Scaling A Company That Sells To Data Scientists With Derek Steer

Scaling a Company That Sells To Data Scientists With Derek Steer

Last Updated on December 10, 2020

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About Derek Steer

My name is Derek Steer, and I am the CEO and co-founder of Mode Analytics. Prior to co-founding Mode in 2013, I was an early member of Yammer’s Analytics team. There, I led sales and marketing analytics, drawing upon my experience on the monetization analytics team at Facebook and my background in antitrust economics. My passion is training the next generation of analysts. I am the author of SQL School and a mentor at Insight Data Science. Outside the office, you can find me biking up Mt. Tam, checking out the latest exhibit at SFMOMA, or stuffing my face at the local taqueria.

About Mode Analytics

I met the other Co-founders of Mode while thee three of us were working on the data analytics team at Yammer. The problems they were trying to solve at the time were very similar to those at other forward-looking technology companies — Google, LinkedIn, Zynga, and many others. All of them were hiring people who were good at solving complex problems and asking them to develop a deeper understanding of the business’ dynamics through data. And to support those people, all of them were building new tools internally. My co-founders and I started Mode to fill that gap. We knew that everyone else wanted to work like Facebook, but wouldn’t be able to afford to build tools themselves.

How Did You Get Your First Several Customers Or Users? How Many Users Or Customers Do You Have Now?

Our first customer was Twitch – the video game streaming platform. They are still a customer of ours today. I am very proud of that fact. We were working in a co-working space called Rocket Space in 225 Bush Street, San Francisco. Twitch’s office happened to be in the same building. This was June or July of 2014.

We had announced our product and initial round of funding through TechCrunch. Someone at Twitch reached out and said, “I was going to build this on my own, but it looks like you just released it. Can I use yours?” We said, “Sure, we’ll come visit you.”

When they told us where they were, we were surprised to find out that we were in fact in the same building. Later that day or the next day, Spencer from their team decided that he was going to come and visit us at Rocket Space. He sat down with our six or seven-person Mode team and talked to us about security and other things he cared about.

He left the conversation, went back upstairs, got Mode running and the rest is history. From there, we did an open beta, which was free for the first six months. Then we started figuring out how we were going to charge people for this product. We were figuring out what would be the effective mechanism for it and how much it would be worth.

How Does Your Company Grow And Acquire New Customers?

We sell to primarily analysts and data scientists. The person who buys Mode and really pounds the table for it is a director of analytics and data science. For that person, as with many technical audiences, they value authenticity.

It’s different from selling to a salesperson. If you want to sell CRM software to a sales team, you could take people out to dinner. That does not work for our audience. Our audience can smell phony cheesy tactics from a million miles away and they hate it. That’s why open source tends to be adopted so well. That’s part of it because, from the early stage, we produced content that was to show other folks that Mode is associated with good data analysis.

We are people who live and breathe the problems of analysts and data scientists. We have done this job ourselves, and we understand what that means. We are not telling them explicitly that we understand it; we are just showing them that we are showing good analysis.

When we first started Mode, we published a lot of analytical content, through our SQL tutorial and our blog. From the very start, my co-founder, Benn Stancil, wrote some fantastic analytical pieces about pop culture that created a great impression and generated lots of goodwill for us, even before we had a product in the market. People began to associate Mode with great analysis, so when we finally did release a product, people in our market paid attention. The content spread through word of mouth, which is still one of our most powerful and productive channels for lead generation. That early reputation building is still paying dividends — we probably wouldn’t be where we are today without it.

What Actionable Tips And Tricks Do You Have For New Founders Who Are Looking To Get Their First Thousand Users Or Dollars?

My first bit of advice is to widen your context. Try some jobs that are adjacent to what you typically do, because it will broaden your perspective and make you better at your own. I don’t think he coined this, but my co-founder Josh Ferguson often reminds me that people tend to overestimate how complicated their own job is, and underestimate how complicated other people’s jobs are. At Yammer, I had to build internal tools for our salespeople, but had never closed a deal. As a result, I made some choices that likely weren’t best for the reps — choices I would make differently now that I’ve closed a few deals myself. It is no coincidence that many of the most successful people I know have broad experience.

Second, connect with people. My former boss, Pete Fishman, used to say “use your feet.” A lot of people think of data scientists as being the geeks in the corner, but the truth is, in order to be good at this job, you need to continually learn from others. What my boss meant was that the fastest way to solve problems was to use my feet to walk across the office and ask an expert in whatever I was working on. Even in the midst of this pandemic, people are constantly available via Slack and other communications mediums, and they will be happy to help you learn — use them.

And finally, learn the skill of active listeninig. It is incredibly powerful, and has ccompletely changed the way I interact. There’s something very powerful about listening effectively, in that it helps others to unlock what’s inside their heads. It’s true in all interpersonal relationships, whether they are personal or work-related. Listening just makes the conversation better. I’m not saying I’m perfect at it by any means, but I am always working at being a better listener.

What Is Something You’ve Learned That Would Not Be Obvious To Somebody Who Hasn’t Worked In Your Space Before?

On thing that comes to mind is something I learned from Rick Hartwig of Enjoy the Work, who I worked with as a communications coach. He helped develop the skills I needed to transition from one-to-one communication to one-to-many as Mode great. In particular, he taught me to always consider two things: 1) Who is my audience, and 2) What do I want them to do, think or feel? This continues to be enormously helpful. Whenever I draft any written or verbal communications piece, I hear Rick’s voice in my head asking me those two questions.

What’s The Craziest Thing That’s Happened To You (Good Or Bad) On Your Founder Journey?

I’m not sure that it qualifies as crazy, but it is probably the most important lesson I’ve learned about business. When we founded Mode, we had a vision of building an open-source, collaborative community for analytics and data science, and we created our initial product around that vision. That was 2013, and GitHub was really taking off, so we weren’t the first to see the value of hosting an open source community.

It didn’t get any traction — partly because people didn’t want to get in trouble with their employers and partly because they just weren’t motivated to share. It wasn’t until after the fact that I realized GitHub was successful because they made a very painful process with a large existing market (maintaining open source software) much easier. We were trying to invent a market, not tap into one, and that’s usually a recipe for failure.

In the process, we did get lucky and stumble upon a great market: people trying to earn data skills. We were early in creating our SQL tutorial. This was long before you could find data-specific tutorials on Coursera and Udacity, but just in time for the data science hype train. Offering these tutorials helped us to gain visibility among data scientists, and has contributed significantly to our reputation in the market.

What Are Your Favorite Books?

“The Hard Thing about Hard Things” by Ben Horowitz. I’m a little ashamed because it feels like a safe or common answer, but it’s just so easy to digest and put into practice that I keep going back to it. One of the most valuable things I learned from it was to hire people for their strengths, as opposed to their lack of weaknesses. Don’t hire by committee – find someone who brings the maximum of what you are looking for to the job, as long as you can live with their shortcomings. I re-read that chapter every time I hire an exec.

Anything You’d Like To Plug?

I’d like to put in a plug for Mode’s SQL tututorial, which has become one of the most popular tutorials on the Internet: https://mode.com/sql-tutorial/. It’s a great resource for becoming more data proficient and learning to answer questions with data to solve challenging business problems.

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