E21: Andy Sparks, Co-Founder & COO at Mattermark – Interview

May 3, 2016


Andy Sparks is the co-Founder and COO of Mattermark. Mattermark provides detailed data on venture capital and private equity transactions and companies. They know everything about what’s going-on in the world of fundraising. Mattermark itself has raised over $17 million from prominent VCs.

In this interview, Andy talks about his past and how Mattermark came to be. It’s quite interesting, especially how Mattermark and the founders developed and nurtured the idea into what is now Mattermark.

Andy is a great guy, and I know you’ll learn a lot from him.

What else did we talk about:

-How did Andy meet his co-Founders?
-How did they get Mattermark going? Did they raise money right away?
-How has the platform changed since you started in 2013?
-Where do they want to take Mattermark over the next 3 years? New products, services?
-What are some lessons learned from starting and growing Mattermark?
-What does Andy like to do to unwind?


Dave Kruse: Hey everyone. Welcome to another episode of Flyover Labs from Madison, Wisconsin and today we are lucky enough to be talking to Andy Sparks who is the co-founder and COO of Mattermark and Mattermark provides detailed data on venture capital and private equity transactions and companies. So, they know a lot about what’s going on in the world with fundraising, which we will talk about more. There’s a lot of valuable data they’ve put together. Before starting Mattermark, Andy started LaunchGram, which was sold to Referly. So, I’m really excited to learn more about Andy and Mattermark and how they got things going and what they’re up to now. So, Andy thanks for joining us today.

Andy Sparks: Yeah absolutely, thanks for having me.

Dave Kruse: So first it would be fun to learn a little more about your background. Can you kind of just give us a little overview on where you came from and what you did before Mattermark?

Andy Sparks: Yeah absolutely. Let see, so, I guess I first got interested in starting businesses in collage at Ohio State. So, I went to school in mid-west and when I was at Ohio State I was at tailgating one day and a buddy of mine came up to me and asked me if I knew anything about microbreweries and I said no, not really. I knew my dad home brewed beer, but I don’t know that much about microbreweries, you know, I think I was 19 years old and obviously it’s not legal to be drinking, but I think I had a Maddy Light or something and that would be it.

Dave Kruse: Of course.

Andy Sparks: Yeah, of course, he said hey, would like to start a microbrewery and I was like well and it was kind of an odd question right, and I was like well, you know that sounds like a lot more fun than anything else we’re doing right now so yeah let’s do it and so we started home brewing beer and like, you know, it’s totally legal, I got my own supplies to make beer and so we made beer quite a bit and we got really actually pretty good at it and we started a company and we built a business plan and figured out everything we need buy in order to start a microbrewery. I even pitched to some investors once, of course, they weren’t interested in investing in an underage guy trying to set up a microbrewery, but that was kind of my first taste of starting a business and all that and I actually got involved with an entrepreneurship club at Ohio State called the Business Builders Club and everyone there was interested in starting something crazy and through that I ended up closing down this microbrewery business, which never really became much of a business at all, but we still had to pay, closing it down and all that and so I got a job at Express folding clothes until 3 in the morning and eventually a friend of mine offered me job, asked if I was interested in getting an internship at a technology start up at Columbus called DOmedia and it’s through that I really started to cut my teeth on tech, so I worked as an intern for a year doing data entry and eventually met a guy outside of work who was starting to build a company that developed iPhone apps and this was like right after the Apple released STK and I saw this you know, the potential for creating apps was just endless at the time and so I convinced them to hire me and I did some designs for him and also I ended up eventually selling development contracts and we built almost a 20% agency over the next couple of years and now it’s kind of my first year out of collage I spent working with him and that was, I think the first or second or something like that, it was an early hire at the company so I really got to see if I could build, and I spent a ton of time with the CEO and the founder of that business and that really gave me the opportunity to cut my teeth right in, really get exposed to what a start up felt like even it was a company that was selling services, we are also trying to build our own products, but that was a lot of fun and eventually I got to the point where I thought I could do it better, of course, and I started my own company LaunchGram and I quit my job and moved out to San Francisco and I failed miserably because it’s not as easy as it looks.

Dave Kruse: No, not always, not usually. What did LaunchGram do?

Andy Sparks: So LaunchGram, I think for the audiences’ perspective, the most important thing about that business is that I got into trouble always, which isn’t necessarily always a bad thing so what LaunchGram did is, we saw an opportunity for us to make affiliate revenue off of basic preleased products and all the hype that is built up around them, so if you have like the next Call of Duty or some really big video games that everyone’s really excited about and they want to see the trailers and watch content about it, as the release date nears, we would run adds on Facebook and Facebook adds were really early, we do our adds on Facebook that would link to a page that would have like a pre-order link and a bunch of content about the product and enough people would pre-order it early on that it made selling the adds worth it, so we would make like 7 bucks on a pre-order and we can put in enough money into Facebook that was profitable and we have only worked for a very brief period of time until everyone else found out about Facebook adds and they got more expensive, but it was a cool opportunity and we said oh! We can make money on this , this is a good opportunity to start our own business, this could be fun, let’s quit and move to California and try to get into an Accelerator and so we ended up covering everything from the next iPhone, which we didn’t make any affiliate revenue off of to video games and TV shows and all that stuff, but I got into it at the end and I was like, you know, I kind of have a problem with the cycle of what’s just, you know, buy the next iPhone as soon as it comes out and throw the other one in the thrash or buy the next pair of shoes because they are really sexy, but your current pair of shoes is just fine and I was sitting there realizing that if I built this business the way that we are going to, I was going to be at the center of that problem and I just didn’t feel comfortable with that and we were running out of money, so those two things combined were our perfect recipe for leading to close the business down.

Dave Kruse: Gotcha okay. No, I mean, that’s a good lesson, I’ve started stuff where I thought my heart was going to be into it, but then ended up not being into it and that’s just the recipe for things not working out because I think the world works better when you heart is really is into it, or like the world helps deliver…… you know, when your heart is into it.

Andy Sparks: Yeah, and even things that you love, you know, you’re going to be, even when you are working on something you love you are going to have really difficult periods and, you know, the only thing that’s going to get you through that is that if it’s something that you really care about and you are working with really good people and I was working with great people, but ultimately yeah, when your heart is not in yet it’s just not enough

Dave Kruse: Yeah and so after that did start Mattermark or what was the path after that?

Andy Sparks: Yeah, so that was a fun story, so a friend of mine Danielle, I’m friends with Danielle, Danielle Morrill, who is the CEO of Mattermark right now. We’ve been friends for, I don’t know, 6 years at this point and when we started the company we had been friends for a year or two and we actually met at South By South West.

Dave Kruse: Oh, interesting.

Andy Sparks: So we met there and then we kept in touch and then I called her one day and said hey, you know, I am moving out to Mountain View or the Bay area with two of my friends from Ohio, because I’m trying to start this company and trying to get a new Accelerator and she basically was like well it’s kind of funny because I just quit my job and I’m moving to Mountain View and I just got into Y Combinator to start a company.

Dave Kruse: Oh.

Andy Sparks: And it turned out that we actually lived across the train tracks from each other. We lived across the train tracks from each other and we’d go over there like every Friday with some beer and we would do what we’d call CEO therapy, which is just have a couple of beers and talk about how we have no idea of what we are doing and we did that for a while and when it came down to me closing down the company, you know, I was talking to Danielle on a pretty regular basis and she also wasn’t too happy with what Referly was turning into and one day she said hey well, she did not say it exactly like this, it was basically like hey why don’t you not move to New York with the job offer that you got, why don’t you come join Kevin and I on Referly and they probably won’t be Referly for very long, but we have enough money in the bank that we could something else, so why don’t you come join us and do that and so that was kind of the pretence that I joined what would eventually become Mattermark. So, I joined them and we took a one way ticket to Seattle to Danielle’s parents house and we said that we’d come back with an idea what we are going to work on next and what we came back with was related to Referly because at the end of Referly’s life and Referly was initially supposed to be kind of an affiliate revenue as a service where you would, you know, pace the products length and do a length shortener and if it was like on Amazon or something that had an affiliate program you could put that link into any piece of content and if someone clicked on it and bought a product you get paid for it and by the end of Referly was really driven by a lot of kind of longer form content where people would write long articles and link their products in it and then enough people would click on it and buy the products, so they’d actually be able to make a decent amount of money, but what Danielle really loved was writing and it turned out that she really learned, she loved to write especially about start ups and private companies and so when we got up to Seattle we kind of came to the conclusion that we’re pretty unhappy with the state of reporting in tech media and start ups and we decided that we wanted to build a better media company that covered start ups, but we wanted to basically build a tech crunch killer, that was kind of what we would talk about and we said, well how are we going to do that, we got to have a way that we’re going to find stories that other people aren’t telling and where we kind of landed was well what if we collected data on these companies right, what if we just looked at how fast the company was moving or changing __14:45 __ follower accounts and this kind of came from Danielle as she had worked at a company called Seattle 2.0 in the past and they had this, it was like a media company in Seattle that covered Seattle tech companies and they had this one feature called the Seattle 2.0 index where they ranked companies from 1 to 100 in Seattle and of course everyone wanted to be number #1 and no one wanted to be #100 or so it was a pretty popular piece of content right because it was controversial. So, we said, well what if ranked all the companies in the Bay Area right? So we started ranking, you know, Y Combinator and __15:30 __ portfolios and looking at just how they were growing based on their Alexa scores and Twitter follower accounts and that was pretty popular content and we were really good at getting on Hacker News, the front page of Hacker News. Danielle was writing everyday and at one point some venture firms started asking us for, they said can we have the raw data, can we have the spreadsheet of this data that you’re writing about these companies because we’d like to see if we can find companies with it and we thought that was pretty cool and we dug in a little bit more into that and found that a number of venture firms had even hired engineers to try to build these data driven sourcing teams and NEA, which is the biggest venture firm in the world who was an investor in us ended up offering us with jobs; come in and do this in-house and this was all over a period of like of 3 or 4 months.

Dave Kruse: Wow and that was…

Andy Sparks: And once we got the job offer we…. yeah go ahead.

Dave Kruse: So that wasn’t part of the original idea necessarily like your business model wasn’t necessarily the first, interesting, okay.

Andy Sparks: No, not at all. The original business model we had, we’d just build a media company with the same concept and we played around with it being a subscription and everything like that, kind of like the information or something, but yeah so they offered us this job and we said okay, well at this point there is enough value here what if we just build a software company, what if we just built a _16:55_ fast/SaaS tool that investors could log in and make it kind of access like a browser based spread sheet about this content and then they could go and kind of source deals themselves and that’s what we decided to and so like 3 weeks later really ironically, because remember, we wanted to kill TechCrunch because we didn’t think they were writing good stories, really ironically Leena Rao at TechCrunch wrote this really good piece of content called the Quantitative VC, which kind of detailed this whole movement of venture firms using data to try to find companies and she did a really good piece and at the end it had a paragraph like “and I bet it won’t be long before some Silicon Valley start up comes along and solves this problem or helps venture firms do this,” and so we got in touch with her and we said hey, can you do a follow piece in 3 days cause we’re doing exactly that and so she did it and that’s how we ended up starting Mattermark.

Dave Kruse: Interesting, well that’s a good story, I did not know the whole story.

Andy Sparks: It’s kind of a windy road.

Dave Kruse: Well, that’s how it is a lot of times and did your prior experiences; do you think that helped you start Mattermark, I mean, it seems like you guys were pretty flexible, which is sometimes people kind of want to stick to their guns, but you kind of changed midstream, kind of what your focus is going to be. Do you think that your prior experience helped that?

Andy Sparks: Yeah, I think that it definitely did because we were pretty self aware of not wanting to… Danielle had even written this __18: 22 __ zombie start up’s basically the walking dead companies that they just kind of trudge along and they really need to be just shut down, but they just survive for longer that they should. So, we were pretty subconscious of not wanting our company to just be walking dead right, but we also wanted to… we were still trying to find what we wanted to work on and we had some money and we were definitely flexible, I think that Danielle’s background, you know, having worked at a media company in Seattle 2.0, but also having done marketing at Twilio was absolutely useful and everyone’s background I think were useful in different ways, but I think that having gone through a failed start up really freshly was really important to all of us because we should not have any ego left because we just want to build something that we care about and we just want to do something that’s interesting to us and didn’t care if anyone else finds it interesting and when we started to find shreds of interest from other people we ran towards it.

Dave Kruse: You know, that makes sense. I know what do you guys offer is just so helpful to many companies and can you give an example of you know a client that you have, like a paying client you have and how they use Mattermark and what type of searches they might do?

Andy Sparks: Yeah absolutely, I can never totally remember which customers we’re allowed to talk about..

Dave Kruse: Oh that’s true, you can make one up.

Andy Sparks: But look at our website real fast, look at our logos. So, I’ll give you an example of a venture firm and kind of an example of how they’d use Mattermark right. So, and this is a really interesting part of the story too because we don’t just… venture firms are only about half of our revenue and the other half of our revenue comes from B2B sales teams and so we’ll get there in a second because that’s like a total different story, but the way that a venture firm would use our data is it kind of depends whether the venture firm is looking for early stage companies or looking for later stage ___20:28 ___ opportunities but let’s see… choose one … so let’s say a venture firm is looking to find earlier stage company and the venture firm usual has kind of a profile of business that they are looking for right, that they’ll either want to do a series A size deal, they only want to do it in the security space and they want to do it in the United States and those are kind of different … the deals have to fit that profile at least roughly in there for them to be able to be interested in it and so the way that a VC that wanted to do a series A in a security company, we’d have to use Mattermart __21:11__, would log into the browser and basically just run a filter like, looks like a spreadsheet and we’d say okay, I want to do B2B security companies in the United States and the cool thing that we can do is with employee talent and data on when their last funding was, we can kind of get an idea of who is right to raise a series A and so we can do that by saying alright, here’s the company, lets look at every company that has somewhere between 10 and 35 employees who has not raised the series A yet and their most recent round of funding was at least 6 months ago and not only that they have added more than 50% of their headcount in the last year, which means they are adding more and more people and then basically they would run the filter and they would have a list of a couple of hundred companies that they could go and look at. They can either export that into a spreadsheet or they can kind of just look at each one and put in Mattermark and at that point they can also set up alerts to let them know whenever any new company fits that profile, so you can kind of stay on top of a given thesis area, get e-mail alerts and things like that, so that’s one way that people will use Mattermark and it’s pretty cool.

Dave Kruse: That’s super slick. How many companies are in your database, do you know?

Andy Sparks: We have somewhere around a million and a half companies.

Dave Kruse: Wow, that’s a lot and …. are there a certain subset of those that you kind of pay more closer attention to or like have more refined data about them or are they all kind of treated the same?

Andy Sparks: They’re roughly all treated the same.

Dave Kruse: Okay.

Andy Sparks: There are some that we kind of want to make sure we have as much data on as possible.

Dave Kruse: Okay

Andy Sparks: And once they get to a certain point, like to a certain point of visibility, but yeah roughly everyone is treated the same.

Andy Sparks: Nice and so you raised some money, so can you walk us through kind of when you raised money and how much money you raised? Just to give people an idea.

Dave Kruse: Yeah, absolutely. We raise money in a really weird way, so even before me joining Danielle, Mattermark had raised like a $1 million and that was through Referly and then basically from June of 2013 when we launched Mattermark up until the fall of 2014, we raised money pretty much every other month in some form.

Dave Kruse: That kept you busy.

Andy Sparks: Danielle would get one small check… oh yeah, oh my God! She would get a small check from this person, a small check from that person, you know, like 6 or 7 months into that, and to launching Mattermark, we tried to raise series A, we went to like eight big firms and they all said “no, you’re not ready, the venture market isn’t big enough” and all that so that was kind of disappointing, but then we had a couple of investors who said hey we are willing to help you try to figure out if you could sell this data to anyone else, so we’ll give you a $100,000 or $250,000 or something like that and so we’ve kind of raised money like really really ad hoc and I think Danielle hated it.

Dave Kruse: Yeah, that’s tough.

Andy Sparks: But eventually Brad Feld from Founder Group reached out and asked us if were interested in doing a syndicate on Angel List and he thought that we could get about $400,000 on it and so we said yeah, let’s give it a try and it ended up oversubscribing until like almost a $1 million in 24 hours after it was live and so we used that as kind of a signal that the market was ready for us to do an A round, which we ended up doing a few months later with Founder Group and Brad Feld actually ended up leading the round. He actually led our most recent series B as well, so today we raised something like $18 million or something like that.

Dave Kruse: Wow! Yes, I read most of Brad’s blog posts and he does love you guys. He mentions you guys quite frequently, talks a lot… He’s a big cheerleader.

Andy Sparks: I love working with Brad.

Dave Kruse: Yeah, he seems like a good guy. Okay, and so when you started raising the money did you have much of a platform built with lots of companies in there or has that kind of evolved in the last year or two?

Andy Sparks: Well, we had some money when we launched Mattermark still left from Referly. We did raise a little bit of money right around then and when we launched Mattermark it was very different from what it is today. I mean, we had maybe I think it was tens of thousands of companies in Mattermark and the data that we had on each one of them was far less complete and accurate than it is today, so we scaled up quite a bit and we’ve been able to cover a lot more companies and do things in different ways. When we launched it was an ugly product and it was one of those moments where I’ve done some product design in the past, you know, I’m not like a… I didn’t study design or anything, but I’ve been a designer and when we launched Mattermark, I was like this bothers me, I mean this thing is ugly and terrible, but Danielle and Kevin were like, no we just had to get something out there and obviously that’s a lesson I learnt a million times then, you know sometimes you just have to get something out there for people to use and to try and that’s a battle that never goes away even when you get bigger and where we are at now it is 50 person company. We are still learning the balance between when do we just get something out there and when do we build it the right way so it can scale and not shoot ourselves in the foot down the road.

Dave Kruse: No, that’s probably good and so where do you want to take Mattermark are there new services or data products you want to, or maybe just kind of keep pushing … I don’t push anybody, push is not the right word but you know going after the B2B clients which is actually quite smart and is probably pretty wide open opportunity or pretty massive.

Andy Sparks: Yeah, it’s obviously a much larger market and so the way I kind of think about it is what we want to do is provide data that lives where you work and what that means is that we have a ton of data on private companies, data on how fast they are growing, data on where they live, data on what they do, all that stuff and that can be really valuable to B2B sales teams because when a B2B sales team is trying to use thermographic data and when I say thermographic, I mean like how large is the company, what do they do, etc., and when they are trying to use thermographic data to target new customers they obviously need to be able to go to a place and say alright I want to find companies that are B2B, that are in enterprise software, that are you know in this region and that they are this size, and we can give them all of that, but the thing is the sales people don’t want to have to log in to any browser right and sometimes they will, but what they really want to do is they just want that data to be in sales force or they want it to be in Excel spreadsheet where they are doing some research and so what we’re really really focused on is helping get our data to live where you work, so it’s easy to get it right where you want it and not just, you know, locked up on our browser or something like that.

Dave Kruse: Nice, those are good. I like that vision. Alright, well we are about out of time. I have one or two questions to ask and you can pick one of them. Either, what do you like to do when you’re not working, that’s one of them and the other one I just forgot.

Andy Sparks: I’ll go with that.

Dave Kruse: That ‘s a problem I can only ask one question at a time which is too complex for me. No but what do you like to do… oh yeah, the other one was lessons learned … you know, are there any lessons you have learned since starting Mattermark that you’d like to share or what do you like to outside of work?

Andy Sparks: Yeah, I could probably answer two really briefly. I mean, the first one I love to cook out, I got a little bit of a backyard in San Francisco and I love to have people come over and this weekend we’re doing what we call a Feast of Strength where we’re cooking like four chickens and we are doing the hot sauce tasting. We got like 20 types of hot sauce and then we’re going to try find our best one.

Dave Kruse: Nice.

Andy Sparks: Other one, lessons learned, and there are so many, there are so many lessons learned, it’s hard to pick, I mean the one early on is find great people to work with, that’s the lesson I learned is I think one of the most important things is just finding really good partners and I found that in Danielle and Kevin. Work on something that you really care about, I mean that’s the trope that you hear from every entrepreneur, but I think it’s a trope because there’s a lot of truth to it. You know, don’t wait forever to launch the product that you’re building, I mean, that another one, you also you also hear that all the time. I think another one is really understand and try to learn as much about hiring as soon as possible, I mean, because hiring is something that, you know, once you hire somebody you’re kind of stuck with them for a while and it’s kind of contract to another person that you want them to be there and they want to be there I think that took us a little while to learn how to hire the right people and that probably cost us a little bit of time early on, but something that I think we have gotten a lot better at, so those are a few, I could probably talk about a million more.

Dave Kruse: Yes, another time, another time right, but we probably have to hear about that hot sauce competition or contest, so anyway, really appreciate you coming on the show Andy. This is fascinating. I appreciate your time.

Andy Sparks: Yeah, absolutely. I’m glad and I hope you enjoyed it and I look forward to talking to you again sometime soon.

Dave Kruse: Sounds good and thanks everyone for listening to another podcast by Flyover Labs and we’ll see you next time, bye.