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#ScaleStrategy: Growing sales from one to many

How Nudge.ai CEO and co-founder Paul Teshima is using hard-earned lessons from the past to transform his startup sales team into a scaling one.

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Steve Woods, Paul Teshima
Nudge.ai was co-founded in 2014 by former Eloqua executives, Steve Woods (left) and Paul Teshima
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#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. 

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Which innovations will shape Canadian industry in 2019?

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Canada
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Canada is in the midst of an economic shift. New and traditional industries are increasingly being driven by innovation and these advances in technology are shifting the economic landscape at an unprecedented pace.

This is the assessment by Borden Ladner Gervais, which is Canada’s largest law firm. The company has issued a new thought leadership report, titled “Top Innovative Industries Shaping the Canadian Economy”.

The report weighs in on the opportunities and risks Canada faces in order to maintain its status as an international leader in innovation across eight key industries: cybersecurity, the Internet of Things, smart cities, cryptocurrency and blockchain, autonomous vehicles, fintech, renewable energy and cannabis.

To find out more about the report and its implications for Canadian businesses, Digital Journal spoke with Andrew Harrison, a partner at BLG.

Digital Journal: Where does Canada stand as a global tech innovator?

Andrew Harrison: Canada has always been at the forefront of innovation. Products developed by Canadians or Canadian companies encompass a variety of industries and include medicinal insulin, the snowmobile, the telephone, the pager, BlackBerry Messaging, IMAX, the Canadarm and the goalie mask, to name a few. Canadians are also fast adopters of new technologies; email money transfer between individuals, which was inconceivable only a few years ago, has been used by 63 per cent of Canadians.

This is why Canada is recognized worldwide for its research and technological know-how, but we have to be mindful of the challenges in a global competitive market.

DJ: What potential does Canada have to grow faster? Is this sector specific?

Harrison: Canada is well positioned to succeed and take the lead in all innovative industries, but there are definitely sector-specific challenges that could limit this growth. For example, the lack of regulation as to whether cryptocurrencies are considered securities or not is creating uncertainty, which may restrain investment in this sector.

DJ: What are the risks that could hamper innovation and development?

Harrison: For any new product, financing is always an issue; with innovation, money becomes an even more crucial element. Companies must have access to capital – including from individual and institutional investors – if they want to bring their innovative product/process to life. Evolving politics and policies can also have a significant impact.

DJ: What framework will Canada need in the future to secure its innovation potential?

Harrison: The key element is finding a proper balance between regulating the issues that might be created by the innovation itself or its use and providing a space where innovations can thrive without too many restrictions.

DJ: What does the Canadian government need to do?

Harrison: In many cases, laws and regulations were enacted long before we saw these innovative technologies and products brought to life, so they need to be updated. In certain sectors, such as cryptocurrencies and autonomous vehicles, the Canadian government has yet to provide a framework that would define the playing rules for all participants.

The government will also need to take a look at its current regulations on privacy: the coming into force in May 2018 of the European General Data Protection Regulation (“GDPR”) and recent high-profile data breaches have created the need for stronger privacy guidelines. Failure to do so could prevent Canadian businesses from accessing the European market.

DJ: What can academia contribute?

Harrison: Universities play a big role in fostering innovation – they could be the home of research and innovation and incubators of ventures, entrepreneurs, and tech talent. Universities can partner with industry players and have their researchers work closely to solve key industry issues. This is already happening in Canada. The Smith School of Business and Scotiabank, for instance, have partnered to set up the Scotiabank Centre of Customer Analytics at Smith School of Business to bring together professors, graduate students and analytics practitioners to collaborate on applied research projects in customer analytics. The academia plays a big role in creating an innovation ecosystem.

DJ: What is Canada’s most pressing technological need?

Harrison: There is still much work to be done to connect with Canada’s rural and remote communities. In 2016, the Canadian Radio-television and Telecommunications Commission (CRTC) declared that broadband Internet amounted to an essential service and adopted minimal performance standards across Canada: 50 megabit per second download and 10 megabit per second upload. However, the evidence presented to the Committee by a variety of stakeholders shows that the digital divide remains prominent in Canada – it is estimated that it will take roughly 10 to 15 years for the remaining 18% of Canadians to reach those minimums. Canada needs to develop a comprehensive rural broadband strategy in partnership with key stakeholders and make funding more accessible for small providers.

DJ: What type of investment is needed with skills and training?

Harrison: Canada has a serious shortage of tech talent, which makes it imperative for both the government, the education, and the business sector to invest in raising and fostering STEM talents. To help businesses attract the talent they require, the federal government is offering hiring grants and wage subsidies to offset payroll costs for recent post-secondary STEM students and graduates.

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Poor IT integration racks up massive costs to companies

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Analysts Cleo have released survey results from 100 IT decision makers, which found that B2B, application and cloud integration challenges amount to a $500,000 loss to enterprises each year.

Another important finding from the report is that poor integrations and lack of resources contribute to hundreds of lost orders each year, leading to annual revenue losses in the range of $250,000-500,000 for 57 percent of those firms surveyed.

As well as spelling out the cost implications, the survey also aimed to identify core business problems behind integration challenges:

  • Experience: The survey found that while 95 percent of the surveyed companies strive to enable their business ecosystems, 38 percent reportedly lacked confidence in their capacity to scale to support the integration initiatives foundational to doing so.
  • Complexity: In relation to this, 63 percent of Information Technology decision-makers stated that new business onboarding is too complex and takes too long.
  • Resources: 29 percent of companies reported they lacked the skilled resources to build and manage integrations between systems, applications and partner ecosystems.
  • Legacy systems: 22 percent of respondents indicated that legacy technologies cause significant delays in generating new revenue. Following this, 81 percent of companies in this position said they believe replacing legacy systems will support emerging business initiatives.

These factors led Cleo CMO Tushar Patel to say: “The overwhelming consensus from these IT decision-makers is that new business demands – many of them brought by forces outside the company – are putting additional pressure on organizations and technologies to deliver better ecosystem integration solutions.”

He adds: “And when they can’t, it’s costing the business money. But for many of these organizations, it’s not an immediately solvable problem because they don’t have the strategy, the tools, the budget, or the resources to execute on these revenue-impacted initiatives.”

In terms of remediation activities to address these obstacles, the vast majority of respondents stated that modernization is key to consolidating disparate technologies, automating data transaction processes and gaining visibility into their critical data flows. These reasons account for why over half of the enterprises indicated they plan to modernize their integration and IT infrastructure in 2019.

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#BoardForward crowdfunding campaign aims to boost female board leadership

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Shannon Gordon is the CEO of theBoardList
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Diverse board leadership is becoming a priority for public and private companies, and discussion around the topic continues to grow. From the business community to the public at large, the lack of diverse leadership is increasingly seen as a detriment to company performance.

Only 9 percent of unicorn companies — companies with a valuation of $1 billion and up — have board seats filled by women despite evidence showing diverse boards lead to better business outcomes.

While governments are starting to take note — California recently passed legislation to ensure that at least one member of a public company’s board is a woman — private and public companies are still being urged to build more inclusion into their company boards.

Curated talent marketplace theBoardList is one such organization looking to drive change and empower female business leaders across industries and build a new kind of diverse boardroom. The organization already has more than 5,000 members, and is looking to increase its community through a new #BoardForward crowdfunding campaign.

The campaign seeks to raise $200,000 to help the organization find more female board candidates, prepare them for board service and help them find a board placement.

Shannon Gordon,CEO of theBoardList, spoke to DX Journal about the priorities of the crowdfunding project.

DX Journal: The launch video for the crowdfunding project states that “Boards lack diversity because networks lack diversity” — can you unpack that?

Shannon Gordon: The vast majority of board searches, in fact 96 percent of them, are filled via referral. So inherently, they’re dependent on networks. The only way you’re going to get diversity in the boardroom is if the networks are diverse, and today the vast majority of CEOs and boards are made up of men.

Of course it’s not true that men don’t know great women. But we do know that it’s a human tendency to find people who look like you, act like you, and think like you when looking for new colleagues. It’s that homogeneity in those networks, in part, that drives the lack of diversity in the boardroom in particular because it’s such a network-based form of search.

DX Journal: Now you’re launching the #BoardForward crowdfunding campaign. Why go the crowdfunding route?

Gordon: We have a really engaged community of people who are very excited and anxious to support an increase in diversity in the workplace generally, and are looking for the right tools and systems to help make that happen.

Because theBoardList offers a solution, there are so many different ways which we can advocate for diversity. Advocacy is a very important part of driving change, but we’re really passionate about providing a solution and a tool for people to use for when they come to realize that diversity is something that will help their company reach its peak performance. We’re there with a solution.

For us, the crowdfunding campaign is about harnessing that engagement and enthusiasm and desire to make change from both the community and the public. So much of the context in the last year plus has shifted, and I think people are looking to make their own personal impact.

DX Journal: You want to scale your platform — what does that mean?

Gordon: It’s a couple of things. The first is reach. We started initially focused on the tech community, but very rapidly moved beyond that, and now we cover virtually all industries.

We want to make sure we continue to drive depth into each of those industries. Every time someone comes to theBoardList, we want them to find the perfect board candidate. That’s our aspiration. So we want to make sure we are talking to, and reaching, all of those qualified women who have the potential to be that candidate.

The second thing is that we want to continue to make investments in our platform technology. As we scale the community, we need to be able to effectively match candidates with the right opportunity. So we’ll continue to make investments in our ability to do that matchmaking effectively in our search algorithm.

Lastly, we want to make sure that we’re driving demand. There are many companies that already see the value in diversity and are actively looking for female candidates. But there are also many that haven’t realized this yet. We want to be talking to those companies, so we’ll need to scale the team and scale the reach to be as effective as we want to be.

DX Journal: What kind of success has theBoardList seen so far?

Shannon Gordon: We’ve grown our community to more than 5,000 people so far, 80 percent of whom are CEO or C-suite or board of directors already, so it’s a very premium talent marketplace. 

We’ve also had more than 550 searches on the platform since it launched in 2016. It typically takes about nine months for somebody to find a board director, and we’re exposing additional candidates who might not have been found before.

Finally, almost half of our placements have been women who are serving on their first board. Which means that through theBoardList, they found their first board seat. That’s really exciting for us because what we want to make sure we promote mobility for women who are perhaps just below board service, but haven’t gotten a chance to serve yet.

DX Journal: How have you been growing your network up to this point?

Gordon: It has been almost entirely word of mouth which is why we’re so excited about the impact we’ve had. But we’re also excited to use the crowdfunding campaign to help us get some of the capital we need to extend that impact.

In order to identify talent that is truly ready for board service, we leverage a network of board directors — people already sitting on corporate boards. They are some really impressive individuals that we know have impressive networks of people around them. We’re aggregating those networks. So inherent in our business is a word-of-mouth phenomenon, as we ask people to nominate women from their network for board service.

We want to extend that impact, which is why we’re launching the #BoardForward campaign.

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