#ScaleStrategy is produced by DX Journal and OneEleven. This editorial series delivers insights, advice, and practical recommendations to innovative and disruptive entrepreneurs and intrapreneurs. Read the in-depth Q&A with Teshima here.
“One of the most important aspects of scaleups is figuring out how to transition sales – from a founder to a larger sales team. It’s also one of the hardest,” says Paul Teshima, CEO and co-founder of Nudge.ai, a relationship intelligence platform that helps sales teams to access new accounts, analyze deal risk, and measure account health.
And, he knows what he’s talking about.
Teshima is a Canadian-born serial entrepreneur and a rare breed too. His previous company, Eloqua, achieved unicorn status.
As part of Eloqua’s executive team, Teshima grew the company to more than $100 million in revenue over 13 years, through two economic crises, its IPO and its eventual acquisition by Oracle for US$957 million in 2012.
Today, from Nudge.ai’s office in OneEleven, Teshima and his co-founder Steve Woods (also a co-founder at Eloqua), are hoping to scale up again. Since launching in 2014, the company has grown to 22 employees, several major enterprise clients and over 20,000 B2B users on the platform. And they were recently featured in the Wall Street Journal on how AI is changing sales. It’s no surprise they’re gaining momentum given the growing need for digital relationship management support. After all, Google, Salesforce, Microsoft, Cisco, and more tech giants are moving into the space.
As Nudge.ai builds out a sales team, Teshima is leaning on lessons from his past and learning new ones about who, how and when to hire, what founders forget about when training newbies, and the art of cracking an enterprise deal.
From One to Many
When it comes to the first few sales hires, Teshima believes they should be entrepreneurial. His approach to building a high-performance sales team is what he calls a classic best practice: hire people in pairs so that you can start removing variables. For example, if both salespeople are having trouble, it may mean that it’s not the right time to transition. If one is successful and the other is not, then it could mean you didn’t hire someone with the right skills.
Nudge.ai is in the process of transitioning its founder-oriented sales team to a larger group. “We’ve got some salespeople working on that delicate transition period now,” he says. “I can tell you that I’m already overestimating how much I think they know because I take my knowledge for granted. I mean, of course they don’t know what I know, it’s in my brain still.”
As a company scales, Teshima urges founders to pause and appreciate how much they know about the business, and how quickly they can make decisions at the drop of a hat in a deal cycle. Those skills are not always things salespeople can do right away.
“It’s really important to simplify,” he says. “Understand what can be translated to a salesperson that he or she can then repeat over and over again.”
To support their success, Teshima focuses on being as methodical as possible throughout on-boarding and training. In addition, he brought someone in to help simplify the sales process to determine what can be scalable.
Hiring Sales People
Should you hire a Director of Sales or build the team from the bottom up? Teshima says it depends on where you sit on the revenue curve as well as the capital and talent that’s available to you at the time.
He definitely sees the value of of hiring a Director of Sales first who can “carry the bag” and help to scale that initial phase, but also agrees with the approach of hiring a hands-off VP to go build up the entire team.
“Both require early evidence of some form of scale. You have some sort of process that defines how the sales process works today and also key metrics about it,” he says.
Teshima acknowledges that finding sales talent can be a challenge. “Are there less seasoned salespeople in Canada who have gone from $0 to $100 million than in the Valley? Yes. Do we need to solve that problem? Absolutely. But you are seeing a lot of seasoned people coming back and as that continues you’re going to see those people train others to get to the next scaling point,” he says.
Closing Enterprise Deals
Enterprise deals are coveted targets for scaleups for the revenue, for the credibility, and for the learning that they offer.
“The hardest part of closing an enterprise deal is finding it,” says Teshima. “Getting involved in the sales cycle itself is challenging because decision-makers are so inundated with a barrage of outbound outreach. These buyers shut down and avoid dealing with 20 or 30 vendors.”
He says that if you’re going to play in the enterprise space, you should understand what you’re getting into. First, it’s difficult to get in. Secondarily, startups can’t wait out a 44-month sales cycle knowing the deal may not close. “You can, but you’ll be losing a lot of sleep,” he says.
Teshima’s scaleup strategy is to show pocketed value right out of the gate. “Lock them in and then go from division to division quickly. And do it more cost-effectively than the competitor. Try that approach versus just the top down approach.”
When it comes to offering freebies or deals to close a deal quickly, Teshima believes low-paid pilots can be risky.
“Enterprises today actually have slush funds to experiment with technology where they didn’t before,” he says. “You could be in a small little pilot where they throw money at you and you wouldn’t even know if it’s a real deal or if they’re throwing real resources behind it. It is absolutely true that if they put some skin in the game, you’ll have a more successful pilot. You need to be pretty disciplined about qualifying, and if you invest in the cycles then put a price on it.”
What about when enterprise customers who scaleback during the renewal process?
Teshima says he hasn’t experienced this yet at Nudge.ai, but in the earlier days at Eloqua, there were times when customers pulled back.
“It’s only a death cycle if you don’t learn from it for the other existing customers. You should never forget that customers can always come back and champions can always move jobs. You always want to do right in those situations because you never know when you’re going meet them next in the ecosystem,” he says.
Channel Partners Sales
In B2B sales, channel partners can be a tempting avenue to explore. While there are good synergies on the tech side – on the cloud and services side – it can be more challenging to have channel partners depending on the nature of the product, says Teshima. In fact, he warns against channel partners in the early scaling stage.
“If you think training your first salesperson is hard, try training channel partners on your product when they have 20 competing products to sell and they’re making a small margin on your product,” he says. “You can get lucky and find one strategic partner and go big, but more often than not, you’re going to find that they’ll get all excited, get trained, and not sell anything. Even if they do close something, it may not even be the right fit,” he says.
Instead, Teshima recommends, clearly establishing that you can directly sell your product in a repeated way before you think about channel partners.
Scaling a sales team isn’t easy. And it won’t happen overnight.
“My one piece of advice is that it’s never one thing,” he says. “It’s a million little things you need to do every day. That’ll make you more successful than trying to figure out the one thing that will help you hit the jackpot.”
Want more? Read the in-depth Q&A with Paul Teshima for more insights on scaling sales.