June 30, 2022
How to Close your First Enterprise Sale | Corey Gross, Founder of Sensibill
When you're selling to consumers or small businesses, you can put up an MVP, generate traffic, and watch the money roll in. Not so for enterprise. Enterprise means long sales cycles, procurement departments, security audits, pilots, and many more hurdles. How do you get your first enterprise sale? How do you convince a company 1000x your size to take a risk and work with you? Corey, the founder of Sensibill, had to sell to one of the most complicated and heavily regulated enterprises o...
When you're selling to consumers or small businesses, you can put up an MVP, generate traffic, and watch the money roll in. Not so for enterprise. Enterprise means long sales cycles, procurement departments, security audits, pilots, and many more hurdles.
How do you get your first enterprise sale? How do you convince a company 1000x your size to take a risk and work with you? Corey, the founder of Sensibill, had to sell to one of the most complicated and heavily regulated enterprises of them all: banks. And he got it done, securing multiple pilots prior to getting funded.
If you're working on an enterprise product and are starting to speak with customers, this is the episode for you.
03:13 - Step 1: Build a Mock Up
05:49 - Step 2: Build Relationships
07:10 - Step 3: Break Into Accounts
09:36 - Step 4: Have Conversations
11:22 - Step 5: Find a Champion
17:17 - Don't count on a domino effect
18:17 - Step 6: Build a business case
20:53 - Step 7: Negotiate
24:26 - Leverage traction to raise a round
26:31 - Recap
WEBVTT
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There's going to be a lot of days where you feel like you're running on a treadmill and not moving anywhere, but the first steps that you take are going to help you get to where you need to go ultimately.
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Welcome to the Product Market Fit Show, brought to you by Mistral, a seed stage firm based in Canada.
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I'm Pablo, I'm a founder turned VC.
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My goal is to help early-stage founders like you find product-market fit.
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Today, we have Corey, the co-founder and CEO of Sensibill, a seat management platform that is embedded into other banking apps.
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Sensibill is based in Toronto.
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They have about 70 employees and have raised over$50 million.
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Corey, it's a pleasure having you here.
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Thank you for having me.
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So, the topic of today's episode is how to make your first enterprise sale.
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Now in a consumer context, when you're selling to consumers, or you're selling to SMBs, you could put up a landing page, you can drive traffic to the site and wait for people to swipe their credit card.
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When your goal is to sign an enterprise onto a 5-6-7-figure contract, you can't really do that.
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And so making that first sale is a lot harder.
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So, Corey, if we could go back to kind of the early days, you have no funding, you've come up with this idea for receipt management app.
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Maybe my first question is on this business model, did you know from the get-go okay, we are going to get this platform embedded and white-labeled into the app of a much larger organization, and therefore we have to do enterprise sales, or did you first play around with the idea of maybe having a direct consumer application or something like that?
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So, thank you again.
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The way I envisioned the company around the time we were forming Sensibill was always as an enterprise play in partnership with financial institutions, not as a standalone app.
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Number one because I thought that that marketplace is already pretty well established and crowded.
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On the SMB side, you had, well-established, companies like Concur and Expensify, which is further down market, and many, many others.
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And on the consumer side, there were already multiple budgeting type applications in the market, most notably Mint.
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So, I didn't feel that was a space that I wanted to occupy or participate in.
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But I was always very fascinated by the idea that most people who are being served by their primary financial institution don't get the level of detail or personal service from their financial institution that they ought to.
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And we could be, yes, a tool to help them budget on the personal side and to capture expenses on the business side.
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But more importantly, we could help connect the depth of data that we would be accumulating by customer's use of our product with advisors and systems at the bank to help them understand their customers as a segment of one.
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We knew that that was going to be the approach.
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We were going to have to sell a financial institution on this kind of service.
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You're going to have to crack this first enterprise sale at some point.
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You have this idea, you're clear on this white-label approach.
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What do you do first?
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What are some of your first steps?
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Do you go out, and you say,"Okay, let's build an MVP product that I can show as a prototype." Do you try and generate hype?
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Do you say, let's have conversations with some of these FIs?
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First was validation, and validation comes through conversation.
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You have to show them something, so we had a mock-up demo, which is...
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To be clear, when you say we, who is that?
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That's you and how many people at that stage?
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It was me and my co-founder.
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So, we had two people.
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And even before my co-founder came on, I was fortunate that I had built some connections, and had a bit of a network in the banking space.
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And I was connected to several large institutions where I could speak to people at fairly senior levels and get their feedback on this type of a solution and where it might fit.
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I mean, just because you speak to somebody in, somebody on the admin side or the digital side doesn't mean that that's your ultimate buyer.
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Your buyer could be in the cards and payments department.
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So having, senior enough level conversations helps you navigate the org and find coaches and champions for what you do.
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So, we were able to do that before we wrote a single line of code, just to make sure that there was an interest at a baseline level for what we were doing.
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And then once we understood what the use cases might be, we had a mock-up demo and the mock-up was simply a webpage on an iPhone that was a click-through demo.
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And this predated all of the envisioned prototypes that people did, there was no envision yet.
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So, we literally had to create a website that was...
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When was this, by the way?
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What year?
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This was 2013, probably leaning into, coming close to 2014.
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And so, we, at that time, were able to start socializing this across multiple FIs.
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We validated that there was a need for it, the need that they had specifically attached to us was in helping customers manage their expenses in the context of their mobile wallet.
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We would be helping digitize their receipt experience, while other parts of the wallet digitized payments and offers and loyalty and those kinds of things.
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And then once we had that level of validation, we looked for letters of intent, and we actually used those letters of intent to drive investor interest in our solution.
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Got it.
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So let's dive in on a bunch of things there to get in some of the details.
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The first one is on the relationships.
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You mentioned, you had a bunch of these relationships already.
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Could you have done this if you didn't have them?
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And I asked this thinking about the first time founder listening to this, a lot of them don't have relationships, and they might be working on an enterprise in a space that they're relatively new to.
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And you could argue, maybe that's a bad idea.
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I am curious on your thoughts there, but yeah.
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What would you have done if you didn't have those relationships?
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Could you still have done it and gone in some other way?
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You have to hustle to get them.
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I didn't start as an entrepreneur with all these relationships pre-baked.
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I built them and I built a bit of a network in this space that I didn't have before.
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There's a VC in Toronto, as a saying, that in the early days you need a hustler, and you need a coder, someone to make things happen and someone to make it real.
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That's what I was able to do in the very early days is just get in front of the right people to validate that what I was about to embark on is worth any time at all.
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For people who are looking to get into something in an industry or market that they don't have much familiarity in, they can absolutely do it, but they're going to have to hustle, they're going to have to grind, there's going to be a lot of days where you feel like you're running on a treadmill and not moving anywhere, but the first steps that you take are going to help you get to where you need to go ultimately.
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And how do you do that?
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How do you get to this is the key?
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You want to sell into bank X, there's only a few in Canada, and huge organizations.
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What do you do first?
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You go in, and you figure out on LinkedIn who all the relevant people are, you find second degree connections, you get intros?
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What's the game plan to get in front of these people?
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So, you follow them on social, and back then obviously social media is what it is today, but you were still able to, there was LinkedIn, obviously.
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We tracked activities, articles, Globe and Mail, or newspaper, contributions that they've made, you meet them at trade shows.
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The technology community in Canada has obviously very recently exploded, but even then there were huddles and meetups around Mars you'd go to, and the banks obviously were supporters of the Mars program.
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And then you use connections you build at Mars.
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The thing about Canada is a lot of people when they graduate from business school, they have a couple of destinations and a lot of them end up in the big five banks or the consulting firms.
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That's where they go.
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They're at Deloitte or they're at TD.
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And guess what, TD gets a lot of their people from Deloitte.
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They cross-pollinate too; the banks with the consulting companies, consulting companies go to the banks.
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So, you start your network by associating with people in those groups, and you'll eventually be able to connect the dots.
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You talk about a game plan of mapping, finding out the who's in each functional group, that can be daunting.
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You can be like,"Oh my God, I have to get to the chief digital officer at TD.
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How am I going to get to the chief digital officer?" To me, it starts with, who do these guys work with?
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They work with consulting firms.
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Okay.
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So now I just got to get to a senior manager level person or a manager level person in the technology practice at Deloitte, much less daunting.
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And then you can start to understand how a bank organization works.
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There's no website where you can just see, here's all of the various functions at a financial institution, and here are all the levels and roles.
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That's not easy to find.
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So, the best, the fastest way of getting there is by getting to someone who might be in the know because they've worked with them, and they can help you start to create that org.
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So, you identify the low-hanging fruit that are close enough to the end target.
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You go there.
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And in these conversations, you mentioned you had a lot of conversations early on that gave you the sense that this was something that would be a fit for these FIs.
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What are these conversations like?
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So, I would not say that I had a methodology.
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I'm much more knowledgeable now about various sales strategies and customer discovery sessions and product discovery sessions, requirements gatherings, and all this kind of stuff.
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Back then, you're just hustling to validate, and you approach it in a very informal way.
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It's like,"Hi, David, I'm Corey.
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Here's what we're thinking about doing, let me show you a quick demo.
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Here's what we think the benefits are.
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What are your thoughts?" And you've got a half hour, there's no deck, there's just me sitting across the table from someone, or sitting right beside them, showing them the thing that we've got and getting their feedback and asking them how this might fit into their strategic priorities, the kinds of things they're working on, how do they see things like this, or if it isn't exactly like this, it's solid, it's meant to address these customers and these pain points and how they see that shaking out.
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And it's that informal.
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There was no set process.
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And you rub sticks together at enough places, you're going to get a spark from somewhere.
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And that's ultimately what happened for us.
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We found somebody, and it ended up being a couple of people who had the patience to deal with our very informal approach because they understood the value that we were trying to deliver, so they can run with it a bit.
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It's like seeing raw talent that doesn't know exactly how to play a sport, but knowing that with a bit of coaching, you can figure this out.
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Is this the classic finding a champion at the org?
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Is that what you're describing there?
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Yeah, absolutely.
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And then as you move on, as you go forward and get more sophisticated, you're like,"Oh, champions should have this level of influence.
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I should understand why people are championing this." It's great to meet a nice person that wants to help you, but you can't always look at all your customer targets for the person who likes you.
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I can't charm my way to a seven-figure deal every time.
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That may work one out of every 10 times, if I'm really good at it, but it's not a sales strategy.
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So then you ultimately learn that, oh, okay, I have to understand the motivators for our champion.
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Are they looking to get a promotion?
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Are they looking to add a successful project under their belt?
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Are they looking to show that they're subject-matter experts and thought leaders in this space?
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It's still far away from an inked five, six-figure deal, which, I assume, is what you were going for in that early days.
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What's next?
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You have some mock-ups, how do you bring them?
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And you're talking about LOIs, when did you bring those to the table?
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Who even signed them?
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And then we can move from there to how you turn that into real money.
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The crazy thing is, I would not advise spending a whole lot of effort trying to secure LOIs.
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First of all, it's a process in and of itself, it is a contract negotiation.
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Even an LOI was executed by the chief payments officer, and those people are busy.
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It takes them time to get to stuff like this, and ask a bunch of questions about why this agreement even exists.
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Point is, I would have rather just gone right to contracting that have killed brain cells on an LOI.
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In terms of where you go from an LOI or some form of interest, you've got to ultimately expand the number of people and the types of people that you speak to.
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And in our case, it's moving beyond business stakeholders and into people who would design a technical solution.
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So meeting with technology architects at the financial institution, opening that up to include product strategy, people, ultimately a product owner gets attached to what you're doing, if they're finding it interesting and relevant enough for their next budget cycle, and if you're really lucky within the budget cycle that they're already.
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Once that progresses to, yes, we want to do this, the project will get green lit by whoever the functional leader is.
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And then they start designing the technical solution with you and your team.
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And at this point it was a team of me and Jamie.
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So, it was a lot of the two of us sitting in sessions with the product owner, the solutions team that they had pulled together.
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And then ultimately once it progressed to a place of, yes, we can do this and these guys can actually deliver this, we feel comfortable with what is being told to us, then procurement got involved.
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And the procurement people were the ones that, ultimately, negotiated the agreement with us.
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Startups are thinking in days, maybe weeks and enterprises are thinking in a best quarters, if not years.
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And so, even if you get an enterprise, especially a bank, they are known to not be the fastest moving organizations in the world, to have interest, what can you do, and what did you do?
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Actually, it's more of the question.
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What did you do to move them along?
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Because you could just get caught in this, oh yeah, we're interested in next quarter, next quarter, next quarter.
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And then you're dead, right?
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.
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So, what did you do to make them feel that this was a priority?
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I don't know if you could generate FOMO, what were the strategies to get things going faster?
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It's a good question.
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To be honest, there's a handful of solutions that will always be priority.
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And the reality is Sensibill is not one of them.
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And very few of them exist.
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And then there are things are trendy or trendy solutions, or there are solutions...
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remember when GDPR came out, anyone who had a solution to address handle GDPR stuff was bumped to the top of the list.
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Why wouldn't it?
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You had to get something done by a certain period of time.
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And so, those companies caught the tailwind of that.
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You've got to know where you sit on the pecking order.
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To be clear, the timeline, you start around 2013, your full launch isn't until three years later, 2016.
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Were you unfunded that whole time?
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We did pilots in 2014.
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And that's what ultimately inspired us, our ability to raise money.
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Following our successful launches and deliveries that were in flight, we were able to get our series A in 2017.
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But enterprise sales is a grind.
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Just to make a sale, sometimes you think 12 to 18 months, sometimes even longer.
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There are companies that I know that have been trying to sell to Bank of America for five years, and then finally, they broke through.
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There are companies that will never land their white whale.
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And so, when people ask me what I would do differently, I'd probably start with smaller, more agile institutions that also could control their own destiny as it related to technical implementations and deliveries.
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And in that class, there aren't very many.
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The one thing that I would say was an advantage to us in working with the big banks is they can make a solution real themselves because they own their own code, they built their mobile banking applications from scratch, or they just some third-party to help them do it.
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But it means that they're going to have a whole road map full of stuff that they want to do.
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And so even after the deal, even if it takes three to six months to lock, to integrate and launch your thing, it could take them a year.
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Who was ultimately the first bank or FI to sign the first pilot?
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RBC was the first bank to sign anything.
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And then we had Bank of Montreal and then TD, and then Scotiabank, and then Tangerine.
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And was there a clear domino effect?
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A lot of people will say, man, once I get this first one, the other ones will just fall along.
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Is that what you experienced?
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I don't think for us, it was easier.
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I think everyone was riding the wave of mobile payments then.
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And so, everyone was having the same dream, and that made it easy to have those conversations.
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But Sensibill didn't go from having one or two signed deals for multi-year agreements and integrated experiences and then every bank wanted it and needed it because there are those solutions that are on something or a new delivery mechanism of something that they already understand of which there is a clear business case for.
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And then there are those solutions that are really new, they're cutting edge, the buyer has never experienced the potential benefits that this thing might offer them.
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That's more what we were.
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What was the business case you made for them in those early days?
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This is why you need to have a receipt management component in your app.
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Well, for the mobile wallets business case was we have to give customers a reason to engage with this when a business, a merchant can't accept mobile payments.
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And if you were an Apple iPhone user, there is no NFC on that device.
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So, they couldn't actually have the payments, but the bank still wanted their iPhone customers to be able to use mobile wallet functionality.
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So, what would this mobile wallet functionality have?
00:18:52.470 --> 00:19:01.049
Well, it's not going to be for payments, so it's gotta be everything that a wallet can do except help you pay.
00:19:01.050 --> 00:19:04.829
So, we effectively helped drive engagement and adoption of the mobile wallet.
00:19:04.830 --> 00:19:06.750
That was our business case.
00:19:06.750 --> 00:19:30.329
And then the downstream business case for mobile banking and online banking was, we are going to help with call centre deflection, if customers can resolve their own disputes by appending receipts to their transactions because there'll be able to get full visibility into where their money went, instead of, I can't remember what I spent$908 at Amazon for.
00:19:30.540 --> 00:19:52.200
We also had a business case around being able to drive more spend by identifying our card purchasers, being able to upsell and cross-sell customers into products or services based on their changing needs and evolving profile or life stages.
00:19:52.829 --> 00:19:54.240
What do these pilots look like?
00:19:54.569 --> 00:20:00.180
And even from your perspective, what it ended up being, but also what were you trying to get into these first pilots?
00:20:00.390 --> 00:20:07.380
I wanted to embed our solution into a banking app, and I wanted to show that we could do that.
00:20:07.890 --> 00:20:11.670
And I wanted to show that this solution was a) technically feasible.
00:20:11.819 --> 00:20:16.319
The second thing I wanted to show is that customers would get value from using it.
00:20:16.380 --> 00:20:20.609
And I want to get customer testimonials and feedback to speak to that.
00:20:20.640 --> 00:20:27.240
If you put this in your banking app, I will use it more, and I will like your brand more for having offered it to me.
00:20:27.329 --> 00:20:28.259
Those are my objectives.
00:20:28.619 --> 00:20:37.079
It doesn't have to be the mass scale because that requires marketing, it requires a real effort to get more and more people to use it.
00:20:37.680 --> 00:20:46.259
So in a pilot, all I'm looking to do is have a control set of customers, of users and validate that this thing has value.
00:20:46.269 --> 00:20:49.900
If it doesn't, what would make it value, what would make it be valuable?
00:20:50.380 --> 00:20:53.380
And if there was nothing to make it be valuable, then it tells me something else.
00:20:53.470 --> 00:20:59.079
If the pilot's successful, here's what the full launch looks like, here's how much you'll pay me.
00:20:59.140 --> 00:21:03.970
Or did you leave that all and just focus on let's prove that we can drive value?
00:21:04.450 --> 00:21:14.799
Even if my desire would be to prove my worth, and then let's get to the pricing conversation, that's not how banks or really any enterprise works.
00:21:14.800 --> 00:21:29.529
They want to know what your model is, and they want to understand how it would scale with them because no one is going to sign up to something where the rug gets pulled out from underneath them and say,"Oh, now I'm in for half a million." Pricing discussions were ongoing throughout the entirety of the engagement.
00:21:29.171 --> 00:21:33.339
And ultimately, we settled on pricing that made sense.
00:21:33.430 --> 00:21:38.109
In some cases, we were given pricing that they would accept.
00:21:38.440 --> 00:21:43.750
And then early days, you have to decide whether that's something that you would accept or not.
00:21:43.930 --> 00:21:53.890
The reality is, when you don't have any customers and someone who's willing to pay you a dollar, you should probably take it because that anchor tenant can help you get there.
00:21:54.700 --> 00:22:01.630
You've talked a lot about how hard it is, and a lot of people might say,"Well, frankly, why would you start a startup focused on enterprise sales?
00:22:02.019 --> 00:22:03.549
It seems a lot easier to just go after consumers and SMBs.
00:22:03.700 --> 00:22:03.700
The flip side of it is that if you make it past that hump, what you end up with, 2, 3, 4 pilots that have very clear definitions of what the future would look like if they're successful, and these are meaningful contracts, it's not a thousand dollars a month.
00:22:03.700 --> 00:22:03.700
Once that happened, you signed this pilot with RBC, BMO, and you have clear understanding of pricing, what success looks like, did you then go into fundraising mode and try and raise a seed round?
00:22:03.700 --> 00:22:03.700
And what was that process like with those pilots in hand?
00:22:33.309 --> 00:22:48.369
I think you've got to be able to tell a story to someone who understands your space well enough that they will see what you've done has proven your thesis, or is beginning to prove your thesis.
00:22:48.371 --> 00:23:01.210
Because as you know, you guys invest in seed stage deals, when you have a couple of proof points, there's still so much, you don't know, even before product-market fit has been fully achieved.
00:23:01.211 --> 00:23:09.130
And I'm going to say that a lot of companies, even very successful ones, are still searching for product-market fit.
00:23:09.160 --> 00:23:12.730
And I don't think that we're any exception to that.
00:23:12.730 --> 00:23:26.019
We do some things extraordinarily well that I believe that a lot of value, but we still want to fine tune our model to make sure that we are as indispensable a product as any in a bank's technology stack.
00:23:26.049 --> 00:23:41.319
There are some amazingly successful companies that sell to financial institutions that are adjacent to us that I would not say are mission critical to the financial institution, which means that if they rip them out tomorrow, nothing about their business changes.
00:23:41.799 --> 00:23:48.559
Does that mean that we should say that company has not achieved product-market fit and therefore is floundering?
00:23:49.039 --> 00:23:57.799
Well, no, it is just an evolutionary process of that company or those types of companies to be mission critical.
00:23:57.800 --> 00:24:06.980
And they got in by being a super nice to have to a I'd like to have to getting towards must have.
00:24:07.190 --> 00:24:25.039
In the earliest days, what you're looking for is not purely in that first sale or in those first pilots to define product-market fit, it's to understand why someone would pay you money so that you could continue to refine your model and get closer and closer to product-market fit.
00:24:25.040 --> 00:24:39.140
Once you achieve product-market fit, you may fire your first 20 customers because what you're doing, what you did for them, and that they may have found a lot of value in, isn't the actual thing that makes you the big, big company.
00:24:38.691 --> 00:24:45.769
It doesn't mean the first thing was valueless, just meant relative to what you became, it is not as valuable.
00:24:46.339 --> 00:24:56.569
And again, going back to that, once you did have those pilots in hand, and you're crafting the story, is that when you decided,"Okay, let's go fundraise"?
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