When Irishman Fergus Gloster speaks rooms fall silent. He delivers powerful, unvarnished truths about sales lead times, the cost of customer acquisition and the culture Irish companies need to succeed globally in the Software as a Service (SaaS) model.
Currently, Gloster is an advisor and Non Executive Director to Brightpearl, FieldAware, and NewVoiceMedia. Previously, he set up Marketo’s European operations and before that was EMEA Senior Vice President at Salesforce.
Niamh Bushnell, Dublin Commissioner for Startups, chatted with him about sales, marketing, the SaaS model, and how they all tie in for Irish companies. Below is an edited version of the interview. You can listen to the full interview here:
Tell me about your move to the SaaS world.
I’ve been in the tech industry all my working life, over 30 years now. Half of it, I was a developer. In 2000, I moved within Oracle to the product marketing side. I got immersed in sales, marketing, and SaaS when Dave Dempsey, John Appleby and I left to set up Salesforce for EMEA.
What was it like working for Salesforce at the time?
When we joined, Salesforce was a tiny company with revenues in the low millions and no international presence. It was like any startup scenario on the planet today. We were figuring out if we could sell something at $50 per user per month and make money.
Tell me about a big decision or strategy that you implemented there.
Together we did many things. We introduced contracts and allowed people to sign up for a year rather than a month. No one deploys the product for just a month. It balanced the collection needs of the company, while keeping the philosophy of a “per user per month” price model. We also set up a specialist renewal team and a customer success team, both separate from the sales organisation.
You set up Marketos international business from Ireland. What is the environment here like for Irish SaaS companies that want to build global SaaS solutions?
I think we’re similar to what I would see in continental Europe or in parts of the US regarding product ideas and development. Where we are somewhat weaker is a function of the size of the market that we start with. Ireland is a small market for any category, and it has been hard to nurture sales skills. But things have changed with the presence of the FDI based multinationals. Oracle, Salesforce, HubSpot, and others are all helping to develop sales and marketing talent.
What are sales these days like relative to what they were 20 years ago?
It has gone beyond just selling on the phone. Salespeople now travel. They have a mixture of inbound activities and real selling. The talent has matured, and I believe the startups need to avail of it. In turn, the sales people from the big corporates should take the risk on startups too.
Do you think that companies understand the value of talent and how talent equates to delivering on their ambitions?
I’d say that in Ireland, we still lag behind in our perception of what good sales teams do. I think there is still that stereotypical view of the uber sales guy who goes from door to door. I believe that it’s incumbent on startup CEOs to come with a different mindset on that.
What do companies need to do about marketing?
They need to understand that the function of marketing isn’t just about messaging and branding. They are key, but marketing has to feed the engine, whatever the engine is. Companies need a comprehensive strategy and mix of inbound and outbound marketing. Its more than having a nice little blog and some social engagement. Companies have to analyse personas and their behaviour. They also need to align sales and marketing.
— NewVoiceMedia (@NewVoiceMedia) April 22, 2016
These are the challenges of SaaS companies everywhere, right?
Yes, and are crucial to be understood and managed. SaaS changed the relationship between the buyer and the seller. The vendor receives the revenue later, which makes funding more critical. Time is always the enemy, but it is more accentuated in the SaaS world.
Does it get easier as a company gets bigger?
There are different challenges for bigger companies like the competitive landscape for example. Competitors see better what you do, they change their messaging, they modify the value proposition. You have to decide how to change yours too.
Is SaaS an actual innovation or is it just an evolution of business models that always existed?
You can find the thinking in other industries, like the Computer Timesharing model from the 60’s and 70’s. I do believe SaaS itself, and what we now refer to as cloud, is an innovation both in the delivery of enterprise class solutions, as well as in the business model that supports it. There is a tangible best practice process that anyone can follow.
Does this mean that the traditional licensing model is out the window or can companies offer both to their customers?
They can, but it is more of a transition phase. In the long run licensing will be rare and will exist only in niche domains. B2B software solutions will all be in the SaaS cloud-based domain. Everyone will have to make the move.
Unless you are in this space where you have a product that integrates with certain internal systems?
Not even that. A lot of the cloud applications integrate both with other cloud applications and on-premises solutions, but the latter is diminishing. How many software companies start off with an on-premises model today? The answer is negligible. Even if you look at the area of business intelligence and big data, they are darting to the cloud. It doesn’t mean it is all there yet, but it is getting there.
Should SaaS companies with products in the cloud travel to meet customers?
One thing that was strong in both Salesforce and Marketo was the practice to swap profits and bring people from one market into another. They would embed things that had worked elsewhere but also work to understand the local market. It is arrogant to assume that you can learn all these things without investing in travel.
So if a company is targeting corporates in the US, it should be there from an early stage?
Yes, or at least find people they can trust to do that job for them. Not going there makes sense if you are the only company on the planet with your solution and idea. However, that is highly unlikely. There are companies doing similar things, and they’ll execute better and spend more.
— Dublin Globe (@DublinGlobe) October 15, 2015
What excites you about the SaaS businesses that you’ve been exposed to in Dublin?
The breadth of different companies. The ones taking part in the Newstalk Saas Bootcamp, as well as many others I have met lately. Their solutions are as good as anyone else’s. We can build a product, that is certain. Now we just need to learn better how to market it.