Trey talks about how working as a music producer prepared him to be an entrepreneur, the 'gift of the gap' and what breaks his heart.
Episode 35: Andy Mowat, CEO, Gated
Listen to Andy talk about his experience as a founder, how he went from running grocery stores to building GTM machines, his vision for Gated, and more.
This week on the CoSell Show, we have someone who's trying to fix email for both buyers AND sellers, and to do some good for the world. Tune in to our conversation with Andy Mowat, Co-founder and CEO, Gated.
- From running grocery stores to founding Gated, how Andy got into SaaS and realised his potential for building go-to-market machines.
- The current state of cold outreach, and how we got here.
- Gated's ideal customer profile, their work culture and how they're functioning in a fully remote workplace.
- Andy's experience as a founder and his vision for Gated.
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Follow along with the podcast transcript
Pete Ryan: Hi, everyone. Thanks for listening in to the CoSell show. I'm here with a good friend, Andy, CEO and founder of a company called Gated. Love what they're doing and thanks again for joining, Andy.
Andy Mowat: Thanks, Pete. I love what you guys are doing too. I think we're both working in a similar space, which is; that selling in the classic sense is broken, and we're both trying to solve it from different angles, which is cool.
Pete Ryan: Yeah. We'll certainly get to that, but it'd be great to start from zero, right? What in your career has led you into SaaS and what led you to start Gated.
Andy Mowat: Yeah, so I’ve done everything from investment banking, and private equity to running grocery stores in Eastern Europe and building gyms for wealthy families in the United States. And I think I was like 27 and I realized that tech was just a better business. So I read Tim Ferriss's Four hour work week and cold-called cold-introed the CEOs of both Fabio and Gary Elance and oDesk and got offers to both. And so I ended up rolling up my sleeves at Upwork. I figured out I was good at systems data and processes when they had me set up their first CRM and marketing automation platforms. And so I just kind of knew what I was good at. So that's kind of how I got into SaaS and I just realized, you know, just like when you find where you're good which for me is like building go-to-market machines. Then things become a lot more fun and a lot easier.
Pete Ryan: Yeah. And so you discovered that that was your superpower. And has the Four hour work week kind of held up or are you working more than four hours these days?
Andy Mowat: I'm working more than four hours, but I'm always inspired by Tim Ferriss. He thinks very aggressively and you know, how to make work. So I'm definitely as you are too, probably working like crazy hours as a founder, a hundred percent.
Pete Ryan: Yeah. I ran into him, believe it or not, on a rainy street here in Austin, and I was kind of starstruck, right. But yeah, I'm a huge believer in his content also.
And so, tell me more about Gated. What's your ICP and what's the grand vision for you guys?
Andy Mowat: Yeah. So I mean, I guess I'll tell you how I got started, and then I can tell the grand vision.
I was running rev-ops and demand gen at Culture Amp. We were like a series E company that's just getting blown up. Like 20, 40, 50 emails a week, a day. And so I was just so annoyed that I wrote this email saying, I don't know you, here's my Venmo link, I won't read your email, It's not going to make it in my inbox unless you donate here for a dime. And here's my favorite charity, and it was wounded-warrior. And people started paying, but they didn't just start paying what I was asking, they started paying a lot more just to get my attention. So I just kept iterating on until you know and started to talk to a lot of friends. And they were like, yeah, my inboxes are blown up too.
And I started giving it to them. Our vision for the world is, that there are 10,000 or more tools helping sellers and marketers, pummel buyers. Like we've been feeling the pain of marketing for a long time. I've caused a lot of that pain. We are building the first tool to give buyers defense and to let them control access to their attention.
Like today, Anyone that wants to think of it at any time can put an email in your inbox. You got to wake up in the morning and deal with stuff that's irrelevant to you. So we started with email, but our vision is really to give power back to the buyer. My friends at Gartner coined the term and they said, wow, there's marketing automation, you're building buyer automation. So a lot of people have trouble wrapping their arms around this, so how do I use it to sell more? We are built for buyers. But ironically, because we kill the noise. It increases the reply rate dramatically for sending.
Pete Ryan: Audit guys. So it's kind of like a supply and demand play, right? Where if you're essentially decreasing the supply of emails touching a buyer, the demand for each email should essentially go up, right?
Andy Mowat: Well, we took off somewhere between 30% and 50% of the average person's inbox. It doesn't disappear. It just goes to a side folder. And in exchange, you know, typically people are receiving like four to six donations a month.
And so when you're taking off like 500 - 600 emails and you're getting 4 or 5, your inbox is cleaner, it's higher quality. And you look at the ones that are donated in a much better way. So we're seeing reply rates of about 46%, and that's just consistently over a week and that's compared to a typical reply rate of about 2%, and that's from like SalesLoft and outreach.
Pete Ryan: Yeah. I mean, even that's high. Like when I was at Trello, we would see, I think, a 0.5% response rate, and that's just a response rate. From an email to an actual opportunity, it’s just so much lower.
Andy Mowat: Yeah, that's true. And then if you say; what is an opportunity worth, I mean, in general, and you probably think about it, but like at Culture Amp, they were worth about 3, 4 grand to us. And so, if an opportunity is worth that, what would you pay to get that first reply? And, you know, the average donation on Gated is $3 and 50 cents.
Pete Ryan: Yeah, And the CAC that goes up, the larger the company becomes, right? With more and more competition and so on. So, let's just sit on the problem for a second. What do you feel has happened that has led us to get here. And what do you think about it? Because for me, it’s like, 5 - 10 years ago, I was getting a lot of leads through marketing and then my cold outreach was making its way through. Today it seems like it's just gotten so bad, right?
Andy Mowat: Yeah, it's the classic economics of marketing, which is for any other channel. If two marketers want to reach a buyer, they're going to bid it up and one will win and one will lose. But anyway, there is no marginal cost, so effectively, sourcing addresses is cost zero. And people have just been blowing you up. It's very similar to the environment, right? Like we're going to destroy our world. If we don't put a price on carbon and force people to make better decisions. I think we're doing the same thing with Gated, which is; that email will die, and I hear so many people saying I've just given up on my inbox, but we fixed that problem. And so email will die. If something like gated doesn't solve this problem.
Pete Ryan: Yeah, I love that analogy. That we're distorting our planet with carbon, email is that carbon, and it's only getting worse. We're just scorching the earth and I already have it, it’s like, literally you could have a donation that is solving the carbon issue and helping that cause. I'll bet your buyers feel good about it too. Like they're getting donations coming through as a result of just them having an inbox, right?
Andy Mowat: Yeah. A couple of senior leaders like sales execs early on said to me, and really good advisors; this needs to work for both sides. And so I generally, if somebody donates, they'll probably get a LinkedIn automated message from me saying cool to see your Gated donation. So I've connected with over a thousand donors, and people are like, this is cool, this is interesting. I think they started with like, you're charging me, that kind of sucks. And they're like, wait, my reply rate is pretty good. And I have this good feeling about giving to charity. And then finally they're like, can everybody get Gated? And so we've got this whole movement of centers that understands that there's a better, newer way.
Pete Ryan: Yeah. And you're touching on all points at Gated. It's like, you have the network effect, and you're donating to charity, and then you're helping solve a problem, which is a problem that's just gotten worse and it's beyond going back.
Yeah. So who is the buyer for you guys? Would it be the CRO then?
Andy Mowat: Oh, sorry. Yeah. You asked that one earlier. Our ICP; think of it like B2B buyers that are overwhelmed. And within that, in particular, we've seen marketers rev-ops, finance, product, and CEOs. People that are day-to-day sending. So if you're in sales or CS but. We've sent over a million challenge emails, and they come across well, but the cost of a false positive when you're selling to somebody and you're asking them to like buy your software is pretty high. And so we, until we can integrate into CRMs, I think we've kind of said, Hey, if your sales or CS don't use it, but pretty much every other persona it works for.
Pete Ryan: Yeah. Amazing. Very cool. So what stage are you at with the company? You're obviously in SF, is the rest of your team in SF?
Andy Mowat: We're fully global, fully remote. We are there other than one gentleman, over in Eastern Europe, Russia the rest of the company is all like US time zones, but we've got people in Latin America, all across the United States.
Very committed to fully remote work. I think I drank the Kool-Aid over the last couple of years with Covid.
Pete Ryan: Yeah. Which is a lot easier said than done, right? Like remote work. And for you, is there any secret sauce to go fully remote and have that working for you guys. But is there some sort of process or tool? You know, you have them placed to make it work.
Andy Mowat: Yeah, we're just doing communications and comms, very thoughtfully and right. I spent a lot of time the last four years at Culture Amp, learning how to help companies build internal cultures.
I think it's every hire you make, I think shapes in some way, shape or form, the culture of your company. So we're deliberate about how we hire, we hire for writing skills, communication abilities a lot, the more work we can do, asynchronously the better. And, you know, we have a lot of people that have families and are balancing work life. And so, somebody asked me literally at an interview yesterday, what are your work hours? I was like, I literally couldn't tell you like everyone in our company. And we don't mandate when people get in or when they get out or, you know, some people are working late, some people are working early mornings. You know, the bed of our CTO is like, he's on it, like 6:00 AM, but I'm not. And then like different people are. So I think we tried to build a company that works for people's lives. That being said, we don't want people that are in and nine out of five. We want people to bring their whole selves to the company.
Pete Ryan: Oh, a hundred percent. Yeah. Trello was remote, Atlassian has become fully remote. It feels like just a lot of documentation, a lot of processes, and then it feels like, getting good at getting everyone bought into that process. Cause if it's just a bad process, no one's going to want to do it. We've started using threads internally and love it. Are you familiar with threads?
Andy Mowat: I'm not, So it's like a competitor to Slack?
Pete Ryan: Yeah, kind of, it kind of sits in-between Slack and a tool like a confluence or notion, where you can go in and document something, and then everyone else can like comment on that thread. And so what I found is we're using a lot less slack, which is kind of a good thing, because oftentimes like too noisy and it's hard to like go back and see what happened or what was the outcome of a certain thread inside of slack. So yeah, it's a cool product. I'm a fan of it.
Andy Mowat: Cool. The slack message, somebody said to me, Diane was like, would you let anyone in your company create a field in sales? Of course, not everyone in your company creates a channel in Slack like it’s a dumb idea. So we just asked her, which is like, if you need a new field, if you need a new channel in slack, like request a year and we'll make sure that we're not creating 17 different channels to talk about somebody's birthday or something.
Pete Ryan: Yeah, for sure.
Tell us more about you. Like something that may not be on your LinkedIn profile, where you can give the world a little inside view of like Andy Mowat.
Andy Mowat: I speak Czech. I ran the largest grocery retailer in Eastern Europe from age 23 to 25. I ran the finance function of that, but I failed my French placement exam when I showed up at Princeton. And they told me you're going to have to do two more years of French. And I was like, I took it and I lived over in Prague. I'd lived in London for a year and a half commuting, and then I lived in Prague for another year.
Pete Ryan: Oh, cool. I've heard Prague is just amazing. I've never been there, but yeah, that's awesome. Very cool.
I would imagine with Gated there's a product-led growth approach to what you guys are doing, and there's an inherent network effect. What are the channels that you've found to be? I see you on LinkedIn too, quite a bit, and I hear people like pouting Gated, which is amazing.
What are the channels that have been effective for you and brought Gated as a brand, out in the wild?
Andy Mowat: I mean, inherently, there's a viral emotion to what we do which is helpful. I'd say we've invested heavily in the voice of our customers. Whichever one saw it launched.
Right. I think we had like 75 people posting about how much they loved Gated. And these weren't people that were like my friends, these were people that, we fixed their email. So I think that, when you sign up for Gated, you've got to attach your identity to it in a way. Because we're going to be sending challenge emails on your behalf.
So one of our early thesis was social proof and seeing other people that are like you using it, like starts to reduce that barrier. So, you know, we haven't fully reduced the barrier, like even Calendly has dealt with some of those issues of, wait for a second, this is kind of creepy. You know, but 15 years ago, people didn't get in the car with a stranger, now they do. And still sleep on someone's random bed, right? AirBnB.
Yeah. So I think everybody needs Gated. I think there still is this latent fear of will I miss emails? Which is no, because they're right there. Any other ones? Will you send a challenge email and blow up a relationship? I think, you know, we've sent over a million and they come across well.
So a lot of that for us, it's just about helping people understand we've gone from like, will it work for other people? To now we're investing in, will it work for me and why will it work for me? And so that's kind of where we're at. So a lot of that marketing thought leadership is key. And you know, we've got some new channels we're turning on pretty soon.
Pete Ryan: Awesome. Yeah. And is there anything that you've learned since being a founder that you wish you knew earlier? Anything that you'd want to tell yourself or your earlier self?
Andy Mowat: So Village Global was one of our angel investors. They had an off-site like in June and they had everyone sit down and write a letter to their future selves the local, where it was like, and they, and they would mail it to you after you raised your seat. And so I got mine yesterday. I haven't opened it yet, but I'll post it n social and tag you later on today. I think, at a fundamental level, don’t stress this stuff. You're always worried about it at the moment. If you've got a product, people love it. Just keep driving on it.
Pete Ryan: Yeah, for sure. It’s easy to sweat the small stuff, right. Is the founder driving forward and wanting things to happen faster than they oftentimes can or should?
Yeah, I found meditation helps a lot. So I try to do that every morning and then exercise is important which was difficult during COVID, but we're past that now. So anyway, thanks so much, Andy. Appreciate you joining in on the podcast and I guess if anyone has any questions about Gated, or wants to reach out, what's the best way for them to do that?
Andy Mowat: Super easy. firstname.lastname@example.org. Not many people are brave enough to share their email on a podcast.
Pete Ryan: Awesome. Right on. Well, thank you, Andy. Appreciate it. And best of luck with Gated, super excited about what you guys are working on, and, thanks again.
Andy Mowat: Thanks, Pete. When we do podcasts, we’d be honored to have you on and interview you because we love what CoSell’s doing too.
Pete Ryan: Awesome. Yeah, let's do it. Thanks.