The rule here at DataFox is, and I quote, “No outreach without research. No follow-up without reason.” You can’t send an email to a cold prospect without having researched that prospect and therefore having the confidence that they might actually need what we’re selling them.
Bastiaan Janmaat is Co-founder and CEO of DataFox, a Sales Prospecting Platform HQ’d in San Francisco. I invited Bastiaan to join me as a guest on The SaaS Revolution show to get insights and advice around Sales for your SaaS Startup.
I’m joined today by co-founder and CEO that’s come from a background in investment banking in Europe and is now based in San Francisco running a SaaS company that deals in sales intelligence. Welcome to the show, Bastiaan Janmaat, CEO of DataFox.
Bastiaan Janmaat: Thanks, Alex. Great to be here.
AT: It’s really great to have you on the show today, Bastiaan. How are you doing?
BJ: All good. It’s 8:00 a.m. It’s a foggy morning in San Francisco.
AT: Okay. Nice and early. I’m a morning operator myself so hopefully, you’re nice and fresh for some good questions that I’ve got for you today.
I mentioned very briefly, I said DataFox deals in sales intelligence. Can you give a bit more of an overview, shall we say, of the company and the origins of the company, etc.?
BJ: On a high level, we actually call DataFox a prospecting platform. We do a lot of things but, fundamentally, our North Star is to take both the guess work and the grunt work out of finding great prospects. We do that not just for people in sales, we do that for marketers, people working in business development, and also people working in finance, which is where I actually come from.
As you’ve said, I used to work in London for an investment bank looking for high-growth companies in Europe. I spend a lot of my day very manually searching through lists of companies, visiting conferences in person, reading industry trade journals, all to find businesses that might be a match for us to reach out to.
So the premise behind DataFox was to bring a lot more automation to that. Moved out here to the Silicon Valley, teamed up with a few folks who were thinking about a very similar problem and then three years ago, founded DataFox.
AT: As your platform is a prospecting platform, deals in sales intelligence and as you’re speaking later this year at SaaStock 2016 Conference about building an outbound sales strategy, I figured that today we can talk about sales and specifically selling SaaS. Are you game?
BJ: Yeah. Let’s do it.
First question is around CRM. I don’t run a SaaS company but my understanding it’s pretty important to have a CRM. Can you sell without a CRM? And what CRM platform do you use and why?
BJ: I think you can, as a founder, as a small company, you can start selling without a CRM but we’re at a stage now, we’re 27 people, eight folks working on sales, three in marketing, there is absolutely no way we could do what we do without a CRM.
Back in the early days, I’d just have a spreadsheet. That was my CRM. It was actually a Google Sheet where I kind of kept track of key prospects. I tiered them. I kept track of their status. It was all pretty manual.
Then as soon as we hired our first salesperson, I had actually just prior to that, I had adopted RelateIQ which is analytics CRM and now SalesforceIQ. It was acquired by Salesforce. Because to someone who’s never used a CRM before, RelateIQ is a really easy, intuitive way to start tracking your deals in something that’s a bit more structured than a spreadsheet.
But actually, very soon after our first sales rep joined us from Salesforce, he said, “No, no, no. We got to go all the way.” So setting up Salesforce (a) allowed us to build in dashboards that at that time you couldn’t do using RelateIQ. I’ve learned what you can’t measure, you can’t improve. The extent to which you can build dashboards in Salesforce is pretty unrivalled.
And number two, we knew we were going to build Salesforce integration down the road so to be able to dogfood that, we had to be on that CRM.
AT: What are your thoughts on outbound cold emailing? Do DataFox do it?
BJ: It’s a controversial topic nowadays I think because there’s so many tools out there now that allow you to cold email lots of people in bulk if you wanted to. I think that’s something that’s a little abused by some folks out there. Download a list of 10,000 email addresses and send everybody the same email.
There are 100 billion business emails being sent every day so we’re all getting inundated. And so our mantra here at DataFox is, okay, we can cold email but we have to be highly targeted. In fact, we can only send them one at a time. In fact, the rule here is, and I quote, “No outreach without research. No follow-up without reason.” You can’t send an email to a cold prospect without having researched that prospect and therefore having the confidence that they might actually need what we’re selling them.
And number two, you’ll never get an email from a DataFox team member that says, “Hey, bubbling this up,” or, “just wanting to check in.” We have to follow-up with a reason. It’s either giving information, like check out this news article that might be relevant or this webinar that we’re promoting, or you’re following-up to reschedule a call or something like that. That’s all okay, of course, but none of the bubbling-up type nonsense.
And the reaction we’ve got to that has been extremely positive. We get reactions to our outbound emails along the lines of, “Wow. Great job with that very targeted email. I’m going to actually share this with my sales team. It’s kind of best practice.” There is obviously a trade-off, because if you’re sending them one at a time, you’re sacrificing a lot in scale, but this is how we do it.
You mentioned in the first question that you use Salesforce. Can you provide some more insights into what your sales stack is and how it’s really helped you acquire new customers?
BJ: Yeah, definitely. We’ve got a pretty clean, I’d say, sales stack. We obviously use our own product for our outbound efforts.
And it might help to give a bit of context. Our sales team, eight people. We’ve got two SDRs, which we define as inbound. Someone hits our website, signs up for a trial, we call them. That’s what our SDRs do.
We’ve also got two BDRs, which we define as outbound. They’re in a very targeted, one-at-a-time way cold calling and emailing to prospects. And then we’ve got four account executives. Actually, one of those account executives is a player coach. He’s carrying his own bag but he’s also leading the team.
I give you that context because we dogfood our own product especially in our outbound efforts. We use DataFox to find prospects that are aligned with our ICP and then we find an insight around the business we’re reaching out to. Like, “Congrats on that award,” or, “I see you just hired your 50th person,” something concrete to mention on our call or in that email. That’s where we use DataFox.
Then to append our emails into Salesforce, we use SalesforceIQ. And then a couple reps use a few tools. It’s not compulsory, but there’s a tool called Boomerang which we use within our email to have an email come back as a reminder that we should follow-up. We use MailTrack to see whether an email was opened. And there’s this nifty little tool called aText, which we use to save template phrases or even just our address or a template email which you can then very quickly insert into an email. aText. Really cool.
AT: I’ve actually not heard of most of those tools so I think that’s pretty interesting. Hopefully, people can go away and research those tools and see if they can help their businesses.
You mentioned that you’ve got eight people within the team and the structure of that team. I’m assuming that you built your sales organisation from the bottom up rather than top-down. Can you explain why you did that, why you didn’t just hire like a VP of Sales and go the other way?
BJ: I’m trying to think whether that was a very deliberate decision at the time. You know, I’ve been selling myself as a founder and so I think the inclination at the time, and this was late 2014, so about a year-and-a-half ago, maybe a year-and-a-half into building the company, we decided we need to bring in some professionals. The inclination there was just bring in quota carriers as opposed to a manager.
So we hired two. The advice I got there was it’s impossible to benchmark and know if your first rep is doing well if you don’t have two people to compare to each other. So that’s what we did. Then one of those AEs is the person who has wound up now becoming the player coach team lead who’s also running the team. I think there’s a lot of literature out there, lots of advice out there on be careful if your best rep has moved into a leadership role. You’re losing your best rep and you don’t know if that person is fit to lead. So yeah, I saw all the warning signs or heard about all the warning stories out there, but in our case, it’s worked really, really well. He’s done a really nice job in that transition.
We had those first two AEs then we brought on one SDR who built the playbook for the SDR function. And then we promoted an SDR into the outbound role, BDR, and he built out the playbook for that function.
It was right around 6, 7 people in total that I realised there was something missing in kind of day-to-day management. Reps weren’t getting enough coaching from me. Obviously, I get pulled in a bunch of different directions here not just sales stuff. That’s when we needed to bring that first AE into more of a coaching role.
AT: Have you ever had to fire anybody specifically from the sales team for not hitting quotas? If so, how was that experience?
BJ: Yeah. We’ve been around for three years so there are a couple of folks we’ve parted ways with along the way, and including on the sales team. However, it was never for a quota reason, honestly. There was a case where we brought in an account executive who we hired out of the management role elsewhere and so there was just a bit of a misalignment there in skills. This person was fit to be a manager and we needed them as an early quota carrier, a bag carrier, so that was a bit of a misalignment.
You know, the thing with quotas I found is that with deal size lumpy and months very lumpy will kind of blow past quota one month and then miss it the next month especially when you’ve still got a relatively small team. I view our quota for account executives as a pretty loose target, honestly. That’s why in terms of compensation, our account executives they get a percentage of every deal they close. So it doesn’t matter… we haven’t built in the accelerators really yet for account executives.
Now, for SDRs and BDRs, I view it very differently. There it’s very concrete. It’s more activity-based. You need to make a certain number of calls, qualify a certain number of opportunities. There, we just make sure we constantly tweak the quota based on how we are doing in that function. And their quota is a much more important and concrete target.
AT: Talking of quotas as we are, last week, I was at a small SaaS conference in Paris. And I met with a founder of a European SaaS company. Actually, I hold my hands up, I hadn’t heard of them but you can’t hear of every company in the world. And they were pretty big. I think they’re about a 200-person organisation. Their sales team do not get compensated. They don’t carry quotas. I was pretty surprised about that. What are your thoughts about that?
BJ: I mean, I’ve never tried it because the advice we got early on here from our investors and our advisers and people around us here in San Francisco was, look, it’s a very metrics-driven job and tying variable compensation to those metrics in a sales job, it’s tried and tested. It’s like what all the great companies do. We’re two blocks from Salesforce and I’d say they’re best in class in how they have built their sales org over time so we’re going to want to emulate that.
I do think also, maybe this is a big cliché or a bit of a generalisation, but you get a certain type of person who’s motivated with financial rewards tied to very concrete metrics.
I personally wouldn’t try it, but maybe early on in a company’s life, you need people who are self-motivated, independent of financial reward and so you just want to trust them to test your market early on, maybe. But my view there was just guess what your quota should be early on and be willing to adjust it over time. Rather to do that than not have variable compensation at all.
AT: Obviously quotas motivate salespeople. They need targets to work towards. Outside of that, from a cultural perspective, what sort of things do you do at DataFox to keep your sales team motivated?
BJ: Motivation. I guess first of all, we find people who are very motivated to do this type of job in the first place. I found that I don’t need to fuel the fire very much here. People come. They want ownership i.e. ownership in stock but also just ownership of their function. They’re excited to blaze a trail in more uncharted territory. They’ve joined us from bigger companies. They’re very self-motivated.
Some structure in terms of goals and dashboards helps a lot. We’ve got a bunch of dashboards built out in Salesforce that we’re looking at on a daily basis and in our weekly sales meetings. That’s helpful. I don’t know if you’ve talked about spiffs much on this show?…
AT: Not so much.
BJ: These are very short-term small incentives. This wasn’t my idea. It was the idea of somebody on our sales team. He’d seen it work well elsewhere.
You’ll say for example, “All right, everybody. Today, from 3:00 to 4:00 p.m., everybody on the sales team make as many calls as possible and whoever sets the most meetings gets a $50 Amazon gift card.” I heard that I was like, “What? A $50 Amazon gift card?” But it works. Again, it’s because folks who work in sales are typically they’re hungry go-getters. They’re motivated by any type of incentive that’s tied to their concrete performance. Yeah, these spiffs have been really interesting to sprinkle throughout the week. It’s been interesting for us.
And then I guess one other thing that we found helps us attract sales reps from big companies and keep them motivated is let them have involvement in other parts of the business. We’ll have a rep, for example, who wants to get marketing involvement. They host a webinar or write a bunch of marketing drip campaign emails. Or somebody who really wants to be involved in product so they get involved in redesigning a feature. Which I guess in our case works especially because we use our own product. But, either way, give folks the opportunity to see inside the kitchen beyond just the sales function. I think that helps as well.
AT: I noticed some of your customers are large enterprises, the likes of Box and Goldman Sachs. You’ve also, as you said, got account executives within your 8-person sales team. I’m making an assumption that these account executives, they’re also field sales guys. They’re going out there because the large enterprise clients probably want to have face-to-face meetings to close down the bigger value deals. Is that a fair assumption?
BJ: I can see where your assumption comes from. We do sell to some big companies, but typically we’ll sell to a specific team first. Our deal size at the moment is still below $100,000 a year. We’d love to cross that barrier at some point but at the moment we’re still below it.
Technically they’re inside sales reps although we do try and get in front of people in person as much as possible. You mentioned Box and Goldman Sachs, we’ve definitely been in their office and they’ve been in ours. I’d say inside sales by structure but trying to get in front of deals where the deal size is bigger. Absolutely.
AT: When should you have or start building out this field sales team? Is it when the deal size gets over $100,000? What is the deciding factor?
BJ: I think there’s often a correlation with deal size but more fundamentally it’s probably when a deal becomes very complex when there are a lot of decision makers involved that becomes difficult to navigate over the phone. That’s why in-person meetings become more important.
I think we’re still quite far away from having dedicated field sales reps so I definitely haven’t felt the need to build out that function here yet. Also, currently, our deal cycle, our sales cycle is about 40 days. It’s just we haven’t seen the complexity yet that would require a dedicated field sales.
AT: Okay. That deal cycle leads in nicely to the next question. So you said about 40 days to typically close a DataFox deal. Can you share advice, just in general, on closing SaaS deals faster? I mean, 40 days it doesn’t seem like a long time. But what are the tips or things that you found that have enabled you to close these deals and get them to 40 days or less?
BJ: Let me think. Well, I guess first and foremost, coaching your account executives. What I mean by that specifically is I think there are, and this is the advice we got from one of our advisers was there are really three questions you need to ask your rep that really matter in terms of figuring out if a deal is going to close and getting it there faster.
(1) What are the hurdles to closing?
(2) What’s the plan to actually traverse those hurdles.
And (3) What’s the mutual ROI expectation with the client?
If you can answer those three questions then you’re in a good spot. If you can’t answer those questions then you’ll motivate your account executive to go bottom that out and that bottoming that out will actually move that deal to close faster.
But I guess more concretely, we offer a two-week trial. Keeping your trial short can help shorten the deal cycle because if your trial is 30 days, people are going to use the full 30 days and then the negotiation starts. Shorten that trial if it makes sense for your product.
Keep your documents really simple. We used to have like a 20-page Sales agreement and then we shortened it to a page that references our Terms of Service on our website. It’s just much cleaner, much simpler so it reduces a bunch of legal complexities. If at all possible, avoid the legal back and forth all together and just swipe someone’s credit card and refer to the Terms of Service on your website. Just try to remove complexity.
AT: What about one piece of advice for SaaS founders or even SaaS sales execs to help them sell more?
BJ: I think my top learning from having our first account executives come in here and sell our SaaS product the way it should be sold, my biggest learning was don’t be shy about really getting into the gritty details with your prospect on the process that they’re going to need to go through to close this deal. Ask them point blank about their budget. Are we replacing something else? Is there a budget that’s already been allocated? Do they need to go get approval? Who is the decision maker?
It can be awkward to ask, “Do you have authority?” But one way to phrase it, for example, is, “Hey, look. I know when we buy new software, new services, I need to get my CFO’s input. Is there someone on your end who you’ll need to run it by?” There are ways to ask it without offending people.
And then urgency. It’s that mutual ROI expectation. Like what is the problem that you’re going to solve with this and how do you stack rank that against the other priorities on your plate right now?
Those were the things that I used to be shy to ask when I was doing sales myself. It meant that I’d often get to a point where I thought a deal was going to close and then didn’t because I hadn’t fleshed one of those things out.
AT: What’s your favourite book specifically relating to SaaS sales that you can recommend and why?
BJ: I’ll give two honourable mentions that I’m sure have been mentioned on your show already, so I’ll give you another one. But those two would be Predictable Revenue, obviously is the bible of a specialised sales team, and then Trish Bertuzzi’s SDR playbook. It’s also just fantastic for very concrete steps on how to put a specialised team in place.
But I’ll offer one that hopefully hasn’t been mentioned. It’s a book called Topgrading by a fellow named Brad Smart. This is actually not about sales. It’s actually about recruiting, about interviewing. It’s an interview style and methodology that’s I think been critical in how we’ve been able to interview and vet candidates and wind up with just really high quality, keeping the bar really high over here.
It’s Topgrading. Its structure basically takes the candidate all the way back to high school and just chronologically walks through their education and work experience and you really get an understanding of what motivated people at each fork in the road. It gives you an insight into someone’s motivation that goes way beyond what I used to get out of our more ad hoc interview style. So Topgrading.
AT: It definitely hasn’t been mentioned on any of our podcasts so far. I’m going to check it out. It sounds very interesting.
Final question, we’ve come to the end of the show now, Bastiaan. I mentioned at the beginning that you’re coming over to Europe. You’re coming to Dublin in September to speak at the SaaStock Conference. What can we expect from your talk that you’re going to give there?
BJ: I think I want to talk about how to set up an outbound prospecting strategy very quickly. Probably like 60-ish days. It’s what we did. Ironically, I think we were very slow or late to build our own outbound sales strategy and we now have one in place that’s working really well, very targeted outbound sales. And so I’m going to talk through just very practically speaking how to get a strategy like that off the ground quick and cheap to know if it actually works for your business and your product. So really excited to share that with folks and get their feedback on what’s worked for other people.