Speaker 1:
From the Library of the New York Stock Exchange at the corner of Wall and Broad Streets in New York City, you're Inside the ICE House, our podcast from Intercontinental Exchange on markets, leadership and vision and global business. The dream drivers that have made the NYSE an indispensable institution of global growth for over 225 years. Each week, we feature stories of those who hatch plans, create jobs and harness the engine of capitalism right here, right now at the NYSE and at ICE's 12 exchanges and six clearing houses around the world. And now, welcome Inside the ICE House. Here's your host, Josh King of inter Intercontinental Exchange.
Josh King:
This morning, like many mornings here at the New York Stock Exchange, a company held its initial public offering. The IPO was a moment of celebration, marking the end of a long journey that took the company from an idea, to a startup and through rounds of funding and steady growth to the bell podium. The company's founders and executives proudly rang the opening bell, announcing its addition to the public markets. The scene was broadcast on screens around the world and each early tick of the stock was watched by financial analysts and reporters with interest. All eyes were on the company for that first day, but what happens next?
Josh King:
Our guest today, Mark Mader, succinctly summed it up on April 27th of this year as, and now I'm quoting him here, "There's the weekend to celebrate, but then our customers want us back to work on Monday." He would know because at that moment, Mark was on the floor of the NYSE and had just seen Smartsheet's stock open up for trading at an impressive 20% over its offering price. Well, we've always wanted to have him back and he's back here today, Inside the ICE House, to tell us how Smartsheet did just that, go back to work. Our conversation with Mark Mader on Smartsheet's first year as a publicly traded company and how to build on success right after this.
Speaker 3:
Cushman & Wakefield is one of the premier brands in the commercial real estate services space. We have 48,000 professionals around the world and 400 offices in 70 countries. This company, 101 years old, if you can imagine, has never been public. There's a reason they call the NYSE the big board. It's a great home for companies like us, big companies with big ideas. Cushman & Wakefield, now listed on the NYSE.
Josh King:
Our guest today, Mark Mader, has been the President and CEO of Smartsheet since 2006, helping grow the company from a six employee startup to a publicly traded company with over 1,000 employees, now serving nearly 78,000 clients. Prior to Smartsheet, Mark served as Senior Vice President of Global Services for Onyx Software. Under his stewardship. Smartsheet has consistently been named one of the best places to work and Mark has previously been named Ernst & Young's Entrepreneur of the Year in Technology for the Pacific Northwest. GeekWire's CEO of the Year and is a regular contributor to industry conferences and the media. Welcome Inside the ICE House, Mark. What brings you back to New York City?
Mark Mader:
Well, now as a public company, we get to both operate our firm and grow it, serve our customers, but also work with investors, our public investors. So tomorrow, I will be engaging with no fewer than 21 current and perspective public investors in Smartsheet.
Josh King:
On the day that Smartsheet listed, Inside the ICE House had your CFO, Jenny Ceran, and your Senior Vice President, Gene Farrell, on talking about the company and its path to going public. As a refresher, can you give our listeners an overview of Smartsheet's technology, what you described in the company's IPO Day as the neutral fabric that connects workers and the applications they use.
Mark Mader:
We're a software as a service and we have just under 80,000 businesses worldwide subscribing to the service today. And what we're trying to do is we're trying to help teams and organizations elevate how they work. And when we talk about elevating work, it's really taking things that historically were relegated to authoring tools like docs and spreadsheets, and trying to get some people out of the primitives, if you will, and the primitives is really hacking your way through your job. And what we want to do is we want to provide people a better structure for how to capture work, organize and report it and now automate it and it's all in the spirit of not only being able to get more done in the day, but really slowing the game down where you can understand what is going on in your work so you can have insights and perform better.
Josh King:
You pride your products on their ability to open up the world of technology to the 800 plus million workers who don't yet know how to code. I'm sure that number comes down every day. How easy is it for a company to integrate a Smartsheet solution into their workflows and why did you choose to pursue the software as a service model?
Mark Mader:
It's a noble cause I think to empower people who maybe don't even understand what possibilities are available to them. I think enabling somebody who is very, very technically able to perform and achieve something, that is also noble, but I actually think it's a bigger challenge to take someone who maybe is stuck and how do you unlock that potential in them? Than reason we like software as a service is there's an element of growing your business in an earned fashion. We don't sell a big contract up front and then talk to you in five years, you earn it every month and year and that's a very powerful phenomenon for a customer, but also holding a company accountable. In terms of the non-technical user, we have many technical people using our product too, but that ability to serve the person who maybe isn't a coder, and while a lot of people are learning how to code, the vast majority of humanity still doesn't.
Josh King:
So the Smartsheet website has a page dedicated to the dozens of tech partners like Slack, Box and ServiceNow, just to name a few, that your company has. How does Smartsheet decide what companies to partner with versus develop internal functionality?
Mark Mader:
When we looked at the market and we looked at the tooling that was available to people, how we differentiate and distinguish between systems of record, things like ERP, HRIS, CRM, these are large, heavy, expensive to deploy, typically systems that don't change very often. What we solve is those higher velocity, nimble things that change all the time. Feedback flows from clients, onboarding of clients, onboarding of employees. And when we looked at what we were trying to solve, we were not trying to replicate what the authoring tools did. There is Google docs. There is Office 365. We weren't trying to displace Outlook or messaging tools like Slack and Hangouts. Those exist. We weren't trying to become a file sync and share platform. Those existed.
Mark Mader:
What we were trying to disrupt was that opportunity that was not yet solved and that is that work management piece. If you went to a normal business user and said, "How did you automate your work last week? How did you develop a dashboard to report out last week?" They would nervously look at you and then try and find their IT person in the room and say, "Well, Bob or Jane did that for me." So what we're trying to do is we're trying to spark that in the business user and enable them.
Josh King:
Let's you and I take a little trip back to April 27th of this year.
Carl Quintanilla:
The stock market has so little money coming in. We look at that macro number, we're not that excited with stocks. We only have enough money to take up one sector a day and today we'll take up tech. The other day, we took up industrial. The day before that, we took up defense. The day before, we took up bags, but we can't take up all everything, because there is not enough money coming in.
Speaker 6:
Yes. There was the opening bell and the S&P at the bottom of your screen. On the big board today, it is an IPO, Smartsheet, a cloud-based business collaboration software company.
Josh King:
That's the voice of Carl con and Jim Cramer on CNBC that day. You didn't get to watch the broadcast because you were about 18 feet up in the air, ringing the opening bell and that's your finger doing the work on that bell. Gene mentioned on the podcast how surprised he was at the manual aspect of price discovery as it happened on the floor for Smartsheet. What stood out from you from that whirlwind of a day?
Mark Mader:
Well, I remember walking onto the floor. What I thought was, "Things just got real," and that's a moment that I'll probably never have again at Smartsheet. And the feeling I had was one part excitement and achievement and another piece, which was a very powerful force that I felt, which was accountability. And when you actually see the floor and you see people running around, you don't quite know exactly what they do, but you know that money is changing hands on your back. That causes you to lean in very significantly. And I think that our whole team felt that. So it didn't feel like an end point for me at all, it felt like the start of something and it was a new feeling in that we were moving beyond private investors, we were moving into now the public market. That was a huge memory for me and that's still with me today.
Josh King:
Had you been a part of an IPO in an earlier chapter of your career?
Mark Mader:
I was with Onyx Software prior, 10th employee. We took that public, but I wasn't one of the founders. I wasn't the person who came up and who really developed that concept, but I was part of the team. I wasn't in New York when it went public, so this was my first go live if you will.
Josh King:
So often as part of these processes, there's this road show in which you're basically filling the order book and telling your story over and over again. Was there a discernible difference for you and your colleagues from that first meeting, until the last finding, your sea legs, getting your story right, feeling comfortable with how you were talking about the Smartsheet story?
Mark Mader:
We didn't quite know what to expect coming in. We'd heard a lot of stories and it was stories from people who had been through it themselves and then people who'd heard stories from others who had gone through it. So like, "Okay, what's the truth?" When the puck gets on the ice, the game is on, like right now. And I remember so vividly, we talked to the sales teams with the investment banks that morning. And then that afternoon, the first big meeting with a big fund. And we clicked in. Now, what is challenging in that process is how you sound on your third meeting of the day, your seventh meeting of the day, your 48th meeting of the first week.
Josh King:
Wow.
Mark Mader:
You better sound pretty excited and authentic, so that is something which is really in the sort of camp of stamina. I think the only way you get through that in a compelling way is if you believe your own story. You can't pull the wool over someone's eyes on this one, you have to believe it deeply.
Josh King:
I saw that you recently tweeted out a photo of the letter that former President Bush left for current President Clinton when President Bush was defeated and he was giving both great advice to the incoming president and being very magnanimous. If you were to write a little letter to a future CEO going on a road show and eventually getting to the NYSE, what would be on that letter?
Mark Mader:
I think you have to have an element of humility to this. You have to be open to continuous learning. If you approach this as, "I have a great story, I'm going to teach these folks something," I think you'll be put back in your seat pretty quickly. And I think the amount we've learned from other companies who've gone through this process, how it helped us refine our story, what we heard from investors during our testing the waters to refine our pitch, which we thought was really great initially, these are things that strengthened the story and gave us great confidence. So the advice I would give is learn from people, not only in the runup, but while you're in process, learn, listen, adapt your story.
Josh King:
With the benefit of a few months of reflection from that day that we just heard Cramer and Quintanilla talking, what are the takeaways of now being a public company CEO?
Mark Mader:
People expect you to do what you say you're going to do. Part of going out was defining a story arc, which wasn't just about the next quarter, but about the years ahead and you should be thoughtful about that story arc because you shouldn't be, flitting about, changing your story arc from quarter to quarter. I mean, now that we've been out, we've had a chance to build evidence against that. We've been able to expand it as well. And it's not that you can't change, but you need to be mindful of how you enroll people in the development of that story over time if you want them to trust you and back you.
Josh King:
Smartsheet was part of a large class of technology companies to list on the New York Stock Exchange in 2018. So in 2019, there's now probably this large class of tech unicorns. Do you think in terms of the timing that you had going out in April was particularly advantageous? Have you sort of sensed a change in the market volatility that would make it even tougher for a company of similar size and SAS model to go out sort of next January, February compared to what you did in April?
Mark Mader:
I think people close to the market's probably have a more informed answer for you. I would say great stories with great customer base and great potential. They have a story to sell in many different types of market conditions. I would say going early, going in April was beneficial in that when other companies followed, our name was usually mentioned alongside of those. So from a pure marketing standpoint, when I look at why we went public, there were a couple dimensions. One was marketing, one was currency, one was transparency for our enterprise clients, but the marketing element, very helpful to go early.
Josh King:
I mean, they often say that when you have a NYSE ticker symbol or even an NASDAQ ticker symbol associated with your name, as you're out in any kind of a client call or sales meeting, it helps that you're a public company versus in any of the various startup phases.
Mark Mader:
Absolutely. So if we're playing cards and I'm holding my cards and I'm telling you how great my cards are and I'm going to dominate you on this hand, maybe. Maybe I'm bluffing you. So for all the companies out there who talk a huge game, who don't show their cards, the perspective buyer of their service needs to say, "Okay, are they overly zealous? Are they real?" and I think the beauty about being public is that there's a level of transparency where the cards are on the table every quarter and that is a very important balance for your perspective customer. They get to hear your story, they get to check your financials, they get to see your reports. And there's really truth that that representation is very thorough and true.
Josh King:
Burden of being a public company, CEO as well too, I've worked for many of them. And if you to think about the year cycle and the four earnings calls that come like clockwork every three months, maybe three weeks leading up to it, not necessarily for the CEO all consuming, but there's plenty of time to say, "Where are we on the message? Where are we on the script? Let's try some Q&A. How do our numbers look?" I mean the burden of actually putting those numbers out there too so that you can be that card player and say, "Look, you know where I stand," it's a tough challenge as well.
Mark Mader:
It is a tough challenge. The way I answer it, if you were to see me on the street tomorrow and say, "Mark has your day going?" I would say, "On a net basis, it's going great." Now, if you said, "Mark, tell me that worst things that happen today," I'd list 10 for you. "Tell me the 10 best things," I'd list 10. And I'll make you bet on a net basis, I'm going to have a dramatically positive day. So I always look at things on a net basis and I recognize, and I think I learned this later in life, that to achieve something great, you will likely have to work really hard and solve tough problems and then also have a little luck kicked in. So I never look at it as a burden. On a net basis being public, dramatically positive. That does not mean it's easy at every turn.
Josh King:
One thing that you mentioned on your Q3 earnings call was that the number of Smartsheet employees has now crossed the 1,000 person mark. That's a 20% growth in a year, if my numbers are right. And has the influx of new employees combined with being a public company changed the culture of Smartsheet? 1,000 people, that's a big payroll.
Mark Mader:
It is a big payroll. It's changed, but I also, when I hear that question, I think of the things that are now available to our team. And I'll give you two stories. The first was I came back to Seattle and I heard from a friend at the gym, he's probably 75 years old, and he told me about how he knows the parents of one of our marketing managers and he had told her parents how proud he was of her. That was a really powerful moment for that young lady. That sense of pride has really galvanized the team. People know our brand more. People see that we're a successful company. They want to be associated with a winner. As a private company where the cards are held closely, the market doesn't know, so now it's in the open and people really have that ability to build on it.
Mark Mader:
The other story is about when we make offers to people. As a private company, you can offer options. So they go home to their spouse and they say, "Hey honey, I got some options. How do you value those, honey? Well, they said, there's going to be a big step up in value. Maybe...." Well, it's confusing. Now as a public company, you have currency. And very often, public companies when they speak of currency, they talk about acquisition. We now have currency to acquire. I look at as currency for employees, and that is a very powerful phenomenon where you're trying to get someone on side.
Josh King:
So speaking of these employees and the efforts to get more of them, the great ones inside the doors of Smartsheet, the us job market is at a historically low unemployment. And doesn't seem to be slowing. Let's hear this clip from CNBC
Speaker 7:
Hundred and 50,000 jobs. Non-farm payrolls rose by 250,000 jobs in October, the unemployment rate unchanged at 3.7%. Average hourly earnings, those were up 5 cents last month to 2730 over the year. They're up 3.1%. That is the jump in wages. Since April, 2009.
Josh King:
Non-farm jobs include coders, engineers, and other roles in the fiercely competitive technology industry. How has this impacted your ability to scale up Smartsheet and what are some of the solutions that have worked to engage new talent? I mean, you're headquartered in a place where unemployment is even lower than it is nationally.
Mark Mader:
It is. I mean, Seattle's on fire right now and we've expanded into Boston. We have a team in Scotland. Now in Edinboro. We just opened up our London office, so we're distributing our hiring quite a bit. What I would say though is we still have this amazing luxury of only needing to hire about 400 people. So if you were to say, "Mark, you need to go out and hire 400,000 coders next year," I'd get super concerned, but I think we are still in this sweet spot of being able to be very selective, be able to spend time with people in the interview process, help them understand our purpose. How do you compel someone to get excited about taking the job you're offering them? I always remind people, we're still tiny at 1,000, tiny, and that is a huge advantage for us still.
Josh King:
Are you accessible to employee number 1,000 as you are to employee number five?
Mark Mader:
Yeah. I'm still surprised that our new employees are surprised that I personally present to every single new employee when they onboard. Every month, I have a new employer orientation, all of the senior execs do, and there's probably 5% of the population like, "Well, we can't believe the execs are talking to us." I'm like, "What the hell are other execs doing?"
Josh King:
What's more important?
Mark Mader:
We're a software company. People drive our business. So if you don't take the time to get to know and engage and share with people what you care about, you're focusing on partially the wrong stuff. We've also used tactics though. We use things like Smartsheet and Workplace by Facebook to engage our population. So tonight, as I was entering the New York Stock Exchange, I did a personal video. I posted it to our internal community. An hour later, I took a picture of how the building was lit up. This enrolls people on what I'm doing today over the next 24 hours, so they're connected, but you have to be very intentional about that.
Mark Mader:
I think the other thing that I really speak to in my first meeting is don't talk to me about just values. And the shock when someone hears, "Mark Mader doesn't care about values," now there's this dramatic pause dot, dot, dot, "unless you live them," so I care a lot more about the action than I do the adjective. So do you observe? Do you ideate? Do you research? Do you recommend? Do you execute? Don't tell me that you're driven, supportive, honest. Tell me a story. Tell me when you've actually done that. And I think if you can compel your team to act, then you're not just living off of a statement on a coffee mug.
Josh King:
After the break, Mark and I talk about Smartsheet's Engage'18 Global Customer Conference and the future of the company in 2019 and beyond. That's right after this.
Speaker 8:
Farfetch is a platform that connects the most beautiful boutiques, brands to people who love fashion from all around the world. We have customers in 150 countries. We have 300 designers. What Farfetch has created is a fashion community. And the New York Stock Exchange is such a strong brand and we're in the industry of brands. So for us, it was a perfect fit. Farfetch is listed on the New York Stock Exchange.
Josh King:
Welcome back Inside the ICE House. We're joined by Mark Mader, President and CEO of Smartsheet. He's been catching the listeners up on Smartsheet since its successful IPO earlier this year. Mark, before the break, we were talking about how Smartsheet's workforce has scaled up to meet the needs of the company's accelerating growth. How has the company evolved since its foundings and what are the key factors driving recent growth, non-human resources aside?
Mark Mader:
I think when you look at a SAS business, I think we were somewhat idealistic early on. We said, "We're going to build this service. We're going to build something that people really like and we're going to let them self discover and enroll and subscribe." And while that still happens many, many, many times per month, we've also extended to say, "What are some of the needs and preferences of enterprises?" and some people with an enterprise like that self discovery journey and purchase, other people want to be supported. So I would say a big change with the company is extending into that full service arena where we have sales people and consultants and trainers, enablers to really help them achieve greater success and that has driven a lot of our personnel growth.
Josh King:
Shortly before your IPO, Smartsheet made its first acquisition with a purchase of converse.ai, a Scottish company that's specialized in bots for business automation. What role do you see converse.ai and artificial intelligence playing in the company's longterm growth?
Mark Mader:
Well, Converse already helped us in developing our bridges to the communication platforms like Slack, Hangouts, Chat, Workplace by Facebook and Teams. And what it's enabling us to do is to really bridge between our work management platform and the communication and messaging providers. And what we believe in is that if you have a business user who has religion over the tooling that they want to use, whether it's a file sync and share store application or it's a messaging tool, embrace that and enable that. So Converse has really enabled us to build those connections in a high functioning way very quickly. On the AI side, the focus that we're investing in right now is about how to drive convenience for users. How can I use technology to suggest, promote and nudge a user either to discover something or realize something's available to them? Converse, we acquired not only technology, but a team that has a really informed perspective on how we go about that.
Josh King:
Will gaining a foothold with a company like converse.ai based in Europe, you mentioned earlier, that's probably the expansion into Edinboro, also help open up more markets for Smartsheet? Do you see yourself moving throughout Europe?
Mark Mader:
Like we said on our Q3 earnings call, we opened up our first sales office in London. We're going to have 15 quota carrying reps there by the end of Q4, so heading into next fiscal year. And the way we go about expansion is we really look to establish ourselves in a market before planting flags all over the world. So we have a very healthy business stateside. 25% of our revenue is abroad today. And what we're now looking to do from that London base is to build that success that we saw in the US with a really an in-market team.
Josh King:
Do you do that by starting with planting some of your successful US folks in London and to train the folks up and get them comfortable with their culture and approach?
Mark Mader:
We have. Absolutely. We did that in Boston. We took a team of folks from our Seattle team. Some people moved permanently, other people moved for six to nine months and we're doing the same thing in London.
Josh King:
But even with the move into London, Boston, Edinboro, you and the company are deeply committed to Seattle. Beyond the ability to commute to work in a Sea-Doo, why is the Pacific Northwest the ideal headquarters for a tech company?
Mark Mader:
Partly, it's a function of that's where a lot of us started our professional lives. So we didn't transplant to Seattle. You look at the founding group, the early group, we were based there. Now, we are mighty lucky that it is this huge center of gravity around cloud, around tech, around productivity, so those were things we were huge beneficiaries of that and we're excited about being that next foundation stone in that.
Josh King:
Recently, you and the other Smartsheeters welcomed a couple thousand clients and partners to Washington for Engage'18. I was remembering talking to your team when they were here for their IPO, talking about it. The second instance of Smartsheet's Annual Global Customer Conference. Let's hear just a little clip from it.
Ed Viesturs:
I also decided that when I went on these expeditions, I would do these climbs under my own terms, but I would listen to the mountain as well. Because ultimately, you have to take in all the information that the mountain is giving you, the environment, the weather, the wind, the snow. Ultimately, the mountain decides what you get to do and you have to listen to that. I call that listening to the mountain.
Josh King:
That was climber Ed Viesturs. And those who have read John Krakauer's Into Thin Air know him very well as one of the great climbers of Everest over the years. He was one of your keynote speakers. Who or what is the mountain that Ed is talking about and what was he trying to get the audience to focus on?
Mark Mader:
Well, I think we talk about trying to elevate our game and I think it was quite appropriate to hear Ed open up our conference when we about reaching further, challenging yourself. He talked also about climbing in the context of teams and the understanding that it's not just you, it's like how do you work with people with different skills and perspectives to achieve a really formidable outcome? So again, he was a tone setter for the conference and he's actually an ambassador for us now representing.
Josh King:
So talk to me about Engage and has it grown from one to two?
Mark Mader:
It did. We had about a thousand customers in our first year. And heading into the second year, I said, "We have got to avoid the sophomore slump. We cannot, we cannot fall on our faces the second year." I mean, the first year was off the hook. We had customers coming up to us. I mean, they were more passionate about Smartsheet than we were. They were talking about how they were using it in manufacturing, education, drug discovery. And we're like, "Holy smokes, we've got to get our engineers connected to these people so they understand what the heck they're building, what they're powering in the field," So we decided to double that up in the second year. So we had over 2,500 people present at Engage'18. And I got to say, some of the most powerful moments from that were not necessarily the big cap companies for whom we're doing amazing stuff.
Mark Mader:
I was in the dinner line and a guy came up to me, tapped me on the shoulder. He said, "Mark, I'd like to share my Smartsheet story with you." He said, "I'm one of your few attendees from Alaska." He said, "Do you know what I do?" No idea. He said, "I use Smartsheet to help manage the preservation of language within remote tribes in Alaska."
Josh King:
Wow.
Mark Mader:
It has nothing to do with about making a dollar, it's about him and his community trying to help tribes of, in some cases, fewer than a hundred people preserving indigenous language. That is a noble cause. So when I connect that story around how he's using our forms technology to capture knowledge about which tribes to enable and support, like I remember that story and I'm a big believer that if you're story driven and you connect with one of your engineers and say, "The reason we're building this is to not only help the world's largest airline or one of the world's largest coffee companies, we're helping people in need." That developer will think of it when they're writing code. And that's what Engage did for us, it connects us to our customers so well.
Josh King:
Did you ask him how a person who is engaged in an activity you think might be handled on pen and paper found Smartsheet in the first place? I mean, how did he become a user? Well,
Mark Mader:
Well, that's the beautiful thing. There are no boundaries to who can find us. Every month, we have well over 100,000 people in over 100 countries trialing our stuff. So guess what? People talk. If one person's successful and they mention it to their friend, that person will try it. So whether it's through an advert, whether it's through content we produce, whether it's through viral growth because our product can be shared freely without paying a collaboration tax, these are all mechanisms to get people exposed to it and that has now built now that we're much bigger.
Josh King:
What were some of the takeaways from Engage and how does closing the customer feedback loop, like the story you just told, help your teams set priorities for every new solutions that you're developing for next year and beyond?
Mark Mader:
Well, the really cruel thing about the job, the really, really cruel thing, is that the things that people want us to do, it comes in such volume. Thousands of pieces of feedback. That's not like maybe a few thousands a month. What we do is we try to get a sense for not only what new ideas are coming in, but what's the vote, how many votes are coming in on certain dimensions, and then how do we invest in either enterprise class command and control and provisioning features versus the most simple onboarding, making the experience better for a collaborator. So the choices that we you have to make, it's tough, but the customers really help shape that prioritization framework. And again, Engage is an important mechanism because when you're looking into the whites of someone's eyes and they're telling you how important it is, that sometimes isn't translated as well in email.
Josh King:
So as we are at the start of a new year, at the end of one year and the start of a new year, what are the trends that you are most focused on in Smartsheet and across the tech landscape?
Mark Mader:
There's sort of multiple stages of helping someone elevate. One is around better organization and making sure their data is consistent, correct and reported out on. The next step, which I would say has been almost viewed as unattainable by most, is now that you have a mechanism for doing this in a consistent manner with others, how can you slow the game down further? And by slowing it down, it might seem counterintuitive to wanting to be more productive, but how do you automate certain things that let you focus more time on the things that matter? And oftentimes, people think about productivity as, "Hey, if I could get you that one hour back, in that one hour, be really innovative." It's like, "That's not the way innovation works." How I view it is if we can help people manage that information in a more calm, methodical manner, they will actually have better insights as they're doing the work. It's not like innovation hour, it's getting time back while you're working on their project or program.
Josh King:
As you said at the beginning of our conversation, you're here to talk to investors. Wall Street tends to focus solely on a company's output goals, sales, revenue, income, et cetera, but what are Smartsheet's input goals for 2019 and how will you judge success moving forward with the people who matter most, these thousand employees of Smartsheet?
Mark Mader:
Yeah. I think the input goals, we're also pretty clear about not sharing our playbook. So if you were to say, "Mark, it looks like your sales are really working well. How do you actually engage with your customers?" I will not tell you. These are things that we've earned over the course of six years leading up to going public. We're refining them. But the input goal is, you make a good point there, we have to look at what are leading indicators, what are things, what are themes that we're seeing that are influencing our objectives and key results that we strive for? Now, while the street wants to hear that and they want to hear that incorporated into your story arc, there's still this intense focus on the output, so tomorrow will be mostly about output actually. It'll be talking about what are the output goals? What are those metrics that we should key off of to see if your business is healthy and your story arc is actually holding together?
Mark Mader:
So part of those things are to what degree are we increasing the number of customers for whom Smartsheet deeply matters? So what does deeply matter mean? That is some level of contribution that's significant. So as you heard on our earnings calls, we talk about the number of companies contributing over a certain level of ARR, Annual Recurring Revenue, and that is a sign that the street sees as, "They are ascending at scale within certain organizations." And I would say a company that it serves a million customers, collecting $10 a year, may not be as relevant or matter as much as a company that is serving people in more significant ways.
Josh King:
Well, good luck with all the meetings and good luck with the second six months of being a public company as you approach that anniversary in April. So happy that you chose to New York Stock Exchange, that you're one of our listed companies and that you're part of our NYSE community.
Mark Mader:
Thanks so much.
Josh King:
That's our conversation for this week. Our guest was Mark Mader, President and CEO of Smartsheet. If you like what you heard, please rate us on iTunes so other folks know where to find us. And if you've got a comment or a question you'd like one of our experts to tackle in a future show, email us at [email protected] or tweet us @NYSE. Our show is produced by Pete Ash and Ian Walt, with production assistance from Ken Abel and Steven Portman. I'm Josh king, your host signing off from the Library of the New York Stock Exchange. Thanks for listening. Have a good week.
Speaker 1:
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