For Irish technology companies to succeed on the world stage there needs to be an honest appreciation that there is a knowledge gap when it comes to the art of selling and building networks and honing the soft skills, writes John Kennedy.
Ireland is a nation of international mould-breakers in spite of itself. Just look at James Joyce, who had to flee to Europe for most of his life just to clear his mind sufficiently to write at length about Dubliners. Go figure!
Two of the technology companies I admire the most currently are Stripe and Intercom. Very different from each other in terms of focus, they were both founded and are headquartered in San Francisco but are lead by ambitious and professional young Irish people; Patrick and John Collison in the case of Stripe and Eoghan McCabe in the case of Intercom.
John Collison recently told me that Stripe, currently valued at $5bn – has its eyes on reaching the 1,000-employee mark.
Intercom recently raised $35m from Iconiq Capital, which manages funds of high-profile people, including Facebook’s Mark Zuckerberg and Sheryl Sandberg, and is to double its workforce in Dublin to 140 employees.
What impresses me most about Stripe and Intercom isn’t the funding rounds. It isn’t just the technology. It is how they have managed to press themselves to the coalface of 21st century selling power, whether it is through e-commerce or communication. In fact, it is both.
Look at Intercom. Intercom has 7,000 paying customers in more than 85 countries. Those customers communicate 3m times per day with their end-users using Intercom.
I know this to be true because I have seen it with my own eyes – Intercom and Stripe are the enabling technologies that are used by emerging companies all over the world. In Berlin during the summer I noted Intercom in use on the screens of at least two fast-emerging start-ups in the German capital.
It isn’t just the technology – it is how both companies actually tell their story. Stripe communicates directly with the developers, who in turn decide to apply their technology on websites to process payments. Intercom is a masterclass in 21st-century selling, not only enabling direct communications with customers but telling its own story through blogs, seminars and e-books.
There are only two things I know about selling. The first is that it is easier to retain existing customers than find new ones. The second is the art of selling often begins with a refusal, a firm no. In essence, both Stripe and Intercom have created sticky technologies and solutions that ensure customer retention.
Dearth of a sales culture
The point I am making about Stripe and Intercom is they are the diamonds in the coal when it comes to the sales culture of Irish tech companies. They are not Irish tech companies per se, they are effectively US companies, but they are led by Irish people who are assimilating the new sales culture of the 21st century in a clever way and are worth watching.
The evidence is also on our doorsteps. Inbound selling and direct marketing are being employed by tech giants like Facebook, Apple, Google, Hubspot and others right now in Ireland. But someone forgot to tell our local tech companies.
‘It isn’t the fact that Israeli software companies have better connections – Wall Street is littered with as many Cohens as Murphys – it is the networks and the intangible selling and the soft side of things that accelerators get’
– BRIAN LUCEY, TCD
The reality, as pointed out by Trinity College academic and economist Brian Lucey at a recent Bank of Ireland panel discussion I chaired, is the reason more Israeli tech companies get to the IPO stage is not just scale or a local military industrial complex, it is the soft skills, selling and networks.
“It isn’t the fact that Israeli software companies have better connections – Wall Street is littered with as many Cohens as Murphys – it is the networks and the intangible selling and the soft side of things that accelerators get,” said Lucey.
Lucey was revealing joint Trinity College and Bank of Ireland research that found that three-quarters of local Irish technology companies grew their revenue last year; 55pc were profitable and 25pc were breaking even.
To accelerate and scale you need to sell
Lucey pointed out that the most pressing issue for these companies is scaling up, but warned that they are not going to scale up through retained earnings alone and need to be open to taking on bank finance and not solely view venture capital or trade sales as a route to the future.
A recent InnovFin agreement allows Bank of Ireland to provide finance to innovative companies in Ireland for a total of €100m over the next two years with the support of a guarantee provided by the European Investment Fund and backed under Horizon 2020, the EU Framework Programme for Research and Innovation.
The potent point Lucey was making about selling and accelerators and networks is important.
In September in San Francisco I met Marvin Liao of 500 Startups and the key thing he said he tries to impress on start-ups is selling. “Every company that is in our batch does between $5,000 and $35,000 in revenue. It’s our job to help them get their sales model working.
“If you don’t demonstrate growth then it is hard to raise funds. If you have a working business model it gets easier.
“All founders figure this out eventually, but we help them to do that in a smaller period of time,” Liao said.
This makes you wonder are we doing it wrong with accelerators. For start-ups, Irish accelerators are the best – we have three out of 10 of Europe’s best start-up accelerators – but what about accelerators focused on mature tech companies that simply need to attune themselves to the new ways of selling?
Goodbye Glengarry Glen Ross
At the Bank of Ireland event, I met Orla Rimmington, a partner with Cork-based Kernel Capital, which manages more than €160m worth of funds that have been leveraged to over €500m invested in Irish tech companies.
She pointed out that sales and the art of selling are a big concern and that international selling is far removed from the stereotypes portrayed in Arthur Milller’s classic play Death of a Salesman, or the exaggerated machismo seen in movies like Oliver Stone’s Wall Street or David Mamet’s Glengarry Glen Ross.
‘International sales learning, despite its importance to our nation’s growth and wealth, is not on our national academic radar’
– ORLA RIMMINGTON, KERNEL CAPITAL
Unlike previous eras where sales was behaviour and personality-driven, international selling is now a complex, multi-channel, multicultural environment. According to Rimmington, there is a knowledge gap that in turn could turn out to be an exceptional opportunity for Irish academia to address.
“Currently, our innovation-led companies have a critical shortage of world-class, internationally-focused sales expertise, which must be addressed,” Rimmington explained. “Imagine if academia was delivering several hundred well-educated, focused, degree-level graduates of International Selling each year. Now, if you can, imagine the potential scale, intellect and long-term impact of this growing ‘international sales force of Ireland’.”
Rimmington submitted a proposal to the Department of Education on the very subject in 2012.
“Thankfully the sales profession has come a long way from the stereotypes portrayed in Glengarry Glen Ross,” Rimmington added.
“The changes that big data, new technologies and social media have brought to selling are enormous and sales professionals have adapted to this new landscape. The ubiquitous access to information is the most significant difference between now and previous eras and affects every aspect of international selling. Sales has moved from being primarily personality driven to being process driven and in most cases traditional selling has been replaced by social selling. It’s now crucial that sales teams have access to the social media tools, data and content they need to build the funnel, convert leads and enable a repeatable sales process which is efficient and scalable.”
In truth, I believe there is a kind of inverted snobbery among Irish people when it comes to selling, or being sold to. Maybe that is in part a psychological hangover from the days of the mercantile British Empire we didn’t want to be part of.
That needs to change, argues Rimmington, if we are to ensure Ireland stays in the forefront of not only technology but a whole variety of industries.
“In years gone by, value was derived from the resources to manufacture products and services. In more recent years, the value was attributable not to the source of manufacture, which has proved to be transient, rather most value was accrued at the source of innovation, design and IP. With manufacturing outsourced to the lowest cost of production. Now even innovation, design and IP is being outsourced. It is control of the sales channel that is key to who accrues and controls and entities value.
“International sales learning, despite its importance to our nation’s growth and wealth, is not on our national academic ‘radar’. There is no coherent national focus of research and teaching in our academic institutions to build up the level of international selling knowledge and skill that the country needs. Today, there are no Irish professors of international sales nor is there any full-time degree course of international sales offered by any Irish academic institution. If, as with science, technology, engineering and mathematics, Irish universities and institutes of technology develop a global reputation and capability in international sales knowledge, the benefits to our nation will be enormous.
“In parallel, we need to ensure that our young people are given the career advice they need in schools to enable them to make informed decisions. Unfortunately, a lot of people still believe that you are either born a salesperson or not and equally there is a common misconception that sales is not really a career.”
Well, it’s time for our dear little nation to get over its misconception about sales and the art of selling. Remember, survival in the 21st century is predicated on one quality: who dares, sells!
San Francisco image via Shutterstock