About Episode Three

In today's episode, Greg and Owen are joined by Serge van Dam — an investor in Kiwi tech companies across the nation, from M-Com to FinTech, and the likes. In this episode, Serge shares his techniques on marketing, disruptive sales, and category creation which have helped grow companies in this competitive market. 

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Episode Transcript

OS:

Welcome to the Growing Tech podcast with Greg Williamson and Owen Scott. Today, we're with Serge van Dam. Serge is an experienced technology company leader, he's an investor and on the board of multiple Kiwi tech companies. Serge is interested in three main things marketing, disruptive sales techniques and category creation. What we're going to cover today with Serge is a background on why he got into tech, what are some of the key challenges that he sees for Kiwi startups, especially SaaS companies, and what are the major constraints on growth?

GW:

Great to have you on board today, Serge. Thank you for your time.

SVD:

Kia ora. Thank you for having me.

GW:

Just to jump in at the start really. You studied psychology and philosophy originally. How did you sort of transition from there into the world of tech? Can you tell us a little bit about that background?

SVD:

Well, I've always had an interest in human behaviour, which is really why I did psychology and philosophy. And so I did that. My first job was as an HR consultant during the dot com boom. So I realised HR wasn't necessarily my thing, but the internet sounded quite exciting. And, uh, I tried doing a startup with a mate of mine and electronic medical records, trying to nationalise medical records and pharmaceutical records for New Zealand. This is in 1999, we were 23 and full of ideas, failed miserably, of course. But I was hooked and then I ended up convincing New Zealand Post to take me on in the IT and digital domain. And then I joined some friends of mine and a successful SaaS company called M-Com and we took mobile banking to the world and that was kind of how I got into it.

OS:

So can we just drill into that M-Com experience then? So tell us about it. There was obviously a really successful venture that you had a great exit around. So how did that opportunity start?

SVD:

So in terms of the M-Com experience, I was friends with Adam Clark and Graham Rainsy, who were kind of the original founders. And, we talked all the time about the future of mobile, how it was going to be a big thing and they'd be trying to get this thing off the ground for a couple of years. And it sort of felt at the time was right. I went and did a couple of workshops with them around what the mobile was going to become and we came to the conclusion that a mobile phone was going to replace the wallet and that was kind of the birth of it. And then I joined the team and we built it against a mobile banking payments platform, had some modest success, but we were a bit ahead of the market.

SVD:

And then when we thought that the market was going to take off, we had a couple of customers in New Zealand, which was more than anyone else had anywhere in the world and we went to Australia. And then from there, we moved our business to the U.S in 2008. And then in 2011, we'd grown a pretty sizeable company with banks across four continents. And we sold the company to the world's largest FinTech, a company called Fiserv. So after 2011, I returned back to New Zealand and stumbled upon a whole lot of early-stage FinTech and SaaS companies. And I've been helping those ever since.

GW:

Brilliant. And just one other question on the background, we'll move on to the present, but you had that startup with M-Com, grew it to a good size, but then you worked with Fiserv for a number of years as well after that acquisition. Did you learn from both experiences? In terms of what you've been able to apply to all these SaaS businesses you help now?

SVD:

Yeah, I mean, Fiserv was a big company, it's a Fortune 500 company, obviously American, very growth-oriented.  I did learn a lot. I learnt what scaling actually means in practice, I learned probably a little bit about ambition and what's required to both build and run really big businesses at scale. And I guess how big companies think about the world. And so there was a lot to be learnt on the other side of the fence. And I think much of that served me well, plus obviously all the relationships I've built with people who work in Fiserv and our customers and all that sort of thing.

OS:

Yeah. So when you came back, I suppose you got those insights and from that experience, then you came back to the New Zealand tech industry. What was your sort of first impressions back in 2011? Like where was the tech industry at? What were they struggling with?

SVD:

Great question. I mean, my observations when I came back and started sniffing around were just probably more about the 2013, 2014 mark. Really that there was plenty of people with good ideas, who kind of knew what they wanted to build, but were probably a little bit naive and a little bit small in their world view, which is kind of what had happened to us at M-Com, so it's not really a judgment when we set up at M-Com there were only five banks in New Zealand you could sell to. So you sort of think about your universe being five companies and then how do you build a product for five companies? Well, that's kind of an absurd notion really now, if you think about it. And so that was kind of what I encountered was people were thinking pretty small scale about what could be achieved. So, my job to a large extent is to try and lift people's gates and make the founders and leadership teams think the whole world is your oyster. If you had unlimited capital and unlimited runway and unlimited other things, what could you become? So that's kind of what I encountered in terms of small worldview and a little bit of naivety, as well as what I try to do now, which is how do I effectively help these founders and companies look a little bit further.

GW:

Cool, obviously you're directly involved in a governance and investment way with a bunch of SaaS companies, and then more broadly with your kiss my SaaS programs through NZTE and other more broad ways you help people, what would you characterise as the key constraints for growth for these companies today?

SVD:

That's definitely changed a lot in the last six or seven years I've been doing this, Capital was by far the biggest constraint. So if I look at my first couple of investments, companies like Wipster, which is still around today. We invented a category but we never capitalised on it because we just didn't have sufficient capital to do that and a company that copied pretty much our business model and product framed the IO, they just sold to Adobe for $1.3 billion a couple of months ago. So, Capital was really the constraint then. And today we're talking, first day of mail just announced their $30 million series B. You've got all of these series A and series B announcements going on, Capital is just really no longer a legitimate constraint in New Zealand. Obviously, talent was a constraint then and remains one that's become more expensive and more difficult.

SVD:

But I still think the scale, the worldview side of things are the most constraining things. People were just not thinking big enough about what's possible. And that typically when I say people, I mean the founding teams, they're not necessarily often thinking about what could be and that remains a challenge. It's obviously made worse by being unable to travel right now. So if you're not spending time in your destination market, you don't get a sense of that, right? If you don't go to a conference where there are 1500 different banks in the room, it's pretty hard to get your head around how many banks you could sell to. And obviously, I'm mentioning banks, but it applies to any industry. So I think that's definitely a big constraint. And the market access is obviously a challenge at the moment, just purely because of COVID and travel restrictions. But having said that, it's become easier to sell remotely. So some of those constraints can be addressed with the right technologies and techniques.

OS:

I suppose picking up on it, remote selling, is obviously an issue for tech companies today, even more so with COVID. How much of a big deal is it, how are companies tackling that?

SVD:

Obviously being far from your customers is generally challenging. So the question is, what do you do about that? There are many ways to look at it. There are some companies that have done an amazing job of selling remotely, some of the companies I'm involved in, for example, Cogo has done an amazing job of selling enterprise deals to banks without having met people on the other side of the table. So I look at a few themes in that regard for the companies that do it well. The first one is, how do you use technologies to humanise where you can't do that in person? An email is clearly not the same as an in-person conversation, but what's an approximate of that. And so, for example, again, some of the stuff we do at Cogo is we send Loom based videos to prospects and say, hey, here's who I am, here's what we're doing. We should have a conversation and so you moved from an email to a personalised video email, that humanises a little bit so that narrows the gap. So that's kind of one area is the humanisation.

The other is blurring the internal, external boundaries between the customer or the client and partners and yourself. And again, digital tools are helping that. So if you're using collaboration tools, whatever they might look like, anything from Google Docs to Canva, to whatever. There's a way in which you can all feel that you're on the same team or the same side because you're collaborating on digital tools. And that sounds obvious, but there's still so much in the industry where salespeople are sending proposals and waiting for feedback. Well, why don't you work on the proposal together in a shared document?

SVD:

And so there are big gaps in what I see. There's still a bit of the old school thinking about how you sell, and I don't know what you call it. People, you can call it asynchronous communication or some other thing, but it's the sort of back and forth rather than doing something together. So I think blurring the lines is pretty important. The other area is sort of creating leverage into these conversations and again, using technology, stuff you guys know a lot about, Concentrate. Like, getting lists of customers, buying lists of customers, or lists of potential influencers in an organisation, using LinkedIn effectively to build relationship maps. All of those sorts of things create your ability to navigate through an opportunity effectively. And again, it's really changed with the use of content, the ability to invite people to webinars and all of this sort of stuff, your ability to mine data of the organisational relationships and who knows who and all of that stuff.

SVD:

I use the word leverage a lot, but I think you can kind of enter it in a sort of show up to a knife fight with a gun if you actually play your cards right and do the work upfront to do those things. So, a few things have changed, some companies are doing it amazingly well. Some companies are stuck in the old sort of outbound SDR model, randomly shoot stuff, throw stuff at the wall and hope something sticks. For those companies COVID or remote selling hasn't really worked, but there's plenty for whom it has.

GW:

Do you think that for those New Zealand test businesses that are willing to think through this remote selling challenge and use digital technology, it almost removes some of the distance barriers we've struggled with in the past because buyers are willing to engage online? When pre-COVID they might've been much more reluctant, but some of these enterprise buyers just resigned to this as a normal method of interacting.

SVD:

Exactly. Well, sometimes resigned, but sometimes they see it as a positive thing. Because the CEO can just show up to a 30-minute meeting, I can hang up whenever like we haven't made tea for Serge and coffee for Greg. There's increased efficiency for the buyer as well. So what I've found is not universal, but it is definitely common in that executives find it an easier thing to do because of the perceived commitments they don't need to make. And again, if they use Coga as the example, we've kind of been able to aim straight for executives and CEOs from off the bat and it's worked surprisingly well.

OS:

So if we sort of shift the conversation a bit to marketing, what do you sort of see as the role of marketing in these companies that you're working with and, if you're looking at investing in it, how do you sort of know if you're getting value out of your marketing?

SVD:

That's a big, big question. I'm a marketer talking to two marketers. The first thing to understand is what is the purpose of marketing in your organisation? Is it to actually do the most of the selling? Is it just to generate high-level leads? Is it to create qualified prospects and so on? So you have to understand in your repeatable sales model, what is the role of marketing and be clear on that. Where I see it, a failure is where enterprise sales organisation expects the buyer to be three-quarters qualified and two-thirds of the way down the ramp when they land in your inbox. Well, that's pretty hard to do in the enterprise and so it's an unreasonable expectation. But what I am saying is generally in marketing, obviously content, investments, are largely paying off for people, especially those that are prepared to push the boat out a little bit, take a few risks and do lots of experimentation.

SVD:

So that absolutely remains pretty useful. The other side is, I guess, tightly integrating the marketing and the sales side. And I know you guys at Concentrate are obviously big HubSpot providers, but the companies that are making the most out of those kinds of platforms and, tracking everything and building relationship maps and kind of going on - the whole hog -  from marketing automation to sales automation, that journey, or again, blurring the lines between sales and marketing are effective. And then the other is just generally as a trend, those that are prepared to take risks. What I see as the highest performing organisations on the marketing side, are just doing, sort of forcing themselves to do one, two or three experiments a week without anyone being ominously tied to the result. They just do the experiments, see what works and what doesn't and keep going. And always in hindsight as these little experiments that turn into these nuggets. And my suggestion and the way I like to work with early-stage companies is just to keep them experimenting and make sure that you build a culture of continuous experimentation.

GW:

Yeah and that seems to be our involvement with SaaS businesses, particularly that agility, not just in their marketing and sales, but across their businesses as a key to the successes. I mean, we come from an enterprise sort of software background, both of us, and it was all up always a lot longer and slower and more structured. Whereas these businesses seem to be a lot more fleet of foot, even if they're selling into quite large complex organisations. Would that be true or that'd be a key part of success for these businesses?

SVD:

Absolutely. I can think of lots of examples of things I'm working on or have worked on, that worked really well during the pandemic as a company called Re-Leased, which does commercial real estate software, and we launched an index for the industry and what was essentially a relatively light experiment, with getting some data together and PR agencies turned into a line of business for us. So we now have an index business called Credia, which in its own right drives its own revenue. So we make money out of index business as well as creating a whole lot of leads. So this is a great mature example. And then a couple of things I'm working on with AskNicely, for example, we are launching a book in a new category, which we call frontline success.

SVD:

So we're launching a book for that audience. And then in its own rights, creating a whole lot of leads and a whole lot of content and all sorts of benefits. And then we're hoping to have the world's inaugural frontline success conference next year called Frontline Summit. And we're already well on our way to getting a whole lot of speakers for that. And the idea of doing global conferences with thousands of attendees would seem really foreign to most tech companies three or four years ago, but they're actually pretty achievable things. It doesn't cost a million dollars to get a thousand people into a virtual room.

OS:

Yeah, definitely. It feels like the SaaS community's quite vibrant, there's a lot going on there. A lot of companies, a lot of startups really exciting opportunities for New Zealand, Inc. really isn't it?

SVD:

And there's no limit in this, I get asked once a month by some politician or bureaucrat, how many roles are open and it's kind of like, it's a categorical error to ask that question because if released, we filled our 50 technical and product roles in Napier. We would grow faster, which would mean we'll then have another 50 or a hundred. And so it's kind of an unlimited market and if you look at the total addressable market or TAM, as most SaaS companies call it, even the dominant players ended up having one or two or 3% of the market. So, if you take Tradify, which I'm involved in or Re-Leased or whatever, we're lucky we have 1 or 2% of the market, the rest of it's still available to us. And that's before you even take into account different, new countries like Germany or Canada or Mexico or something else. And yeah, there's just so much scope.

GW:

How much is it? It's a bit off the theme, but how much is that? You mentioned it before the talent and the limitation, the talent shortage. I mean, because on one hand, New Zealand offers a great lifestyle for talent to operate from. But on the other side, we have to have a pretty limited resource, particularly constrained by COVID right at the moment.

SVD:

Settings. So if you look at the educational settings, there's no focus from our university sector on producing capabilities the country needs. So it's just a total mismatch. It's not even a market, it just doesn't even work. That's the first thing, the second thing about that is university degrees aren't necessarily the way in which you get more capability into the market. Firstly, it takes a long time and secondly, it's inefficient. And so organisations like Dev Academy and so on are doing a good job, but they're operating at maximum capacity. What they actually need is probably some government funding to the tune of, single digital or double-digit millions and to create some scale. So we've got sort of a supply problem on the educational side. On the immigration side, obviously, we can't bring migrants in at the moment, but there's plenty of people who want to move here.

SVD:

So it's really an issue of opening the borders and we all have our own opinions about COVID and what should be done and shouldn't, at some point it will be more than ridiculous that we don't have open borders, so that should solve itself. And then the third area, which I think is an exposure problem is people who are actually doing good jobs in other industries, who if they knew what was going on in the tech sector would actually migrate their skills into it. And I see there's an exposure problem because most SaaS companies are focused on their own thing, right? The average new Zealander doesn't know who Re-Leased is or Tradify is, orany other SaaS companies you can mention. And it was really obvious. Recently I ran a thing called Walking on clouds, a walking tour of one of the Wellington tech sectors and that whole lot of policy and political and bureaucratic representation, a couple of media people along.

SVD:

And we went and met 5 companies, none of them had heard of all of them going global from Wellington. And it just really brought to life, this exposure problem, no one, no 18-year-old and 90% of people at university studying relevant things, know anything about this. And most certainly people who are working, being productive and mid-sized companies and financial services or professional services, working in a Deloitte or PWC that hadn't heard of these companies either. And so they've got this exposure problem and we need to solve that. That's really on us as a tech industry to showcase what's going on in this country right now whether it is 5 or 600.

GW:

And the alpha-like great sort of world-class technical business, marketing, sales, operations, all kinds of roles for people don't they to really get the teeth into.

SVD:

For marketing professionals given world market is and you're working for a Japanese photocopy company, things in marketing to New Zealand corporates, that's fine. That's an okay job, but you could be applying those talents to growing a global, New Zealand, SaaS company. And I know pretty clearly what I'd choose if I had the option. And again, it's an exposure problem. That person probably doesn't know that the role exists.

OS:

Yeah. I know it's probably made worse too. Because a lot of Kiwi companies, we're great at focusing on the niche, the B2B nations and an offshore one at that. So the general public doesn't really hear about it or experience it. So let's just shift a little bit to a broader discussion, what's your sort of biggest piece of growth advice for Kiwi tech companies today?

SVD:

Well, in some ways we've covered it. I want to lift your gate. Like what is the most amazing version of your company? What could you be? And most people don't really ask themselves that question. And I don't mean that in a sort of Adam Neumann, WeWork or Mark Zuckerberg meta kind of way. I mean, if we solve the problems that we understand, well, what kind of business could we build? I think it's kind of ambition or a mindset challenge. It's conditioning, largely because we live in a small island nation in the middle of the South Pacific and we have to change the mindset to say, what, if we dominate. We owned the world, what could we do? So this kind of, to me is a mindset challenge.

SVD:

And then the second one is really about, um, creating an environment where experimentation is the default and you don't punish things that fail. You don't actually set the expectation that things will work. You just have this cadence of continuously trying new things and hopefully, new things that have some level of audacity and the unexpected about them. Because if you do that enough times, you will typically stumble on some amazing gems. I think those two things combined, plus doing the basics well, which the stuff that most companies can do, that you need a baseline of, speaking of marketing automation and defined sales process, understand your ideal customer profile. Just some of the sort of blocking and tackling, as they say in America, you do the basics well, and then if you've got your gate lifted high enough and your mindset right, and you do enough experimentation, I think you combine those three things and you've got a formula for sustained growth.

GW:

Awesome. You've given us a really, quite an exciting, ambitious vision for tech companies and SaaS companies. I suppose, just to finish it, it would be good to understand, the development of some sort of programs to share insights and intelligence around SaaS, like the kiss my SaaS program, particularly, do you want to just outline that a little bit? Because I think it's pretty well known in the industry, but for those that don't, those kinds of programs are great ways of learning and sharing and advancing people. So could you just give us a little bit of that to sort of close us out?

SVD:

Perfect timing where we're having this conversation because Callaghan and NZTE have made a bid to the New Zealand government to set up a SaaS sector, an organisation to create events, learning and build a community. So it's going to go onto the brand kiwiSaaS. I think it'll get formerly launched, early December or thereabouts. And under that, we'll see a whole lot of events, including Kiss my SaaS, which is all the B2B SaaS companies that are exporting. We meet once a quarter in Auckland, Wellington and Christchurch, COVID notwithstanding. Southern SaaS, which many people will be familiar with. And then we're going to put a whole lot of events around that. So, kiwiSaaS will be the umbrella brand and it'll be funded. We have a full-time community manager, full-time events manager, etc. So all of those things are going to start coming together.

SVD:

There's recognition, both not just in NZTE and Callaghan, but also wider in government that SaaS is a sector, it's our fastest-growing export sector. It's obviously the most productive sector in terms of income per employee. So, there's a recognition that the future of New Zealand could sit here. Obviously, everyone on this call believes that already, but the average New Zealander doesn't even know what SaaS is. So we've kind of got to lift our game in that regard. And then the second thing about kiwiSaaS will be, there'll be a moderated Community. Generally for SaaS, geographically, and obviously each location, as well as an individual lines of responsibilities. So, get together marketing people who get together, the marketing people who market to Americans or salespeople who are doing enterprise sales and stuff. So there'll be a whole lot of self-managed communities on the back of that. And I think that will actually crystallise a bit more of this sort of learning and sharing and moving the industry forward for all of us.

GW:

Brilliant. Well, that was awesome Serge, we really appreciate your time, you'll have plenty to keep yourself busy for a while, being above all of that. But we hope you get to enjoy a bit of Wellington getting out for your exercise and your food as things open up more and more. And, we'll look forward to seeing you in person pretty soon, hopefully.

SVD:

I hope so too. Thank you for having me.

OS:

Oh, well that was a great interview with Serge there. He's so involved in so many companies and has so much experience. I'd like to actually have another chat with him, there are lots to learn there. What were your key insights out of today?

GW:

Oh, I think it was packed full of them. There were heaps there, but the thing I loved the most was, he's all about trying to get these talented entrepreneurs to lift their vision. I mean, raise the gate. He, I think he called it, but I think the key thing is really being aspirational about what we can achieve as a nation, particularly in the SaaS area where we have world-class people, they just really need to behave and look at the world like that.

OS:

Yeah. I think for me that sort of fail fast, innovate, try things, a no-blame sort of culture because I think that it's actually really difficult for people or for all of us to just have a go at something. Because basically, we're all brought up that if it's wrong, it's bad. Whereas actually we just get to our goal quicker if we try stuff and figure out what works and what doesn't. So, that's a pretty big challenge, actually. It was good.

GW:

So, thanks everyone for tuning in to another Growing Tech podcast. We love having you involved and always welcome any ideas or suggestions for guests. We will have another great guest lined up for the next pod. So stay tuned to our different updates on social media or on our blog for the next one. Thanks for your time.

 

Interested in learning more about growing your tech or SaaS business? Make sure you check out our blog which covers all things New Zealand tech. You can also subscribe to our podcast channel on YouTube, Spotify or Google Podcasts.

See you next time,

Greg and Owen.

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