In this edition of One the Record, we chat with Derek Steer, the co-founder and CEO of Mode Analytics.
Among other things, you'll learn how Derek was able to acquire the Mode.com domain name even after he thought the opportunity was lost, and what domain name advice he has for entrepreneurs.
Can you tell me a little about what Mode does, and how your own background may have influenced your decision to create Mode?
Mode combines the best elements of interactive Data Science (DS) and collaborative Business Intelligence (BI) into a single platform, bringing the data team together with the rest of the business to enable fast, high-quality data-driven decision-making.
I was personally inspired to co-found Mode through my prior work experiences on the analytics and data science teams at Facebook and Yammer (where I met the other co-founders).
The problems those companies were trying to solve were very similar -- along with other forward-looking technology companies like Google, LinkedIn, Zynga, and many others. All of them were hiring people who were good at solving complex problems and asking them to develop a deeper understanding of the business' dynamics through data. And to support those people, all of them built tools themselves.
My co-founders and I started Mode to fill that gap. We knew that everyone else wanted to work like Facebook but wouldn't be able to afford to build tools themselves.
How many employees do you currently have, and roughly how many customers do you work with?
Mode currently has more than 100 employees and works with over 500 customers. Historically, Mode has served fast-moving start-ups and early adopters like Lyft and Twitch, who want to grow their businesses as fast as possible.
With the rising popularity of cloud data warehousing (Snowflake, Google Bigquery, Amazon Redshift) and the ecosystem developing around them (Fivetran, DBT, Mode) sophisticated data analysis solutions have become much more affordable and accessible to this market, so nearly any business can see strong ROI from building out their data proficiency. More recently, we've seen larger companies working like the small, nimble ones: Mode has started to serve enterprise companies such as Anheuser Busch, Capital One, VMWare, Conde Nast, and many more.
Where did the Mode brand name come from? How did you go about initially naming your startup?
We began by brainstorming, threw a bunch of stuff on a whiteboard, and asked our friends for their opinions about various statistical and mathematical terms.
Mode refers to the statistical term for the most commonly occurring item in a set. Interpreted more broadly, it refers to the standard way of doing things. That's a really positive association. Plus, it's a memorable 4-letter word. And the letter M is such a great mark to work with from a branding perspective.
Does domain name availability come into consideration in the early stages of a startup's life?
Yes, absolutely! For software companies, it's how most people remember and access a brand, so it should definitely be a top issue for consideration.
When we first started Mode seven years ago, we wanted to buy the domain name Mode.com but didn't have enough money to buy it. We went with modeanalytics.com, figuring that we would want to pick it up eventually as we grew. Mode.com was a marquee address, like the house on the corner that you want to move into once you can afford it.
When did you first hear that the Mode.com domain may have been for sale?
A company called Glam Media rebranded to Mode several years ago, and they acquired the Mode.com domain. They had raised quite a bit of VC funding and appeared to be growing really quickly, so we thought we would never be able to get the domain.
But after owning the domain for a couple of years, they went out of business abruptly and their assets were broken up and sold. At that point, we had the opportunity to bid, but not just for the domain name -- it was bundled with a bunch of intellectual property and other assets.
We really didn't want some of the other things included in that bundle, and our bid was too low, and so we didn't get it. But then, whoever ended up purchasing the lot didn't want the Mode.com domain, so it came back on the market around a year later. That's when we bought it.
How long did it take you to close the deal to acquire Mode.com?
From the time we founded Mode in 2013 to the time we acquired the Mode.com domain, it was around 5 years. But once our final bid was accepted, it was a 2-month period to get everything finalized and transferred over. We structured our payments over the course of the year and used an escrow service to hold the payments and the domain.
How did you go about determining your best offer for Mode.com? Did you base it on metrics such as your MRR (monthly recurring revenue), or were you guided by comparable sales data or expert opinion, for example?
We were guided by comps on what people were paying for other 4-letter domains, in combination with our estimation of how competitive the situation was. At the time, we were the most well-funded company called Mode that might want the domain, so we were pretty confident that we would be able to outbid any other interest.
I see on your website that 52% of Fortune 500 companies rely on Mode. Does owning Mode.com make it easier to get your foot in the door? Are customers more likely to place instant trust & credibility into Mode by just seeing that you operate on Mode.com?
It's hard to quantify, but it's quite possible that some of our customers look at us as less of an early-stage startup because we own the Mode.com domain. Perhaps more importantly, we want to create great domain authority for the brand that we plan to use forever.
For example, many of our inbound customer leads come through our SQL School, which is one of the most popular tutorials on the internet. So, as we accrue more awareness for that offering, we would like it to benefit the main brand that we plan to use for the foreseeable future.
What would be your advice to other startup founders who may be considering a premium .COM purchase?
.COM domains are going to continue getting more valuable with time, not less.
There's a perspective out there that people will be able to find you through search regardless of your TLD, but the reality is that we are already conditioned to believe that .COM is better than other options. There's an inherent trust in .COM domains, where .IO and .LY instantly make us think "startup".
So, choose the name of your company with an eye toward what .COM domains are available now because if you end up becoming big and successful, you will want that domain eventually.
Thank you to Derek for taking the time to take us behind the scenes for an On The Record interview about Mode.com. If you want to know more about Mode Analytics, you can go to Mode.com or follow the company on Twitter @ModeAnalytics.
Answers have been edited for clarity.