Mastering Enterprise Sales with Carsten Thoma

Carsten co-founded omnichannel e-commerce software company Hybris which was acquired by SAP in 2013. Today, Carsten is active as an angel investor and mentor of several emerging global start-ups.

In March, we discussed the secrets to successful enterprise sales with Carsten Thoma. Carsten co-founded omnichannel e-commerce software company Hybris in Munich, Germany in 1997 — at time when many investors underestimated the powerful impact of the Internet on commerce businesses. In 2013, the company was acquired by SAP for an undisclosed sum, making it at the time the highest value paid for a private technology acquisition.

Carsten afterwards served as President of SAP Hybris from 2013–2017, where he was responsible for SAP’s Customer Engagement & Commerce (CEC) line of business, SAP’s fastest growing business unit.

Carsten today is active as an angel investor and mentor of several emerging global start-ups, such as Celonis, Mirakl, myCujoo and Spot-a-Home.

#1 LET YOUR BABY OUT OF THE NEST AND PRICE ITS VALUE

The “founder syndrome” is when founders are overly critical of their product, and don’t want to launch it out of fear of imperfection or immaturity. Carsten likens it to “It’s your baby and you always think it still needs to learn”.

• Ensure others tell you off: Implement a process and hire the right people to enforce launching the product, despite imperfections — it will never feel ready.

• Showcase the love: Use your love and appreciation for the product in sales meetings, this passion and emotion can be useful.

• Outsource pricing: Let other experts in the team work on pricing, the “founder syndrome” may make you underprice.

#2 OBSESS ABOUT DEAL DETAILS

Enterprise sales is an art form; the level of detail and data you can use to make it more predictable and increase conversion rate is often underrated. The Hybris team excelled at gathering and utilizing highly detailed intelligence about every lead.

• Build the structures early: Sales operations and pre-sales are key functions according to the Hybris rulebook, and should be set up early.

• Study your stakeholders: The intelligence on a lead should include deep details about all (even if indirectly) relevant stakeholders — sometimes you need to prepare different stories for different recipients.

• Build a dossier: At Hybris, there were just under one hundred dimensions the team would gather on each lead and consolidate into a multi-page briefing document.

• Gamify: Define gamified exercises for your extended sales meetings to really get into the head of your customers and establish a culture of paranoia about the competition (e.g., win-loss analyses to understand drivers and resistors).

#3 CARVE OUT DAILY COFOUNDER TIME

Inner circle leadership (i.e., co-founders and later the central executive team) should spend dedicated time together as often as possible — Carsten and his co-founder would spend countless evenings together after the workday to strategize about clients and how to win them — “people are spending major money on your product, so you need to think about them a lot.”

#4 SEEK THE UGLY TRUTH

Carsten advises to ask the hard questions, and not to be scared of hearing harsh feedback from your potential clients. That way, you will learn how to improve, and the signs of clients leading you on below the surface.

• Consult the peers: Try to utilize people on the same hierarchy level as your key decision-maker to find out the true sentiment for your solution in the client organization.

• Ask “what would it take”: In sales meetings, ask the client (especially the CFO) what it would take for them to definitely say “yes!” — you will only make progress if you know where you need to land, even if it’s beyond reach.

#5 OVER-INCENTIVIZE YOUR SALES PEOPLE

To set up and enable the sales organization, one should establish a clear go-to-market philosophy — and then follow-through on it. In the case of Hybris, the philosophy was to aim for positive reinforcement in the sales team through high incentives.

• Set very achievable targets: Targets were achievable at Hybris to allow a positive experience, reinforcement and a traction fly-wheel — Carsten even notes their targets were “not even stretch-goals”.

• Avoid double incentives: At Hybris, the sales team was incentivized through very attractive quotas, rather than direct equity participation — and were additionally given the opportunity to invest their earned sales quotas into equity shares to build retention.

• Incentivize customer success, too: Customer success teams often identify upsell opportunities or churn risks, but are ideally incentivized on a company KPI or OKR level, rather than on a deal level.

#6 CUSTOMIZE CAREFULLY

Most B2B customers will ask for tailor-made features and product customization. This can hamper engineering capacity, and slow down the roadmap to the long-term product vision. Carsten shares some insights on how to manage this trade-off:

• Strategic accounts only: Customization is done only for co-development partners in the early days, and for large or strategic partners in the later stages.

• Assign fixed capacity: Carsten advises to set aside engineering capacity for customization, which can be booked for strategic accounts. When the capacity is fully booked, it’s booked and is not extended.

#7 SIMULATE YOUR PARTNERSHIPS

Very few sales partnerships work for both sides in the long-run, with SAP and Celonis as a positive example, so ideally treat partnerships like war-games and simulate every step your partner will likely take in the mid- and long-run. Especially think about “Is my partner’s product something I want to build/own myself in the future, and vice versa?” — if the answer is yes, beware and factor it into contracts.

• Independent Software Vendor (ISV) partners: Think about “How long do we want to keep this partnership and what will we need in order to keep the value when the partnership ends?”

• Cloud providers as partners: Cloud providers want to support their core offering, including owning the most powerful pieces down the line — including potentially owning your product. So partnering with them can be an attractive exit route. In any case, you need to check the threat of them building your product, e.g., by asking casually “How many developers sit in your [insert your very specific piece of the stack] team?” — Even though they have a lot of resources, the innovation teams are often tiny and non-threatening.

#8 CLEAN UP YOUR PIPELINE

Some sales cycles drag on for a long time. You jumped all the hoops. You established that you are the superior solution. You may have built a great relationship. You answered all questions. You waited. But at some point, it is time to establish your position with clarity — and perhaps move on!

• Ask for process transparency: Ask concretely when the next and when the final gateway is happening.

• Do two follow-ups, max: If the key stakeholder does not get back to you once, kindly ask a second time — but after that, mentally mark the deal as lost.

• Value your time: If a deal is going nowhere, be brave enough to communicate your need for a decision “Here we are — Otherwise, we need to move on!”