#9: SaaS Enterprise Sales: How To Succeed, Even With a Limited Market Size

Ron: For entrepreneurs, You need to, you need to get ready, strap in. Nobody's going to believe you. You know, you're going to hear a million no's. But if you know this is what you want to do, and if you, if you are convinced, then part, you just need to look at it as part of the rite of passage, you know, part of that zero to one. Prove it, just like if you're going to run a marathon, right? You have to run 42. 2 kilometers. You have to finish that, cross that line, or you didn't run a marathon. So whatever, right? I think you have to start with the end if you understand the problem very well Don't give up. Because the problem is there. If you don't solve it, someone else will. So if the problem is there, just continue to try fixing this problem.

Christian: Welcome to the Messy Growth Show, the podcast that dives deeply into the heart of B2B growth stories. We are here to unmask the raw, the real, and the often messy road to success, because let's face it, growth isn't always neat and tidy. Join your hosts Soren and myself, Christian, as we sit down with top leaders mining for proven strategies to accelerate your business. Welcome to the Messy Growth Show. Your roadmap to success starts here. Ron Gidron, welcome to the messy growth show. I'm super excited having you here and you're the CEO of xtype.io. Tell me more about that.

Ron: First of all, thank you very much, Christian and Soren for having me. It's nice to be with you. xtype is a platform engineering solution for ServiceNow teams. There are 7, 000 enterprises in the world, largest enterprises in the world, who build a lot of digital transformation on the ServiceNow platform. These enterprises are growing in their use of the platform and they're building. Centers of excellence around the platform itself in order to scale it. Then xtype is a platform engineering product, that underpins those centers of excellence, or sometimes they're now called centers of excellence and innovation.

Christian: Okay. So you're basically built on. On another company's like platform. Is that correctly understood?

Ron: That is correct. We are an ecosystem player within the ServiceNow ecosystem. One of the challenges, by the way, for a lot of investors early on, it's like either you've invested in an ecosystem before, or you have not. We chose the ServiceNow ecosystem for two reasons. One, we understood the problem very well. We knew it was very real. We know so much about it. Second is we saw its growth. And if you follow ServiceNow and for the audience that doesn't, you know, you can just go very quickly, go onto any financial website and take a look at ServiceNow, it's like five year history, you'll see the trajectory. And we looked at other more accomplished ecosystems, like the Salesforce one. We saw where this is going. And if you look at the Salesforce ecosystems, there's quite a lot of unicorn companies that are born in that ecosystem. Same thing is happening now for ServiceNow. And, you know, we're very happy to be part of that ecosystem. It's also very unique. Yeah.

Christian: Sounds good. So, Ron, I remember you told me before we started the interview that you actually started out as a farmer, like, and now you're like in tech, like, can you like unpack that for me? How, what happened there?

Ron: Yeah, sure. So, yeah, I grew up on a kibbutz, which is a unique way of living that I, as far as I know, only exists in Israel. It dates back to the way when the country started. It was basically a way for people to get by. They had nothing. And they, so they came together in communes. It has very communist kind of roots. Everybody shares everything. We own our fields. Everybody chips in and does. When I was born, kibbutzes were already established, right? We had a big farm. We had an envelope factory. We had a dairy farm. And so I grew up as a kibbutz kid and I loved the fields and I, and I, and I was quite a. Quite a big, to this day, quite a big motorhead. And so I really loved, you know, the big tractors, the combine harvesters, et cetera. So that's what I did when I, when I was a kid, I was 13 years old driving combine harvesters. And that's really what I wanted to do. And the jump to tech was completely unplanned and unexpected. When I, so in Israel, when you're 19 or 20, you go to the army, it's like a compulsory service when you come back. We go back to the kibbutz and in the kibbutz there was basically a program to get some education, right? Now the reality is do whatever you want. We want you to be, you know, an educated person, but at the end of the day everybody comes back to the kibbutz and has their life kind of planned. And I enjoyed math and I took, I took, you know, some, math. Classes, a degree in a university in the South of Israel. And it was the very, it was the end of the eighties, the very early nineties. And software companies were basically hiring people out of university because there was nobody there. So I met this company called Mercury Interactive and they offered me a job. And I thought, that's nice.

Christian: Sounds.

Ron: Here we are 30 years later, I have not driven a tractor since.

Christian: You want to.

Ron: I do. I do, a hundred percent.

Christian: Nice, super interesting. And so then you started there and then like at some point you like decided to go into the whole xtype company, start that up, like what was like happening at that time that facilitated that. Action to start that company.

Ron: It actually took a while, right? But I spent 10 years at Mercury and I spent another 10 years working for other companies, all within enterprise IT and all sort of like, software companies, I think the entrepreneurial spirit, if you want to call it that way for me. Really dates back to the kibbutz, because in the Israeli mythology, if you want, kibbutzniks, which is how you call people like me who were born in the kibbutz, are kind of like farmers, right? Workers, people who do stuff. You get up in the morning, you go do stuff. And so for me, it was always about Work and building something and doing something. So I always wanted it. I didn't have the tools. I had no understanding of what the hell that means or anything like that, but I wanted it right then. So with the years and inside of the tech industry I guess I gathered more skills. I was a programmer for a little bit of time. I was in pre sales for quite a long time. And, you know, that gave me international exposure and selling. I was in marketing and product marketing, et cetera. So I've done a number of roles and I think I've probably started actually dreaming about building a company about 15 years ago. So I started reading books like I'm sure most entrepreneurs do, right? Zero to One by Peter Thiel wasn't around then, but others, Crossing the Chasm, etc. And.

Christian: Over here.

Ron: At some point, yeah, is that Zero to One or Crossing the.

Christian: That's over here. Lying on the zero to one with Peter Thiel.

Ron: Zero to One is my number one, my number one. Go read that. If you're going to start a company, there's a bunch of others, but yeah. So I don't know, at some point, you know, it just became apparent. Then, I was working for an Austrian company called, UC4, later renamed Atomic. And that's where I met my two co founders. We've known each other now for 15 years. And it was actually Peter who came to me and said, Hey, I want to show you something. And I, and I looked at that and I was like, okay. Here's a company. This is what we're going to do. And of course there's a million ups and downs until where we are today. But yeah. At some point you just pick it up and go to work just like when the kibbutz.

Christian: Sweet. I like the, I like the hardworking metaphor for like, you know, just applying that in a company because that's really what you need to do, right? Like as an entrepreneur, you just need to get some stuff done and like, maybe, you know, not super motivated every day, but you just got to do what you got to do.

Ron: Yeah, it's not gonna get it's not gonna do itself. Yeah.

Soren: The idea about, because I have been through the process myself before starting my own, and, For the longest time, you will have the general perception of what it means to start a business, right? And that sometimes, if you are in a, depending on what culture you're raised in, where people are predominantly employees versus own business owners, you have a perception of what it means to run a business. And once you get started here and you are dedicated, you get a completely different view of what that, of what that takes. And you really appreciate The fact that you have to like what you're doing, you have to like the people you are engaging with and the type of customers you're supporting. And then you will get that understanding of what it really takes, what it really means to run your own business.

Ron: Yeah, i mean, I couldn't agree more. It's, I did an interview with, I think it was computer weekly or like last week and what I said was basically all the cliches are all true, right? It's all true. This, you know, this is going to be hard. Everybody's going to tell you no. Nobody's going to believe in you. You have to just get up and do it. You gotta, you know, you, there's no substitute to doing stuff. And you're going to fail more than you succeed. And you have all of those cliches. I can see it in your eyes. You can see it in mine. It's like, yeah, that is the reality of it. So now is the question, you know, are you. Are you up for it or not? But let me, let me jump in.

Christian: It's also opening up for like massive, like freedom to like shape your life in the way you want to do and like achieve those things you want instead of just, I mean, there's nothing wrong with that, but being like working for somebody else's dream. Right. So. No.

Ron: Well, I guess so. So look, I think it's very personal. I, you know, I can't speak for other people, but I do know people who are very happy, you know, making a good living, programming, running marketing, doing things very happy. And if you know, if you're wired that way, you can set up yourself a really nice life. I mean, let's be honest, right? Most of us in this industry, we're not struggling for food. We are, we're optimizing our lives and there's multiple ways of doing it. So I guess it really boils down to what do you want? And I can tell you, so, okay. So obviously there's always in the background, right? The millionaire thing. Okay. You're going to build a big company and sell it and be a huge, et cetera. Yeah. Okay. Chances of that are not very high as everybody understands. So maybe that's not a good enough motivation on its own, although denying it would be a lie because that's part of it, right? Then there is another, but I can tell you right now, right now, when people ask me, how has your life changed? How has your life changed? I had great jobs before. I, like I told you, I was, I did, I had a great career and it's kind of funny. I mean, I started a software company. Well, guess what? I work in a software company now, you know, I've worked in software companies before. So what changed? CapTable? That doesn't walk with you, right? You don't, it doesn't walk with you. What changed? Well, for me, what's changed is my job. For me, what changed is it doesn't matter which job I was in before. And I, and I liked my, Jobs and et cetera, but you could probably always lure me with some other job at some other company. Some headhunter could potentially call me. It wouldn't be easy, but they could, right? And offer you that next thing and you say, okay, I'm going to take another jump in my career and move out, et cetera. That can't happen now. That's the thing that changed. I am doing the thing I really want to do. It's a huge difference. This is the best job I ever got. It's the hardest, the most amount of pain, but that's really what changed for me.

Soren: Would imagine, I would imagine that the things that you have on your plate, the problems you need to solve are slightly different. And you as a person have had to grow to solve.

Ron: A long way to go.

Soren: Oh yeah. So for my, as it's all personal, I would say what has changed is the confidence that I have that I can always create something for myself. To me, that is freedom.

Ron: I agree.

Soren: I can rely on myself to pull through when I set my goals and I need certain things in my, whether it's flexibility or time with my daughters or, I can prioritize the way I want.

Ron: I totally agree. I think it, again, it boils, it comes down to this thing that has to do also with the reason, I guess the reason we're a little bit more confident is because you've taken on responsibility, put it on your shoulders, maybe for a lot of other people that are now working with you and you know, are relying on you. To continue to build this thing that they have signed up for. And so, and I, and I know this to be true. You can delegate authority. You can, you know, you can put someone in charge of anything in the company and give them full authority to hire who they want to, you know, if they need to make changes, to spend the budget the way they want. All of it. But if it doesn't work, it's ultimately my responsibility that doesn't roll down, right? So that's the thing that I think that's the price you pay. Now, either you enjoy it where, you know, putting that bag on your back or you don't. Maybe we're masochistic. I don't know.

Christian: Absolutely.

Ron: I have no idea. We.

Christian: Ron, let's go back to like the time when you met your three or two co founders and you started the company. Like how did you like kick it off? How did you get the first customers? How did you get from like zero to 10 customers?

Ron: Yeah, we really did it the garage way. The bootstrap way we got into a, we knew the problem around managing ServiceNow instances. We were technical enough to understand a domain of problem that has to do with, and I don't know if we get into it here, but the differences between developing software, on, you know, on the open, in the open world. So you can choose whatever architecture you want and build something, you know, versus you're an enterprise and you chose your architecture, you chose. ServiceNow you chose. And now with that architecture comes a lot of power, a lot of things you don't have to do. ServiceNow offers tremendous value out of the box, but it also means that everything that you want to build on top, you have basically signed up to an architecture that is already done for you. And it's not managed by you can't change it, you cannot swap it out. So that's the kind of difference. And that is also, and the reason we were so attracted to it is because that also meant that the myriad of open source tools out, if you know, if you Google DevOps and things, right. And they all work wonderfully. They just don't apply because they can, because they are built for a different architecture. And if you want to. Support this ecosystem. Well, you have to build for this architecture and take on the risk that you are now tied to this architecture, right? We did our risk assessment and just worked on that. And quite frankly, so we started just building something and mocking up. We did many iterations of everything that the book says. We lined up, you know, a whole bunch of architects and service. Now people, I, you know. Just cold in emails on LinkedIn, right? No more email today. It's all LinkedIn. And Hey, I'm, you know, I'm thinking about building this product. I remember telling both Peter and Toby, and we all did it. Make sure that when you contact people, tell them I'm not in sales. I'm not trying to sell you anything. I just want feedback, right? Hey, would you like to take a look? And it worked. And we started interviewing. It still took two years and two different products. Iterations to get to the thing that ultimately also proved to be able to get product market fit, which is much later.

Christian: Did it take two years before you had actual like paying customers? Okay.

Ron: A little bit more, a little bit more. We did have to, we did have to, and I think I saw this in the pre, in the, in the prep questions, you know, did you work with some customers? So we did. There were two customers in the, in my backyard here, but I keep, I'm going to tell you this. Like I told all the investors, they're not my cousin or someone from the kibbutz, right? They are in Israel. They are very close to where I live, but I didn't know anybody there. It was the same cold, you know, right? That's the other thing about entrepreneurs. If you, if you don't try to sell, you're not going to sell. So you have to, so we did have two design partners that actually paid us a little bit, they were, you know, kind enough to say, Hey, we'll cover your costs still, you know, we're running an AWS cluster, et cetera, and we're doing it all in our pocket. We got no funding at the time. And it was, it was very, it was the real stark reality of the difference between someone telling you, yes, I love this, right. To then actually putting their hand in their pocket and paying you for it. That's a huge, a huge difference. And people will tell you, right? You do these interviews, they go great idea. Cause people don't want to tell you, Hey, I'm not sure. So this is a hard thing to know that the only way to know that it works is when someone actually pays you until that day, they can, they can tell you how great you are, how beautiful what you do is. I love it. Didn't work. So we had a product. It was, everybody loved it, but there was no real usage coming out of it. And it was more, you know, if they use it's for a very special case. It was full of features. It was amazing. Like seriously, and we had to dump it, like throw it out. And I was like, there's no usage here. They use it once a week, right? Once every two weeks. It's yeah. And yes, they can only do this with you and it's very cool, but there's no real meat, there's nothing here. So then we iterated and we did a search product. Which was, nevermind, there's a lot of search products in service. Now we did the best one out there still to this day. One day we're going to open source and just put it on the web for free. And what we saw was the usage growing. People started to use it, which was what we were lacking in the other one.

Christian: Yeah.

Ron: We thought that, wow, okay, now we're onto something. All right. But we're, but we want to build a company. So how much are they going to pay for this thing? Who's going to pay for it? Right. And you start working around that and you realize, shit. Yeah. Now I have a product that people are using, but it's not going to make any money. Right. It's just not going to make any money. So turn around again. Stay always within the domain. So it was the third iteration where we, where we actually got to, of course, now it's a built up product and, you know, it's used a lot, et cetera, that we actually got to, you know, a platform engineering thing that, and as strange as it may sound, all three of them tackle the same problem. Even though they are very different in functionality, they tackle the same problem. And that problem is, how do you scale up development on a platform like ServiceNow, which is the real problem we solve for customers. So these large enterprises, they start adding users and users, and it's very, and ServiceNow is making it easier and easier to develop new stuff on ServiceNow. So you can now do low code stuff and there's multiple ways of building. And so organizations are taking advantage of it. And that's great. There's a little secret. Developing and running in production are not equal. You still have a process to move because after you develop, you have to test. And before you test, you have to put it into production and you have to make sure that it doesn't conflict with other things. So there's a whole process underneath it. And that's where the center of excellence production people, you know, build processes, et cetera. We fit right in there, automate that process. And so, yeah, it's, it is the same problem, right?

Christian: It's interesting the whole part where all of it is, but the part where like you end up with three iterations that probably cost you, several hundred thousand dollars to develop and then lost revenue basically. Right. Maybe selling inside like an ecosystem, slightly different, but. When I'm asked a question like, what would you do differently if you were to start a SaaS company tomorrow, I would, I wouldn't want to write a single line of code or just pre sell it and get them to pay the money. Just like you said, get that credit card up because then you get the objections of why they don't think it's a good, fit for them. I was like, okay, then we can have a real discussion about, that it actually wasn't about that random feature you wanted. It was like something fundamental. You don't see the pain maybe that we're solving or we're bad at messaging. Like you said, it's the same thing you're solving, but maybe you're just like communicating in a different way. So.

Ron: I think this goes back to what Soren was, Soren was, sorry, Soren, what Soren was saying before, that it has to do with confidence, right? Today I'm a lot more confident. Today I would have no problem doing exactly that. But when you start out, at least for me, I wasn't as confident. So you're trying to please trying to show, Hey, let me show you what I built. Right. A hundred percent. If I started today, it would probably be shorter.

Soren: My point to what you said, Ron, is that confidence, but what confidence? Because we would be Not so confident in how we eventually, if and how we eventually arrive at a solution that will work, will scale and will bring money. That confidence is not there yet. But the confidence in you being committed and relying on yourself and your partners to eventually get there. I think that's what you need to rely on in the beginning and just have confidence. Some people say you have to believe. That you will get there eventually. But it is, it is true that confidence changes. And one question to me that maybe highlight that I would like to ask you is if you hadn't had paid customers and that accountability that normally follows when somebody is paying you to do something, if you haven't had that, what would the process and the speed of iteration and the path that you took, how would that have been different, you think?

Ron: It's a tough question. I think the answer is if you don't have customers, you've got nothing. So I don't know. What we would have developed, it would, you know, you could get lucky and develop something great. I actually, I really don't believe in that. It's not, that's not my recommended way of, you know, at least in the business world, you know, otherwise just go to the next lottery stand and start doing that. Maybe that'll work. So the answer is, I don't know. I mean. Look, it's not like we came out of the air. We did, we did sort of know a problem, so we knew what we were working on. And it's possible entirely that we could have arrived at an idea that is closer to what we ended up with faster. It, you know, things could have worked differently. Frankly, I don't know, it's very hard to say because again, there was this thing of a lot of users giving us really great feedback for something that eventually, we just trashed. Right? So.

Christian: Blinded easily by the, by the positive feedback.

Ron: It's really, it's really hard. It's really hard. I mean.

Christian: People don't want to be mean. Like, you know, it's like, this looks good. Yeah, I could use that. It was like, until you say, yeah, it costs you 10, 000 per month. Then I don't want.

Soren: Perhaps some of the consequences of a client paying you is that they are less hesitant to give you their frank opinion. Where somebody not paying is probably going to be more polite if you ask them for their opinion.

Ron: Correct. But correct. But on the flip side of that, and I will talk about the xtype sales process, because it is not as easy as a credit card, because the types of deals we do are six figures, you know, and they don't, they're not, they don't get done on a, on a credit card. But, So you're right that if this is an interview, right, pre product, idea, storming, or maybe let me show you some mock ups or show you a demo, let me know what you think, etc. At that stage, I think even if someone would say, and we have heard it, that yes, they will pay you, it still doesn't mean that they will. And it also doesn't mean that they'll pay as much as you might have on your business plan. So right now, so as you know, like life is life and the rest is, the rest is, I don't know. But when you have sold to a large enterprise customer who has invested, you know, hundreds of thousands of dollars, which is the type of deals that we do, You get the feedback, you get it straight, right? And you better be ready. So that, by the way, and I don't know if this is where you wanted to take the conversation, but that by the way is where I think, especially in enterprise sales, there's, there is what's called the whole product and the whole product in our case is not just the product, it's also the company, the people, because the customer knows when they buy from someone like us. They know we don't have the full feature set for everything that they wanted. They've usually tested us, et cetera, right? So they'll come back and they'll say, oh, we need scoped apps. We need this, we need that, right? And we will say, yes, we'll do it. Well, you got to own up to your commitments. You have, you have to show that you can actually do it. And the type of systems that the system that we sell. So xtype, when a customer puts xtype in, it becomes a very important part of their infrastructure. It is how they run all of their release and deployment processes and test processes, et cetera. It's, you know, it's critical. It needs to work. So if it fails, you gotta get on it like right now. Okay. It's a, it's a high risk, high reward game. And so that also means culture, like what kind of company you want to build, et cetera. So yeah, it was very hard for us to raise money because we were preaching an enterprise sales led company in a world that has gone completely PLG. And you start, you know, everybody wants to be a classy and you start for 10 bucks and you don't have any salespeople until you hit a hundred million and all those stories, which by the way, I don't know if they're true or not. And for us, it was like, but the business we understand how to build is solving a big, real problem for an enterprise. And it's going to require this. Enterprise sale cycle with an account executive that understands and talking to multiple people in the organization and rolling up a process to do it.

Christian: How did you convince the investors to buy in on that?

Ron: By doing it, by selling, by actually doing a first deal. And I got an email from, one of my board members and an investor, yesterday, actually, where he said, If anyone, I think I told you this already when we started, says anyone comes up to me and tells me that, Hey, that's my business model, I wouldn't invest somehow this works for you. And so, and so we were very close to an enterprise deal with a large customer who is now a very public reference of ours, work insurance. And, you know, I said, this is going to close and they were able to talk to them and see that this is actually happening and they said, okay. And so, yeah, it was not easy. Put it that way. It was not easy. We had to show that it works.

Christian: Yeah. And it's also just the best way to show value, you know, that like, instead of being like pre money where you're like, you haven't really shown anything, but actually getting out there, selling, pushing, like a lot of founders will be slightly on the hesitant side to go out and do the actual sales part of the job. And instead of sitting in front of the computer. And waiting aggressively for the money to pour in, like Søren is always saying. Like, it's.

Ron: Raising money, yeah. Raising money is, was never an objective for me. It was a means to an end. By the way, the best investor in the world, and my investors are probably going to hear this, so hey guys, no offense, but the best investors in the world are your customers. Guess what? They give you money, they don't take any equity.

Christian: That's.

Ron: I mean, it's the perfect investor. It's a, it's an amazing deal. So however you can write there, if you're going to grow and you're going to go on messy as it is, you're going to go on a growth path. You do need money to generate that growth. And so at some point, you know, it's a, it's a great, it's a great combination, having good investors with good companies build something together.

Christian: Absolutely. Speaking of like gross pass, like, you know, what has been the most effective way for you to actually expand the business over the years?

Ron: Yeah. So, like I said. The ServiceNow ecosystem is comprised of over 7, 000 enterprise customers, and that might sound like a tiny little thing, right? It's a tiny little slab. And you'd think, Hey, wait a minute, this is like, I'm done, right? Because I, and I know you have a lot of SEO, like background and selling out in, let's call it go fishing out in the ocean versus I'm going fishing in a, right. In a, in a, in a, in a bucket. And it might sound and it would be wrong. Like all your problems are solved because at the, at the face value, I only have one question. Are you a ServiceNow customer? Yes or no? Right? Well, guess what? It's not enough. It's not enough. Because, and just like everything else, you know, you talk about the ideal customer profile, you mentioned it, right? Then you learn, you have to specialize. You have to know a lot about your typical customers. So the fact that you're a ServiceNow customer is great, but what if you just started your journey? You're a year in, you haven't done anything in it yet. You're not feeling the pain of scale yet. What if you are a tiny customer and the price point where I am doesn't fit, right? So how do you segment the market? And now you've come to a realization. So we know, for example, right? We knew because ServiceNow is, publishes this, that they have, well, it's close to 2000 now out of the 7, 000 customers who are doing, they call it. Over a million cohort in ACV, but actually the average, I believe the last time was four point something. So we're talking about very large customers. They have 40 customers doing over 20 million with them a year. So you're like, okay, I understand that. I need to target the whales first because of two things. That's where the pain will be the biggest, and that's where the money is as well. So you target that first. But now, you know, as messy growth as it may sound, we actually started a PLG program at the back end of it. And so the way we went about it, ServiceNow has a store, an app store. So if you just did the pure DevOps play on ServiceNow, you would start with put a freemium product on the ServiceNow store, get it out to as many, as many people as you can, then, you know, find a way to convert them into a paying customer. We kind of went the other way around. We're like, okay, wait a minute. The problem is big enough that it hurts. Can we show these customers a way to solve the problem for real and sell, right? And now we're selling, but now you've got this bottleneck of a long, expensive enterprise sales cycle with a big lucrative. Thing at the end, but you want to grow quickly. So guess what? We release a freemium product that is a view only part of, X type onto the ServiceNow store after we've been selling for a year. And our whole sales process changes because right now, when we go and meet a big customer, we'll say, well, a, we have references and go on our website, see who else is using us, right? Here's other banks, here's other pharmaceuticals, right? That are using us, maybe your competitors, et cetera. Reference selling is a big enterprise. Deal. But then we'll say, Hey, you know what? Go on the store. Just get that thing, put it on your, just it's free. Go get it. It just worked. We closed a deal with, they're not a public reference, so I can name them now. I'll do it.

Christian: Sure. No.

Ron: Do it. I'll do it. But we closed 153, 000 contract in four months. With the customer, never installing the product. All they did is they took the freemium product. They saw it, they knew our story. They were like, okay, I have this, I have it in, I have the text from the guy who was Robert, this guy was buying from us. And he said, we installed xtype view on 20 of our instances. No more value selling needed. It's the best text message I got in my life.

Christian: Nice. How long is your like normal sales cycle? You said four months on this one. I'm just curious, like how much you actually like compact.

Ron: Working on shortening it, right? So it's six to nine months. It depends, depending on the size. Of.

Christian: Okay.

Ron: Of the deal. A lot of that time is idle time, right? When you're a young startup, sometimes there's just no, you're not in the budget, right? We did not budget this. So you've got to wait for a budget cycle, et cetera. The good news is the more we sell, the more references we get, the more I find customers are already prepared. It's almost like when we show up, they've already heard about us. Or ServiceNow told them, listen, for that problem, go speak to them. So it's shortening. I wish the day comes when, you know, we just do nothing. But then again, that's like building a startup just with.

Soren: You're already part there because you find that you are being invited in the, in the buying journey when they have already completed the previous steps. You have already been pre qualified. They've already set a budget and now they're inviting you. This is what we all struggle with in the, in the startup process, right because we're not on the radar. It is unexpected. They may not be aware of the kind of solution we have, and they're certainly not budgeted for it. And who else of my colleagues should I involve in this process? And then all the idle time just starts, right?

Ron: Correct. Enterprise, sir.

Soren: If you were to look, so does question, does the, complexity of the product that you're selling, which is probably considered fairly complex in that it becomes a very integral part of a large enterprise. Because they can't just skip it with a two weeks notice afterwards and then choose something else. You get pretty much married at some stage, right?

Ron: So, yeah, so that's a great point. And zero to one that we talked about before, right? Peter Thiel says, Hey, you've got three jobs as a CEO. Number one, product manager. Right? Until the product is ready, you've got nothing else, then you become sales manager or culture manager. So let's talk about that product manager part. This is cliche, but it's true. I really believe in the, in the way Steve Jobs kind of talked. Like first you start with the user experience and then you engineer back. Start with how it looks, then you engineer back. I know it's not always possible. And my, you know, Toby and Peter shout out guys. I know sometimes they're like, yeah. Can't do it, right? We have engineering issues that are there. I respect that, but I always go that way. So xtype is actually very easy to use as compared to anything around it. Installing it takes nothing. It takes within four hours. You can put it on all of your, all of your systems, and there's not a lot of customizations in it. Having said that, it's not the usage of the product and the way it installs that is complex. So there's no, you know, heavy lifting services, you know, implementation parts for it. But what it does do is it has the customer now think about their process and how they optimize their process now that you have a new tool. So you have a process that is running for you about, let's just call it, quality assurance. I need to do A, B, C, and D, and then I need, you know, change management. And then I put it into production in the right time. So you build a process around it and you put the people into it. Now I introduce a new tool and that tool can make the tests for you ahead of time and can automate, you know, the change request for you. So what does my process look like now? So there's process engineering involved, right? And that's a different thing. That's.

Christian: That's typically an area where I see like a lot of deals going sideways when you're, when you come in with this new product and, you know, it's doing things better, but it's a change of process. Right. And it's like, Oh, we cannot deal with that right now. Or like, you know, there's too much stuff going on. And like, you know, people, humans, we're not happy for about change.

Soren: Not happy with change.

Christian: No. So, but has that been like the case with you or like, how do you deal with that? Or no.

Ron: Was not a problem for us for, and I know this sounds very cocky. Very, the reason it's not a problem for us is that the process we aim to change hurts them today. That's the problem. It's really hurts, right? We're, you're talking about people who are doing, you know, sitting on a bridge, 30 people over the weekend, waiting idle for, you know, 60, 16 other people to do their stuff before they can do their part. And, you know, and platform owners. That keep hearing, no, I'm sorry, I can't roll it out. I'm sorry, I can't roll it out. And then they, you know, and now they're, and they're already looking at the next thing because they're, you know, under business pressure to move forward with, you know, with digital transformation across a lot of things. So if the problem is painful enough.

Christian: At least from a board level or a C level that I can push it down.

Ron: Actually, no, actually, even from the practitioners. So there's a, there's a, there's a guy called Alex Chow over at Zurich insurance. And there's this thing called cloning and service. Now I'm not getting into it, but it used to take him three full days. By the way, that's the beauty about software products is sometimes customers teach you stuff about your product that you weren't even aware of. This guy showed us how we can take our packaging system, which we built for releases and use that to implement the same clone in under half a day. Right? That's freedom that we gave him. Like, you know, it's, yeah.

Soren: One of the things Christian and I always introduce to our customers Even though we're talking about lead generation and sales, is the idea of pain, you have mentioned it a couple of times. But we don't only talk about the pain because the pain in and of itself is not a reason to act, only if the pain is big enough.

Ron: I agree.

Soren: Only if they can describe what situation they would like, which we define as desired outcome. And if we can get to that, we can better describe how we solve that and deliver that. And it seems that, not unnatural, that the bigger the deals get, the bigger the clients get, the more you understand this because you have mentioned this like it was your second nature. You talk about this pain is big enough. So you, it's just an inspiration to hear it from somebody who's been that learning curve and understand, which maybe, which is, could be a question is at what point do you decide whatever prospect you are talking to. There are these things that I need to have in place before I'm going to invest my sales time on this. If that is not in order, I'm going to leave it in a nice.

Ron: Thank you.

Soren: Kind way, but I'm going to leave it because it's not going to materialize.

Ron: Thank you very much for asking me that question. This goes, this goes straight to DNA and sales process. And again, I'm going to talk about xtype and the types of type of business that we're in. So you're right. So if you're going to do a deal with it, and we walked away from a, from a very large pharmaceutical, company where we had a lot of interest just two weeks ago, a lot of interest and really pushing us hard, let us Install the product, et cetera, which we let customers do, but we said, yes, but guys, in order for this to be a successful thing, we need to know who's the budget holder, who's paying for this. Can we have access to them? We want to have a business discussion to make sure that we are aligned on what we're going to do here. Right. So it's all. And so you look at our sales process and. And you can see it in our, in our HubSpot that we mandate these things, that there are certain things that we demand happen before we move a deal into the, into the, into the next stage. And that is all about, it's very front loaded. So our sales process is very front loaded. We ask all the questions in the beginning. And if we don't have that, we don't move forward. And we don't chase after POCs or POVs or whatever. For us, they are a closing thing. It is, it is the thing that you do in the end. So we are very happy to lean in with the customer and allow them to use the technology. We're not afraid of putting it. I told you, installing it is nothing, using it in a, in an environment like that. But we will not do it unless we know there is a deal in it, or at least that, you know, that we, that there is a good possibility of that because of the expense. And as you say, this, you know, every, this is a mutual investment that we are making with customers. So, we are demanding the same sort of courtesy. Hey, we're going to put our best people with it. We're going to be with you. We're going to teach you. We're going to do a lot of things for you. We're very happy to do it. You need to do something for us too.

Christian: This, I completely agree. I love your approach. I'm curious because now you're taking a whole other go to market approach at the same time, like you have the enterprise sales and then you have the product led growth, which is like just opening up the can line. Try it out. Which would bring in like a lot of leads and like potential noise in your otherwise pretty clean, pipeline. Like how do you deal with that? Like it's a very different flow in my head.

Ron: Yeah. Yeah. Again, great question. And I wish Ralph was here. Ralph is my CMO. And he keeps saying, I don't care about leads. I want deals. We don't have two, we don't have two pipelines. We don't have an MQL pipeline and a deal. We don't, we just don't. So our sales process out on the, what I talked about now is a sales process after something has become an opportunity. It's a real, right? But there's, it's even, it starts even earlier. So in the marketing area, Hey, you know, we do lead scoring, you know, we see, we offer things, conversions, all that, all that stuff that you guys know very well, however, before anything comes into our pipeline, for example, there is an SDR process. And that SDR process requires BANT. So budget authority, right? Knowing that it's there, you cannot put a deal in our pipeline that doesn't have BANT qualification. And once it's there, we use MEDIC, which is a standard way that we've built into our thing, and it basically walks you through, right? Here's the data you need to move it from M1 to M2, M3, etc. So, to answer your question, we qualify very hard. At the front. So what I want ultimately is to have a very clean pipeline.

Christian: Got.

Ron: Frankly, I don't care, I don't care about the number of MQLs or the number of.

Christian: It. Got it now.

Soren: Ron, I think, I don't know if it's fair to say, my intuition tells me it's fair to say, if everybody knew how to do that, they would do it. Because they would have a predictable pipeline.

Ron: You don't think, you don't think if everybody knew how to do what you do, they would do it, of course, but the, but the actual reality is you took it upon yourself to go figure it out and learn and do it. So now, you know, it's the same thing. I don't think I'm special. Other people.

Soren: I don't think anybody has intent of running double pipelines if that's what they're doing like you're suggesting. It's just how does it work if it's a joint pipeline? And what are the, what are the questions that we need to ask? And then now we're talking about in your case, a lot of experience, right? In order to sit in front of. Four or five different decision makers which all need four or five different types of questions. So it's just a beautiful case of this general talk about ideal customer profile and decision makers becomes very concrete and very specific in your case. And we appreciate, very much that part of what you're doing sharing with us right here because it's a beautiful case of how it actually works and what it means for your business.

Ron: Yeah. And what I'll say is that this and I'm going to tie it back to the kibbutz. This ties back to building a real, you know, culture, society, company, right? That people need to work together. And this is the key. The key is that your sales leader and your marketing leader and your CEO and, you know, and your inside sales. We all are part of one team and we, and we all get measured in the end of one same thing. Yeah, sure. We have different KPIs for each of us, but in the end, we're all, you know, under the same gun in the same boat, whatever you want to use. So we better, so we better get it straight. And then we have a conversation and, you know, and sometimes it can get messy. Hey, I don't care how many people.

Soren: Two or three product iterations. Of course, you're going to have some iterations here, right?

Ron: Yeah.

Soren: So.

Christian: It's a, it's a new, no, shoot.

Soren: We got clarity on your sales cycle and all of the entire sales lead generation process, which. I just feel it's beautiful because it, the necessity increases with the sales cycle and the deal amounts because of who you're sitting across with, right? And the amount of resources that you actually tie into a sales process. So before you do that, you better know if, what the possibility is going to be with this.

Ron: All right. Don't make expensive mistakes.

Soren: Do you feel, do you feel that? When you have this sensation of expensive mistakes and all the sales resources and engineering resources, you tie into a sales process, do you feel less FOMO of letting a customer like the one you just mentioned go? Because you don't, you don't sit, you don't, you're not left with a feeling. We could have made it a customer. We could have.

Ron: Brian, who is the VP of sales at X Type is going to hear this and he's going to laugh and he's going to enjoy. And I'm going to say it right now because the truth is that I'm always paranoid. And I'm like, I can't, I can't say the name. I'm like, this is, you know, are you crazy? We're not going to walk away from them. Right. We're going to do it. Give them a freaking product. Let's see what happens. He says, no. Right. Two weeks later. The people we were talking to had both left the company. Case closed. It was a pure mistake to have done it. I would have been completely wrong. So, but to your, to your point about FOMO, I'm always, I don't know when this ever goes away. I'm always, I'm always paranoid about everything.

Soren: To that end, I would say the more clarity you have on when you're going to walk away so that you make a more educated decision rather than a pure emotional, right?

Ron: Correct. Correct. But as you.

Soren: Yeah. Yeah.

Ron: You know, right. You have a client, right? There's a prospectus client there. You, that is, that's really against our nature, right? Because we were just talking about it. Like a customer is everything. And now you're going to walk away from one. Ooh, that's very difficult, but is it the right thing to do? Absolutely. Absolutely.

Soren: Case, you don't have any one person making that decision. You are multiple people that collectively make that decision. It's more, I'm sure you would get more cold sweat on your forehead if you were just yourself having to make that decision on part of the company.

Ron: Absolutely. And I don't feel, I don't feel that, I don't feel that, you know, look, there's some superstars out there, right? For me, I like to harness the power of more people and work together. I don't, I don't, I don't like doing anything just on my, on my own.

Christian: Ron, before we wrap up, I'm curious, you know, if you have a ton of experience, especially here in like the B2B SaaS enterprise space, so if you. Should give some advice to somebody starting out in that space now. What would that be?

Ron: Are we talking about general, like, startup and.

Christian: Starting in that space. You can angle it like you want.

Ron: Yeah. Well, for entrepreneurs, we kind of touched on it. All the cliches are true, right? You need to, you need to get ready, strap in. Nobody's going to believe you. You know, you're going to hear a million no's or whatever, and it's going to be tough. But if you know this is what you want to do, and if you, if you are convinced, then part, you just need to look at it as part of the, part of the rite of passage, you know, part of that zero to one. Prove it, just like if you're going to run a marathon, right? Hey, you have to run 42. 2 kilometers. You have to finish that, cross that line, or you didn't run a marathon. So whatever, right? I don't know if that's a good analogy, but anyway, when it, when it comes to enterprise or actually not just for enterprise, I think you have to start with the end in the sense that if you think that you're going to say it's And again, Saron said it earlier, it's the problem. Faces the solution versus the solution looking for a problem, right? If you understand the problem very well and you have validated that the problem is there, maybe your solution is not perfect. Maybe the way you thought about it isn't right. I told you ours wasn't right. But if the problem persists and the problem doesn't go away, someone else solved it, etc. And it's just you that has not, have not been able to come up with a solution yet. Don't give up. You, right, because the problem is there. If you don't solve it, someone else will. So if the problem is there, just continue to try fixing this, problem. And the enterprise side of it, I would say that, you know, if you're planning to do enterprise sales, fix on doing enterprise sales. If you're planning to do PLG, fix on doing PLG.

Christian: Absolutely.

Ron: Don't go all over the place because that will just lose your focus and you have less chances of succeeding.

Christian: Very wise words. Thank you, Ron. It was absolutely a pleasure having you and, I'm looking so much forward to where you're going.

Ron: It's messy, man.

Christian: It's very messy.

Ron: Hey guys. Thank you so much.

Soren: For taking the time, Ron. And.

Ron: Absolutely. Thank.

Soren: I could leave with a, with one of the quotes that I, really enjoy and that has helped me is there's a guy called Kerwin Ray, who's a business coach that says, irritation is learning. And frustration is an oncoming breakthrough. So those are negative emotions, but if we can turn that to something positive that keeps us pushing through, right? I appreciate your time, Ron.

Ron: Me, Jörg. Thank you so much for having me guys. Take care.