Why Are Sales Enablement Platforms So Hot?

Why Are Sales Enablement Platforms So Hot?

We saw the news this week that the sales enablement platform SalesLoft has raised $70 million, giving it a $600 million valuation. The D round was led by Insight Venture Partners, will go toward fueling the Atlanta-based company’s growth, specifically to fund geographic expansion (the company opened a new London office recently) and invest in technology like it’s AI-driven sales coaching network.

Sales Enablement is a hot category, particularly in B2B software sales, which faces a constant battle against high churn, rising customer acquisition costs, and uneven sales performance. The idea behind sales enablement platforms is to provide sales organizations with the tools and resources they need to produce consistent sales results.

SEPs began as content management systems that sales reps could use to access information to help develop sales messaging, nurture leads, and so on. They’ve evolved into very sophisticated platforms that mine reams of data to engineer all the elements of sales. SalesLoft, for example, provides email marketing, and call dialers, sales coaching, and training (increasingly AI-driven), intelligence and analytics, and so on.

How to sell software effectively to SMBs will be a foundational topic at the LSA’s upcoming Localogy Engage conference, June 3-4, in Washington D.C.

New Podcast: “Robot Waitresses” Featuring Rebellion Research

New Podcast: “Robot Waitresses” Featuring Rebellion Research

Our latest Above the Cloud podcast features a conversation on AI with Alexander Fleiss, CEO of Rebellion Research, a New York company that delivers AI-driven investment advice to its clients worldwide. Andrew is also a lecturer on AI at Yale, Amherst, and Rutgers. As Alexander puts it, teaching is his passion.

We talked about how small businesses already use AI, but largely indirectly through the software they use (he cited Zendesk as a good example). In fact, most SMBs using AI probably do so without any awareness that they are.

We also talked about how small businesses in some ways are in a better position than large organizations to deploy AI because they have simpler problems to solve and small data sets to work with. And then we got into the fun stuff. Robot dog walkers. Robot waitresses. Robot financing. All the Jetsons, Cyberdyne, dystopic stuff people love to talk about.

One of his more interesting predictions was that driverless car will be prevalent by 2025 and that one outcome will be that cars will become homey, social spaces once car owners no longer need to worry about doing the driving.

Alexander comes down on the side of AI creating more and better jobs than it kills. I express some skepticism that every displaced worker can be retrained as a programmer, as Alexander argues most can. We didn’t even get to the threat AI represents to knowledge workers like accountants, lawyers and even, gulp, writers. And Alexander made this feel a little scarier when he talked about how the advent of 5G (over the next couple of years) will accelerate the rollout of robots that replace laborers — drivers, waitresses, dog walkers, landscapers, and so on.

Here are a few choice comments from Alexander. I encourage you to listen to the full podcast below.

Why SMBs May Have an Edge over Big Firms in Implementing AI

“When you are a 10-25 person small business, first of all, you have less data, so it’s easier to work with. You have fewer customers, fewer products, fewer targets to hit. If you are a very large business, you have a thousand bullseyes to hit. As a smaller business, you don’t have as many bullseyes.”

Why AI Might Gain Traction First in a Vertical Category

“When it comes to working with AI, the narrower you can be, the more you can contain your dataset into a vacuum, the easier it is for AI to work.”

Why AI Will Be a Net Positive for Job Creation

“Throughout history, progress consistently has brought more jobs at higher pay and in a better environment…The Uber driver who gets replaced by a driverless car will make more money as a programming assistant and will get to spend more time with his loved ones. And he won’t have to worry about robbery or getting into accidents.”

Why Unleashing the Bots Will Disproportionately Benefit Small Businesses

“Small businesses have a much greater share of their cost in labor than large businesses. So having automated trucking, waitresses, etc., will help small businesses boost profits more than larger businesses, which are already very efficient.”

And How Will Small Businesses Pay for Those Robot Waitresses?

“In a few years you re going to see advertisements for bot lending that say, ‘pay us $400 a month (to finance the bot) or pay your employee $2,000 a month.'”

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New Podcast: “Happiness and Efficiency in the Workplace” featuring 7Shifts

New Podcast: “Happiness and Efficiency in the Workplace” featuring 7Shifts

Jordan Boesch got the idea to build a great software product from watching his dad struggle with a combination of excel spreadsheets and sticky notes to juggle the employee schedules at the Quiznos franchises he ran in Saskatchewan.

This week’s Above the Cloud podcast features an in-depth conversation with Jordan about how he took his original product, build for his dad, and evolved it into 7Shifts, a SaaS company based in Saskatchewan (if that counts as a pun) that raised $10 million in January. Now, 7Shifts is poised to be among the leaders in the competitive restaurant management software category.

Here is some of what we covered in the podcast.

Building a Tech Company on the Prairie

Jordan incubated 7Shifts in the Bay Area but eventually moved back to Saskatchewan to grow the business. He acknowledges there are pros and cons to growing a business away from a known tech hub like the Bay Area, Austin, New York, Toronto.

One pro is that 7Shifts is a big fish in a small pond. As he puts it, “We sneeze and we’re in the newspaper” in Saskatoon. A low cost of living and high quality of life are other advantages. Two key challenges are access to “smart” capital (the kind that comes with seasoned mentorship) and access to senior talent. To address the latter challenge, the company has opened an office in Toronto and is flexible about remote work.

Making the Pivot from Horizontal to Vertical

Despite its origin as a solution for his dad’s restaurants, 7Shifts was an all things to all people employee scheduling tool in its early days as a company. The decision to go horizontal turned into a nightmare when requests began pouring in from customers asking for product tweaks that were specific to their industries.

One big reason for the pivot to a focus on restaurants was that in Jordan’s assessment, “The restaurant industry was super antiquated. It had no technology. We had a massive opportunity to have a strong impact on an industry that no one was really looking at.”

There was also an emotional element to the decision to go vertical. He realized that the product as it stood “was not something where people were like, ‘I can’t live without this product.’ And I wanted to build a product where people felt that.”

Will Restaurants be a Winner Take All Category?

We asked Jordan about a recent conversation we had with SurePath Capital CEO Mark MacLeod, where Mark asserted that restaurants could become the first winner take all category in the SMB software space, which is generally noted for its fragmentation.

Jordan agreed only up to a point. First, there are a few different slices of the restaurant market to fight over. Point of sale is the big battleground, where Jordan sees a “winner take most” showdown between Toast, Touch Bistro, and others.

7Shifts plays in the “employee lifecycle” segment, which Jordan has ambitions to dominate. He defines employee lifecycle as hiring, training, scheduling, payroll, and retention.

“Of all the challenges restaurant owners face, labor management is still the number one thing restaurants complain about,” Jordan said.

The LSA’s Tech Adoption Index backs this up. In Wave III of our small business survey research, conducted last October with more than 1,000 U.S. SMBs, 47% of respondents in the “Dining and Entertainment” vertical cited “recruiting qualified employees” as a top two concern. This was the highest of the seven verticals measured in the survey.

How 7Shifts Uses Automation, AI, and Machine Learning

7Shifts makes ample use of machine learning to optimize and automate employee scheduling, factoring in seasonality, weather trends, manager behavior, sales data, guest counts and other factors that impact demand and employee performance.

“When we tell a manager we can automate the scheduling process, they are often like, ‘Well, I don’t believe in that.'” Jordan said, “When we ask why, they say, ‘My gut instinct.”

It’s a process to convince them that automation works and frees them to focus on other tasks.

“There is this ego aspect with restaurant operators and managers,” Jordan said. “We have to ease them into how this is going to help them.”

You can listen to the full podcast here:

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What’s the Story Behind QuickBooks Live Bookkeeping Services?

What’s the Story Behind QuickBooks Live Bookkeeping Services?

Intuit has been gauging interest among small businesses for an on-demand bookkeeping service called Live Bookkeeping and is expected to launch the service in the near future.

This has caused some consternation in the accounting world, sparking fears that Intuit is going into competition with its bread and butter — the community of accountants who serve small businesses, often with Intuit’s QuickBooks accounting software. And specifically, the move raised fears that QuickBooks would compete with its own network of ProAdvisors.

We couldn’t find any formal announcements for the new service, but Accounting Today is reporting this week that Intuit contends that the service will actually create more business for its ProAdvisors.

The article quotes Rich Preece, U.S. Country Leader for QuickBooks, as saying, “We’re not competing with accountants. This [will] expand opportunities for ProAdvisors to work with small businesses,” Preece said. “We are incredibly fortunate to have very deep relationships with hundreds of accountants in the U.S. It would make no sense to start anywhere else.”

However, the article goes on to describe Live Bookkeeping this way: “Intuit Live Bookkeeping will allow accountants who are looking for other work options, or some flexibility, to find paid bookkeeping work — for instance, stay-at-home parents who want to work just a few hours a week; or a firm that wants to delegate two accounting staff to do live bookkeeping full-time via Intuit’s platform.”

This description provides some fuel for concerns that this move represents the Uber-ization of bookkeeping and will drive down rates and turn bookkeepers into yet another army of underpaid on-demand workers.

However, the article also points out that many businesses need an ongoing relationship with a bookkeeper or accountant who understands their business, making the notion of using a bookkeeper on demand for an hour here or there unattractive.

This video makes the case that change is inevitable in accounting and accountants need to provide higher value services in order to rise above automation, the gig economy and other trends challenging the profession.

We’ll keep an eye on this and write about further developments.

 


New Podcast: “How Do You Franchise an App?”

New Podcast: “How Do You Franchise an App?”

Matt Crowell quit his job and sold his car and condo to pour everything he had into his first startup, GetintheLoop, a mobile marketing SaaS platform. While his parents thought he was crazy when he put all his chips in, today the risk looks like it just might pay off.

Get in the Loop started in 2013 in Matt’s native British Columbia and has since gone national in Canada, with plans to enter the U.S. market this year. The platform gives local consumers access to offers via a mobile app. The service started out as a way for golf courses to send out offers like half-priced afternoon tee times. It quickly expanded to multiple categories, from food and dining to health and fitness.

Get in the Loop has churned through a few channel strategies since its launch, including direct to SMB sales and using a media reseller network. Last year the company settled on a franchise model, where local entrepreneurs can buy in for C$35,000 to own a local market.

The franchise angle sets Get in the Loop apart from other digital marketing platforms. While not unheard of, franchising is an unusual channel strategy for digital marketing software. Will it work? Time will tell, but Matt insists he already has many franchisee success stories. He also claims there is pent up demand among potential U.S. franchisees.

“We had been thinking for a couple of years, ‘How do you franchise an app?'” Matt said, recall the transition to the franchise model. Matt said he consulted with a seasoned franchise pro. “We came up with this model to empower an entrepreneur to go into a market and sign up local businesses.”

The launch was originally planned for late 2018 but those plans changed after an experiment last summer to test messaging on the franchise concept quickly got out of hand.

“On a Friday night, I put out some tag lines like ‘mobile franchise’ in small cities in Canada where no one would notice,” Matt explained. “When I woke up Saturday, eight people had applied to buy a franchise. By Monday we had about 25. So I went into the office Monday and said ‘Drop a media release and tell people we are franchising.'”

Get in the Loop then went all in on the franchise model, even reassigning its direct sales force to teach franchise owners how to sell in local markets.

The podcast covers his launch story, the evolution of his channel strategy, and why he thinks the franchise model will work. There is an interesting aside on why firefighters make good franchise owners.

You can listen to the podcast here:

Here’s a short video clip from our conversation where Matt describes the risk he took to grow his business.

And as always, Above the Cloud is grateful to its sponsors.