How Contently Reached About $20M ARR with a Couple Hundred Enterprise Customers (Interview with Shane Snow)

Introduction: Shane Snow and Contently

Nathan Latka

00:01Good morning, everyone. My guest today is Shane Snow. He's an award winning journalist, celebrated entrepreneur, and the best selling author of Smartcuts. He's also author of the forthcoming book Dream Teams, as well as the co author of The Storytelling Edge. He co founded the content technology company, Contently, which helps creative people and companies tell great stories together and serves on the board of the Contently Foundation for Investigative Journalism. Shane, are you ready to take us to

00:25the top?

Shane Snow

00:26I am ready.

How Contently Started as a Marketplace

Nathan Latka

00:27So you know this value. Most authors I, you know, say no to because they just wanna promote a book and it's frankly very boring and I just eat them alive. But you, I made an exception for because you come from a SaaS background. You come from a software background. So tell us quickly about Contently, and then I'm gonna go why on earth do you decide to write a book? This is like the most difficult thing ever

00:44instead of doing Contently.

Shane Snow

00:46So Contently didn't start as a SaaS platform. It started as a marketplace, kind of a newfangled talent agency to help, you know, laid off journalists from the New York Times connect with clients. Turns out that the most profitable clients, the most interesting clients when we launched about eight years ago ended up being brands wanting to do content marketing, which was starting to become this popular thing. And so as we leaned into that, we by necessity had

01:08to start building project management tools to help these brands who were connecting with our marketplace, and then that became the business. It turned into this full blown, sort of like Salesforce for content marketing for managing everything about your content program, and that's turned into sort of the content operating platform that helps companies, not just with content for marketing, but for HR and a whole bunch of other things. So that's the very quick sort of backstory. But

Validating the SaaS Model at $1,000 per Month

Shane Snow

01:31we actually had a point where we were gonna have the software portion be free and be subsidized by the marketplace. And we got in this big argument, and the argument was solved by my partners and I deciding to do a test to start selling some features of the project management tool for a monthly fee of $1,000 and when we sold 13 in the first month, we said okay, this is the business and here we are.

What Customers Get and Enterprise Pricing

Nathan Latka

01:57What do people get for $1,000 a month? Was it like a number of words or number of articles or what?

Shane Snow

02:02Back then when we started, it was sort of workflow. So you want your PR people and your lawyers to weigh in on your content you're about to publish. Now there's packages and tiers, but it's everything from analytics, document analytics,

02:19sort of more hardcore workflow integrations into everything you could think of, sales enablement tools. So it's kind of everything you'd want to do to organize content in a big enterprise. So yeah, depending on the size of your enterprise, the number of seats, very much kind of mimics that standard kind of marketing automation type of SaaS product only. It's content rather than email.

Average Customer Spend: $6,000 to $10,000 per Month

Nathan Latka

02:42And would you say you're still kind of enterprise folk? Like, what's the average customer pay per month? Is it a couple thousand?

Shane Snow

02:476,000 to 10,000.

Nathan Latka

02:48Okay. Okay. So very much enterprise space. High volume.

Shane Snow

02:51Yep. Yeah. And that'll change at some point, but that's where we are now.

Company Scale: Funding, Team and Customers

Nathan Latka

02:53Okay. Good. And before we move on to the book, can you give me a general sense of scale? So I know you raised capital. How much have you raised, and can you generally share team size, things like that?

Shane Snow

03:00Yeah. So we've... The company's about eight years old. We've raised $20,000,000 in total, which is about a quarter of any of our competitors, which is great for us because we're you know similar size and have an outsized presence in our own content marketing. Staff is about 100 people, and yeah, what else did you ask?

Nathan Latka

03:22How many customers are you working with now?

Shane Snow

03:25We have a couple hundred enterprise customers. We have one group, like I alluded to, that'll change at some point. We have a group of customers that we call high growth customers, so smaller companies that are paying a lower average, and I forget what the number is, but that's a big growing category for us as well.

Nathan Latka

03:25Okay.

ARR Confirmed at About $20M

Nathan Latka

03:42And north north or south at 20,000,000 in ARR?

Shane Snow

03:46It's about at 20,000,000.

Nathan Latka

03:48Real? Oh, look at that, man. I'm on fire this morning. Good guess. Okay. So you're sitting on this rocket ship. You're eight years in. Started as a marketplace. You shift the model. You're now serving 300 enterprise customers paying, call it, $6,000 a month. Call call it 20,000,000 in ARR right now. Why take time out of your schedule to write a book?

Why Shane Wrote Dream Teams

Shane Snow

04:05So a couple of reasons. One is I think of my identity as a journalist. I'm a journalist who ended up starting this company with a couple of partners. I wrote about business and technology and science, and I was covering companies like mine is now. So when we started this company, it's in the field of media and content, is my industry. So it was a natural thing to sort of fall into, but as we started growing the

04:29company, I realized that I had deficits in terms of how to build an innovative company. And so my first book I wrote, basically I interviewed people and I took a tour of history and psychology to try and understand how breakthroughs happen, how innovation happens, and find patterns for how we can do that. So writing the book was an outgrowth of my journalism work that was an excuse to help our company get better. The second book that

04:55I co authored is about our industry. It's about using storytelling to build relationships and build companies. And this new book, Dream Teams, sort of a similar thing. It's sort of this itch that I've had for a long time as my role went from being the guy who did stuff. Every founder ends up, you paint the walls and you take out the garbage and you write the code and you do everything. My role went from that to

05:18the guy who picks people to work together and then has to help them work together better. And seeing as the team grew, things slowed down as organizations get bigger, it's sort of natural, people start having problems with each other, and casting the right group of people to work on problems becomes really important, and realizing that I can't make every decision myself. I have to empower people with information to make decisions. So I became sort of obsessed

05:43with this as a new role that I have that I suck at. So similarly, let me take a tour of history.

05:50And the other thing too is part of what I was looking at is just the way the world and our society is sort of changing now because of technology communication and just politics is getting very strange. I was concerned with the idea that we need each other to do anything great, to make progress, and yet we prevent progress because of each other. And so I kind of wanted to take a meta look at human collaboration and

06:16the dynamics that help a team in business exceed the sum of their parts or slow down or destroy itself, and how that same thing plays out psychologically in society, in politics, in art, in entertainment, all those sorts of things. So that became the genesis for the book. Part of what happened also, I've been doing research, I've been interviewing people, and doing my sort of obsessive weekend and night thing, But I realized that I was not the

Stepping Back from the CMO Role

Shane Snow

06:42right person to take our company from the 15,000,000 to 100,000,000.

Nathan Latka

06:49Shane you have co founders though, right? How many co founders?

Shane Snow

06:50I do. I have two co founders. One's the business guy, one's the tech guy, I was the marketing guy and content guy. So I realized that I was not the CMO that was gonna take our company to the next step function, so I hired a replacement. And after a month of getting her up to speed, I wanted people to stop going around me,

07:08and really for the mantle to fall on her. And so I took a two month sabbatical to kind of write for fourteen hours a day and finish this book. So I took some time off to step back and do this, and then came back and kind of became the consultant to her organization rather than the boss. And so Got that's how I managed to do both these things.

Nathan Latka

07:27Well coming up we'll talk about why Chrysler failed while Wu Tang succeeded, and some other surprising factors behind mergers, marriages, partnerships. We'll also talk to you, I know you talk about the Wright Brothers a lot and what their daily arguments can teach about group problem solving. So Shane, we'll talk about both those things. But real quick, just since Facebook's hot right now in the news, you got Sheryl Sandberg to do your afterword. Tell us how you

07:44got her to agree to that and why she liked the book.

Shane Snow

07:47So I helped out Sheryl and Adam Grant with their book launch, Option B, which is the book that was kind of inspired by the tragic untimely death of her husband. And they wrote about resilience and getting through hard things. And they reached out to me asking if, because I'm a LinkedIn influencer, if I could write about a time when I had to be resilient and get through something and promote their book through that. So I wrote

08:12probably the most difficult blog post of my life about, and you can find it pretty easily, it's called How I Got Through the Worst Days of My Life. And I wrote this post and it went kind of inadvertently viral. A few million people read it, and so then Cheryl emailed me and kind of with this email, oh my God, thank you for sharing your story. Thank you for helping us with our launch, raising awareness for this

08:33important thing. If I can ever do the same for you, let me know. So I said, would you write the afterword for my book about your philosophy on teamwork, collaboration, working together without falling apart? And so she actually pulled Adam in as a co author of her book, and we then pulled in a dozen artists from around the world to illustrate cartoons with some of the salient quotes. The afterword of the book is kind of unique,

08:59it's a collaboration, sort of again a meta study and people working together. But she is one of the more generous executives of huge gnarly companies that I've run into, and was surprised and pleased by that.

The Wright Brothers and Cognitive Friction

Nathan Latka

09:13That's great. Alright. Let's dive into some of the hard content in the book. So you talk about... I know you talk about the Wright brothers in the book. Tell us more about, again, why their arguments each day can serve as an interesting lens for us to look at group problem solving through.

Shane Snow

09:26Yeah. So I love this story of these guys. They're two brothers, and it kinda reminds me of me and my brother. I have a brother who's a year and a half younger than me. Couldn't be more different. And we hated each other growing up, and also were really good at building forts together, and know, those are things that brothers do. So they recognized that if they were going to invent the things that they wanted to invent,

09:46if they were going to solve big problems, they had to have this sort of war of ideas. They also recognized that they couldn't let their egos become too attached to any certain way of thinking about a problem. So what happens when we have a very strong opinion on something, when we're debating, which is I think an important part of problem solving and innovation, often we reach a point where the conflict either sort of threatens to destroy

10:09the relationship or threatens to get too personal where we're no longer talking about ideas. So they had this really clever thing that they did to kind of, in the book I talk about this ideal zone of cognitive friction. So what they would do is they would be working on a problem such as how to propel this flying machine forward, and they'd start these arguments and they'd purposely get really intense and really hot to the point that

10:36the neighbors would sort of worry about the yelling they'd hear out the windows. And they'd scream and they'd argue and they'd fight, and then they'd stop for lunch and they'd eat their sandwiches and then they'd go back to fighting. But what their rule was is whatever side that Wilbur had took in the morning, he had to take the other side in the afternoon and vice versa. So when they got to the point where they were going

10:55to kill each other, they had to switch sides, and this forced them to do a couple of things that I think are really important. Forced them to depersonalize the argument. So you know, you want to win the argument, it's no longer about winning for your sake, it's about winning for the idea's sake. And also force them to put themselves in different perspectives, which it turns out is how we can become smarter than the smartest person in

11:20our group, is by combining different perspectives and heuristics and different things in our mental toolkits. So it kind of forced them to take these sides and do this. And my favorite sort of meta lesson from this that you probably read in the book is with the propeller argument in particular, they actually

Nathan Latka

11:20Yeah,

11:37so everyone knows if you haven't connected the dots, Wright Brothers, we're talking, you know, plane guys.

Shane Snow

11:41Yes, the airplane. They're trying to figure out how do you propel this plane forward, and the result of these debates and arguments where they had to keep switching sides was they realized they needed two propellers, and they had to spin in opposite directions in order to keep the plane from spinning on its sail. That actually is sort of the perfect analogy for kinds of groups that can solve problems in very clever ways, is that you need

12:06to combine disparate ways of approaching things. And anyway, so they did a whole bunch of other stuff, but I love that they had these hacks for forcing themselves to look at things in ways that their competitors weren't looking at things.

DaimlerChrysler vs. Wu Tang: Lessons on Mergers

Nathan Latka

12:19One more example quickly here. So mergers, acquisitions, a lot of my listeners are either buying companies, selling companies, their private equity firms, rolling them up. They know they build a pro forma for an acquisition, and, you know, 0% times does it actually pan out exactly as you model the pro forma. So what did you learn as you studied Chrysler and Wu Tang in terms of why sometimes mergers, acquisitions, and two groups come in together

12:41work versus don't?

Shane Snow

12:43So the sad math is that most mergers and acquisitions don't achieve what's called synergy, which is they don't add up to more than the value of the two companies beforehand. So most acquisitions just don't result in any net gain. In fact, a huge number of acquisitions actually result in a loss, which really sucks because they're a lot of work and obviously, and companies merge so that they can combine the different things they have and become better,

13:07which in theory is what we want to do. And so in the book I write about two kind of contrasting case studies. One is the worst acquisition of all time, which is Daimler and Chrysler. Two massive auto companies that come together, and after a few years they're worth less than any either of them had been worth before.

Nathan Latka

13:24Shane, have to challenge you there. Why did you not choose Time Warner and AOL?

Shane Snow

13:27You know, it's...

Nathan Latka

13:29Was it close?

Shane Snow

13:30It was close, but it's not as bad.

Nathan Latka

13:30Okay.

Shane Snow

13:30And I think also the reason for it was a little more, it was a little more out in plain sight with Daimler and Chrysler than AOL Daimler. So what happened with it, and then I contrast this with the Wu Tang Clan, is a smaller merger, nine kind of alpha males from the projects in Staten Island that came together to become the greatest rap group of all time and

13:57change music history. And they had a lot of very obvious conflict at first. They came together and they actually brought guns to the recording studio. You know they came from different gangs, they did not like each other, and they were very suspicious of each other. And they went on to become this amazing transformative group,

14:17DaimlerChrysler had everything on paper for them for this merger. They had sort of complementing skill sets, but they also, the thing that people chalked up their failure to is what most mergers get chalked up to, which cultural conflict. So they did all of this stuff, were like there's the Germans and there's the Americans, they have different values and different ideas and different etiquette, so we're going to do these sensitivity trainings on German dining etiquette and sexual

14:44harassment in the American workplace so we can get them to play nice. And they were so timid about making sure that they didn't destroy each other that actually what happened is what when you dig deep, what normally kills most mergers and most synergy in mergers is they they actually had what was called organizational silence. They did not actually press together well enough. They didn't rub their different ideas, and they didn't have that friction that actually makes

15:14for new ideas coming out of different people. So they actually stayed away from each other. Two CEOs would go weeks without talking to each other. They didn't want the Germans to fight with the Americans, so they just kept them separate. And this made everything get sort of demoralized and fall apart. This is a really quick version of kind of the lesson learned from this, but you look at mergers in business history, and this is the thing

15:35that actually leads to mergers not doing well, is people are scared of conflicts so they don't speak up, they don't argue, they don't combine things. And mergers that do go really well are the ones where they actually make people move and live in different offices, and they host the arguments, and they host the debates, and they moderate these things, and they let people fight, and they let people quit because of fighting, rather than quit because they're

15:58getting ignored. And with the Wu Tang Clan, what happened is the whole point was the RZA, who's sort of the captain of the gang, he would make the beats and you had to show up to the recording studio and battle one of the other guys. And whoever had the best rhymes for this particular beat would win and you get to go on the record. And so he'd host these battles, he channeled their energy away from wanting

16:23to be suspicious of each other and kill each other into coming back every week with newer and better material to try and beat each other. And when you look at the history of innovation in music and hip hop generally, but in all sorts of fields, it happens when you don't let competition or fear of your differences cause you to go silent or murder each other. It's when you manage to keep it in this ideal place where

16:53it's actually elevating the game itself. And so you look at research even in marriages. The surefire sign that a marriage is going to fail is not arguments. It's not fighting. It's when you stop talking to each other.

Where to Find Dream Teams

Nathan Latka

17:08Yep, communication. It's so key in both those examples you gave Shane. Listen, hey, we're running out of time here, but I want ask you real quick before we wrap up with the famous five. Where can people grab a book if they want to get it?

Shane Snow

17:17Shanesnow.com has everything in mind, or it's just called Dream Teams. You can find it there.

Famous Five: Favorite Book, CEO, Tool and Habits

Nathan Latka

17:23Guys, there you have it. Shane, let's wrap up with the famous five. Number one, besides any of your own, what's your favorite business book?

Shane Snow

17:29My favorite business book besides any of my own?

17:34You know, I always, since it came out, I really liked Adam Grant's Give and Take, because it was, I'm sure it's been mentioned a lot here, but it's a fresh perspective on what it means to get ahead. That the people at the top and the bottom of any field are the most generous. And how can the most generous succeed and not succeed? And I think there's something really important to that message that we do our best

18:01work when we help each other out, and when we're generous, and that that's important, and sort of being takers and trying to get ahead by stepping on other people is sort of short sighted. And then there's also the other side of it, being generous with only the short term in mind is going to get you stepped on, but being generous with the big picture in mind I think is how we get ahead of ourselves and together.

Nathan Latka

18:24Right, quick answer on this one. Number two, is there a CEO you're following or studying right now?

Shane Snow

18:28CEO I'm following... Katherine Minshew, I think, is one of my favorite CEOs. She's CEO of The Muse.

Nathan Latka

18:33Yeah. Good one. Number three, is there a favorite online tool you have that you love... That you use a lot for building the company?

Shane Snow

18:39Sumo.

Nathan Latka

18:40Yep. Oh, yep.

Shane Snow

18:41Sumo.

Nathan Latka

18:42Number number four, Shane. How many hours of sleep do get every night?

Shane Snow

18:45Five to six.

Nathan Latka

18:46Okay. That's pretty good. And what's your situation? Married, single, you have kiddos?

Shane Snow

18:49I am single.

Nathan Latka

18:50Single. No kiddos?

Shane Snow

18:52No kids. I actually was married at one point, but I am single again.

Nathan Latka

18:55Alright. And how old are you?

Shane Snow

18:57I'm 33.

Nathan Latka

18:58Last question, Shane. What do wish your 20 year old self knew?

Shane Snow

19:02I

19:07wish my 20 year old self was more confident. I didn't do a lot of things just because I was scared that I couldn't do it, it turns out that I could do it. So I would go back and tell 20 year old Shane, stop worrying and just be confident.

Nathan Latka

19:21Guys, there you have it from Shane. We're the co founders of Contently founded back about eight years ago. They've scaled now to, over a 100 folks on their team, 300 customers, enterprise customers that pay about $6,000 a month. So call it around $20,000,000 in ARR today, growing rapidly 20,000,000 raised. He decided he wasn't the guy to take the company in the CMO role to the next level, so he took a sabbatical two months, went off and

19:40wrote this book called Dream Teams. The importance of really embracing competitive stuff inside of these teams. Let the best idea win. Take the other perspectives view after lunch so you can really get in their shoes. And ultimately, that's what leads to the best ideas. Go grab it. Dream Team, Shane Snow, thank you for taking us to the top.

Shane Snow

19:57Thank you.