Zvi Band, Founder, Contactually
It’s Who You Know
How Contactually founder Zvi Band found success, one relationship at a time.
Zvi Band describes himself as an introvert—someone who tends to be inward-looking, generally preferring to spend time alone. At the same time, he’s a successful entrepreneur, writer, and speaker who preaches the importance of relationships.
“I actually found that all of my business, and more importantly, all of the amazing opportunities in my life came from, of all things, knowing the right people,” Band says.
That may not sound like something an introvert would say, but for Band, human connection is about quality over quantity. He isn’t focused on collecting new friends on social media or passing out stacks of business cards at mixers all over town.
Instead, he is focused on maintaining and nurturing the relationships he already has. That, he says, is the key to success. Yes, it’s all about relationships, but in a world of constant connectivity, it’s about focusing on the meaningful ones.
“I was in a room of a hundred real estate agents this morning and everyone raised their hand when I asked, ‘Who here thinks their relationships are their most important assets for business?’”
The power of relationships is more than a philosophy for Band; it’s his business. His enterprise SaaS platform, Contactually, helps professionals, particularly real estate professionals, build and maintain relationships by automating personal communication.
A resident of Washington, DC, he’s been named one of Washingtonian Magazine’s Tech Titans six years running, and has been featured in publications like TechCrunch, Washington Post and USA Today. He’s even written a book on the topic, Success Is in Your Sphere: Leverage the Power of Relationships to Achieve Your Business Goals.
Why Are Relationships So Important?
Band understands that humans are naturally social creatures, and the biological need for connection translates directly to the business world. He sees that as an opportunity to build success through the support of a professional network.
“We rely on social connections and relationships to help keep us safe and therefore help us identify who we should work with,” he says.
To Band, relationships are directly connected to reputation, something that has become either an asset or a hindrance, depending on how people view you as a professional. Because the world is so connected, professionals are now competing with other professionals with the same skills on a global scale. The only way to differentiate, he believes, is through reputation.
“Because no one can fully copy you. So that reputation and your ability to maintain that reputation ended up becoming us.”
How does a good reputation resonate in the business world? Through the relationships professionals build.
Band points to a study of banking customers in Germany and the relationship they have with their bank. “They found that when a customer is referred by another customer, there’s a 25% higher contribution rate, so referred customers become better.”
Relationships Paved His Own Career Path
Band started out as a software developer, eventually leading a team at an intelligence agency. In 2009, he struck out on his own, creating a software design and development firm called skeevisArts.
It was there that he started thinking more about relationships and how they can make or break a career—or a company. But he also found that maintenance and development of those relationships was tough.
“I would meet people for coffee and two weeks later completely forget who they were. So, a lesson learned for me was, ‘Okay, well, what’s the right thing to do, here? Well, how can I solve this with software? How can software help us build and maintain better relationships?’”
And that’s how Contactually started. With the help of fellow co-founder Jeff Carbonella, he developed a platform to organize and automate personal contacts in order to maintain and build relationships that he knew were so critical.
They brought on Tony Cappaert as the third co-founder to lead business development. Both Cappaert and Carbonella were connections Band already had. Carbonella was a lead engineer at Band’s consulting firm, and he had gotten to know Cappaert through the local community.
He started small, not really thinking about building a company but more fleshing out an idea. They initially decided to focus on real estate agents, who rely heavily on relationships to sell homes and build their business.
In 2011, they were chosen to participate in the 500 Startups accelerator program, where they raised their first venture capital.
“We quite literally had an apartment with three mattresses on the floor,” Band says, laughing.
Over the course of eight years, however, the company has raised $12 million in venture capital. It now has, according to Band’s personal site, “tens of thousands of customers, including eight of the top 20 real estate brokerages in the country.”
And Band practices what he preaches. To this day, he uses his own tool to maintain his professional relationships, keep up with current and potential investors, recruit new talent, and stay connected to the media and important influencers.
He even used it to develop a relationship with Compass, the national real estate company that acquired Contactually in 2019.
“Robert , the CEO, knew me well enough that he had absolutely no problem reaching out to me to say, ‘Hey would you be interested in a potential partnership?’ And that’s an important thing, right? It’s not like companies just get sold overnight.”
Band now using all he’s learned about relationship building to mentor a new generation of entrepreneurs.
In 2010, he founded MadeInDC, which markets startups in the DC area and helps entrepreneurs get started. He is a co-founder and co-organizer of DC Tech Meetup, one of the largest tech meetups in the country. And he created DC Tech Summer, where over 550 interns apply to work at tech startups in the area.
That’s a lot of new, powerful relationships that Band is out there, helping to form. Not bad for an introvert.
Key Lessons in Nurturing Relationships
Throughout his career, Band has learned some valuable lessons about harnessing the power of relationships. He shared some of them with us.
On Starting a Business
Band tried to start a few companies before his success with Contactually, while he was still running his consulting firm. None of them really took off, and he realized it was because he was working on his own and only on the side. He wasn’t committing to their success.
This was true of nStructo, a backend-as-a-service tool he tried to get off the ground.
“With nStructo, we had no customers, we had no users, we had no team. It was just me. So it almost could exist in my head or it could shut down in my head and no one would know and no one would care. And so I knew that I needed to have a team around me.”
He realized how much he needed that team to keep him accountable and give him the discipline to invest time in his next startup venture.
On Identifying the Right Relationships
While cultivating relationships is the name of the game, Band stressed the importance of identifying the right relationships first.
To do that, he says, you first have to identify your goals, which will lead you to the right people to reach out to. He learned that the hard way when networking for his consulting firm.
“So, for example,” Band says, “I used to think that going to a lot of tech meetups and developer meetups was a great way of doing business.” But Band had to find companies in need of software services, not other developers.
“I was looking to work with a lot of design agencies, so I would go to design meetups and pitch myself as a software consultant. I would go to marketing meetups.”
By clarifying his goals, he found the right people to reach out to.
On Cold Outreach
While Band stresses the importance of cultivating current relationships, he does see merit in cold outreach to expand a network. But, he cautions, a generic or overly produced message will fall flat on your audience.
“Everyone is used to getting slammed with cold emails,” he says. “Therefore, if you write a cold email that actually stands out, or if you do it via LinkedIn or you do a handwritten card, or something that says okay…this person genuinely wants to talk to me or be of value to me, then I’ve actually found that people are pretty receptive.”
Also, he says, make the contact short and sweet. An email, for example should be no more than a few sentences that engage your contact directly. Asking a simple question of your prospect rather than talking solely about yourself can draw them in and send the message that you’re interested in a conversation.
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Laurie Mega
- How Band’s background in software development and challenges with building new relationships inspired the idea for Contactually
- Why Band, despite being an introvert, believes in the power of relationships above everything else
- The connection between relationships and reputation
- Why Band and his co-founders decided to focus on real estate agents for their SaaS platform
- From accelerator program to $12 million in venture capital
- How Band practices what he preaches
- The relationship with national real estate company, Compass, that eventually led to Contactually’s acquisition in 2019
- How Band is using his relationship-building knowledge to mentor a new generation of entrepreneurs
- A sneak peek into his book about relationship marketing, Success Is In Your Sphere
Full Transcript of Podcast with Zvi Band
Nathan: The first question I ask everyone that comes on is how you’d get your job?
Zvi: How did I get my job? Not via the standard way. I got my current job as general manager of the CRM platform here at Compass because Compass acquired my company. Prior to that, leading into that therefore, I was co-founder and CEO of Contactually, a software platform. Got that because I woke up one day and wrote the idea down. The rest is history.
Nathan: Yeah, there you go. Very well known with Contactually. We use the software still to this day. It’s been a game changer for us on the biz dev side. I’m curious, was Contactually your first business or …
Zvi: Definitely Contactually’s been the largest business I’ve been with so far. Obviously most successful, hence the acquisition. No, I had started a couple businesses before. I started my own consulting firm back in 2009. Basically I was freelancing for awhile, so that was a one or two full-time person business. 20, or 30, or so contractors. I had tried to start a couple other businesses on the side while I was doing that consulting work. Those didn’t pan out, but then Contactually was the one that did.
Nathan: Wow. Awesome. What were they? Are you able to share just … Or lessons learned? It’s just always really valuable for people to hear because it’s often people … You only have to be right once but often people don’t hear the things it took to get there.
Zvi: Yeah. Absolutely. One of the ideas I had was called Structo, S-T-R-U-C-T-O. Basically what it was it was … There were a couple companies like Conveyor or Parse that started up around the same time. A couple of them got sold, but basically it was a backend as a service. Basically allowing developers to focus on the front-end or the mobile application and we would be the backend database for them. Almost like think Amazon Web Services, before Amazon Web Services became so popular. Never really panned out.
In part because I was doing consulting work as well. The challenge with consulting is that you’re getting paid by the hour, by the project, and it’s very quick and easy money. You’re always in demand. Versus building a startup where it could be years if you see any money at all. What I found is that whenever I would run into issues, or lose motivation, or run into snags with Structo or other companies, I would say, “You know what? Well I’ll focus on consulting instead. I’m going to get paid.”
When Contactually came about we saw that it had legs. I felt I needed a burn the boats moment. I needed to make sure that this was going to be my full-time focus and I couldn’t go back to consulting. I ended up … We raised venture capital. The same day we raised venture capital I closed down my consulting business. Passed on all my clients to other professionals, who did great jobs with them. I needed that moment.
The lesson learned is I would say there’s this big effort on side hustling and things like that. Well you can but that requires an incredible amount of discipline.
Nathan: When you say discipline can you elaborate with that?
Zvi: Yeah I mean discipline meaning you have to be able to focus on … You have to be disciplined with your time and not just focus on the thing that is closest to you or the thing that is most urgent. Where I lacked discipline was I was not willing to cutout 10 or 20 hours of my week to work on startups that I was really excited about and had long-term potential. Instead I was spending that time just doing my other jobs and doing my other projects. Just like if you’re disciplined about if you want to workout you need to be disciplined about going to the gym versus sitting on the couch and watching another hour of television.
Nathan: Yeah. That makes sense. How did the idea of Contactually come about? Did you see the CRM space … Did you start off with just servicing real estate professionals? Did you see an opportunity in the CRM space? Because you started it 2011, so eight, nine years ago. I’m just curious did you … Yeah, tell us how did that idea … How did you conceive it?
Zvi: Yeah. It’s really funny. No, we had no plans of building a real estate company. We had no plans of building a CRM company. So it’s very funny that we ended up building one of the best CRMs for the real estate industry. Then now we’re part of a larger real estate technology company. I kick myself every day for it.
The idea came about because when I was running my consulting business, or even before that, despite me being a pretty introverted person I actually found that all of my business, and more importantly all of the amazing opportunities in my life, came from, of all things, knowing the right people. Being in the right room at the right time. Building the right relationships. Then just amazing things came from that time, and time, and time again. So I saw this was happening and I was like, “Wow all this is great. This is amazing. What can I do better?”
The problem is is that most of us … I’m assuming, like I don’t know about you, but did you feel before Contactually did you feel like you were a great relationship builder or did you have a sense that you were missing out on things, and forgetting about people, and not keeping track? Would you say that?
Nathan: Yeah, yeah. 100%.
Zvi: Yeah. So like that. I felt the same way too. I would meet people for coffee and then two weeks later completely forget who they were. A lesson learned for me is, “Okay, well what is the right thing to do here? Well how can I solve this with software? How can software help us build and maintain better relationships?” That was the initial idea behind Contactually. As I wrote down in May of 2011, it was around how can technology help us build better relationships?
Initially it was focused around, “Well I have all this information out there about my relationships. How can it pull that data in from email and automatically add it to a CRM, and help me, and give me prompts so I enter more information?” That was the initial idea.
Nathan: Yeah, okay. That makes sense. Then did you have a co-founder? Yeah, like how did all that happen?
Zvi: Yeah. Really great question. That was also another issue that came up. In that when I talked about my previous failures, again I lacked discipline. I think one of the reasons that I lacked discipline is I had no accountability. With Structo we had no customers, we had no users, we had no team, so it was just me. It almost could exist in my head or it could shutdown in my head and no one would know or no one would care. I knew that I needed to have a team around me.
I didn’t have an idea for initial co-founders but luckily I had an engineer who I had just hired to work for me at my previous consulting firm. He ended up coming onboard as a co-founder. Again, we were initially just not saying, “Hey do you want to start this company with me?” But, “Hey I have this idea. Do you want to help me build it?” He and I worked together. Then I had gone to … I also knew that, “Okay he and I are developers. We need someone who’s a little more business savvy or can at least be focused on the business.” Our third co-founder, Tony, I had got to know through the local community. Again, it was just like a, “Hey, you’re looking for something new. I have this business idea that I’m thinking about. Do you want to help me out with it?” He just started doing some customer development calls and things like that. We all just seemed to really jive well together.
Finally, when there was that burn the boats moment that I talked about earlier, we got the offer to raise funding, we had said, “Okay, well this is the opportunity to become a company.”
Nathan: Yeah, love it. All of you guys were in the same room when you started?
Zvi: Yes. Actually quite literally. For the first four months we were based out in California for a 500 Startups venture incubator. We quite literally had an empty apartment with three mattresses on the floor.
Nathan: Yeah, there you go. Yeah, you went through 500 Startups?
Zvi: Yes, absolutely.
Nathan: Okay. That’s when you … Through 500 Startups that’s when you raised venture?
Zvi: Yeah. We were batch three of 500 Startups, I think. Obviously we’ve raised $12 million over the course of the company, but they were the very first check in.
Nathan: Yeah. Got you. Wow, awesome. Talk to me … Before we get into Contactually and how you were able to scale it to be, yeah, one of the leading CRMs, especially in the real estate space. To be honest before prepping for this interview and doing a little bit of research on you guys, like I said we’re a customer, we’re certainly not in the real estate space. I didn’t know you guys really specialised in these particular niches around real estate, and consulting, and other professional industries. Before we jump into that I just am curious around this concept where I can see … I think it’s something you’re passionate about and you kind of mentioned throughout our interview, is the importance of relationships. Why do you think they’re our most important asset?
Zvi: Yeah. Really, really great question. I think, listen, as human beings we’re wired to be social creatures, right? That stands out from time and time again. Biologically we are not able to exist outside of the womb for more than a few hours without the support of our mothers, our family, our community. So we are naturally hardwired to rely on social connection. That is pervasive throughout. That is pervasive throughout society, therefore we rely on connections and relationships to help keep us safe. Therefore, help us identify who we should work with.
That, obviously, translates nowadays where, again, there are … We live in this amazingly connected world where there are millions of professionals we can work with but therefore those people can also work with others as well. How do we set ourselves apart? Well, again, it used to be that maybe there was an information advantage. But again, I can go on YouTube or Google and I can learn about any subject, any topic, get information about a property, or a skill, whatever I want to do. So that’s gone. The skills gap is gone because, again, I can work with … If I want a good designer I can work with a designer in Romania, or Australia, Ukraine, not just someone who happens to work within a couple miles of me.
Therefore, the best way and still the only really remaining way that we have to set ourselves apart in our world is our reputation because no one can fully copy you. So that reputation, your ability to maintain that reputation, ends up becoming this. Going, “Yeah this is pervasive.”
I was in a room of 100 real estate agents this morning. Everyone raised their hand when I asked, “Okay, who here thinks that their relationships are their most important asset in their business.” I could have done that to accountants, lawyers, financial advisors, consultants. For them at the end of the day you’re not selling a product or widget, you’re selling yourself and your reputation, your skills. Your relationships become all the more important.
Nathan: Yeah. I agree. When it comes to those relationships what do you think people should be doing to not only just foster and nurture them, which is something that Contactually helps you do, but actually create them? Because I agree with you 110%. If I think of my career as a CEO and a founder, so many unlocks have come from jumping on the phone, emailing somebody, just randomly outreaching to somebody, jumping on a call because there might be a mutually beneficial exchange in value that can take place. We learn from each other and it’s been a really, really fruitful relationship, which has helped me or one of my companies grow. Yeah. I’d love to hear your take on not just the fostering and nurturing side but cultivating, developing, and yeah.
Zvi: Yeah, absolutely. Really, really great question. I would say it this way, first off I wouldn’t … Most people are pretty bad at the actual nurturing relationships. Cobblers son has no shoes here, just to be clear. I could do a lot to improve. I think it’s really important before … I almost don’t want to answer your question because I so strongly believe that you should be focusing first and foremost on the relationships you already have. Not only because they are important and you could always be doing a better job of nurturing those, but because the best business comes from referrals.
There’s a study of a German bank. They found consistently that when a customer was referred in by another customer there’s a 25% higher contribution rate, so referred customers become better. Again, I did my business solely via referral.
The important thing though, and this is kind of connected to relationship building, is if we identify our overall goals, then identify the types of people that will help us with those goals, then I think it becomes a matter of, “Okay, of those people who are the ones that are already in my network? Then where do those people congregate where I can meet new ones?” For example, I used to think that going to a lot of tech meetups and developer meetups was a great way of doing business. Turns out, no surprise in hindsight, it was terrible.
Instead I was looking to work with a lot of design agencies, so I would go to design meetups and pitch myself as a software consultant. I would go to marketing consultant meetups. So it’s finding where the types of people you want to work with are hanging out. Trying to avoid as much the generic networking events.
Nathan: Yeah. Yeah, that’s so true. Yeah, I agree with you. Thoughts on cold outreach?
Zvi: I’m actually … I think nowadays not full cold outreach is productive. I think you should not … I think a well-read cold outreach can be incredibly effective. Obviously, listen, warm introductions always better. But I think in nowadays, especially given that there’s this growth of marketing automation tool that basically you can throw 50,000 contacts in and it blasts all of them, I think that … So everyone’s just used to getting slammed with cold email. So therefore if you write a cold email that actually stands out, or you do it via LinkedIn, or a handwritten card, or something that says, “Okay, this person isn’t just … I’m not just one of the thousands of people they’re spamming, but this person genuinely wants to talk to me and can be a value to me.” Then I’ve actually found that people are pretty receptive.
Nathan: Yeah. I think that’s a really good insight because yeah I agree. If somebody has actually done their homework and it’s not just a random blast, and you can always tell, yeah it does get cut through. But I think so many emails just … Yeah, I like the handwritten note. Very, very powerful because it’s a lost art form, receiving things in the mail. People get excited still when you receive things in the mail, right? It doesn’t matter-
Nathan: … how many things, it’s still really exciting. More than ever, I reckon, these days.
Zvi: Yep. Exactly.
Nathan: You talk about introductions. One thing I … It’s one of my pet peeves, I’d love to hear your take. When you get introduced to somebody but nobody asked if you wanted to be introduced. Then you look like a jerk or a rude person if you don’t write back. That’s sort of how I feel, if you don’t write back, but you might not want to or you might not be interested in that intro.
Zvi: Yeah, exactly. I have no problems saying no. I’m totally fine.
Nathan: So if you get introduced … Let’s just say we didn’t know each other. You’re not interested in any PR, any media, doing any podcasts, any press. Your head’s down working on post-acquisition. One of our mutual friends introduced us, and you weren’t interested, how would you approach that? Via email. Introduced via email.
Zvi: Yeah, absolutely. I would say, if I were just … You’re basically just asking for my cold outreach template?
Zvi: Yeah, absolutely. A couple of key points. One, it has to be two or three lines, or less, very clear. Like you write a two or three paragraph long fricking sob story, or talking about your value, that’s absolutely worthless. I would say honestly, and this is where especially nowadays, the rawer your message works better. I actually found, and I was talking with another relationship coach about this, that they find that some of their best emails are ones that have spelling mistakes or all in lower case. Again, there’s so much work to be done to polish your marketing emails and marketing content, that the unpolished stuff seems to do better.
Literally I may write on one line, just not an ask but just an innocuous question. Like let’s say, for example, Nathan I would love to get booked on your podcast. I would just email saying, all in one line, “Hey Nathan, really liked your episode. Quick question for you, who’s the ideal type of” … Or, “Who’s your dream guest for your podcast?” I would ask something very, very simple like that because what you’re trying to do is you’re trying to start a conversation and trying to demonstrate that you’re being a value. Not just asking how can I help you but again, as a … If I’m reaching out to you as a podcast host I know that what you’re trying to do is you’re always trying to bring on the absolutely best talent, so how can I help you do that? Does that make sense?
Nathan: Yeah. I love that. Really smart. Leading with value. Serving first.
Zvi: Yep, exactly.
Nathan: Yeah, that’s cool. Awesome. I’d like to switch gears because yeah that was really valuable, thank you. I’d like to switch gears and just talk about early days, Contactually, and then work towards the acquisition. How it came about and Compass, et cetera, et cetera. So you went through 500 Startups and you raised some venture. What happened next?
Zvi: Yeah, absolutely. Then well, obviously, we raised venture over the span of years. You know it’s 50,000, then 500, then a million, then two million, then eight million, et cetera, yada yada. I would say we felt … If you’re familiar with the Lean Startup Playbook I would say we were pretty good implementers of that. The initial product, if you were to use Contactually back in 2011, it had nothing at all in resemblance to the tool that you see today with all of this amazing shine, and polish, and functionality, because we just were in this constant, constant hamster wheel of having an idea, vetting it with potential customers, seeing if we could get those customers onboard, building the actual features, seeing how it responded, looking at the data, iterating from there.
We did the same with our markets and with different customer segments. For example we started off focusing on who we knew, which were other professionals, and millennials, and the TechCrunch audience. We knew that we wanted to focus on a particular niche, so we said, “Hey, well let’s try and focus on real estate agents because it seems like this really good market.” That, initially, was a test back in 2012 that turned to pan out and we ended up focusing on it more, and more.
Then the rest is history. Just kept iterating on that. We went from selling to individual real estate agents to teams, to brokerages. Obviously we were in many other markets, so we were testing out different markets, and probably a few coming onboard. We were testing out different price points. It was there weren’t large changes, I would say, at any point in time through our history. What you’d see is just hundreds or thousands of little dial tweaks here and there.
Nathan: When it comes to, I guess, growing the company, getting your first early stage users, do you think going after a particular subset of a market was the best move, or do you think you would have gone broader, or … Because anyone can use your tool.
Zvi: Yeah. Absolutely. Without question I do very strongly believe in niche to win. One of the main books I recommend to entrepreneurs, especially those starting off in the B2B space, is Geoffrey Moore’s Crossing The Chasm. His thesis there is that if you’re trying to move from early adopters to early majority you need to focus on a particular niche because clearly, for example, early on we had a lot of early adopters. Among those early adopters were real estate agents who were always willing to try and test out new tools that may have absolutely nothing to do with real estate, but as you start to focus on the early majority then you need to start speaking their language. You need to start speaking about real estate, or accounting, or finance specific terms. That was a very important lesson for me because otherwise we … In fact in the product, as you know, there’s nothing specific to real estate about it. It was really just in how we marketed it, and sold, it that became more and more real estate specific.
The lesson for me, therefore is that if you want to go to the early majority you’re not going to have the early adopters who are willing to take a risk. You need to have some kind of proven insight that, “Yes this is the right product for my type of business.”
Nathan: Yeah. Yeah. I think it’s an interesting approach. Did you guys end up changing verticals? Because to be honest I go to Contactually now and it’s very, very focused for real estate professionals. Obviously, because of your acquisition to Compass I think that’s probably part of it but I don’t remember when I went to the site, and we’ve been a customer for like two, three years at least, I don’t remember ever feeling like, “Oh okay, this is for real estate professionals.” So I’m curious, did you guys eventually move, and try and move into other verticals, or yeah?
Zvi: Yeah. Again, that was like the pendulum kept swinging back and forth. I would say for us we always knew that real estate was going to be a major market for us. But we kept playing around whether … A, whether real estate was a big market or the market for us. As you see by our website marketing now at some point we had said, “Hey, we are going to focus only on real estate and proactively market only to real estate.” So there was that decision.
But at the same time then we were also experimenting with other markets and we said, “Hey” … There were times when we said, “Okay, we are focused on real estate for now but let’s start developing other markets over the next couple years.” Then there were also times where we said, “You know what? We got to focus our efforts. Let’s be the biggest CRM in real estate first and then we can think about other markets.” Again, the pendulum swung back and forth a fair bit.
Nathan: Yeah. No, that’s fair enough. But you guys identified this particular market and niche from your early stage users, and probably some of your best ones, in terms of stickiness, average revenue per user, et cetera, et cetera, right?
Zvi: Yes, absolutely.
Nathan: Okay. Interesting. Did you use Contactually at all to raise venture funding doing biz dev and anything like that?
Zvi: Oh yeah, absolutely. I mean I think actually even for awhile, despite having tens of thousands of customers, I was still among the top most active users. I’d be using it all the time. Even post-acquisition I still use it all the time. For me, I … Again, going back to your ultimate goals, I would be using Contactually to raise venture capital, to stay in touch with my current investors, to stay in touch with perspective investors, months and years in advance of the raise. I’d be using it to recruit talent. I’d be using it to build my general network. I use it to stay in touch with reporters, and influencers, and sales candidates. The magic of relationships, because it’s so pervasive across so many different use cases, and roles, and it’s so many different hats needed, that I was able to very, very successfully leverage my tool for many different things.
Nathan: What about the acquisition?
Zvi: I actually … Believe it or not, yes. It was obviously a little more targeted but we had been building relationships with folks at Compass, as well as other potential acquirers that we were engaged with, for years in advance. So Robert, the CEO, knew me well enough that he had absolutely no problem reaching out to me and saying, “Hey, yo would you be interested in a potential partnership?” That’s an important thing, right? It’s not like companies just get sold overnight. There’s sometimes years and years of work that goes into that. That, again, may result in all of a sudden a very quick process or transaction but what’s important is that do the parties trust each other? Can they reach out to each other?
Nathan: Yeah. Interesting. That’s a really good insight. Tell me, yeah, how did the acquisition come about? Obviously you knew, like these conversations were happening a couple years in advance because the acquisition was quite recent, right?
Zvi: Yes. The acquisition closed in February of this year, 2019. Again, it’s hard to necessarily say any one thing or any one key part of this. We had known folks at Compass for years. At the end of the day we, obviously, grew because of our focus on helping real estate agents. More and more of our customers, therefore, were starting to partner with Compass. So we got to know the team very well. It started off as a very loose, just kind of we knew each other’s names. To we started meeting together to talk about how we could work together. We did some shared projects together. They were working with more and more of our customers as well, and ended up growing, so by the time the acquisition came about clearly both sides did their homework. There’s a hell of a lot of legal work that needed to happen, but both sides were very happy and convinced that this was the best thing for our shared mission.
Nathan: Yeah, amazing. So you are now general manager of the company, is that difficult?
Zvi: Yeah. Really great question. It definitely is. I mean the magic of our opportunity and my position inside of Compass is that the mission has stayed the same. Just the role has expanded significantly because now we’re part of this much larger company. We are not focused on just building CRM. We’re focused on building out CRM as part of this massive company platform. We have a lot more resources at our disposal, but the same exciting thing is at the end of the day we’re still here to help individual professionals grow their business and to realise the value of their relationships.
Nathan: Yeah. Amazing. Well look, we have to work towards wrapping up Zvi. Question around what’s next and what’s exciting for you?
Zvi: Yeah. I mean honestly for me what’s been very exciting is, obviously, watching this acquisition come. Seeing the incredible growth that’s happened and just continuing to iterate on the mission. Obviously, for me, I’m very passionate about relationship building. So many of your listeners who are those who know me may know that we released a book earlier this year called Success Is In Your Sphere, which gives the strategic growth path to be able to help you nurture key relationships.
From then, honestly, I’m looking forward to relaxing. I have two very young children and I’m looking forward to spending time with them. Then long-term seeing what the future holds.
Nathan: Yeah, that’s cool. I really respect that. Family’s really important.
Nathan: With when it comes to, I guess … You said something at the start of our conversation where you said you used referrals in a big way to grow. Was that still, all the way up until the acquisition, your number one growth channel?
Zvi: Oh absolutely. This frustrated the pants off of the marketing team but for the entire history of Contactually, even at acquisition or post-acquisition, our number one source of business was direct or referral traffic. Meaning, literally, someone would just type in Contactually on Google and find us. That’s where our business came from. It was obviously therefore very hard for our marketing teams to be able to put clear numbers or guidance around where their business is coming from. Therefore, where we should be investing in further. We had this larger trust that, “Hey, you know what? It was relationships.”
Nathan: Yeah. Wow. What about paid?
Zvi: Paid was not very successful to us.
Zvi: At least it was in certain cohorts but we actually found that we did better when we started scaling down our paid spend.
Nathan: How is that?
Zvi: Great question. Honestly we say that our … When we were thinking about overall unit economics we were spending a lot of money to acquire customers that … And obviously clearly you’re paying a lot for those customers, but then we saw that those customers weren’t nearly as sticky. So the LTB to cap ratio for people coming in via paid channels wasn’t nearly as strong as, again, people who came direct, or people who came via a referral, or via an enterprise partner.
Nathan: Sounds like the referral channel was the one that you just needed to keep putting gasoline on?
Nathan: How did you do that?
Zvi: Yeah. I mean honestly we spent a lot more time … To no extent we spent a lot more effort on customer success. I mean customer success was always, always really important for us but we spent even more on making sure we were delivering absolutely great service. I spent a lot more time on the road. Not just speaking at conferences but also just engaging with customers and engaging with partners. We saw that, yeah it turns out … Again, it was hard to justify, “Why am I spending $5,000 on a dinner for these 20 people?” But then we would see the referrals come in. Sometimes a day or two after that, so it was a lot of faith but we kept seeing the numbers from that.
Nathan: Yeah, interesting. Did you have any network effects, tools, built in the app? Not that I’ve ever seen, but anything there? If a user’s been with Contactually for six months refer a friend, or refer a professional, or colleague to one month free or anything like that?
Zvi: Yeah. Yeah, we tried that and I think we still have that. It was a … Just at the end of the day what really came about was people would refer us to others if they thought it would be valuable to other people. So putting any kind of incentive was almost an insult. Really we saw people say, “You know what? I’m going to refer to you for free if I think it’s going to be worth it.” All these get a free month, get $10 off your subscription, we tried all that but for us, at the end of the day, having a valuable product is viral enough.
Nathan: Yeah. Okay. Interesting. Awesome. Well look, I won’t take up any more of your time. This has been a great conversation, extremely valuable. I think the resounding theme of this conversation is relationships are an essential part of building a successful business. Just one last question. Well two, where’s the best place people can find out more about your latest book and also your work? Then lastly, just any last pieces of advice you wanted to share?
Zvi: Yep, absolutely. My website is Z-V-I-B-A-N-D.com, just ZviBand.com. The website for the book is successisinthesphere.com. Of course you can also just do a quick Google search for Success Is In The Sphere or also just Google Zvi Band.
Nathan: Awesome. All right. Then, yeah, any final pieces that you wanted to close off with? Parting wisdom?
Zvi: Yeah. I mean, listen, I mean for me I’ve dedicated my career so far, and most likely my career moving forward, to helping people build deeper and more authentic relationships. Not just for your business purposes but for your life as well. Just understand that this is not something that’s just a New Year’s resolution. This is something that needs strategy.
Nathan: Yeah, I agree. Awesome. Well look, thank you so much for your time man. I really appreciate it. Congratulations on all your success.
Zvi: All right, thanks so much.