The article below is taken from SaaS Mag Issue 3. To order your free copy, click here.
There are several ways to be a good COO — it’s an agile role, and depending on your strengths you may have sales, operations, marketing or any combination of departments reporting to you. To be an exceptional COO, you have to be able to handle anything and everything thrown at you.
Courtney Sanchez has a strategic mind that fits problems into broken-down structures, allowing her to administer solutions to a variety of challenges that inevitably arise in the process of scaling a billion-dollar SaaS company. Not many executives charged with this station who possess a penchant for not only the technical, but also (at times) unquantifiable and ineffable key components of scaling a business. Any good executive knows that the complete picture to the operations involved in growing a business cannot fit on a spreadsheet; to scale successfully, the nuance contained within the needs of the customers must be at the heart of the strategy, right alongside the behavior of the market and its top players. Courtney, the Vimeo COO responsible for driving the billion-dollar SaaS company forward is demonstrably talented, not only at the technical demands, but also the art of scaling.
According to Jason Lemkin, “…as you scale, a great COO can make all the difference. As you hit $10 million ARR…a COO can take over everything the CEO isn’t core to.” Vimeo is in a unique position, as its CEO is none other than Anjali Sud, who joined with the specific aim of bringing Vimeo up as a standout SaaS operation. Courtney brings an MBA from NYU Stern and comprehensive experience as Director of Audience Research and Web Analytics (later progressing to VP of the latter) at HBO, where she developed research to better understand the consumer behavior taking place across all of HBO’s digital properties. This experience perfectly positions her to base the needs of the customer at the core of all strategies implemented in the company’s growth plan.
As the video platform leader approaches 1 million paying subscribers, the software services portion of the business accounts for a vast majority of Vimeo’s revenue, with 99% of Vimeos’ subscribers utilizing the self-serve software. For Courtney, the challenge (among incalculable others) becomes to not only scale the SaaS business in a competitive manner, but also to integrate the creative prowess required to retain the video creator customer base with the best marketing, pricing and segmentation practices endemic to a successful SaaS business model.
In her position, Courtney must contend with—and ultimately conquer day in and day out—many challenges that SaaS executives across the world will find to be familiar; how does one find the balance between providing a personal touch and operating efficiency? Who bears the pricing burden and how does that contribute to the brand’s positioning and market perception? Vimeo is exceptional in its ability to remove advertisers from the equation—in fact, viewers are not monetized in any way. As a SaaS company, it has struck a duality between a robust platform for creators and an ad-free experience for viewers. They aren’t timid with their placement in the market, either.
Vimeo exists by and for the creator, whether that is small businesses, filmographers, advertisers or high school students. Creators are offered a suite of production and distribution tools, including publishing their videos to YouTube and social media. Vimeo knows who they are the experts in content production, and they aren’t afraid to use that to their brand’s advantage. With recent investment into video advertising campaigns to support growth and brand awareness, Courtney has her hands full. Fortunately, SaaS Mag had a chance to sit down with her to discuss everything from team communications to scaling, and learn from one of the most multi-skilled and intuitive executives in the world of SaaS.
What has being COO at Vimeo taught you specifically about how to build successful teams?
In my experience, the truth is that communication is key to building successful teams. That can mean a few different things, but whether it is the leadership team making sure everyone is aware of the vision and goals for the company, or being transparent on what is going well and what is not going well for the team, or if it is managers providing direct feedback for an individual’s development, creating the space and the mechanisms for clear communication is super important in building successful teams.
Anjali has mentioned that when she became CEO there was a bit of a shift from focusing on content creation to a SaaS model. Did that impact Vimeo’s expansion strategy at all?
Right, so technically Vimeo has always been a SaaS company. The shift away from content creation was more about allowing us to better focus on the content creator itself, and that means anyone from filmmakers, to small business owners, to agencies, to yoga instructors, to churches. In a world where all of these companies are looking to reach audiences through video, Vimeo uniquely stands for the creators providing tools to allow them to be successful. This is different from other online platforms where the monetization model is typically advertising, which means executives are thinking about how to monetize the viewers. Vimeo has always been about the creators, and the content creation piece was just shifting focus to that. Instead of spending on content, our resources, time and people are built on building products and tools to allow creators to be successful with video.
Can you talk a little bit about the pricing model? It’s a little different than what we typically find on content platforms.
Vimeo does not monetize viewers. The way the business model works is that you can have a free account and upload videos to Vimeo, but if you want to use additional tools to review content, collaborate, distribute or even monetize your content, you as the creator have a paid subscription with Vimeo. There is no monetization of the viewer, unlike other platforms.
The value for the creator is that the platform is ad-free, and they have control. Any creator can put their content on our platform and decide if they want to use it for marketing or distribute it or use our private sharing feature so that they only are distributing it to sets of users that they want to see the content. So the value is in the tools and the ability to make those decisions about your content on your own.
Does that feel like a risk for you guys to say, “Hey, you can publish directly on YouTube from Vimeo”?
Well for us, being an agnostic distribution hub that allows the creator to be successful where they need to be makes sense, because it’s all in service of the creator, right? Because we are ad free, we are able to operate in an agnostic space and allow creators to not only have their content on Vimeo, but also distribute it natively to LinkedIn, Twitter, Facebook, YouTube—wherever their audience ends up being.
How can staff members pare down inefficient operations to build towards a more successful company? How do they answer the question, “Okay, what do I actually need to focus on?”
I think what’s interesting is the word you chose of “focus”, because that’s actually really critical, right? The key here is to take the time to understand what is truly strategic for the company, what is a distraction, and make sure the company is structured to support those strategic goals. Then you, as the individual founder or person in charge of operations, take steps to understanding what is it you really need to be involved in from a strategic perspective, and what team do you need to build around you that can leverage complementary skills. That’s how you cut out the noise of task inefficiencies.
Are there hard and fast rules about who you should hire, when, as the company scales?
I think every company’s growth trajectory is unique so it’s kind of hard to say a specific point in time. The reality is if you have the ability and resources to hire—which, it’s important to note that sometimes this isn’t even an option for some of the smaller companies—it’s really about bringing on those complementary skillsets. That is the only thing that will allow you to focus on what you’re good at and recognize that someone else can probably be way more efficient with their time when solving for other strategic problems, if they’ve had the experience and can be a complement to what you can add.
That’s really all you’re hiring someone to do, right, is to solve problems for you or solve problems for your customer. It’s not just always internally facing. If you are building out a sales organization, there are plenty of companies you can model from that have built a sales organization. You don’t need to reinvent the wheel, right? Bring on someone who has scaled that function before, and repeat that as you go from zero to whatever hundred of people at first, and make sure you are building that out in a way that puts each person in a role well-suited to their strengths. That way, you are leveraging the experience that person has in knowing where to focus first in building out their department. The first steps you take in building out a sales department are different from those you take in building out the marketing, engineering and human resources departments. Someone who has done it successfully before will know what those first steps are.
Markets continue to show us that the SaaS business model is incredibly sound, with no signs of slowing. Even Microsoft is seeing improvements brought on by the model, as their services division generated more revenue than platform division for the first time ever. Can you speak to how this shift towards a cloud-based recurring revenue model is bringing about fundamental changes in the markets?
I think a good SaaS business can create really incredible levels of customer loyalty, which translates into lifetime value, right? Additionally, if it’s combined with a good cost structure, you can significantly disrupt markets, and I think that’s where we’re seeing all of these SaaS companies become highly successful, whether that’s on price—that is, they’re just coming in and killing a market because they can do it much more cost efficiently—or on product offering, where they are able to offer a really robust solution to a problem that historically, customers have had to cobble together a bunch of different tools and businesses to be able to solve. Or, it can be a killer combination of an incredibly robust product offering for a valuable price. I think, across many industries, you see that this is where the disruption is.
We often see the disruption conversation put the impetus on smaller companies to drive innovation either, as you said, by offering their product at a lower price, or delivering a robust product in a more efficient way. What made Vimeo decide to be the one to disrupt the creator video model?
You know, I honestly think it initially came about organically. Vimeo was a platform for filmmakers created by filmmakers, and they were solving their own specific needs at the time. They wanted to be able to share their videos with their friends, which means that from the start, Vimeo always had creators as the business’ backbone and guiding light. The current model, then, grew from that unique insight into the needs of content creators. However, I think what is now quite compelling is that the definition of creators has changed over time: it doesn’t just mean a filmmaker anymore. “Creator” now refers to small businesses, yoga studies, churches—you name it—who are developing content to distribute to their audiences or talk directly to employees. Really, the use of video is what has changed over time.
Can you talk a little bit more about that changing use of video?
We believe video is one of the strongest marketing vehicles out there. We see businesses today adopting video at incredible speeds, and audiences are, quite frankly, expecting high-quality videos with more frequency from the brands that they associate with. A lot of that momentum is probably being driven by social media, but it’s changing the paradigm of how businesses have to think about the channels they use to reach their customers (or their audience), no matter the type of business they are in. Consequently, we are constantly thinking about how we can solve that problem by asking, “What are the tools that our clients need from the moment of creation all the way through to distribution?”
The recommendations around video length tend to center around making longer videos. Platforms like Facebook, for instance, will indicate that longer videos tend to do better in a message box when you are uploading to the platform. I’m curious, what does the consumer data say there?
You know, we actually don’t have a firm position on the best video length to be quite frank, and that’s because it does differ by the platform, and it also differs by the use case. We have tons of filmmakers on our platform who are creating beautiful long-form content, and for their needs, that is exactly the right video length. That is how they create success. For some businesses, yeah, even a six-second video clip is all you need to catch of the eye of your customer. I think it often depends on what your end goal is.
We’re seeing companies like Shopify add 3D modeling as well as videos of products. Is that picking up at Vimeo? Are e-commerce store owners utilizing Vimeo to incorporate video into their sales strategy?
Definitely, and this is sort of what I meant before: when we talk about creators, we’re actually not just talking about the filmmaker. We are talking about small businesses, and oftentimes that shows up as e-commerce. A good example of this is organizations like large enterprise businesses that are using video as both a marketing vehicle and even an internal communications vehicle. Think about companies that have distributed workforces: their all hands meetings from their CEO gets livestreamed to all their offices, and now what we are seeing more of is training materials for sales teams move to video. It all depends on how they think about the portal of video within their own infrastructure. There are so many ways that businesses are now using video alongside marketing.
As a SaaS company, what are some of your most important growth vehicles, and do you think that there is anything to be learned from these for a SaaS startup?
The way we are thinking about customer acquisition hinges on the fact that Vimeo actually has both a self-serve funnel—meaning you can come to Vimeo and put in your credit card and purchase or sign up and just use the account for free—and an acquisition model that we more recently launched, which is slightly different, and is what’s called a sales touch model. What does this mean: we have actual sales account executives who are working with clients for more sophisticated video needs, which comes down to, basically, things like creating your own Netflix-like channel, or pretty complex livestreaming events, or major projects that they are working on. Because of the differing needs of our customers, we actually have multiple ways that we think about customer acquisition. Some of it is really lead-generation driven, for instance paid marketing and performance marketing driven tactics, and at the other end we have that sales-touch driven customer acquisition strategy.
Could you ever see Vimeo expanding into a mega level of helping creators by, say, providing production studios or services?
Yes, we actually do. As part of enterprise level service, we do have production teams that will help creators with larger events, should they need that support. That’s more about helping someone get onto the platform and really make sure their events are successful, right?
I see. So, say Lil Nas decides to post a new music video on Vimeo: would Vimeo have anything to do with that other than standard interaction with the platform?
No. I mean, Lil Nas, like any other client would be choosing to do that on his own, adding it into the platform and then choosing to do whatever he wants with that: posting it on social media or putting a privacy above it because he’s working with a collaborator and they’re still editing the video itself, and they don’t want anyone to see it yet. There are different stages it could be in, like pre-production, or distribution, but we are not involved in that process since we’re not going out and trying to solicit brand ambassador-type users as part of our strategy.
The customer success piece really comes down to making sure any creator is successful using the platform. If there is a more sophisticated video need, and the creator needs someone to make sure that they can handle it, that’s where our enterprise sales touch team would be involved.
You have spoken on the importance of being kind but also clear and direct. Do you have any advice on how to balance these two ends of the spectrum?
I think that as a leader, you have to be true to yourself first. What exactly does that mean, then: it is being honest with how you feel about a given scenario, what you believe and then speaking directly from that place. For some people, that is not easy, but I do think that direct and honest communication ultimately ends up building trust, building better teams and better relationships. And it’s worth that uncomfortable moment in order to sort of break through and get the results that you need.
Right. You found that that has served you? Because I know that you spent quite a bit of time reviewing kind of data, research at HBO, and COO tends to be a very data led role. So it’s just an interesting answer to hear, to be direct and honest and tell how you feel.
Ultimately, your own opinions are one thing. The data is something different, right? The data is using that information to make informed decisions and helping to drive strategy, and you can add your opinions on top of that. But you also have to be respectful of the opinions of others in the room, and really how you use that collective conversation to make an informed decision.
Do you have any words of advice for helping new founders understand how much they should be investing in customer success? How do you know when a client is too big to take on?
I think that the reality is if you’re building a platform company, where you’re not a custom development shop, where you’re really selling a solution that is supposed to serve a single person and the large enterprise with the same solution, you have to be truly honest in your conversations with clients that this is the platform that you have and that it might not solve all of the needs on the request from them, right? Because usually in an enterprise conversation, they’ll come back and say, “We want these five things,” and some people, I think, overpromise and often get themselves in trouble in the sense that they’re not able to meet the needs of the client, right?
And so I think, again, it comes back to that honest communication piece, and I think this is something that Vimeo does really well. The team is very honest about what we can and cannot serve with our technology in those conversations. I think that is really important because that is where you sort of start to misalign clients with your platform.
Do you have a particular mental approach to having difficult conversations?
You know, I do think each issue is a little different, but I would say transparency is still key. Make sure you have all of the information as you’re thinking through how to either solve the problem or answer the question or whatever it is. I think it is really important to make sure that you convey these decisions or deliver difficult news with all of the information available and then speak directly from that place. Transparency is the key piece, and that may mean that you have to go out and seek information before you make any decisions.
For some people, that is not easy, but I do think that direct and honest communication ultimately ends up building trust, building better teams and better relationships. And it’s worth that uncomfortable moment in order to sort of break through and get the results that you need.
It sounds like culture at Vimeo is a really big part of the overarching success of the company.
Yes, absolutely. Inside these walls we believe in supporting the creator, with a focused mission on that. Having values that define how we work individually and as a team is how you sort of push people towards a mission.
Should a company be founded on its values and mission, or is it okay for that to arise organically?
I think it’s okay for the values to arrive organically. Your mission might change over time as you grow, but you need to have a clear vision of mission, A, for people to invest in you, or B, for people to join you, or C, to motivate the people on your team towards a common goal. I do think every business needs a clearly defined vision or mission or whatever you want to call it, but that the values typically begin organically and then could be clearly defined to enable you to become the kind of company you want to be.
That’s interesting. So values are the vehicle by which you achieve your mission?
I know you spent quite a bit of time at HBO covering the analytics across all their digital properties. Is there a way that you know when it is time to abandon a customer acquisition channel?
You should always be looking at your ROI. You should always have measurement in any of the channels that you’re investing in, especially for smaller companies. Time is very precious, as are dollars, and so I think you should be investing initially into channels you can measure. And so as long as you are able to understand what that return is on that investment, it’s much easier to make decisions on whether you should be abandoning channels or not. It’s not always perfect. You’re going to try channels that might be not as measurable initially, but you have to create some sort of way to get signals to understand if it’s worth doubling down or abandoning ship.
Should brand management be a particular percentage of marketing spend?
No, I don’t think there’s a hard-and-fast rule on that, and I actually think you can try branding through channels. You don’t have to do an out of home highway banner or whatever to build branding, right? You can do branding through digital channels which are much more easily measurable. I think there are ways that you can think about your messaging, and the vehicle is separate to that. How you manage it can still be through a channel that you’re able to measure.
This is probably very different from company to company, but was there a most important thing that you would focus on when it came to analyzing those digital properties and the behavior of consumers—some metric that SaaS founders should be focusing on?
It does depend on the stage of the company, but obviously, you want to understand your conversion rates. You should always be evaluating your rate metrics, as well as your top of funnel. How are you increasing the number of people that are going through that funnel? If you are able to increase both the number of people coming through your funnel and your ability to convert them, you will see significant growth.
What’s next for Vimeo? Where are you looking to expand into or capture market share from?
We just recently acquired a company called Magisto, which is a video creation app and technology, to help Vimeo solve the needs of the creator from end to end in a video platform. That means from the creation of a video through the distribution of a video, a small business or an individual can create, edit, host, distribute, monetize and measure the video all in one workflow. That is what we have really been focused on, is making sure the creation piece is just as simple as the rest of the process.
The other thing that we haven’t touched on much is the community that Vimeo has, and that has been the core to Vimeo’s heart and soul. I think what’s interesting about the users of Vimeo is that we have creative professionals like the filmmakers of the world and businesses and agencies also using our platform, and so if you think about that as both supply and demand, there are interesting ways you could consider marketplaces and how we could connect creative professionals with businesses or agencies, or creative professionals with each other to help think about content creation and distribution over time. Magisto is already adding to that right now.
How much investment is Vimeo banking on for AI?
I’m assuming you are referring to Magisto, and the AI used with their video creation tool, but I think in general, in the video market, we are seeing AI with video creation as one thing, and then we also have the advancement of video intelligence, right? That means it is determining: what type of content is in that video? What type of objects are in that video? I think in the future, the advancement of AI and its ability to analyze behaviors and identify insights is going to be extremely powerful for creators. It is not just about actually assisting on the creation of content, but about understanding the data that is generated from video and how you are able to bring that back to the creator so they can make smarter decisions on their marketing strategy, the types of video they should be creating or the people they should be targeting. I think that’s where you will start to see some really interesting movement in the future.
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Vimeo empowers video creators of all kinds to tell exceptional stories and connect with their audiences and communities. Home to more than 90 million members in over 150 countries, Vimeo is the world’s largest ad-free open video platform. The company provides professional software, tools and technology for creators to host, distribute and monetize their videos anywhere. Headquartered in New York City and with offices around the world, Vimeo is an operating business of IAC (NASDAQ: IAC). Learn more at www.vimeo.com.