Could nimbly adapting to new markets and new client bases be the key to successfully creating a new product category?
Creating a new product category comes with a plethora of challenges – from spotting the right market niche to convincing customers that yours is a service they need. If people aren’t looking for your solution, you have to educate them about the problem your product solves. You also need to evolve and adapt at a greater pace than more established peers.
Where others might see an uphill battle, Nicolas (Nico) Marchais saw an opportunity. As Head of Sales for Spendesk, Nico was inspired by the vision of founder Rodolphe Ardant who had spotted a gap for “spend management” in the B2B market based on personal banking trends.
Four years later, and as the company moves upmarket with their customer base, Spendesk is adapting its sales cycles to cater to bigger clients. Nico joined me on Inside Intercom this week, where we discussed everything from the three stages of company growth to how growing companies can address new markets. Short on time? Here are five quick takeaways:
- The founders of Spendesk noticed that, while the B2C space was innovating with peer-to-peer quickpay options, nothing like that existed in the B2B space (which often lags a few years behind the consumer market). So they created a software that provides control, visibility, and payment methods for corporate finance teams.
- When you create your own category, it can be tough to gain traction because potential customers simply don’t realize they need you. If people aren’t looking for your solution, you have to educate them about the problem your product solves.
- Spendesk thinks about building its company in three stages: startup, growth, and scale. Now operating between growth and scale, they utilize SDRs, account executives, and customer success managers in a dizzying structure that’s constantly changing. Getting to 100 customers doesn’t demand a complex setup, but getting to 1,000 in a specific market requires evolution.
- The pace at which you learn – and the pace at which you make mistakes but also learn from those mistakes – will dictate the rhythm of your company. If you make mistakes without learning, you’re not improving. Instead, focus on fostering a culture of communication and feedback loops between the team.
- As the Head of Sales, Nico has to navigate the cultural differences in key markets from the UK to Germany and Scandinavia to Spain. It’s safe to say he’s learned a thing or two about adjusting his message and product for each unique customer persona.
If you enjoy our conversation, check out more episodes of our podcast. You can subscribe on iTunes, stream on Spotify or grab the RSS feed in your player of choice. What follows is a lightly edited transcript of the episode.
Starting from scratch
Dee Reddy: Nico, we’re delighted to have you as a guest on Inside Intercom today. You’re currently the Head of Sales at Spendesk. Can you give us a bit of background on yourself and your role there?
Nicolas (Nico) Marchais: Thank you so much for having me today, Dee. At Spendesk I am currently head of sales, so my main missions are hiring and building the sales department, and I also work on all of the go-to-market strategy. So I spend my time hiring people, developing them for success on specific deals and also working on other levels such as packaging, pricing, going international.
Dee: And you have quite an interesting background for a head of sales. You started off in engineering, I believe.
Nico: Exactly. I was not supposed to do sales. I originally studied engineering in France, and then I went back for my last year at UC Berkeley in Silicon Valley, where I was both working on a computer science master’s degree as well as launching my own company with a few friends. As always, it did not work out.
When I came back to France with this entrepreneur experience, I was thinking, “Okay, where can I apply this skill set I’ve learned around thinking about solutions that could help solve problems?” This is when I happened to meet Rodolphe [Ardant], who is the CEO at Spendesk, and he convinced me of the mission he wanted to go after of helping businesses spend smarter. When I met with Rodolphe, what I found super interesting was , unlike other entrepreneurs, he is super ambitious about his company but also humble and a great people person. He really fosters innovation and humility as a team player – aspects that were important to me. This is why I decided to jump in.
“Our mission is really to think about how we can help businesses spend smarter through the technology we provide”
Dee: You joined the company so early in its trajectory. It had only been set up three months before, right?
Nico: Correct. When I joined we had just an MVP, 10 beta customers, and no pricing. It was really the early days, and from there I built with the team all of the go-to-market engine, from building the first sales team to thinking about how to evolve the organization as we grew and finding product-market fit to where we are today. We’re present in three core markets in Europe: France, UK, and Germany as well as other countries such as the Nordics and Spain, with 1,500 customers that we serve. The challenges have evolved a lot in the past four years. I believe we did manage to do a good job, and now it’s a super exciting time where we are well-funded. We have a great product, and customers love using it. It’s all about how we can carry on our mission and expand globally in Europe and in the US.
Dee: That must have been such an exciting time to join the company. You’ve managed to do some pretty interesting things during that period. I know you once jumped in a taxi with some potential investors, is that right?
Nico: Correct. In fact, I met Stan Massueras (Intercom’s Director of EMEA Sales) and Des Traynor (Intercom’s Co-founder and CSO) in Paris. At first when you have no brand, just a working product and only a handful of customers, you really have to find any opportunity to get your name out there. And the traffic is very bad in Paris, so what was supposed to be a 10-minute taxi journey happened to last half an hour to an hour. It enabled me to present where we were and the vision we had, even though it was still in these early days, and I managed to get some very interesting feedback from the people that built Intercom.
What sets Spendesk apart
Dee: That’s pretty cool. Thank god you were well-prepped! For anybody who might not be aware of Spendesk – and I’m sure that’s not too many people nowadays – do you want to just tell us briefly about the company and what it is that sets you apart?
Nico: When we initially started, what we identified is that there were a lot of innovations in the B2C fintech world, with neobanks in Europe coming out of the ground with a new system to send money from peer to peer. And when we looked at the business world, we identified that there has not been any innovation in the past 20 years. We know that often, innovation in the B2C world tends to translate a few years after into the B2B world. So we said, “How can we take the innovation around payment and integrate it into a piece of software that will make it usable for finance teams and modern companies?” So our mission is really to think about how we can help businesses spend smarter through the technology we provide.
“Part of our job at Spendesk is to be considered as a trusted, caring expert advisor to the finance team”
Concretely, what we provide is a software platform that gives the right level of control and visibility to the finance team – and that embeds payment methods. So virtual cards to help you buy a new subscription or do a new digital marketing advertising campaign on LinkedIn. But we also provide smart plastic cards for people on the ground, so they don’t have to wait the end of the month or get their receipts reimbursed and can directly use the company’s money. Recently, we launched a full invoice management system where you can process an invoice, get it approved and paid in the same system.
What we try to do is really think of how can we make a product that not only speaks to the finance team, but is made for the end user like you and me, Dee. And critical to this approach is how can we foster autonomy and how can we deliver a B2C-like user experience to the operational people while providing automation, control, and a robust piece of software to the finance team. On top of that, we also believe that part of our job at Spendesk is to be considered as a trusted, caring expert advisor to the finance team, so we can help them make better choices and better decisions when it comes to their finance function.
Dee: This is all part of what you call “spend management,” and it strikes me that fintech has really shifted the balance over the past few years in the prior relationship between businesses and consumers on one side and banks and financial institutions on the other. Have you found it a challenge to convince businesses that there are huge operational savings to be made by adopting this model?
Nico: Definitely. When you create a product category, it’s always the case. You will find people who understand the new way and the opportunity to have just one end-to-end solution such as the one Intercom provides to clients. Often, it’s just a question of knowing: “Do we believe that in the future, people will be able to work like they behave in their personal life?” And if the answer is yes, it means they will adopt chat systems (and this is why Intercom is here). Or they will adopt Slack, because they are used to using messengers to communicate with their friends. And if they adopt innovative payment methods in their personal life, they will adopt them in their B2B lives.
But again, as with any product category you try to launch in any market, you have to find people that have the same vision that you have, which will also help you grow your product. One of the mistakes not to make in the early days is to onboard any type of customer just for the sake of having beta customers and growth. You really have to think, “What is the criteria that defines a perfect fit for me, and what are the end qualification criteria?” It could be size, it could be the type of finance person at the other side of the table who will make this company not a good fit for us and who will not give us the right product feedback and who will deter our product roadmap from the vision we have for modern companies.
How to creatively market a new category
Dee: You touched on something there that I’d love to deep dive into a little bit more. Spend management is a category that really didn’t exist before, so especially when you’re talking to businesses that are quite large, the potential losses are much bigger than for an individual who just wants to send money to a friend. Do you have to be a bit smarter about how you market it?
Nico: Definitely. One of the big challenge at Spendesk is that we’re pushing a new product on the market. We can sell virtually to anyone and everyone at the same time, so you really have to pick your battles and present what Spendesk is for a company like Intercom, what Spendesk is for a company like Algolia, what Spendesk is for a company like FlixBus, for example. The challenges are really about, “How can I push my message while still capturing existing intent from the market?” They can subserve on the wave to get my early traction, my early growth – at one point you’re able to say, “Yes, we are creating a new product category that’s called ‘spend management’.”
“How can I push my message while still capturing existing intent from the market?”
It’s super important to think early on about what strategy you have. It can be a two-step strategy like in our case where we want to provide a new product, but we know people are not necessarily looking for this product at this moment, so we need to position ourselves in places where people are looking for solutions to their problems. On the other side, it’s true that when people are not looking for your solution, you have to educate them on their problems.
This is why we spent a lot of time thinking, “How can we bring value to the community of CFOs and finance teams so that they consider us as experts, and they believe what we believe?” This is why we created a community of CFOs across Europe and the US called CFO Connect, where we try to provide events and meetups and foster communication between peers so that they can exchange ideas on their common problems. So far, this move of creating this community has helped us get feedback from these people who are our customers – and perhaps also show we are interested in providing as many products as possible to ease the life of finance teams.
Dee: I’ve had a look at CFO Connect. It’s really, really nicely done. It’s very light-touch in terms of content marketing. But you’ve done other stuff as well, I suppose, that’s a little bit more “confetti”: you’ve gone to SaaStock and offered people free Wi-Fi, you’ve hidden credit cards around conferences. Do you want to tell us a bit about those marketing drives and what your thinking was behind them?
Nico: Of course. So at one point, you have to use multiple channels, multiple touch points. You have to go after a different person as your actual ideal customer profile companies. So of course we use LinkedIn, we use social selling, we use email, we use calls. But we also use new tools such as Intercom to gather intent from inbound leads or to gather intent from outbound companies that come back to the website.
We’ve also always thought about, “How can we have this physical touch point in this digital world?” So of course we are doing corporate cards, basically smart cards. It’s a physical product, which happens to be super rare for a software company. We said, “Okay, how can we show the product as fast as we can to our clients?” And this is why, when we approach a new company, we think of delivering high-value content online but also shipping the Spendesk card with 20 euros or 20 pounds on it, so they can enjoy the experience. We tend to try to also deliver hard-copy versions of ebooks we’ve done.
The key here is that most of these ideas I just told you about are my own ideas. It’s just creating an environment with your sales teams and your customer success team where they feel they can innovate. As long as they can deliver their objective, they can think of new ways to cut through the noise, and that’s super important. How can I get my message heard? How can I deliver the right message in the right way to the right finance person? We’ve used physical cars; we’ve even sent gifts directly to our customers. We use the CFO Connect community to invite them even if they’re not interested yet. And in the end, they will come back to us because they have a need and we have a product that fits their needs.
“We think of building the company in three stages: to start, to grow, and to scale”
Dee: Did you find that being spun out of a foundry like e-Founders was a big benefit to you in terms of getting your name out there?
Nico: We think of building the company in three stages: to start, to grow, and to scale. We are now between the growth and the scale stages, based on the different markets. But at the start phase, you will need to find your product-market fit. The e-Founders recipe was to really do customer discovery and think about the minimum viable product we can ship with a super high quality. We always think about the right product to develop for our customers. And it helps us get this in our DNA and think always about being customer-centric.
But what does it mean? It’s not only about the product that you develop, it’s also the service you can put behind it, even though you don’t put a price on it. How can you position your sales team so that they are more like consultants than they are hot sellers? How can you position your experience around onboarding, around enjoying your product? Your marketing says that your product is really a help and it brings a lot of value. If you want to be perceived as a valuable partner, you have to give something to get something. And I believe e-Founders helped us from day one to get this customer-centric DNA. That’s super important to cut through the noise when you’re bigger and where the only thing that matters is that you help customers reach their outcomes and that customers are happy with the product, because they will become the most efficient marketing channel for you. They will tell your story, they will discuss with their peers about the products they use. I’m sure at Intercom you’ve experienced the same journey.
“The only thing that matters is you help customers reach their outcomes and they are happy with the product because they will become the most efficient marketing channel”
Adapting your sales cycle to your target market
Dee: You mentioned that you are now more between the growth and the scale-up phase. I know you started out by just targeting smaller businesses, but your core market now seems to be more firmly mid-size. How are you adapting your sales cycle for that market?
Nico: Just to give a sense of the market we go after, what we’ve seen on the market is we can help any company between 20 to 1,000 employees. That’s quite a large market. And we’ve put our product on this market in a sequenced way. We started with low SMBs: companies between 20 and 60 employees, digital-first businesses, startups, digital identities, retail commerce platforms. And as your product matures, and as you can focus on your biggest clients that start to outgrow your product, you can develop more features. It helps you slightly move the rifle at market. That’s super important. You go at the market very slowly so that your organization can adapt.
We started with a model which was purely inside sales, with what I call full-stack salespeople, doing everything from A-to-Z, so lead generation to closing. We are more mature now, where we have Customer Intelligence Trainees (CIT) working on sourcing accounts and researching accounts thinking really of the verticals we can go after. Our mission is to point the rifle in the right direction. The CIT send over accounts to inbound SDRs and outbound SDRs who are really at the tip of the spear. So they’re the most in contact with the market, and they work with the marketing team, with the growth team, with the account executives and whose job is really to conquer different countries, one market at a time.
“If your objective is to go from 100 to 1,000 customers in a specific market, you have to make your organization evolve”
Then the SDRs send over qualified opportunities to account executives and work with onboarding managers, people in charge of the implementation who will then send over the happy customers to customer success managers whose mission is really to be a partner and help them be successful with the product. This type of squad – this is what we scale across countries, and this is what enabled us also to be more precise and have more value in the sales process.
I believe that you should not adopt a structure if it does not fit your needs. So if your objective is just to get to 100 customers, you don’t need such a complex structure. But if your objective is to go from 100 to 1,000 customers in a specific market, you have to make your organization evolve. You have to make your team structure evolve. You have to make your communication routines evolve. You have to make your compensation system evolve to be aligned with what you want your people to focus on. And it’s important not to do it too early and not to wait too long when you’ve decided to go to the next stage.
Addressing new markets
Dee: It’s hard to know when to push that button, I guess, but you seem to have really done it at the right time and scaled your team really nicely alongside your customers. I’m curious as well about how you address new markets. Can you tell us a little bit about what you’ve coined “city attacks”?
Nico: Oh yeah, definitely. Being a company in Europe is tough, because you have very different markets, different cultures. In the early days, we said, “Okay, we want to be a global company, which means we want to go after Europe, and we want to go after the US. It helps us to hire super early on in the UK market and the German market.” Just to give you some figures, among the first four AEs we had, two of them were focused on the UK and Germany. And today, more than 50% of our employees do not even speak French. We have about 17 nationalities, and the earlier you include this international aspect in your company, the better it is to scale later down the road. So when we think of going international, there are two types of core markets where you will need, at one point, to have your foot on the ground, because that’s important for service purposes, because your customers expect you to be there. And there are non-core markets that you can manage directly with everyone at the same place.
For example, in France, in the UK, in Germany, in Spain, in the Nordics, we have a three-stage approach. We really think, “Okay, if we go after the UK, we have to validate a few things.” That’s what we call the “start” phase. We have a few objectives, which are:
- Validating the product-market fit.
- Understanding if there is a local accounting system we have to integrate with.
- Analyzing the competitive landscape in the UK.
- Figuring out if it’s going to be the same packaging and pricing.
- Determining if we can get early traction with 50 to 100 customers.
All of these elements need answers so we can get to the next stage, which is your growth stage. At the growth stage, you need to make a decision on how you’re going to scale your market. You need to be able to figure out your distribution models, your go-to-market model. In this stage, you want to start specializing your people more. You want to start bringing sales leaders and business leaders into the team to be ready for the next stage, which is the scale stage.
The scale stage is really about you having your product-market fit. You have your core team in place, you have an office. It’s more about: “How can I go deep in terms of industries and not only stay in my early adopters pool that I know perfectly? How can I go from companies like Algolia to more old-school consulting firms that still want to adopt a new modern way of doing finance?” This playbook is what we’ve tested and iterated a few times now because we opened a few markets. This is what we tried to use as a tool to guide us and help us make decisions, because sometimes it’s tough to know when it’s the right time to push the accelerator and invest more.”
“The pace at which you make mistakes but also learn from those mistakes will dictate the rhythm of your company”
Dee: It seems like a really, really shrewd approach. I’m curious where that idea came about.
Nico: It’s all about making mistakes and failures, and this is the importance of doing post-mortems and understanding that the pace at which you learn – and the pace at which you make mistakes but also learn from those mistakes – will dictate the rhythm of your company. If you make the same mistakes two or three times, you’re not learning anything. You’re not better. So the next time, you have two options. You can either hire external expertise to help your business, and you have to do it at the different stages. Or you can also foster a culture of communication, of feedback loops between the team.
This is how, for example, we came up with qualification stage criteria. Our onboarding manager and customer success manager were identifying some customers for which rollout did not happen as well as we scheduled, because they were too big. Today we know we can’t go after underpriced clients. The product’s not ready for this. And so the onboarding manager and customer success manager helped us understand the perfect type of use case. If you have a problem with your subscriptions, if you do a lot of online purchasing, if you have a sales team on the field – fixed-use cases work super well. And this is what feeds the marketing engine and the sales engine. This is how we can also be better at telling stories about our current client base, help our prospects understand their needs and understand what’s the right approach is. It’s super important to have this feedback loop system that will help you build this type of framework.
“Process is important. It’s important to be process-driven, data-driven, customer-centric”
Dee: The frameworks that you’re talking about internally seem to be quite complex, but they work really, really well. Do you think you are applying your learnings from engineering and computer science degrees to how you approach your work?
Nico: We’re going after SMBs and lots of enterprise and, when you think of releasing a product forward in those markets, numbers are important. Process is important. It’s important to be process-driven, data-driven, customer-centric. One of the skills I have is understanding problems and designing solutions that work – thinking of how this could work at scale in six months or in 12 months and being okay with breaking the system every six months and proposing a new system. This scientific approach is important. Building a sales pipeline is like building a hiring pipeline. It’s really a process. So it’s really about finding the right solution for the problem you want to solve.
The challenge of growing in Europe
Dee: Sticking with geography for a moment, there are some unfair assumptions in the tech community that France, as a location for a startup, has barriers that perhaps other regions don’t have between language, corporate tax rate, employment law. What would you say to people who might think that to prove them wrong?
Nico: That’s a fair point. Europe is a tough market, because it’s the sum of different countries, different languages, different approaches to buying a product. But it’s also a great opportunity, because it forces you to be even more customer-centric by providing the service you provide in the right language. I believe we have a huge talent pool in France and in Europe when it comes to engineering and product resources. In some cities, we are starting to have a serious pool of people who have done the journey once or twice. Of course, it’s a small pool compared to what you can have in the US, but we are starting to have this next generation of people that have done the journey. It’s a huge market where you can say whatever you want. The market is super digitalized, buying products with a true will to make changes and adapt new tools. So it’s a big opportunity. You just have to find the right people to scale the different countries.
“In Europe, you have to think local, you have to think city by city”
Dee: And I suppose it forces you to get very, very good at localization of your product, as well.
Nico: Definitely. You mentioned the “city attack” we have, which is about planning a trip in a specific city – like Munich, Berlin, London, Dublin – in advance. Going and seeing your prospects and your clients there is super important. In Europe, you have to think local, you have to think city by city. It’s not like just one continent and you have to be okay. If it’s profitable, you have to send people there to meet clients face to face, because this will matter. They will turn and become better clients. They will stay with you longer. They will make more referrals. It’s just an opportunity. You have to figure out a way to turn this constraint into an opportunity.
Dee: It’s clearly working for you. You’ve seen some phenomenal results, having raised over $60 million in funding in four years, most recently in September with a Series B round. What is next on the cards for Spendesk?
Nico: Our first objective is always figuring out how we can improve the product, how we can improve the service to help our customers reach their outcomes, how we can help SMBs think and leverage and spend in a smarter way. That’s the first focus: really carry on building the product, invest more in automation, invest more in integration with the other tools from their finance tax. The second thing, of course, is how we can get more traction. How we can help companies in specific regions where we are not? This is why we opened an office in Berlin this summer and one in San Francisco, as well. This is why we are going to open up an office in London in the next few months. It’s really about how we can help these companies, wherever they are. This is the second pillar for which we wanted to get more funding to be able to go faster. And the third one is also about building the organization: how can we hire great people that will help us keep the same culture we have and help us go faster? And all of these pillars are what we think about every day and what we try to improve on if we can.
“Social selling is super important, and if you give back to the community, it will trigger a lot of interesting conversations”
Dee: It sounds like a really, really exciting time for you, so I’m delighted we got the chance to talk to you at this juncture. Before we let you go, Nico, we’d love to know if there is a business leader that you aspire to in your work.
Nico: There are multiple! The thing that’s super important when you don’t know how to do it is to be super humble and have this growth mindset, trying to connect with peers and senior executives who can help you avoid the mistakes they may have done. One person that helped me, though I don’t know him directly, is Reid Hoffman with what he says about blitz scaling, approaching markets, and scaling a business. That was super useful, and his podcast Masters of Scale is also super useful to understand how to build great organizations that last. He truly inspires me by the way he shares a lot of the learnings he has, and this is what we try to do. We also try to share what’s happening inside the engine, inside of the machine with Spendesk stories we publish every month.
Dee: Brilliant. And lastly, where can people keep up with your work?
Nico: If they are interested in understanding how we think about product marketing and sales, you can just go on our website, spendesk.com, and sign up for Spendesk Insider Stories. Otherwise, we tend to share a lot on LinkedIn these days. Social selling is super important, and if you give back to the community, it will trigger a lot of interesting conversations. You will have people that want to help you, and you will have people that relate to what you’re doing.
Dee: And of course if we have any CFOs listening today, there’s CFO Connect for them as well. We look forward to hearing a lot more from you, and thanks a million for your time today, Nico. It’s been a real pleasure talking to you.
Nico: Thank you very much. It’s always good to try to take a step back and identify the mistakes we could have avoided and share a bit of the learnings we’ve had.
Dee: And the many successes too, don’t forget!