WayBack Marketing Series: Jesse Hertzberg on Experiencing Rapid Growth and Following Your Instincts #WayBackMachine

September 30, 2013 Aaron Dun

For the next installment in the WayBack Marketing Series, we checked in with Jesse Hertzberg, COO of Squarespace.

If you are not familiar with Squarespace, you should be by now. The company started with a simple idea: to make a content management system that was beautiful and easy to use—two descriptors rarely associated with content management. But rather than wade into the crowded enterprise CMS market, Squarespace did the opposite and first targeted the individual site builder and made it easier than ever to create a beautiful website. With hundreds of thousands of customers and some incredibly compelling and offbeat marketing, Squarespace is, without a doubt, on a serious run.

As an industry watcher and former insider myself, I wanted to learn more about how they got here. Here is their story.

I just saw your most recent ad on TV (and even in a taxicab!), but I am sure you weren’t doing those ads when you got started. Jesse, let’s start off by asking what are the top two or three things you did back when you got started that enabled you to scale to the platform you have today?

JH: In the beginning, years ago, it was all about PPC. We were really able to arbitrage blog-related keywords. Of course, this was back when we were primarily a blogging tool and the environment was led by paid products, not free competitors.

We’ve only ever operated out of cash flow, which then and to this day has imparted an operating efficiency on our spend and focuses us on constantly optimizing toward cash-on-cash returns. As a result, the discipline we developed on PPC years ago continues to serve us well.

How has that philosophy evolved as the business started scaling rapidly?

Over the last couple of years—particularly this year, in which we’ve been experiencing torrid growth—we’ve kept things simple. We focus on supporting great content and personalities across all media. There are folks out there who have amazing relationships with their loyal audiences. Many of them are Squarespace customers or become customers as a result of the relationship. We help these folks financially to ensure their content will continue to be produced for a long time. In turn, we accrue audience loyalty along with the host. Win-win.

On the technology side, we have relentlessly invested in data analytics and business intelligence. Today, our data and analytics team is world class, and it represents about 10% of our workforce. We are able to produce sophisticated multichannel ROI figures, from search keywords to podcast episodes. Our brand-response models measure both DR attribution and brand lift. This level of accountability and diligence helps us optimize our spend but also helps us to work with our partners to fine tune the joint content and messaging we are putting out.

Technology is one thing, but you run a pretty tight team correct?

Definitely. People cannot be overvalued. We operate a tiny marketing team, with a ton of dollars flowing through each person. We hire young but strong athletes, typically generalists with a deep love for our product and a fantastic gut for our brand. We let them run pretty free. Given the strength of our data analytics, the quantitative chops develop rapidly. The talent we’ve fostered and their lack of preconceived notions are what allow us to regularly uncover unexpected sources to mine.

That is an interesting way to frame the connection between data and talent. In my experience if you don’t have that data rigor in place, it’s a great deal harder to ensure that “letting them run pretty free” doesn’t turn into chaos!

Let’s turn to something perhaps that you starting doing more recently, that you wish you had started doing earlier…

The one thing we should have done, we did. There was a point in time about two years ago when we were down to a bare-bones engineering staff. We took over half the team and asked them to create our data analytics and attribution platform from scratch. It was a big risk in that our resources were highly constrained and the process slowed product development down to a crawl. But we knew the rewards we would reap down the road. We’re lucky to be a software company with strong developer talent that makes it possible to get these things done in house. The month we turned it on, we found hundreds of thousands of dollars in spend savings without losing a single conversion, and today our marketing engine as well as our product and customer care teams are deeply wired into our data platform and testing frameworks.

Very impressive—and the kind of gutsy call not everyone makes!

Yes, thanks, it really did pay off. Though I still owe you an answer. Nearly every time we’ve tested a new broad reach marketing channel or taken an existing channel and tried to find a bigger concentric circle to grow it, we’ve been able to succeed and buy significant growth. While we are not slaves to data, we have entered these new opportunities with a conservative test/learn/expand/test/learn/expand approach. Looking back, I have to admit we haven’t leaned into success fast enough. For instance, we saw one program work really well in three markets, which we then tested in 12, and so on. Looking back, we could have reaped larger rewards had we gone national more quickly. Data is important, but sometimes your gut should just make the call.

To be fair to your team though, I imagine scaling from three markets to 12 and beyond probably felt like you were flying at the time! Taking that one extra leap can feel paralyzing, which is where balancing your gut and data comes in to play I imagine?

I always want to move faster. At Squarespace, we believe everything can and should be measured. But we also believe that successful business metrics are simply a reflection of our ideas, values, and execution in the marketplace, not the goal in and of itself. We optimize towards ideals and are confident the numbers will follow. I think it’s this confidence in what we believe in that lets us regularly step back from the data and push the business more aggressively.

Thank you for your valuable insights, Jesse. I think we can all appreciate your rigor on analytics and see how we can apply aspects of it to our own strategies! As always, I welcome input from our readers on how you are using data to drive your marketing. Happy analyzing!

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