magazine | May 29, 2015
“Before” and “After” Shifting a Startup Into High Gear
In 2009, Alex Shootman, a senior VP of Sales at Austin-based software company Vignette Corp., said goodbye to a job with a comfortable base salary to take a chance on Eloqua, a startup with less than a fifth of its revenue.
His challenge: to help build the $33 million maker of marketing automation software into a major player in the space and make it so successful, he’d someday be able to reap the rewards of his gamble.
Like many others who have moved to a tech startup, Shootman took a big pay cut, in his case about a 30–35 percent reduction in his base pay, in exchange for a generous equity package. If the company succeeded in going public or getting acquired by a bigger company down the road, Shootman stood to profit mightily.
The decision I had to make was whether I was WILLING to take a step back to move forward.
For every executive who moves to a startup with dreams of a big future payday, those who end up disappointed far outnumber those who walk away smiling. But Shootman can count himself among the minority of big winners: In August 2012, Eloqua went public, raising $92 million in an Initial Public Offering on the NASDAQ stock market. Four months later, in December, Oracle agreed to buy the company for $871 million. By then, Eloqua’s sales had grown to almost $100 million.
Startups, by their very nature, are often risky propositions, but Shootman evaluated Eloqua’s management team, product and target market — all of which he found to be exceptional — and then he looked at how the job could augment his own professional experience and move him toward his ultimate career goal of becoming the General Manager or Chief Executive Officer of a technology company. “If I want an experience, I’m willing to take a job that doesn’t make sense to other people to get that experience,” he says. “The decision I had to make was whether I was willing to take a step back to move forward.”
Shootman has no complaints about the outcome. “It turned out fantastic,” he says. The sales exec, who started out his career with a dozen years at IBM, followed by stints at BMC Software and TeleTech, is now president of worldwide field operations for Apptio, a company in suburban Seattle that sells a cloud-based platform to help CIOs manage their business.
Of course, luck didn’t have all that much to do with it. Shootman, who got promoted along the way from head of sales to president of Eloqua by CEO Joe Payne, played an active role in the company’s growth and success through his hard work and the concerted steps he took to increase revenue. Speaking of his Eloqua days, Shootman says: “I’m the luckiest guy on the planet. It was an amazing life experience and a great team to work with.”
“If somebody wants you to grow the business, they’re measuring you on how fast can you grow the revenue given the money they’re willing to spend,” says Shootman. To do that, it’s necessary to focus on five principles, he says: the people you have in your organization, the processes you run, the structure you design, the compensation plan you establish and the tools you provide to the team. Even simpler than that, it’s mostly about building a pipeline and making sure your team members have the skills they need to accomplish their goals. “If every individual on your team has enough opportunity and they are prepared for their moments of truth, it will cover up most every sin in a sales force,” he says.
“As we grew, Joe asked me to take on more and more responsibility,” recalls Shootman. “I had the sales team for the entire time. We consolidated all the customer-facing functions into one organization, which I ended up running. Whether it was sales, account management or customer support, anything touching the customer, I ended up managing it.”
Shootman was responsible for $100 million in revenue, and he managed over $50 million in worldwide expenses. Managing about 200 people, his direct reports included a slew of VPs — including those responsible for new logo acquisition, account management, professional services, customer experience, field operations and more. The motto he lives by: Get it done and do it right.
Numbers help tell the story of Eloqua’s rapid growth. When Shootman joined Eloqua, the privately held company was valued at $1.43 a share. By the time of the IPO, its value had soared to $11.50 a share. And when Oracle completed its acquisition, that value had more than doubled to $23.50 a share. From 2009 to 2012, Shootman helped triple quarterly GAAP revenue to $27 million.
Along the way, Shootman worked with SBI’s CEO Greg Alexander. Greg provided knowledge, skills and experience in four areas that were critical to accelerating growth. First, SBI built the skills profile of the next generation of sales reps, which was needed as Eloqua ramped up their sales hiring. SBI also created a territory planning process at the company level. This allowed them to execute the segmentation and coverage model efforts, and understand where to place reps to drive rapid growth. Next, they were able to take the territory work down to the individual rep level. They used account scoring to build territory plans, and opportunity scoring to make sure that the reps’ time was used productively.
Eloqua also developed a certification program, at three levels, for all its sales reps, with six fundamental sales plays every employee needed to master. “It is the job of leadership to make sure the individual is exceptionally prepared, to be awesome at their moment of truth,” says Shootman. “That’s our job.”
“When you’re in a brand-new market, you need people with high verbal agility,” Shootman says. In fact, he found one of the top predictors of success of their salespeople over time was their ability to do a whiteboard presentation. So, during the hiring process, every prospective employee had to complete a whiteboard exercise. It was one of several critical steps Shootman took in the recruiting process to align with the profile SBI had created. Ultimately he needed to figure out three things — can they do the job, do they want to do the job, and do we want to work with them.
During his tenure at Eloqua, Shootman says he learned these six important lessons in building a successful sales organization and achieving high growth.
Shootman says the importance of culture can’t be overemphasized. “The payday was awesome but the culture is what I take away most from the Eloqua experience,” Shootman reflects. “I think the thing we were most excited about at Eloqua was the culture we built. Culture allowed us to be successful.”
That culture was customer-centric at its core. For example, Eloqua created their own version of the Emmy Awards, a splashy event in a packed ballroom designed to honor its own customers for their achievements. And when the company announced its IPO, rather than putting employees onstage, they put their customers up there — to drive home the central role they played in Eloqua’s success.
Shootman increased customer retention rates to 85 percent from 71 percent and net dollar renewal rates to $1.10 from $0.95 by restructuring the customer experience around the customer life cycle and upgrading the account management function.
During that same period, Eloqua ramped up the number of sales reps by over 300 percent. Typically, as companies scale up, sales teams face new challenges. “You go through different stages as an organization,” Shootman explains. “In the early days you’re really hiring Special Ops salespeople, Delta Force salespeople. These are people that are exceptionally aware with high mental agility and great verbal acuity. Their ability to articulate the sales message is amazing.”
But those exceptional salespeople are rare indeed. After you’ve hired your first 15–20 salespeople, Shootman says, it’s time to bring in the infantry to hold the territory you’ve won and build up the sales structure.
“That can alienate the first tier,” he concedes. “When you really change into growth mode and move from $20–30 million to $100 million, you have to realize that your go-to-market strategy is going to change, and that when you change your go-to-market strategy, you’re going to lose some of your sales force. You just have to recognize you might lose 25 to 30 percent of the sales team.”
After Oracle completed its acquisition of Eloqua in early 2013, Shootman planned on staying around through the transition. He and his wife had recently adopted two girls from Ethiopia, and so he decided to leave Oracle to spend more time getting to know them.
Then, fate knocked yet again: Shootman was offered the position at Apptio, and he couldn’t pass up the opportunity, he says. He left Oracle in October 2013.
So, once more, Shootman evaluated the opportunity and what he could gain from the experience. He studied both the market potential and the company’s leadership, and again, this company passed his test with flying colors. He says that Apptio’s CEO, Sunny Gupta, puts his company’s success before his own ego. Shootman was also impressed with Apptio’s leadership team. “I emotionally connected really well,” he says. Shootman still lives in Austin and spends a lot of time in the air.
Of course, most sales execs don’t make career bets that are nearly as calculated, or as lucky, as Shootman’s have been so far. His advice to others faced with a choice like his at Eloqua: “I tell them, ‘You have to be willing to give up something, and you’re kind of fooling yourself if you’re not.’”
In this edition, we present practical advice from CEOs, heads of sales, marketing, finance and HR. We take a look at how to adjust the hiring profile, demand generation programs, forecast and pipeline management process, sales management coaching cadence, sales methodology and the big deal inspection process.
© 2017 Sales Benchmark Index (SBI)
A Business Strategy Consulting Company
2021 McKinney Avenue, Suite 550
Dallas, TX 75201
© 2018 Sales Benchmark Index (SBI), B.V.
A Business Strategy Consulting Company
Cornelis Troostsraat 29
Amsterdam, The Netherlands