Given that I have worked in software for way more than a minute ( I used to peddle on-premise software installed on CDs in my youth), it probably comes as no surprise to anyone that as an investor, I really gravitate towards startups that change the way companies build, market, sell, support, and consume software.
Over the last decade, I have come to believe a few universal truths about software and software companies. None of these are amazing epiphanies for which I take credit for but I find it helpful to repeat.
1 - Every company is a software company
Often, people think of software companies as just that - independent software vendors that sell software to companies. The reality however is that so much of the services we all use everyday use software. Ask yourself - is Allstate a software company? Is Charles Schwab a software company? Is Cox Cable a software company? Yes, they are, albeit ones who are really bad at producing consumer-grade software leaving them susceptible to disruption from challengers who start with a software-first mindset. A personal example - for some reason, my insurance company canceled coverage on a house I own. Instead of waiting around to call the agent that I have worked with for 30+ years, I went online and found and purchased better coverage than I had previously for less money in five minutes from Lemonade - all without talking to a human. Is lemonade an insurance company? I would argue that it’s an amazing software company first that happens to sell insurance.
2 - Software companies that are product-led triumph
Using the example of Lemonade above, that is as product-led an experience as I have seen for a multi-thousand dollar personal purchase. Needless to say, and Openview has amazing content on product-led growth, but PLG software companies are far more efficient in acquiring and retaining customers and as a result, are valued significantly more in the private and public market. For those new to what PLG means, Openview defines it as an end user-focused growth model that relies on the product itself as the primary driver of customer acquisition, conversion, and expansion. Using the lemonade example, their website entirely guided me through the acquisition and conversion process in five minutes. As to expansion, they offered the next day pet insurance (which I have never bought) which I purchased as well.
3 - We trust the software that we run our business and lives on way too much
The ugly truth that we all too easily compartmentalize away is how much data about our professional and personal lives sit in the servers of the various services we use - whether their own server or the servers at their large cloud providers. What’s worse is that for those companies that are super product-led and amazingly easy to try and buy in far shorter a consideration period, we weirdly trust them more. We have all marveled at how much easier it is to start a company today - this is because, with the rise of cloud computing, we have disaggregated the entire software stack. Software developers can leverage cloud providers for so much of the stack that they can build and sell a software product in far less time, resources, and potentially money. That then means that as a user of that software, however, you are not just using the company’s software but all of the software that they are using to produce, host, and run their software. So you are not just trusting that software company but, as a byproduct, all of the software they have chosen to use. We scoff at those strange irrational people who wonder “what’s in their vaccine”? But do you know what’s actually in the software you use every day?. I suspect not.
So, then, are we really surprised by what happened with Solarwinds and a Russian cyber-hack that compromised the security of Microsoft, Intel, Cisco, as well as the following departments of the US government: Treasury, Justice, Energy, the Pentagon, DHS, and, ironically the Cybersecurity and Infrastructure Security Agency. This compromise went unnoticed for nine months.
Product-led is a road that leads to nowhere without Trust.
Like any company that is in the business of selling software to corporate buyers, the days of eye-rolling around the hoops that the internal security teams at our buyers make us jump through are over. Every buyer of software, especially software companies (and remember, every company is a software company) needs to ensure their use of your software is not going to create a trust crisis with their customers. They do not want to become the next Solarwinds or anything that approximates it. They need to understand quickly and confidently that your company and products can be trusted. If they can’t, they will not buy your product. Stop. Don’t pass go. Go straight to jail without collecting $200.
Given this reality, how do the vast majority of software companies make their buyers comfortable with their trust postures today? Well, it’s a bit like a bad Benny Hill Sketch - complete with the Yakety sax theme music:
- The sales team engages with prospects, running whatever wonderfully designed sales process and methodology to get the buyer in their frame and super convinced that their product is simply life-changing.
- At some point in the sales process, the business buyer utters the dreaded words every account executive fears: “we need to get our security team involved to ensure they sign off on you as an approved vendor”.
- The deal stalls for more than a bit as account executives, sales engineers, and internal security team send and share a bunch of security documents to and fro the buyer, hoping their security team signs off on your trust posture.
- The deal really stalls and often dies when your buyer stops reviewing your doc-a-palooza and sends you instead their requirements that all vendors must meet.
- The sales team then bombards via email, text, slack, and the batphone the one security resource you have in-house to help get prospects’ approval - who themself is busy being bombarded by other members of the sales team.
- That poor person has been trying to do the hard work of actually improving your trust posture but can never get anywhere because despite the magic set of security docs he/she posted on gdrive six months ago, Sally and Stevie Sales need his help all the time.
- This happens so much that, in order to not get burned again in missing forecasts, rev ops inserts a new late-stage sales stage in your CRM called legal/security review. Problem solved!
Sound familiar? You know it does. You also know that the following is true:
- This extends sales cycles.
- This drives your close rates downwards.
- This reduces forecast accuracy as deals stall or slip because of those darn security folks.
- This wastes your go-to-market resources time on tasks they are the least qualified to do.
- This reduces the impact your already limited internal prodsec/infosec resources can make.
All of this assumes you throw many humans at your buyer discovery and purchase process. In a product-led world - where you likely spend more in R&D than in S&M, you don’t actually have said plethora of humans around to answer questions, ferry red lines back and forth, etc. Worse, your buyers see you as a product-led company and expect to confirm and approve your trust posture in the same self-evident way in which they discover and validate your product. Which is much earlier, much more transparently, and in an appropriately engaging manner.
To succeed at being more product-led, you must also be trust-led. If you lead with product, you must also lead with trust. Because today’s buyers can’t really bother to consider products anymore unless they can trust them upfront. There is also rarely a situation where a buyer is not considering several alternatives - and as such, if your trust posture sucks or is opaque, they will choose to engage with others - and no amount of force methodology or value selling tricks will get them to change their mind.
Enter Trustpage - a Better Way to Build Trust
When we first met with Chase and his team at trustpage, we knew they were our kind of people. Chase had experienced this very same pain/challenge that I explained in way too many words above at Ambassador when they pivoted up-market to enterprise buyers. He marveled there at what a chaotic goat rodeo it was to manage what was becoming a critical portion of their sales process. And as such, he did what many strong technical founders do when not finding a good solution for an impactful problem - they start a company and create one.
For a mere pittance, every software company in the world can easily launch its own trust center in a few hours at www.trustpage.com. With your own trustpage powered trust center, you can easily:
- Make it dead simple for your buyers to understand your existing and future trust posture.
- Understand if your posture is up to snuff vis a vis your competitors.
- Quickly compare your posture versus prospects requirements and identify gaps to overcome.
- Empower the right people to collaborate with prospects in far less time until your buyers say “yes, I trust you.”
Come join the trust-led revolution and move from being a software company that is just easy to try and buy to one that is easy to try, trust and buy. Your prospects, your sales teams, and especially your infosec resources will thank you profusely.
More importantly, in a world where trust is now table stakes, you can be far more confident that you will achieve the top-line growth that your company desires.
