One of the most important — and hardest — aspects of running a scaleup is figuring out how to transition sales from being founder- to team-driven. Paul Teshima, CEO and co-founder of Nudge.ai, knows how important it is to growth.
Teshima is a Canadian-born serial entrepreneur who, as part of Eloqua’s executive team, grew that company to more than $100 million in revenue over 13 years before it was acquired by Oracle for US$957 million in 2012.
In 2014, Teshima launched Nudge.ai, a relationship intelligence platform that helps businesses find and build the right relationships to drive revenue. He secured an office in OneEleven and along with his co-founder Steve Woods (also a co-founder at Eloqua), and they have grown the company to 22 employees, landed several major enterprise clients and more than 20,000 B2B users on the platform.
Bilal Khan: How did you manage the transition of startup to scaleup when founders go from being the primary salespeople to building out the sales team?
Paul Teshima: One of the most important aspects of scaleups is figuring out how to transition sales from being a sales team of one as a founder to a sales team. It’s also one of the hardest. Founders often overestimate how much they actually know that no one else knows, decisions that they can make in their brains at the drop of a hat in a deal cycle. It’s really important to try and simplify and understand what could be translated salesperson that they can then repeat over and over again.
I also think that first hire is super critical to be much more of an entrepreneurial sales person. A classic best practice as you continue to scale is hiring them in groups of two so that you can start removing variables because it may not be the right time to transition it you didn’t hire someone with the right skills. That stage is really delicate and you will need to be patient.
Khan: Have you transitioned Nudge.ai into a sales team approach as opposed to the founders?
Teshima: I’d say that we’re still in founders plus a bit of hybrid sales teams. So we’ve got some salespeople working on that delicate transition period now. I can tell you that I’m already overestimating how much I think they know because I know and take it for granted. I mean, of course they don’t know, it’s in my brain still. It’s about being methodical. We just brought someone in to help us really try and simplify the sales process to determine what can be scalable.
Khan: When do you start thinking about finding a seasoned sales leader? Do you immediately find someone who can start building a sales machine or is this further down the road once you hit your stride?
Teshima: It depends on where you are on a revenue curve plus the capital you have and the talent that’s available at the time. There’s definitely an argument that you hire the Director of Sales first that can carry the bag and helps to scale that initial phase. But there’s also an argument about hiring a hands-off VP to go build up the entire team. Both require early evidence of some form of scaling. You have some sort of process that defines how the sales process works today and there’s some of the things that we know in terms of the metrics about it.
Khan: What are some of the key metrics for a sales success that you think are important?
Teshima: There’s obviously the output of generating revenue in the growth program. For us, we’re in a product-led model so it’s a little bit different and a little newer. We look at early stage interest as signing up for a user, finding a cluster of users account — is it qualified product lead? — and then we ask if we can turn that into a trial that converts to a paying customer. We look at those stages which is a little different than the classic B2B funnel.
Khan: In Canada, we talk a lot about whether we have the sales professionals with the deep skill set to be able to scale companies and do B2B sales. Has finding sales talent been a struggle for you?
Teshima: Are there less seasoned salespeople in Canada who have gone from $0 to $100M than in the Valley? Yes. Do we need to solve that problem? Absolutely.
I’ve been lucky that I’ve been part of the business that has gone from $0 to $100M in revenue (Eloqua) and we didn’t have anyone to rely on but ourselves. I think it’s just a matter of going in and doing it. You are seeing lot of seasoned people coming back to Toronto and as that continues to happen you’re going to see those people train others to get to the next scaling point.
[Sales] is really about the discipline of keeping in contact and helping others in your network, knowing that it will pay back over the long term. We did a study where we showed that the average head of sales has a strong network at work that’s three times the size of an sales development rep, which makes sense.
Khan: I wanted to talk about B2B sales cycles. Those are really challenging time frames in cycles to manage when you’re starting a company. How have you hacked in on the early stages of the sales cycle from a simple cash-flow perspective?
Teshima: The hardest part of closing an enterprise deal is first finding it and then getting involved in the sales cycle itself because they’re so inundated with a barrage of outbound outreach from all these customers. The strategy I recommend to scaleups is this: You have to show some pocketed value, lock them in and then go division-to-division quickly. And do it cheaper than a competitor. Try that approach versus just the top down approach right out of the gate.
Khan: Would you do that at the expense of generating any revenue?
Teshima: Enterprises today actually have slush funds to experiment with technology where they didn’t before. It is absolutely true that if they put some skin in the game, you’ll have a more successful pilot. This opportunity allows you to qualify those deals earlier. I think you need to be pretty disciplined about qualifying and if you invest in the cycles and then put a price on it.
Khan: So you’ve landed the customer and they are paying for the product offering. You’re coming to a renewal cycle and they scale back their offer. How do you address a situation like that?
Teshima: We haven’t had that happen at Nudge.ai. If I think back to me 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 customers that are existing. You should never forget that customers can always come back in and in champions can always move jobs. You always want to do right in those situations because you never know when you’re gonna meet them next in the ecosystem. Maybe they’ll evaluate it differently.
Khan: How do you think through channel partners strategically?
Teshima: In cloud software, it’s more challenging to have channel partners because of the nature of the product. On the technology side, there is probably good synergies. On the service consulting side, I think it’s harder. If you think training your first salesperson is hard, try training channel partners all your stuff, when they have 20 competing things to sell and they’re making a small margin on your product.
You first need to establish that you can direct sell your product in a repeated way before you think about channel partners. You can get lucky and find one strategic one and go big, but more often than not you’re going to find that they’ll get all excited, get trained and they’re not going to sell anything. Even if they do close something, maybe it’s not exactly the right fit. I’d say be careful with channel partners in early stages.
Khan: Are there any books that helped you in your scale journey?
Teshima: I am probably less of a book guy than I should be as a CEO. There are two books, however, that I found helpful:
- Jim Collins’ book “Good to Great”. I especially liked chapter five about managers and this idea that the best managers, CEOs and executives don’t even want the spotlight. They’re much better being extremely streamlined and determinedly humble, inwardly focused on driving change.
- “Switch” by Chip and Dan Heath. One thing that came out of that was this idea of focusing on the bright spot in your startup. As a founder, you’re geared towards focusing on what needs fixing. It’s actually better and more uplifting for the business to focus on the bright spots.
Betting on yourself with entrepreneur Tanya Gough
Armed with a passion for narrative literacy and a knack for content architecture, creative-industry entrepreneur Tanya Gough is driven to help make the writing process more interactive, collaborative and social with StoryBilder.
“Whatever you do will be wrong…until it isn’t,” says creative-industry entrepreneur Tanya Gough, about navigating other people’s feedback while building a tech platform.
Armed with a passion for narrative literacy and a knack for content architecture, Gough has created StoryBilder. It is an adaptive story-generating platform that transforms the way writing happens. The platform is aimed at helping storytellers build out their plots, characters and entire worlds to make the writing process more interactive, collaborative and social.
Gough is one of 50 women across Canada selected for the first cohort of the BANFF Spark Accelerator for Women in the Business of Media. With support from Western Economic Diversification Canada, this new program offers training, mentorship and market access to women entrepreneurs ready to grow or launch their own businesses in screen-based industries.
Leigh Doyle: You’re a big believer in narrative literacy. Can you tell me a bit about what is narrative literacy, and why do all of us need to sort of relearn it?
Tanya Gough: Narrative literacy is the ability to recognize and understand narrative structure in the stories around us. It matters because we’re surrounded by story, and it’s an incredibly persuasive format for transmitting information. When we understand story, not only are we better able to express our own stories and be heard, but it also gets easier to recognize when we’re being manipulated or lied to. And that gives us better defenses against fake news and makes it easier to differentiate between fact and fiction.
Doyle: How did the idea of StoryBilder come to you?
Gough: I was hanging out with a friend of mine who is a game designer, and we were brainstorming for an app we were working together on. At that moment, StoryBilder just happened for me. I knew exactly what it had to be.
I wanted to create an environment where people could not only write their stories, but that could also help them organize their thoughts and ideas. And, if they were new to writing or didn’t know what to do next, there would be support and tools to help them improve their craft. I also wanted to ensure the platform would foster creativity, which I think is missing in the market.
Here’s what it is and how it works:
Doyle: Who is StoryBilder for?
Gough: StoryBilder is currently designed to support creative writing, particularly for fiction novels. But the technology is adaptable. I’ve already got screenwriters who want to use it as a planning tool for their scripts. I have game developers who want to use it for world building. I even had a D&D master ask me if he could use it to build campaigns — and the answer to this is yes. StoryBilder is built around a narrative construction model that can be applied to any storytelling format. It can be used for a lot of different things.
Doyle: What author would you be thrilled to see using StoryBilder?
Gough: It’s so hard to pick! The obvious answer is George RR Martin. The idea of this huge epic world, with tons of characters spanning multiple books and managing all of the interconnected pieces, is a long-term ambition of StoryBilder. But, personally, from more of a literary geek perspective, I would say Michael Chabon who wrote The Amazing Adventures of Kavalier & Clay. It’s probably my favorite book of all time. Chabon writes these incredibly dense, complexly structured storylines with interconnecting plots and massively detailed backgrounds. This is the type of narrative I’m keeping back of my mind as I develop StoryBilder.
Doyle: When will StoryBilder be available to the public?
Gough: Right now, we’ve got beta testers helping me find the last of the bugs, and I’m doing some extra design work. Then we’re launching this summer. I’m looking forward to getting it into the market and getting the word out.
Doyle: You’ve owned a boutique CD and video store, the world’s largest Shakespeare video catalogue and created content for companies like BlackBerry, Shoppers Drug Mart and more. How have you seen the entrepreneurial landscape change for women over the course of your career?
Gough: If five years ago, you asked me if there would be any substantial change for women in business in my lifetime, I would have said no. And clearly I won’t see parity in my lifetime — just look at the numbers. But what I have seen — especially in the last few years — is a rising opportunity for entrepreneurial women to connect with each other. This is thanks to social media and groups on large networks like Facebook.
The women in these groups are not only talking about their challenges in a really honest way, but they are incredibly generous about helping each other and supporting each other through not only the bad stuff, but making sure that we’re all succeeding together. Change is happening now. It’s not going to happen as fast as people hope, but it will happen as long as we continue to support each other and continue to speak openly. Support and solidarity are incredibly empowering.
One of my big drivers for creating StoryBilder is this knowledge that more women need to have businesses to create a path for the next generation to follow. Someone needs to be out in front. And that’s where I need to be, with the rest of the women taking the hits and leading the way.
Doyle: What lessons do you have for entrepreneurs building tech platforms like Story Bilder?
Gough: The first is to forget about funding. Sure, there are stories about people getting funded at the idea stage, but it’s rare, and you’re new and inexperienced. Find another way and don’t waste all of your time chasing the money until you have something solid in hand.
The second is whatever you do will be wrong…until it isn’t. Take the time to experiment and try new approaches to make sure you’re solving the right problem in the right way. Likewise, if you are looking for funding, be prepared to hear you’re not ready — a lot.
Finally, do it because you love it. Starting a business is way too much work to do if you don’t wake up every morning excited to be working on it. Which isn’t to say you’re going to love it every day, but if you’re waking up every morning not knowing if you’re building the right thing, go do some market research or get out.
Connect with Tanya and StoryBilder on social media:
Digital transformation for a more sustainable world
Sure, they’re confronted with business challenges every day, but the world’s top business leaders have a significant part to play in solving the world’s challenges — economic, technological, societal and educational.
As Christian Klein, Co-Chief Executive Officer of enterprise application software company SAP succinctly puts it in a blog post for the World Economic Forum, “Companies today don’t just prosper based on their financial performance, but on how they make a positive contribution to society.”
Ahead of the World Economic Forum’s 2020 meeting — taking place Jan. 21-24 — Klein outlined how digital transformation can be a force for good in the world, and be a way to create a more sustainable world.
Critical minds, he starts, might wonder why companies would take the time, considering their primary goal of making money. “These critics should not underestimate the power of the consumer,” he argues, explaining that while customers do consider their decisions based on products or price, but the company’s values. Employees act in a similar way, choosing to join companies “that embrace their responsibility towards humankind and the planet.”
Almost every person on the planet knows that technology plays a profound effect on just about every facet of our lives, from jobs to wages to health to security. Meanwhile the need for business to undergo digital transformation, simply to stay relevant and alive, is hardly big news anymore.
“But transformation is also about a change of culture, which requires a radical rethinking of people, processes and technologies,” Klein writes. Included in this are “tectonic changes” that go into a company, and how employees interact within the whole system.
“And just like a business cannot digitally transform unless – or until – its people transform, I believe that, while they come with their own environmental costs, technology and digitalization can play a crucial role in developing solutions for a better tomorrow.”
Some examples? Blockchain’s potential to add traceability (and by extension, trust) to food supply chains. The empowerment of people with disabilities through AI, which, when properly applied, can reduce bias in the hiring process. Smart cities, powered by everything from sensors to open data to better supply services and protect resources.
[Related reading: How 5G and the Internet of Things can create a winning business]
“There is no doubt that technology and digital transformation break down silos and create transparent and unified data for objective decision-making,” Klein writes. “But even more so: they change how companies manage their relationships with the wider world.”
Creating a sustainable world requires us to look beyond corporate borders, toward the communities around us, creating an ecosystem of trust “that allows us to exchange ideas to create a safety net for the most marginalized.”
DX survey reveals high levels of enterprise-consumer disconnect
A new survey looks at the global investment and effectiveness of businesses’ digital transformation efforts. The survey shows a disconnect between enterprise investments and consumer experiences.
The survey is titled “The Kony Digital Experience Index (KDXi) Survey”, and the main takeaway is that while businesses have invested nearly $5 trillion on digital transformation initiatives, only 19 percent of customers have reported any significant improvement in the experiences offered to them.
The Kony Inc., survey included 1,600 responses from business leaders and customers across the U.S., Europe and Asia. The responses were used to gauge the target digital project implementation efficiencies in banking, retail, utilities and healthcare. The research showed a disconnect on both sides and a potential misalignment around investment priorities, and highlighted the impact this could potentially have for businesses.
Among other things, the study found that consumers are underestimating the number of businesses that are investing heavily in every customer experience outcome by at least 50 percent. This means that while business are spending money on digital transformation projects, consumers are not necessarily noticing a difference.
The survey also reported that 62 percent of consumers say that they spend more with companies that offer effortless digital experiences, while 56 percent of consumers indicate that they will switch if a retailer does not deliver the digital experience they want. This signals the necessity for businesses to continue to invest in the digital experience for the customer. However, in doing so they need to start making an impact.
As the report states: “It is critical for businesses to have a greater focus on understanding and aligning with customer needs and priorities to ensure that they are driving the agenda for the digital technology they create and fund.”
In terms of what businesses should be doing, the basis of a strategy includes:
- Embracing innovative thinking, ambition and a commitment to improvement
- Prioritizing investment in digital outcomes, not digital initiatives
- Getting their foundations right before evolving
- Building for now, but investing in a roadmap that leads to the future
- Saying no to silos and yes to integrated digital strategy
- Setting a customer-centered digital transformation agenda
This means companies should work to provide web experiences that make it easier for users to navigate, and for websites to be more engaging and intuitive to use. There also needs to be comprehensive online and mobile facilities so that users can do everything online or via their mobile device. Furthermore, to truly step forwards, businesses need to begin offering digital experiences such as AI, chatbots and augmented reality.
Summing this up, Thomas E. Hogan, chairman and CEO, Kony, Inc. states: “Improvements in costs and efficiencies are always welcomed and clearly important to project funding, but the real returns and real impact of digital starts and stops with its impact on the customer experience.”
Get more #ScaleStrategy
Sign-up to notified when the next #ScaleStrategy story about these amazing entrepreneurs, intrapreneurs and companies is published.
Investment3 months ago
4 ways to plan for the post-pandemic normal
Technology3 months ago
Five key trends shaping the application landscape
Leadership5 months ago
Organizational change expert says leaders should expect a new normal
Leadership2 months ago
The irony of industry disruption and digital transformation ROI
Investment2 months ago
Mary Anne Moser aiming to put Calgary Science Centre in global top 10