This is a transcript of the Bowery Capital Startup Sales Podcast – Whale Hunting with JT Levin & Geoff Winchell (Sailthru)
MB: Hey guys, welcome to the podcast. I’m here today with J.T. Levin and Geoff Winchell at Sailthru. These are the two guys who started very, very early with the company. They now manage essentially most of the large, what you’d consider whale hunting sales for the business. J.T. and Geoff, welcome.
Geoff: Thanks for having us.
JT: Thank you.
MB: Tell us a little bit about Sailthru.
JT: Sailthru is a Smart Data Platform. We’re focused really on outbound messaging and personalization. So we’ll have to take all of the data that people have on their users, combine that with some proprietary data of our own and tailor the experience for each individual user depending on the channel that they’re coming in through.
MB: Great. And then maybe can you guys give a little background on who you are, when you started there, give me… use as many numbers as you can but just talk to us about what you’ve been through at Sailthru and where you came from.
Geoff: Sure. So Geoff, Geoff Winchell here. I was, I think, employee number six at Sailthru so I got in there in the very, very early stages of the company. This was the time where we didn’t really have anything but a product and a group of flagship clients based on the relationships that our co-founders have in time, so coming in to the market with no real marketing collateral, no good market strategy. When I came on board, it was much more of the inception phase of figuring out who our target customer is going to be. At that time, we identified mainly Fortune 1,000 companies in the media space where we’ve since grown to have a little bit more of a holistic offer in targeting digital retail, e-commerce, media and…
MB: And how many customers?
Geoff: About 350 customers today.
MB: And when you start, it’s zero, right?
Geoff: Zero in terms of post funding new customers in there at the time. They’re probably, I think five to six.
MB: Got it.
Geoff: Monthly billing, no annualized contracts, so very much in the… who wants this product? How can we actually bring it out there? It doesn’t really drive the value that we are hoping it does.
MB: Sure. JT, maybe a little background on you.
JT: I’ve been there three years. I was previously at Yext where I worked for almost three years, so I was number 20. We were two sitting around a… we were a bunch of guys sitting around two picnic benches when I walked in. Now we’re about 200 employees and four offices across the country and in London.
MB: Cool. So you guys are predominantly focused these days on large customer accounts from an outbound sales standpoint. Can you maybe give us some background and tell the listeners a little bit about how, as a company, you approach this early on, what a younger business maybe with just having one or two sales people needs to really think about this whale hunting and when is it appropriate, when is it not appropriate? Do you go after that from day one or is there a playbook that you have learned over the past two to three that you can impart some wisdom to the listeners.
JT: Yes. So early on, the process was certainly much different than it is today for the listeners out there, depending on what type of business you guys are operating and the big important takeaway for going after very large whale enterprising accounts. It’s not only can you actually sell value of your company, but can you support a client of that type of scale and overall needs.
So in the early days, we have about seven institutional VCs participate in our seed round. So without marketing, without budget to actually have some type of lead generation process come to us, we rely really heavily on VC referrals, investor referrals, as well as tapping your own network. And so to a lot of startups as well as companies who were looking to make a change in the way that they were driving their marketing strategies and programs.
So early on, interestingly enough, it was an easier sell in a sense that we had a very differentiating product. It was very API driven. We’re talking to a lot of co-founders/dev guys who were not only managing the decision making process but also the implementation itself. So starting in that smaller scale, we had less decision makers and key stakeholders in the evaluation process. So it was going to be easier to identify, here’s a good fit for the product that we’re ultimately going to be leveraging for their email marketing and website recommendation services and ultimately dealing with one to two individuals that were going to evaluate the product and make the decision to actually integrate it without the need for a lot of account management or implementation support to get integrated into our system.
MB: So you advocate almost not whale hunting in the beginning and really just trying to build a base of small or medium… depending upon how you price and the type of product you have. At least as I’m hearing you, it’s stay quick and easy versus let’s go in and sell to a financial services firm for instance or somewhere where the sale cycle is very long.
Geoff: Yeah. I’m definitely an advocate of not biting off more than you can chew and now granted, if your product will be able to function the way it’s supposed to for a big company, there’s going to be a lot of accounts that are going to ultimately benefit from the services you provide but the reality is you’re a small team. If there’s account management component that’s going to go into the business and you find this being a much larger need as you get into the larger enterprise accounts, what we realize is that best in class tech needed to be complemented by best in class service.
And without the head count or resources is to really manage that, getting an account that would get a lot of value for the products you provide was not necessarily going to do you a big favour if you couldn’t get them to implement it correctly, if you couldn’t support them from an overall collaborative and strategic partnership standpoint. So you want to identify those target accounts that are going to bring revenue to your business but also not cripple your ability to actually provide the level of service that you need to retain that client from a renewal standpoint, which is as important as getting you deals in from a B2B company, or for a B2B company.
JT: I mean, renewal is certainly important but reputation, I think, is more important particularly for an early stage company and we did a really nice job of making our customers into really big advocates for us. That’s the easiest lead gen channel that can exist, is from your customers. They all know each other, they all work together, they’re all going to cross paths at some point.
I talked to a guy last week, this is the… who we may end up working with. This would be the third time that he has brought us in somewhere. And if you screw up that first big one, it becomes a very, very dangerous precedent to set. They will talk and so make sure that before you may even consider going out whale hunting that you’re ready to support the whale if you bring them in. And over that discovery process, it’s okay. Understand that building companies is a long game and it’s okay to maybe take a pass this time around. And if you don’t think you can support it, it will do far more harm than good to bring them on.
So that… make sure you have a strong baseline there for product, for an understanding of how your product works, an understanding of where the product is now versus the vision of where it’s going to go and make sure you don’t get too caught up on the vision side and really make sure that that product is steady and dependable, because larger enterprises really will depend on you for their business. You’re talking about, in some cases, tens or hundreds of millions of dollars that they’re counting on coming in through you and you can’t screw that up and you can’t put that at risk.
Geoff: And that’s a good point knowing the vision, but making sure you’re selling, you can actually execute on today. Yeah, this is something that we still deal with now as a 200-employee company with global headquarters. There’s aspects of our business that we still absolutely need to improve upon, when you position that value in that vision, make sure that you’re satisfying the checkboxes that are ultimately going to be required during that evaluation process.
So I think a lot of that comes down to I think why JT and I had a lot of early success on advice for listeners or sales folks coming from the early stage company. I liked it that we’ve always really marked on as know your product, know it very, very well. There’s a kind of cheesy expression that the only difference between a tech salesman and a used car salesman is a used car salesman knows what he’s lying to you.
So now, you get to these scenarios where you got a good meaning, you got good conversations, you want to be the yes man and say, “Of course, we can handle this.” But for a company like ours, integrations and implementations are not an overnight process.
Geoff: It takes multiple weeks to ultimately get these guys up and running. If you also were very important deliverables that need to happen, what you will run into and we certainly did in the early days, not necessarily lying to people or saying that, “Yes, we can provide his but we couldn’t.” But it’s one of those situations where you could provide a certain piece of functionality but you didn’t really talk about the developments that goes into making sure that integrating the product the right way is going to ultimately get that done, then you’re going to end up pissed off clients from a pretty early point. So the happiest of clients is going to be with you is the day they signed a contract. I want to make sure that three weeks after that…
MB: They’re still excited.
Geoff: … they’re still excited.
MB: Yeah. And did you guys early on proactively not take certain leads and how do you think about that? And then also did you ever, during your prospecting with a potential, start to realize well, we really not going to be able to meet the needs of this person. And how do you sort of nicely tell this well like, “Hey, we’re just not ready yet,” and then maybe to close that thought, when do you … okay, so now you’re a year later, five to six months later. When do you reengage that person to ultimately attempt to win the business?
JT: There’s a couple things to consider as it relates to that. People will be very respectful and they will understand if you tell them that you’re just not quite ready. They don’t expect you on day one; they don’t expect an early stage company to be ready to support somebody on a global scale, a large company. It comes back to that age-old saying that nobody gets fired for buying IBM, right? They don’t expect that you’re going to be ready. So that’s okay to have that conversation.
I don’t think there’s really a timeline that you can say six months, a year. You’ll know when the business is ready when the functionality is capable of supporting that, so that could be four weeks. But also, you need to understand as part of this process, I think there’s a notice on the salesmen to make sure that they are not bringing in a deal that’s going to be bad for business, and you need to make sure that everybody’s aligned on that. Part of that is going to be a compensation thing, part of it’s going to be an equity thing, part of that’s going to be a cultural thing that they are making sure that you don’t have folks that are just trying to get paper-signed – they get paid up front. And ultimately, that deal’s going to blow up. You’re going to have the reputation problems that we talked about earlier.
So you can have those conversations with people, tell me you’ll come back. On the other side, there’s part of the discovery process with whoever those large companies are. You need to understand what it looks like to sell into that. The biggest thing about that process is to find a champion. Find somebody who internally is going to sing you praises for as long as that needs to be. In some cases, we’re going to talk later about I know specific deals. I’ll tell you about one, the 27 months. You have to find the right person there who’s going to keep you top of mind, who’s going to look our for opportunities, but who’s also going to coach you, who’s going to tell you what does procurement look like, what does budget negotiation look like, when is… maybe the contract if there’s competing vendor. When is that contract going to come up and to be able to guide you along down the process because maybe the decision isn’t going to come for a year, or it isn’t going to come for 18 months.
And so you as a company are safe to start selling into that, having those very high-level vision meetings and those vision conversations to then be able, when the time is right and the functionality has come along, to deliver on all of that and win the deal.
MB: So you advocate sort of a fine line but if you can begin the discussion prior to actually having a product, but let’s assume you’re in lockstep with your product and engineering team and you ultimately know when they’re close and you’re ready for that.
JT: Absolutely. I believe in taking every single meeting possible as long as you don’t waste people’s time with false promises and you’re honest and you’re straightforward about where you are. And also, this is a consultation. This is as much… and generally first meetings with these people is far more about them than it is about us. We need to understand the goals, the drivers, the people involved in the decision, the motivational factors behind that decision, who are the players in the room, and make sure we have a very, very clear understanding because depending on the piece of tech you make.
It’s very possible particularly when you’re selling to these large companies, you’re going to become a partner with them. You’re not just going to throw a piece of tech over the wall, give them an API key and tell them to go knock themselves out. You’re going to be a partner with these people and you need to understand their business and how it works. And so that’s what some of these early conversations and then you can start to float some of these high-level ideas in about how you’re going to be able to help.
Geoff: Yeah, I mean I agree. Early stage, I mean even now we take… take every conversation you get. I mean, it’s certainly important in the very early days as well because you’re also going to be able to mean a lot of these general learnings about the industry around, what businesses care about at varying sizes, and if they operate in the similar vertical. And ultimately, you will be able to circle back with these folks at a later date, but it’s good and I can’t… I couldn’t agree more of the fact that people very much appreciate when you’re honest and up front, especially for us. We operate in a very, very convoluted space where every vendor is saying the same thing about… especially today, one to one, omnichannel, personalization.
So it’s tough for a lot of these companies and the people that will be evaluating vendors like us to cut through the clutter. So if you’re honest around, this is what we can do versus what we can but always making sure that you’re still having that consultative approach and you’re not feature-dumping on them, if you’re trying to build a really good B2B business and you’re not operating on a commoditized space, then it always needs to come back to not, “This is what my product can do, but this is the value that my product can bring to the business.”
And you will absolutely disqualify accounts even as a ten-person company. I can remember a law firm coming to us where it was this sleazy personal injury lawyer who was willing to give us 90 grand to essentially spam the entire New York database of people who have ever had some type of injury. I mean at that time that probably would’ve equated to one-eighth of our annual run rate but…
Geoff: … you also have to be very, very sensitive to the fact like JT said, partnering with organizations that are not going to cripple your reputation…
Geoff: … your IP environment for us as well. But still, have those conversations, chances are if you’re a sub 20-person company, you’re not going to be overbooked with meetings.
Geoff: So you get to build up your own knowledge base around the industries that you sell into and understanding what really makes these people tick.
JT: And that there’s a balance that play there obviously. As you design a product, you had a… you think you had a clear understanding of the ideal customer. Not everybody’s going to be the ideal customer. There’s always going to be a need for trade-offs to take some of those short term revenue gains in order to set yourself up for the long term opportunity and the long term vision that you’re working towards. But be careful with that and make sure you don’t dance with the devil there…
MB: So just to switch gears, let’s jump in… JT, you jumped the gun and gave the listeners some idea of what we’re going to talk about. But for purposes of the podcast to keep the conversation going on whale hunting, I brought Geoff and JT on to discuss specific deals that they have actually worked through. So this is something new and we’re going to try it out.
JT, I don’t know if you want to start just give us the basics – how you built this lead and then ultimately the entire sales process, closing maybe with some tips and tricks or snags you encounter or issues. So if you just want to just dive in.
JT: Yeah. So we stared… this was a 27-months sales process that I alluded to earlier and then it comes back to the other point about taking every meeting. Introductions obviously make the sales world go round. If it’s not coming straight from a customer, anybody that has more credibility than the cold email or the cold phone call you’re sending out, it is a better avenue. So it was actually… I got an introduction from a company that we didn’t end up working with. It just wasn’t a very good fit and both of us just saw that and stayed in touch because you never know where those people are going to go and where they’re going to end up.
He made an introduction to a very large media company and there are various… any time you’re dealing with whales, you’re going to have various different players, various different pieces of the business. One of the key things you need to make sure you do is tailor your message based on the audience that you’re talking to. You talked to the CMO very differently, then you might talk to the director of e-commerce, then you might talk to the director of audience development.
There are times and places for vision, there are times and places for tactics, there’s times and places for technical functionality. And so I got an introduction, went down for a very small portion of the business.
MB: So you went… so you got an introduction to the CMO?
JT: Got an introduction to the SVP of marketing.
JT: And that’s generally who we worked with their heads of audience development on.
MB: So they’re the right person.
JT: Yeah, the right person. And who that right person is is obviously going to vary based on the product and what we’re selling. Introduction to the right person, went down to discuss a very small portion of the business. It turned out we weren’t a very good fit for that portion of the business but the larger portion came up. At that point, you have to find your champion in a large company. You would have to find that person who’s going to navigate because you’re going to have people in a large company that don’t want to buy from you for whatever reason.
I think one of the biggest misconceptions that sales people and founders make in this business is they believe that an employee at a company will always do what’s in the best interest of the company or will buy based on what’s in the best interest of the company, and that’s just nonsense.
JT: It’s just absolute nonsense. People are going to buy based on what’s in the best interest generally of themselves. So the CMO, yes, that’s in the best interest of the business. Maybe you have an email marketing manager and they need to… they want to come in and drive up clicks So they’re going to look for something that may just drive up clicks even though that may not lead to downstream conversions because that downstream conversion is the audience developments team’s problem.
And so you need your champion who is going to be able to navigate you through all of that. You need to be able to make sure you tailor the message. At that point, it becomes a case of building that partnership with the champion, with some of the other folks that are going to be key internally, understanding who those people are, sit down with that person, understand who are these people and what are their roles. Try to get as wide as you possibly can in this account. Try to touch as many people, turn as many people into advocates, into champions and to understanding why because then, you’re going to get a collective decision more based on the best interest of business there.
So it just started and then patience is key because these companies are going to move when they want to move. They need a compelling event on their side, but it’s very, very rare that you, as a smaller or early stage tech company are going to be able to create that compelling event. So without that, you have to wait and then maybe it’s a contract, maybe it’s timing, maybe the budget needs to come back around. Maybe the inertia needs to wear off for some other reason.
MB: And so in this case, what was the motivating factor for them? So you obviously went down and you talked to the SVP of marketing, it wasn’t a fit, you kept in touch. What brought you there?
JT: So the larger portion of the business came up, made a clear case on value to improve their infrastructure, improve the technology for media companies. There’s a number of different pain points as it relates to the software that we sell, understanding those paying points and being able to play to those is key. And then as the contract comes up, you push on those paying points to try to make them see as clearly as possible how much more value you can deliver and also the fact that you can stop that pain, heal that pain. And then you’ll go from there as a more a straightforward sales process.
It’s getting them to that point where they’re going to now do a serious evaluation where they’ve decided yes, we need to make a decision and move. That is really the trickier part. After that happens, you can…
MB: And clearly, they had an existing vendor in their… what were some thoughts on your end of how to counteract that or obviously there’s a combination of we’ve worked with this company for a while so there’s some safety there, but then also as you said earlier, there’s probably somebody who bought that piece of software that is sort of beholding to said the company.
JT: Yes. So part of that… the big key, don’t pick a fight you can’t win. Time is a finite resource and if the other vendor is doing a really good job and they liked that other vendor, they’re not going to move. So don’t waste your time there. In this case, it was a much older vendor that they didn’t really love. You get into the pain points of why they don’t like them, why am I sitting in this room. They’ve agreed to take this meeting, so why are they talking to me?
Dive in on that stuff and then everything becomes a tailored message around those points that are driving a motivation for them taking the meeting in the first place.
MB: And then so presumably, they do an analysis of Sailthru against a number of other companies. You guys clearly won that from every angle. Can you talk me five figures, six figures, seven figures, how large of an account does that ultimately become?
JT: Yeah, large six figures, my largest ever. Yeah, you see that you won that on all friends. You’re probably very rarely are you ever going to win on all fronts.
JT: So push hard on the fronts that you can. If you look at it like a matrix, maybe you get tens, in some places you get sevens and eights and others. Make sure that that cumulative score at the end is higher because it’s very rare that you’re just going to show up and be better on all fronts. There’s always going to be some pros and cons. You very rarely will buy and get 100% in technology of what they want. So just make sure that your percentage score is as high as possible.
MB: Perfect. Geoff, you want to jump in?
Geoff: Yeah. So I mean, I’ll talk a little bit more to a commerce client just to mix up the selling process. I mean similarly, the… JT have delved a lot of similar media conversations, 13 plus month sales cycles, then I think it pretty much down to the things to focus on. For the commerce account that I guess all reference here, the deal size was mid-six figure range, growth company based on the city. And one of the things that worked out in our figure on this front and I think this is a good takeaway as your company does go upstream a little bit and start getting those conversations, redo our displacing enterprise solutions.
There’s a lot of times they’ve worked with more than one enterprise vendor in your space. And if they have juggled between a couple of those over a few years, what we’re going to realize is that they’ve got a lot of very cheap pain points for what they wanted versus what they ultimately could get.
So for this particular instance, another thing that was working in our favour, and I think this goes across the board for any conversation, there had been some recent turnover in the decision making from on… I think I also got the SVP of marketing at this particular account…
MB: How did you get into that account?
Geoff: I got… it was always a referral. It was a network referral from someone I knew. I actually had sold to in the past so I mean, you can’t stress enough the importance of making sure that you maintain good relationships with people that said yes and said no to you, especially if you’re doing a good job in really articulating what you did or what your company does, whether it was the right fit for this particular time.
So I got a good referral from someone who had just recently started at this company. They had been with one of the big enterprise, email service providers in the space at the time. The integration for them was a nightmare and then ultimately, the type of personalization and targeting, functionality they were looking to get just wasn’t in place.
So I mean… I’ll take a step back there, I mean know your competitive landscape really, really well so you can put your “kill kits” in place to politely displace the competition in a very, very logical way. But I still have Google alerts running for updates for new people that were hired into new companies and new roles for the positions that we sell into, because I think what… like JT mentioned, one of the big challenges is if you’re going into a company even if they don’t love their vendor but your decision maker or potential champion is someone who’s been at the company for five plus years. They’re very risk reversal a lot of times, like you don’t get fired for buying IBM.
So it’s good when you can identify people that are coming into new roles and new companies that are looking to make an impact. So I think those people are oftentimes if nothing else, coming in to these roles, I know the first priority is always let me evaluate the vendors that I have in place right now. Are they really providing the value that we need from these specific companies? If they are, great. If they’re not, we’re going to evaluate and have other conversations with players in the space that have a differentiating product or value prop across the board.
So we were fortunate in this instance that we knew the competition that we were the incumbent for the company that we’re going to be displacing. A lot of the competition that we were going up against were either vendors that we’re very familiar with or someone that have used that company before and ultimately did not renew with… paired against the fact that we had that decision maker in place that was looking to shake things up a little bit.
So this was also one of those interesting scenarios where it wasn’t the specific sale cycle is not more than I would say two and a half months partly because contract deadlines are very, very important in our sales efforts because integrations aren’t an overnight process. You need to be having their conversation at the right time because a lot of our competitors and ourselves as well, you’re not… you’re not that likely to find somebody who’s just going to-up for a three-month period at let me go month to month after that contract ends. And with email being one of the biggest channels for conversion and revenue generation in our space, it’s a huge negative if you lose a month, a week, a day’s worth of campaign settings.
So you need that communication flow to be consistent so you need to make sure that you get to these conversations on the right time. So because we got in there at the right time, we were able to actually provide some differentiating value and it certainly wasn’t light years to beyond what they were getting today. But to JT’s point, we were getting the checkboxes in those eights and nines in the right areas and they just didn’t have any place today.
And this was also a scenario where it was getting close to the end of our quarter and personally, I’m not the sales guy that likes to position the, “Hey, I can give you a great discount if you’re getting signed for this month.” I think a lot of time, that will discredit or devalue your product and your overall ability to get into that account. But it was towards the end of the quarter, we could… I think we’re up against one or two vendors towards the end. I think we have the pole position and they wanted to work with us but they also wanted to make sure they were getting a good competitive price, which we ultimately provided.
It wasn’t a bad discount by any stretch of the imagination, but keep in mind even if you are in a business where you got what you considered a premium solution in the market, throughout the years it’s going to take you a couple years to actually get there and have the market understand why you’re putting a premium price tag on your solution.
So I mean, if you’re a company that’s a top line revenue focused, you’re trying to grab a market share. So you should have some more flexibility around making the financials work for this company and once again, if you’re making sure that you’re going to be integrating in the right way and providing the type of value that they expect, they’re going to realize the returns pretty early on and their relationship and tenure with you.
Say from a renewal standpoint, you’re going to be able to very clearly justify why there’s going to be an increase in price if they’ve grown, if that growth is aligned with how you price. So for this as well, we were just breaking into the commerce market more heavily for the first two years. We were really, really media-focused as well as kind of the flash sale a little bit.
But in terms of more straightforward retail e-commerce, there’s a lot of justification you could make to get that deal in because you were trying to penetrate that market, you want to get good clients that had a good brand name. There could be good referrals for you. So that… it was ultimately a combination of those factors that one, allowed you to get a little bit more competitive on price, I mean you… otherwise would’ve loved to be. But to also make sure you’re grabbing good market share in the newer vertical that you were selling into.
MB: So how large was that deal if you can… five, six, seven figures? How…
Geoff: Yeah, six figures. Probably between… I’ll say between 250 and 500 great deal for us.
MB: Yeah, absolutely.
Geoff: Stilll a client, which we love.
MB: Cool. Well that’s been enormously helpful. I don’t know if you guys have any closing thoughts where… at a time in this point, but maybe if each of you wants to give a final thought to whale hunting that would be…
Geoff: Yeah. Know your product, know the right time, and don’t go whale hunting unless you got a harpoon that can actually kill this beast. You will… you will get into… you will go upstream with the conversations you have if your product is good. But knowing that you’ll probably have less resources to throw at these sales processes, our competitors will basically bring the village to every sale cycle they have where big enterprise accounts. It’s good to have that, but in the absence of a large team where you got a lot of cross-functional resources, yeah it’s tough.
So hit your selling points, bring the people that do matter and can add value to the conversation, but know when to get into these conversations and plan and prepare accordingly. Never come unprepared.
JT: Whale hunting happens in two different phases. The first is to get invited to the actual dance, and then to take somebody home from the dance. So make sure that you treat those two phases the way that they need to be managed, which are very separate. And then also make sure you tailor your message as much as possible within the organization. Make sure that they view you as a partner and they see that you’re there to help them better build their business. Make sure you get into all of their key metrics and all of their key drivers and make sure you find your champion.
JT: Oh, yeah. If you’re looking for omnichannel personalization solutions across the board…
Geoff: Yeah, if you need an email…
JT: Yeah, contact JT@sailthru.com and or Geoff with the G @sailthru.com.
MB: Thanks guys for coming in. I really appreciate it.
JT: Thank you.
Geoff: Our pleasure.