Strive not to be a success, but rather to be of value. — Albert Einstein
As of April 2017, there are 156 Companies valued at $1 billion or more by venture-capital firms, according The Wall Street Journal and Dow Jones VentureSource.
To learn more about managing hyper-growth companies, Ray Wang and I invited CEO of a fast growing startup that successfully went public in October 2016, and a startup CMO that is currently experiencing hyper-growth.
Rob Bernshteyn is CEO at Coupa Software. Coupa is the cloud platform for business spend; delivering measurable value through real-time spend visibility, control, compliance, and agility. In 2016, Coupa was ranked #17 on the Forbes Cloud 100 list. As CEO, Bernshteyn drives the company’s strategy and execution. Bernshteyn is also author of the book, “Value as a Service”. Bernshteyn has over two decades experience in the business software industry. He came to Coupa from SuccessFactors, where he ran Global Product Marketing & Management, as a member of the executive management team, as the company scaled from an early start up to a successful public company. Bernshteyn is also a guest lecturer at Harvard and Stanford business schools, and a frequent contributor to Forbes and Fortune magazines. You can follow him on Twitter: @rbernshteyn.
What is Value-as-a-Service? Bernshteyn begins by focusing the Value-as-a-Service concept to enterprise software and notes the shift from product-based to software-as-a service based business models using cloud computing as the delivery medium. If you assume if eventually most business models will be subscription based, then the main focus will be on the value of the service to your stakeholders. It is the realization that over time, the move to SaaS has a commoditization element to it, and the ability to measure customer value and desired business outcomes will be true differentiation. Coupa helps customers quantify and qualify the value of their SaaS solutions.
As we shift from products, to services, to insights, to experiences, to outcomes, to value, should we think more about hiring and training value managers instead of product managers? Ultimately your strategic business partners must design for scale-ability, agility, trust, and customer experience. Its about the platform and the value delivered to the ecosystem.
“It is already common knowledge that many traditional-products companies are converting the delivery of their offerings to the as-a-service model. With the completion of this transition assumed, the coming disruption will focus less on the delivery model and more on the value delivered. Value as a Service is the simple idea that measurable value delivered for customers will be the ultimate competitive battleground. Every customer will want to understand the exact value that they are being provided. They will want a quantifiable difference as they compare their options.” — Rob Bernshteyn
The pain killer and the vitamin combination leads to a strong market fit. The spend management is high growth category. Coupa’s platform delivers solutions for three core spend areas including procurement, accounts payable, and expense management. Coupa has modernized these back-office capabilities in an elegant and agile framework. In addition, Coupa can see incredible volumes of spend data (hundreds of billion of dollars in spend data). Access to this information helps empower companies to optimize how they spend money and improve their relationship with business partners.
How important is using cloud-based solutions to accelerate digital business transformation? The spend management category is the least risk area to start with respect to SaaS, according to Bernshteyn. Coupa started 11 years ago, when the move to the cloud was more difficult, but today, customers are rapidly adopting a SaaS model for spend management.
How do you start an enterprise software company that is as successful as Coupa? Bernshteyn said that it starts with execution, commitment and conviction to what you’re doing, a culture of delivering value and customer partnerships. As CEO, Bernshteyn ran the startup like a public company. For 32 quarters, Bernshteyn clearly communicated the company’s financial and innovation goals to his board of directors and the investment community; process that mirrors a public company. Overtime, being able to forecast and consistently meet and exceed goals, help Coupa build momentum and confidence in the leadership team.
What is the impact of emerging new technologies like artificial intelligence (AI) on both product and business model innovation? Data is the oil. The oil rigs are the algorithms that mine the data for real value, according to Bernshteyn. Coupa has access to over a $1 trillion dollars of spend data and algorithms that deliver real business insights. Coupa is in a real unique position to apply advanced algorithms to its data and produce insights that can help companies optimize their existing processes and value-creation service models.
“We went through an industrial revolution for 70 plus years, we are in the heart of an information revolution now, and what we are at the tip of is the knowledge revolution,” — Rob Bernshteyn
Coupa is led by an incredibly smart, giving and customer focused CEO. The company has access to incredible set of data that can be leveraged to transform businesses in the spend management category and beyond.
Price is what you pay. Value is what you get. —Warren Buffett
After speaking with Bernshteyn, Ray and I invited a CMO of a 2-year old startup that has grown from 3 co-founders to over 100 employees.
Sangram Vajre is the co-founder and CMO at Terminus. Vajre has quickly built a reputation as one of the leading minds in B2B marketing. Before co-founding Terminus, a SaaS platform for account-based marketing, Vajre led the marketing team at Pardot through its acquisition by ExactTarget and then Salesforce. Since the Terminus platform launched in 2015, the company has experienced white-hot growth winning accolades such as Atlanta's Startup of the Year, #1 Best Place to Work from The Atlanta Business Chronicle, and #1 in Employee Appreciation from The Atlanta Journal-Constitution. Vajre is the author of "Account-Based Marketing For Dummies" and is the mastermind behind #FlipMyFunnel.
What is the value of Account-based marketing (ABM)? According to Vajre, ABM is a mindset, whereby marketers shift their focus from managing leads to managing accounts. The problem statement as defined by Terminus is this: less than 1% of leads turn into customers. B2B marketers are looking for new ways to convert leads into qualified accounts and closed-won opportunities. Vajre believes that using an Account-Based Marketing platform helps marketers target best-fit accounts, engage decision makers on their terms, and accelerate marketing and sales pipeline velocity at scale. The value of ABM is to achieve relevance, using precision marketing, in a hyper-attention economy.
Is value creation a team sport? Account based marketing is a team sport and it includes sales and customer advocates. Companies that use ABM are accelerating their sales cycle by focusing on identifying the buying decision team - average of 7 in the B2B space - and developing a buying process map for each of personas. ABM allows marketers to deliver valuable insights at the right channel, right time, and the right content to the right audience.
How important is sales and services alignment to fuel growth? Successful companies are blurring the lines between sales, marketing and customer service. The B2B marketing mindset and practices are shifting more towards B2C marketing with personalized, immediate and intelligent customer engagements. ABM is a misnomer because this process is more than just marketing, it also includes sales and customer advocacy, according to Vajre.
Advice to other startups with regards to managing hyper-growth? Hiring the right talent is the most important job of startup founders. Defining a career path that is leveling up the employees is also critically important. Vajre is surrounding himself with experienced executives by recruiting talent with a growth mindset and experience. Growth is a function of strong leadership, healthy culture, and operational rigor. The culture is about challenging the status quo and the keys to the Ferrari (ultimate autonomy and opportunity to experiment and drive fast).
Vajre and his team believe that the best way marketers can deliver value to stakeholders is through account based marketing. It’s all about educating, inspiring and igniting positive action by spending sufficient time to really learn about your target audience. Vajre is an energetic social business leaders, who actively engages the community, always willing to teach and be taught. He is a digital marketing thought leader and a great follow on Twitter at: @SangramVajre.
Ray and I concluded our discussion with focusing on artificial intelligence as a technology accelerator in business by speaking to a data-to-decision analyst expert, Doug Henschen, Vice President and Principal Analyst at Constellation Research, focusing on data-driven decision making. Henschen’s Data-to-Decisions research examines how organizations employ data analysis to reimagine their business models and gain a deeper understanding of their customers. You can follow him on Twitter at @dhenschen.
Businesses today can accelerate their ability to deliver customer value by integrating artificial intelligence capabilities into their products and services. Henschen explained the differences between machine learning, deep learning, robotic automation, natural language processing and other data science categories.
AI is driving cutting edge capabilities using deep and machine learning that can lead to both product/service and business model innovation. Henschen also identified industries that are early adopters of smart capabilities for discovery, prediction, recommendation and automation for mass personalization at scale.
According to Henschen, the cloud service providers will be first to use AI technologies, followed by ISVs and SIs. Please watch the video with Henschen to learn more about AI market trends, research focus for 2017-18 and specific AI use case examples.