SaaS Backwards Podcast: Ep. 125 - Harnessing the Power of Network Effects in SaaS Growth

A big THANK YOU to Ken Lampit from SaaS Backwards and Austin Lawrence Group for talking with us. 

About this Episode:
Utilizing the network effect by onboarding partners of customers simultaneously can lead to organic growth and increased platform adoption in SaaS companies. 
In this episode, Doug Heckman, Chief Solutions Officer at Surefront, discusses how they leveraged the network effect to drive and accelerate the adoption of their collaborative platform. By providing a no-cost license to every partner of their customers and handling the onboarding and training process at their own expense, Surefront facilitated a seamless transition for all parties involved. 

Doug also highlights his passion for solving "unsexy" but critical problems in the industry. The conversation provides deep insights into Surefront's journey, challenges, and innovative strategies to achieve success.

This episode is ideal for individuals involved in enterprise software solutions and CEOs and CMOs of B2B SaaS firms looking for strategies to drive their businesses forward and accelerate growth.

Listen to the episode >

Transcript

“Welcome to the SaaS Backwards Podcast, where we reverse engineer the success of fast growing SaaS firms and explore strategies CMOs and CEOs are using to drive their businesses forward.

Welcome to SaaS Backwards, a podcast that helps SaaS CEOs and CMOs to accelerate growth and enhance profitability. Our guest today is Doug Heckmann, Chief Solutions Officer at Surefront, a collaborative platform that unites retailers, brands, and manufacturers in a seamless shared workspace, replacing isolated systems, and increasing value to users via network effects as more partners engage. Hey, Doug, welcome to the podcast.

Thanks so much, Ken, and thanks so much for that wonderful introduction. I feel like you could have a place on the sales team, how succinctly and precisely you put that.

Well, thanks so much. And before we dig into our episode, though, I'd like you to expand a little bit on that. So if you could tell our listeners a little bit more about your background and your company, Surefront, and then we'll dig into the episode itself.

Absolutely. Yeah, thanks for that invitation. Really pleased to be here.

“My name is Doug. I've pretty much worked with startups my entire career. I went to university in Pittsburgh and with a couple of classmates my junior year, founded a consumer products good company that we grew pretty well regionally in Pennsylvania and the Northeast and Mid-Atlantic.

So that was my first introduction to startups. I wanted to keep working with startups after I left my day-to-day role in that company. Came out to Los Angeles to work at an early stage venture firm for a handful of years, which is coincidentally where I met our founder at Surefront, Dr. Luke Wong.

It was as a part of working together at that firm that we really identified the opportunity that we saw with Surefront. And that kind of came out of experience that our founder Luke had had with his previous entrepreneurial backgrounds. He's a multiple-time entrepreneur himself.”

“And one of his ventures is a major home goods supplier and brand to the largest retailers in North America, the Walmart's and Dollar General's and TJ Maxx's and stuff of the world. So Surefront was really kind of born out of necessity, which is I've always in my career like to work on what I call unsexy problems. You have so much of the capital and the most brilliant minds out there chasing whatever the newest Vogue item is, right?

Now it's certain types of AI. A couple of years ago, it was crypto and blockchain. I don't have to compete in that space as far as my preference is.

“I'd like to tackle things that might not be the sexiest problem to everyone else, but that have real outsized ability to impact the market that we're playing in. So Surefront was kind of born while Luke and I were working together at that early stage venture firm, based off of some of the experience that we were seeing with a company that he owned, like I mentioned, in that home goods space. What we realized was ultimately that the world's largest retailers and brands and manufacturers that are supplying consumer goods all have this common problem, which is they've spent the last 20 to 30 years implementing enterprise software solutions to help achieve Six Sigma excellence within their internal business processes.”

“So they've optimized and they've invested and they've spent money, and they've totally transformed digitally how many of their processes work internally. But at the end of the day, these same largest retailers and brands and manufacturers, they have to consistently collaborate with their external partners, right? At the end of the day, Dick's Sporting Goods and Nike and Nike and Nike's overseas manufacturers, they have one shared mission, which is bringing the right product at the right price at the right time to that end customer.

But they have to work collaboratively with each other to do that. That being said, like I mentioned, the last 20 or 30 years, they've all been implementing their own software solutions. So what that means is team members on the front lines of those businesses that have to work with their counterparts at the partner organizations, they have to rip information out of those internal solutions, and they have to put it into the lowest common denominators and formats that their counterparts have in common, which is overwhelmingly emails, spreadsheets, PDFs, PowerPoints, WeChat, text messages.”

“So then when you really get down to it, what we were observing in our lived experiences with these companies is that on average it takes about 40 different communication touch points. It takes about 12 different versions of a spreadsheet that might have 200 different pieces of information or attributes that you're collecting, about half a dozen different pieces of other collateral, whether those are CAD designs or PDFs or PowerPoints, just to bring one new product to market. So as a consumer, when we walk into Walmart or Target or Dick's Sporting Goods, and we think about the millions of products that they offer and all of the new ones that are coming to market every year, if we can kind of wrap our heads around the problem that it took that retailer and that brand and that brand and who ultimately manufactured the product, each of them, 40 touch points and a dozen different versions of a spreadsheet with 200 different pieces of information and a half dozen different pieces of other collateral for every one of those products before we're actually able to see it and it's available for purchase.”

“We said fundamentally, there's got to be something that's broken here. So we kind of identified the problem space and then I'd be happy to talk a little bit more about when we started to get into the cause and effect of how we address and brought our solution to market to help alleviate this major bottleneck that we saw happening in the industry.

So, I mean, that's really interesting and it makes a lot of sense. It's a great narrative. And I think it rings true to me that these firms invested millions in their ERPs basically to organize their own ops, but those things really don't want to talk to each other.

It seems like a great opportunity for you guys. And I think that's what we want to dig in on a little bit. This firm's about six years old, right?”

“We launched our beta maybe six, seven years ago. And then we launched to the wider commercial market, auspicious timing in January of 2020. So, been around for a handful of years, but I think we really started exploring this problem space about nine or 10 years ago.

Interesting. So what was the reception from brands and retailers as you started bringing this narrative out, because it seems like a really compelling narrative. Was this difficult to get people to sign on to the vision?

What was that early experience about?”

“So I would say it was definitely mixed. When we started to identify certain patterns, when we first started talking about this problem back in like 2015, 2016, the largest retailers in the world were like, hey, we're still running many of our systems on-prem just because we want that full level of information control and stuff. Talking about a connected system with all of our suppliers is just not something that culturally they're set up for.

Now, in today's day and age, those largest retailers and brands, no one's running anything on-prem if they can help it anymore. They're all transitioning. So that barrier is kind of gone.

But where we found the greatest degree of what we'll say, like fertile soil for our message, for us to plant the seeds of that message, was really in the mid-market. And that's mainly because in mid-market companies, a lot of times we're encountering companies that have just grown way faster than what their solutions we can keep up with. They don't have the same level of kind of historical inertia of change, of different ways of doing things.”

“And then they looked and said, when they have such a solution gap and they've been growing so fast, they're experiencing the problem that I described of needing to bring all of these new products to market through that information bottleneck in their information supply chain. It hurts them a lot more. So when we were taking our solution to them, it was a much different type of reception.

It was a, wow, I can't believe that something like this existed. Like it's almost like someone designed a solution or a tool for exactly what my problem was, which as someone with a product and design background, it's really the most delightful thing to hear that you've made a lot of hypotheses, you've tested, you've delivered, and then you get that moment of magic where you've designed something with a anticipated customer needs.

“So you're describing the product market fit experience, right? Where actually you've found the right audience for the right product. I think it's a really powerful place to come from to have a lived experience, as you put it, or to have been the subject matter expert on the wrong end of a lack of a solution, right?

Right.

You experienced the lack of a solution or Luke did in his prior business. And what better place to start building something from?”

“It was a very beneficial experience. And we were very fortunate that we had built in beta customers amongst his company and their network of partner organizations that as we designed and iterated and built the solution, we could roll out and get feedback to achieve a product market fit we were comfortable with before we opened up to the wider market.

Oh, really very interesting. And he's also like an investor, right? He was able not only to put it to work, but also fund the initial development.”

“That's right. We're very fortunate that Luke himself has been the sole provider of investment funding for Surefront.

That is awesome. That's an unusual thing. We've done 124 episodes.

No one's been the person who's created it, funded it, and brought it to market.”

“As a colleague, it's something that I value very much. It's always easier to take risks when it's not your own scheme in the game. It's been wonderful to work with Luke when he's really put everything on the line.

He's fully committed. What's the old saying about a bacon and eggs? A lot of startups, the team members can be like the chicken.

They're involved in the bacon and eggs. Whereas in this case, Luke, he's more like the pig. He's fully committed to our success.

That's funny. I haven't heard that one either. That's pretty good.

So just before we go a little further, I want to make sure I understand your job here. You call yourself Chief Solutions Officer, but you've been here pretty much since day one, right?

That's right.”

“So what are you doing for your customers and prospects as the Chief Solutions Officer? And should there be more such people in this role?

What I've really learned in my experience when we're delivering these enterprise software solutions is our customers aren't just looking for the right software solution. They're looking for the right business partner, right? You can buy the right solution, but without the right partner, the difference between buying and successfully adopting can have a really large delta.

So you're looking for someone who's a great partner, who understands your pains, who has a level of expertise in the industry. So when we say Chief Solutions Officer, we mean not just the software products that we offer, but also our team and our expertise in implementing that to realize those outsize asymmetrical returns on investment that you get with us compared to other choices that you might get out there. That's kind of why we use the solutions term.”

“Rather than like a Chief Product Officer or something else.

Is there a significant professional services component to delivering the solution?

I'd say in most solutions in our space, the professional services side is not uncommonly 40 to like 80% of like a single year subscription cost. Thankfully, we've really looked at, especially within many of our markets, saying one of the biggest barriers here is that perceived risk on behalf of the customer. So we spent years of learning from multiple different implementations about what works the best and what can be improved.”

“And we do most of our implementations in-house because of this, but we really identified what those best practices were on our side so that we could cut down the cost and most importantly, cut down the amount of time between when we have a customer formalize our partnership with an agreement and then that they're going live and starting their daily use. So I'd say even at the billion dollar plus level, customer deployments that are large and complex, typically for us, we're talking about a matter of like weeks, somewhere in that 8 to 12 week range. Whereas our competitors, it's not uncommon that that's like an 8 to 12 month range.

That's significant. Let's move on. I think you guys have done some really good messaging.”

“There are certain ways your messaging is really interesting. And one of them is that you say you have this ambition to be like a Bloomberg terminal for the CPG industry. And so I'd love to have you dig in a little on that.

And how drives the company? Like, what is the reason we're using that reference point? Which is a really important one.

Reference points are the way people understand things, right? It's a good cognitive device. And I'm curious what you guys hope to get out of that.”

“That reference point not just drives the vision of the business, but also the vision of the product. And where it came from was as we were really exploring and understanding the problem space, why does it take those 40 touch points and a dozen different spreadsheets and half a dozen other pieces of collateral for every new product we're bringing to market with our trusted business partners, who are doing tens of millions, hundreds of millions of dollars with the business every year, who we've worked with for decades. Why is it like that?”

“And what we saw was most analogous to the change in paradigm of what we were hoping to deliver was really kind of the invention of the Bloomberg Terminal. Thomson Royers offers a similar product, but if you read Michael Bloomberg's books, which we have, you really kind of see that before the Bloomberg Terminal, I think when he left his previous firm, he looked and said, if you wanted to buy or sell a stock or an option, you're calling someone up, they were getting on to the exchange form, they've got paper tickets, they're yelling. It was a very inefficient process.”

“But if you think about how someone transacts those financial instruments today, they're logging on to a specialized computer, they have all of the analysis that they can formulate a hypothesis based off of with a couple of clicks of a button, and then they're frictionlessly transacting a complex financial instrument with someone that they've never met before or may never meet again with two clicks of a button. So we look to say, okay, we have this process that is extremely laborious, it's really time intensive, it's happening at an enormous scale with an enormous financial impact, sort of like what market investing was pre-Bloomberg Terminal. So we looked and said, we have to be able to let these buyers at retailers and the salespeople at brands, the product developers at those brands, the people manufacturing these items.”

“When you look at it, we're talking roughly 60% of the US economy is consumer spending on these things, enormous things. Why can't we give them a tool that not only gives them all of this time back because they're more efficiently transacting and interacting with their counterparts, but that they can also leverage the data from previous decisions and performances of items they bought to make smarter decisions? Because at the end of the day, when I decide to buy the blue sneaker versus the red sneaker, it's an investment decision.

Which do I think that the market will be more receptive to? And then I read that data after the cycle. What attributes were people liking better?”

“What price ranges were they responding to? And I formulate my hypothesis again. Now I want to be able to step into a tool like Surefront and seamlessly get feedback on that hypothesis and then execute, rather than having to jump through months-long hurdles and email inbox that are thousands of emails long and all of these spreadsheets and PDFs.

That's an interesting way to position it and I think get people to understand some of the value transfer. Also from a messaging standpoint, I don't know how much you guys have exercised this. I love the spreadsheet as the villain.”

“One of the great things in marketing to do is villainize something that's defenseless and nobody's defending the valor of spreadsheets, right? There's no one really defending the spreadsheet and yet everybody has to deal with them and most of us don't get much joy out of the experience. So we love that too for you guys.

What I always say and I actually will peel back for a second as someone with a statistics background, spreadsheets are wonderful ad hoc data analysis tools, but as soon as we find them for being a communication and collaboration tools or light business application, like then that's where everything starts to break down. It's kind of the hallmark that we don't have the appropriate solutions in place. One of the things that we've actually found is really helpful to our sales and marketing.”

“When you're selling an enterprise software solution, you don't necessarily want to go in and say, we're here to replace this other existing solution. So a lot of times there are great leadership at that company that they said, I believe I'm putting myself on the line. I'm putting my career on the line.

I'm betting that this is the right solution for us. You don't want to go against that friction. And honestly, if something is working well, I don't want to replace it.”

“As long as something is working well, I'm happy for you. But where we go in and sell and we'll remark it to is, examine all of the processes in this area that you've created ad hoc Excel macros to accomplish. Examine all of that manual data entry and transformation that you're doing.

That's what we're here to replace. That's our competition. That's where we're making the investment.”

“You can bolt us on to other systems you already have. We just want to take you out of the doldrums of having to siphon information through that bottleneck of spreadsheets and macros and such.

And those systems, they're fragile. They're also difficult to audit and subject to error. And you're making big commitments.

If you're a retailer and you're going to buy all the red sneakers, well, that's a lot of money on the line. So the fact that those manual-based workflows are very difficult to manage and audit, I think is maybe a risk factor also. It's a huge risk factor.”

“We're going to kill the spreadsheet. That's the mission.

That's right.

So I think we should talk a little bit now about part of your go-to-market strategy, which came at the very end of when we did our prep session. You mentioned that there's a big network effect in play in the adoption and really your go-to-market strategy. And as I mentioned, we don't hear network effect anymore.”

“That was something people were talking about maybe five or ten years ago with systems adoption. And I think that there's a lot of validity here in marketplace systems, which is really what we're talking about in a way. You're creating a community or a market.

But how have you harnessed the network effect? And what does that really look like? And what are the lessons for other firms that might be thinking about the way they connect their customers and their partners?”

“Oh, yeah. What's fundamental to not just Surefront's platform, but Surefront's survival as a business is understanding the network paradigms of our customers and their partners. Going back to the Bloomberg terminal, if only one firm is using a Bloomberg terminal and no one else, everyone else is calling their orders in and still trading on paper tickets, well, then that terminal doesn't have much value because you're not transacting internally.

We really knew from the beginning of this that Surefront as a solution would only deliver the value that we're promising to our customers if we had them and their business partners adopt it relatively simultaneously. First, that was a real uphill battle, right? You have to imagine there's already a huge inertia of change anytime that you're selling a new system to an enterprise about both the investment and the change management and the training and getting people up and running on that solution.”

“Now, imagine that we're selling that to you. We're saying, oh, not just you, but also all of your business partners are also going to have to go through. Until we really understood how to message, market, and package our product into a way that was a lot easier, we were kind of running into brick walls like that's a big thing for anyone to sign up.

What we really realized is the sales is not just about the monetary investment. A lot of it, especially at this enterprise level, is risk and risk perception. Because at the end of the day, it is someone or a handful of people putting their career on the line saying, this is the right solution.”

“These are the right partners to do it. And if that perception of risk is growing and especially more than what you would typically take on, it's a tough thing for them to say yes to. So what we really did was we said we have to kind of eat our own cooking.

We have to put our money where our mouth is. Let's take on a lot of that risk ourselves. So what we started doing was going to our customers and saying, you guys, you buy the solution.

You have your 8 to 12 week onboarding cycle, typically depending on the size of the customer. And what we will do is we'll give a no cost license to every one of your partners at our own cost. We will onboard and we will train them with no additional cost to you.”

“And then you're going to see it on day one as you start to utilize this day in and day out with those partners. And you're not getting hundreds of emails and thousands of spreadsheets and all of these other different disorganized pieces of data collateral, how much of an impact that's making on you. So we take that on.

And that's really where things had a night and day change for us and for our customer adoption. Not only was it one a lot easier for us to sign up those initial customers because we were taking on that risk. Now we got to really leverage the benefit of the network instead of fighting against it.

So we've onboarded and adopted with all of our customers' partners with the warmest possible sales and marketing introduction, which is their customer saying, hey, we'd like you to sign up for Surefront. It's going to be very important for us to do our business together. We onboard, we train them.”

“And then typically in the first six months or so, a sizable portion of those supplier or those business partners of our original customer end up saying, we love Surefront. We want to add additional users. We want to subscribe to additional features directly with us.

So then our business grows along there. So we had to take on that additional risk ourselves, but we're definitely starting to see the additional reward on the others.

So I want to unpack this just a little bit, because I think it's really important. And for people that listen this far, here's where the reward really comes in, I think, or certainly one of the big ones. I really believe that organic deep commitment to customer success, especially at the enterprise level, is really important to outsize growth.”

“Like I said, we've had more than 120 episodes, 120 different companies talking about what drove their success. And there's been a handful of these enterprise solutions where the founding team has a realization that onboarding and deeply ingraining the company and the success of their users makes a huge difference in the outcome, not just in situ in this one user, but generating reputational, if not network effects. Becoming a system of choice in a category, or certainly in your case, having these ancillary or secondary customers become primary customers because of that experience that you offer them.

And customer experience is so often this redheaded stepchild of software as a service go to market. And so I think it's just a really important point for CEOs, CMOs, CROs of these firms to ask themselves, is there a greater role for success, and how can it feed into the momentum of the company? So it's just a really, it's an interesting anecdote.

And if you don't kind of distill it a little bit, you might not get that impact.”

“I think it's been fundamental to us for really two reasons. One, at the end of the day, the entirety of a return on investment from our customer's perspective is the gap between purchase and implementation versus adoption. And adoption only happens when they're finding value and they're seeing success.

And for us, when it's not just our primary customer, but their partners that are also finding value and seeing success. The second thing there is when you're selling a solution like Surefront and enterprise software, if you start to get into the nitty gritty and you start looking at, well, how much does it cost me for me to get prospect in MQL? Well, how much more does it cost me at an SQL level?”

“What's our total cost of customer acquisition by the time someone signs on the dotted line? Those numbers are, it's much different when you're marketing the businesses than when you're marketing the individual consumers. So on this side of things, we have those SQLs that are introduced to our product with the greatest sales pitch possible in that your customer wants you to use this for you to continue doing business with them.

And you're starting off at no cost. And if that's right for you, you continue at no cost. But we promise that this is going to be valuable for you.”

“So we get you, we get your attention. We can prove out to you that value, and then you can very quickly organically become our customer. And it's kind of end around that entire traditional investment cycle in moving everyone through that marketing and awareness funnel to customer.

Now, there's also the possibility, and I imagine it's already happened for you, where a supplier might find that they have more than one customer on the platform. Is that right?”

“Right. And one of the things that we designed the platform around too, is if you have more than one customer, that's great. You're kind of naturally incentivized to subscribe to additional features or add additional team members who might be working on those accounts.

But one of the other really important things about understanding our market and the network that we're working with now, rather than working against, is when we sell to a customer, that customer has an incredible amount of leverage to insist on business practices to their upstream suppliers who bear the customer, right? Transparently, everyone I'm sure listening is working in sales or marketing or customer related role. We jump through hoops for our customers.”

“We run through walls for our customers. Because at the end of the day, the more successfully we do that, the more likely we are to win their business. So when we go and when we sell to our customers, it is very easy.

We introduce to the upstream suppliers, our onboarding rate with those suppliers is greater than like 95 or 96%. Very hot because they're very motivated to get on to the platform. But then we also know when we sell to our customers, they kind of have to mirror that situation when they're dealing with their customers.

So when we sell to a brand, we might onboard all of their manufacturers. But when that brand turns around and sells to retailers, we have to make it as easy to use as possible without disrupting or changing any of their retail customer business preferences or business practices. So that part of our platform, what we like to call our wholesale customer relationship management portion, is much more open.”

“Like it's a mixture between our existing platform and something like a Google Drive where you can share collateral like showcases, showrooms, quotations, sales orders, products, communication tools, all just by adding customer specific emails. So maybe you're finding your customer already on Surefront, but maybe you have 10 different customers that you wholesale to. Okay, two, three, four of them are on Surefront.

Well, I've got all my other information in Surefront anyways. Now I want to put together that collateral to make my products and my sales team stand out to my other customers, but I don't want to go ask that customer, hey, go adopt, go invest in another system. It's just they're going to get an email, they click right in, and just like Google Drive, they're dropped in to their own segmented environment, where now they can be seamlessly collaborating with them.”

“That's awesome. You've talked about collaboration quite a bit, and I'm just wondering if you have a sense for the impact and how important collaboration will be for CPGs going forward. How can executives who aren't clear on the value of this collaborative work style get a handle on it?

The best way that I can describe this is talking about terms that we're much more familiar with being mission critical and making large investments in, and that's by calling this your overall supply chain. Two, three, four years ago, supply chain was all that we heard in the consumer products industry. Supply chain crunches, delays everywhere.”

“People were moving mountains and investing tens of millions of dollars to get an extra day or two out of their supply chain. But when I say supply chain in that context, and when most media and most companies talk about supply chain, they're almost only considering their physical supply chain. From the moment that I decide I'm going to manufacture this item until it ends up on the shelf, that's typically what people think of as their supply chain.

I'm here to tell you that today's winners and tomorrow's best-in-class companies know that the supply chain is a combination of your informational supply chain and your physical supply chain. And in my experience in most consumer products, that informational supply chain ends up being about two-thirds of the total time going from product concept until it arrives on a shelf. So when we're talking about the value of collaboration and reducing the bottlenecks in your information supply chain, well, we build mountains just to get an extra day or two in shipping this from the Port of Qingdao to the Port of Los Angeles.”

“Imagine the outsized ROI that you're going to get when your product development cycle or your merchandising cycle goes from 24 weeks to 12 or to 14 weeks. That's so much more time to be agilely designing and hypothesizing closer to market. When you have that agility and speed to market, it ends up creating a flywheel of success when you talk about the entire product life cycle.

If you had to design, Ken, what the leading shirt is going to be in 2028, and you had to do it today, and you had to invest and you had to commit to it today, the likelihood or your on-target rate is going to be a lot lower than if you get to design and develop 12 weeks out of cycle, 8 weeks out of cycle. The ability to hit on trend, to get full price sell through, to have more turns, because you're actually able to design, develop, and commit to your hypothesis with a little bit more agility and flexibility as you bring things to market, ends up creating huge downstream wins for brands and retailers.

“That's a great way to put it. I want to get up just a little bit into some of the marketing you're doing for Surefront. I was just on the website today, and I noticed that you're leaning in to decision support content on the website, and especially around the PLM aspect of the business.

And I'm curious about how you arrived there on that set of content, and how it's performing for you, and where it figures into the buyer's journey.”

“We kind of examined what we were putting out there as far as marketing content, and the journey that our customers and SQLs and MQLs and then just prospects go through. One of the things that we really found is that the typical consideration cycle is much larger than the buying cycle. But even the buying cycle in things like enterprise software is not uncommonly 6 to 18 months.

So I might be looking just at the consideration side of things for something like a PLM or like a PIM maybe 24 months out before we're actually going to buy something. Because I need to pitch it into my budgeting cycle. I need to get that project picked up.”

“I need to know enough about it that I can pitch the value. So what we found was for a company of our size, the most impactful things to our growth as far as MQLs and SQLs and new customers went was trying to connect with customers that were further down in that consideration cycle or in that buying cycle. So what are the things that we can do that are going to provide value that is most relevant for that smaller number of people who are saying, hey, I have a PLM that I have to invest in.

I got to get something up and running by June of this year or within the next six months really. So that decision support material, it's one helpful in an ephemeral sense of, hey, to anyone that sees it, it kind of helps establish our credibility and authority as a thought leader in the space. And when it's your turn, you're more likely to come back to us, maybe not through a sponsored ad again.”

“But for the people that are further down in that decision making cycle and that buying cycle, fundamentally, if you're at a mid-market company and you're buying a PLM, chances are pretty good. This is the first time that your company's ever bought a PLM. And chances are also pretty good that most of the people on your team, this is their first time professionally buying a PLM.

Imagine putting together a request for proposal for PLMs for the 300 things that you want to check out that are mission critical for us from complete scratch, right? That's a heavy lift. And then as you're doing that heavy lift, you want to find some good feedback from established authorities in the space to say, am I doing this the right way?”

“So one of the things that we offer is a PLM RFP template or RFP guide. One of the other things that we offer is just a PLM software guide in general. What are the things that you need to know about how this interacts with your other systems?

What teams are going to be involved? How do you choose the right optimizations for you? Choosing a PLM maybe in the auto industry or more high tech manufacturing is very different than choosing like a fashion PLM.

So if we can provide that support that is the high value content, we tend to find that intersects most closely with people that are closer to the bottom of that decision.”

“It brings up an interesting point which we didn't talk about before, but probably your number one competitor is Do Nothing, right?

Right.

The Do Nothing, the no decision. I'm curious what are the strategies, tactics you use to push people off status quo? How do you get people off status quo?

We really look at it two ways. There's one is the Do Nothing and that's the organizational buy-in. And then the other one is the Do Nothing and part of our organization really is very invested in getting a solution.”

“And then we have some resistance to change that we have to get on. And honestly, in that first portion of Do Nothing, if your organization isn't looking at this as a problem space, we're happy to educate you and everything. But at the end of the day, if you're in the middle of a three-year lease for your car, you might not be in the market to buy another car.

We'll get you when you're ready. We'd love to have the conversation when the time is right for you. And even if Do Nothing in this space, you might realize it's a problem and something you want to do, but maybe you had to overhaul your ERP system to no longer being an on-prem manager.”

“You might have other fires you're putting out. We're here to talk to you when you're ready. Instead, we don't want to be down your door to say you have to do something.

But then it's a little bit different when you get into, hey, we have significant institutional support amongst a customer's team about the criticality of adopting a solution. Yet we have a couple of important people in the decision-making process that are, whether it's risk aversion or that they don't think that there's as much to be gained or that they're worried about that level of institutional change. And that's where we really get into breaking down the return on the investment of what doing nothing today looks like, what it looks like six months from now, what it looks like 12 and 24 months from now versus investing in Surefront.”

“And we go through and say, literally, where I came up with those numbers that I went through, on average, 40 different touch points, on average, 12 different spreadsheets, is from that type of exercise with our customers. We say, break it down for me. Walk me through a single product life cycle.

Take me through all of it. And now how many of those do you do every year? Do you know how much that's costing you an additional time in admin data entry alone, let alone the opportunity cost of missed sales or markdowns because you were off time or off target?”

“That opportunity cost of doing nothing starts to become a lot more clear at that point. But we really only kind of target that to people and customers when we have some institutional level of support. If the institution is not willing to change or not ready for change, we'd love to talk to you down the road.

Fair enough. And I think that's a great place to land our episode. Hey, Doug, if people want to learn more about Surefront or get in touch with you, how can they do that?

So go to surefront.com is a great way to learn more about Surefront. One of the things I'm really proud of is our team has probably the largest video content library of any solution in the industry. So if you're curious about the space, really easy to get into some of those videos.”

“And if you want to get in touch with me, you can find my email, doug at surefront.com. I'd be happy to have a conversation.

Thanks so much. If people want to reach me, I'm on LinkedIn slash in slash Ken Lempit, or KL at austinlawrence.com. If you haven't subscribed to the podcast yet, please do so wherever podcasts are distributed.

And if you're doing podcasts on YouTube, we now have a full archive of every episode on YouTube as well. And I want to say, hey, thanks, Doug. This was a great episode and look forward to connecting with you again soon.

Thanks for listening to the SaaS Backwards Podcast. Brought to you by Austin Lawrence Group. We're a growth marketing agency that helps SaaS firms reduce churn, accelerate sales, and generate demand.

Learn more about us at www.austinlaurence.com. You can email Ken Lempit at kl at austinlaurence.com about any SaaS marketing or customer retention subject. We hope you'll subscribe and thanks again for listening.”

From SaaS Backwards - Reverse Engineering SaaS Success: Ep. 125 - Harnessing the Power of Network Effects in SaaS Growth - with Doug Heckmann, Chief Solutions Officer at Surefront, May 31, 2024

https://podcasts.apple.com/us/podcast/ep-125-harnessing-the-power-of-network-effects-in/id1538169815?i=1000657427875

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