This is a new series “Scaling Stories” to share what I’ve learned from my career and from others’ over the last 30 years. If you don’t want these articles (or if you want to turn on/off any particular series), you can manage these settings in the Substack app.
I started doing board and advisory work as “Westslope Advisors” to start paying it forward - to help companies that are looking to scale operations. You can get a sense for how I think and advise on these pages of text. If I can help someone you know to grow their business, connect with me here!
Preamble
I’ve been scaling businesses and running services businesses for 30+ years. I’ve presided over 9 acquisitions, led BP3 through the financial crisis of 2008-2009, through COVID, and through 2 major market transitions. We raised money from two different Private Equity firms, navigated two different boards, and built a truly international business from Austin, Texas.
BP3 not only gave me the opportunity to build a great business, it also gave me the opportunity to give back to our community in Austin: as a board member of Magellan International School, and as a board member of Austin Technology Council.
In the spirit of Austin Technology Council, and of Austin, I’ll share what I learned. They say you learn more from mistakes than success - and if so, I’ve learned a lot.
In another series of posts I’m sharing everything I learned about recruiting, but in this series, we’re going to take on other operational elements of building a business at scale.
How to Scale a Business
This is the second post in the series
Introduction is here
THIS POST: Building your Go-to-market, Part 1. We’ll examine how we approached go-to-market for BP3, and how this evolved over time. Your mileage may vary, but I think there’s a lot to learn from our story, and from companies like ours
Why start with the Go to Market? Because building your go-to-market (GTM) motion is the most critical thing for scaling your business. Pardon the “bad words” coming - but we’re talking about sales, and pressure, and under such circumstances a bit of artful swearing seems to be in order in many businesses.
Trilogy Story Time: “just sell some f*cking software”
When I worked at Trilogy, in the early years it wasn’t uncommon for our CEO to call a meeting with top execs and individual contributors from each part of the business - almost always on a Saturday morning. In one of those Saturday meetings, everyone wanted to know why we were struggling to close some of the deals in our pipeline. We all felt the pressure. We were a small company that often would book 50% of our revenue in a single deal, the last week of our fiscal year. Talk about concentration risk!
The sales team members and solution engineers were complaining about what was still missing from the product that made it hard to sell (never mind that someone had paid $10M for what we already had plus some near-term promises). To the very young version of me, it felt like a bit of an impasse: sales needed more features to complete the story and the deals, and engineering needed more resources to deliver those features (which costs money). The whole meeting bogged down, and there was no sense of order or prioritization.
One of our sales execs got fed up and said, paraphrasing from memory, with his Boston accent: “Guys, guys! you know what would really help? It would really help if we would just sell some f*cking software so we can pay for all this stuff.”
I was floored. But he was right. Sales - and the revenue that follows - pays for everything in a business that investors don’t pay for. I was equally floored that generally the room responded positively to him. I didn’t know who he was yet - I don’t even think he had closed a deal yet when this conversation happened - but he went on to be the most successful sales executive Trilogy ever had, and certainly the most successful sales exec I ever worked with, and that quote stuck with me. Sales pays for everything.
Building the GTM
Whatever business you are starting, give great attention and care to thinking about three things:
How you will find your customers,
How they will find you, and
How you will win them over.
It is the Revenue from new clients that best represents the results of your go-to-market motion as you start to scale. Revenue from new customers looks something like this:
And our count of new customers comes from two sources, customers you found, and customers who found you:
I wrote it this way to focus on the three elements above - the customers you find, the customers who find you, and how you will win them over. If you can maximize these three terms, you’re likely to grow your business.
Your company could choose any number of ways to find customers, or to enable customers to find your company. Let’s start with how services companies should or could think about this, and then examine what might be different for other types of firms.
Your First Client and Founder Hustle
Your first client should be someone you knew before you started your services business. The surest way to land your first few clients is sheer founder hustle and credibility. You likely don’t have a sales rep yet (and shouldn’t yet), and you don’t have a go-to-market that any larger company would recognize. What you have is a personality, a reputation, and a collection of connections who might buy your services. You’ll have to go find your first client, and probably your first few.
Founder-led hustle is typically the way services companies get started. There’s nothing wrong with this as your starting point. Eventually you will scale to a point where you don’t want to rely solely on your own ability to hustle to find the next client. Not because it is a bad way to find new clients, but because you’re allowing too much risk to your revenue as you grow. You don't have an infinite list of trusted contacts, and you don’t have and infinite number of at-bats with them. You need to find a more sustainable way to meet new prospective clients - or to help them find you.
Partner-led Growth
A great way for a small services company to grow is to be aligned with a growing software company that needs great implementation services alongside. This is fundamentally how we built BP3, and BP3’s superpower continues to be the company’s ability to partner effectively with a willing software partner.
Why does this work?
Your customers can find you - through your software partner’s recommendations, primarily.
The prospective customer is already filtered down to likely buyers - because they have a mature sales motion with the software vendor before you are introduced, and likely they are asking practical questions about implementation before the software partner introduces you.
Your odds of closure can be quite high because you are operating from a place of strength - your expertise in this software - and you have a good reference: the software company itself.
You see this work successfully especially when a services firm has some alumni form the software partner as senior staff or founders of the company.
How did this work at BP3?
After working for Lombardi Software for four years, Lance Gibbs and I left to start BP3. We had street credibility within the Lombardi customer base - because we worked on quite a few of the deployments ourselves - and because we had senior positions at Lombardi. Lance was a rainmaker and defined the PMO (Project Management Office). His name often got written into customer contracts during the sales cycle. I built up and managed the technical services team in North America and Europe. So we had credibility not just from doing the work for clients, but for building a team and establishing the way these projects get done successfully.
And then we launched BP3. We maintained a positive relationship with Lombardi, with a goal of being their *best* partner. We leveraged our network to find the first 3-4 clients (founder hustle!), most of which were in Lombardi’s ecosystem but were not being serviced by Lombardi’s services team. By then, Lombardi was ready to put us to work in their channel.
The Lombardi partnership led us to some great clients: Allianz, Aflac, Ford, Wells Fargo, Stubhub, Ebay, Walmart, Disney and Walgreens among others. I had friends running businesses who couldn’t understand how we would land these marquee names. But the answer was simple: we were the absolute best at deploying Lombardi’s business process software, and we maintained good relationships with the hand that fed us. As a side note, our very first customer was a company that makes casings for sausages. The first customer isn’t always glamorous, sometimes there’s a lot of tripe involved!
And then Lombardi sold the business to IBM. Suddenly, we had new relationships to foster, and we had a much bigger addressable market. We leaned into growth mode. I’ll never forget the first meeting I had with Mark Darholdt at an IBM conference. I was coming out of a long day of sessions, packed to the rafters, with Lombardi execs and product experts presenting to IBMers and IBM clients about the new business process software that was now available through IBM. And I was trying to figure out if this acquisition was as good for us as it seemed it could be.
Mark sat me down and had this, simple, message:
"Scott, BP3 is the best Lombardi BPM partner. Now I need you to be the absolute best IBM partner.”
And he was right. That’s all we had to do. We grew 10-fold together with IBM over the next 7 years. I think we delivered on that message - far beyond anyone’s expectations. By the time we peaked with IBM, we had published three products that changed the game for anyone building solutions with IBM’s Business Process portfolio:
Brazos UI - the number one way to build a user interface for IBM BPM and its successor products. It was responsive, drag-and-drop, fully integrated with IBM’s development tools, and saved clients untold thousands of hours of labor building solutions. Not only that, it was the best-looking and most customizable UI you could build with on that platform. It was also backward compatible to a ridiculous degree.
Brazos Portal - our second product built upon the success of the first, building a Portal that could federate process work from any back-end data source (or multiple versions of IBM’s business process software), and provided all of the features that really trip up people implementing process portals: search, filter, sort, all dynamic as you type, as well as custom dashboards and other important details. Brazos Portal lives on now as a great portal for Camunda portfolio projects.
Neches Code Analysis - it would scan your IBM business process implementation and score it for adherence to best practices. It was the sexiest code analysis tool you’ve ever seen, and it exposed, dramatically, how much higher quality our work was, as compared to the work being procured from other services firms.
Building Direct Sales
So if Partner-led channel was so great, why invest in building your own direct sales channel as well? Well, there are a number of reasons:
Sometimes your software partner - or your channel - doesn’t love you as much as you want them to. They don’t want to be too dependent upon you. They want other partners to be successful as well to act as a counter-weight to you. With a mature software partner like IBM, the more successful we were, and the more separation that we created between us and the next-best partner in our market, the more IBM tried to rebalance things.
Sometimes their product offering stops being the new hotness, and becomes de rigueur - commoditized and undifferentiated - or worse, falls behind. When this happens, your partner channel stops producing new clients for you to work with and you’re in trouble. You either need to align with one of their other growing product offerings, or align with another software partner. You may have to pivot your whole business.
If you really want to be a great partner, you need to be able to sell your own deals, and bring them in. Building your own direct sales go-to-market can help establish you as a unique partner in the market, that isn’t just leeching off of the software, but rather one that is bringing value to the ecosystem.
At BP3, we invested in direct sales for all of these reasons over time, but we started investing in sales help because we just had enough sales volume that we were dropping balls. We were running a $5M business when we hired our first sales executive. Our goal was to do two things:
Grow revenue
Improve the quality of our revenue
We felt that if we had more opportunities to choose from, we could choose not to work with misaligned projects that didn’t fit our path forward. We also knew that developing our own pipeline was insurance against taking whatever breadcrumbs IBM might deliver to us. We felt it was important to do our own outreach in the ecosystem and sell directly to clients.
It turns out, this investment in direct sales was exactly what we needed to put our partnerships into overdrive: we were generating net-new opportunities with our software partners, and we were building bigger opportunities for our partners than their typical sales process would get to, with a tighter focus on return on investment and business impact.
At one point, it felt like every software company entering the North American market would reach out to me to see if we could be a reseller and implementor of their software.
How to Scale with your Partnerships
We took our partnership experience at IBM and codified it into something we could replicate. At IBM, we won numerous partner awards including partner of the year. We helped IBM take care of clients that spent more than $100M on IBM software every year. That’s impact.
We took our methodology and expertise to partnering with other software firms: Automation Anywhere, UiPath, BluePrism, AWS, Camunda. And we acquired firms with good partnerships with Broadcom and OutSystems that we could build on. Effectively, we made partnering a core competency of our executive team, but also of our sales and marketing teams.
There are three fundamental principles to great partnerships:
Layered executive and sales relationships - your executives and your field sales execs need to have alignment and relationships
As an example, I’d reference this interview I did with Jakob Freund of Camunda, in the summer of 2022. This shows the kind of mutual respect and alignment you can build with a great partnership.
Culture and market alignment - you have to have overlap in what you believe to be true in your culture and your market messaging
Delivery par excellence - nothing less will do. At BP3 we never let a project fail.
It doesn’t always work, however. We were never really able to crack the PegaSystems ecosystem for example, nor Appian, nor Alfresco. There were a few others where the partnership just didn’t “take.”
And yet. We won partner awards and recognition from Automation Anywhere, UiPath, and BluePrism, as well as from Broadcom and OutSystems. And with Camunda we have had a run of partner awards that is the best in the ecosystem.
The biggest challenge as you expand partnerships is that software partners want you to be exclusive. And yet, they are not exclusive to you. It’s an uneven relationship. Some partners will look jealously at any activity you have, no matter how non-competitive it is. But at the same time, they likely won’t feed you enough to wean you off of other work. So this is a tightrope you have to walk as a firm growing with a channel. If you’re a services firm, how you balance software vendors’ interests with your own.
In Part 2, we’ll discuss direct sales and alternatives… and in Part 3 we’ll talk about marketing and brand.
One More Thing… If you’re like me, you might never have noticed this Austin PBS piece on Austin’s High Tech origins! Worth a watch:
You can find the video by following this link
