Smartsheet CEO Mark Mader stood on the floor of the New York Stock Exchange Friday morning and before ringing the opening bell got a few chills.
With Smartsheet branding draping the storied financial institution, Mader admitted that it was a “pretty special moment.”
But Mader — whose Bellevue, Wash.-based enterprise software company priced shares Thursday night at $15 and is now valued at more than $1.5 billion — isn’t standing still. And the former collegiate football player at Dartmouth College used a slightly different sports analogy to explain what’s next for the 13-year-old company.
“It is the feeling that the puck is on the ice and now you play game,” said Mader in an interview with GeekWire shortly after the company started trading on the New York Stock Exchange under the ticker “SMAR.”
To emphasize that point, there are a few things Mader said he won’t be doing now that Smartsheet is a publicly-traded company. The 47-year-old tech executive said Smartsheet’s ticker symbol will not be on his phone, nor will there be some over-the-top IPO party when he returns to Bellevue this Saturday after a two week road show.
“We have 74,000 customers that don’t want us to party, they want us to work on the product,” said Mader, adding that some lower key celebration will occur to mark the milestone of raising $150 million.
That mindset is rooted in Mader’s management philosophy, something he picked up as a former executive at Onyx Software. It was 20 years ago that Onyx —whose co-founder, Brent Frei, also co-founded Smartsheet — filed to go public. Onyx eventually sold to M2M Holdings for $92 million in 2006. Meanwhile, Salesforce — which competed with Onyx in the customer relationship management arena — ended up dominating the market, now valued at nearly $85 billion.
Asked what he learned from the Onyx experience, Mader was clear. Don’t get too enamored with your product. And, more importantly, investors don’t buy a stock based on what you’ve done in the past, but what you plan to do.
“If you are always looking at the rear view mirror, than you are not running the business,” he added.
Mader certainly is plowing ahead as Smartsheet looks to transform how employees work, rolling out new cloud-based tools that replace spreadsheets and other business applications. Big competitors loom for sure, including Microsoft, Google, Asana and Workfront.
Smartsheet also is unprofitable, showing a net loss of $49 million for the 12-month period ending January 31, 2018.
Asked about those losses, Mader said there’s a huge opportunity to keep growing the company’s market share at a rapid clip. On the IPO road show, investors seemed to understand the growth opportunity, he said.
He called Smartsheet “one of the fastest growing companies in SaaS today” — referencing the enterprise segment known as software-as-a-service. And the company — at least for now — plans to step on the gas.
While Smartsheet raised $113 million in venture capital, it still had roughly $58 million on the books at the time of this week’s IPO. That means it took Smartsheet $55 million to get to $100 million in recurring revenue, a feat that Mader said puts the company in a “very small club, maybe a club of one.” Many long-term investors and new converts told him to “lean in” on the growth.
One of those believers is Madrona Venture Group, one of Smartsheet’s earliest backers and now 25 percent stakeholder in the company.
Madrona’s Matt McIlwain told GeekWire that Smartsheet is signing up big enterprise customers who start small with their initial spend, but then keep adding on more services and functionality. That puts the company’s net dollar renewal rate at about 131 percent.
“In other words, if I spent a dollar with them a year ago, I’m now spending $1.31. And the longer you are a customer, that number gets even better,” said McIlwain. “And the bigger you are as a customer, again, the number gets even better. So a big part of their growth is growing more comprehensively into these larger enterprise customers.”
With the new funding and status as a public company, Smartsheet is looking to build on its initial success. It made its first acquisition earlier this year in the artificial intelligence arena, and it plans to use the new public stock currency to recruit more people.
Smartsheet is not the only company with Washington state roots to go public this week. Laser maker nLight and electronic signature powerhouse DocuSign, which was started in Seattle and continues to employee more than 800 people in the region, also completed IPOs this week, both trading on Nasdaq.
Interestingly, Mader said he bumped into the DocuSign executive team during an investor meeting in Chicago. As a long-time Seattleite, Mader said he’s proud of what the Seattle tech industry has accomplished.
“You are really starting to see scale established in Seattle,” said Mader, adding that the growth of the public companies will bring more skilled people to the region as new businesses “hit their stride.”
For now, Mader is focusing on solely on Smartsheet’s stride.
“We are excited to deliver,” he said. “It’s back to execution now.”
Editor’s note: Smartsheet is a GeekWire annual sponsor.