- Posted by Randy Hendriks
- On January 25, 2018
- 0 Comments
In this episode of the VA Partners Sales and Marketing Podcast, our host Randy Hendriks interviews Christopher Dell, the Senior Director of Product Management at Intelligent Mechatronic Systems. The two discuss Chris’ insights into the relationship between SaaS sales, product development, and marketing, and how to learn from your mistakes and apply them to new challenges.
Please be advised, this is not a direct transcript and some sections have been edited and condensed.
Randy: This is the VA Partners startup sales and marketing podcast. Happy new year to you all. My name is Randy Hendriks. I’m a sales rep at VA Partners, Venture Accelerator Partners. I’m here today with Christopher Dell. He’s the senior director of product management intelligence at Intelligent Mechatronic Systems, IMS, based in Kitchener, Waterloo. Welcome Chris.
Chris: Thank you, thanks for having me Randy.
R: You’re an experienced product management professional with experience in fintech, SaaS, and telematics. Maybe just to start with, tell me, how does product management fit into the sales and marketing process?
C: Great question. If you think of it using a football analogy, product management is the quarterback on the field. We’re responsible for working with the engineering teams in terms of defining products, we’re responsible for working with the marketing teams on go-to-market plans, and we’re responsible for working with the sales people to incorporate voice with the customer, in terms of what to build, how to price, and get competitive intelligence through them. We spend a fair amount of time working with and supporting the sales organization.
R: So with this analogy, who are the line backers?
C: If product is the quarterback then I’d say engineering is definitely the linebackers and I’d say the wingers are definitely the sales people. They’re the guy who’s lining up the big throw and the guy to receive it and catch it in the end zone. So product can’t do it alone, sales can’t do it alone, and it really requires that partnership.
R: That’s a great analogy. To go back to your company, Intelligent Mechatronics Systems, or IMS, tell me about your company.
C: We’re founded in 1999 by, at the time, a professor at the University of Waterloo. His vision was really about making the driving experience safer, smarter, and greener. It started with a very personal situation where one of his family members were in an accident. Again, this is pre-1999. He realized airplanes have black boxes, why can’t cars have a black box that record what happened. That view and vision went from there and grew from there to where we are today. Now we’ve evolved the organization where we focus on telematics and collecting all this dynamic driving data, data about how you’re driving, what you’re driving, what the vehicle is doing, what the vehicle is telling you. We use that for government, for insurance, for businesses, a variety of different verticals.
R: If we’re talking about the sales process, that must be different in those different verticals.
C: Absolutely. One of our biggest verticals is in the insurance-telematics space. In particular, programs like usage based insurance, where you pay how you drive. If you know anything about insurance, they’re very conservative, they move fairly slow, so that sales cycle is pretty long. It can be upwards of 12 months or longer depending on the insurance carrier and what they’re doing. We’ve certainly seen cases where it’s shorter, but it’s typically on the longer side than the shorter side.
R: You have one role in the team, but what have you guys found you need to do when it’s the longer sales cycle or sales process?
C: So we’ve optimized everything from our initial marketing activities right through to the fulfillment process knowing that, because our product is new, there’s this thirst for knowledge for the insurance carriers when we’re selling to that space. So we do a lot of content marketing pieces, we have a lot of material and that really starts the funnel, the demand generation process where we’ll actually see leads come in through our systems and we’ll see those start to translate into actual sales leads that we’ll hand off to the teams internally. They’ll further qualify them. And so when you look at it from a trade show where they were found or saw speak at an event or in a webinar, to when they actually get to the point where we’re in the actual ‘sales process’ – That can be upwards of 8 months or longer. But we’ve done a lot there to help them answer the questions that they don’t know they’re going to ask. For example, we use different hardware enablers in our software solution. The first question they often have is ‘what do we do? which one’s? which pros and cons are there between them?’ So instead of answering that in the sales motion we’ve created content pieces that answer that question for them.
R: Probably the shift in the last ten or twenty years is the fact that those people that you’re making the sale to, they’re so much more educated already on your product.
C: Absolutely. Even if it’s new to a particular geography, they’re looking at what’s happening in a different geography. There’s parallels, so we’re in the insurtech space in this vertical, but you can look at what’s going on in fintech and see some parallels there. You can play those out: they’re not the exact same but you can draw a lot of parallels and say what was the challenge that they had in that particular industry, and how does it apply to us?
R: I’m sure when you’re developing different products, it’s the same experience. You’re using the knowledge that you’ve gained from being in different verticals.
S: I think there’s a common theme that this telematics space is relatively new in a lot of different spaces. Whether it’s in insurance or the government or selling to small businesses, there’s this question of ‘I don’t know what it does, I don’t know what it can do for me’. So we optimize it for the vertical but we look at ways that we can have that for them. So the government obviously has to go through some open contracting process, a public consultation perspective, so we’ll line up a large mass trial where people can sign up and use it and be able to have their voice on it. In a small business, it might be giving the business owner a 30-day trial. They get to play around with it, understand what the technology can do for them, or answer the questions and fear they might have. Then you can go and close that sale.
R: A book that I’ve been reading recently is The Challenger Sale. They talk a lot about educating your buyer, but it’s about commercial education. Educating them towards a certain end, or education that leads them towards understanding the values that you have in your product.
C: For example, we have a white paper out on the hardware enablers. That’s a great example where we know the questions that they’re going to ask. It leads them down a path that’s more advantageous to what our strengths are: obviously we’re going to do that. But we know those are the fundamental questions. And there’s still customers that it may not exactly fit. Maybe 80% we fit, but there’s still 20% that read it and say ‘well, yeah but I don’t really fit, I fit between the cracks’. That’s important because they’re going to figure that out anyways through the sales motion. I’d rather them learn and self select and say that the IMS technology isn’t for me. It saves our people time if nothing else.
R: That’s time that you don’t have to invest in travelling to see them.
C: Right, a dead-end sales motion.
R: As companies grow and scale, what are the things they should be thinking about in terms of keeping their alignment, or maybe you can speak from some experience you’ve had.
C: At IMS we use two macro-processors. One, we call it the integrated-business-planning process, IBP. There’s all sorts of great material on that. That’s a process we use between the product organization, the sales organization, the executive teams, and if there’s a hardware element to it, the supply chain folks. Keeping them in the loop on a monthly rotation. That’s the outward demand facing side. From a product development perspective, we use agile, in particular we use scrum. The great thing there, we do weekly sprints with our scrum teams. We plot that out, but we’re revisiting it. And because the IBP has a monthly cycle – although with scrum you can change every week. Realistically you want to get things completed. You kind of have this natural evolution where you can have this new business opportunity coming up, and when can we work that into our next set of scrums? To be able to have that process where you’re able to nimbly react to new things that are coming out, whether it’s a new opportunity, altering your course because of a competitor, taking advantage of a new trend. You have a process that lets you do that.
R: In relation to the opportunities that are coming from the sales team: you’re working in the system where you’re communicating regularly. How do you address different opportunities that come in from the sales team when they’re looking for a specialized product?
C: There’s a couple of things. Certainly, the sales organization can be a great source for trends and information about where the market’s going. They’re talking to customers, prospects every single day. But, you have to filter out, which is probably more art than science in terms of, is that a one off or is that symptomatic of a potential merging trend? And then being able to identify it and pick up on it very quickly. Certainly there’s been cases in my career where we’ve worked with a customer. They’ve wanted to do something and at first pass it sounds totally crazy. But then as you talk about it and work through it with them and understand what their business problem is, you can say ‘I think we’re onto something’. The best times we’ve done that, we’ve actually used that customer to first validate it, and then you have a first reference customer to be able to sell this to when you’re in your promotions. Not only do we have a product, we have a reference customer: it’s fantastic. There’s certainly been times across my career, across three different organizations where we thought we were onto something, or we thought we were opening up onto a market, and in reality was a one-off. The challenge with the one-off is all of a sudden you have to support it. How is your roadmap fit to do that? Depending on different organizations with different tolerances, but if you’re truly a SaaS organization, if you don’t think it’s absolutely core to your business, it’s indicative of a trend, you need to resist the urge to do it. Because if you’re at 1 or 10 customers, yeah you can support it. But if you’re at 100 or a thousand, you can’t. So if you’re thinking about scaling, and different businesses scale in different ways, that becomes critical. It’s really about if you’re going after ten thousand really small businesses, that becomes a suicide. If you’re talking about going after five or ten, really large enterprise deployments, that might be more maintainable and supportable. I think it really depends on the market dynamics and again, there’s been times where it’s worked out fantastically and there’s been times where, you know what, it’s a professional services revenue and it doesn’t really pan out and it becomes a boat anchor in terms of other things that we want to continue to do.
R: How do you differentiate?
C: I think there’s two pieces to it. The first part is that we always ask ourselves, as a product organization, we always ask ourselves two fundamental questions. The first one is what’s the business problem the customer has? Rather than having a solution that we want to sell, what’s the business problem that we’re trying to solve? The second part to that question is, are they willing to pay somebody to solve that problem. If you answer yes to the first one but no to the second, then you’ve got to rethink that particular project. And there’s all sorts of areas – hey, that’s a cool business problem, but no one’s willing to pay so I don’t really care about it. So that’s the one area. And if you ask that question and then you start to say ‘hey, this is a slightly different vertical or slightly different product – is it a business problem that we think we can solve, are they willing to pay for it, do we think if others pay for it they’ll be having the same problem’. So that would be one part around that in terms of how you ask that question and flush that out.
R: For VA Partners we work with a lot of startups in the SaaS space. Any tips that you have as far as being in the midst of the business startup community?
C: I have a couple tips. One, more from the sales perspective, and this is bigger than just sales because it’s about where the organization is focused on, but you look at the channel or vertical you’re going after and what the length of that sales cycle is. That really factors into your path to revenue. Especially as a first product organization, when you’re trying to get to your initial revenue, that’s so important in terms of understanding it. No matter how lucrative the market is I wouldn’t go after, for example, government, or insurance, or healthcare, or some of those verticals that have super long lead times, either because regulatory approval, the buy cycle is super long. I’d look at potentially other verticals to exploit that. Now sometimes if you’re doing medical residence imaging technology, it’s going to be pretty specialized to health care.
R: It is what it is.
C: It is what it is. But if you have an opportunity to go in after some verticals that are, and I’m not saying everything is consumer, but being able to look at some of those verticals that might have a much shorter buy cycle that allows you to get to some revenue, that gets that under there, start generating cash flow, which is critical. That would be one particular area. The other piece of advice I would have, and again it comes back to something we touched upon earlier, but if you’re truly, for example, a SaaS business you have to protect yourself from that desire to solve for the one-off’s. And I’ll use the example of if you’re going after a thousand medium sized businesses, that’s your target market, and you think you have a reasonable chance of getting there. And each sales person brings in a really good opportunity and they only want a particular feature. You multiply that out, when you’ve got a hundred customers you’ve got a hundred custom features to be able to deal with. You multiply that out at scale and all of a sudden it’s a thousand. And certainly there’s engineering techniques where you can do feature toggles or configurations to turn those things on and off. But the challenge for the development side of the organization is managing all those nuances and complexity, and remembering it, and upgrading it release by release and keeping it there. There’s always that risk in product or engineering that they don’t want to be customer focused and they’re pushing back on this one little thing – ‘my customer just wants it with pink polka dots, why are they pushing back on it?’ And at that long term division of ‘I want to get to a thousand customers, we need to be at a thousand customers’ – that’s why they’re doing that. If you explain that to your prospects and your customers, certainly someone will really need pink polka dots and it’s just not going to work, and others will say ‘I get it, I understand the rationale and I’d rather have something without pink polka dots and something supportable and I like the vision you’re going with’, than saying ‘you’re going to bend over for me and give me pink polka dots’. That’ll be the other one, and that’s really tough because it feels a little bit backwards: we always want to say yes, we always want to do what the customer asks, but there’s times where, even at scale, these little things, it’s death by a thousand cuts. That’s why it’s an analogy.
R: Death by a thousand products. If you’re basically creating a thousand products, you’re over your head in that sense.
R: That’s great – great tips for startups. As far as your sales stack or your technical stack, why don’t you tell me about a couple of the tools you’re using to make that work.
C: So we have a Salesforce tool, I honestly can’t remember the name of the tool, that our sales people use. We are evaluating moving to Salesforce as a tool. We’ve already deployed Hubspot as a marketing automation tool. So we talked about some of the content marketing things we do, so we can see those leads very early on coming in, we see customers coming back and using it, and that’s a great opportunity. We can say ‘Acne Insurance has hit our site 18 times and they’re downloading these whitepapers and they’re looking at this content’. That’s pretty indicative of someone who’s interested. So we can take that contact information and that interest and pass it off to the appropriate sales team, to be able to talk to them and help them along the channel. So we use Hubspot from a marketing automation perspective. For a product organization we use a number of things. We use Trello boards, for example, in terms of how we share and be able to collaborate with our engineering partners when we’re doing planning out there. Then we’ll actually pull them up to share with the sales teams to say this is what we’re working on. Trello boards are basically electronic sticky notes, so you can move them around and collaborate on them. So we use that pretty extensively. From a product development perspective we use Confluence in terms of sharing information and Jira in terms of tracking tickets and stories and items in there as well in terms of a support organization. Primarily from a sales and marketing perspective we’re using Hubspot, a little bit of a CRM, but again that really depends. We’ve had this debate: do we need a Salesforce automation type tool? Where you can do some of it really easily through an excel spreadsheet or something really low tech. I think it really depends how many leads you’re going after – are you going after a thousand opportunities? Well then that’s not feasible. Are you going after ten? An Excel spreadsheet is going to be fine. Don’t sweat the technology necessarily.
R: We’ve found that with a lot of the companies that we’re working with, we’ll get them set up sometimes on the Hubspot marketing side, but then for sure usually if they don’t have a CRM in place we’ll just put them in with the free Hubspot CRM. Because even if you’re not using the marketing automation side you can still use the email tracking, you can see what they’re downloading, all of those sales triggers that you’ve mentioned. And that’s a great place to start. When I’m doing sales calls I’ll have sent out my 10 or 15 emails the day before and who am I going to follow up with? Well obviously the one’s that have opened, that have clicked on something, and then we can best use our sales effort to focus on those ones. So I would suggest for your company to always use a CRM. Mark Elliott, of our VA Partners team, he always shakes his head when anybody mentions Excel as a way to track things because the challenge with it is that you don’t always get the nuances of every conversation – it’s not always tracked in Excel. If it’s a lead it might get tracked but maybe not when someone needs to follow up or that you did have a conversation with somebody. That’s why we always like to have something in place, to be able to track those things and then schedule events to take place, whether it’s a call or email to follow up on.
C: So our counter point, not to contradict Mark, but have a good process first and then use the tool, because whether it’s an ERP, a CRM, or a Salesforce tool, make sure you’ve got a really solid process, and then the tool helps. We looked at it about three or four years ago and we decided that we’re not quite there yet. We didn’t even have a standardized sales process: let’s focus on that first, then lets take a step back and make sure we’re investing in the right technology.
R: If you have a CRM that people don’t put the information into, then it’s kind of a moot point.
R: So around the sales experience, can you think of any terrible sales experiences that you or your team have had? Any silver linings from what you’ve learned from them?
C: I’ve got a couple of funny stories. I remember way back when I was at RIM, when they were selling devices to the investment community – they were all brokers and stock traders. And they were the only people who could use that technology. We had this great set of technology and we flew down on the company jet and we were talking to all these IT guys, and I got up to do a road map presentation. Every feature I talked about, they said ‘can I shut it off? can I turn it off? how can I control this?’ And for me, I was still a pretty green product manager, and that was the first time I thought I had really nailed it, I had all this great material and I was presenting it and realizing that I just didn’t know my audience at that point. IT guys are like ‘great you put in this new feature for my broker, they’ll be happy, but I need to control that particular piece’. So that was one: it seems so obvious.
R: To have an off switch.
C: Right, to have an off switch. The other one that was interesting: I used to work at a previous company. The sales manager was really good. I didn’t realize how good he was until I stopped working with him and we’d go on an RFP defence or some other activity and he would say ‘Chris, don’t confuse selling with implementation’. At first, I thought is he trying to pull a fast one? What I’ve learned is you know all the details: I can talk at super level detail, but I could potentially scare people. It’s important to give them the right information at the right time. So what I took away from that over time was that it isn’t about misleading people, but it’s a sales process. They’re going to need to know about all that other information later, but now is not the time. And if anything, you might actually slow it down because you can ask questions that they will naturally get to, but they don’t need to get to at this particular point.
R: Focus on their pain points or their challenges and just addressing those three of four things, versus the twelve other features that don’t address anything that they have a problem with at this time.
C: Exactly. Sure, they’ll still exist in your product and they’ll maybe eventually learn those benefits, but that is more of an area of the customer success team, post-implementation. There you can say ‘are you taking advantage of these other ten things?’. Now, all of a sudden they’ve gotten through the implementation, all the complexity, and they’re seeing the initial value in purchasing your product, and then you can come back and delight them and say ‘by the way, there’s these other ten things that you didn’t know about’, or ‘here’s two of those things’, and get them started using those first. That was one where it was easy to reflect on because it was a nice sound byte: don’t confuse selling with implementation. But as I think back on it, and I think how I, as a product guy, as my product team supports the sales organization, keeping that in the back of my mind and saying that I know all this stuff, but when can I start contributing those bits of information to advance the sales motion and not scare them, overwhelm them, give them irrelevant information at the time, but I can share it because people will think I’m smart.
R: I still remember meeting you fifteen or twenty years ago when you had one of the earliest Blackberrys that didn’t yet have a phone in it.
R: Or coming over to visit me and saying ‘Randy there’s this cool thing and we’re putting a phone in it!’. It was just blowing your mind that they put those things together: a PDA and a phone together. Any thoughts of what it was like back then in that space of the pre-iPhone and pre-Blackberry time?
C: It was interesting because I got to be part of that in the early days. One of the things we did really well is that we solved one pain point really well. Before we did anything else, before we added a phone, we figured out how to make people’s email wireless. Now we scoff at that but back then it was groundbreaking and they called it a ‘Crackberry’ for a reason because it was so addictive for people. And then we moved onto the next thing. And then we also paired that with some interesting approaches from a sales perspective. So back then, IT wasn’t what it is today. So what we would do is we would see at the top of the organization these motivational people. People like Jack Welch and Mike O’Dell, Bill Clinton’s Vice President, those type of people: influencers with technology. And we’d do that for a sales perspective where we’d put it in the VP of Sales’ hands, and once he had it he wanted all his team members to have it and it just grew like wildfire. That was interesting. That helped lead to a lot of that initial success. I think where we lost it and where Apple started to get us was we saw the same kind of thing but it had evolved to apps and the IT guys were no longer important in that decision process as well. We played that one strength really well, ran the table on it, but when that next shift happened around apps and more capable devices, I wasn’t at RIM at the time, and friends there said Apple was never going to take off, but they were missing the bigger picture. Those things don’t matter, you don’t have to have a mobile optimized web page, or it’s really about these apps because it’s not about the ten apps the device manufacturing is going to provide you, and missing those trends. So we became victims of the same thing we attempted to do way back when our competition was those big Nokia phones that had sliding full QWERTY keyboards. So those are interesting seeing the trends from not just a product perspective but a general technology perspective.
R: Any battles you had back then or presently where you feel like you’re always up against a wall: ‘I’m trying to convince people on this point in my organization’. Anything that stands out to you and how do you try to get your point across?
C: When I was at NCR and I was leading their fintech side, we saw this big trend move from online banking to mobile banking and mobile payment technology. We think of banks as not that fast moving but when I went to IMS I quickly saw that same trend: everyone’s using portals. The portal technology in 2013 was kind of ‘long in the tooth’, so I started shifting our organization towards mobile: let’s have an SDK and let’s make it easy for people to develop the application on top of it and let’s put the technology in their phone instead. At the time it was really early on for them because people were like ‘what are you talking about?’. Sometimes I questioned myself and I looked at the earliest presentations I gave to our customers and I knew it was there. I was talking about an SDK in 2013. Even now, they’re not quite there yet, because what we see as fintech or general technology spaces, other verticals are very slow to adopt. You have to have confidence in the trend, maybe not having the timing correct but holding the course and having confidence in that.
R: How’s your timing for Bitcoin?
C: I’m thinking of buying in at 17,000.
R: There you go, perfect. So as we move towards concluding our session today, any final thoughts or insights you have, Chris?
C: One of the big things that I’ve always seen and enjoyed the most success, from a professional level, is when there’s that high degree of partnership between product and the sales organization. One can’t be successful without the other. Sometimes we’re naturally at odds. A sales person wants the customization, product thinks you’re discounting the product too much. I’ve equated it to, I’m using another sports analogy here, we all have to play our position, otherwise it’s like watching five year olds playing soccer and congregating on a ball. While I’ve never been a sales person, I’ve got all kinds of opinions on how to be a sales person. Just like my colleagues in sales, I’m sure they have ideas on product. It’s great and we want to hear those opinions but at the end of the day there’s a reason why there’s one goal keeper, four defence men, whatever that lineup may look like. You’ve got to trust that people play their positions. There’s a healthy tension that keeps things in check, as long as you keep it a healthy tension and not conflict, then I think that’s good. We’re trying to protect revenue and profits for a particular reason, sales are trying to get the deal, and they both make sense, but you have to look at it from that overall perspective. I think that’s key, making sure you’ve got that right balance.
R: One last fun question, if you were to leave your office today, you step outside your door and find $10 million on the front step, what do you do next? Your bitcoin investment pays off, what do you do next?
C: I think if I were in that situation I’d hang my own shingle up. What that might be, I don’t know. In product management they liken it to being CEO of your own company. While it’s not entirely true because not everyone works for me, certainly you’re orchestrating a lot of different parts of the organization. I think I’d really want to scratch that itch and be able to build and do something of my own and run that. I have no idea if that would be in tech or decidedly non-tech, but I think I’d do that and apply those things because there’s a part in product where you get to do a little bit of sales, a little bit of marketing, a little bit of engineering, and so when you’re a small business doing your own startup, you by definition get to do a lot of those things. So I think that’s what I’d do.
R: Great answer. Chris, thanks for joining us today. Anyone who’s listening, you can find the notes and a general transcript of our conversation with our blog post. Check that out! We’d be happy to have your comments and keep the conversation going.
Thanks for listening to the VA Partners Startup Sales and Marketing Podcast. Got a question? Looking for sales or marketing support for your B2B Startup? We’d be happy to have a conversation with you. Connect with us at VAPartners.ca.