B2B Revenue Acceleration
B2B Revenue Acceleration

Episode · 3 years ago

8: Building a Startup Commercial Team in EMEA for International Vendors w/ Matthew Smith

ABOUT THIS EPISODE

Startups often underestimate moving to new markets.

This is especially true in the EMEA (Europe, Middle East, Africa) region.

Matthew Smith is a Principal Consultant at Acumin Consulting where he just recently celebrated his 5 year anniversary. Matt has been in the cyber-security recruitment  space for 8 years, and he has seen the industry change and evolve during that time.

Acumin is celebrating their 20th anniversary, and they work within the consulting world to help offer a full range of cybersecurity consulting solutions, from system integrators all the way down to penetration testing companies. Matt is on the vendor team and he specializes mostly in director level searches.

We sat down with Matt to talk about how market timing and cultural differences affect internationally expanding startups, the importance of your first sales hire in the EMEA region, and the roadmap to success.

Doing Business. In your report,international can often be a completely different model and way of working then it isover in the US. You're listening to BB revenue acceleration, a podcast dedicatedhelping software executives stay on the cutting edge of sales and marketing in their industry. Let's get into the show. Hi, welcome to be to be a reverieacceleration. My name is any amoutier and I am here today with MattSmith from Acamin. How are you today, Matt? Very well and very warmtoday. Ideas really warm. That's true, though, but today wewanted to invade you to the podcast to discuss about building up a start commercialteam in the A EMEA market for international vendors, and I know it's yourvendors will probably most of them the US base, some of some of themIsraeli based, some Mosl from other countries based. All about coming to theneamarkets. But before we get started, can you tell us a little bitmore about yourself and and and Acumen, which is the company actual represents?Yeah, so I've been with that came in it was my five years anniversaryactually at the beginning of last week. So I've been with acumen for fiveyears, but I've been within the cyber security recruitment world for eight years.So obviously I've seeing the industry change and evolved and and I'm seeing a numberof views and, as you say, is really in European client you know, enter builderscales across Europe, some of the dots, some of the companiesdo it very well, others don't. But it's a bit of background.I work for ACUM IN CONSULTING and we're a cyber security specific recruitment business.We have actually been going I I certainly haven't been here for that long,but we were set up. It was our twenty anniversary this year. ItInfo Sap and we we covered the full paradigm of security. So we havea team that covers end users. So we do a lot of technical recruitment, IE, see those security architect security managers for very large end user associations. So back for these are your those sort of companies. We have ateam that covers system integrators and consultancies. So we've placed partners with the LKpmg, you know, some of the traditional big four consulting firms, andthat's all the way down to pet. Working with pet. We are penetrationtesting companies or whatever, the kind of flavor of the days and the consultancymarket and also, I said, on the vendor team. So I leada lot of our VP or director level searchers, but also specialize in helpingstartups and to build and scale throughout a mere yes, so that's that's likeKim. That's that's really useful to thank you very much, math. Sojust today traight into the big off today. We know that there is many aus. So I stray the on startups general that they're not that's expendingin the European market and sitting up their initial cells to more. I thinkthat commercial elements traits obviously very important for them. So from your experience,would you believe at the key elements for successful expansion? So I think oneof the key things to begin with is market timing and I think if youlook at certain areas the the CAS be space with within cyber so so generalcloud security. The normal bear is I think the European market is probably generallytwelve to eighteen months behind the US market, and then a pack is normally sixmonths or so behind the European market in terms of adoption. But Ithink one of the real key things that vendors have to fully qualify is theappetite and opportunity for their product in the market right at that time, becauseI'm sure we will cover some of these points further in the conversation. Butoften us, that particularly US vendors,...

...those of which have very little ortraditionally have done very little work internationally or in Europe, often vastly over estimatea not so much the opportunity for more so what's achievable and what the marketis actually buying. And also, and I think also often, they sometimescount your is just another sales region in the US and, as I'm surewe can cover lighter on doing business in your report, international can often bea completely unfferent model and way of working. Then it is, I really us. So I say one of the first points is is market readiness?Yes, and I think you are right. Work through the podcasts recently with witha company called CBG and with a CEO, with a gentleman called JamieMurphy, and we spoke about one of their service which is a service calledpulse, and the purpose of that service is to actually, I guess,address at first point that you mentioned that that market readiness and taking the product, the solution, the conversation to the end user, student channel and seehow people react to it, to see the appetites, and I agree withyou. I mean if there is no market was the point. And alsoagree with that other region. Obviously I'm French, you're British and I'm prettysure that our way of buying things are culturally. I mean, I've beenliving in England long enough now to be a bit more with the British culture, but I remember when I first arrived in the UK realizing that things arevery different, the way people do business. The world was expecting things to open, despite the fact I was just living across the across the sea fromyou guys. It was a big, big shock for me. I thinkit's something that some days vendors would appreciate the deep culture difference. First Iwas going to say are you French? I hadn't noticed then. I know, I know, I'm trying to Promin this yeah, yeah, but nowI mean I think if we go back to I mean even if you don'tlook at clouds security, you look at general adoption of cloud services globally andI think definitely not. You know, definitely one of one of the firstfailures or reasons why international expansion can cannot go wrong is absolutely looking at theEuropean market. And I think there's kind of to there's two or three things. Is that you have the difference in how you do business in the USto expanding international. But then quite clearly, as you set, when you actuallylook into Europe, and I think again one of the generalizations is thatoften to US venders can look at Europe has just one region, when whenyou actually look into it and as you correctly state with your own personal experiences, there's a widely different way of doing business in the UK to Germany,to France, or southern Europe to northern Europe, to Ben a look tothe Middle East, and I think that, you know what a treating all ofthose regions exactly the same can often prove, you know, very difficultbecause I think, particularly if you look just high level, that you knowthe way that you do the business in Middle East is that they're very muchit can be difficult to and a trait and when new business in the MiddleEast, however, when you have very strong relationships with partners, with customersin the region, you really take on more of a trusted adviser piece,whereas if you flip back to, I imagine, probably from I mean,I think in terms of being one of the potential biggest markets, but also, by quite some distance, one of the most difficult to do business andwould be Germany because if you look there obviously a huge economy. There's enormouspotential market, but there's enormous market potential in the region. How are thereanybody that has recruited soul to operation in Germany will say that it is avery you know, it's a very different and all be kind of unique cultureeven within Europe. And you know some...

...of the stereotypes about Germans, iebeing you know, often they are one of the one of the last marketsto adopt new technologies. So as a result it can be very difficult tohire or to sell new technologies over there because generally they are one of thelater adoptors. And if we go back to the point about cloud and aboutcloud security in particular, the German market have huge concerns about privacy. Theyhave enormous concerns of where data restored and one of the key pieces that alot of the successful, a lot of the successful US vendors that come overand particularly where data well, where there a cloud vendor a sense, wheredata has to be stored in the cloud and sent back to the US,often there will be a number of these vendors that will have to physically builddata centers in Germany to be able to get around, to be able toget around some of the kind of restrictions and and some of the reasons whycloud has been slow to adopt, particularly in Germany. But I think ifagain, if you use juring as an example, so much about a successfulinternational expansion, and it goes back to the key bit is it's firstly hiringthe right person, and I think so much of it. If you geta US vendor, that's the startup that hasn't there any business in Europe before. It's very important that a they higher the right person, and we cancome on later on to what characteristic is that person has. One of thereal key parts, and I say this during a lot of readership searches,a real undervalue, is the ability to manage an influence or so obviously youget first people on the ground of VP of Europs who are used to buildingand leading teams beneath them. But so much of it, surely, whenyou're going into a new region, is about managing the expectations of the USvender. And I think so often, and it goes back again by theinterlinking with the point about market. You know, market adoption and market potentialis having a European leader in place that can successfully manage expectations of the USin terms of what's actually going to be achievable. And I think sometimes USvenders can, or any vendors can, be bold in by a sales guyor girl who, throughout the interview process, may say they could scale or achievethirty, forty percent higher revenues that some of the other people in theprocessor. But I think it's really about not just taking the person who commitsthe generating the bigger number, for taking somebody who's been through the journey beforeit can actually give realistic numbers in terms of what they can achieve. AndI think so much been able to aid manage expectations above and also managing ateam below really helps the risk it because often so many venders, because Ithink if you know, if you commit a number, as you well know, venders take that as written, implord that that's what's going to be achieved, and I definitely think having somebody that has got the level of seniority tobe able to manage upwards, but also still has enough kind of minds inthe fire and feet on the street to be able to go out and sellthis critical yes, yeah, absolutely so. If I was summarize a little bita few things here, fundamental key elements for six suspension. Number oneis a taming. Is The market tready for you? Number two would beabout umbracing and understanding the culture deferences and that they to just Ripley Gate,whatever was a success in trial or or in North America and Latin what youactually from and with your local market. And number three around, I guess, that first person on the ground, and I think there is I alsowant to put a number four points, which is not being too naive orover enthusiastic, and I think the real stations, because I think you're right, this expectation would also come from that first person that you are, butyou will almost come from the vendors.

These two needs to agree on whatis realistic and obviously put themselves from under a bit of pressure is good,but you want to make sure that if you work with someone who's already doneit in the past, you've got expectation from a board or from investors orfrom a from a company. See Your perspective. It's about matching them tomake sure there is a planet can actually be achieved. That the four pointsthat you you wanted to put across. Yeah, I mean, yeah,absolutely, because I think one, I mean I definitely think if you look, there's that. I mean I'm not sure if we get, if you'remis coverless hour or crimelessie order the conversation. But again, so much is criticalabout that first tire and there's a lot of character respects. But that'sthat. You my next question, Matt So, about I'm glad you youbring it back, ever, because that's a fantastic bridge question, and thenmaybe I will appear with this what I'm ath to tire, but we avinga ton of conversation which individual are looking at recruitine that first person on theground. I think you are at this button when you say this is thisis critzy called that those person will drive, that first person will attract. Thefirst person is almost like a Swiss army knife. Someone would needs tobe a well different ads but also would be able to put up their sleeveto get the job done if needs be, as well as recruiting, selling,getting involved with technical issues, all that sort of great stuff. So, based on your experience and when it comes to you supportting your clients,you know they don't he find that first person on the ground. What arethe key skills that you are looking after, or what are the key skills thatyou think vendors should be looking after? So I mean I think you knowgenerally if you're the first higher in. And again it's just for the purposesof this conversation, let's keep using a US vendor as an example.But obviously it's slightly different if it's you're repaying or Israeli. But if you'reset it up that a region, if you're the first hire in a regionanywhere. But let's say you're it's obviously very key. I mean because oftenvendors make the mistake as hiring, you know, a sales leader that comesfrom a more establish vendor, even within that space. So I guess ifwe use end point security as an example, you know that it isn't it.We those coming over the last few years, marketing particular, and anotheryeahstment, lots of things from DC's as one. Well, yeah, yeah, exactly, but I think on both points. So if you have,I guess, the more old school endpoint vendors, Sociam Ante, McAfee,trem micro, those sort of companies that are all public companies, you know, employee, thousands of people, generated hundreds and hundreds of millions of revenue. You then have a lot of these new endpoint vendors that would look todisplay some of the larger players. So, as a result, you would thinkit would be natural to go and head to hunt for the first salespersonin the region, to go in ahead, somebody very senior from those organ fromthat from the more legacy organizations. And without a shadow of a doubt, there's a lot of very capable people in larger organizations. However, ifyou look at it holistically, somebody who's ahead of Europe or in a seniorsales position for a company that might have four, five, six, seven, hundred people in Europe, firstly, they'll be very they're very likely tobe completely removed from the coal face, so they're not going to be onthe street selling. They're not going to be on the phone to customers allday every day. They may well have the infrastructure and of managed very verylarge ps, very very large pnls and if ex having have a lot ofvery good experience in terms of senior people leadership. However, whether then thefirst comes over, and I think actually separating the two, you made agood point that probably two years ago, against focusing on the endpoint market,there was a number of vendors or with hundreds of millions of funding. Sowhen they first come to your they were...

...typically higher a fairly senior VP ofeup, but that would be somebody that has worked for multiple startups before,somebody that's been through the journey, that understands what it takes to what ittakes to be successful. But I think more so if you fast forward it, because I think if you look at some of those enders I just mentioned, they were coming over to your they were haring, you know, verybig hitting vp of europs who would then hire senior Presales, senior marketing inthe UK then often look to go and put feet on the street very quicklyin all of the regions and whilst you still absolutely need people who have workedup in a startup environment, more so now, two years later, you'reseeing a real reduction in the number of vendors that have such significant funding.So as it results, even though both of those types are you ones withtwo and million or ones with ten million, both need to hire people that havethe start up DNA, in the startup characteristics. More so two yearslater, after a lot of these companies come over, the first person onthe ground needs somebody that is able to go out, you know, andboot doors open, so to speak, you know, when the very firstfew accounts, because often somebody from a much larger business, he might noteat, you know, it might have been ten or fifteen years since theymade fifty, sixty, seventy calls a day. And I think really gettingsomebody that understands what is needed and somebody really that has a proven track recordof success working in a very similar environment. I'm really, really key with littleresource or budget, and that's why I think, particularly from a resourceperspect and generally, and obviously this is this isn't all encumbass in but generallythe view is the people that have worked for very large vendors, even ifthey're in the same space will not be used to operating with very little support, very little infrastructure and all that sort of thing. So I think somuch of it relies on hiring people who've essentially built businesses from scratched before andunderstand everything that goes with that. But, Sholie Maddy, must be a shortageof the people. At some points I have there's a very there's verymuch shortage of people, because there is there is more companies coming in atree, people who've done it, and you would expect to people who havedone it and we've done it well, you probably stay in job. Itwas with our you know. I guess you know in a way, sohe's own. Guess I'm about to ask you a question about how you findus people, but as can you maybe a less unless races characteristic. Areyou looking at someone was been a very good Sir Spellson, that wants totake more respect on stabilities? Are you looking at some as you mentioned asa most been very, very senior, but he's looking at getting more foran exciting startup job and you know, order be walking much more closer tothe action. It's a truck. He's there. A profile is now he'sjust he's do do it with feelings or do you do it a how wouldyou find the right profile and what are the Greaterias that you think? I'mimportant to well, from a from people best pick teeth, from a human, skilled perspective. So I mean from my perspective, you know, asyou know, but sensely the viewers don't. I mean, I do kind ofspecialize in helping start ups come over. So as a result having ran multipleVP of Europe searchers, having worked with many of the high profile startupsthat have come over, I personally have a very good network of what youwere classes, start up guys and girls. But you know, you're absolutely rightthat so much of it depends on I think, touching on some ofthe point of what we raised it in question one is that it's managing theexpectation of the vendor because so, for example, if you have a say, you know, or if it's safer to keep these in cloud security.If I'm working with a series a ten...

...or fifteen million backs cloud security vender, they might be at fifty or sixty people globally. You know, generallywhen company start looking Europe or international expansion, is often because they might have ofglobal clients. So you know some of the very large finance houses,for example, that they've sold into in the US been successful and they've essentiallybeen dragged into Europe or international because some of their global clients are saying,well, Hey, can we buy the solution over here? But as aresult, if you've got to come to it's only fifty sixty people globally,ten or fifty million dollars investment. What they need generally is generally a veryhigh performing individual contributor that wants to make a step up, somebody that's workedin a very early stage company before, maybe has been sales higher two,three, four or five, has been really successful, has gone through thejourney and now wants to take the step up and move into being that firsthire in the region. And I think if you look at some of thecompanies that we spoken about that have huge funding rounds, often they will probablygo for the next level, so a VP of Europe that might have donetwo or three successful IPOs or acquisitions, somebody that's built a business from zeropeople to thirty or forty. But I think it's kind of interesting when youlook at the startups in general because whenever I'm talking to candidates and clients andand I'm just using the numbers I speak about here just for illustration purposes,but if you look at revenues from a start up perspective in Europe, Ialways say you kind of have three stages. So you might have zero to fivemillion or zero to ten million, dependent on deal size, deal values, investment in the region excep what you might have one person that takes themfrom zero to ten as a sales lead. That person is your typical kind ofregional sales director that's hungry, that's aggressive, that will be able to, you know, BOOT doors down open win a lot of the Marquis earlycustomers because, as you know, it can be extremely difficult to win thosefirst few reference customers. They then build the business. They would either leadthe business themselves and hire a pre sales person, a market in person,EXC and then start expanding into the other territories which might be that first banda looks northern Europe or or however they want to run it. But thenonce they've got to that scale, is then at once they've got to thatsize, is then important to potensally bring it a more kind of commercially focusedleader, and the reasons that I say that is often the first higher youmake from a sales perspective. You know they're hungry, that they'll boot thedoors down. However, they don't always have the processes and procedures that whenyou start getting to five or ten million revenue, that have to be putin because obviously, when you're only doing a small number of deals, youdon't always necessarily have, you know, the best poc, you know thePOC's being run the best way or even or whatever. He's tenders. Yeah, exactly, I'm basically yeah exactly. And then I think you would generallyget someone that would then come in and take them maybe from ten to thirtyor forty million, and that would be stage two. And then often youget somebody who would come in maybe a year or two before IPO and withor IPO or acquisition and take them through the rest of that journey. SoI think often what you find is that they're a right people for right timesat venders and you do get some people who will be vp of a mare, will be the first sales higher in Europe and may still be there threeyears later when the fifty people however, they're fairly unusual because when companies havehuge investment they have to grow incredibly quickly. So, as a result, that'swhy I mean, I think particularly because there's been a lot of investmentand there's been so many new companies coming over to market. In terms ofthat first sales, higher or very early...

...stage hires, whether it's sales,pre sales whatever. I think your average ten year of a sales director orVP of Europe at the moment it's probably about eighteen months, two years.Yeah. So, as you can see, companies go through a lot of alot of changes. So as a result, your average tenure of someonethat these organizations is fairly sure and I think one of the natural things is, well, what can we do to try and get more longevity? AndI think a lot of it does come back to a the whoever is incharge of the region being able to manage and build the region out underneath them. But again it goes back to manage the expectations of the vendor above themanaging the expectations of the more senior commercial guys over in the US. Sobut I definitely think due to the huge amount of investment, the the industryas a whole has become very short term and I think so much of thatis an apologies of them going out off on a tangent sign. It's justfor Nice, because I think really, the way I look at it,that when I very first started working in cyber security seven or eight years ago, the perception of cyber was that it was a bit of a nerdy tiearea of the IT Department. People kind of had half an understanding of whatit is and what it was therefore, but he wasn't really a big thing. I mean, it's set along development in terms of, you know,the people that you keep rocks under the stairs that just do coding and youbring them out for food and light a case. Then I think so muchif you look at even the past twenty four month you've gone from this perceptionof security being a slightly nerdy, technical small part of the it depart allof a sudden to influencing the US election, you know, being that you knowthis huge geopolitical factors. You know cyber wars, cyber warfare's being usedcountries the country and I think in this year's a hole has become a normalyou know, so much more high profile than it used to. And Ithink one and it's kind of a benefit and a negative, is the factthat traditional, when I first started looking at startups, you used to focuson looking who some of them, of the wellknown VC's, what companies?Aig funded so Andreas, and horrow it's Besima venture partners, the more traditionalVC's. But I think so much now, because cyber is so high profile,you've seen an absolute avalanche of investment from outside of the kind of coretraditional BC's, which is no bad thing. But I think there's a result ifyou're working in an industry where seven or eight of the new entrance tomarket. Again, if we use endpoint as an example, eighteen months,two years ago, if you're a startup sales guy or sales girl or seeor marketing lead, if you've got six or seven vendors, all with theseactually the same funding, all with very similar products, how are you expectedto make a guess on who's going to be successful or not? And Ithink there's been because there's been so much investment, the industry as a wholeis inflated with too many venders and, dare I say it, too manyrecruiters and too many lead generation company. There's too much pr there's a millionevents and I think the industry at the moment it's just a bit bloated andone of the things is that you are seeing and you will continue to seeis hopefully, firstly an increase in IPOs because obviously that means a company hasgone public can be successful. But as a result you are also going tosee a continued number of startups being acquired by some of them more larger legacyvendors that we've spoken about before because general really large legacy of and the struggleto innovate and often siscoing as example, often going a big mnating to buya large security capacity and obviously in the company gets required it. It's agreat thing, particularly for the early stage people. But you know, ifyou look, if you've got compli's got a hundred million funding and to getis a gets a quiet to seven hundred million and that's obviously a superb result. However, if you look at a company that's got a hundred million fundingat the end of getting acquired for eighteen million, then you don't have necessarilyhave to be the most forward thinking finance...

...analyst to understand that that's not agreat resource. Yeah, absolutely, that was very full. My one wasassociated with was a very pushing a person, or the image of a very pushingeight person with a funny accent. I'm glad I found you today becauseyour guess you are like me. It's fun passing, but you know,I really appreciate all the time you gave us to them in some of theinsight. Well, probably putting even further all expecting from you today, butI like the way you speak about you're on the ledge industry. Is Absolutelyis beautiful to listen to. Now, if any of our listener would liketo get in touch with you and would like to take conversation of Lane whise, you find your reason, because brain maybe look at what your company coulddo for them or whatever. What is the best way to get old ofmy Smith? Well, they can either reach out to me. I meanit reads out to me on Linkedin. It's probably the easiest. Why?It's Matthew Smith at CAM IN CONSULTING WAI. I'm obviously on linked it a lot, but if anyone wants to reach out directly, my email addresses andSmith at at Camencom don't UK, but it's all on my linkedin profile.So if anybody has any further questions and queries, yeah, please, please, reach out on that's one the for myth. Thank you again for yourtime today. Let's off inside really android a conversation and we'll make sure thatwe reinvade you very soon too. Falls all done some of the conversation withtoday on some of the key Topa you touchdowns. So thank you very muchfor your time. At no problem. Look forward to the next one.operatics has redefined the meaning of revenue generation for technology companies worldwide. While thetraditional concepts of building and managing inside sales teams inhouse has existed for many years, companies are struggling with a lack of focus, agility and scale required intoday's fast and complex world of enterprise technology sales. See How operatics can helpyour company accelerate pipeline at operatics dotnet. You've been listening to be tob revenueacceleration. To ensure that you never miss an episode, subscribe to the showin your favorite podcast player. Thank you so much for listening. Until nexttime,.

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