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Business Observer Friday, Mar. 13, 2020 4 months ago

Pipe dreams: Sales software firm sees big potential in area

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An upstart European tech company has arrived in St. Petersburg, opening its second U.S. office. It chose the city over several other suitors, in an effort to hire a team quickly.
by: Brian Hartz Tampa Bay Editor

Pipedrive, a European sales technology firm with business practices that have been hailed by USA Today, the Financial Times and Inc. magazine, has established a beachhead in St. Petersburg as it looks to expand in the U.S.

It’s just the second U.S. office — the other is in New York City — for the company, which was founded in 2010 in Tallinn, Estonia, and expanded to other European cities. 

Pipedrives operates in the booming Software-as-a-Service space, providing a customer relationship management platform that CFO Dominic Butera says is a sales tool built from a salesperson’s point of view. That sets Pipedrive apart from rival products like Salesforce, which Butera says are built for management, not sales staff. 

“Typically, it’s the CFO who says, ‘Oh, we need a better tool for sales,’” Butera says. “We started by asking what’s the better tool for the salesperson.” 

‘We help your sales success be inevitable.’ Pipedrive CFO Dominic Butera

 

The market has responded with great enthusiasm: Pipedrive, Butera says, has some 90,000 customers worldwide. And most of those are “multiple-seat” clients, which means they buy licenses for each employee who uses the software. Although the privately held company does not disclose revenue figures, Butera says sales have been growing “significantly in a capital-efficient manner.” 

(With four monthly pricing tiers based on a client’s number of users — $15, $29, $59 and $99 — Pipedrive's annual revenue, at 90,000 customers, would be, at minimum, $16.2 million, assuming the majority of clients are at the $15 per month tier.) 

Like other fast-growing tech companies, however, Pipedrive faces a steep challenge when it comes to talent acquisition and retention. That’s a big reason why it came to the Sunshine City, Butera says. Pipedrive sees St. Petersburg as a city on the upswing, drawing young, highly educated workers who can fill its ranks as it looks to add more customers in the U.S. 

Butera, 56, says St. Pete compares favorably with cities like Prague and Lisbon, where Pipedrive opened offices that quickly grew to more than 20 employees. Stateside, he and the executive team visited candidate cities in Colorado, Utah and North Carolina before settling on St. Pete as their top choice for expansion. 

“Less than 10% of our staff is in the U.S.,” Butera says. “So we’re small, and we’re always going to be small here, but we want to help build something and be in a market where we can help the community and be a place where people want to work.” 

Butera worked for several years as CFO of a division of IAC, a $6 billion conglomerate that owns a diverse set of websites ranging from dating services like Match.com to reference sites including Ask.com and Dictionary.com. But he was drawn to the startup world and began moonlighting as a valuation expert. That’s how he discovered Pipedrive. 

Butera liked how the scrappy, upstart company was trying to offer an alternative to Salesforce, what he calls “the thousand-pound gorilla” in the CRM industry. He found a kindred spirit in Timo Rein, Pipedrive’s founder and CEO, who was also frustrated with the sales management tools that dominated the marketplace. 

“I've been in the online media space for a number of years,” Butera says, “and one of the things that I always found frustrating as a manager was that my sales folks would be very reticent to put numbers into [Salesforce].” 

Salesforce, he found at IAC, didn’t have the highly focused, dynamic functionality Butera’s sales staff required. He says to get the staff to buy into it, he had to resort to docking commissions by 20% if they didn’t use the tool. 

Pipedrive, he says, takes a different approach — and doesn't require negative incentives. Instead of merely being a repository for client info and sales pipeline tracking tool for management, it provides detailed, procedural guidance for salespeople.

“It takes you through the steps of the sales process, so that you make sure you actually do them,” Butera says. “We help your sales success be inevitable because when you walk in to work, you don't have to think, ‘What am I going to do today?’” 

A simplified CRM also makes good business sense for Pipedrive. Although it’s technically a SaaS product, Butera says the majority of Pipedrive customers, some 75-80%, he estimates, require no technical support to set it up and use right away. “We have carved out a tremendous niche in this space where you've got these other more expensive, far more difficult to implement products,” Butera says. 

(This story has been updated to clarify that Dominic Butera was CFO of a division of IAC, not the entire company.) 

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