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Scaling a SaaS Company in a Competitive Space: Gainsight CEO Nick Mehta (Part 6)

Posted on Monday, Dec 23rd 2013

Sramana: Thought leadership marketing is very expensive. When you are building a category, it takes time to build a market. It’s helpful to have competitors because you are no longer the only company investing in leadership marketing. Have competitors to Gainsight emerged?

Nick Mehta: Yes, they have, and you are 100% right. I like having competitors because customers have comparison points. It legitimizes the space we have worked so hard to build. We were able to get ahead of the rest of the market in terms of defining the category but we did not build the category alone.

There are some products where the demand is latent. People know they need something and it is about finding those potential customers and developing a method to get sales volume targeting those customers. However, if the category is nascent it is more about understanding customer need and mapping your capabilities to their needs. We are in the latter category. We had to hire salespeople who are really good listeners. We had to develop a sales process that addressed the various concerns someone would have in the buying process. We had to build content to support that sales model and we are still building out our sales methodology.

We find that we sell to startups that have just a few million in revenue and we sell to established companies with billions in revenue. We had to think about what our model really looks like. We have an inside and an outside sales team. We are still figuring it out.

Sramana: It would seem like you require consultative selling even on the inside.

Nick Mehta: Consultative selling at small price points does not scale. In the early days we just wanted to get some customers, so we did not care about that. At small companies, if you do a good job of teaching them how to do things, they will be good to follow best practices. A lot of smaller companies are looking to us to tell them how to do these things because we are working with so many other companies that are telling them how to do things. Our inside deals have become more predictable and streamlined. Outside deals are focused on larger companies and it is a much more complicated sales strategy.

Sramana: What is the breakdown between large companies and smaller companies?

Nick Mehta: One person’s large customer is small to someone else. Right now I would say it is a mix between customers paying us five-figure deals which are sold through our inside sales team. Our outside sales team focuses on six-figure annual deals. The sales plans for the next few quarters looks to be roughly even between inside and outside deals.

Sramana: What is your sense of the real comparative dynamics? When you look at your competition, what really threatens you?

Nick Mehta: There are different answers depending on your time horizon. We have direct competitors which are also very solid startups. I think each company will have a different background. I think that is important. All of us here at Gainsight came from companies that ran subscription businesses, and we all dealt with this. We have all lived this problem first hand, and we designed the product to address what we lived through. We know we are not going to win every deal. However, we must win the deals that we are a good fit for.

Customers purchase you not just for your product, but for your prospective and vision. All companies in our category will change dramatically in the next five years. We have a vision and we need to make sure people believe that our vision will align with their needs.

This segment is part 6 in the series : Scaling a SaaS Company in a Competitive Space: Gainsight CEO Nick Mehta
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