chief.io hosted an event titled Building your enterprise software stack, featuring Matt Curl from Fivestars, Alessandra Sales from Ipsy and Maranda Ann Dziekonski from Pared. As VPs of Sales, Marketing and Customer Success at various venture funded startups they shared their thoughts on how they empower their teams and companies with software.

Insight #1: First 90 days aren’t about software, it’s about reporting

While software is going to guide a lot of your workflows and processes, the first 90 days are really about developing an understanding of your business and getting answers. You won’t succeed in leading your team to hit its long term goals without the right set of metrics and reporting.

Matt Curl: “The first thing you want to look for is basically asking very simple questions. Can you give me simple reporting. I think it's really common when you ask very simple questions like ‘What is MRR for a saas business?’ or ‘What was monthly recurring revenue last month?’ to have answers usually followed by a lot of asterisks. And this should be  a warning signal.

The first 90 days is really about what is the core reporting to set up, what is the information I'm going to look at, do I trust it, is it accurate and can I manage off of it. It’s not uncommon to ask “what's churn last month”, “what was sales last month” and just not be able to get an accurate answer. So you've got to fix that first.”

Insight #2: Choose the right investments

People are always an important investment but sometimes, you need to choose your software first. Software is designed to streamline your team and increase productivity. You may scale your team very differently if you add headcount to cover an increasing volume or if you figure out how to use technology to automate some of the work.

Maranda Dziekonski recalls her early days at HelloSign “When I first started at HelloSign we had a small support team and they were all operating on UserVoice. UserVoice was great for what it was, it got the team to where they were but there wasn't a lot of analytics. I needed more data to be able to tell what the monthly active user to ticket ratio was and other relevant numbers to generate a forecast model. I needed to understand what the MAU to ticket ratio was and how we could improve it.. So I made a quick determination to invest in software instead of hiring.

I put Zendesk in place to implement automation and allow the support team to do things that require critical thinking. In that first year of implementing Zendesk: all of the automation, the macros, the help center and everything that comes with Zendesk helped us save approximately four FTEs (full-time employees). And if you do that and you scale it out over time, that’sa lot of money and savings. It also allowed customer support reps to avoid just resetting passwords and answering questions that didn’t require critical thinking.  It put more of a focus on troubleshooting, higher level tasks and having that personal touch.

Insight #3: Company leaders now take software infrastructure into consideration when accepting a role.

A company’s infrastructure can reflect its internal culture, its capability for change and desire to enable its leaders.

In a recent conversation with Alon Wertheimer, VP of Marketing at Truebill, he stated this clearly: ”If a company doesn’t have MParticle or Segment, or won’t let me invest in it - I wouldn’t take a job there.”

Maranda: ”I do ask those questions [what technologies are being used]. Tell me what you use for reporting: Periscope, great. Tell me what your customer support team is using. What is your sales team using and how are you currently making sure all the information is flowing correctly and tied together for reporting? Then I want to make sure that they're not married to any technology. If they are so heavily ingrained in their tech, and I don’t think it’s going to grow or scale with them, it may not be the place for me. I may not be able to put my touch as a leader”

Insight #4: Build vs Buy: Be self-aware and recognize the cost of maintaining software

Companies often add complexity to a software evaluation by pitting the process against building an internal solution. Many factors can influence this decision: cash flow, ego, feature set, implementation complexity. There’s one recurring theme: people always underestimate the cost of maintaining and improving an in-house tool.

Alessandra Sales: “There is a tendency to try and do as much as we can in house. There's also this pride and ego with our engineers. The best engineers in the world, especially in Silicon Valley, they want to have fun so they tend to push for in-house solution. You should always do the math because you're either going to spend money on software or on people plus maintenance”.

Matt: “In the early days of Fivestars, you're not trying to think about what software you need to implement or how to set up a sustainable system. You're just thinking about the next day.

So in that phase, it's really tension between what is way too risky and where do we actually need to invest and there's often times a miscalculation about when the right time to invest is. One example is we [Fivestars] were too cash strapped  to invest in a billing platform. We decided to have our development team build an invoicing, quoting and billing engine instead of building our core products.

Unfortunately, it had too many bugs,  as you'd expect from a pre- series A company codebase on a billing platform (that wasn’t the product we were actually building). It would erroneously bills and cause a lot of revenue failures that cost us time and money.”

Insight #5: Buying is easy. Implementation, adoption are hard

A lot of details are overlooked during an enterprise software sales process. That’s because a buyer looks to the vendor to be educated and the salesperson is looking to get your commitment by signing a contract. This puts tension on the amount of implementation details disclosed and the corresponding planning.

For Alessandra, implementation is always contingent on having a data plan. Building and evolving a marketing stack requires getting all her tools to talk to each other but in her experience, she’s never experienced an environment with clean data. That’s because the early days of setting up your data infrastructure at a startup are the exact time when you can invest the least in guaranteeing data cleanliness and scalability.

After the implementation, it is not uncommon for adoption to be another uphill battle. For Nadjia Yousif, partner at BCG, her suggestions is to “... treat the tech you use at work like a colleague.” The analogy is to think about what the job description for this role is. When you’re hiring employees, you want to put a job description up, you want to talk about what that person is going to do and you want to get everyone bought in that we need this actual role. And when you do, you need a commitment from the hiring manager to be the owner who sees it through.

Insight #6: Don’t negotiate by yourself when buying software

Deciding to sign a software contract is an emotional investment. It will become part of your team goals, and you will attach an ROI number to it. It’s appealing to only evaluate your preferred vendor and get a contract signed quickly, but you’ll pay a higher price.

“Best tip to negotiating, don’t negotiate yourself,” says Matt Curl. “At Fivestars we have this really great guy named Alex Morales. He breaks down the pricing, talks to other vendors and identifies all the levers vendors use to back into their quotes and asks really tough procurement questions”.

On the renewal side, Maranda shares her view from the Customer Success lens: “Companies like Salesforce, they don’t negotiate much anymore. They generally know if they have you. They know how sticky you are and how embedded they are in your workflows.”

In other words, if you want to keep some leverage for your contract renewal conversation, you need to ensure switching costs are as low as possible. Great documentation, talking to an alternative vendor 3 months ahead and good vendor agnostic integrations can really help. Segment and MParticle are famous for reducing switching costs in a lot of products by making data portability that much easier.

Bonus Point: What Software Just Doesn’t Deliver Value?

Slack

People seem ambivalent on Slack. For some, Slack is where communication happens. For others, it creates a real-time stream that takes too much time and attention. Adding to the attention drain, it carries risks from an HR standpoint as everything is recorded and can be audited. Yet, employees haven’t adjusted their consumer habits with messaging to the enterprise world.

HR Tech software and Greenhouse

They are extending what used to be workflows internal to the HR and People Ops teams into other functions. Some of it is positive in driving increased feedback, better compliance and measurements, but the negative is its driven the transactional costs for other users up.

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