#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.
Growing world-class scaleup hubs through global lessons
Dean Hopkins, CEO at OneEleven, discusses how global scaleup hubs can learn from each other in order to build outstanding scaleups.
Any time a new global city or region emerges as a technology or innovation hub, the inevitable comparisons to Silicon Valley begin. New York as Silicon Alley, Israel as Silicon Wadi, and Toronto was recently dubbed Maple Valley to much scorn.
But it’s time for globally emergent innovation hubs to look beyond Silicon Valley as they work to build scaleup success, with each location learning from the specific lessons of one another to help all players in the community succeed.
Outside the original Valley, collaboration, diversity and connections into other ecosystems are major strategic advantages for any hub that wants to scale faster – more connections, more funding, more talent, more resources and more stories to share to teach others.
Just look at Stockholm: With a population of only one million, it has developed more Unicorns per capita than any other innovation ecosystem outside Silicon Valley. Among other things, connecting into other major hubs helped propel growth and seed opportunity.
With OneEleven now established in the UK, we’re applying lessons from two leading hubs — London and Toronto — to guide our strategy and propel our value. Both cities embody hard-earned scaleup lessons, like specialization, building ecosystem partnerships and leveraging the power of diverse leadership, that we believe are key to ecosystem and company success.
Focus on growing the greatest verticals
London has built an ecosystem around its strengths.
The city is by far the leading source of fintech innovation worldwide: it has the greatest concentration of fintechs and the largest workforce in fintech — it dwarfs everywhere else even New York. In the first quarter of 2017, London saw $421 million invested in its fintech industry pushing New York out of the top spot for fintech investment. The City of London has worked with a variety of institutions to rally behind this emphasis on fintech, bringing together government, educational institutions and various sources of funding to embrace the fintech ethos.
The lesson to be learned from London’s focus on fintech is that innovation hubs need to concentrate their efforts in certain sectors where they already stand out as a global leader.
In Toronto, we’re starting to see a lot going on in the deep AI tech space, through the Vector Institute and other organizations building on a research base of over 30 years by Dr. Geoffrey Hinton and his colleagues. Of course, there’s room for improvement. While research labs are popping up regularly, with big partners involved, Toronto and Canada are lagging when it comes to patents and application of AI tech. As we build up this sector of our innovation ecosystem, we have to develop a well-rounded AI industry that includes a robust IP regime to keep AI innovation in Canada.
Diversity in leadership
Both London and Toronto also boast the highest demographic diversity of global cities, and demonstrate how valuable entrepreneurial leadership from all over the world can be. Forty percent of London residents classifying themselves as other than white according to a 2011 census, and that diversity powers the tech and innovation ecosystem in the city. Recent research shows that immigrants and people from minority backgrounds in the UK are twice as likely to be early-stage entrepreneurs.
Toronto is similarly diverse in its population, and talent is one of the reasons the city is seeing global recognition as an innovation hub.
Canada’s fast-track visa program prioritizes highly skilled workers and entrepreneurs and was created as a talent magnet for Toronto especially – last year MaRS released survey results showing 45 percent of Toronto tech companies made international hires in 2017 alone, and 35 percent of respondents used the visas to hire.
Other scaleup hubs could build valuable leadership and collaboration from a similar approach to entrepreneurship: one which looks to bring in more diverse, global talent on the leadership side, as well as the wider talent side. Scaleup communities have to be competitive on the world stage by inspiring people from all over the world to come and build their businesses there, as a lack of immigration and global perspective can starve an ecosystem of oxygen.
Culture of collaboration
We’re very fortunate in Toronto to have a culture of collaboration that starts at the earliest stages of entrepreneurship, and continues throughout company growth. There’s a strong expectation that you will work together, and for that reason, forming a community in Toronto is almost a matter of course.
Hubs like MaRS, 111 and the DMZ, for example, have opened up prime real estate to provide space for young companies to grow and to foster their developing businesses. Canadians have proven they are wired differently and Toronto’s collaborative and inclusive culture is one of its strongest competitive advantages.
In London, there’s a hyper-competitive environment for businesses, and perhaps not as naturally collaborative of an environment. That might just be because the city has only just recently seen an effort made to boost that kind collaboration from organizations like the Scaleup Institute and Tech London Advocates.
But collaboration between government, academia and business is one of the things that makes London a world-class scaleup hub.
Collaboration between groups tends to be verticalized in the UK, with TheCityUK being a prime example; the industry-led body that represents UK-based financial and professional services companies showed that collaboration between financial institutions and fintech companies can speed up the process of creating innovative products and services. By looking at IP, regulatory compliance, data protection and privacy, TheCityUK provided seven possible models for collaboration between banks and fintech companies.
Big scaleup success stories can also influence the effort to increase collaboration in scaleup hubs — and London has some amazing stories to tell.
Renewable energy company Bulb grew from 85,000 customers to 870,000 in the space of 12 months, becoming one of the fastest-growing scaleups in the UK. The company’s founders Hayden Wood and Amit Gudka are immensely proud of their place in London’s ecosystem. This is how how big names in a scaleup hub can advocate for an entire community.
For our part at OneEleven, we’ll work hard to build up that kind of collaborative community and collective effort as we continue to expand into London’s innovation ecosystem. We want to ensure that the success of these companies continues past their early stage, into growth and on into the billion-dollar club. The middle chapter is currently not being written in London — despite early stage support for companies and big success stories — and that’s what 111 is here to address.
Global scale through collaboration
Innovation hubs around the world can also work together to take the friction out of companies expanding between markets. Furthermore, cooperating markets can increase their competitiveness by promoting an exchange of innovative business practices, and reap the economic benefits that scaleups can bring to innovation ecosystems.
London and Toronto are a good example of global collaboration, as they the two cities have begun to explore greater cooperation when it comes to facilitating expansion between hubs.
The Mayor of London’s promotional agency London & Partners has opened an office in Toronto to better encourage Canadian businesses seeking to expand to consider London for their next destination, and to support UK businesses seeking expansion into Canada’s market. Over the last decade, the organization says 44 London businesses have expanded into Toronto and 118 Canadian businesses have set up shop in London during that same period.
This is only the beginning when it comes to proper cooperation between these two cities: government, academia and innovation hubs should work together to encourage scaleups in their efforts to expand between international markets.
Greater than the global sum of our parts
At OneEleven, it seems to us that the unique evolution, and now collaboration, between the London and Toronto ecosystems signals the rise of a global network of innovation that is in its early stages. Such a global network, powered by the diversity of each market, promises to have a dramatic effect on the ability for scaling companies to access talent, customers, investors and partners much more easily. We are excited to be a part of the rise of this globally connected and collaborative ecosystem that builds on what was started in Silicon Valley, but brings innovation into the more global and highly connected digital present.
#ScaleStrategy Q&A: Borrowell’s Co-Founder on Why Scaleups Need Values More than Culture
Eva Wong discusses how the credit and fintech company keeps applying their values to support growth.
“I remember having a half hour conversation about building a sales team with our OneEleven office neighbour. He took me into a board room and wrote out everything that he learned and the mistakes he made in the nine months it took to build out his team. That’s just one example of our first value: humility. Admitting there’s someone 15 years younger who’s been in business way less than I have been, but who knows way more about this than I do,” she recalls.
Wong says values and the culture that emerges from them can help companies scale by bypassing cumbersome process and bureaucracy that can slow growing organizations. As Borrowell has grown from 4 to 45 employees, Wong says she has learned that values are more fixed — and crucial — than culture.
“In the early days, we talked about culture fit. Now we talk much more about culture contribution. [New team members] don’t have to fit into the existing culture. As we grow and change, the culture will too. The values are more important to hold true to,” she says.
Recently, John Ruffolo, the chief executive officer of OMERS Ventures, caught up with Wong to discuss why scaleups need to pay close attention to culture, how it impacts hiring and how to scale it as the company grows.
John Ruffolo: Why is culture so key for scaleups?
Eva Wong: There’s a really popular quote that says “culture eats strategy for breakfast.” Culture is what keeps larger companies agile. If people don’t intuitively do the right things on their own, you have to add process and that slows companies down. For us, as we grow, a really strong culture involves ensuring people understand how they help us continue to scale in a way that avoids bureaucracy.
Ruffolo: How would you describe the culture at Borrowell?
Wong: Culture isn’t about perks. It’s not about things we do for fun. Or how the company has shared interests. For us, it’s clearly tied to our values. Our values are:
- We’re high-performing and humble.
- We’re trustworthy and team-oriented.
- We love learning.
- Act like owners.
- Diversity makes us better.
Ruffolo: When the initial team came together, did all of you share those values?
Wong: I don’t think it was as explicit. When you come together as co-founding team, you just click. It was more implicit. We did read the Netflix culture deck and said “that’s what we want our culture to be!” We knew we’d have to articulate it one day because people were asking what our culture is and we wanted to be consistent in how we described it.
Ruffolo: How did the culture shift as you grew from 4 to 45 employees?
Wong: We didn’t have our values established or written down when we were four people. That came when we were maybe 16 to 20. It was a collaborative, organic, bottom-up approach where we asked employees, ”What’s different about working here than other places you’ve worked?” People shared different things and we came up with the values that way.
But as we continue to grow, culture is naturally going to change and we’re okay with that. It has to change. What we don’t want to change are the values. We want to add people to the company who add to the culture, not necessarily stick in the lanes. We recognize that as we grow and become more diverse those values can manifest differently. We still want people to act like owners, but it just might look different compared to where we were when we started.
One thing our VP Talent, Larissa Holmes, launched within the company is a competency matrix, which explains what behaviours we expect from team members at each level of the organization. For example, if you’re a senior director what does it mean to be ‘high-performing and humble’? It’s also a way for employees to know what competencies are needed to move from a manager to a senior manager to a director and how those things are tied to our values. Employees have to get better at exemplifying the values to move up in the organization.
Ruffolo: Do you think culture is playing a role for talent wanting to work with you?
Wong: One hundred percent it is. A lot of people will check out Glassdoor before they come in, so they already have a sense of our culture and values. We take the interview process seriously as well, since it will be their first real taste of our culture. On Glassdoor, people can actually post reviews of the interview process, even if they’re not hired. There are posts from people who we turned down but who wrote positive reviews of their experience. We try to make sure that people we are interviewing see and meet various team members from different levels within the organization. That’s important to us.
Part of the interview process is doing an assignment, which exemplifies our values as well. It’s not just about who can talk a good game. You have to produce good work, too.
Ruffolo: In interviews, how do you describe your culture to a candidate?
Wong: Like any company, you can put values on a wall. But you need to give specific examples of how you actually live them. Our value ‘act like owners’ is a pretty good way of encompassing us. We really do encourage everyone to think about what they would do to make the whole company successful — to put on their CEO hat and think about what’s best for the business. It encourages people to avoid thinking in a very narrow sense about their role.
Our ‘high-performing and humble’ value is a big part of who we are too. Humility helps us recognize that although we’re all really smart and capable, you can’t just operate as an island. You’re dependant on your teammates, and we need to listen to our customers. Humility allows people to be able to take a step back and have their ideas challenged by others.
Ruffolo: Is there one of your five values that needs to be taken to the next level?
Wong: The value — ‘diversity makes us better’ — is something that we’re working to improve on. Our goal is to have a gender-balanced company, and we’re not there yet. We’re currently at 40%, which is not bad, but it’s not evenly distributed within our company. We’re continuing to track as we grow as a team at different levels and different departments.
Obviously, diversity isn’t only about gender. There are a number of different metrics we measure, including the percentage of employees that are born outside Canada. Since we have this focus on diversity and inclusion, I think we’re more likely to attract and retain diverse talent and to promote people with different backgrounds and experiences.
Ruffolo: Which entrepreneur inspires you the most and why?
Wong: There’s an entrepreneur named Kim Scott who has written a great book called “Radical Candor”. I admire her because she’s been very effective as a business person and operator without losing her humanity. She still cares very much about her team, and I think she would say those two things reinforce each other, whereas some people think you can either be a strong operator or a good person. She said in order to be an effective operator, you have to care about your team and have authentic relationships.
Ruffolo: Are there are books that helped you in your scaleup journey?
Wong: I read a book by Adam Grant called “Give and Take”. He talks about people falling into one of three categories: givers, takers, and matchers. Within givers, there are smart givers and there are pushovers — those who give but not in a smart way. They tend to burnout and get taken advantage of. Of all those groups, those who do the best are the smart givers. At Borrowell, we ask ourselves: “how do I give smart without burning out or being taken advantage of?”
Ruffolo: What is your number one piece of advice for a founder in the scaleup stage?
Wong: Constantly reevaluate what you’re doing and make sure you’re still working on the highest value things. When you’re scaling, things are constantly changing and you have to keep reevaluating your role. Are you spending your time doing the most high value activities?
3 Things to Know About Scaling Culture Through Values
Co-founder and COO of Borrowell on the power of values
As Wong has helped grow Borrowell from a team of 4 to 45, she has learned that being clear on values is more important than maintaining a culture through scale. Culture emerges from a company’s values, she says, and both together help companies avoid the need to create cumbersome process and bureaucracy that can slow down growth.
“Values and culture are what keeps larger companies agile,” she says. “If people don’t do the right things on their own, you have add to process and that slows companies down.”
When Borrowell was first founded, they didn’t have their values written down, says Wong. As they grew, they needed to articulate those same values clearly for the scaling team.
“We first did it when we were about 16 to 20 people. It was a collaborative, organic, bottom-up approach where we asked employees, ‘What’s different about working here than other places you’ve worked?’ People shared different things and we came up with the values that way.”
About a year ago, as growth continued and Borrowell raised another round of funding, Wong and the rest of the management team knew they needed to add one more value: diversity.
“We care a lot about diversity. Checking off a diversity box and getting them in the door isn’t enough. We want diversity of opinions and to retain diverse employees,” she says.
Today, Borrowell’s values are:
- We’re high-performing and humble
- We’re trustworthy and team-oriented
- We love learning
- Act like owners
- Diversity makes us better
For scaleups looking to refine their values and culture, Wong has three key lessons she has learned through the evolution of Borrowell.
1) Values Over Culture
“It’s more about values and less about culture,” says Wong. “We’re open to our culture changing, but want to keep our values consistent.”
In the early says, she says, the founders talked about culture fit, while now they talk about culture contribution. Employees don’t have to fit the existing culture or share the same personalities as current employees because those things will grow and change as the company does.
In fact, Wong wants to see a diversity of culture at Borrowell and is open to seeing their values manifest themselves differently as they continue to grow.
“We want to add people to the company who add to the culture, not necessarily stick in existing lanes. As we grow and become more diverse those values will look different. We still want people to ‘act like owners’, but it just might look different as we grow compared to where we were when we started,” she says.
2) Ask About Values When Hiring
One lesson Wong learned through trial and error was to be explicit in interviews about the company’s values and share what they mean.
“We take the interview process seriously, since it will be a person’s first real taste of our values and culture,” she says. “We embedded our values into the process and we have specific questions we ask during around each of the values to make sure people are aligned with them.”
Part of the interviewing process at Borrowell is to do an assignment, which helps the team see the work a candidate actually produces.
“It’s not just about who can talk a good game,” says Wong. In addition, candidates interview and meet with various people from different levels within the organization who discuss how values are executed throughout the company.
3) Empower Employee Success with Values
Wong and her management team have taken their values one step further in an effort to support the scaling company.
“When we started, people were in contact with the founders every day. But as we’ve grown, that’s less true. So we need to define what each of our values mean at different seniority levels and not just demonstrated by the management team.”
To address this, they launched a competency matrix that defines what skills and behaviours are needed for the values at each level of the organization.
“If you’re a director, what does it mean to be high performing but humble,” she says. “We’re communicating what it takes to move from a manager to a senior manager to a director and what is expected. It’s part of the promotion process. Employees actually have to get better at exemplifying the values to move up in the company.”
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