When investors like Google Ventures and Foundry Group bet their money on a software startup, we take notice. This was the case last Fall, when they and other investors put $1 million into Yesware, an innovative developer of sales productivity tools.

Boston-based Yesware was founded in 2010, and now has eight employees. The company has more than 20,000 sign-ups for its suite of productivity services which provide both an intelligence and productivity layer on top of Gmail and CRM products, including Salesforce.com, Microsoft Dynamics, Oracle CRM, Highrise, and others. 

Yesware for Gmail is free to individual salespeople and available for sales teams on a per-seat subscription basis, at $4.95 per user per month. Yesware for Android is available for a one-time purchase price of $4.99 via the Android Market. The company’s customers include KISSmetrics, SalesCrunch, StackOverflow, and others. 

Co-founder and CEO Matthew Bellows is somewhat unique in the world of software entrepreneurs, in that he isn't a technical guy; his background is sales. This gives him a perspective that's different from many, but, we'd argue, his point of view is exactly what the majority of startups need to hear.

Tip #1: The size of your opportunity determines the need for investors (or not)

"I've been there both ways," Bellows says. "I bootstrapped a different company, WGR Media, and sold that to CNet back in 2004, without any venture funding. 

"That one was based on the idea that people would play games on their cell phones. This was an aggregator and review site for the first mobile games, before the iPhone came out.  

"Then I worked as GM at a game developer. We raised a bunch of money, and sold that company to Zynga.  Then I went work as the VP of sales at a VC-backed startup, but left because a sale of the company wasn't imminent.

"I founded Yesware in June 2010. This time around, I realized that the problem we were trying to solve was bigger than we'd be able to do without help. The opportunity was big, but we needed resources to tackle it properly. We're going to raise more money. We're really all about growth at the moment."

Tip #2: Free software = revenue if you have a conversion path (and hook)

Thousands of salespeople use the free version of Yesware, which naturally begs the question, can Bellows turn his company into a financially viable concern?

"I think so," says Bellows. "A lot of people will use the free version forever, and that's OK. We want to give away a lot of value. Then we want to offer more and more things they can buy on top it. 

"Right now we have just one paid product, but we'll have more paid products on top of that, and we'll add more features, too. People can try and get benefit from the free version, and every few months we'll come out with something new and ask them, 'Does this help you make more sales? Would it be worth $5/month to you?' 

"If we can convert just 1 to 3 percent of our free users to paid users, then we have a profitable company."

Tip #3: How to beat the fear that "if it's free, it can't be any good."

"We haven't really run into any resistance from big companies," Bellows says. "We can’t afford to have enterprise sales guys going around knocking on doors, and a six-month sales cycle. The product has to sell itself. 

"Eighty percent of our users tell their friends about Yesware. We just haven't had that experience that people say, 'If it's free it must be bad.' They are willing to try it, and if it  installs in 10 seconds and starts working for them, then we just have to keep them engaged.

"We have a really obsessive focus on the problems that salespeople face, and a deep desire to make them more successful. Our business plan is simple: Help salespeople make more money, and they'll give us some of it."

Tip #4: Integrate with the big boys, and you won't have to fight them.

"We started with email, specifically Gmail," says Bellows. "That isn't the end; that's just the starting point. And Yesware integrates with almost every CRM system. 

"I really don't have any worry about competition from someone like Salesforce.com. Don't get me wrong, they can compete with anybody, and they're really, really good at executing stuff. 

"But I think they're much more likely to help companies like us, because we help make their product better; we improve the data that gets into Salesforce."

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