The 220% Commission Model That Aligned B2B SaaS Sales

Omer Khan [00:00:09]:
Welcome to another episode of the SaaS podcast. I'm your host Omer Khan and this is a show where I interview proven founders and industry experts who share their stories, strategies and insights to help you build, launch and grow your SaaS business. In this episode I talked to Markus Stahlberg, the co founder and CEO of Enrich. He An ABM platform helping B2B companies target and win high value customers more efficiently. In 2015, Marcus and his co founder spotted an opportunity While running their B2B publishing business and started building a new marketing platform.

Omer Khan [00:00:43]:
But finding product market fit was tough. It took nearly a year to get their first 10 customers and then they struggled with high churn rates as customers expected immediate results rather than understanding the long term nature of account based marketing. I After years of bootstrapping and slowly building their product, they hit their first million in ARR and raised a series round of around $4 million in 2020. But a series of missteps towards rapid growth nearly bankrupted the company. Then tragedy struck.

Omer Khan [00:01:12]:
Marcus's co founder was diagnosed with cancer and passed away a year later, leaving Marcus to run the company alone with little Runway left. Rather than give up, Marcus rebuilt the company from scratch and he focused on building a proper in house team, got serious about cash flow and created innovative ways to align their sales and marketing. Today, after years of persistence and hard lessons, Enrich is profitable generating multiple seven figures in ARR with a team of 55 people across 25 countries.

Omer Khan [00:01:44]:
In this episode you'll learn how Marcus discovered their true ideal customer profile by looking beyond basic company demographics. Why positioning as a challenger to expensive big box ABM platforms transform their growth. How they solved the sales and marketing alignment problem with a creative compensation model. We talk about the surprising way they use the LinkedIn ads library to identify perfect fit customers and why their approach to content based advertising delivers better results than traditional formats. So I hope you enjoy it. Markus, welcome to the show.

Markus Stahlberg [00:02:16]:
Thank you very much. Thanks for having me.

Omer Khan [00:02:18]:
My pleasure. Do you have a favorite quote? Something that inspires or motivates you that you can share with us?

Markus Stahlberg [00:02:23]:
Yeah, I can share my own motto. It's Talk is cheap. Life is short. So basically early in my career I came to conclusion that what you do is what defines you. And then maybe a bit later I realized that life is short and you just need to. You just need to do those things you like and you want to do during it, our lives.

Omer Khan [00:02:49]:
I think we're going to talk about that as well because that was a very relevant part of your story. Tell us about Enrich. What does the product do? Who's it for? What's the main problem you're helping to solve?

Markus Stahlberg [00:03:04]:
Yeah, Enrich is an account based marketing platform and we help B2B companies who are targeting this upmarket or like high annual contract value customers and want to basically grow their business without wasting their resources.

Omer Khan [00:03:26]:
And give us a sense of the size of the business. Where are you in terms of revenue, customers, size of team?

Markus Stahlberg [00:03:32]:
Yeah, so we are 55 people at the moment. The revenue is ARR is like between 5 and 10 million and we are growing fast. Yeah, we are fully remote. So like 25 countries with this kind of team. So it is no offices anywhere. So it's like fully remote setup.

Omer Khan [00:03:53]:
And you've raised somewhere between 4 and 5 million, is that right?

Markus Stahlberg [00:03:58]:
Yeah, that's right. In 2020 it was a fair say practically more like a seed round. And now we are profitable and just investing everything that comes into growth.

Omer Khan [00:04:09]:
Profitable, that's a word we don't hear enough. So nice job on that. All right, so we're going to talk about where this all started, where you came up with the idea for this business. Before we do that, let's just make sure that we've got everybody up to speed here. I think a lot of people listening to this will understand what ABM is, but just give us like the two minute spiel on how ABM is maybe different to something else that you know, organizations may be doing.

Markus Stahlberg [00:04:40]:
Yeah. So account based marketing is based on the idea that, that you select the companies you want to sell to during the next few years. So that's called the ICP Ideal Customer Profile. You define your ICP and then you just center everything you do around those accounts. It's the marketing and sales collaborating together like from the start of the buyer journey from like we call it cold stage until the accounts eventually are hot.

Markus Stahlberg [00:05:05]:
And then passing the bet on to sales while like marketing keeping, supporting this like by targeting these companies with advertising and ensuring the buying committee is on board. So the idea is that you waste much less resources here because like everybody knows what they do. There's also intent data which is very important part of ABM so that like you collect this data about the account's propensity to buy. And like when you know that the account is ready or hot, then only sales starts to work on them.

Markus Stahlberg [00:05:43]:
And maybe also as an important thing, this is not lead generation. It is not about like getting MQLs or form fields. It is about really long term effort like towards these accounts. That you have selected from early awareness, building a relationship, like making sure that they know you, they know what you stand for. And then eventually like when they become like sales opportunities, usually like the sales cycles are shorter, deal size is higher and win rates higher as well. So it just improves the efficiency of the overall go to market motion.

Omer Khan [00:06:18]:
I think that was a good distinction in terms of, I mean you said icp, every company should have an icp, but with lead generation you're basically just going out there and saying this is the kind of buyer I want and I'm just going to go out and do cold outreach or marketing or whatever. And with abm, I guess one big distinction would be is it's almost like building a wish list, right? Or a dream list of these are the hundred companies I'd love to be doing business with.

Omer Khan [00:06:45]:
And then these are the ones we're going to focus on building relationships with and make sure they understand what we do and how we can help. And eventually that leads to good things happening. Great. So let's go back to 2015. Where did the idea come from?

Markus Stahlberg [00:06:59]:
So we started from actually we started from advertising format like so we have within the platform we have like this, we call it native article. So the idea was that it's about content marketing essentially like advertising directly with an article within the media. That's where we started. And then within the first year or so it was clear that B2B is where we want to focus. And then soon after that it was ABM that we started like realizing that okay, there's a lot of potential in the B2B market.

Markus Stahlberg [00:07:35]:
These companies are evolving very slowly compared to B2C. Like the transformation to digital just is going to take years, tens of years, always takes a lot of time in B2B and that there is a big potential, long term potential in this market. So then we started building the product and we have our own DSP or we built our own DSP which is basically an advertising programmatic advertising platform which then gives us a lot of capabilities that many players in the market don't have.

Markus Stahlberg [00:08:09]:
And just a lot of focus in the R and D, not so much on the go to market side but like more on the R and D. And building this really, let's say unique product for this account based marketing marketplace.

Omer Khan [00:08:25]:
What did you see happening in the market at the time? So you have this idea, were there other products out there? What was the driver that told you that hey, there's this opportunity here?

Markus Stahlberg [00:08:38]:
Yeah, that's a good question. So we actually we Started with like very early. We started doing B2C and B2B at the same time. And then our first B2B customer, big B2B customer we got, we were able to invoice them something like 20,000, whereas the other B2C customers were something like 1,500 or something like that. So we were asked, okay, so these guys are willing to pay a lot.

Markus Stahlberg [00:09:07]:
And then with this customer who is by the way still our Customer after almost 10 years, we kind of realized that this account based data is super valuable like that. If you think about B2C, it's like every, it's just like this pray and pray. Like you just do a lot of things and then hope that something hits. Whereas there it's, it's really about you know, one individual account, you know, visiting your website or like engaging with your ad.

Markus Stahlberg [00:09:34]:
And there we realized that there is a lot of potential in this market and these companies have a lot of money also that, that they can invest in this, in this. So there was kind of this, this realization that this could, there could be something here. There was also like one big player who is still there in the market called Demandbase who we actually like did a lot of, let's say benchmar from them.

Markus Stahlberg [00:09:55]:
That was really helpful for us in our early journey to just like understand how these kind of products work and then building our own DSP based on those requirements. And of course we had a lot of these unique features or capabilities that those players didn't have. But it was super valuable to realize that there is a market and like that, that we kind of fit ourselves into that market rather than like, I think that was actually, that was also something that we worked with quite a bit about finding our position.

Markus Stahlberg [00:10:31]:
And one of the early important milestones were when we realized that okay, let's not try to come up with a new category, like something completely new. Let's just be an account based marketing platform. Because that's, you know, that's what people know and that's, that's where you know like they are going to find us better. So yeah, that was, that was basically the early, early journey.

Omer Khan [00:10:52]:
So part of the positioning of the value prop is that Enrich is a more affordable ABM solution compared to some of these other products. How much could someone, an organization typically pay?

Markus Stahlberg [00:11:09]:
Like

Omer Khan [00:11:12]:
what sort of difference are we talking about here?

Markus Stahlberg [00:11:15]:
So affordable is usually the last one we mentioned. So it's more starting from the second, starting from the fact that with those other, we call them big box AVM like you'll get 180% of what you need. And with Enrich, you get like 100% of what you need. And the price is probably 30% or 20% of what those big platforms cost. So the price is important, the ease of use is important. And also implementing ABM is not about buying a tool.

Markus Stahlberg [00:11:48]:
So that's something we just tell to every customer that if you imagine that by buying an ABM platform, that's going to solve all your ABM needs and you'll get great results. It's not. So there's a lot of transformation that needs to happen within the organization and that's where we are with the customer. So we are basically providing support no matter if you are, let's say 50 employees or a smaller company. Whereas these bigger players, they only really care about these huge enterprises.

Markus Stahlberg [00:12:20]:
So we really want to help customers to achieve sales and marketing alliance and really get those results and understand what ABM means because it's a different motion altogether of what many companies are used to doing.

Omer Khan [00:12:34]:
How long did it take to build that first version of the product and what did it do? I'm sure it didn't have everything that you would have loved to build when you launched that product. So in simple terms, what were the specific problems and the solutions you were offering in those early days when you were trying to get those first 10 customers?

Markus Stahlberg [00:12:52]:
Yeah, this is good. So we really started from this very simple solution with this advertising format that you can advertise, do this native advertising to specific audiences. And then we built the dsp, which then gave us more, let's say, accuracy and more optimization in terms of the targeting. So then customers started seeing really good results in terms of the low cost per engagement and so forth.

Markus Stahlberg [00:13:23]:
And then eventually we, let's say the third stage of evolution was that we added several features or capabilities into our platform that actually made us a platform rather than just an advertising tool. So intent data was one of those important capabilities that we added. And then I think at that point we were like on par with, or we became on par with the market with these big box players. Until that point, we had been just, you can use us for account targeting advertising. We have these unique ad formats.

Markus Stahlberg [00:14:01]:
You can get great results and then some analytics, but you can't really kind of do the full ABM implementation. So that was kind of the third stage then.

Omer Khan [00:14:11]:
So in terms of the ad piece, just explain how that was working in simple terms. So somebody buys the product and they want to do some kind of advertising. What are they setting up what platforms or where are these ads showing up and what sort of results are they trying to get?

Markus Stahlberg [00:14:30]:
So it's a content based format. So you create an article which is 1500-2000 characters long and you basically see it as an advertisement. So you go to let's say Forbes and then you see a scrollable article there which is talking about something about the advertiser's B2B product. And when you scroll it, our system is tracking the scrolling so we'll know who is interested in the content. So it's not about impression, but it's actually about the engagement with the content and in terms of where it's shown.

Markus Stahlberg [00:15:01]:
Like we used Programmatic already in the beginning, but we used third party dsp. So it could be essentially anywhere where you see ads, like we were targeting those accounts like that you want to target. Like you select the accounts you want to target and then like they can see these ads basically anywhere they go where ads could be visible.

Markus Stahlberg [00:15:23]:
And this eventually became the way that we optimize this advertising delivery or distribution that since we can learn who is interested in specific content, like let's say you are targeting a CFO within, let's say an IT company, you'll have a certain kind of an article, certain kind of content. And if you have another Persona, like let's say a marketing person, like they are not interested in that. So this way the system learns who is interested in the content and this way the results keep getting better over time. Great.

Omer Khan [00:15:57]:
And how do you tie it back to helping the customer understand who's actually engaging with this content. So you know, knowing that it's potentially somebody from this company or it's a CFO versus a marketing person or maybe even like individual level, trying to figure out, okay, it's a person in this, you know, the CFO of this company, how far or how specific are you able to get?

Markus Stahlberg [00:16:27]:
Yeah, yeah, this is a good question. And there is a big difference in international regulation in Europe. Like it's absolutely not possible to get to the top title level that we would know who the person is without having a consent. And obviously nobody has consent for these CEOs or like C level people. So then we know that it's this company and like they are interested in this specific content. So it's up to the user to create content that is relevant to a certain Persona. Of course we don't know it for sure.

Markus Stahlberg [00:16:57]:
Like you know, you can have a janitor who is interested in financial things, but like most likely it is like somebody from the finance department in the U.S. then again we can go to the job title level. So basically selecting the chop titles you want to target and also get the analytics on the job title level. So that's possible in the US where you don't have so strict regulations in terms of the privacy. Great.

Omer Khan [00:17:27]:
You mentioned getting some customers early on fairly quickly. How long did it take to get those first 10 customers and how easy or hard was it?

Markus Stahlberg [00:17:40]:
So my and my co founders experience were really in sales so it wasn't I'd say super hard. We had our former venture which was about B2B. It included this B2B publishing. It's more like a publishing company. And through that we were able to get some which served as early references for us. So eventually I think during the, I'd say still it probably took the first year or so like to get these first 10 customers but we had huge churn back then. So it's like it was very hard to keep customers.

Markus Stahlberg [00:18:25]:
Also it was more like campaign type implementations that they did rather than us being able to retain them for long term.

Omer Khan [00:18:33]:
Yeah, let's talk about that. So you're doing a great job finding these customers, getting them excited about the product and then when they start using it they're not really getting the kinds of results that they were hoping for. And then so they're churning. Tell me a little bit about what was going on and what was the problem behind this.

Markus Stahlberg [00:18:57]:
So maybe I just fast forward a bit because talking about that early solution maybe better to talk about like a bit when we had a bit more advanced solution. But we still faced the same problem and it is really related to first of all the expectations that the customers had. So we were able to, we actually packaged our offering into this three month paid trial. So customers commit to three months. They pay us, you know, quite a bit. Typically like 20,000, 30,000, something like that

Omer Khan [00:19:37]:
for that pilot as an annual.

Markus Stahlberg [00:19:39]:
No, no. During that three months. So we were really like pushing this like kind of it's you know, from the advertising spend pushing it quite high. And then the results expectations from customers were huge during those three months. And what we learned the hard way and it just took very much time to really kind of understand it that when people first time when they hear abm they think lead generation and like you know, whatever they are doing within abm often they are still waiting for those form fills.

Markus Stahlberg [00:20:16]:
Like there's this idea that previously they were doing spray and pray just targeting anybody on Google or Facebook or whatever. And then they get a Certain conversion rate, certain number of leads and now they're expecting okay, with ABM we'll just get still the same number of leads and it's just going to be from these great companies and it's going to be this great Personas from the companies. And obviously that's not going to happen. So this is something we learned that in order to get value from ABM it takes time.

Markus Stahlberg [00:20:48]:
It takes 6 months, 12 months, even 18 months depending on our sales cycle. You need to get your sales on board to really get value from abm. Typically also whether it's CEO or whoever is leading the go to market, that person needs to be involved. So it really takes a lot of, a lot of effort from customers. So we realized that we were kind of over promising under delivering from customers perspective.

Markus Stahlberg [00:21:16]:
And then we switched this more in a way that we started telling customers that this is not easy and the product is not going to be solving all of this. You also need to do a lot of things like within your organization you need to change. We are going to help you hold your hand and what you are going to have to listen to us. And if you are not willing to change then you're not going to get this result.

Markus Stahlberg [00:21:42]:
So we don't want to make it sound hard and definitely we don't want to make it sound that like you shouldn't start today, you should start today if you are not doing it. But at the same time it's not going to be easy. Like it's going to take a lot of effort.

Markus Stahlberg [00:21:57]:
And I think that was one of the main learnings that we did from the start and then like actually quite far away in the, in our journey that we realized that like, you know, we just need to ensure that the customer understands how they get the value and that we are there like for them, like to support them from start to finish.

Omer Khan [00:22:21]:
Yeah, yeah. I've seen you mentioned, you know, getting the sales team on board and I've seen this in the past working with different companies where you know, from a C level there was this desire to have some kind of ABM motion in place. You can get from a marketing perspective it looks good because you're really targeting the companies that matter. But there was a lot of resistance from sales where the spray and pray kind of approach was like, okay, they're doing something, they're getting out and reaching people, sending a whole bunch of cold outreach.

Omer Khan [00:23:01]:
And I think for many of them it seemed like this ABM stuff, it just sounds like we're wasting a lot of Energy in cycles doing this stuff that doesn't result in leads. Right. So there's this thing about setting expectations and getting people on board about the value of doing abm. But then if they're not getting leads out of this, what were you promising them? What was the outcome that they, you know, you said that this is what you're going to get from doing this.

Markus Stahlberg [00:23:33]:
What you're going to get, like if you do things right, is that you're going to get more like of these high ACV customers, normally you should have at least 50,000 as the annual contract value or 30,000 for ABM to make sense. So you're just going to get more of those great fit customers. But it is exactly like you said, that if sales is used to dealing with those marketing leads, then they expect that it's going to be super easy. They just get the lead, they do the meeting qualification and then create the opportunity or disqualify.

Markus Stahlberg [00:24:10]:
It's super easy. They don't need to do anything. But then with ABM you actually need to do prospecting. So it's, it's actually closer to code outreach than to this inbound leads. So it's just, it's warm outreach. So in code outreach, salesys, you know, needs to prospect these accounts. They need to find who to contact, they need to send messages, you know, make calls and so forth. But these are cold accounts, whereas in ABM the accounts are warm already.

Markus Stahlberg [00:24:37]:
They know about you, they've visited your website several times, maybe they've interacted with your content on LinkedIn, they've seen your ads and so forth. Like it's kind of. They already know about you and which should be clear sign that this is going to be an easier process for sales than doing a cold outreach. But this is what many companies don't understand, or let's say many salespeople don't understand, is they just have this experience of doing that. Marketing is going to help us with providing. Providing leads.

Omer Khan [00:25:08]:
Yeah, yeah, it's a tough sell because you've got to sell the product, but you also got to sell this education piece and you've got to make sure culturally the organization is ready to, to do this. You know, across, across the board, the. Let's talk about, okay, beyond the first 10 customers, let's talk about getting to the first million in ARR and how you got there. And in many ways you are having to apply the same principles and strategies that you were talking to your customers about.

Omer Khan [00:25:42]:
And when you and I were talking earlier, it seemed like that you yourself weren't that clear about your ICP initially, is that right?

Markus Stahlberg [00:25:53]:
Yeah, yeah. So we had somewhat of an idea of what the ICP is like. We started with the tech software companies that are still our icp. But the problem that we faced and that many companies face is that when you do it in such a trivial, simple way just to define the industries and company sizes, you don't really have an icp. You have a TAM or target addressable market. So okay, you can sell to these companies and they can buy from you, but that's it. They are not really an ideal fit.

Markus Stahlberg [00:26:31]:
So then we faced this over many years. We don't really get great conversions, especially from cold outreach. And even with our ABM efforts, we were not able to really hit the message, get the message on these accounts. So the important realization was that ICP actually means like, why is this company within the tam, like a perfect fit for your product? And for us what it meant was that we realized that companies who get most value from our products immediately are those that are already spending like significantly on digital advertising.

Markus Stahlberg [00:27:14]:
So if they are spending, let's say 50,000 on LinkedIn and Facebook and Google and so forth, like they are probably wasting a lot of money like if they want to go UP market because LinkedIn is the only channel where you can do targeting like in a precise way way that it's actually the account based. But not every company is using LinkedIn so you can't reach everybody. Then you use Facebook, you use Google, like you're going to do. It's almost like spray and pray.

Markus Stahlberg [00:27:39]:
You're just going to target like a lot of different accounts and then just hope that something goes to the right icp. So then we realized that, okay, by refining this ICP of ours into these companies who are actually big spenders, they are advertising a lot. We can get very easily to the discussion. Okay, let's reallocate. Let's say if you are spending now 50,000, reallocate 20,000 to ABM. And that's an easy decision and it's also very easy to show the improvement compared to what they did before.

Markus Stahlberg [00:28:13]:
So I think the call out here is that TAM is not the same as icp. And at least my advice would be to think about how can you optimize certain metrics like acv, like in our case, like how can you find companies that are really good fit for your product and for your offering in terms of like this, these eventual revenue metrics. Great.

Omer Khan [00:28:36]:
You talked about a lot of really interesting things there And I want to drill down a little bit more into that. Let's start with the, the icp. So you've figured out over time who that ICP is really is. You talked about the ad spend and so on. How are you figuring out who these people were, how much money they were spending and all of that sort of stuff?

Markus Stahlberg [00:29:03]:
Yeah, that's a good question. So we call this. But there are these visible attributes and dark attributes, and this is their dark attribute. So nobody advertises on their page that this is how much we spent to do advertising. And there is no databases really that would include this for B2B. So usually in this kind of cases, you need, need to think about proxies. So there is something in public data sets that correlates with this attribute, with this dark attribute, which is high spend. In our case, like, it's a very simple metric.

Markus Stahlberg [00:29:38]:
So the question, or like what we have found is that like for instance, LinkedIn, they have ads library, like where you can see for any company you want, you can see which ads they're running, and the number of those ads they're running has a direct correlation to their ad spend.

Omer Khan [00:29:54]:
That's smart. I think Facebook has something similar.

Markus Stahlberg [00:29:57]:
Yeah, Facebook and Google has it as well. So it's, it's, it's required because of this, you know, political ads, like, and the transparency.

Omer Khan [00:30:05]:
So, okay, so you're basically saying, okay, this is our icp, let's go and find some of those. Let's narrow down that list of potential companies and then let's take a look at like the LinkedIn ads library. How many ads are they, you know, do they have how maybe, maybe I think you can even tell like how recent they are or something like that.

Markus Stahlberg [00:30:27]:
Right.

Omer Khan [00:30:27]:
So you get a general idea of, okay, this wasn't like some ad stuff they did like 20 years ago. Like, they're actually, you know, doing this stuff now. I also really liked what you said about going in saying, okay, well, they've got this big ad spend and they're probably not getting a great return on that. Or our ICP is hopefully not getting a great result on that. And so we're not saying to them, you need to find additional budget to invest in our product. You're talking about reallocating ad spend, budget to this.

Omer Khan [00:30:58]:
How did you come up with that? Was that like something you discovered over time or you were pretty, you knew early on this is the way we need to try and sell this?

Markus Stahlberg [00:31:05]:
No, it's really over time. The way we approach this is that we we come up with hypothesis every quarter to our icp. We want to test certain things. Typically it's based on some ideas that somebody has, like intuition or then we have some. Just insights from some data. Okay, let's see, does this hold? And this was one of those cases where we just decided to test, let's see if it works or not. And it did work. So then it's stuck. So that's how we do it. And that's actually how I recommend anybody to do it.

Markus Stahlberg [00:31:44]:
So you shouldn't change your ICP constantly, but at least the way we approach it is that every quarter we do this iteration. So it's an iterative process like incrementally improving it based on the current situation and current data that we have instead of overhauling it completely every quarter or even more frequently than that.

Omer Khan [00:32:07]:
So a lot of the. We talked about LinkedIn and so you can use that as targeting for your ICP. You're running. You start running LinkedIn ads. And I think you were successful at doing that. I think a lot of founders I talk to always say tried ads, never worked, waste of money, blah, blah, blah, whatever. But you got to the point where you were clear enough about your icp, you figured out how to target those people and then you're running LinkedIn ads. But you were also doing your. You were using Enrich as well alongside it.

Markus Stahlberg [00:32:46]:
Right.

Omer Khan [00:32:46]:
Can you explain what you were doing?

Markus Stahlberg [00:32:48]:
So this is one of the interesting sides of being in this business that we actually like, do the same thing for our own GTM as we are like offering to our customers, like drinking our own champagne. It also took quite a bit of time to, to really get it working. So we even have had challenges with getting the sales and marketing aligned. But generally the way we do it is that we have the ICP defined. We use LinkedIn. It's a very effective channel because we can be so targeted.

Markus Stahlberg [00:33:22]:
But then you can't target everybody on LinkedIn. So then ABM is there. It doesn't cost so much to run ABM ads, programmatic abm. So it's kind of a constant nurturing like that we do like in both channels with our product. We can also go into more granular, like details. So like based on the stage of the buyer journey, like some accounts are cold, some accounts are like closer to buying, or some accounts are researching online based on intent data. So then there's a different message, different campaigns that are being run to those accounts.

Markus Stahlberg [00:33:58]:
And eventually the target is to get those accounts from cold to hot. But that can take a lot of time. And this is like, you know, when you say that advertising doesn't work normally it means that you didn't get any leads. That's normally the thing like you are just doing this tactical short term thing. But with abm, with this ICP based approach, you need to be prepared to doing it for like two years or something. Like it's a very long cycle. You are looking for this big fish, not for this transactional small deals.

Markus Stahlberg [00:34:27]:
So you need to be prepared to building awareness, investing to it, you know, for six months, 12 months. Even for individual company, it's still cheaper than doing code outreach. You know, it's much more scalable and marketing doesn't cost so much. But if you have sales trying to, you know, close or like, you know, even generate opportunities from those companies, nothing is going to happen when you reach out to these code accounts.

Omer Khan [00:34:52]:
So when you're running these ads, you're doing the LinkedIn ads along with this programmatic ABM ads through Enrich. If you're not focusing on leads as the KPI, what were you focusing on? Was this mostly about just engagement with the right people?

Markus Stahlberg [00:35:11]:
Yeah. So here we get exactly to the point that we actually tried to get these accounts from cold to hot. So when they are hot then sales conversions increase about 10% points. Like we can say that. Okay. It's like significantly better conversion that sales is getting like when they are targeting accounts that already know us and already engage with us. So it's actually quite simple. Somebody might call this marketing qualified account like MQA rather than mql.

Markus Stahlberg [00:35:41]:
But I think this warm versus cold is a better comparison because like when you compare to MQLs then you immediately start to think that you have something tangible. Like you have a person who wants to talk to you, but here you don't. You just have a signal or like an indication that this account is likely to be ready to talk with your sales and interested in your offering. Right.

Omer Khan [00:36:03]:
And you were doing a combination of say on LinkedIn paid ads as well as organic. And so you know, you posting regularly, members of the team posting and trying to use that as a way to build authority in relationships as well. I think you still do that today, right?

Markus Stahlberg [00:36:23]:
Yeah, yeah, yeah. And that's actually a super important thing, something I really recommend to everybody. So I started personally I started posting every day last summer and it's very clear that it is working well. So we are like, we get to the radar of these ICP accounts. Of course we need to connect first and it's of course not just me. It's, it's like you know, we want to, it's not all of our management team members but like that's the direction we are going to so that everybody's posting quite frequently and it's all about content.

Markus Stahlberg [00:36:58]:
Like it's all about like when I guess Everybody who uses LinkedIn actively knows that when you start seeing the same people having smart comments or smart posts then you start to kind of feel like that you know them. Like you know, okay, this, this guy again and then he has good ideas and this leads to a kind of a relationship.

Markus Stahlberg [00:37:18]:
Of course it's not real like one to one relationship but it is, it is in a way that they recognize to you and know you and that's really like a strong, strong like and you know, absolutely free. You just, you just build, build your audience. You just keep posting and like, you know, it's surprisingly easy.

Markus Stahlberg [00:37:39]:
I have to say that you know, as a CEO, I would have expected like when I started posting that we had a board meeting where the board members were just pointing out that you are posting so frequently and I was expecting that they'll be telling me that you should stop it and focus on something more important. It was the other way around. They said that that's great that you're building authority and so on. That's really important I think.

Omer Khan [00:38:07]:
So you started the business in 2015. It took about a year to get the first 10 customers. I think getting to the first million in ARR was somewhere around 2017, 2018 and then 2020 was the big milestone I guess for you because you were running a multiple seven figure business at that time. You raised your Series A round which we talked about. So things are starting to look good. It's taken a little bit of time to, to get to this point. You've got some traction now, you're generating decent revenue.

Omer Khan [00:38:47]:
You raised the Series A and then kind of things started to fall apart a bit. What happened?

Markus Stahlberg [00:38:55]:
Yeah, so first of all it's good to tell everybody that we were self funded so we didn't have any funding. So we were basically funding this from our own pockets. And then also we got some funding from there's like a Finnish government like this institution where you can get grants and funding. So we didn't have this luxury of having pre seed or seed financing and we were always with my co founder very strict on money, not to overspend or something.

Markus Stahlberg [00:39:32]:
Then we got our round, first 2 million and then a few months later more and then we just you know, like there was this idea that okay, now you need to burn money, like you just need to spend it, you need to be really fast and like just, just you know, start, start investing it. And that we did just in a very, let's say not an ideal way. So. So with my co founder we always were kind of the brain of the operation in all of our, all of our companies.

Markus Stahlberg [00:40:02]:
And like instead of hiring like a team and building this management structure gradually, like we instead like we just hired a huge number of like SDRs, sales development people in Philippines. Like I think at first we had maybe 150 people. Like we were first like you know, 20 or so like when we got the funding and then like we probably in six months like we grew to 150 people. Like so having this huge team which was not managed properly, we didn't get any managers or management level people there. So you can imagine how it went.

Omer Khan [00:40:40]:
It was like the two of you trying to manage this remote team of like 150 sales folks.

Markus Stahlberg [00:40:48]:
Yeah. So I'm not super proud of that, but it's always good to learn from your mistakes. So I'm happy to share this. So nobody else does it. So our idea was that it was just kind of excel money in a sense. Like this is how much one SDR brings and then you just multiply it and we actually did it. We actually implemented this. So we had every month we had a batch of new candidates coming in and had to train them.

Markus Stahlberg [00:41:19]:
Obviously there were people who then managed that, but not everybody was kind of grown from ground up. So first there were SDRs and then, then they moved to training and or managing a small team or something. Anyway, that was like a lot of took a lot of money and a lot of effort. You know, even if it's Philippines, it cost a lot. So it's not really like something that I could recommend to anybody. And then eventually like not maybe 10 months after we got the financing, my co founder got diagnosed with cancer.

Markus Stahlberg [00:41:54]:
And that was completely surprised. So there was nothing to indicate that, which was of course a huge shock. And it was then there was an operation and he was able to continue still for maybe seven, eight months and then just had to leave the day to day operations. And then I was left running this organization by myself. And then after a second operation, like after a year from the diagnosis, he eventually died. And then that was the situation.

Markus Stahlberg [00:42:33]:
Obviously we weren't anymore having 150 people in Philippines, it was much less already, but we had burned almost all the money. So there Was not a lot left. So it was pretty, let's say, challenging situation to just had to rethink a lot of things at that point.

Omer Khan [00:42:56]:
Sorry to hear that. That's a really tough situation. And your co founder, you two had known each other for a long time and worked together on a bunch of different businesses, right?

Markus Stahlberg [00:43:11]:
Yeah, correct. So we started in maybe 2002 with our first or maybe 2004 with our first venture and just work together really like kind of. We called it almost like symbiotic. Like we had very different roles in every company like that we were running. So it was like a huge change then when he was gone.

Omer Khan [00:43:37]:
So I'm just trying to paint a picture here. So you took the Series A money, you guys threw it at this kind of army of salespeople in the Philippines. That wasn't working. Your co founder gets a diagnosis and he's kind of focused on that. And obviously I think that means that the momentum that you guys were building probably slows down anyway.

Markus Stahlberg [00:44:05]:
Right?

Omer Khan [00:44:05]:
It just has to. And then you end up losing your co founder. So you're dealing with that loss. And then you said you spent all, you know, pretty much most of the money that you had raised. What was going through your mind? Like did, did you. Did you like, how did you get the energy back to then go, you know, go back and start saying, okay, I'm going to do this alone. I'm going to go and rebuild this business and get it to where it needs to be.

Markus Stahlberg [00:44:38]:
I had the intention. So I think like this is one of the things like that I have, like when I want to do something, I will really like, you know, put effort to was hard. But also I had a very clear vision and intention to start doing it. I'd say within four months or so, five months, it was already clear what the direction is, what the direction is going to be. So there was still enough of these funds left so I could start hiring people.

Markus Stahlberg [00:45:17]:
So started hiring proper sales team first like AES, supported then by the SDRs who were remaining at that point, and then expanding to getting an SDR leader, getting customer success like manager, who quite soon became the leader revenue operations expanding gradually to all the core functions that you need for a functional go to market. So that was kind of, I think it happened quite fast and I think surprisingly easily, even with this very difficult situation at that time.

Omer Khan [00:46:07]:
Okay, so you started building this in house team around you and it was a much smaller team than what you were trying to do in the Philippines that time. You said you Also mentioned this idea of being very clear about the direction. Was there something about the, the business or the product or just your kind of go to market motion? What were the two or three things that you said, okay, I'm going to build the team around me and then I'm going to do these other things strategically to move the business in the right direction?

Markus Stahlberg [00:46:43]:
Yeah, so I think it kind of gradually became clear what the direction is. I think the first point was about realizing that it's a good idea to build this team. Like we had actually like our like sales director, eventual sales director who was like the only ae, like back when we had this big Philippines team, like was ramping up really nicely like to do the sales director role. And I think that was like one of the, you know, where I saw that, okay, this actually can work and this is the way I should do it.

Markus Stahlberg [00:47:26]:
So I think we had this early indicators that this is working, like we are getting some results. I could have selected also as the quote, this short term predicts long term, which usually works. When you start to see results with any decision in the short term, then it's probably going to continue to the long term. But especially when you don't see results in the short term, then you probably need to do something about it quite quickly.

Markus Stahlberg [00:47:59]:
So this is also something, I think this is one of the things that I realized that this needs to be happening in terms of the other, let's say strategic things. I think this came a bit later. So there was still one important milestone here in the process before I could really kind of focus on long term and strategy. And that was a situation like, you know, after I started hiring like these people, of course, you know, it's much more expensive like, than, than like the, the Philippines team.

Markus Stahlberg [00:48:31]:
So I like started looking at the balance sheet and like P and L and just realized that okay, you know, every month we have 200,000 less. We had 800,000 in the account and every month it's 200,000 less. Everything looked good from let's say accounting perspective, but cash flow was the problem. So it looked like that, okay, now if I don't do something, we are going to run out of money in just a few months. So that was a big shock and I realized that, okay, now something needs to be done here.

Markus Stahlberg [00:49:11]:
I did a lot of calculation myself and I think I built some kind of a system to just mitigate it. But then I had to hire actual finance person who can work on this and just ensure that we have the money and that's when we built this system, which is based on cash flow. So we just invest what we have money for. And now we are in a stage that we can already predict a bit like we can already invest next quarter's revenue. But at that point it was really close.

Markus Stahlberg [00:49:49]:
It felt like that, okay, now we can go bust even if we don't do something about it. So at that point, once we got that sorted, then it became possible to actually start looking into the future and into more strategic things.

Omer Khan [00:50:04]:
Cool. Just going back to hiring the sales team. Earlier we talked about getting a sales team on board with ABM and having marketing and sales alignment and making sure that customers are set up to do that to be successful. That turned out to be an issue in your own company as well, right?

Markus Stahlberg [00:50:28]:
Yeah, it's maybe surprising, but we were very sales led. Obviously you can understand it also from this, from our background. And then on the other hand, like from the fact that we had such a big, big team around sales, so we had one person in marketing and 150 people in sales. So that was kind of the, that was kind of the situation, you know, back at that time. I don't think any kind of alignment would have been even possible.

Markus Stahlberg [00:50:57]:
But like eventually, eventually like when we started having some kind of a reasonable team, we started working on this more like alignment initiatives and just realized that sales is not really realizing what value marketing can bring. And then on the other hand, marketing didn't really know what sales is doing. So it took a lot of time before we actually got to a point where we found a solution of how marketing and sales should collaborate. And the solution was actually quite simple. So like, so we have those inbound opportunities.

Markus Stahlberg [00:51:39]:
So those who come like only, you know, through marketing, somebody is filling a form and then like just, you know, sales is qualifying and then opportunity is created. Then you have the code outreach. So sales is reaching out to the account. There's no signals, there's no, I mean there's no data about them interacting with us, visiting the website or interacting with the ads. And then we just came up with this third category which is warm, outbound or mixed influence we call it. So marketing and sales work together with this category.

Markus Stahlberg [00:52:10]:
So marketing tries to warm up as many accounts as possible and sales prioritizes those accounts so they first go and target those accounts. I think one of the main innovations there was that instead of splitting the commission in a way that marketing gets half and sales gets half, we actually pay 100% to marketing and 120% to sales. So we actually paid 2.2 times the commission that normally we would pay. And this was the way to really communicate to the sales that you should focus on these accounts.

Markus Stahlberg [00:52:47]:
And then, of course, it was motivating for marketing as well. And it was a profitable decision in the end because the conversion rates of these accounts is much higher than for those, quote, outreach.

Omer Khan [00:52:58]:
Right. So just to be clear, you mentioned, like, three different types, but the incentives were all around them going after the warm leads, right?

Markus Stahlberg [00:53:08]:
Yeah, yeah. And it's warm accounts, so we don't have the contacts. And that's what makes this, like, a bit challenging from sales perspective always, because you just have a name of company you have, you know, like, what they did, like, which pages, which ads they engage with, where this engagement comes from, like on a city level. But then still, you don't know who it is. So you still need to do prospecting, find the contact, get in touch with them, like, you know, do the, you know, all this. What. What sales needs to do with.

Markus Stahlberg [00:53:35]:
With outreach.

Omer Khan [00:53:36]:
So, yeah, I mean, I think that's a pretty clever solution. And it turned out you said the ROI was there. It's kind of interesting that, you know, on one hand you're already like, every month, okay, 200,000 gone. 200,000 gone. And then it was like, oh, let's pay twice as much to sales and marketing for the leads. It's kind of a creative solution. I'm glad it kind of worked out, but, I mean, we could talk more about that, but there's a few other things I want to cover, so let's kind of keep moving.

Omer Khan [00:54:08]:
You started initially, I think, focusing on customers in Finland. You had customers in Europe that you were kind of growing, and then now you're spending a lot of time in the U.S. i just want to understand, like, where is your focus? What's your biggest market today?

Markus Stahlberg [00:54:24]:
Yeah, so actually, very early, we did focus to Finland, maybe first, second year, but then after that, it was already quite international. Like you said, in recent years, US has been growing fastest. And what we see in the US Market especially is that companies are more aware of ABM and they realize that they need it, they understand what it is, but then the solutions that are out there are too expensive, too complicated. So we put a lot of focus into the US Market at the moment, but also to the European market.

Markus Stahlberg [00:55:08]:
So this is a very, let's say, interesting, interesting market because, like, there are so many companies who don't do ABM yet who know that they should be doing it. And, like, if you look At Gartner Magic Quadrant there are only like, you know, there are two of these so called or three of these big box players and then like there aren't so many. So we are there which is like, you know, really good place to be. So, so we want to be this, you know, challenger. Challenger in the market. Market.

Markus Stahlberg [00:55:38]:
And yeah, that's, that's why we get like, you know, that's why we get Nice the moment.

Omer Khan [00:55:43]:
Yeah, awesome. Love it. All right, we should wrap up. Let's get on to the lightning round. I've got seven quick fire questions for you. Are you ready?

Markus Stahlberg [00:55:52]:
Yep.

Omer Khan [00:55:53]:
What's one of the best pieces of business advice you've received?

Markus Stahlberg [00:55:56]:
So this is something that came from my co founder. So he pointed out that, that we should always think about return on investment. So, so if you invest 1,000, it's unrealistic to expect that you get 100,000 in return. So like ROI should be. You should have that in mind when you invest or when you like count your calculate your expected returns. So if you expect 100,000 in return, maybe like investing 20,000 already would be a huge ROI. So I think that was a really, really important, clever advice.

Omer Khan [00:56:34]:
What book would you recommend to our audience and why?

Markus Stahlberg [00:56:37]:
So there's a book I read a while back, it's called Presenting to Win. I think it's written by Cherry Wiseman. So I learned to present thanks to this book. And I see a lot of people who are not very good at presenting, creating slides, creating narratives. And that's why I recommend this book to anybody. Because especially in today's world, being almost all online, you need something to tell a story. You need something that people really can relate to and attach to and like, yeah, that's, yeah, that's an important, very valuable book, at least for me.

Omer Khan [00:57:21]:
What's one attribute or characteristic in your mind of a successful founder?

Markus Stahlberg [00:57:25]:
Tenacity is the word I would select here. So this entrepreneurship is always like a roller coaster. So you always can expect that after you get high, then you'll get low as well. So I like this metaphor or approach that many cold callers have that every no takes you closer to a yes. And it is kind of this way that you just need to take those series of no's because eventually there will be a yes.

Markus Stahlberg [00:57:58]:
And I think those people, those entrepreneurs who are willing to work on a very long term, they are the ones who are going to win.

Omer Khan [00:58:06]:
No is the way. Right. What's your favorite personal productivity tool or habit?

Markus Stahlberg [00:58:12]:
It. I was thinking like about this and I think I had this focus time in my calendar. So I book half a day every day, Tuesday, Wednesday, Thursday from my calendar to focus time. And generally I don't take meetings during that time and that has been huge. Being fully remote, you know you have a lot of meetings. You know I have up to you know, 40 meetings to 50 meetings a week. So then it's, it's really important. Otherwise you have no time to think not how to really work.

Markus Stahlberg [00:58:51]:
Like so that has been super important, at least for me.

Omer Khan [00:58:55]:
What's a new or crazy business idea you'd love to pursue if you had the time?

Markus Stahlberg [00:58:58]:
There are so many, there are so many. Like I just had today like a great chat with our discussion with ChatGPT but at the moment I would say like what I'm like I would be, let's say top of mind for me would be this AI based marketplace for AI solutions. So basically for B2B buyers who want to leverage AI to make their organization more efficient, like to be able to find those because it's super hard.

Markus Stahlberg [00:59:27]:
There are a lot of solutions out there, but you just don't know what is the right fit and what does not the right thing for you.

Omer Khan [00:59:33]:
Yeah, yeah, it's kind of a, it's like a gold rush right now with all these crazy tools and it's really hard I think for people to make sense of all of that. What's an interesting or fun fact about you that most people don't know?

Markus Stahlberg [00:59:46]:
Yeah, so my both parents are professional or were professional at least track and field. So father is shot puter and mother is runner and like they were both like in the international level. My dad was even in the Olympics. But I, I didn't, there was enough like sport in, in the family back then so I, I didn't do anything like that. So I, I kind of found sports later, later and nowadays I couldn't really live, live without it.

Omer Khan [01:00:21]:
Love it. And finally, what's one of your most important passions outside of your work?

Markus Stahlberg [01:00:25]:
Work. Yeah, so it's, it's, it's, it would be running. So I, and sport in general like doing this like exercise. I think it's what I realize when I'm ill or like when there's a lot of stress like that that it just accumulates without, without having, having this like you know, way, way to get it out and like especially running this long like I do half martens quite often. So that's, that's like a good way for me to kind of reset and also get my thinking going awesome.

Omer Khan [01:01:00]:
Well, Marcus, it's been a pleasure chatting. Thank you. Thank you for making the time. I think we covered a lot here. Hopefully we gave people listening some ideas, some insights that they can take away and apply to their own business. Hopefully we got people also, if they're not already doing abm, a little bit more interested in, in, in that with a realistic set of expectations on how to succeed with abm. So if that's awesome, if people want to check out more, learn more about Enrich, they can go to Enrich.

Omer Khan [01:01:36]:
That's IO that's Nletterrich IO and if folks want to get in touch with you, what's the best way for them to do that?

Markus Stahlberg [01:01:45]:
LinkedIn definitely. So you'll find me there.

Omer Khan [01:01:48]:
Awesome. Thanks man. It's been a pleasure. Wish you and the team the best of success.

Markus Stahlberg [01:01:52]:
Thank you very much. Thanks for having me. It was great.

Omer Khan [01:01:54]:
Awesome. Cheers.