Smartsheet is exploding because it works like the tools we all know

Credit: surface warriors via Flickr

Early this year, I was searching for a tool to help me coordinate CITEworld's workflow. We're a small team, but a couple writers wanted an easy way to check what everybody else was working on -- both to make sure that all our bases were covered on the big stories, and to avoid unnecessary duplication of effort.

I tried out a number of tools. Campfire seemed more like a real-time communication tool, which was overkill for our small team; I simply wanted a single place where everybody could see, at a glance, what everybody else was working on. Same with Salesforce Chatter and Microsoft Yammer. (Plus Yammer requires a domain-specific email address, which doesn't work with our mostly freelance staff.) Salesforce's Do.com wasn't intuitive enough -- I had trouble finding an easy way for writers to view all projects underway. A couple of our writers had objections to the way Asana worked with their computing platforms of choice. Another writer didn't want to create a Microsoft account to use SkyDrive for a shared spreadsheet. And so on.

Finally, I punted on the whole endeavor and went back to the way we were doing it before, and the way that most other publications used to do it back in the olden days: email and a spreadsheet. In other words, everybody emails me what they're working on, and I track everything in Excel. It ain't pretty, but it works.

Apparently, I'm not alone. 

Smartsheet cofounder Brent Frei has turned that same insight into a thriving company. Smartsheet is an online project manager that looks like an Excel spreadsheet. But it works like a spreadsheet on steroids -- you can share individual rows, attach files to rows, coordinate events with a shared calendar, even attach Gantt charts (the project management charts best known from Microsoft Project). It's flexible enough to be used for small teams to track fairly simple workflows -- like us -- or for event company Populous to coordinate the SuperBowl

Frei explains, "You go into any Fortune 500 company, and around that central core of Oracle or SAP, the whole business is run on spreadsheets and email. Our thesis around our product is don't go build the next Basecamp, the next Project, the next Yammer. Take the tool that people have already picked – a billion people know how to use this already – and fix it! Stick file sharing on the side of it, add a Gantt chart if somebody wants to see it, make it talk to your calendar so the dates were actually active."

The approach is working -- the Seattle-based company tripled its revenue and customer base each year from 2009 through 2011, and is now being used by 23,000 companies. That includes 100,000 paying Smartsheet creators, and as many as 600,000 "active" collaborators.

That split between creators and collaborators reflects Smartsheet's go-to-market approach: only the creator of a Smartsheet pays the monthly subscription fee, which starts at $15.95. That user can invite as many collaborators as he wants to each sheet. Often, these collaborators go on to start their own sheets for different projects.

This hands-off approach has fuel within organizations. Frei tells us that Cisco has seven active nodes inside the company, ranging from a single person with a few collaborators up to a team with 40 Smartsheet creators and 800 active collaborators. 

The strategy now is to go to companies like Cisco and sell them on the enterprise edition, which lets administrators manage users, ensure that files don't get "orphaned" when a user leaves the company, and offers single sign-on integration with Active Directory and online directories such as Okta and Ping. The company has begun hiring a marketing team and full-time enterprise salespeople to get there.

The one thing that Smartsheet is not doing, however, is going to IT departments and pitching them to install the product as a company standard, focusing on metrics like ROI. That's the approach of Jive, and Frei thinks it's totally wrong for the increasingly consumerized world.

"The reason Jive has to sell high is because they don't have something people will adopt from the bottom up. It is a classic enterprise sale – here's the benefits you're going to get, here's the design, ram it down the throats of people and go. It's the way enterprise used to work." 

He continues, "Salesforce, they grew up coming into the salesperson level and the sales manager and drove from there. When they went into the big guys of the world, they looked around the table and said 'raise your hands -- how many of you are using Salesforce now?' They got business value out of it, they didn't deploy Siebel."

Perhaps the best story, though, was how Google itself came to discover Smartsheet. A few years ago, when Smartsheet was smaller, Frei would spend a couple hours every morning answering phone calls from customers.

"One day, it was YouTube."

Credit: Screenshot
A sample Smartsheet the company put together to prepare for our interview. Click here for a larger version of the image.

They were coordinating a huge advertising project, and they were tracking everything in Google Spreadsheets. It was getting unwieldy.

Frei continues, "They say, 'we're going to share our spreadsheet, can you fix this?' So I'm looking at their spreadsheets, it's 68 columns, and I'm going 'this is classic' – you do it this way because this is what spreadsheets do. So I flip it on its side, stick it into a structure like this [Smartsheet], and all of a sudden they can hook files to rows from Drive. They can do notes. They can send individual rows out to their clients and say 'look at the attachment to this, is this what you want? Go ahead and put your stuff back on it.' And it automatically updates that section, so they don't have to be sharing this big sheet."

It only took one hour of coaching for YouTube to adopt Smartsheet as its operating tool for these kinds of campaigns. 

"We have a good conversion rate with hands-off," says Frei. "With hands-on, I think we can double our conversion rate. We're already cashflow positive so doubling our conversion rate can be very good."

Although the company has had a lot of success integrating with Google Apps, Frei is equally excited about Microsoft's Office 365. Part of that is his background -- he worked at Microsoft in the early 1990s before leaving to start CRM company Onyx. But he's also seen what tight integration with Gmail and Google Apps has done for Smartsheet, and he's hoping Office 365 helps him repeat the same trick with Microsoft's cloud customers.

"We've had a ton of success in the Google Apps marketplace because there's one sign-in, one new authentication, one place in the cloud, and anybody who's a Google Apps user now knows all about Smartsheet. That's not been the case with Microsoft. You couldn't do that. In particular, a lot of Microsoft's customers, even if you did have stuff in the cloud, it was effectively private because they had a SharePoint deployment somewhere."

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