging is a big thing, maybe we might finish by doing a hug. Absolutely, let's do that.
