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Tim Harsch, the CEO and co-founder of Owler, who learned some harsh lessons during the early days of his startup.
Reddit almost ruined Owler, but Harsch turned it into a learning opportunity. During its early stages, Owler resorted to paying users to collect company data and insights, paying out more than $200K in incentives for users who added or updated information about companies listed on its platform. It worked, until it didn’t, and over six years Owler built a strong, crowdsourced community.
The incentivized tactic ended up featured on Reddit where college students figured out how to game the system by submitting false data and still receiving a payout. Three weeks prior, however, Owler raised a $19 million Series B funding round. While the Theranos’ of the world would’ve doubled down, Harsch went humbly back to investors to admit Owler’s business model wasn’t scalable, even offering to return the funding untouched. The investors remained committed so Harsch pivoted the business – a shift that resulted in a platform with over 5 million users and millions of real-time business insights.
The outcome: Owler was purchased by Meltwater for $24.5M in 2021 and Harsch credits his empathetic leadership style to the faith his investors once showed, as well as his journey with Type 1 diabetes.
Digital Journal spoke with Harsch to discovery his story.
Digital Journal: How did Owler get to where it is today?
Tim Harsch: Reddit nearly ruined Owler’s business model. During its early stages, Owler focused on paying users to collect company data and insights to build a strong crowdsourced community. We paid out more than $200K in incentives for users who added or updated information about companies listed on its platform. It worked – until Reddit got involved.
The incentivized tactic ended up featured on Reddit where college students figured out how to game the system by submitting false data and still receiving a payout. Three weeks prior, however, Owler raised a $19M Series B funding round. We went humbly back to investors to admit the business model wasn’t scalable, even offering to return the funding untouched. The investors remained committed to us, so we pivoted the business – a shift that resulted in where we are today. We have since built a strong, crowdsourced community, and our team worked to turn our experience into a learning opportunity.
DJ: How has your company managed to scale since this incident?
Harsch: Thanks to our investors remaining committed to Owler’s mission, we pivoted our business model. This fresh start helped get us to where we are today; over 5 million users and millions of real-time business insights, along with an acquisition from Meltwater last year for $24 million. You hear a lot of horror stories regarding acquisitions, but we are very fortunate to have joined a very supportive company. Sales intelligence was a new market for Meltwater, but the team made an effort to learn with and alongside us, which has been an incredible experience that allowed us to build the foundation for new products like Owler Max.
DJ: What role does empathy play in company and employee growth at an organization?
Harsch: We incorporate the servant-leadership model throughout Owler to foster individual growth. We believe that empathy in the workplace leads to a number of long-term benefits, some including improved communication, strengthened relationships, and increased sales opportunities.
The pandemic and remote work emphasized the importance of understanding people exist outside of work and how to be empathetic when it comes to that: if there’s a child in the background of a work call, that’s great! Redefining workplace boundaries required a lot of learning, but we learned to balance work and life to become overall more reasonable about company flexibility.
DJ: How has crowdsourcing data led to success in real-time business analytics?
Harsch: Companies require accurate, real-time sales data to optimize workflows and generate new opportunities for a business. The crowdsourcing of data has enabled coverage of new companies and entire industries that previously were not covered by traditional data providers. Dynamic community inputs have enabled business leaders to make better informed decisions with real up-to-date data and not stale data that may have been years old.
DJ: How can organizations build a better awareness around their internal data so it can be leveraged to make strategic business decisions?
Harsch: Organizations need to understand how they can use different types of sales data to their advantage. The key to managing internal data is having an internal champion who can highlight use cases and spread the word about what is possible with the internal data. It is crucial to know what is currently stored and possible use cases to spark new ideas. In the case of sales, data sets derived from internal (and external) sources are essential to optimizing your sales practices; including identifying new prospects, assessing KPIs, and hitting your goals.
DJ: What are three main takeaways you’d offer to leaders based on what you learned in the early days of your company?
Harsch: Grow for the right reasons: There’s an emptiness in focusing on growth for growth’s sake. It’s easy to become obsessed with one number that detracts you from your core mission. In our early stages, Owler’s main priority was building a community of users. With a free product, we rationalized monetizing our platform once we attracted more users. However, pursuing growth for growth’s sake meant we missed out on early revenue and opportunities to strengthen our product.
Crowdsourcing is a strong practice: We started experimenting with crowdsourcing in its wild west days. In 2010, our company took advantage of the early opportunity to derive value from this type of data and built Owler. Since then, we’ve focused on building tools for sales teams to track companies in real-time to make personalized outreach and closing in on prospects easier and more efficient.
Lead with empathy: Owler wouldn’t be where it is today without the grace our investors showed us, and having empathy as a leader is a must. Leaders need to show up as their authentic selves to ensure others feel connected to leadership and the company. Without that, it is impossible to understand the concerns and needs of others. You’re not a leader if genuine curiosity, compassion and authenticity are not part of who you are.