SaaStr Podcasts for the Week with Matt Garratt, Trisha Price, David Schmaier, Rob Bernshteyn, and Jason Lemkin


This post is by Amelia Ibarra from SaaStr

Ep. 359: The Secrets to Vertical Growth, What it Really Takes to Build a $1B SaaS Company with Matt Garratt, SVP, Managing Partner @ Salesforce Ventures, Trisha Price, Chief Product Officer @ nCino and David Schmaier, CEO & Founder @ Vlocity. From strategies in recruitment and team building to sales tactics, these leaders from Salesforce, nCino, and Vlocity, will discuss the top tips for moving beyond horizontal SaaS and building a billion-dollar SaaS company.

 

This episode is sponsored by Linode.

 

SaaStr’s Founder’s Favorites Series features one of SaaStr’s best of the best sessions that you might have missed.

This episode is an excerpt from a session at SaaStr Summit: Enterprise. You can see the full video here, and read the podcast transcript below.

 

Ep. 360: Digital transformation marks a radical rethinking of how companies use tech, people, and operations to fundamentally change their business performance. Coupa CEO, Rob Bernshteyn, and SaaStr CEO, Jason Lemkin, will discuss how the Cloud has changed in 2020.

This episode is sponsored by Guideline.

 

This episode is an excerpt from Jason and Rob’s session at SaaStr Summit: Enterprise. You can see the full video here, and read the podcast transcript below.

 

If you would like to find out more about the show and the guests presented, you can follow us on Twitter here:

Jason Lemkin
SaaStr
Matt Garratt
Trisha Price
David Schmaier
Rob Bernshteyn

We’ve shared the transcript of episode 359 below. You can also jump down to the transcript of episode 360.

Transcript of Episode 359:

Matt Garratt:

Thank you. I’m really excited to be here today. I am Matt Garratt, Managing Partner of Salesforce Ventures, and we will be talking about the secrets to building a $1 billion vertical SaaS company, and we’re very fortunate to have two executives from leading enterprise software companies who have done this.

So first, Trisha Price, who is the Chief Product Officer of nCino, who recently had an amazing IPO, and also David Schmaier, who’s the founding CEO of Vlocity, and CEO now of Salesforce Industries, as they were recently acquired by Salesforce for over a $1 billion, as well. So, very excited to have both of you with us today, and thank you so much for making the time.

Before we go into our stories [inaudible] a bit more, provide a bit of context. I’ve had the fortune of working with both of you over the last few years and seeing, really, the change in the vertical SaaS industry change over a number of years. We’ve invested in over 300 companies at Salesforce Ventures and have partnered with both of you closely and it’s been amazing to see this story up close and personal over the years.

Matt Garratt:

I remember a few years ago when companies were out fundraising, vertical SaaS was not as popular as it was today, and part of that is, the adage would go that, “Well, these are smaller TAMs and these are going to be lower gross margin businesses, and if you look at the chart we’re showing, the gross margin in the early days can be as low as 30% and maybe getting above 50%. There’s a lot of services. Are these really product companies? There’s heavy services, at least 30 to 45% versus best-in-class that want to be less than 10%.”

Matt Garratt:

But then when you start to grow and you start to get these customers, you see some really nice benefits. These companies can scale really efficiently. They need fewer sales as a percentage of overall employees. When you look at sales efficiency as measured by magic number, it’s quite good. Retention is much better than most businesses and then the upsell opportunities are quite good, so it’s not surprising that while maybe not so popular a few years ago, you’ve seen quite a few successful exits in this space. A few of the leading companies in the Cloud 100 list, as put together by Forbes, of leading enterprise software companies are in industry verticals and just on the Salesforce platform, the three most valuable companies built on the platform were industry-vertical companies, including nCino, Vlocity, and Veeva.

Matt Garratt:

If you just look at Vlocity and nCino, amazing businesses. Grew to over a hundred million dollars in revenue in five years. As I mentioned, acquired by Salesforce for over a billion dollars and nCino, amazing business. Had a fantastic IPO recently valued depending on stock price around $6 billion, so we wanted to hear firsthand: How did you do this? We have, again, David Schmaier of Salesforce Industries. David, maybe would you give us a quick background about you and what gave you the idea to start this company?

David Schmaier:

Yeah. Thank you, Matt, and it’s great to be here. Thanks for inviting me and welcome to all the folks from SaaStry. I’ve been working in the front office space for 34 years, so I’ve been doing this a long time and when I started, the worldwide market for what we now call CRM software was $50 million globally and so I worked back out of graduate school at a small company called Oracle in the ’80s and I met a guy named Tom Siebel there and I went off and founded a company called Siebel Systems with him and I met another guy named Marc Benioff who went off to found Salesforce, so I was either smart or lucky, and either answer’s okay by me, but maybe a little bit of both.

David Schmaier:

But I had built CRM and then I had built industry-specific verticals, actually over 20 in my prior life, and a few of my colleagues worked with Salesforce right when the app exchange started to found a company called Veeva Systems and Veeva became, I think, it’s still the biggest company ever built on the Salesforce platform and as the worldwide leader in life sciences CRM, and so I saw how successful Veeva was and I went to my first Dreamforce in 2013 to find the next Veeva and what I found was incredible. I was amazed by how big Salesforce was in the ecosystem. I was amazed by the app exchange. I think back then there was 2,800 companies. Now, there’s 5,000 and 2,799 of them were horizontal software companies and one was Veeva. Actually, two. I think nCino had been already started, but I didn’t see nCino there, I didn’t know of them then, so maybe there’s a couple of vertical SaaS companies, but Veeva was a big one and it became clear to me that this was a huge opportunity.

David Schmaier:

I’d built verticals before, so I called up my old friends from Oracle and Siebel who founded Veeva and I got together the next morning with the three Veeva founders, and of course it wouldn’t be a great software company without a cocktail napkin, so on a cocktail napkin, we drew out the strategy for what became Vlocity, so that’s how we got started.

Matt Garratt:

Fantastic. Trisha, I’d love to get a bit more of your background for everyone and then talk about the founding story of nCino, which is certainly a little bit different than Vlocity.

Trisha Price:

Sure, Matt, and David, the reason you didn’t know about the other industry vertical is because that stage, we probably had like two customers or something like that, so we were just too small to be on your radar back then, but I appreciate the chance to talk to everybody today, Matt.

Trisha Price:

nCino is a little bit different in its background. We were actually built out of a bank called Live Oak Bank and Live Oak Bank was founded in 2009 and they had a need for a completely digital bank. Well, to most of you, that may not seem crazy today. You may even engage with a bank that is completely digital today, but at that time, it was pretty much unheard of to have branchless institutions, and so they started looking around for the right software to help digitize their processes and Cloud was important to them for scalability and they couldn’t find anything, so they started working on this concept of digital banking in the Cloud, and from there, very early on, we spun out and created nCino, which is Spanish for Live Oak, and we created nCino.

Trisha Price:

Our roots from the very beginning were built by bankers for bankers and from the very beginning, we made the choice to build the application on the Salesforce platform and since then, we’ve scaled quite a bit. We have over 1100 customers across the globe. We have offices in Tokyo, Sydney, Melbourne, Toronto, Salt Lake City, and then our headquarters here at the beach in Wilmington, North Carolina, and we have over 900 employees.

Matt Garratt:

Super. We went to the idea, so let’s talk about the different phases of building a $1 billion vertical SaaS company. David was kind enough to share this framework that he uses. David, you talked a bit about the team and the founders. Can you talk about maybe a little bit broader than the initial founding team and when you were first hiring people, how did you think about hiring people who had SaaS and software experience versus people that had industry-specific experience?

David Schmaier:

Sure. I think the team is probably the most fundamental step, maybe even more important than the idea, so I’m a big believer in Jim Collins’s book, Good to Great, where “You want to get the right people on the bus and then figure out where you want to drive the bus to,” and luckily from my prior experience, I was able to call a few of my old colleagues who were like-minded, and I think that’s the key is if you’re starting a company, it sounds glamorous, but it’s 24 by seven and it’s a lot of work, it’s exciting, it’s thrilling. There’s amazing highs, but there’s low lows, too, and you have to do everything. You have to plug in the computers, you have to set up the network, you have to figure out how to pay people, you have to find office space, all that stuff.

David Schmaier:

But we found a team of people who are really passionate about building software and building a company and so I went through my Rolodex of top people that I knew from my prior networks of companies and there was a founding six and ultimately 10 of us that banded together in a little low-cost office to figure out how to build a bunch of industry Cloud verticals, and then the key part, which I think we’ll get to later, is we figured out that we had to do it with a partner and so there was no other choice in our mind, we were all aligned at doing it with Salesforce. That was maybe the other most fundamental decision besides the team is the partnership with Salesforce.

Matt Garratt:

Thank you. Trisha, similar question: When you were starting to hire and scale out the team in Wilmington, were you focused on people who had experience in financial services or software experience or a little bit of both and how did you balance that?

Trisha Price:

Yeah, I mean, I couldn’t agree more with David. At nCino, it all comes down to the people and execution, right? Ideas are a dime a dozen, lots of people have lots of them, but to make a company successful, it takes grit, it takes determination, it takes a certain attitude, it takes relentless focus on customers, and that is just a level of execution that you need to get to the kind of success that David’s company and we at nCino have had, and so we’ve always been one to hire for attitude and aptitude more than a specific skill set.

Trisha Price:

Now, in an industry vertical like financial services, you absolutely have to have a deep banking experience and the built by bankers for bankers has been a part of our core DNA, so we absolutely have hired lots of folks with a banking background, but the problem you get if you only focus on folks with a banking background is the faster horse’s problem and what I mean by faster horses is they know how to automate the processes that already exist at a bank, but that’s not really going to disrupt an industry, that’s not really going to get people to get off of their current systems and processes, and so it’s not about faster horses, it was about inventing a car, right?

Trisha Price:

So, how do you get people who are innovative, who can think outside the box? It does require, certainly, people with technical background. For us that didn’t necessarily mean Salesforce. We’ve tended to hire just the best attitude and aptitude full-stack developers we can find and Salesforce has such a plethora of trailheads and training that that’s not really an issue, and so it has been a combo, I would say, of three types of people: the best technical talent we could find with the best attitude, certainly people with deep domain experience, which is needed in vertical SaaS, and then those out-of-the-box thinkers, those inventors, those creative folks who can really cause you to think about things in a different way.

Matt Garratt:

Well, I can attest to the commitment to hire for aptitude versus specific skills. I don’t know if you recall, but we were at dinner one time and there was a waiter that she just blew us away. We were really impressed with her and she ended up becoming one of your… I kept saying, “You need to hire her,” and she became one of your customer success managers, if I recall.

Trisha Price:

Yes.

Matt Garratt:

A full testament to you never know where great talent is going to come from.

Trisha Price:

That’s right.

Matt Garratt:

Let’s move on to the initial product. David, can you talk about the initial product that you took to market? Maybe to provide some framework, I generally think of industry-vertical solutions of having to be sort of full-stack and a bit broader than a horizontal app, and so there’s generally a higher build upfront. Can you talk about the first product and how did you know it was done or at least ready to take to market in the first place?

David Schmaier:

Sure. Yeah, I’m a product person by training and so we had had a lot of experience building SaaS and vertical products. The key for us was we were building not one industry Cloud, but four, and then at Vlocity, we later added two more and expanded to six, so the secret of building one vertical SaaS product is going deep. The secret to building more than one is reusing components so that you don’t have six engines that do the same thing, that you reuse that engine and you get to use what we call metadata to reimagine it for each one of these industries.

David Schmaier:

Luckily, we had had experience doing that, so I couldn’t agree more with what Trisha said: If you do industries, you got to have domain experts, so I had originally four domain experts, now six, leading each one of our industry teams. Then we also hired full-stack developers, so like you said, Trisha, not Salesforce experts, but just great developers and they all learned Salesforce. We immediately standardized on Salesforce and did the full training course, I think this was pre-trailhead, but did whatever the training was back then, can’t even remember what it’s called now.

David Schmaier:

We were amazed how fast we were able to build on top of the platform. So my prior life, I had built the platform and the core apps and the industry apps, but to build the platform can actually be several years of work and cost hundreds of millions of dollars depending on how you do it, and so we got incredible leverage, incredible. It’s hard to overstate this from the Salesforce platform and so we actually created our company in March of 2014 and at Dreamforce, we showed the four vertical apps, which is about six months later, and they were beta releases and then we shipped them soon after Dreamforce, so maybe in seven or eight months, we were able to ship for industry Clouds, and then we were off to the races. But the key again in industry-specific SaaS is understanding the business processes, understanding the critical problems and the issues, and really going deep in each one of these industries.

Matt Garratt:

Now, I want to pick up on that in a second with you, Trisha, but David, I guess when you were building this out and you had such a big vision, can you talk about the fundraising? Did you need to raise more money to build such a big product platform and were there specific VCs that you sought out or that were going to be more attracted to this solution? How did you manage that?

David Schmaier:

Sure. Yeah, I think on the fundraising, maybe our experience was a little unique, which was we knew a lot of people in the industry, so because we wanted to partner with Salesforce, our first call was with Salesforce and John Somorjai and Marc Benioff wanted to immediately invest in our company, which was great. If you’re going to build a company with Salesforce, who better to invest than Salesforce? I think if that’s the question, the answer to that should be yes.

David Schmaier:

Salesforce became our lead investor and then in our second round, there was room for a second investor, and so we went with Sutter Hill Ventures was a VC partner of ours and I had known a bunch of the partners there. It’s a great tier one firm on Sand Hill Road, but I think what they’re looking at when they’re trying to fund you is this wheel of: Is there a great idea? Is there a strong team that’s done it before? What is the product, or what will the product be, or where is the product? Do you have customers? And then, how repeatable is the model? And so, because we had done this before, we were able to very quickly do the fundraising, so we literally had like two meetings with each one of the investors and were able to close on the financing, so I don’t think that’s normal. I wouldn’t expect that to be the typical process, but it was pretty straightforward for us

Matt Garratt:

And Trisha, maybe back to the product and building the platform: How do you compare this building a more vertical industry solution versus a horizontal application and how challenging is that initial build?

Trisha Price:

Yeah, I mean, certainly when you’re in a vertical build, the depth you have to go to for customer success is deep, right? There has to be value that you’re delivering beyond a surface level set of features. It’s got to solve end-to-end problems at a financial institution or whatever your vertical may be. It may be that they’re on spreadsheets or word documents or things of that nature and so maybe your barrier to entry in those type of processes can be a little bit lighter, but if you’re doing a rip-and-replace of a legacy solution, that requires an end-to-end set of features that really solve that end-to-end business problem, and that typically means deep integrations, right?

Trisha Price:

Most of these vertical industries that we’re talking about, you’re not the only shop in town, right? It’s an ecosystem of applications and so having a very strong approach to integrations, whether it’s one like Salesforce took with having your own app exchange type concept and ecosystem or whether you’re building direct productized integrations or a combination of both, that takes quite a bit of time, not just to solve your end-to-end set of workflows and feature sets, but to get those integrations right for customer success.

Trisha Price:

I do think that takes time, but I completely agree with David: Building on top of Salesforce dramatically decreased our time to market. From my background, I’ve been building banking software for my entire 20-plus year career. It’s really the only thing I’ve ever done, pretty much, and so for me, this was the first time I’ve worked for a product company built on top of Salesforce. It was a tremendous difference for me to come in, certainly a learning curve of different ways of doing things that takes some getting used to, but the benefit that we received from it from a company perspective was tremendous.

Trisha Price:

It wasn’t just in the early days to get that product out quicker. Think about the scalability as you go global. I talked about our offices in all these different countries across the world, data centers. I mean, have you thought about data centers in Japan? Have you thought about data centers in Australia? These are not simple things to solve. And then you layer on top of that platform features like multicurrency, multi language, you layer on top of that things like entitlements in security and investment in security and so that certainly did impact our ability to get to market, even with the kind of complexity and depth that our product and our vertical requires.

Matt Garratt:

You hit on something pretty interesting there, Trisha. When you said you’re talking about ripping out incumbent players. Even if it’s a bad solution, as long as people aren’t miserable, they’re not going to rip those out if it’s part of your banking platform. What was the core value proposition or the thing that you focused on most that was the most convincing thing or that really was compelling for banks, particularly the larger banks, to move off of their incumbent solution to you?

Trisha Price:

Yeah, I mean, for us, it has changed over the years and it has changed as we’ve launched new solutions, right? When we first started, we primarily focused in the commercial lending space and since then, we’ve launched retail banking solutions as well, and retail banking solutions tend to be more fully banked than the commercial lending space was when we first started, which was a lot of spreadsheets and Word documents in the early days. Changed a little bit now, but primarily, that’s still true.

Trisha Price:

But from the beginning, we’ve had core value that we’ve been able to deliver to our customers, right, faster. As a customer, what do you care about when you’re applying for a loan? Am I approved? When do I get my money, right? Whether you’re a business or you’re a consumer. And so, how do you help banks do that quicker? How do you help them do that at scalability and how do you as a software company do that for the smallest community and regional institution in the US to the largest, most sophisticated global institutions in the world on one code base, right? Cloud, definite differentiator, right? Because if you look at these financial institutions, they have growth aspirations, right? They get acquired, they acquire other institutions, so having immediate scalability of the Cloud, definite differentiator, and then having a set of features and solutions that drive value of regulatory compliance, supporting their growth strategies, doing it in a cost-efficient way are really our core values in how we think about building software and why I think so many customers have jumped on the nCino product.

Matt Garratt:

Maybe a follow onto that: When you’re building an industry-vertical solution, how do you avoid a lot of the customization work? Is that a challenge from company to company? You have presumably a somewhat smaller TAM and if a large bank is coming knocking and they want something, how do you balance that in making something that’s reusable without too much customization and services?

Trisha Price:

Relentless focus, relentless focus. It is very easy in vertical and these kind of depth of applications, and I know David’s been faced with this, I’m sure, many times, to get off course from the industry product that you’re building and say yes to a customer. But if you have those creative people that I talked about earlier, you can figure out how to solve a customer problem, but do it in an industry way. I think, yes, that requires the customer to be able to apply configurations on top of your base product to meet their needs and it requires some ingenuity in how you code and create a product, but it certainly can be done, and I think coming back to the Salesforce platform, Salesforce has done this phenomenally as a platform, and so you can learn from what they’ve done and take advantage of a lot of their configurations to handle that in a similar way that they have.

Matt Garratt:

Well, we are at the bottom of the hour, so, David, Trisha, thank you so much for taking the time, walking us through your experiences at Vlocity and nCino. It’s been a pleasure working with you, and a pleasure talking here, so thank you both so much.

Trisha Price:

Thank you, Matt.

David Schmaier: 

Matt, thanks so much.

*****


Transcript of Episode 360:

Jason Lemkin:

Good morning everybody. I’m super excited for the next session at SaaStr Enterprise with one of my favorite CEOs in one of, I think, one of the most interesting cloud companies, Coupa, and I’m glad to have Rob back at SaaStr in general. He was kind enough to come a couple of years ago when Coupa was still on fire, maybe had recently IPOed, I don’t know the timing. But I’m super glad to have Rob back now because Coupa, to me, in the crazy world we’re in, is at a very interesting intersection. And there are what we’ve talked about as COVID beneficiaries. Folks that have benefited from these crazy times and Coupa is one of them. Coupa’s growing quickly and its stock price has done fine and it has benefited.

Jason Lemkin:

But at the same time Coupa is the market leader in spend management, and managing procurement, and managing supply chains and those are areas that are deeply impacted by the economy, deeply impacted. It’s hard not to walk downtown through [inaudible 00:01:05] it to see what’s happening in healthcare all over the place, in financial services. And so Coupa is super interesting because it’s benefiting as a software player but yet it has this insight into the economy of software and the economy of the real world that I can’t think of another vendor that has. I’m super excited to talk with Rob and down at the bottom on the Zoom, hit Q&A, we will save time for questions. We had a few already come in but click there and I’ll remind you at the end so we can chat and I can let Rob talk a little bit about Coupa and then we can chat about it but managing almost 2 trillion of spend across basically all segments of our economy. Which we’ll chat about.

Jason Lemkin:

Coming up on 500 million in revenue, whatever the exact number is, no forward looking statements in this presentation but what’s super interesting that I’ll make sure we talk about even here is that Coupa has redefined the category and now has more revenue in this category than ever existed. What does that mean for the cloud? How do you change a category? And again, we’ve been talking about digital transformation for 20 years, probably, Rob, since you and I started in software but so much has changed. I want to dig into a bunch of things on the slide but what are you seeing? What’s changed the most since March 15th? What’s unexpected? What’s expected? What are the number one things that have shocked you, or have been pulled forward years that you weren’t expecting?

Rob Bernshyten:

Well, I think as everyone is saying, Jason, and again thank you for having me on, there has been a greater energy and focus in what was already happening, which is the move to digital. I think in our case it’s even more interesting because when you’re in times of hyper growth folks tend to focus a little bit more on revenue than they do on profitability. And they do on operational efficiency frankly and our value proposition at Coupa has always been to help companies become more operationally efficient. To help them unlock all of their potential so they can pursue all of their missions and visions.

Rob Bernshyten:

Obviously we’re doing that now for hundreds and hundreds of companies around the world. It’s an opportunity to engage in the same dialogue we’ve been having now for well over a decade but the ears are perking up even more because they know that they need to move to a digital method of driving their operational efficiency, understanding how they’re managing their spending as it pertains to everything they need for their business, how they’re thinking about supplier risk, how they’re thinking about their inventory levels, their sourcing activities, and so much more. It’s really, really exciting for us to have a greater emphasis into an area that we know is so important anyhow.

Jason Lemkin:

It’s interesting because it’s different for different vendors. Since March 15th, was there a trigger point where maybe I had a project that I was talking to Coupa, it might be a 2021, 2022, 2023 long term deployment because you have many enterprise customers. Was there a particular drama issue, shelter issue, a wedge issue that got projects pulled forward years?

Rob Bernshyten:

Well, interestingly enough it was actually a bit of the opposite in the first month or so, and I mentioned that on the last earnings call. There was almost a deer in headlights moment amongst all the vast majority I would say of our prospects around the world whereas we don’t know what’s going to happen so we actually need your help. We need to get PPE equipment. We need to get things to sort it out so then I’m back in two, three weeks. You can do that. It was really rewarding for us here at Coupa. We have this robust community of existing customers and they came together on our platform to source personal protective equipment for their organization. We were less oriented to how do we close more business during that first month, to more oriented towards how do we help this community make sure that they are going concern which was very real in some industries for sure.

Jason Lemkin:

Yeah, we’ve all been through four phases since March. I hadn’t fully… I did hear that when you said it before but didn’t think through it. There were vendors where the end of March into April were crazy even Zoom the next day exploded. But even Slack it took a while for folks to figure out we needed to Slack more. Then Slack took off. You had the chief procurement officers, CIOs and others needed to survive for that first month. Then what was… Has there been four waves? What are the next couple of waves that you’ve seen across your partners and customers?

Rob Bernshyten:

Well, the most interesting thing for us is that we’ve taken dozens of customers live since this hit. Because it’s one thing to sell new prospects, and of course we’re focused on that, and we’re doing just fine there but when you think about the existing inflight projects when suddenly these people are operating from home and they’ve never operated in a virtual environment, and to take large global deployments live and have see them start running massive amounts of spend through our system.

Rob Bernshyten:

Ceding them control spend. We have a whole bunch of customers who didn’t have control over their spend. They couldn’t stop the company from spending money in certain places. We’re able to help them do that on their mobile phone through our integrated email capabilities offered via Coupa. That was very, very rewarding and powerful. And then of course we reemerged and we started looking at how we can drive our global reach and expansion, obviously we’re well into that now months after the crisis started.

Jason Lemkin:

For a big Coupa customer, pick one if you want or don’t or an example, but before March 15th what was a typical deployment to be fully into production? Not an agile kind but maybe an old school type. Would it be a year? Would it take a year from really signing and fully going live? If it was or whatever it was, how do you compress that into weeks? How do you manage the team? How do you do the internal change management and the external because we’re not necessarily wired that way until March, were we?

Rob Bernshyten:

That’s right. Well the average is roughly six to nine months for our enterprise customers. Our mid-market customers, four, maybe five, weeks, so it’s not bad. But you know what happened is that we gained a lot of efficiency ourselves in working while our customers remotely, you don’t have the time. “Well we’ll meet you on Thursday we’re going to fly in. Were all going to get into a room.” “Well, it’s Monday let’s just do it right now.”

Rob Bernshyten:

You’d get the systems integrator on the Zoom session, you have the existing customer on the Zoom session, you have my Coupa colleague on the Zoom session. We’re sharing as you’re sharing this slide the configuration set up and literally walking through it. In many ways we stand to gain an advantage in the efficiency with which we can work together as long as we can overcome the change management required for some folks, as you say, to be a little bit more tech savvy and be willing to work in this way. We’re seeing that happening without a doubt.

Jason Lemkin:

Where do you think… It’s hard… There’s so much change it’s hard to even predict but in some ways it’s great that you can now deploy customers over Zoom, right? It’s so much more efficient. You don’t have to get on an airplane. You don’t have to book the hotel and all this but some things are lost and some things are different. Has enterprise buying changed? Do you think it will swing back into the middle? Can we live this dream where we never have to get on jets again? Where do you think we’ll be on the other side of COVID?

Rob Bernshyten:

You know it’s hard to predict that, Jason, of course, and probably it’s somewhere in the middle. I don’t think it’d be an extreme one way, or the other if I had to predict. But what I will tell you that will be consistent is that enterprise software is really about driving change management. Driving the change. One of our core values at Coupa is focused on results. In other words, identify exactly what it is that you’re attempting to achieve after you’re live, a year after you’re live and then focus everything in and around that. Limitations like the inability to travel, or advantages like the ability to get on a virtual session like this are the methods of getting to have that result. As long as we keep people oriented toward that outcome I think we’re in fine shape, and that’s how we think about this approach.

Jason Lemkin:

That’s good. I want to talk about this because you have some great data in this. I worry about supply chains. I try not to worry in the world but there’s a lot going on. You want to remain positive, but I look back at some of the first SaaStr blog posts in 2012. I wrote one in 2012 as I was walking Downtown University in Palo Alto when the last retail store reopened, but it was four years. Downtown Palo Alto, it’s a fairly gentrified community.

Jason Lemkin:

There’s a lot of money in Palo Alto–tech money, but it took four years for the last retail, what’s now West Elm to reopen for four years. I’m worried about this. What are you seeing? And this one is interesting, 43% of companies were worried about the ability to fulfill orders. At the beginning of COVID you still can’t get a webcam. You couldn’t get a monitor. We were worried there were some groceries you couldn’t get at the beginning of this. Tell us what you’ve learned being at the center of this.

Rob Bernshyten:

Well, first of all brick and mortar retail absolutely is in trouble, and frankly brick and mortar retail to some extent has been in trouble well before this pandemic. We were looking at our business spend index, if your viewers go to spendindex.com they can see the data on that. We’ve been looking at retail for three, four quarters and it’s been trending down. When we’ve seen a lot of very interesting data I could share with you around the downward trend. But when you think about global supply chains and this massive globalization dynamic we’ve had in the world for the last six, seven, eight years. We’re getting into, let’s call it globalization 2.0, which begins to balance global with local. As this slide says is there some fragility in our supply chain? Yes. But I would argue that fragility is really in the area of information technology, information access rather than in physical access because the goods and services exist.

Rob Bernshyten:

And as soon as there’s demand, supply gets there. You look at PPE there was a massive demand and within three, four weeks, there was massive supply. The challenge wasn’t there. The challenge was having the information at your fingertips to hot swap suppliers, get access to things you needed at the right time, make commitments contractually to people to know that you will fulfill your obligations. That’s the world in which we play in at Coupa. That was what makes it so interesting. We’ve got customers literally hot swapping suppliers, moving them into certain areas where they never even thought they’d be buying from, creating contingency plans for categories of spend. You need information technology for that and that’s what’s exciting about many of the things we’re doing and seeing in our customer community.

Jason Lemkin:

Well, that’s interesting. I was following after right when we got into this wonderful pandemic, how Coupa was at the center of getting PPE and identifying this but I didn’t fully understand why. Other than it’s a great thing to do but I guess it took a while for me but the supply got there within a relatively short period of time relatively speaking but it needed help, it needed liquidity, it needed connection. And I guess Amazon works again, right? We can still get Amazon products to our home. I guess we don’t need to worry as much that–the market will solve this, no matter what global turmoil there is in the short term as long as technology can connect us, I guess is the learning.

Rob Bernshyten:

Yeah. Absolutely information technology. Access to the right data at the right time to make the right decisions and collaborate amongst the supply chain. It’s very exciting to see some of the largest companies in the world really reorienting themselves to fully modernizing their supply chain, their business spend management approach. It couldn’t be more exciting for us obviously.

Jason Lemkin:

I want to get some of the data next but on this last point in the slide. This is something I think about a lot. Did we know that the cloud would be this strong after March, that there would be this boost? It’s crazy, right? Coupa is on fire but you talk about retail, look at Shopify. Shopify is a $120 billion company today. It’s crazy and the growth factor is insane. It’s the maximum output of this trend that we’ve seen but can’t… If we’re in shelter, if we’re in this world through the end of next year, can we have this divergence? Can we have a cloud on… Can cloud remain on fire when one out of three people are essentially unemployed in the country? How long can we remain divergent? Do you have any insights here?

Rob Bernshyten:

Well, it’s a tough question. It’s interestingly Shopify and Amazon, and these are our customers. Amazon runs in tens of billions they manage through Coupa so we’re close to these customers but the same value proposition that existed before this crisis exists now, it’s just seen as a higher priority. The ability to get greater speed, the ability to have information at your fingertips, the ability to embed, Jason, best practices into your deployments. Just about every CIO I talk to tells me, “Hey we’re going to go with Coupa, but hey promise me you’re going to deploy this in a way that’s going to be quote unquote, vanilla or best practice so that my team doesn’t start doing a whole bunch of end rounds that are going to make us on upgradable and slow us down.”

Rob Bernshyten:

They want agility. They want access to community information, hopefully we’ll talk about. I think there are a lot of dynamics that are really tailwinds for us in pushing cloud faster into the world at large and obviously these are big, big markets we’re all playing in and I’m sure many of your viewers are playing in. The opportunity is now, really, to accelerate our efforts, no doubt.

Jason Lemkin:

It’s usually the CIOs wanting these best practices, right? They don’t want custom made. They have this sort of on-prem scars of some hack. Some bit of corner code written that–or weird workflow. I should have known Amazon was a customer. I didn’t know it, but my mistake. But boy you must learn a lot from Amazon. Amazon must be the like the Walmart of today, where they’re an amazing customer, but they school you a bit. What is like for an Amazon? What do all your other customers benefit from? What are some… That vanillaism? What are some things you’ve learned from really those mega customers like Amazon that–and how does that benefit the others? How have they leveled you up?

Rob Bernshyten:

The beauty of enterprise software, as I think every one of you viewers knows is, is can you have minimal code that supports the massive amount of use cases, as many use cases as possible?

Jason Lemkin:

That’s the dream.

Rob Bernshyten:

That’s the dream. What we learn from our largest customers, Amazon being one and others, is how to support massive complexity in the simplest way possible. And what we learned from some of our smaller customers is how to keep things very intuitive and user centric but at the same time abstract them from some of the complexity that they may never need to use and make everything configurable. We’re constantly learning about scale and stretching our platform from the larger enterprise and we’re consistently staying very, very true to usability and user centricity that we’re picking up from the smaller growing companies. And that’s a beautiful marriage to have on one platform.

Jason Lemkin:

Yeah. Relate to this. This is something I wanted to learn from you in the enterprise is brands. You and I chatted right before we went live, I asked you about competition. I had some fun talking about Ariba which we’re in 2020, Coupa isn’t really an Ariba 2.0 but maybe in the early days there was some truth to that. I had a lot of experience there and you said I don’t spend some… Now that we’re big enough, now that we’re actually larger than this category used to be, I don’t spend as much time thinking about competition. I think one reason is you have this trusted brand. You’ve become… Every deal is hard. You have to prove yourself to Amazon and Shopify but you are this brand. There’s suites and there’s best-of-breed which we thought about. But do folks want even more from trusted brands now in 2020, and even more after March 15th? And what does that mean, versus going more horizontal? And where do we want to invest more in trusted brands?

Rob Bernshyten:

Well, it’s interesting. I’m looking at this slide and saying do enterprises want more from vendors? In some sense I would push back on the term vendors because I don’t consider our company, any one of my colleagues working here, anything that we offer, we’re not a vendor. When I think of vendors I think of a hotdogs at a baseball park-

Jason Lemkin:

I would have hated it myself as the CEO. You’re right. But-

Rob Bernshyten:

Well so, but-

Jason Lemkin:

But CIOs might still use the term.

Rob Bernshyten:

It plays into your question. It’s a term that’s grounded in business they used to be a products business, it smells of commoditization. The reality is what customers really want is they want trusted advisors, they want partners, they want people to bring best in class technology, embedded best practices, and they want folks that are focused on value creation with them and measurable success. That’s what they want more than ever and that’s what they deserve. They’ve always deserved. They just didn’t have the chance to get that on the first run of this thing, and enterprise software in the 90s and maybe a well into the new millennium.

Rob Bernshyten:

When you develop trust, and I believe trust is built on transparency. You have to actually see measurably that we’re delivering value for you. If a third party came in and said, “Okay, there’s a relationship between Coupa and one of their customers and here’s what’s happening.” They will be able to point to measurable value X amount saved, or X user adoption, or X spend categories and a management, or X improvement in operational efficiency, whatever that may be.

Rob Bernshyten:

Once that’s established, of course those customers are inclined to want to tap into subscribing to more what we call value as a service from those partners of theirs, and we consider ourselves to be that type of partner for them. We’ve benefited from that and I hope we’ll continue to benefit from that because we take every one of our customers very seriously. We want to keep them forever. We want to continue to drive more and more value for them.

Jason Lemkin:

Yeah, it’s interesting. I think at Salesforce, depending on how you look at it, CRM is either their fourth or third largest category now. It’s pretty crazy, isn’t it?

Rob Bernshyten:

Sure is, sure is. Well look, understanding every component of your customer, how you market to them, how you sell to them, how you service them, how you interact along on the web it’s super important. But I argue it’s just as important to understand your entire supply base and how you buy from them, how much you spend with them, how you can collaborate with them, whether or not you can mitigate risk when they have risks. We’re really operating on the exact opposite side of the equation. We’re helping people, companies who spend money do it in the most operationally efficient and thoughtful way.

Jason Lemkin:

And related to this and at the bottom point, when I listened to the last earnings call, you said inbound demand is up from your base. Your customers want more and more from you, from a trusted vendor. A related question because it seems like–so you’re coming up on 500 million in revenue, whenever it exactly, I don’t know exactly what ARR, it doesn’t really matter for this, but how far can you see? Can you see… You obviously can see to a billion. You can see it right behind you going across the bridge but can you see 10 X? Can you see to 5 billion now as crazy as that might have sounded a couple of years ago? How far can you see in… What do you see? What do customers want? How should the product and things like… What do you see? What’s the furthest you can see, and what do you see?

Rob Bernshyten:

Well, I appreciate that question, Jason. What I see is a $50 billion plus total adjustable market, and what I typically ask are two very, very simple questions of any prospect I interact with, frankly anyone I interact with whether it’s over Zoom, or before in the physical world. Do you think, number one, your company is doing a great job in managing the spending that it’s involved in for all the things and services that you need, or you think it’s done really, really well? I’ve rarely, rarely gotten an answer that says, “Oh yeah we’re great. We know everything about how we spend money. We have control over it. It’s complex.” Okay.

Rob Bernshyten:

Then I ask the second question, “Do you think you’re employing information technology in a way that’s comprehensive, and fully integrated, and user centric, and deployed quickly that addresses some of the challenges described?” And the answer is always no. Just about every company in the world can really stand to improve the way that they do their business spending and the way they manage their business spending. I see a huge, huge opportunity and I think this is in many ways early innings for this category. We’re proud to do our part in trying to lead a focus into this area and then fulfill that leadership with a real brand promise and real measurable outcomes for every one of our customers. I think that is why we’ve seen more inbound interest and more capabilities, and additional features and functions of modules that we can deliver for our customer base of course.

Jason Lemkin:

A couple things, this is more a tactical point and I want to make sure we get a couple of things on the data you have but this is a bit of a mystery to me. I should know the answer to this, but I don’t. Why are payments so hot now? I understand the innovation of Stripe of two lines of code back in the day, but why–you’re seeing this? Why is this all coming together now, and why couldn’t payments be as hot five years ago? I put hot in quotes. What’s so much more valuable today than it was, or what’s changed in technology because I’m missing a bit of, why now.

Rob Bernshyten:

Well first of all, it’s saying that the value proposition has been there for a long time. It’s been there for a long time. The question is, has the value proposition been fulfilled? I’m not sure [crosstalk 00:22:45]-

Jason Lemkin:

Why now?

Rob Bernshyten:

Well look at what’s happening in the consumer world. The value proposition has been there a long time too, but it’s only now starting to be fulfilled with Square, and Apple Pay, and Google Pay. Now if you look at B2B payments, my gosh. First of all it’s much bigger. There’s a lot more money flowing there but secondarily the technology, the capabilities there are really archaic. Old school technology, a lot of manual–a lot of paper. In the United States, nearly half is paper-based checks. What are we kidding ourselves? These systems are rigid, you have monthly batch jobs running out of incumbent solutions. There’s no ability to collaborate with your supply base around payment rails, around dynamic discounting, around virtual credit card payments and transfers, yet cross border is still super old school and complex.

Jason Lemkin:

Super old school.

Rob Bernshyten:

There’s is so much we can do here. You got third parties enter to do supply chain finance. We’re in the very early innings of a huge market and it requires leadership, and it requires incredible tech. Some of the approaches that been taken in the past year have largely been driven by banks. The approach we’re taking is partnering with banks where we’re bringing what we’re really good at to the equation. A highly scalable, robust, transactional platform. What we know about usability and how important user centricity is to that problem, and we’re starting to really get somewhere. We have, as I mentioned in the last earnings call, nearly 100 customers leveraging components of Coupa Pay and that’s growing. It’s really exciting for us.

Jason Lemkin:

If you look at what’s happened with Shopify, how big payments have gone there. If you look the very low end adjacent to like bill.com that used to have any payments revenue and then it became one of their key drivers of growth. What do you see a few years out here in the enterprise? How core is this? It’s obviously core to Coupa but how big… Is this flip around and become one of the most essential parts of what we’re doing in terms of managing this business commerce? Or are we… In five years will this be massive?

Rob Bernshyten:

It’s hard to make a detailed prediction. The way we like to do our business is do it very organically. Our customers are asking for these capabilities of us. We didn’t wake up and say we’re going to do payments. Our customers said we’re doing procure to okay to pay through your platform. How about we do procure to pay? [crosstalk 00:25:03]

Jason Lemkin:

Got to do the last mile, right?

Rob Bernshyten:

Yeah, let’s do the last mile and pick off a bunch of use cases that we’re struggling with. We see a big opportunity here. We’re going to co-develop with our customer community. We want to take the same approach we’ve taken with every other set of modules we’ve deployed and we’ll see where it goes. But the likelihood of us being able to capture a real meaningful portion of this market, based on what everyone is saying, I think, that’s objectively looking at this appears to be quite high.

Jason Lemkin:

Yep. Now this next slide is something I picked out of your investor report because it’s interesting to me as a founder, how do you… Fiscal discipline is super interesting. You turn around you probably can’t believe all the unicorns you read about on tech crunch each day that are raising 400 million and you don’t even want to know what the bottom line looks like because it doesn’t matter. Coupa is a generation… We’re generations ago in terms of thinking about this, and then you look at weird things like Zoom. You know what Zoom’s burn rate was the year before it’s IPO? You know what it was?

Rob Bernshyten:

I don’t, I don’t remember.

Jason Lemkin:

Zero. It wasn’t minus $1 or like Eric literally said to the marketing team, “You can spend every dollar we have, but it’s the funniest thing, it’s like 414 million in revenue and like 414 million of losses.” And it’s literally a zero. It’s the fun you can get it. You can imagine that conversation. Here’s your allowance. But what is this? What’s 50 is the new 40 and when should software be profitable? It’s supposed to… Shouldn’t it be really profitable? You need X number of engineers and everyone can buy it but what does this all mean? What are you saying about this 50 is the new 40?

Rob Bernshyten:

Well, first off let me say I love how Eric thinks and I think similarly in the sense that there need to be guardrails on your business. The idea of spending at all costs, and by the way we’ve had some pressure as a public company certain quarters where people say, “Well why don’t you just press further in sales and marketing and grow-“

Jason Lemkin:

Press on the gas.

Rob Bernshyten:

And then you’d have the other side as soon as there’s a little bit of backwards says “Hey, why don’t you accelerate the pace to profitability?” Look, we all know in software as a service what really matters is cash flow. Cash flow is what matters. That’s what fuels the business. We have put guardrails on the business now for 45 quarters. We’ve had guardrails on the business. Very, very careful and thoughtful growth not overextending ourselves, but at the same time, careful management of sales and marketing efficiency, and then getting scale into a model on the bottom line.

Rob Bernshyten:

Those are the guardrails we’ve had every quarter for 45 quarters, and just as Eric does it, here’s what it’s going to be for the next quarter. We’ve got 12 weeks, go, and we see what exactly what happens. We distill that, we look at all the metrics by business unit, by geography, by product line, and then we unlock the investment we’re going to have for the next quarter, go and do it over and over again. When you do that for as many quarters that we’ve done you get into this situation where you can have this rule 50 dynamic that my colleague and CFO came up with, I think when he became 50 years old. But we are operating at this level now and it’s exciting.

Jason Lemkin:

There’s a benefit at 50? Is 50 too much? Obviously you’re a proponent of it because you put it out, but where we’re at… How do you set that guardrail? What is too efficient versus too inefficient when you’re able to be efficient? I can think about it [crosstalk 00:28:26].

Rob Bernshyten:

I think you have to combine backwards looking metrics. When you complete a quarter, you look at all your backwards looking metrics and then you combine them with all your leading indicators as an executive which is what does the pipeline look like? What does our talent look like? Where are we in terms of stage of pipeline? Where would we want to make investments geographically? When are we launching the next product release, and then use your gut to fine tune exactly how you’re going to run out at the following quarter. You have the guardrails but you also don’t hamstrung yourself as an executive. Otherwise you could automate the job of the CEO in that area and that’s probably not the best way to do it.

Jason Lemkin:

Good. Let me skip… Oh, oops we had this slide. Maybe we lost one on the different segments. I want to talk about some of these points, but we might’ve taken some of this out, but tell me what you’re seeing across different industries because you do have some data on this. One of the most interesting things from some Coupa data I’ve seen is I read The Wall Street Journal, I read the New York Times. It seems like many banks are doing very well in this crazy environment. But like Coupa shows financial services under a lot of pressure, healthcare. It’s hard to get a handle on what’s happening in healthcare. Some hospitals are all at the edge of bankruptcy. On the other hand, other segments of healthcare are on fire. They’re literally on fire. Walk me through some of the data you see of different segments and maybe some things that are counterintuitive that you’re seeing in different parts of the economy.

Rob Bernshyten:

Well, I think one of the biggest things that I think most people now understand is that given the amount of liquidity in the market it’s very hard to gauge the extent to which financial services firms are doing well and healthcare et cetera. You have to have that context in mind. It’s very difficult to answer that question in two sound bites, I really do urge your audience to go to spendindex.com. Here’s what we’ve done there Jason-

Jason Lemkin:

We have a slide on it here. I think I just lost it but yes it was a great one.

Rob Bernshyten:

Let me tell you what we’ve done there because we have created an index that is a real leading indicator. Let me tell you why. We’re looking at things like what are the approval cycle times in the current quarter. In other words it didn’t take longer for people to prove something before they even bought it, before they even ordered it, before anything happened. We have a leading indicator in terms of how long, by industry, folks are thinking through purchases. That’s never been seen before, in an aggregate level with nearly $2 trillion worth of data. We’re looking at rejection levels. What percent of things are getting rejected? You never see that in the GDP. Now if there’s an increase in rejection levels, of course there’s a likelihood that that industry has concerns.

Rob Bernshyten:

We’re looking at average spend per employee and companies and we’ve put that into an index to give leading indicators that we launched this every quarter and when we backwards tested this to 2016 against the GDP, we saw a very real and meaningful correlation. We think this could be a real enabler for people to get a sense for things. But if you look at the last one, what we shared at the last earnings call of course significant retail slow down, slow down across the board frankly but what’s more so on pronouncing retail. When you look at a financial services slow down there as well whether that’s seen or not in stock prices. I’d urge people to go to spendindex.com. We’re sharing this openly. We want to be a good corporate citizen. We’re not gaining anything from sharing this other than maybe a little bit more awareness about Coupa. I’d urge your folks to check it out.

Jason Lemkin:

Yeah. Everyone go to that because it’s pretty awesome, spendindex.com and I’m on it on my iPad. I had a screenshot in here but I think maybe we took it out because it was backwards looking but let me ask you one or two questions because it is great. Everyone should check this out. It is great to see this data and granted there’s a little bit of a lot. It’s not up to the minute, right? It takes you… You’ve got to get that data so it’s through Q1. But one that that surprise to me is high tech was down. How you define high tech, right? That was down in Q1. When the cloud’s on fire but in spend index high tech’s down, what are we seeing there? What should I see something? Is there a story behind the story there?

Rob Bernshyten:

Well, you see what you see which is [crosstalk 00:32:27] Q1 when you look at the index purchases for hardware and software in the first quarter of the year, when you look at time to approve, when you look at number of rejections, we look at average spend per employee was down and that’s a reality of what happened there. Now whether or not that’s measured it in the stock prices of many of these companies, probably not. But again you could argue that the current liquidity environment and the longer term opportunity in the digitization area is very, very real. Look investors are looking for places where they going to get yield. They’re not going to get it U.S treasuries. They’ll look at placing a yield. They’re looking for longer term bets and there’s no question. Many things… My colleagues and I like Eric and others are doing have the opportunity to really stand the test of time and develop into very, very meaningful longterm businesses. That’s what we’re doing here.

Jason Lemkin:

I want to chat about your book next but on the spend index, the Q1 just remind me. Q1 is calendar Q1, right?

Rob Bernshyten:

That’s right.

Jason Lemkin:

So Q1 is through March. This retail one plummets dramatic even through Q1. That trend you can see it in Q4. Retail was already off deeply in Q4 then Q1 is down. Boy it’s just epic. It’s almost a step function. It’s almost a step function here, right?

Rob Bernshyten:

Absolutely step function. And look, if we have to make predictions I think they’re pretty obvious We’re going to see real backward seasoned retail, we’re going to see a lot of consolidation, we’re going to see brands get rolled up. It’s going to happen. It’s already beginning to happen because look, folks aren’t going to the mall and not buying in those stores. The retailers that are quick enough and nimble enough to get to consumers directly to figure out different innovative ways to manage their supply chain will stand the test of time but it’s a real struggle in retail. No question about it.

Jason Lemkin:

Yeah. I would literally encourage everyone listening now, or the thousands that will watch this later go to spendindex.com. It’s fascinating. Coupa has a massive… It has almost 2 trillion of spend thrown through the platform. If nothing else, this is a fascinating data point that you can segment across financial services, healthcare, high tech, manufacturing, retail, and it’s a slice but you may see right now a story that is worrisome of our economy. There is some optimism in this.

Jason Lemkin:

Actually health and life sciences out-performs more than I would expect from the press because our hospital’s not taking ordinary patients and our dentists at a lay level. I felt like that’s under more pressure than the spend index suggests. But outside of that, it’s a worrisome. It’s a bunch of more worrisome trends and maybe we’re all ballooned by the massive liquidity injections, the trillions of dollars in the economy, the planes fly nowhere and the extra unemployment checks but the real signals underneath our economy are very worrisome on these charts.

Rob Bernshyten:

Yes perhaps. I’m looking forward to the next quarters release. We’re actually going to start slicing by category of spend. What are the categories folks are spending on? Were they increasing, decreasing as part of the blocking enterprises? We’ll have more robust data. Greater fidelity of data as we go, and hopefully it’ll help folks understand what’s going on in the world frankly.

Jason Lemkin:

Yeah. All right. I’m going to post this on SaaStr after the next one’s out because it’s super fascinating. Okay so book. You got a book. Is it out? I should know I’m going to buy 100 copies, 50 copies are… Tell us about the book.

Rob Bernshyten:

Well, this is really a book that is the next step from values of service. A book that I did about three years ago. And this is really about breaking the silos of traditional enterprise software which was always deployed one customer time with one set of data and never being able to see anything across. Never able to take anonymized, sanitized, aggregated data. We’re beginning to take that data, distill insights from it, and push that back into individual customer environments so that we could be smarter together as a customer community.

Rob Bernshyten:

I look at this book as really… I don’t have a PhD, Jason, I ended at my MBA. This is kind of my hypothesis, or thesis, or dissertation if you’d like, and it’s really a position paper on where we see enterprise software going, which is the breakdown of those silos so that we could be smarter together as enterprises and customers for the use of information technology. We’re on the very bleeding edge of that with what we’re doing here at Coupa and every day we discover more and more interesting use cases that we can employ for our customers to take advantage of, and I’m happy to share anything you’d like about that.

Jason Lemkin:

It’s interesting in these communities. SaaStr is a community. I never knew much about community before this. I’m still learning. There’s a lot of talk about communities and how that customer, vendors, technology solution. People will be communities, communities are out there. What do you mean by communities? What are you seeing? What have you learned at Coupa in general? What does this mean?

Rob Bernshyten:

There’s so much but I would give you the metaphor that I love which is waves. I was very proud that Noma endorsed this book after having thought through our concept committee intelligence here-

Jason Lemkin:

Yeah, that’s a space you didn’t imagine community would exist on maps but it sure does.

Rob Bernshyten:

Exactly. And with waves we’re truly smarter together as we traveled from destination, from A to B because we’re leveraging immediate access to data and that data requires almost no friction, in some cases zero friction to collect, aggregate and distill insights that could be pushed back to the individual driver they could find their way through. The exact same concept applies to everything happening in business processes. Best practices for how many people you should have in your workflow Jason. There’s companies out there 60 people in their workflow to approve something that’s $200. If they knew how far outlier they are in real time they could fine tune that.

Rob Bernshyten:

They’re overpaying for categories of spend all over the place. They’re exposing themselves to risky suppliers and not leveraging community insights to figure out which suppliers they should be considering working with. The list goes on and on of all of these use cases where we can truly be smarter together, and proudly as a platform we’re enabling that for our customers. With every release of our product we’re turning on more and more of these community intelligence capabilities that allow them to be smarter together.

Jason Lemkin:

The book in large part, is it share a lot of learnings about how to build this community among your customer and partner base?

Rob Bernshyten:

Well, first of all it frames what it actually means to have a community intelligence environment. What are the components of that? It explains why the time is now to strike. Particularly if you have early stage companies that are watching us, right now is the time to really build up a platform that can have the stand the test of time in leveraging cross company committee insights, and then it shows a whole host of use cases and case studies of what we’ve experienced so far, and asks the reader as I did with values of service to comment on what they’re seeing, pushback on some of the hypotheses in the book so that we can learn together as a community of readers, frankly, of the book as well.

Jason Lemkin:

Okay. That’s great. Well let’s… Everyone let’s… I’m going to do a deep dive. I think community for business software is super powerful. It’s so important and it’s something we’re learning today. Just like payments, maybe. Everything in enterprise sometimes it’s four to five years later than consumer. Maybe payments is there, and maybe community is there too. Waze to hit this five years ago but we need to learn this as leaders. Let’s all read this and, Rob, if you want, maybe whenever you want we could do a deep dive on community on the podcast to 130,000 people because I think this is a great topic on its own.

Jason Lemkin:

How to building this community thing because… Otherwise this is a great book. Let’s all read it and I will share some learnings on it on SaaStr in a bit. There’s more I want to talk about, let’s make sure we have a few minutes of questions before we end. Actually hold on. How are we doing that? Let me make sure I grab… Apologies for one second. There was one very specific I wanted to hit and then we’ll go into the Zoom. These are specific to procurement but I think these are good ones to hit for Rob. What are the three pain points for chief procurement officers, excluding generating savings and reducing supply chain. What are the top pain points in 2020 for CPOs?

Rob Bernshyten:

One of the biggest pain points is ensuring that the CFO, the CEO, and the CIO become their truly connected colleagues in solving many of the challenges that they’ve been thinking about for a number of decades. If you go to a CPO conference of any kind, the conversation is typically, how do we get a seat at the table? How is it that the whole organization doesn’t understand all the value that we can offer? Now is the time to strike to showcase that value, and that value is in every possible way of course from savings, which is very obvious, but it extends to supplier risk mitigation, which is obvious, and all the way through managing the entire integrated way with which a business manages its spend through information technology. Now’s the time to strike.

Rob Bernshyten:

Look if we have a phenomenal CPO and we use our own platform but if my CPO ping me on Zoom, email or walked into my office and said, “Look, hey I need a budget of X because I’m going to make sure that we’re going to mitigate our supplier risk. I’m going to save us this much money. I’m going to give us a platform that’s going to help us be modern and scale into the future.” Why in the world would I not support them if they were a trusted advisor? That’s the opportunity.

Jason Lemkin:

Yup. The next one it’s a bit of a lay up, or even a commercial but I always love to hear what a CEO has to say which is, which new Coupa product or feature are you most excited about?

Rob Bernshyten:

Well, the most exciting one for me is community intelligence, which is a set of capabilities that we discuss in the book, but in the entire fabric of the product set. They appear for example in expense management, which we don’t talk about as often but we have hundreds of customers using Coupa’s expense management. We are mitigating fraud in spend management. We’re using the data set of our aggregated customer base and serving up individuals that are highest likely to be doing fraudulent activities so you can investigate rather than rigid policies, or a free for all. We found a way to use technology to be prescriptive, which is the P in Coupa. Prescriptive to individual controllers and people responsible for spending in a company leveraging community intelligence. And that’s just one example of many capabilities leveraging community intelligence within Coupa.

Jason Lemkin:

This one from Nikko. You probably don’t know the answer although it’d be wonderful if you did. I know Coupa works with many hospitality companies and how many quarters do you think bars and restaurants, hotels, airports will rebound? If you knew that you could probably be on CNBC any night, everywhere any night anyway but do you have any insights, or do you have a model? Do have an operating model, when will these hyper impacted hospitality businesses recover?

Rob Bernshyten:

Well, I love the second part of the question because of course I’m not a fortune teller. In fact, the big unknown is when some of these things will happen but we have a very clear scenario based model for V, U, and L, and then we execute accordingly based on where things work out.

Jason Lemkin:

So V, E. V I get. Are we past V, or is there still a chance for V?

Rob Bernshyten:

Well, it depends on how far you step back and looking at your V-

Jason Lemkin:

How wide it is.

Rob Bernshyten:

But I think in many ways you’re right. We are pretty much past it. I think that’s a fair assessment of the market.

Jason Lemkin:

This one will take you back but let’s at least do one and have some fun because we did chat about this before we started. What were the biggest challenges early on when Coupa was a startup procurement folks hadn’t quite heard of. You didn’t have the brand and were replacing their competing with solutions like Ariba.

Rob Bernshyten:

Well I can give you a very long list of challenges but I think the biggest is to get folks to give us a chance. If you look at some articles that came out in 2009 when I was raising money, and our first raise that I was involved in it was 15 million and a half post. There was I think $7 million raise, 15 and a half post. It was getting folks to try. We did things like we said, “Look, give us a year annual subscription. If we don’t deliver this quantifiable value to you within 12 months, you could cancel and we’ll give you your money back.”

Rob Bernshyten:

That was a big, big risk to take in 2009 and 2010. But we delivered for these customers and they became fans, and they became highly referenceable and they gave us a chance to go to the next customer, next customer and grow our ACV, and grow our renewal rate. It was very, very hard to really early days of course but that built a foundation and the right culture I think in this company because we don’t take anything for granted.

Jason Lemkin:

Did any material number of customers really ask for their money back?

Rob Bernshyten:

No, not even inmaterial. None asked for their money back.

Jason Lemkin:

I personally love the money back guarantee hack. It’s always one that asks for their money back, and it doesn’t matter because if you don’t keep the customer for life, it doesn’t matter if you give one year of revenue back, even though it’s stressful, it doesn’t matter.

Rob Bernshyten:

Well, you know, Jason, the beauty of it is, even if let’s say they were to ask at the end of the year if you’re objectively looking at data that said on a mid-market customer you paid a $100,000 a year. Well we’ve saved you $700,000 this year. Isn’t a little egregious for you to ask for your money back and isn’t it obvious we delivered value for you? Are we not a valued service partner for you? So frankly, we didn’t have that but that doesn’t mean it wasn’t easy to get those deployments, to configure the product, to build new features, to do what it took to get it done, no question. It’s very hard.

Jason Lemkin:

Let me ask you one related early question, and then we can wrap up with a few more current questions. But one of the reasons in the early days that I got very… From afar, I was interested in Coupa as back at Adobe Sign, EchoSign I would meet with a lot of folks and mostly on the contract side we would deal with sales side of course in the early days, but there’d be a lot of buy-side conversations, a lot of them. And we would go in and we built an Ariba connector early. It was very hard to do because it wasn’t an open platform but, and I mean this is no disrespect to anyone at SVB, but I never heard so many complaints.

Jason Lemkin:

People would complain about Ariba and people complain, obviously you’re biased, but it lit up the hair on the back of my neck because I hadn’t heard this. When you’re selling those early days and you don’t have the brand, can you… Looking back on it without bias, how do you leverage those complaints? How do you turn those into an asset? Do you bash the competitor? Do you not? Does that create a bigger wedge then if they’re happy, and maybe you didn’t see it but I heard this again and again at so many global 2000 companies Ariba would be their least favorite vendor.

Rob Bernshyten:

Well, to be frank, we did some bashing early on. We didn’t know whether it was right or wrong but that bashing wasn’t grounded in logic. It was grounded in facts. When you’re talking to a customer that’s getting 4% of their spend running through an incumbent system, the bar is not that high to get them to eight, nine, 10, 50.

Jason Lemkin:

It’s not that high.

Rob Bernshyten:

It’s not that high but it’s a matter of bringing that to the forefront. Bringing facts to the forefront that everybody could look at so they can make the right choices. Those were early day things you have to do but obviously now thankfully we’re well beyond that.

Jason Lemkin:

All right. Maybe the last one, or the penultimate one. Maybe this will be the last one. In this… But this is probably more from a founder perspective if you thinking about. In these uncertain times some deals go more quickly but some go most slowly. Any tips you’ve learned to accelerate closing of deals in these shelter area?

Rob Bernshyten:

Yeah I think it’s in the shelter area but I think it’s more broadly. What I notice now we work with so many different… I’ve had the chance to work with so many hundreds of sales professionals in my career, certainly hundreds of Coupa as well over this time. What you find is folks tend to pivot a little bit more towards being a bit aggressive. In other words, look where great, where the best, nine out of 10 people use us. I don’t love that. Then you have the other extreme which is they’re a little bit overly passive. In other words they chase balls. Yeah, let me give you 50 references. 50 references. Let me show you a customer exactly like you. What else can I do for you? Our mindset at Coupa is we don’t want to be too aggressive, and you don’t want to be too passive. You want to be assertive.

Rob Bernshyten:

Focus on the facts, become a trusted advisor, get vision lock on what is you’re attempting to achieve in working with us, and if we agree to that vision lock, perhaps I’m the right player to help you achieve it. If I’m not, you can go find the other player to help you achieve it. We try to be very, very assertive in our dealings and always, Jason, always grounded in integrity. That’s very, very important to me. I never wanted an environment where the sales person would sell something and then they’d be afraid to interact with that prospect. That’s horrible. We want a lifetime relationship with this customer. They should be proud of what they’ve done and they should know they have now thousands of people behind them, they’re going to deliver for that customer. This is value of service. It’s a different way of thinking about the traditional product space business into the business that is today. I mean, SaaStr right? This is what it’s about.

Jason Lemkin:

Yeah. No turn and burn deals.

Rob Bernshyten:

No.

Jason Lemkin:

They’re the worst. Rob this was incredible, thanks for giving us the full 50 minutes. I love spendindex.com go to it. We’ll talk about more about it on SaaStr spending next [inaudible 00:50:01] you will. There’ll be another quarter of data coming out shortly I assume.

Rob Bernshyten:

That true, it will.

Jason Lemkin:

But you will see things that are fascinating that are data-driven, which I love. Check that out and also Smarter Together. This community in B2B, I think, is super powerful for the next five years. So hopefully we can continue the conversation there but grab your copy. Rob again, this was wonderful. Thanks for taking the time out.

Rob Bernshyten:

Don’t mention it, cheers.

 

The post SaaStr Podcasts for the Week with Matt Garratt, Trisha Price, David Schmaier, Rob Bernshteyn, and Jason Lemkin appeared first on SaaStr.

OwnBackup lands $50M as backup for Salesforce ecosystem thrives


This post is by Ron Miller from Fundings & Exits – TechCrunch

OwnBackup has made a name for itself primarily as a backup and disaster recovery system for the Salesforce ecosystem, and today the company announced a $50 million investment.

Insight Partners led the round, with participation from Salesforce Ventures and Vertex Ventures. This chunk of money comes on top of a $23 million round from a year ago, and brings the total raised to more than $100 million, according to the company.

It shouldn’t come as a surprise that Salesforce Ventures chipped in when the majority of the company’s backup and recovery business involves the Salesforce ecosystem, although the company will be looking to expand beyond that with the new money.

“We’ve seen such growth over the last two and a half years around the Salesforce ecosystem, and the other ISV partners like Veeva and nCino that we’ve remained focused within the Salesforce space. But with this funding, we will expand over the next 12 months into a few new ecosystems,” company CEO Sam Gutmann told TechCrunch.

In spite of the pandemic, the company continues to grow, adding 250 new customers last quarter, bringing it to over 2,000 customers and 250 employees, according to Gutmann.

He says that raising the round, which closed at the beginning of May, had some hairy moments as the pandemic began to take hold across the world and worsen in the U.S. For a time, he began talking to new investors in case his existing ones got cold feet. As it turned out, when the quarterly numbers came in strong, the existing ones came back and the round was oversubscribed, Gutmann said.

“Q2 frankly was a record quarter for us, adding over 250 new accounts, and we’re seeing companies start to really understand how critical this is,” he said.

The company plans to continue hiring through the pandemic, although he says it might not be quite as aggressively as they once thought. Like many companies, even though they plan to hire, they are continually assessing the market. At this point, he foresees growing the workforce by about another 50 people this year, but that’s about as far as he can look ahead right now.

Gutmann says he is working with his management team to make sure he has a diverse workforce right up to the executive level, but he says it’s challenging. “I think our lower ranks are actually quite diverse, but as you get up into the leadership team, you can see on the website unfortunately we’re not there yet,” he said.

They are instructing their recruiting teams to look for diverse candidates whether by gender or ethnicity, and employees have formed a diversity and inclusion task force with internal training, particularly for managers around interviewing techniques.

He says going remote has been difficult, and he misses seeing his employees in the office. He hopes to have at least some come back before the end of the summer and slowly add more as we get into the fall, but that will depend on how things go.

Sales and GTM in Uncertain Times with Adnan Chaudhry and Matt Garratt (Video + Transcript)


This post is by Team SaaStr from SaaStr

Leveraging survey data from 66+ enterprise SaaS companies, Matt Garratt, Managing Partner of Salesforce Ventures shares the landscape of how businesses are shifting their sales & GTM strategies to react to today’s uncertain times. Adnan Chaudhry, SVP of Sales at Salesforce then provides actionable takeaways on how to refocus your sales teams, engage with customers, adjust your sales comp, and how you can properly forecast in today’s new landscape.

Adnan Chaudhry | SVP of Sales @ Salesforce

Matt Garratt | Managing Partner @ Salesforce Ventures

 

Matt Garratt:
All of our mid-market business and we are going to be talking about how our portfolio companies and how Salesforce ventures, and how Salesforce is shifting our go to market strategies during these very uncertain times and really excited to have Adnan here, one of the best sales leaders I’ve ever had the privilege of working with. And also he works with many of the leading tech companies so he has a really good perspective of what is going on in the market. And he also has the, I don’t know, benefit or dubious distinction, but lived through this before in 2008 and 2009. So a lot of lessons that can be taken from there as well.

Adnan Chaudhry:
Thanks, Matt. Good to be here.

Matt Garratt:
Next slide. Oh, sorry. Adnan, you have feedback. There we go. All right. So everyone is adjusting their go to market strategy. And I think adjusting really is the operative word here. It seems for the first few days, everyone was adjusting day to day. And now it seems more week to week and initial reactions certainly were one of shock, just trying to figure out what’s going on, checking in with their employees, making sure everyone’s safe, making sure everyone’s healthy and checking in with customers and doing the same. And seems we’re headed more into a bit of an adjustment period of trying to stabilize trying to establish a new normal, and so we’re going to talk about what that means in a bit more depth.

Matt Garratt:
Go to the next slide. So we’re going to talk about this in two parts. I’m going to first talk about some of the insights that we’ve gotten from serving Salesforce Ventures portfolio companies, both in terms of what they’re seeing in the market and how bookings and churn and things like that are heading, but then also how they’re adjusting to this on their go to market strategies. And then I’m going to hand it over to Adnan and he is going to go in more depth and provide a framework of how Salesforce is adjusting, and then talk really some of the more detailed specifics about some of the tactics and strategies that we’re employing.

Matt Garratt:
So for those that aren’t familiar with Salesforce Ventures, we are the strategic investment arm for Salesforce. So we have over 260 portfolio companies globally, it’s all enterprise software, predominantly SaaS. Some of the companies you may hear of such as Zoom, a lot of other companies on this list like Anaplan that you might be familiar with and feel like we did, we did some surveys of the portfolio company and given the breadth and scope, feel like it gives a pretty good index of what’s going on in SaaS in the enterprise software landscape.

Matt Garratt:
And so we’ll walk through some of the some of the surveys that we did, you can go to the next slide. So we surveyed a portfolio over a couple of surveys and to set this up, this is largely a company that are Series A Series B, and Series C, 80% of the companies fell in that category. These were kind of small or mid sized companies with employees generally that had 11 to 250 employees, about 90% of the companies fell within that range, and mostly selling mid market and up into enterprise. So think of this as more direct sales, mid market and up kind of earliest to early growth stage companies to sort of think about the survey results.

Matt Garratt:
So if you look at the results themselves, if you look at Q1, not too surprising. Bookings were down, I think silver lining’s but not by too much, 50% of the companies that we survey, whereas 76% of plan or better, which was pretty good. It does tend to separate when you look at it more in companies that had their fiscal quarter ending in March versus April. And certainly, kind of what you’re going to hear coming out of this was that companies were able to really accelerate deals that were at the bottom of the funnel, trying to close things quickly. And as April kind of came on, things started to slow down a bit more.

Matt Garratt:
So as you move forward, and you start to look into Q2, not too surprising, everyone’s expecting Q2 to be much softer. So in this case, only 30% of the companies that we spoke to expect to hit 76% of bookings plan or better. Certainly, some of this is and a lot of this is going to be COVID related. But I think also it’s, and Adnan will get into this too more. I think it’s a bit of a strategy. Companies were very focused on customer success, retaining existing customers just checking in, seeing how customers were doing, assessing the health of the business, assessing the health of their own employees, really focusing on upsell, closing existing deals, and not as much focusing on top of the funnel.

Matt Garratt:
And so if you look at where the pipeline is right now, on the next slide, again pipeline is flat to down. Again, not too surprising, some similar things. And this has come out as we started to really talk to many of our portfolio companies as well. Companies were really reaching out to existing companies and checking in. There was not a lot of outbound sales or marketing. And I really think what we’ve seen internally and externally is that’s starting to change. So last week, really starting to adjust to, I won’t say the new normal, but kind of trying to stabilize businesses and really starting to focus again a lot more on outreach. So we’re going to check in on this in a month or so and it will be interesting to see how this changes over time as companies really start to increase outbound as well. And if you look at churn, so in Q1, starting to see some early signs of churn. 30% of the companies saw some increase in churn.

Matt Garratt:
And then if you can look at this a little bit more on the next slide, if you look at the whole year, we are expecting to see a significant increase in churn. 30% of the companies are expecting to see churn increase by 1% to 5%. Another 36 are expecting to see churn increase by 6% to 10%. I think the silver lining in this though is that only 14% of the companies think that churn will increase by 11%. So I think that is somewhat of a good news in this in that SaaS businesses are sticky. Companies tend to stick around. And so while the churn I don’t want to minimize it, stable base of revenue should be able to maintain that through the year.

Matt Garratt:
So I think that is some good news. If you dig into the churn numbers a little bit more, we’re using some of the data that Gainsight provided and they did a great job, I recommend looking at the survey that they did. They really go into churn and customer success a great deal. And this is highlighting something that we’re really seeing across the board. And that is you’re seeing a bit of a separation in those companies that have really the stickiest, most critical solution. So if you have a renewal rate of around 90% to 95%, churn’s only expected to decrease by an additional 5%. Whereas, if companies have a bit higher attrition and retentions less than 80%, the churn could go up to above 16%.

Matt Garratt:
Go to the next slide. So we are getting a lot of questions around what are best practices, what are companies doing, so on the next slide, I’m going to go through this somewhat briefly, and then Adnan’s going to go into this in a lot more detail. But some of the most commonly cited strategies and tactics from our portfolio companies, again really initially focusing on customer success and retention, from there, focusing on upsell versus targeting market new opportunities. Again, that stunning shift, we’re seeing that shift more in the last week or two to outbound sales. And everyone’s really, really redirecting their efforts on to those industries that are less impacted.

Matt Garratt:
And now the goal is really moving to identifying opportunities regardless of the size, just finding opportunities that have the highest percent of closing, call that the sell what you can, sell a box of doughnuts if you need to, but identify things, I stole that from Adnan. Identify what you can and try and close those deals. Also, there is focus on changing terms to try and close and accelerate deals, reducing time commitment requirements for contracts, pricing minimums to get to a yes more quickly, and then also focusing on cash and cash collections by building more efficiency in that process. And some of our customers are also shifting a little bit more into the enterprise side as well.

Matt Garratt:
You can go the next slide. I will say there are some encouraging signs that we’re seeing in this, and so 70% of companies have been able to identify new revenue opportunities, whether it’s shifting to the public sector or shifting to healthcare, and you’re just seeing just the whole go to market motion in how sales teams are configured to becoming just much more nimble, much more quick, adjusting, experimenting, seeing where there’s opportunities and going for that. And I think one of the other positive things and hard to see this now, but 90% of the companies that we surveyed did say they believe that this will create a tailwind for the companies coming out of COVID-19.

Matt Garratt:
And to dive into that a little bit more, we asked our companies about travel. 31% of the companies that we surveyed said that they’ll see a decrease in sales related to travel by 26% to 50%. And then another 24% said that that will decrease by more than 50%. And this is like coming out of this, this isn’t now. This is going forward. We also asked another question where a portfolio company said that 90% of the companies expect work from home to dramatically increase. And so when you combine that and some of the other things we’re seeing, it’s really going to, we think accelerate the transition to a digital economy, it’s really going to accelerate digital transformation.

Matt Garratt:
And it’s not just going to be we think in things like work from home tools like Zoom or IT solutions like VPN, but it’s really going to transform how business is getting done, whether that’s online education and learning. Right now, learning for companies is only at 10% online. We expect that will increase dramatically. We’re seeing a huge uptake in people wanting more automation, whether that’s RPA or automating their call centers or automating other parts of their businesses as well. And it’s going to impact all industries, whether it’s we’re seeing supply chains shift from manufacturing and companies moving from having a single source for a supplier in one country to multiple countries and needing to be much more agile, much more nimble. So that’s going to require solutions that are cloud based that you can spin up in a matter of days or weeks versus a matter of months or years.

Matt Garratt:
So we do think that what we’re seeing coming out of this, we’ll see a huge acceleration in SaaS related solutions. So that is again, can’t understate how difficult what we’re going through now is but there is somewhat of a silver lining I think coming out of this. So what I want to do now is shift over to Adnan, and oh, just last bit, too. We have all this data online, if you want to see more results from the survey. There’s a link here. You can also go to our medium Salesforce Ventures, and we have a bunch of resources there. So with that though, what I want to do now is shift over to Adnan, and let him talk more specifically about what’s Salesforce doing, how are we reaching out to our customers and talk through some of the frameworks and tactics that we’re using?

Adnan Chaudhry:
Great, Matt, thanks so much. Well, good morning. Good afternoon. I’m going to be talking a bit about a couple of things. One is certainly the approach at Salesforce and some of the things that we’ve been going through, but also kind of a lot of what we’ve been hearing in the market, between Matt’s perspective and 60 plus portfolio companies that he’s working with. I’m responsible for the U.S. commercial business. And so, we’ve got companies that I interact with in all sorts of industries, travel, leisure, hospitality, to some companies that have been really hard hit, others that have been on the other side of this and have really seen a massive uptake in their business.

Adnan Chaudhry:
One of the guiding principles that helped me personally, I was here as Matt mentioned, I was here at Salesforce in 2008, 2009. I was an account executive covering financial services vertical and covering in New York. And so, I remember being in New York and the whole market was melting down. And I think Salesforce has learned a lot since then. And certainly the market has come quite a bit far from that point. Certainly the Safe Harbor, if I’m making any forward looking statements, this is largely meant to be if you’re making any decisions on Salesforce or any product purchases, make them based on current configuration, current functionality. More here, I invite you to read this later.

Adnan Chaudhry:
But if we zoom out a minute, the way that we’re thinking about it I think this is the case across the board in late February, early March, I called Marc Benioff, our CEO had a company all hands shortly after the earnings release, and talked about, “Hey, there’s this thing coming.” And I think everyone kind of looked and was a bit sort of confused to even like, “Hey, is this really a potential crisis coming down?” And here we are 60 days later, or a month and a half later, and we’re in this global crisis.

Adnan Chaudhry:
And at first, I just want to acknowledge that we’re going to talk about the business models of some of our broader customers, some of the things Salesforce is going through. But this is a public health crisis. It’s an economic crisis. It’s a business crisis. And so I empathize with you, your family, your loved ones, your businesses that have been horribly hit heavily.

Adnan Chaudhry:
And in these three key buckets, the crisis hit officially. I live in California. And so even though we were working from home and a lot of global travel for us, and even domestic travel at Salesforce came to halt in early March, at least California, it was really mid March when the shelter in place directives and certainly the country followed throughout. And when you look here, I think we’re still here. When I talk to customers, they’re in some version of this crisis management, if you’re like me a parent with three different schools running upstairs, as long as those kids aren’t even back to work, you’re still in crisis management.

Adnan Chaudhry:
But I think as a business though, we’ve teetered back into stabilization. And then the third component when all this comes back, and what that new normal looks like, and we go into acceleration. And so this is the framework I’m going to walk through today. And all of this blends and also weave in and out. And I think for us, the crisis management tiptoeing into stabilization, where I think we are right now, at least in our business, this could also be considered the phase of back to work, and how do we equip our teams to get back to work and whatever that new normal means.

Adnan Chaudhry:
And so I use that term interchangeably in stabilization. And then kind of acceleration is sort of how we call our business. So this is going to be the framework. And so in the first part of this framework, you’re on crisis management, I just want to share some of the things and lessons learned we had. So three key pillars here. One was really refocusing our team and refocusing your teams and what does that mean, then redirecting your operations, and then how do you engage your customers. So each one of these areas has some lessons learned and I was on a call yesterday with somebody that’s working with clients in the education sector, and they’re still trying to refocus their organizations and their teams. They’re even trying to figure out do we bring higher ed back and what’s the go, no go date for some of the universities. When do we need to make that call and that’s going to be probably for them in late July, at the best if students are showing up on campus, and so they’re still kind of in this early crisis.

Adnan Chaudhry:
[inaudible 00:17:17] having broader relief efforts at Salesforce, we believe our platform is something that’s the greatest platform for change. And so for us we’ve been really active in leveraging our ecosystem. We’ve gotten over 50 million PPE equipment out in the market through just our broad efforts and working with our partners. We’ve got, and by the way, in the back of this deck, I’m going to have a fair amount of links, a lot of the stuff I talked about. So if you’re trying to figure out where to go find information, just know that it’s coming. We’ve reached out and we set up a grant process for a lot of our SMBs to help them financially in whatever way we can.

Adnan Chaudhry:
We made a public pledge, for example, to not have any layoffs for 90 days, and see how that goes forward, but sort of being very open around anything we can do in these relief efforts. And then internally, transparency was a big part. We’ve got to rethink our channels for employee communications and feedback. And I’ll give you an example. We’re having a weekly global all hands call with our executive staff every single week for our 50,000 employees. That was something that was typically at that level done quarterly. Now we’re bringing that in every single week.

Adnan Chaudhry:
We’re doing sales leadership, all hands calls with customer service and support and sales every single week. So that cadence and that feedback loop is really ticked up. And that’s the best practice that I think is across the industry. And then also restating validating your goals. Everyone here, a lot of the companies here are led by values, were led by values. We don’t have the market cornered on that. But really, we’ve had to reevaluate how do we think about that. And our internal annual strategy process is called a V2MOM. It stands for vision, values, methods, obstacles and measures.

Adnan Chaudhry:
We’ve taken that process and put it directly towards what does that mean for COVID-19? And so I’ve got that full V2MOM at the back end of this deck should anybody want to read that, and that talks about how do we treat our customers? How do we go to market? How do we think about events? How do we think in this new era? And we’ve really taken our values and applied it to these new methods.

Adnan Chaudhry:
Through this crisis management, there was also an opportunity to redirect our operations. One is just everyone’s gotten remote, remote connectivity. That’s a lot of challenge. We have teams that are not used to working remote at all. They’re office based. And we have some teams that are purely home office based, they’re closest to the customer. We have employees we’ve hired in the last month that have never been on site, either to a client, have never met a single employee in person at Salesforce. So how do we bring them in? How do we make them feel part of the team and integrate them? And so we really put a lot of work on that.

Adnan Chaudhry:
And then for marketing, we’ve had to just pivot overnight. We’re at a company that’s heavily focused on high touch in person events. I’ll give you an example. Our Sydney World Tour, we had 10,000 registrants. And when everything shut down, we have to pivot overnight. We went from an in-person event with about 10,000 registrants, and we led it virtually and led all the sessions virtually, and we’ve got some best practices we’ve shared around that. And that ended up having 80,000 attendees.

Adnan Chaudhry:
And what we found through those events also is not only is there a great appetite for virtual, but on those virtual events, we ended up getting a lot more higher level C level attendance than we would otherwise. And so really shifting both the marketing and sales engagements to all virtual, and then the organization on our operations. We’ve had to really self organize, and a lot of this was informed by some lessons we learned in 2008. I remember when I was a rep, there was still sort of the agile and the nimble process around credit collections, customer service. Contract modifications were still so decentralized. We learned from that early on. And so in this process really around customer success, developing the financial plan for our customers. And so we’ve learned good best practices to put more tools and more controls in the hands of frontline managers, frontline reps so the back end finance teams, sales ops teams aren’t inundated. And that’s really helped through this message.

Adnan Chaudhry:
And engaging customers, I suspect that’s the common theme for everyone. How do you do it? If you’re like me, I got bombarded just even by so many different vendors and different players in the space about all these emails, and it’s really hard to pull that message back around what that means. And so for us, we’ve been really selective. So cold calling efforts during this phase, we pulled back totally. Any noncritical outbound efforts, especially within industries that were hard hit, we’ve totally pulled those back.

Adnan Chaudhry:
And then the check ins were really about leading with empathy, deep, deep listening. Salesforce, we’ve got the market covered on great ideas, and so a lot of what we’ve learned, we’ve learned through our customers by deeply listening and deeply engaging. And what we found through that was there was a big appetite around understanding what’s happening. And so Leading Through Change is a series we’ve launched. It’s available to everyone bringing in third party speakers, bringing in, we had Mark Cuban couple of weeks ago, we’re having Brene Brown for our SMB business, around empathy, and leading through courage. And so there’s a massive demand around some of this content.

Adnan Chaudhry:
And another is just being there and just telling people you want to help. So Salesforce Care is our package of various solutions across industry, whether it’s healthcare, it’s the government sector, or the public sector. It’s the SMB space. There are specific tools for each of those areas, specific functions. We have customers that are totally isolated in the sense of they have support teams that were used to working side by side at a desk and now they’re working from their home office. So how do you pivot over to ask a question to someone and so we’ve turned on tools and we’ve made a lot of our product bundles free for 90 days.

Adnan Chaudhry:
Those were some of the lessons learned we had during crisis management. I think some of the industry has also sort of taken this to operationalize. I go forward one framework I just wanted to share from pipeline. I get customers ask me a lot about pipeline. We certainly put a lot of focus on that internally. And one area I would just point out here is this is illustrative. This is pretty standard certainly out of Salesforce or most CRMs around pipeline fidelity in the chart. So starting from the left, sort of where the pipeline starts at the beginning of the quarter, across the bottom, various percentage changes, and then certainly where you end. And the green neck activities are areas that create pipeline, create the positive, the red are certainly the degradation. And so for one, I think the create and close is super important. So every one of these slivers, we dive in deeper, so don’t just say, “Hey, what’s the starting pipeline? What’s the ending pipeline?” So create and close, that [inaudible 00:24:05]

Adnan Chaudhry:
Closing out your Q1 now. And so really the create and close effort, what was the motion? And we’ve even found even creating spiffs and incentivize create and close in the current motion in the current month or in the current quarter created a big uptick. And that’s the case across the industry as well. Certainly you have your pre book, you have your pull forward revenue. I think what we tend to see is the more larger enterprise businesses tend to have more ability to pull forward because their pipelines are back end loaded versus I think, in the SMB space, that pull forward has been a little bit harder.

Adnan Chaudhry:
Then you go to the push, and what were the activities, what were the issues for the push, and for us, this has been super, super helpful because projects are either canceled, they’re paused, or they’re just pushed for a little bit of time or maybe they’re sort of thinking what their budgets are, how they want to operationalize, and so really understanding this bucket and segmenting it and sticking with it is super, super important.

Adnan Chaudhry:
And then certainly a lot of value changes, certain things that are getting out in the wind. So for both the mid market, SMB space and the enterprise space, I think are super critical and we find certainly, I think that’s across the industry, the SMB space, mid market space, there’s a lot more create and close and momentum in front end of the year, in the front end of the quarter. And so those have been taking a bigger hit versus the larger enterprise motions. Those tend to be back end loaded, especially with whether it’s the January or December year end, so pulling that step forward has really been helpful. So I would encourage people to really think about pipelining this core fidelity stage and moving to stabilization.

Adnan Chaudhry:
Now this is the next stage, I would say this is the back to work. In some elements, we feel very firmly here. In other parts, we’re still early. In the same construct, what are the opportunities here? One is investing in your team, calibrating your operations and then re-qualifying your customers. And I’ll just hit on a couple of points here that I think might be worthwhile to the audience here. One, the importance of morale and well being, super, super critical, more than ever with the situation where the teams are working from home.

Adnan Chaudhry:
Our sales teams have never been busier. It’s crazy. Nobody’s sitting around watching YouTube or Netflix. There’s real work. And it’s not exactly clear. Sales is wearing many hats. You’re customer support, you’re credit, you’re collections, you’re enablement, you’re a number of different things. So we really have to focus heavily on their well being. We’ve got a daily 9 Pacific 30 minute well being session organization wide. It was around mental health and well being. It’s been super helpful to our team. We actually have now opened up to the whole community, all of our customers, anybody on here. There’s details at the back end of this deck where you can tune in, if there’s any sort of content that’s of interest and we’ve also used this as an opportunity to heavy investment in enablement and reskilling. We have a lot of folks that are based in home offices, closest to the customer. This is not new, whether it’s in sales, I’ve got kids. And I was having conversation with my daughter the other day, and she was talking to one of the teachers who’s just been exceptional on the Zoom exchange [inaudible 00:27:24].

Adnan Chaudhry:
Run it, and now they have to really work on a different skill and vice versa. And so the enablement, there has been really important, we thought about our new call motion, our first call approach, how do we come to bear? So that’s been a heavy investment. The other part that I think is top of mind probably is around stability. I get asked by virtually every customer I talk to, “Hey, what are we doing around giving guidance on job roles and compensation?” I’ll tell you from what I’m seeing across the market, you have some firms that have had to make deep cuts for all the right reasons are certainly important to them. You have some companies that have done nothing. Internally, we’ve decided to give guarantees to certain sales teams. And so that’s been the best way to just sort of pause and say, “Hey, there’s a guarantee. We’ve got you covered through this, just focus on the right motion.”

Adnan Chaudhry:
And so through that, that’s really helped. And then if there’s a specific tool that we think is really helpful to the market or part of our stack that can really, really help, we put spiffed, incentivize that continuity in the emphasis. And so putting spiffs that are very specific and time bound has really helped quite a bit. And then we’ve also have had to really harmonize with new tools and processes. There’s just so much coming at sales, as I mentioned. They’re playing every single role. And so we’ve had to really create pocket guides, and really get them super focused and same thing with marketing.

Adnan Chaudhry:
And then so what are the things we’re measuring? And so this is to calibrate your operations. And so if we’re saying, “Hey, do the right thing for the customer, have the right motion.” So the kinds of things that we’re doing now and this is what also guided us in 2008, we call it AMP. It stands for activities, meetings and pipeline. This is the notion of, “Hey, have the right activities, have the right meetings, the pipeline will come.” And so we’re measuring those inputs, because historically, the output was, “Hey, here’s your number. Here’s your pipeline, go for it.” Now we have to look to a different metric. We have to look at different metric than just quota attainment. Those things will come later.

Adnan Chaudhry:
And then also forecasting, I’ve got a [inaudible 00:29:28] depending on the deal cycle, deals days in the quarter. Now what we’ve said is, “Hey, cut off the COVID noise to the best extent that we can. Take all the COVID impact out, and then confidence and really build that hard edge at 90% confidence.” And so with that, that’s given people a lot of confidence, a little bit more opportunity to sort of, “Hey, this stuff is not going to hit but this is going to hit.”, and then it’s having that first data point, then it creates a map. And then from there, we’ve been able to build on top of that 90% confidence. And I’ve shared that with customers. And I get that that’s been a really good best practice.

Adnan Chaudhry:
And then our marketing strategy continues to evolve. We certainly continue to roll out virtual events. But we really think it’s all about speed and relevance. You’ve got to be fast, and the content’s got to be highly, highly relevant. And so for us, a lot of that has been around smaller, more intimate roundtables, and also with the customers when we talk to customers, and that’s opened up as things have stabilized, speak to power, talk the truth. And in that conversation, I think people understand there’s been a really confirming the project status, is this on? Is this frozen? What’s going on? How can we best help? And through that conversation, we’ve also been able to qualify at a deep, deep level with that 90% threshold, and I think customers have appreciated it because these projects just didn’t show up overnight.

Adnan Chaudhry:
They kind of maybe in some cases got frozen overnight, but they’re open to it. If it’s a project that’s maybe just frozen, there’s actually a lot of get the permission from the customer, “Hey, we’re going to continue to work through this with our teams.” And that’s been super helpful. And it’s also helped our team internally because again, we tend to be heavily on premise, in person with some of the events. So we’ve been the sort of solutions engineering, building the right ROI is the business case, we’ve now taken those to virtual sessions. But with the customer’s permission, we’ve been able to actually go deeper, and through that uncover a lot of near term opportunities that the customers are asking for, they’re begging from the sale.

Adnan Chaudhry:
So that’s some of the high level at the stabilization phase. I did want to take this towards one of the key areas that’s top of mind I suspect for everyone, and that’s around capacity in hiring, and how do we think about AEs. And this is just an illustrative example. It’s a company with right now with 50 AEs. That’s going to grow to 80 AEs. The same model applies whether you have five AEs and you’re going to 80 or you have several hundred AEs and you’re doubling. And this was something that in 2008, Salesforce, I think, maybe stalled hiring a bit. And what we learned was that there was some pretty big trade offs. And so we’re leaning into the market, you’ve seen some of the messaging we put out there, Mark’s been very vocal about hiring. And we’re leading into the hiring.

Adnan Chaudhry:
And so I wanted to just walk through some of the key trade offs in each of these and so in this example, maintain the current course of hiring. [inaudible 00:32:31] Some cuts, in this case, the company with 50 AEs, you drop 20 headcount, and then you’re 30. What’s the impact of that to your business? And so that’s the impact of capacity. Certainly, there’s other levers you can pull around improving productivity, minimizing attrition, promote internally, so maybe onboard faster, and certainly accelerating the ramp time. And so this is a bit of an eye chart. You have to bear with me for a minute. The sales capacity trade off here. In the key hiring space, if you just assume $1 million quota, 60% attainment, again this is just illustrative. Everyone’s going to sort of input their data in here and pull the lever differently.

Adnan Chaudhry:
But in this example, if you go through the seasonal hiring and the example of hiring 10 reps in April, 10 in July, 10 in October, you end the year at 80 reps. Here, we’re also taking a pretty big assumption of a 90 day ramp and you’re seeing the ramp phase internally. At Salesforce, we view our ramp cycle closer to about six months for a typical AE more on the larger enterprise side.

Adnan Chaudhry:
And so here you’d have 88% ramp capacity going into December and a bookings impact of 35 million of the yield. If you see what happens, if you just stall hiring by even just those 10 hires and you push the 10 hires from April into October, you only end up with 75% ramped and about a $5 million, about a $3 million hit on your business. But what’s really interesting is if you make some cuts now, if you drop from 50 reps to 30, you cut those 20 reps out. And then you’ve got to hire those back in the back end of the year and even a big assumption, if you can hire that fast, let alone ramp, so I think they make cuts scenario is a lot, lot more generous than it might be otherwise, where you end up is you have a 50% of your team is only ramped. But the bookings impact is over $10 million. And assuming 150,000 OTE, again you can flex the OTE event, you find that in this example, you get a $10.2 million loss in bookings. But you only pick up $1.5 million gain in cost savings.

Adnan Chaudhry:
So just something to think about on trade offs because I think the market is moving so fast. And I hear customers in some cases are really struggling with, “Hey, I’m going to make some deep cuts now and figure it out later.” And some customers are saying, “Hey, we’re going to stall or in our case, we’re going to go right into it and keep hiring through this downturn because we do think on the other end, having the sales capacity ramped and being closer to the customer is super, super important, valuable.”

Adnan Chaudhry:
So that’s just one framework I wanted to share here. And then to wrap it up on the third phase of acceleration or growth as we come back into work, just some thoughts here that again, we don’t have the market cornered on good ideas, but some of the things that we’re working with, and the feedback we’re also getting. One is, under any scenario, you got to empower your team, you got to have that psychological safety. It’s going to be some form of a rolling reboot, for sure. And so you have to be uber flexible with personal needs.

Adnan Chaudhry:
Whether it’s in the stabilization or now, I do think once things sort of get to that standard, you got to have an expectation of performance. And so we’re expecting every sales team member to have performance goals, and we’re expecting them to perform, and that’s going to be creative. We’re going to be scrappy, and so this is not about, “Hey, we’re going to sit there and wait until Q4, get that one big deal and that’s going to make the year.” No, in this new normal, that’s gone. I don’t care what segment you’re in, everyone’s going to participate, everyone’s going to put a win on the board. I think setting that expectation clearly to the team’s going to be super important, because we’re going to have to have any calibration.

Adnan Chaudhry:
On the operation side, I hear this a lot from a lot of my clients. Some are in retail, some are in hospitality. And this whole notion of re-entering in shifts, you’re going to have maybe a Monday and a Wednesday shift and a Tuesday and Thursday shift. How do we have a rolling reboot into the workspace. If someone gets sick or a team gets sick, you need to quarantine a whole team. So I think this hybrid approach and adapting the operations is going to be something that’s going to be more front and center. And we’re going to try to help lead the way with some of our clients.

Adnan Chaudhry:
And then just the agility and being responsive. And here, it hits every part of our organization. So as I mentioned, with marketing, our goal is speed and relevance. And here, operationally the same thing. There’s going to be a lot of unknowns, whether it’s customer specific or industry or public health directives that continue to come our way. So a lot of the operations, historically, I think we’ve been more quarter to quarter or year to year. Now we can go week to week or month to month, the shorter time span, shorter bursts and having those metrics are going to be super critical.

Adnan Chaudhry:
And then it’s all about elevating our customers. And I think there are some` companies that are well positioned for this, and the digital transformation is paramount. People were trying to get here before. They’re sprinting to get here now, and really having the full, full journey of your customer and everything that you’re doing around digital touchpoints. If you’re in retail alone, for somebody have a shopping experience or a return experience, you’ve got to be fully digital. And here leveraging what’s been successful around the stabilization phase, the remote support, high touch virtual exec events, focusing a lot of the marketing towards industries in heavy need or surging with new opportunities. And again, just doubling down on the [inaudible 00:37:56] around tying yourself to digitization, enabling smarter, more personalized experiences. That’s going to be the new normal. That’s how we all get our customers through digital transformation. So make those investments now, don’t wait would be my advice to you.

Adnan Chaudhry:
Some resources I just want to leave you here with. One, Salesforce Care. Here’s the hyperlink that says all of our key offerings or product bundles, our SMB grants, but I also wanted to give other takeaways as well. Here’s our daily, the next one up Safety and Wellbeing Actions. That’s where we put all of our responses to the market. Our small business grants are on here. As I mentioned, we have a COVID-19 V2MOM. We’re making it public. I encourage you to dig in. Leading Through Change newsletter, again we have a lot of thought leaders and change leaders coming and might be helpful to you or your teams if there’s interest. The Be Well Together is the 30 minutes daily 9 a.m. It’s been incredibly helpful. My wife and I most days chime in together. It’s really brought the content into the house in this new shelter in place world.

Adnan Chaudhry:
[inaudible 00:39:06] You and I hope you, your stakeholders, your team are all safe and doing well. So Matt and team, I think we’re there now. I think we’re opening it up to any questions if there are any.

Deborah:
This is Deborah from the SaaStr team. I can read out a few questions for you guys if you’d like. So we have one that says how should companies think about sales teams right now? Do you look for top talent that might have been unavailable three months ago? How do you identify the lower performers when numbers and targets have completely changed or need to be? Do you make drastic changes or stay the course?

Adnan Chaudhry:
No, I can take that. I think one is just always be hiring. In our case, we haven’t let off. We’re going to continue to invest in talent through this and so certainly, if you’re in the market, we’re looking. Please come find us. I think that the second part of that question, Deborah, I think was around hey, it’s easy to just look good with closing revenue and closing bookings and saying, “Hey, here I am. I’m the superhero.” But I think that’s in some ways the rising tide. When that goes out, it really brings into focus what are the key activities at the top performers. And as I mentioned before, we’re looking at activities, meetings, pipeline, and the underlying motions under all of those are super critical. Are people agile? Are they able to learn a new skill? Are they able to pivot fast and move with agility is something I really look forward to and look to. I didn’t get the last part of your question, just to make sure I had it.

Deborah:
Sorry, I’m just pulling it right back up. Basically, it says after identifying performance when numbers and targets have completely changed or need to be, do you make drastic changes or stay the course was the final part of that.

Adnan Chaudhry:
Yeah, I think for us right now, the drastic changes are really around making sure we’re pivoting our message and our resources to take care of our customers and our teams. The market itself, if you step away from what we’re talking about here, you look at the public equity markets. I mean the smartest minds in the world haven’t even been able to price assets. Asset prices have gone down 20%, 30% and then gone up 20% in a matter of like, two weeks. And so I think drastic changes from that standpoint, I would maybe pause and think about before massive cuts or massive, massive policy changes towards some of these areas. Where we made the changes are really around giving people comfort and security around some guarantees that they’re going to be okay.

Deborah:
So we’re seeing some questions kind of on the flip side of that. How are you mitigating churn? Does it impact business in the future? And another almost similar question, how does expected churn vary by company size?

Adnan Chaudhry:
Matt, do you want to take that maybe with some of the portfolio that you’ve had on the churn side and I can add on?

Matt Garratt:
Yeah, on the varying by company size, I mean I think there’s more of natural, larger companies tend to have a larger base of capital, more stable revenues. And so from that standpoint, larger companies are going to experience a bit less churn. And so I think that’s a bit how company size plays into it, I would say. It really is also going to vary a lot more though by industry and sector that you play in. And then sorry, oh and how are companies addressing churn. I think Adnan hit on this and some of the stuff that Nick and the Gainsight team focused on was really insightful.

Matt Garratt:
But it was really kind of breaking down the barriers between account management and customer success and sales and just really creating really nimble teams to respond quickly and surround those customers, spend a lot of time and then being flexible across the board, whether that’s deferring, and it’s very much a customer by customer case, and that’s whether it’s postponing payments, deferring payments or sometimes it was giving a customer, not making them pay for all the extra features of a product that maybe they’re consuming and just charging them for the base price to keep them on. So it’s just getting really creative in thinking about what are the best ways to retain that customer. And sometimes it’s really, really going to be specific to kind of what their needs are. But flexibility, listening, empathy is really the key thing.

Adnan Chaudhry:
Yeah, and I would add that [inaudible 00:44:02] online sales team to frontline leadership has the best knowledge around how to pivot the solution set to help the customer. Maybe this team has been put on pause by the customer but the solutions are, your offerings can be applied here. And they’re a lot more nimble if you give them that flexibility. And so what might seem like hey, it’s a contract negotiation or a payment issue is really around being agile. But if you make it seem like it’s an operations and finance approval, then you’re kind of stuck in that path.

Deborah:
So moving forward, we’ve got a couple questions about this. Can you give examples of new tools deployed during this crisis, ones that have been helping engage customers better?

Adnan Chaudhry:
Sure. I can give a couple. One of our examples is even with Tableau. Tableau is an acquisition that Salesforce made a year ago or so. That visualization, we’ve just opened up the marketplace. And so the public sector, health clinics are running their dashboards on some of these solutions. And just making these tools available has been super helpful. Other is we’ve got some of the tools around remote call centers or remote service or remote service teams. How do you give them something that’s pre configured, and they can turn on very quickly? So that’s been super helpful. A lot of collaboration tools that are tied into not just for purposes of pure collaboration, but the next level where they’re tied into the data itself. And how do you collaborate on the data? That’s been super helpful. A lot of enablement tools and solutions for example, as we’re enabling the team, even quick videos that we’re attaching versus making people sit through long webinars or the experiential training, just kind of making quick guides, quick pocket guides have also been really helpful.

Matt Garratt:
Yeah, maybe to add one thing I think you’re hitting on is something that’s sort of the secondary effect of being a SaaS company that I think will have long ranging impacts, and that is having collaboration not just the pure pay to play collaboration tools, but the inherent nature of SaaS being collaborative in tying to the data and an example of that as a company in our portfolio Propel PLM, it’s a design tool, product lifecycle management tool and it allows companies as they’re going to release a new design to more easily collaborate with other suppliers and manufacturers, and so it makes sense inherently like having that as a cloud based solution, makes a ton of sense just because all the things that you associate with SaaS solutions.

Matt Garratt:
But having that collaborative component as you’re thinking about, I’m moving my supply chain from a country in Asia to maybe a country in Mexico. And we’ve never met in person, we have to do this in days rather than weeks, you not only have to have that. I mean, there’s no other way to do it but in the cloud, but then also you’re collaborating around that project, and that those tools really need to be intricately linked to the design changes, the quality assurance systems. So it’s something that kind of I always thought was pretty eye opening in terms of that secondary effect of why SaaS solutions are going to be so impactful going forward.

Deborah:
So you both mentioned video at different times, video and being apart during this time, we’re seeing a few questions along these lines. Are you able to close big or rather enterprise deals that most commonly would have needed physical meetings in the past or are they being pushed to the next quarter?

Adnan Chaudhry:
Yeah, I’ve never touched more executives in a 30 to 45 day cycle in my life, the fact that I never jumped on a plane. The whole notion of flying to [inaudible 00:48:14] really need help right now. And so the short answer is yes, I’ll even take it a step further. We’ve had to really rethink our approach because a lot of the, I mentioned briefly earlier, when we do the architect workshops or solutioning, we’ve been able to pivot and one of the ways we’ve done that is we’ve been thoughfully internally. We’ve been running our internal strategy sessions or internal meetings onto ourselves, the fact that we’ve got to be running daily, I’m sorry, weekly, all hands with 50,000 employees, for example, means we’ve got to get the tools set up in place that can sort of take all that content and that feedback and keep working. And so for large scale organizations especially, they’ve been coming to us asking us for guidance. And my experience is they’re buying and they’re interested. And so make your message relevant and move fast.

Deborah:
So it looks like we have time for about one, maybe two more questions. And I kind of want to follow in line with what we were just talking about. This is specific to Adnan, but of course open to both. How is your sales org leaning on ISV partners to generate co-sell revenue, relationships, et cetera? Are you focusing at all on those partnerships as a means of entering new opportunities?

Adnan Chaudhry:
100% yes. I mean, we’ve got a very strong, healthy ISV channel. What’s coming up now are really interesting use cases. Some of our ISV partners are just seeing their businesses boom, and others are trying to figure out how to rethink their message. And so that’s a core, core tenet of our business and how we go to market, whether it’s through the channel or even our sales teams and putting that solution center for our customers and so that’s never been healthier. And I don’t know Matt if you have a different experience on that.

Matt Garratt:
Yeah, I’ve also just been really proud of how many of the ISVs have responded during this time. So whether it’s SIs or software companies just really helping us and help customers, whether it’s standing up solution so that companies could track, healthcare companies could track their healthcare providers could track their employees what their PPE needs are and that way that you could, this was a company that’s doing this in Canada, distribute that throughout Canada, or as I mentioned, Propel leaning in, in the manufacturing space for PPE equipment. Some of these companies have maybe expertise scenarios that we don’t and so as we’re pivoting not only just how can we help, how can we solve these solutions, we’ve really leaned on a lot of our ISVs to just like, how do we solve COVID but then also how do we sell into some of these other market segments in new ways that we have and as new needs are coming up, whether it’s healthcare, education or manufacturing.

Deborah:
So it seems like we’ve actually run out of time. But thank you both so much. We are so inundated with questions, so we’ll be sure to share all the Q&A with the Salesforce team and make sure that you have a chance to answer them.

Matt Garratt:
Right, thanks so much.

Deborah:
Thanks. And see you guys in the next presentation.

Adnan Chaudhry:
You’re welcome. Thanks.

The post Sales and GTM in Uncertain Times with Adnan Chaudhry and Matt Garratt (Video + Transcript) appeared first on SaaStr.

Scandit raises $80M as COVID-19 drives demand for contactless deliveries


This post is by Natasha Lomas from Fundings & Exits – TechCrunch

Enterprise barcode scanner company Scandit has closed an $80 million Series C round, led by Silicon Valley VC firm G2VP. Atomico, GV, Kreos, NGP Capital, Salesforce Ventures and Swisscom Ventures also participated in the round — which brings its total raised to date to $123M.

The Zurich-based firm offers a platform that combines computer vision and machine learning tech with barcode scanning, text recognition (OCR), object recognition and augmented reality which is designed for any camera-equipped smart device — from smartphones to drones, wearables (e.g. AR glasses for warehouse workers) and even robots.

Use-cases include mobile apps or websites for mobile shopping; self checkout; inventory management; proof of delivery; asset tracking and maintenance — including in healthcare where its tech can be used to power the scanning of patient IDs, samples, medication and supplies.

It bills its software as “unmatched” in terms of speed and accuracy, as well as the ability to scan in bad light; at any angle; and with damaged labels. Target industries include retail, healthcare, industrial/manufacturing, travel, transport & logistics and more.

The latest funding injection follows a $30M Series B round back in 2018. Since then Scandit says it’s tripled recurring revenues, more than doubling the number of blue-chip enterprise customers, and doubling the size of its global team.

Global customers for its tech include the likes of 7-Eleven, Alaska Airlines, Carrefour, DPD, FedEx, Instacart, Johns Hopkins Hospital, La Poste, Levi Strauss & Co, Mount Sinai Hospital and Toyota — with the company touting “tens of billions of scans” per year on 100+ million active devices at this stage of its business.

It says the new funding will go on further pressing on the gas to grow in new markets, including APAC and Latin America, as well as building out its footprint and ops in North America and Europe. Also on the slate: Funding more R&D to devise new ways for enterprises to transform their core business processes using computer vision and AR.

The need for social distancing during the coronavirus pandemic has also accelerated demand for mobile computer vision on personal smart devices, according to Scandit, which says customers are looking for ways to enable more contactless interactions.

Another demand spike it’s seeing is coming from the pandemic-related boom in ‘Click & Collect’ retail and “millions” of extra home deliveries — something its tech is well positioned to cater to because its scanning apps support BYOD (bring your own device), rather than requiring proprietary hardware.

“COVID-19 has shone a spotlight on the need for rapid digital transformation in these uncertain times, and the need to blend the physical and digital plays a crucial role,” said CEO Samuel Mueller in a statement. “Our new funding makes it possible for us to help even more enterprises to quickly adapt to the new demand for ‘contactless business’, and be better positioned to succeed, whatever the new normal is.”

Also commenting on the funding in a supporting statement, Ben Kortlang, general partner at G2VP, added: “Scandit’s platform puts an enterprise-grade scanning solution in the pocket of every employee and customer without requiring legacy hardware. This bridge between the physical and digital worlds will be increasingly critical as the world accelerates its shift to online purchasing and delivery, distributed supply chains and cashierless retail.”

SaaStr Podcasts for the Week with CMX Media and Salesforce — May 22, 2020


This post is by Deborah Findling from SaaStr

 

 

 

 

 

 

Ep. 335: David Spinks is the Founder @ CMX, the premier network for community professionals. In 2019, CMX was acquired by Bevy, where David now serves as the VP of Community. Bevy is a customer-to-customer community management platform, building products that brands use to build, grow and manage their community event programs, both virtual and IRL for companies like Slack, Twitch, Salesforce, Atlassian, and Duolingo. Prior to CMX, David founded 2 prior startups centred around different forms of community building and before that was Community Manager in the early days of LeWeb the largest tech/startup conference in Europe.

Pssst 🗣 Loving our podcast content? Listen to the start of the episode for a promo code to our upcoming events!

In Today’s Episode We Discuss:

* How David made his way into the world of SaaS and came to found CMX. Why David believes that community is so central for all SaaS companies today?
* How does David advise teams on expectation setting around virtual events? How ambitious should they be? What big mistakes does David often see in the early days of the planning? How does this differ if you have an existing cohort of users vs are starting new with no audience?
* How dependent is the success of the community on the platform it is hosted on? What is the ideal size for Slack, Telegram and Whatsapp communities? Should the host seed the discussion or allow it to be natural? How important is it to establish a handbook of expected actions and behaviors? Should you cull members who are inactive?
* What does David believe separates good from great when it comes to discussion groups? What innovative strategies has David seen work when it comes to bringing a virtual event to life? What is the right amount of people in that discussion group? What is the core role of the moderator for the group?

 

Ep. 336: Leveraging survey data from 66+ enterprise SaaS companies, Matt Garratt, Managing Partner of Salesforce Ventures, shares the landscape of how businesses are shifting their sales & GTM strategies to react to today’s uncertain times. Adnan Chaudhry, SVP of Sales at Salesforce, then provides actionable takeaways on how to refocus your sales teams, engage with customers, adjust your sales comp and how you can properly forecast in today’s new landscape.

 

This podcast is sponsored by Guru.

SaaStr’s Founder’s Favorites Series features one of SaaStr’s best of the best sessions that you might have missed.

This podcast is an excerpt from Matt and Adnan’s session at SaaStr Summit. You can see the full video here.

 

If you would like to find out more about the show and the guests presented, you can follow us on Twitter here:

Jason Lemkin
SaaStr
Harry Stebbings
David Spinks
Matt Garratt
Adnan Chaudhry

Below, we’ve shared the transcript of Harry’s interview with David.

Harry Stebbings: Welcome back to the official SaaStr podcast with me, Harry Stebbings, and you can suggest both questions and guests for future shows on Instagram @Hstebbings1996, with two Bs. And I always love to see you there. But to our episode today. And there’s one question every SaaS company is asking themselves right now, “How the hell do I do virtual events, and what makes the best so good?” Well, diving into this today, I’m thrilled to welcome David Spinks, founder of CMX Media, the premier network for community professionals. In 2019, CMX was acquired by Bevy, where David now serves as the VP of Community. Bevy is the leading provider of in-person community software, powering community programs and incredible companies like Slack, Twitch, Salesforce, Atlassian, and more. And prior to CMX, David founded two other startups centered around different forms of community building, and before that was community manager in the early days of LeWeb, the largest tech startup conference in Europe.

Harry Stebbings: But enough from me, so now I’m very excited to dive into this extravaganza on what makes the best virtual events, with David Spinks, founder of CMX Media.

Harry Stebbings: David, it is so great to have you on the show today. And what you probably don’t know is I’ve been an admirer of yours from afar, mostly on Twitter, for a while. So thank you so much for joining me today, David.

David Spinks: Honored to be here.

Harry Stebbings: I would love to start, though, with some context. So tell me, how did you make your way into the wonderful world of startups, SaaS, and how did you come to found CMX?

David Spinks: Yeah, it’s a long story, but to make it as brief as possible, I’ve been building communities online since I was a kid. Started in middle school, around video games, Tony Hawk’s Pro Skater 4 was my game of choice, built a big online forum around that, and just became pretty fascinated by how technology could connect people and create community. And so I did that, I was just active on every online community platform I could. Eventually that became my career and I became community manager, joined a startup in Philly called Scribnia, at the time. And we were in an accelerator program for three months, and halfway through that accelerator program, we pivoted and started SeatGeek, which, everyone will know SeatGeek, and no-one will know Scribnia. And we kicked that off and that was my first entry into tech. And I ended up running that first company, Scribnia. I was the managing director and ran that company. And that just got me in the door and that led to more and more opportunities to work with different tech companies.

David Spinks: I ran community at a company called Zaarly for about a year, I ran community for LeWeb, which you may know was one of the biggest tech conferences in Europe for many years.

Harry Stebbings: Sure. Absolutely. Loic.

David Spinks: With Loic Le Meur. Yep. And helped Udemy kick off their first community program, and also started companies. So I started a company called Feast, which was delivering ingredients to your home, and you get this home cooking experience with videos that teach you how to cook.

David Spinks: And ultimately kicked off CMX six years ago, because throughout my career, starting companies and building community for companies, ironically, there was no community for community professionals. And so I would do everything I can to find other people who are doing this work and just get to meet up with them, ask them questions. I co-founded thecommunitymanager.com with a couple of friends, about eight or nine years ago as a place to just start writing about this stuff.

David Spinks: And eventually led to starting CMX Summit six years ago, which is our conference, as just a place to bring everyone together who’s doing this work, building community for companies. And so that grew, we bootstrapped it for five years. Last year, at the start of last year, we were acquired by a company called Bevy, which powers event programs, event communities for companies. And that’s how I’m here.

Harry Stebbings: And the rest is history. Speaking of communities today, every company in the world is thinking, “Shit, how do I move from physical to virtual events?” I want to dive into that because I think many are foundering and a lot of scratching their heads, doing it for the first time. So you’ve had a starting point, and expectations set slightly when thinking about the transition to virtual events. So when you think about maybe expectation setting for these companies, how do you advise companies to approach just how ambitious they should be when it comes to that first virtual event?

David Spinks: Yeah. It’s funny because I’ve been banging this drum of community for more than 10 years now, and all it took was a global pandemic, and all of a sudden everyone’s like, “Wait, this is important.” I’m like, “Yeah, I know.” And so there’s companies that have been doing this for a while, but even the ones who have been doing it for a while were probably still reliant on in-person events, and they’re trying to pivot. And then you have companies who weren’t really doing much in terms of community, or weren’t doing anything online and they’re kicking it off for the first time. If this is your first time doing that, I think just getting started’s really important.

David Spinks: It’s easy to overwhelm yourself and try to do too much, and launch a massive forum, and throw a huge virtual conference. But you can start in very simple ways with just simple discussion calls, kick off a Zoom call with your 10 top customers. People are craving community right now, they can’t connect with each other in person. And so they’re looking for any opportunity to connect with each other, and they’re all dealing with this epidemic. It’s affecting everyone, and so everyone has a lot of shared challenges and lot of things they want to ask each other right now. And so just start creating those spaces for them to come together, and a lot will start to happen organically.

Harry Stebbings: Can I ask, when you create these spaces for them to come together, and sorry, this is off schedule, but I’m intrigued, do you seed the discussion threads themselves, or do you let the discussions flourish naturally within the participants?

David Spinks: Ideally, it’s all happening organically, and you’re just sitting back and nudging the direction or facilitating. More realistically, you’re going to launch an online space and you’re going to have this vision of everyone showing up, and participating, and engaging. And then it’s just going to be crickets. There’s so many spaces for people to engage today, that to create a new space, you really have to put in the work and facilitate. And so in those early days, I think you really want to be creating a lot of the content yourself, be putting out discussions, be putting out conversations that you think would be interesting, and then don’t even wait for people to respond. As soon as you post it, message five people that you know, and already have a relationship with and say, “Hey, I just posted this question. I’d love to get a conversation going. Do you have a minute today to jump in and post a response?”

David Spinks: And so you’re manufacturing the example that you want others to see. So when someone new joins a group, now they see activity, they see people engaging, they see thoughtful responses in there. And now, that sets an example for them to be thoughtful in their responses and start posting. And it just puts out the message that this is an exciting place to be. It’s the same reason that a bar might only let some people in at a time, in order to create a long line, so it looks like it’s in high demand. Same kind of thing for communities, if people show up and it just looks empty and it looks dead, that’s not going to feel like an exciting place to participate, but if you start to create that experience of engagement and excitement in the community, then when people join, they’ll feel drawn into that group.

Harry Stebbings: So, as I said there, we write these schedules and then we just go completely off script, but I much prefer it that way. In terms of the platforms, I’m really intrigued. How dependent is the success on the platform choice that you make? Because you could do anything from a WhatsApp group to a Telegram group, to a Slack channel, to any of the collaboration tools that we have today. How dependent is success upon the platform choice?

David Spinks: Yeah, it’s a big question. If you already have an engaged audience, and a lot of people who are trusting the brand, aware of the brand, engaged with you, it’s going to be easier to launch your own owned platform. Maybe you kick off a Discourse forum, or you use one of the enterprise platforms, and you bring people to your site and your community, because they’re already engaged, because you already have an audience, that’s going to be easier.

David Spinks: If you’re starting from scratch and people still don’t know who you are, and they’re not fully engaged with your brand, and your team, and your product yet, maybe you don’t have a lot of users yet, it’s going to be really hard to get people to participate in a new space as well. You’re just creating a new habit, and people are so used to going to big social to interact now, that it’s hard to get people’s attention. And so in that case, it might be better to go to where they are already, which might be a Facebook group, Slack is really popular because people are already in there, Discord is really big for gaming, and use that to build the community. And then, once you have that engagement, once you have an engaged community, the community is the people, it’s not the product. And so once you have the people engaged, then it becomes easier to move them to different spaces that maybe they otherwise wouldn’t have.

Harry Stebbings: Totally get you. Can I ask, in terms of those groups and communities that you build in those initial days, how do you think about optimal size? Because you want enough where there’s enough discussion and enough content going around, to where it feels like the velocity of thought is high, but you also don’t want too much where there’s apathy and too much noise. How do you think about the optimal size in those early days?

David Spinks: Smaller is often better, right? A good quality group of 10 people is going to be much more valuable to someone than a hundred people that weren’t as curated, and in an experience that isn’t as intimate. And everyone knows that, like you go to a dinner with 10 really awesome people, this is the best experience, right? Everyone loves that kind of experience.

Harry Stebbings: Totally.

David Spinks: But then you go to the meetup with a hundred people just casually drinking, and it was open to anyone, that’s not nearly as valuable. It’s not as facilitated. You don’t get to talk to people as deeply. It doesn’t feel as curated. And so in general, I think smaller is better to start, and then you want to grow it incrementally. So if you’re looking at an online group, maybe ten’s a little small, unless you’re in a WhatsApp group, or a chat space that works with a small group, but let’s say you did a Slack or a Facebook group. You’re going to want more people than that, I would say maybe 50 or a hundred’s a good starting point.

David Spinks: And then you want to grow it gradually. So you don’t want to overwhelm it, right. Going back, I keep using bar examples, I don’t know why. It’s on my mind, I guess, I haven’t been to a bar in months, but you ever go to a bar, and you’re with friends, and it’s not that crowded and you’re having a great time, and you can hear each other and you have space to move, and you can get a drink quickly, and then rush hour hits. And all of a sudden it’s packed with like 500 people, and you can’t get to the bar and you can’t hear each other, and you don’t have space, and it no longer feels like it’s there for you? That’s what it feels like when someone kicks off an online community and they have a hundred people in it, and then they invite 500 people into the group. It just completely overwhelms the community dynamic that you had in there.

David Spinks: And so maybe a good rule of thumb is to keep it to like 50% growth each week, or each month, or even 25%. So if you have a hundred, then add 25 more each week, and then you can welcome those people properly. Everyone who’s in the group can contribute to welcoming them properly. And you create more of what feels like an organic growth, rather than a manufactured growth.

Harry Stebbings: Can I ask a tough one? Do you cull people who don’t engage or who don’t consistently show themselves to be a meaningful part of the community?

David Spinks: Usually, no. It depends on the format. Let’s say you did bring together 10 people in a discussion group, and it’s noticeable that someone is not participating, that they’re not showing up, that they’re not engaging. Then I might call that. And I might say to that person, “Hey, it seems like maybe this isn’t the best fit for you, so totally cool. But we want to make sure that we keep this group really focused. And so we’re going to keep rotating members out based on engagement.” You might be able to do that in that small group, just to keep it really high quality. In a larger group, it doesn’t matter. You actually want to have people, even if they’re passively engaging in these large groups, because that becomes an audience for those people who are creating, that makes them want to create.

David Spinks: So there’s the 90-9-1 rule is this old study on large online communities, and it basically said that 90% of people will passively consume in a community, 9% will be responding and engaging, and 1% will be creating. And so realistically, every community is going to have a very small percentage of people who are actively creating and contributing, and then a much larger percentage who are passively consuming. And then there are people who just go completely inactive. And at the end of the day, unless you’re paying per user, or some meaningful metric to you, you can just let those people do what they do. And you can also run campaigns to try to reengage them. So everyone plays a role in the community at all different levels of activity.

Harry Stebbings: Can I ask, we mentioned the different levels of activity and we mentioned some different behaviors there, in terms of very active, responsive, and then creating. In terms of guide books, or guidelines, when initiating people into the group, how important is it to have almost a guide book, a set of rules? “This is how the community operates.” How important is that, versus letting it be much more free flowing?

David Spinks: It’s absolutely critical. There are communities out there that prefer to just be completely free flowing. I think we’ve seen that historically devolves into some pretty bad behavior. And I think it’s really important that you have a lot of intention in any community space that you create. And so there’s a concept called setting the container. And I think that applies to anything from a small discussion group, where you’re trying to essentially explain, “Here’s how to participate in a quality way, and here are the rules that will make sure everyone feels safe and comfortable participating here,” right? So it’s not just rules, it’s not just what not to do. It’s also being explicit about, “Here’s how to contribute in a great way. Here’s the kind of behavior we encourage in this group.” That’s going to guide people to know how to participate in a quality way, that they may not have realized, or may not have been comfortable doing that before.

David Spinks: And so it’s really important to have that. That said, you should always be open to evolving and changing and learning from your community members. And so maybe someone one day recommends a different kind of guideline, or they do something within the boundaries that you’ve set, and you realize, wow, that was a great way of approaching this problem. Let’s turn that into an official guideline or rule. So you can constantly adapt and evolve your guidelines, but you always want to be intentional about how you want people to participate, and how you don’t want them to participate in the community.

Harry Stebbings: We’ve spoken quite a lot about discussion groups there, and I think a lot of companies in particular, are scratching their heads in terms of how to really encourage engagement within the community. I’d love to hear your thoughts, having seen so many different kinds of viral and vibrant communities, in terms of really, what cool methods of engagement have you seen really work well in virtual events?

David Spinks: Yeah, so the world of virtual events is evolving rapidly right now. And I honestly think everyone was sleeping on the value of virtual events before, and now that they don’t have a choice, everyone’s getting a crash course in it. The default has been the Zoom call. The Zoom webinar, the traditional webinar. Have a speaker, everyone watches that speaker. There’s a chat feed where they can respond, or ask questions, or talk to each other. And maybe there’s a Q and A at the end. It’s pretty one way, right? It’s one person broadcasting to a lot of people.

David Spinks: That’s not really going to be a virtual event in the same way that a physical event, you have the opportunity to meet people, to turn to your neighbor and talk, to network. And so the really great virtual events are incorporating more opportunities for those attendees to engage, to participate, to network with each other. And so, events that do this really well have a combination of different formats. They do have speakers that are presenting and educating, and then they have speed networking, so icebreaker.video is a really great tool for this, or if you use Hopin. A lot of these tools have speed networking built into it, where each attendee gets randomly matched up with another attendee. Icebreaker does a good job of giving discussion prompts for them as well. And you can choose the time that it rotates out. So you can do three minute talks, or five minutes talks, or seven minutes, and then it fades out then at seven minutes, and you get matched up with someone else. So our community loves that, that’s been really effective.

David Spinks: And then just a small discussion group. When you have a speaker broadcasting to everyone, no-one else is getting to meet each other or discuss the content. And so using breakout rooms, using smaller group discussions, is a really awesome way to make it feel more like a real event where they’re getting to meet people. They get to participate in the discussion, they get to bring their questions and hear from others. And so that’s a really valuable way of making your virtual event more engaging.

David Spinks: And you can combine these things, right? So we do, CMX Connect is our global event program that’s run by members of our community. We have over 60 chapters around the world. And for all of the events that we do, we combine all these different elements into one event. And so we might have 30 minutes of speed networking to start, and then we’ll have a speaker talk on a topic, like measuring your community, or running virtual events. And then we’ll break out into discussion groups, so that people can discuss that topic amongst themselves, and share their own challenges and their own lessons. And we might mix up that order, and mix and match different formats, but you can think it as modular like that, you have these different event modules, and you can combine them to make a more holistic experience for your community members.

Harry Stebbings: I’m really pleased you mentioned Hopin there, it’s one of our favorite platforms. So, really pleased to hear that. And you also mentioned discussion groups, and I’ve heard you say before that one of the key rules is, it’s under 10 and over 30. Explain this ratio and rationale to me here, David.

David Spinks: So it’s just a way of remembering how to make a discussion group really valuable. And it’s not a hard and fast rule, but more of a guideline. So under 10 means less than 10 people. We’ve all been in discussion groups with 15 people or 20 people, and there’s just no way that everyone gets an opportunity to have their voice heard, not everyone’s going to get to participate in the discussion. If you try to involve everyone, you just don’t get to go very deep. And so I think ideally discussion groups are generally six to eight people. I think 10 is about the most you want to have, so shoot to have less than 10 people per group.

David Spinks: And then over 30. So this depends, but generally, especially if the entire event is a discussion group, 30 minutes is just not going to be enough time. You want to have enough time for people to introduce themselves, for you to kick off the conversation, and then really give people opportunity to bring their challenges, bring their voice, be able to respond to each other, be able to get into conversation. And just so many discussion groups, especially virtual ones, which just take a little bit more time to really facilitate and engage, they get cut off at 30 minutes, and that’s when the conversation usually starts getting good. And so, just making sure that you have ample time for people to have that discussion, and you keep the group small enough that it can be a meaningful discussion.

Harry Stebbings: Totally with you there in terms of giving it ample time. You mentioned the facilitation, there. I’m interested, because it’s a tough role, being a facilitator. What’s the most important role for a facilitator to enforce, in your mind?

David Spinks: I think it’s about equity of voice. I think their job is to identify who hasn’t had a chance to speak, and making sure they create the space for those people to speak, and their job’s to see when somebody is taking up too much airspace, and moderate and facilitate and say, like, “Thank you so much for sharing. It’s been really great to hear from you. I’d love to hear from other members of the group. Harry, what do you think about this topic? Anything that you’d like to share?”

David Spinks: And so without that moderation, every single discussion group I’ve ever participated in has devolved into one person talking a whole lot, and everyone else is having to sit there and listen. And when people participate in a discussion group, they don’t feel like they’re in a position of power or authority to moderate themselves. And if they did, it might feel very, they’re bringing conflict to the group. And so first of all, every discussion group should have a moderator, a facilitator. You should never have an unmoderated or unfacilitated group. You always want to have someone who’s responsible for facilitating the discussion, and it’s that person’s job to make sure that everyone has an equal opportunity to share their voice

Harry Stebbings: Totally with you in terms of the voice equity. There’s one element, which is always challenging, which is that terrible, awkward silence, especially when you throw an open question out and everyone’s waiting for everyone else to answer. I’m interested, in terms of the awkward silence, what’s the right way for the facilitator to act and engage in those awkward silence moments?

David Spinks: You just got to sit with it, honestly. It’s always tempting to try to fill in empty space. You always want to take out the discomfort for everyone, but I think a good facilitator is comfortable just sitting with that silence and letting others fill it in with their voice. And sometimes it’s just people wanting to be polite, and they don’t want to be the first one to speak, and they want to give other people a chance to speak. I remember in elementary school or middle school, not wanting to be the first one to raise your hand. People just are hesitant to be the first one to volunteer, but then once one person gets going, then it opens it up, and others want to share.

David Spinks: And so just being comfortable with those uncomfortable silences, letting it sit and letting people fill it in themselves. I’ll just sit there on the Zoom call and smile, and see them start to smile as they realize that no-one’s saying anything. And then inevitably someone, within 30 seconds, which might feel like a lifetime, but it’s usually only 30 seconds, someone will be like, “All right, I’ll go.”

Harry Stebbings: That’s funny. 30 seconds, as a facilitative before, 30 seconds does feel like a lifetime, I tell you, David. I do have to ask, though, when we do Q and As, as well, the awful moment is when you say, “Does anyone have a question from the audience?” And you get the really awkward, no questions. What do you do in those situations? Do you seed people in the audience? Do you have backup questions ready? What’s the right way to approach that really awkward element?

David Spinks: Yeah. I think that you really do want to seed it ahead of time, if possible. And you want to continue to remind people to post those questions. One really fun thing you can do is ask people to send in questions ahead of time. And if you’re doing it like a webinar or Zoom call, you can actually have them send in videos of themselves asking the question, and then you can pull in the video and play it live, so it actually looks like someone came on and asks a question and then you bring it back to the speaker to answer the question. So that’s a fun way to make it work on virtual events that you couldn’t even do elsewhere and offline, but seeding things upfront is really good throughout the event.

David Spinks: Reminding people, like, “Hey, just as a reminder, we’re going to be moving to Q and A in 10 minutes. So please put in your questions now, so we can get rolling right away.” Right? So that’s the kind of thing, because sometimes you open up to Q and A and you forgot to remind anyone that it’s coming up, and then they’re not ready to ask a question. And so you want to try to seed it as much as possible. And then when you get to that Q and A point, if you realize that there are no questions in there, don’t stop and say, like, “All right, any questions?” Just keep rolling through it and say like, “All right, well, I have a few more questions that we seeded from the community ahead of time. Please keep posting your questions here in the chat, but let’s dive into the first one.” And so you don’t have that dead air time. And so that’s different, right?

David Spinks: If you’re facilitating a discussion group, uncomfortable silences are really good. If you are putting on content, you’re performing, you’re creating, it’s like doing a podcast or doing a radio show. You don’t want dead silence on a TV or on a radio. It’s the same thing in your webinar, you don’t want to be sitting there live with 200, or a thousand, people watching you and just saying like, “All right, any questions?” That’s just awkward and that just looks like people aren’t engaged, which isn’t a good look. And so I’ll just keep rolling through it, and just go right into those pre-seeded questions that you’ve already pulled in, or prepared. Or just make it up, say like, “Oh, we collected these questions ahead of time. Let’s dive into that.” Even if you literally made up those questions right before the call.

Harry Stebbings: Trust me, David, with my over-excited British way, there is never an awkward silence in my podcast, but I totally agree with you there. I do want to ask this, so we have this event, and we want to know if it’s successful, and we need to measure it. In terms of measurement, I’ve heard you say before that there were two lenses with which to really measure the success of your event. What are those two lenses and how do you break them down?

David Spinks: Yeah. So in working with any community team, we map it out that you have two, what do we call them, dual objectives. So you have a business outcome that you’re hoping to achieve, and then a community outcome that you’re hoping to achieve. And you should be able, in theory, to achieve both with any sort of experience or program that you run. So if it’s a forum, you have your engagement in the forum, your monthly active users, your daily active users, your sense of community, you can actually survey people, you can get NPS, and all these ways of measuring the health of community. And you might be looking at something like reducing support costs, or collecting feedback on your product, or retaining customers. And so you have both the community and the business objectives.

David Spinks: And it’s the same thing for events. You’ll have aspects of the event that you want to tie back to, are we building a healthy community? And in the same way as an online group or forum, you can send out surveys. “Do you feel like you belong in this community? Do you feel safe in this community?” Net Promoter Score. You can look at number of attendees. How many RSVPs did you have, and what percentage of them showed up? How many of those people were repeat attendees? So these are all kinds of things that show you, is your community happy, healthy, and engaged?

David Spinks: And then you’re going to have the business objectives. We use a really simple framework for identifying the business value of community programs. It’s called the SPACES model. So that breaks down into support, product, acquisition, contribution, engagement, and success. And so those are the six areas and you could probably figure it out from the name, but support is people supporting each other, answering questions, giving each other support with their technical problems. That tends to be more in an online forum space, but it can work in events as well.

David Spinks: Product is, you’re collecting feedback and insights on how to improve your product from your community members. So, did you collect that feedback at a booth at your event? Or did you have people fill out a survey at the event to help you improve your product?

David Spinks: Acquisition is growth. So this is actually a really key one for events, and everyone should be doing this, and every event platform should hopefully be able to help you do this. And so you should be able to say, who came to our events, how many people came, how many of them were new leads? How many of them were new prospects? How many of them were opportunities? How many of them ultimately closed to sale? How many of them were customers? And so that gives you a good idea of how your events are actually impacting pipeline.

David Spinks: Contribution is, if you have a platform, let’s say, Airbnb, you have hosts who are contributing to the platform. They run lots of events for their hosts, and they want to see that those events are helping their hosts become more successful at contributing to the platform.

David Spinks: Engagement is essentially customer attention. And so, are our customers more likely to be loyal, to stick around, customer lifetime value as a result of attending our events.

David Spinks: And then success is, customer success. It’s helping people be more successful at using your product, and growing in their career through education programs.

David Spinks: And so all of those can be powered by your events and your online communities, and you can tie any of those events back to one of those business outcomes.

David Spinks: And the last thing I’ll say there is just, we tend to think of these events as one-offs, right? We think of it as like, “This is an event and this event needs to drive this business value, this community value.” And that’s it. We look at it in that bubble, but what you should look at your events as, is touch points with your community over time. And so your goal is to build an ongoing, engaged community over years. And that event is just one single touch point amongst many touch points, that can include your forum, it can include your email, it can include events, in-person events, when those come back. It’s one touch point in an ongoing community member journey that people are having with you.

David Spinks: And so, think about holistically for your event program. Maybe you’re doing a big conference twice a year, and you’re doing regular meetups every month, and you’re doing office hours every week. Those are different kinds of events that you can create, and each one of those is going to have a different community goal, and it might even have a little bit of a business goal. Or maybe some of the events don’t have a business goal, it’s just about engaging the community, knowing that later it’s going to drive business value. And so when you think about it, now you start thinking about your entire community program holistically, and all the different events and touch points that might feed into that customer journey.

Harry Stebbings: I absolutely love that holistic perspective. And I really liked the breakdown there between the two different lenses. So I think that’s an awesome clarity to what is quite a murky, “How do I measure success?” I do, though, David, want to move into my favorite, which is the quickfire round. So, I say a short statement, and then you hit me with your immediate thoughts and I’m going to throw in a couple that aren’t in the schedule that you just mentioned because I’m too intrigued. So just roll with that. Okay. So you mentioned that RSVP to confirm in attendance, what’s a good measurement and a good success rate in terms of that RSVP to attendance of virtual events?

David Spinks: That range is going to be huge, because it depends on the size of the event, right? If you have a 10 person event, you probably want all 10, or at least nine out of 10 people to show up, because you personally invited them. If you have a big conference, it’s going to be lower and we’re seeing the range all across the board. Some people are seeing higher attendance rates than their offline programs were, some people are seeing lower rates, and so offline, historically we’d see for a free meet-up, or a free event, you’d see about 40% people show up. We just hosted CMX Global. We had 3000 people RSVP for that event and we had 2200 show up. It was about 70% showed up, which awesome. It was really cool to see that high of a turnout rate.

David Spinks: It’s hard to have a benchmark, just compare against your own events. So if you did a conference, how do you compare against the last one? If you do a meet-up, how do you compare against your previous meet-ups? And see what you can do to continue to improve that conversion rate by improving your emails, your communication flows, things like that, that might help people be reminded that the event’s coming up, and make sure they have it on their calendar, and that they’re ready to join when it kicks off.

Harry Stebbings: What a terrible question from me, I apologize for that. Benchmark- [crosstalk 00:30:08].

David Spinks: Well, it’s a terrible, “It depends,” answer, which everyone hates.

Harry Stebbings: Tell me, what’s the biggest misconception around virtual events?

David Spinks: There’s a belief that you just can’t build real community through virtual events, there’s just no way you can replace in-person experiences with virtual experiences. And that is true, that you can’t replace it, and there’s a hundred percent, many elements of in-person gatherings that we are just never going to be able to replicate virtually. Even if you got the VR experience perfect, and you have your haptic suit, and you could feel everything. And even then, it’s still not going to be the same as just being able to run into someone in the hallway of an event. It’s the serendipity that you miss out on.

David Spinks: That said, there are a lot of things that you can do to create really meaningful experiences that help people actually connect with each other, and form relationships and form legitimate bonds. And so you have to get creative, and you have to figure out ways of creating serendipity and connecting people with each other in ways that aren’t just a webinar.

David Spinks: You can replicate a good amount of things that you have in an in-person event. Will it do it a hundred percent? No, but there’s a lot of value that you couldn’t even do in an in-person event, because virtual events are just more accessible, for one. So people who may have not been able to travel, or afford a ticket, they can all come together in a virtual event in a way they couldn’t in person. So look for the unique values, or the unique opportunities that virtual events provide, rather than just trying to copy what an in-person event is.

Harry Stebbings: Totally agreed in terms of not being a copy of the in-person. Final one, but a really interesting one for me to hear is, obviously you have CMX, but of all the other virtual events you’ve been to, what has been your favorite virtual event, and what made it so good?

David Spinks: it would be the virtual Passover Seder that we hosted with our friends and family.

Harry Stebbings: Got you. And what made it so good was the bond between friends and family?

David Spinks: Yeah, it was awesome. It was a virtual Seder and, so Seder means order. And so it’s basically, you go through the order of Passover, and you read the stories and you sing the songs. And we had, everyone pulled up a virtual Seder, and they each read from it. So we rotate around. So everyone felt involved, everyone felt included, you drink a lot of wine during it. So it was fun. And so we used to host Seders at our house all the time, every year.

David Spinks: Obviously we couldn’t do that this year. So we did it virtually, but my family is in New York. I grew up in New York, I live in San Francisco now. And so they’ve never been able to be there for the Seder that we host. And this year they were able to join from New York. And we even had two other friends, from Australia, join us. It was morning for them, so they maybe had a little less wine than us, but it was really cool to be able to have our really close friends in San Francisco and our family involved. And just seeing that melding of different groups, that I think otherwise would have been really hard, because everyone would have just done it with their friends, or with their family, to be able to bring those groups together was really special.

Harry Stebbings: David, as I said, I’ve been an admirer from afar for a long time. So I can’t thank you enough for joining me today, and this has been fantastic.

David Spinks: Awesome. Well, thank you so much for having me.

Harry Stebbings: Absolutely loved that deep dive with David. And if you’d like to see more from David, you can find him on Twitter @DavidSpinks. Likewise, it’d be great to welcome you behind the scenes here. You can do so on Instagram @HStebbings1996, with two Bs.

Harry Stebbings: As always, I so appreciate all your support. And I can’t wait to bring you another fantastic episode next week.

 

The post SaaStr Podcasts for the Week with CMX Media and Salesforce — May 22, 2020 appeared first on SaaStr.

As private investment cools, enterprise startups may try tapping corporate dollars


This post is by Ron Miller from Fundings & Exits – TechCrunch

Founders hunting down capital in the middle of this pandemic may feel like they’re on a fool’s errand, but some investors are still offering financing, even if the terms might not be as good as they once were. One avenue that appears to remain open: corporate venture capital.

The corporate route offers its own set of unique challenges, depending on the philosophy of the organization’s investment arm. Some are looking strictly for companies that fit neatly into their platform, while others believe a solid investment is more important than a perfect fit.

Regardless of style, these firms want their investment targets to succeed on their own merits, rather than as part of the organization the funding arm represents. To get the lay of the land, we spoke to a couple of firms that take very different approaches to their investments: Dell Technologies Capital and Salesforce Ventures.

Corporate venture is a different animal

Corporate venture funds aren’t typically as large as private ones, but they have a lot to offer, such as global sales and marketing support and a depth of knowledge that offers direct benefits to a young upstart. This can help founders avoid mistakes, but there is danger in becoming too dependent on the company.

The good news is that these companies are often not leading the round, but are instead providing some cash and guidance, which leaves entrepreneurs to develop and grow on their own. While the pandemic is forcing many changes in approaches to investment, the two corporate venture capital firms we spoke to said they will continue to invest, and their theses remains pretty much the same.

If you have an enterprise focus and you can convince these firms to take a chance, they offer some interesting perks a private firm might not be able to, or at the very least provide a piece of your funding puzzle in these difficult times.

Process Street Raises Accel-led $12M Series A For No-Code Workflow Builder


This post is by Mary Ann Azevedo from Crunchbase News

Process Street, which has developed no-code workflow builder, has raised a $12 million Series A led by Accel.

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Atlassian, Salesforce Ventures 1 and others also participated in the round.

Australian-born Vinay Patankar came up with the idea for Process Street when running a distributed marketing agency through contractors all over the world. The spreadsheets and project management tools were causing more problems than solutions, he said.

So, the concept behind Process Street was born. Initially, it was an internal tool to structure and manage internal workflows by doing things like documenting and tracking simple checklist-based processes for Patankar’s company.

But then Patankar teamed up with Cameron McKay to form a company based on that initial concept while both were staying at a hostel in Argentina.

Today, Process Street has evolved into “a fully-fledged no-code workflow builder with an easy-to-use interface that can handle almost any type of business process, from client implementation to employee onboarding and content approvals,” according to Patankar. And it does this by giving small-and-medium-sized businesses (SMBs) and enterprises the ability to create those workflows without having to write code. (Customers are mostly SMBs, with 10 to 20 percent being enterprises.)

The company services over 450,000 registered users – both free and paid – including enterprise customers like Colliers, Accenture, Spotify and Airbnb, as well as institutions like Columbia University and Johns Hopkins University.

“Process Street lets you build these workflows and plug them into other Continue reading “Process Street Raises Accel-led $12M Series A For No-Code Workflow Builder”

Why the top entrepreneurs are seeking corporate venture money

Vector Cartoon of Online banking concept: Send money via smart phone, computer, tablet, phone The role of corporate venture capital in the venture ecosystem has never been more visible or impactful than it is right now. For entrepreneurs, this evolution and increased competition in the venture funding landscape means more potential sources for backing and greater emphasis on what assistance each can bring to the table to help get their company to the next level. Read More

Salesforce Ventures Funds Enterprise Companies to Grow Its Ecosystem

Salesforce Ventures invested in 40 startups last year, mostly enterprise cloud companies. The company continued to invest during the fourth quarter, even as the overall venture capital investments fell sharply. The company has invested $470.8 million into privately-held companies as of October 31.

Corporate VC Investments Hold Steady Amid Broader Downturn in Market

Marc Benioff, chairman and chief executive officer of Salesforce.com Inc., looks on during a panel session at the World Economic Forum in Davos, Switzerland, Jan. 20, 2016.
Jason Alden/Bloomberg News

Corporate venture arms invested more money in startups last year than in any year since 2000, the height of the dot com boom. Although venture capital investments dropped in the fourth quarter of last year, corporate investments held steady, said Anand Sanwal, CEO of CB Insights.

About 85 new corporate venture capital units made their first investments in 2015, including Twitter Ventures and Workday Ventures, according to CB Insights, which tracks financing to venture capital-backed companies. Overall, corporate venture groups invested over $7.5 billion in 905 deals to high-growth startups, accounting for 13 percent of all venture capital dollars invested for the year, and 21 percent of all deals, according to a recent report by PricewaterhouseCoopers

Continue reading “Corporate VC Investments Hold Steady Amid Broader Downturn in Market”

Salesforce Ventures Earmarks $100M To Invest In European Cloud Startups

salesforce_ventures_logo_rgb_1.0 Salesforce Ventures, the investment arm of the cloud services giant, has pumped half a billion dollars into over 150 cloud and enterprise startups since 2009. But with most of those investments focused on the U.S., Salesforce Ventures is now getting more serious in the Old World. Today, the group is announcing that has earmarked $100 million to invest specifically in European… Read More

Salesforce Ventures Joins in Latest $50 Million Round for Radius Intelligence

Radius Intelligence Chief Executive Darian Shirazi
Radius Intelligence

Less than a year after its last $50 million-plus funding round, Radius Intelligence Inc. has gathered another $50 million for software that predicts which markets its customers should go after next.

The Series D round was led by a current investor, Founders Fund, and includes Salesforce Ventures, the venture arm of customer relationship management vendor Salesforce.com Inc.

Salesforce.com is also one of Radius’s most important partners, according to Radius Chief Executive Darian Shirazi. Radius integrated its software with Salesforce.com about 2½ years ago, and Salesforce noticed. Now he and Salesforce.com Chief Executive Marc Benioff and his team speak regularly, he said.

“We have data science at our core DNA…and Salesforce is investing in companies with that core DNA…and really trying to get more involved in data science,” Mr. Shirazi said.

Radius combines machine learning–algorithms that learn as they are Continue reading “Salesforce Ventures Joins in Latest $50 Million Round for Radius Intelligence”

Corporate Venture Capital And Exponential Value Creation

curtain What if I told you there was a class of investors who are involved in 29 percent of venture funding and whose investments are three times more likely to see an exit than other investors’ startups? Would you know who they are? Would you want to meet them? Would you want to know the secrets to their success? Read More

MuleSoft Postpones IPO for More Funding at $1.5 Billion Valuation

MuleSoft Chief Executive Greg Schott
MuleSoft

Last year, MuleSoft Inc. Chief Executive Greg Schott told Dow Jones VentureWire that by the end of 2014, the software company would have enough revenue growth to go public and would decide then whether it was the right time.

Last week, Mr. Schott said it isn’t time.

Instead, MuleSoft, whose software automatically integrates disparate data, applications and application programming interfaces so they can all work together, raised another $128 million at a valuation of $1.5 billion from at least a dozen corporate, public market and venture capital investors.

This new round, which was led by current investor Salesforce Ventures, nearly doubles MuleSoft’s valuation as well as its total funding since May of 2014, to $259 million. Investment terms were standard, Mr. Schott said.

MuleSoft, whose headquarters are in San Francisco, was founded in 2006 around an open-source software project. It provides a Continue reading “MuleSoft Postpones IPO for More Funding at $1.5 Billion Valuation”