Ep: 299: Yousuf Khan is the Chief Information Officer @ Automation Anywhere, the only web-based and cloud-native RPA platform. To date, Automation Anywhere has raised over $840m in financing from Salesforce Ventures, Workday, General Atlantic and NEA, to name a few. Prior to Automation Anywhere, Yousuf was the CIO & VP of Customer Success @ Moveworks. During his time at the company, they raised over $108m from Lightspeed, ICONIQ, Kleiner, Sapphire, and Bain Capital. Before Moveworks, Yousuf was CIO @ Pure Storage during their period of hypergrowth, both as a private and public company. Finally, before Pure, Yousuf’s first role in the valley was with Qualys, again as CIO, where he owned the entire global IT budget.
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In Today’s Episode We Discuss:
* How Yousuf made his way from the UK to the valley and how that led to his becoming one of the leading CIOs today in the rising prominence of CIOs in enterprise.
* What are the biggest green lights for CIOs when startups are pitching them? Why does Yousuf believe now more than ever, the buyer experience is more important than the price? What makes for the best buyer experience for the CIO? What are the biggest red flags CIOs see when startups are pitching them? What must startups always remember when pitching CIOs?
* How does Yousuf advise CIOs to approach pricing strategy when pitching CIOs? What must startups remember about how CIOs think about price? What other elements of the contract should startups really spend a lot of time focusing on? Where do founders make mistakes in negotiation? What can they do to enforce a sense of urgency when signing new clients?
* What can startups do to actively work with procurement teams and make the process as fast as possible? How does Yousuf advise founders to think about customized procurement requests to fit certain buyers? What do CIOs really want to see in the form of security and compliance? How can startups clearly and articulately present their plans for security, compliance and change management?
Ep. 300: When it comes to seamlessly scaling your applications, a top-notch engineering team will be your foundation. Next comes the decisions to build or buy your infrastructure, DNS, monitoring, and analytics tools. Julian Lemoine, Co-Founder, and CTO of Algolia will share his lessons learned on how to stay focused and innovative as you scale while also avoiding the innovation for innovation’s sake pitfalls.
This episode is sponsored by Brex.
SaaStr’s Founder’s Favorites Series features one of SaaStr’s best of the best sessions that you might have missed.
This podcast is an excerpt from Julian’s session at SaaStr Europa 2019.
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Below, we’ve shared the transcript of Harry’s interview with Yousuf.
Harry Stebbings: You are listening to the official SaaStr podcast with me, Harry Stebbings, and it would be great to hear your thoughts and feedback on the show. You can do that on Instagram at hstebbings1996, with two Bs, and I respond to all messages personally there. However, to the show today, and we had this guest on the show recently, but two things. One, I loved having him on the show and we have so much left to discuss. And second, just last week he started an incredibly exciting new opportunity with his new company. And so with that, I’m thrilled to welcome back Yousuf Khan, Automation Anywhere’s newly announced Chief Information Officer.
Harry Stebbings: For those that don’t know, Automation Anywhere is the only web based and cloud native RPA platform. Prior to Automation Anywhere, Yousuf was the CIO and VP of Customer Success at Moveworks. Before Moveworks Yousuf was CIO of Pure Storage during their period of hyper growth, both as a private and as a public company. And finally before Pure, Yousuf’s first role in the Valley was with Qualys. Again as CIO, where he owned the entire global IT budget.
Harry Stebbings: So now I’m very excited to welcome back to the show Yousuf Khan, CIO at Automation Anywhere.
Harry Stebbings: Well, Yousuf, what can I say? I had so much fun on the first show with you, but thank you so much for joining me again this day for this very special round two.
Yousuf Khan: I am super excited to speak to you again and I really, really enjoyed our first conversation. I’m glad that we’re doing chapter two, and I really just want to thank you for both the feedback wishing you an amazing 2020, because you’ve done so much for this community and I couldn’t be more excited to try and be a little bit more helpful.
Harry Stebbings: Well, I mean I am blushing but thank you so much for those kind words. I do want to start there. You mentioned the first conversation there, for those that maybe missed it, which is a terrible crime. But for those that missed it, can you give me a little bit of context in terms of how did you make your way into the world of SaaS that we love so much, but also really come to be one of the leading CIOs in this really rising mega wave events by SaaS that we’re seeing today.
Yousuf Khan: I think the key thing is that companies have basically getting into a stage now that they are buying more software than they’ve ever done before and they’re building more software than they’ve done before. The build piece continues at a rapid pace, because it’s product centric. But when it comes to building out their company, being able to execute, go to market, being able to be operationally efficient, that is really going to be done by providing amazing solutions, which SaaS has really pioneered as an industry across pretty much every vertical, every business function there is.
Yousuf Khan: And so as a result, I think the intersection has been that the CIO has been much more involved in decision making around SaaS purchases. But it also means that SaaS has had a much bigger impact in the growth of businesses and in the ability for companies to execute a great go-to market strategy. So I think it’s definitively we’ll be here to stay for many, many years to come. It will be much more impactful and I think the quality of the product is definitely increasing as well. And so for me it’s a very exciting time to be a CIO for pretty much any one of my peers. And I think it’s in an industry which will be absolutely central to company’s strategy in the time ahead.
Harry Stebbings: I couldn’t agree more in terms of the centrality of the strategy. I do want to start this day really with a bit of chronology really in the sense that I want to start with pitching the process to CIOs and then move further down the line, so to speak, in terms of the customer success and the post-sale side of the equation. Does that work for you, Yousuf?
Yousuf Khan: It works absolutely fantastic. I’m happy to share the insights.
Harry Stebbings: So if we start on closing the sales process, in order to do this, we have to master the pitch to the CIO and we were seeing before, there’s really not much written about this, so I’m really excited to do this. So not an easy thing to do in terms of the pitch and always feel slightly sorry for founders with that lack of training. So you sat in the buyer’s seat for multiple different companies, both private and public. What are the biggest green lights to CIOs when startups are pitching them?
Yousuf Khan: I’ve been very lucky and being on the seat and having bought hundreds of solutions in the past across pretty much any business function. And I think there’s a couple of common threads that have come about. Number one has basically been that companies typically want to be able to present a great vision about the product that they’re building. I think this is something that I’ve seen commonly where if you look at a solution which resolves a major issue, a major business problem, but it’s part of a larger vision. And I think that’s what companies and CIOs are typically buying into. I think number two is, is that the team that’s been assembled to be able to make this solution successful. I think customer success is definitively one of the growth areas for SaaS companies in terms of both hiring and building out a strategy and being able to differentiate themselves.
Yousuf Khan: And I think one of the things that CIOs look for is how are you going to make this solution very, very successful. By being able to deploy it and deploy it across the organization. I think the third thing is really about the level of investment that you want to be able to make and how you measure that. It’s not just about ROI conversation, it’s about a longer term play around the impact that this solution is having and the value that it typically delivers.
Yousuf Khan: Maybe that’s a productivity uplift in your employees. Maybe it is an uptake in revenue or a marketing generation or it’s operational efficiency in a number of different verticals. So these are the kind of key things that for me, one, two and three which come across as ones which help close and help get the CIO’s mindset to be able to say, “This is a company that I want to be able to buy.” I think the fourth thing, which is kind of critical is really because security and compliance become such big areas both at the board level at companies as well as in the CIO’s mandate. I think being able to talk about a security story and how you’ve been able to secure your infrastructure and the data that goes into it and how you’re integrating security within the company’s infrastructure. These things are absolutely critical and so those kind of four big things I would say are kind of top of mind, at least from my standpoint.
Harry Stebbings: I mean, Yousuf, we joked beforehand, we start with one question and then we just go totally off schedule. You mentioned some elements there where I want to go totally off schedule on them, because you mentioned firstly the vision and I totally agree with you in terms of how people can be inspired by that product roadmap that you mentioned in episode one. I guess my question is, how patient are CIOs and customers when it comes to the providers really delivering on their promises of V2, V3, V4 in terms of timeline, how patient are they?
Yousuf Khan: I believe people are patient. I think building out products is hard. Building out companies is hard. I think CIOs know that, sitting in their seat, whether they work for a several hundred person company or a several thousand person company. And I think they know that executing on product is hard. I think the question really comes down to is sense of partnership. You know, I mentioned four things in my first outside. I think the fifth thing is really the sense of partnership that a company is able to build with a CIO.
Yousuf Khan: And I think that’s kind of critical. That sense of partnership will be based on transparency of the product vision. It’ll be based on how well the company is doing. It’s going to be based on being able to demonstrate how easy or even how difficult it is about how this product is being built.
Yousuf Khan: I think CIO is actually very interested to know about why things are hard, why things are easy, but you know, they actually are intellectually curious from my standpoint. So I think what’s important is transparency between a founder and a startup to a CIO to say, “This is what our vision is.” Number one. I think number two is yes, keeping up regular updates is a good thing. I think the third thing is if you decided to change, that’s totally fine. I think you need to demonstrate why that is and I think you need to talk about why that is.
Yousuf Khan: I think the difficult part comes in is when you’ve made a solid commitment, because you probably want to close a sale or something else of that sort, and you’re unable to deliver. I think that’s a difficult situation for anyone, not honoring your commitments. But I think the key thing is being able to be very transparent about that product roadmap and the process that goes into it. That’s the confidence that a CIO wants to have with a startup. They want to basically make the buying investment and make that product successful.
Harry Stebbings: Totally. I mean, you also mentioned there in terms of kind of the centrality of customer success and really feeling aligned to the CIO. And we mentioned all the same kind of change management and real efficient change management being important for CIOs. I guess the other question that I have, and again off-schedule, is how does one measure the success of a CIO? And I always think like put on the hat of the other person, put on the hat of the buyer, what are they judged on and what’s like a success criteria for the CIO?
Yousuf Khan: Right. So having deployed out multiple solutions in multiple companies, I think it comes down to a couple of things. I think number one is, have you delivered in what you as a CIO had a vision to deliver? And that really takes time to be able to articulate what that vision is. It takes time to be able to be very, very clear about why you’re doing something. And I think the other key piece was how you’ve actually done it.
Yousuf Khan: The how piece is actually very critical. And this is where the partnership with a SaaS company comes into place, because customer success is absolutely critical. And there’s alignment about why we’re going with a particular solution to deliver value. I think the other piece is change management enablement in these companies, any company is really, really hard. And so what really needs to happen is, how do you partner with the customer success function of a company to be able to make that easy? And I think there’s multiple ways to do it, but I think customer success is one of those areas which in 2020, and in the years ahead will probably be one of the most fastest growing for SaaS companies, because I think there’s going to be greater demand for CIOs to be able to make sure that they are successful and being able to deploy out solutions.
Yousuf Khan: When you asked the question about how a CIO is measured from that standpoint, they’re going to be measured across a number of things. But it’s really going to be about the way they’ve been able to deliver on key change programs in their company. Because this programs have originated from conversations in the executive staff about what needs to be done to be able to make this company grow, be more efficient and grow in profitability and revenue.
Harry Stebbings: You mentioned that kind of the transparency, the trust and that alignment and partnership between the CIO and the actual vendor itself being caught to kind of the green light. If one kind of flip sides of the table. As I said, you’ve witnessed, and bought hundreds of different software providers in terms of like the red flags. Are there any big don’ts that and really kind of want to highlight when it comes to startups pitching CIOs?
Yousuf Khan: I think it’s always about being able to manage expectations. I think self-awareness is kind of important for founders and startups to know what’s possible and what the focus is. I think being able to clearly articulate that is something that people have a difficulty doing. Because they, yes, of course you can do tremendous amount of things. It’s a very exciting time to be able to build a company and to be able to go to market, but I think rigorous focus is also very, very important. I think it’s actually critical for companies to be able to make sure that buyers and customers and specifically CIOs know what they are very good at and what they’re focusing on and what they’re not focusing on.
Yousuf Khan: So I actually think that being both transparent upfront is probably a safe way to basically do it. Well, the one things I would probably just ask people to avoid is trying to basically paint a larger vision, which you don’t fundamentally believe in. You’re doing it from a sales perspective. I think there has to be a sense of reality about what you can achieve when, and being upfront about that.
Yousuf Khan: And I think actually CIOs really respect that, because then they know that they’re managing their risks accordingly. And the strong likelihood is they’ll probably make that decision based on the fact that they’ve got a clear timeline of 18, 24, 36 months of where this company is going and where the product is going. And I think that’s really, really useful.
Harry Stebbings: So we’re going to run with this hypothetical pitch, and let’s say we’ve had the green light moment so far. I’m picturing you, Yousuf, with my phenomenal piece of software, and it’s going well so far, but it comes to the element now of pricing. How do you advise founders to think through the right pricing strategy when pitching CIOs?
Yousuf Khan: So stebbings.io is a phenomenal company and I couldn’t be more excited when the founder basically reached out to me and said, “Can I have a moment?” And I said, “Well, of course.” So now that we basically fast forwarded over to basically realizing that this is a great product, I want to deploy it. I think pricing comes down to a couple of things.
Yousuf Khan: I think number one is, what is a commercially sensible decision, both for your company and the CIO? Remember that you’re a startup. Remember that depending on what stage of the company you are, are you basically approaching for a good logo and you’re asking for a customer that can be wildly successful and are therefore asking for a case study as a result of it? What are you willing to compromise to be able to make that work? Number one.
Yousuf Khan: Number two, you’ve got to defend the price. I actually fundamentally believe this that, “Do you fundamentally believe that you are going to be adding value to this company?” Of course you are, and so you should be able to understand that you’re defending the value that you’re providing to companies. I think CIOs actually respect that. Saying that, I think you have to be very clear about how you came to that.
Yousuf Khan: I think number three is you have to be able to iterate. At the stage of company you’re at, I bought hundreds of solutions even before they were a fully fledged product. I’ve understood that your company has set the stage. Price and strategy of a company’s changes many, many years into their life cycle. I mean, some companies are revamping their entire price models, even after being in business for 10 plus years. There’s several examples of that.
Yousuf Khan: What I’m basically saying is I think being able to iterate, being able to optimize for what you want to achieve without basically doing something unnatural, I would basically say, is probably the right way to go. And I think most people are reasonable when they talk with both procurement teams, CIOs otherwise, to be able to basically make that work.
Harry Stebbings: I had someone on the show recently and they said, “If you’re going to give a discount you want to make sure you get two things from it, not one thing in terms of cash upfront, but a second thing in terms of case studies, in terms of ability to showcase logos, whatever that second thing might be.” Would you say that kind of strong negotiating stance of, “Fine Yousuf, you can have my software at a discounted rate, but I want two things.” How do you find that rolls with CIOs?
Yousuf Khan: I think it resonates. Here’s the challenge. If you want to do a public testimonial of some sort that basically takes a cycle to work through with say a marketing team or others. In other cases, this is about basically being a reference customer, being a private reference customer, be able to talk about how well and successful the company has basically been. I think in most cases CIOs are very, very approachable and want to be able to tell their story.
Yousuf Khan: And I think there’s many of my peers, who I’m lucky to have learned from over time and they’ve been able to tell their story about how they were very early with a company and they were able to basically make it successful. I think letting a customer tell your story is a very, very powerful way from a go-to market standpoint. And I think that’s very well worth having a discount conversation for.
Yousuf Khan: I think the other piece is really about, most companies forget. This is also about when startups are in fundraising mode, this is what it comes down to. VCs are reaching out to customers, to potential customers otherwise. I don’t think it hurts to be able to make sure that not only have you delivered well with a specific customer, but that customer is willing to basically say, “I’m willing to help this company in my way because they’ve done right by me.” And I think that’s becoming pretty much the standard, at least from my vantage point. And so I would actually encourage startup founders to be able to build that partnership. And I think it really builds a good relationship between definitively CIOs and technology SaaS companies where they’re able to say, “Look, we’re early on in our journey. This is what we need to be successful. Can you be a part of this?”
Yousuf Khan: And I think that’s a refreshing change to what would be a very typical vendor transactional relationship.
Harry Stebbings: No, I do agree. I really like your removal of that transactional relationship. But the pricing is–
Yousuf Khan: And sorry, just for the record, I would happily be a reference for stebbings.io, because I would say it’s a phenomenal product. But let’s continue the conversation.
Harry Stebbings: I totally agree with you. I’m glad we got one five star rating. But the pricing is just one element, so to speak, of the contract negotiation process. And it’s a lot more diverse. But you know, honestly, I don’t think a lot of people, me included, know the true granularities. So I guess, where do you recommend founders spend the most time and energy when it really comes to negotiating the finer points of the contracts?
Yousuf Khan: I think there’s a couple of things. I think number one is on the pricing side, you know, you have to iterate. Think about what the CIO is optimizing for. Is the CIO optimizing for cost certainty? I’ve talked about this before. Cost certainty is a very good thing. It makes sure that they can plan their budgets accordingly, it makes sure that they know what the investment looks like for the best part of a one year contract or a three year contract.
Yousuf Khan: Are you optimizing for per user growth? Most SaaS companies are, they’re going for being able to play out towards the enterprise and be able to do that. But then you have to realize what the middle ground is when the deployment of that solution takes quite a bit of time to be able to be successful. And how do you contract to that? That’s from a pricing strategy standpoint. So my recommendation is, be intuitive, understand what a commercially sensible decision looks like for both parties.
Yousuf Khan: I think when it comes to the nitty gritty of contracts, I think it comes to a few things. One is definitely on the security and compliance side. I think these things are absolutely table stakes. I think the other pieces really come down to what success looks like. And it’s very difficult to define in contracts, so I wouldn’t really go down to that level. I think that’s really going to be a conversation in a partnership about providing a customer success plan and a way how you’re able to execute it. And that’s where actually the value is really, really created.
Yousuf Khan: I think the third piece is really centered on the overarching partnership about how this product is being built. And in the longer term relationship, are you, for example, going to be early to be able to test out new products that are being created and therefore benefit?
Yousuf Khan: Are you able to lock in a good price and a good investment because you believe in the company? You know, CIOs as much as that they are buyers, they are thinking it from an investment standpoint as well. I mean, okay it’s not a VC type investment, but it is an investment of sort because what you’re trying to basically do is to say, “Okay, do I understand that this is going to increase in value over time?”
Yousuf Khan: And so there’s a mindset there which needs to be applied from an investment standpoint in terms of time and effort from their team to be able to make successful. They believe in the company and the product, and of course the end output that they’re going to result, it’s going to be the company. So I think those three vectors is what CIOs are basic thinking around. And I think startup vendors should basically alignment alongside those.
Harry Stebbings: Absolutely in terms of that investment mindset of CIOs. And there’s also just the opportunity cost of dollars and where they’re allocated, they could be allocated elsewhere if they’re not going to you. So totally agree with you there.
Harry Stebbings: I do want to ask though, I often say to enterprise founders, “If you’re not a top one, two, or three buying decision for CIOs, honestly it’s going to be too tricky.” Can I ask? Am I being too short-sighted and narrow-minded with that quite black and white view, and actually given now the broad spectrum of software that is being bought, is that actually no longer accurate?
Yousuf Khan: I mean, with respect, I’d say that’s a bit short-sided. I’d say the following. I think the reality is that companies are moving at such a fast pace that their ability to be able to nail down problems and solutions is changing. And as a result of that, new opportunities occur. And I think really question comes down to is, how quickly can you execute on a product decision that you basically make when you want to buy it? And does it solve a problem right off the bat?
Yousuf Khan: And if it does, great, you should basically execute it. So yes, I think it does come down to prioritization. So for example, one thing I’ll tell you in hundreds of conversations that I’ve had with CIOs, top three priorities are pretty much along the following lines. Customer experience and how they’re going to be able to impact that. Number two, how are they going to be impacting transactions and how they partner with revenue operations. And third is of course looking at product innovation and where they’ll be able to input from that standpoint.
Yousuf Khan: And there’s 10 other things that typically come up, but I tend to hear this quite commonly. That does not mean that you don’t get mindshare, it just basically means they’re looking for a great solution. So I fundamentally believe that if you have a solution where you’ve been able to build a great track record, you’ve had good thought process about how you’re executing. And the data that you’ve basically used to be able to come to that conclusion. It really comes out around mindshare and how you market to CIOs to be able to get that.
Yousuf Khan: There’s a number of solutions out there, which weren’t probably number one priority but CIOs have made the investment because they’re like, “Okay, I’ve been thinking about this problem for some time. I just haven’t had a seen a good solution for it. I believe in this solution, I want to head towards that.” And that’s what they basically did.
Harry Stebbings: Well, I’m so glad we’ve discovered that I’m now short-sighted. I love that and I think you’re totally right there. I do want to kind of discuss the next phase, because all being well then we move into the procurement phase. And you know, it’s feared by all VCs and founders and many also suggest that it just takes so long and it’s so difficult to navigate. If we think about kind of grabbing the bull by the horns, what can startups do to actively work with procurement teams and really make the process as fast as possible?
Yousuf Khan: Well, first thing is they shouldn’t try to avoid them. I think that’s a mistake. I think partnering up with procurement teams is probably a much better strategy, number one. I think number two is going through a procurement process. If you’re building out an enterprise company, this is a good thing. This is a good muscle to be able to build, to be able to understand how to build out complex transactions over time, because you are building a long lasting company. And so building a relationship and understanding of a deep procurement process is a very, very good thing.
Yousuf Khan: I think the third thing is preparation. Most companies, most startup vendors are not prepared for that. They’re not prepared with basic things around sometimes on the paperwork side of things, sometimes on the pushback, on things like the MSA, they’re not prepared on documentation when it comes to security and compliance. They’re sometimes too rigid in terms of how they want to go around pricing.
Yousuf Khan: We understand as buyers that everything is a negotiation, so if we all know that, that’s basically approach it with that mindset and understand where are we going to get to a great decision, which is a win for everybody around the table. The role of procurement teams is to get the best value for the company and that’s their job. That’s nothing you should try and avoid them for. I think the one thing that every startup should basically do is how are they able to very clearly demonstrate their procurement team why they are a winning solution.
Yousuf Khan: It just sounds very basic and fundamental, but you have to remember, procurement teams are not just focusing on buying one SaaS solution for one department. They’re buying hundreds of these, right? Their objective is to be able to get value. Their objective is not to be the expert on marketing generation technology, or demand generation technology, excuse me. It’s not based on cybersecurity solutions.
Yousuf Khan: And so being able to do better enablement of procurement teams in a friendly way to be able to demonstrate the difference is important. Most startups are not on the Gartner Magic Quadrant. Most startups do not have a large marketing budget that they paraded. And so therefore your only friend in the room are the people sitting across from you who are trying to basically make sure that they get best deal for a CIO and an IT team who really likes your solution, they’re not trying to be adversarial. What they’re trying to basically do is reiterate to me, help me basically make this decision easier.
Yousuf Khan: And I think most companies forget those. They come into the role, they’re like, “We’re going to negotiate and try and get a good deal.” They really just want to know whether this is going to be a successful … You have to remember, procurement teams are probably going to be using your solution if it’s an enterprise wide solution. So surely it makes sense that you have more and more champions in the company.
Yousuf Khan: This is one of the things that I think startup teams totally forget. They look at it too much as a transaction. They don’t look at it as a partnership across the board. It is a partnership across the board that needs to basically happen.
Harry Stebbings: I really like the mentality of kind of arming them with materials and tools to really sell it internally and ensure that it is adopted as it should be. But my question to you is, Are there tools? Are there guidebooks, FAQs, resources that startups should put together, so they can literally give them the stebbings.io fact book and say, “Hey, here’s all the materials, you go run with it,” and you have all of it very clearly and structured in terms of kind of the presentation style. Is that a good way to do it or does it need to be much more customized?
Yousuf Khan: No, I think that’s a very, very good way to do it actually. I think that’s something that I’ve had exposure to. It shows a couple of things. So for example, our recommendation number one, build out a really good security narrative and a compliance narrative that you can speak to, and that actually you can enable your salespeople to. And again, you’ve got to balance it from that sampling. Number two, being able to talk about the company’s history and articulating it in a very clear way, and packaging that up is absolutely right.
Yousuf Khan: Talking about how you’ve thought about product roadmap and not just the details in an MSA. This is about the value that you’re actually demonstrating and the outputs and the outcomes that you can have in a company. Prepackaging these are super important. I think the other thing there’s just a general part of this, which most people forget. It just demonstrates great professionalism.
Yousuf Khan: The ability for you to respond to a procurement team, a CIO, an IT team that reports into the CIO or align any line of business, for you to be able to quickly respond in a very clear way about who you are as a company and respond to queries. It just demonstrates a great buying experience. I’ve talked about this in the past. It’s no longer going to be based on price and, “Oh well, I bought the right solution that integrates with all these into your infrastructure and you should be buying it.”
Yousuf Khan: This is going to be about the entire buying experience. And the entire buying experience just doesn’t include the CIO, it includes a procurement team and that experience is really going to be about the level of professionalism that you bring to the table. It’s going to be about a great POC. It’s going to be about great response to FAQs. It’s going to be response about providing them security documentation. It’s your ability to jump on a call to clarify a whole bunch of things.
Yousuf Khan: These are the things that most companies forget. I think this is the kind of behaviors I’ve typically seen from companies that have really done well in the SaaS space and have won my respect.
Harry Stebbings: I totally get you in terms of kind of the mindset and the approach that they take and how that is shown through the resources that they can bring in speed. You’ve mentioned security and compliance quite a few times and it’s a bit of a catchall phrase in my mind that is often said, but actually I didn’t know a lot of the granularities around it, so kind of help me here. What do CIOs and teams want to see by way of compliance and security?
Yousuf Khan: Well, I think what you need to understand is that in some cases a security mandate will fall within the CIO. In most cases it will fall under a larger cybersecurity function, especially in enterprise companies which [inaudible 00:25:27] the CSO. Candidly speaking, the CSO doesn’t know about your solution, probably won’t care about the solution until they actually get to know it and won’t champion because that’s not their objective.
Yousuf Khan: And so I think being able to talk about what your security strategy is. I mean I think the good thing is as the cloud has evolved and cloud forms have evolved, being able to build on those platforms provides you with a good advantage to be able to have a good security narrative.
Yousuf Khan: You’ve got to think about things like privacy. Now this is just in the mainstream now. It’s a common question that will basically come up. We’re talking about basic things about how you’re securing your infrastructure. But also talks about your security posture and what that basically is when you think about the kind of people that you’ve hired or the consulting partners that you brought into place to be able to manage your security infrastructure.
Yousuf Khan: The problem that most companies are now having when they go to market is they probably will win hearts and minds within a different business function and unfortunately then the security team only hears about it at the end and they’re having conversations. It doesn’t help. I would advise companies in the year going ahead is to be able to make sure that when they’re basically going to market that they’re actually enabling the procurement team, that they are talking early with the security team volunteering that, is actually a good thing. Because it actually demonstrates professionalism. You’re like, “Hey, listen. It’s really centered on a couple of things.” It’s centered on the fact that you’re saying, “Look, we care about security. Number two, we have the right solutions and infrastructure in place and number three, we have a right plan and a right strategy in place when it comes to security.”
Yousuf Khan: It’s about demonstrating and articulating security posture. These are the things that will be absolutely critical and I think it’s going to become easier as it becomes in the mainstream. From the tools that are available to you, both from the cloud platforms otherwise, there’s just so many candidly speaking. And so being able to just constantly improve your security posture over the course of a year and demonstrating and talking about that is a very, very good thing.
Harry Stebbings: Totally. I think it shows real readiness and kind of prime activity to suggest bringing them in earlier into the process. I guess the final element that I do really want to touch on is, especially for me as a [inaudible 00:27:20] I see a ton of companies with POCs, we’re seeing innovation budget swelled from large incumbents where maybe they hand out POCs easier than they would have done in previous years.
Harry Stebbings: My question to you is, what are the core signs of the POCs real effort of engagement from the incumbent? What are the signs that it’s not?
Yousuf Khan: I think one is demonstrating sense of partnership earlier is important, and this is something I’ve talked about from a basic level. The level of engagement that you typically have, the team that you’re putting to the table who’ve got the experience, give you assurance that this POC is going to be successful.
Yousuf Khan: Number two, understanding the environment is going to make you successful, because what you say is that, “Look, we can do this POC. We’ve done it multiple times before. Here’s how it basically works.” I think number three is this aspect of differentiation. The differentiation path comes in is really about being able to deal with complexity, without being overly confident and arrogant, but being able to say, “Look, we’ve looked at every different sort of environment before, and we’ve been successful and here’s why. Here’s how we basically built out a product.”
Yousuf Khan: I think the number four thing about the POC is how well it’s executed. So clarity of timeline, clarity of basically what the goals are within those, and then what the end goal basically looks like. Those are the successful POCs that come to mind where it just felt great as a solution. You start to go in, you’re like, “Wow, it’s already deployed,” or, “Great, the team is super engaged.” The human part of this, of a POC is actually very critical. Because that’s how you demonstrate the sense of partnership that you’re basically building in these companies. That changes the customer experience from a buying perspective, it changes the ability to be able to make sure that you deal with the issues collectively.
Yousuf Khan: You have to remember, when you’re doing a POC, you have understanding of a customer environment but you don’t know the depths of it. And so being able to work with it and integrate into it means that you have to build a great sense of partnership. And only the companies that do that well are going to really, really succeed. Otherwise I think it’s going to be supremely problematic.
Harry Stebbings: Is it too aggressive to request automatic conversion of POC into a much longer form engagement if certain conditions are met, certain benchmarks, certain goals? Is it too aggressive to request automatic conversion, not a separate decision?
Yousuf Khan: It depends very much on the end output of your solution. I think in most cases it’s absolutely fine to do so. I think it’s actually really advisable that you state that upfront. I think it’s about the posture that you want to put in place in terms of the POC. If it’s going to be real hard work on your side, whereas the other one is like, “Well, and even if it is a good solution, we’ll think about it.” Well, there’s an opportunity cost towards whether you want to focus your efforts towards that as a customer, right? Because you want to have one sale process, you don’t have multiple sale process. And so my advice is really aligning on that early is probably a good way to do it. I mean, is there going to be a compelling case why it’s not going to happen?
Yousuf Khan: I think having the review checkpoints in the POC, agreeing those upfront and committing time towards it is kind of important. What you want to avoid if someone comes in three months later, they’re like, “What’s been happening?” And you’re like, “We have to now come up with a whole story of what happened in the last few months.” I think having regular checkpoints, regular updates, I think those successful POCs, those are the ones that work really well. Because you’re just letting people know, even if it’s like a short email, even if it’s a short report or by the way, it’s a phone call that you put into play to say, “Look, this is going really well. This is not going really well. Here’s why it’s not going really well and we need to be able to look at this.” I think those are the successful POCs that I’ve seen done in the past.
Harry Stebbings: Yeah, checkpoints are totally crucial. I totally agree. The longer you have in terms of engagement, I think the less likely it is to convert. I do want to move into my favorite, though, Yousuf, which is the sixty second SaaStr. You know the drill here. Different questions this time though, so this should be fun. Are you ready to rock and roll?
Yousuf Khan: Well, stebbings.io of pitch, I’m about to buy, so yeah, I think I’m ready to rock and roll. Let’s do it.
Harry Stebbings: Yeah. Get the pen out, ready to sign. What would you like to change about the mentality of CIOs today?
Yousuf Khan: I think more partnerships with startups, more partnerships with VCs, and taking more risks.
Harry Stebbings: What is the right relationship between the CIO and the CEO?
Yousuf Khan: One of deep partnership being able to be most impactful when it comes to customer experience.
Harry Stebbings: Which CIO is crushing it today and why do you think?
Yousuf Khan: Pretty much all of them who are being able to represent technology, not because just working for a technology company, but they’re able to champion how it’s impacted their company. I think those are the ones who are really crushing it.
Harry Stebbings: What can founders do to build trust with CIOs fast?
Yousuf Khan: I think be transparent and upfront about how a CIO can help them as being a champion customer, as well as being a true partner in the company story.
Harry Stebbings: What are the core reasons buying processes take longer?
Yousuf Khan: Lack of preparedness and lack of conversations about what the company is trying to win for when it comes to commercials.
Harry Stebbings: Yousuf, there was another one where we stuck completely not to the schedule. I think we’re turning this more into a monthly engagement, which I absolutely love. Listen, honestly, it’s such a pleasure doing these shows with you. So thank you so much for joining me today.
Yousuf Khan: Thank you again for the time. Wishing you an amazing year ahead. Thanks again.
Harry Stebbings: I do just always love my discussions with Yousuf, and if you’d like to see more from him, you can find him on Twitter, @yakhan. That’s @yakhan. Likewise, it’d be great to welcome you behind the scenes here. You can do so on Instagram @hstebbings1996 with two Bs. I really do love to see you there.
Harry Stebbings: As always I so appreciate all your support and I can’t wait to bring you an incredible episode next week with a founder who’s raised over a hundred million dollars in the last five months of 2019. It’s a special one.