Scaling A Business From “Minus Two Customers” With Jeff Koser

I’m happy to be able to introduce another wonderful business owner who has experienced the joys and challenges of the seven-figure growth journey. I’m welcoming Jeff Koser to the show. Welcome, Jeff. How are you?

I’m good. Thank you for having me.

I’m thrilled to have you. I want to tell everyone a little bit about you and your business. Jeff is the Owner and Founder of Zebrafi. He has many years of sales leadership experience, and he’s a thought leader in the space. Zebrafi is this cool software-led selling approach that uses artificial intelligence and machine learning to help you or your sales team members move that prospect or that good lead along. Jeff, with that basic understanding, please tell us a little bit more about Zebrafi and how you got into this business.

Zebrafi and the Zebra software itself, we call it software guided selling. It’s software that you use when you talk live with prospects. You can talk with them about it and show them why you are calling on them. What makes them a good prospect based on the business issues that you have solved for others that look like them in the past? Get agreement that you are both in the right place and then you can agree on the next step, which is logically laid out in the guided selling.

The other thing that it can do for you is oftentimes, we get lost in talking about our products and our services. We don’t link it to what the prospect cares about. Our software links and leads with what they care about and then links it back to your product and quantifies the value. With the click of a button and some collaboration, you produce a business case, which changes the conversation to business issues and value versus the features and functions of your product.

The way I got into this is a lot of your readers and guests, so we took a company that was starting in the US had zero sales here, and I like to say had minus two customers. The reason I say that is because those two customers had been sold by independent dealers. This company was headquartered out of the Netherlands, and those two companies were sold by independent dealers and both were suing the host company.

All of our references that we could use were outside the US and it was pretty critical stuff. It was ERP software, so it was a very significant decision for buyers. We had to figure out who would buy from us and it was a survival thing. We are not going to succeed if we couldn’t figure that out, and we did. We competed with SAP in Oracle on every ERP deal that we did and grew the business.

When I left, it was worth $12 billion. That was the market cap. I took those tools and processes them and started. The original business was Selling to Zebras and that’s still the name of our book, and then we changed the name to Zebrafi as we finally came out with a software platform to support the consulting work. You will like this. Many of your readers have been there. We have been doing this for many years. After many years, hopefully, you get a couple of things right.

I’m super impressed and I’m glad you mentioned the book. I want to mention that Jeff is the author of an award-winning book called Selling to Zebras: How to Close 90% of the Business You Pursue Faster, More Easily, and More Profitably. Jeff confessed to a twenty-year overnight success on all of that concept. Going from -2 customers to over $12 billion in market cap, that’s pretty good. Not bad.

We had fun. We learned a lot.

To take some of those learnings as to what works when Selling to Zebras and put it into intelligent software that guides the process for selling, for some of us, that might sound a little too good to be true. I noticed on your website that you do target enterprise. It’s for selling to enterprises or is it for enterprise customers?

We sell to enterprises. Our software helps organizations that sell to enterprises. It’s B2B.

It could be smaller businesses that are trying to sell to enterprises.

No question. Our target is not too different from your own. Most of our customers are $5 million to $20 million. Many of them are in the technology space. They are in the services space or they are manufacturers. We have done considerably bigger and GE and IBM, but many of our folks are in that space where the trajectory is starting for them and want to increase the pitch.

I’m glad we got that clear because the focus of our conversation will be around lessons that you learned in growing your seven-figure business. There may be many of these readers who need to go check out Zebrafi.com. If they are selling to enterprises, this is something that could help them. Let’s go ahead and transition now to you. I know you are an expert on selling. This audience would love to learn more about that as well.

I want to get some of the lessons you learned as you were trying to scale your seven-figure business. Not the rough road leading up to $1 million, but the rough road after $1 million because it doesn’t ever quite get super smooth. Tell us about some of the challenges that you started to have some success with Zebrafi and then what were some of the challenges that you experienced as that founder or leader who was trying to grow their business?

This happened back at Baan in Spades. Scaling meant that, as a team, we had to trust the next generation that we were hiring into the business that hadn’t been there through the school of hard knocks, not overburden them with too many of our stories about what it took. It was more than a process. It was a different mindset. Our customer target changed, for example. The way we approached them changed and even the way we delivered to them changed. There were scale issues everywhere you turned.

Scaling A Business: Scaling means that you have to trust the next generation that you’re hiring into the business that hasn’t been there through the school of hard knocks and not overburden them with too many stories about what it took.

Let’s talk about some of those. You alluded to one that I caught onto, which was the next generation of leaders and team members that were coming in after a stage. Maybe you went through a stage of growth and then we are like, “Now we need the next group of people to come in.” What were some of the challenges with bringing in new people besides that they hadn’t experienced the full history and stories that you guys had? What were some challenges about bringing new team members into that growth?

They had opinions. The more we listened, the better it got because they had good ideas and opinions. Maybe they didn’t know the war stories, but they also weren’t encumbered by them either.

That is a great perspective. They had good ideas. If you grabbed onto the way that you have always done it or the war stories, we earned our stripes and all that thing. You might have missed some of that.

Good analogy with the Zebras. Good job there.

What did you do or what did you learn to do to engage those ideas in a productive way that maybe you weren’t doing naturally at first or maybe you always did it naturally? What did you learn about getting those ideas and tapping into them?

To continue with patience that I started to learn. When I left Baan, it was a consultancy and I had to learn a lot more patience than I previously had. I had come from a place where I had helped build something. I had a COO title. I had resources, people that would do things if I asked them to do them and I was used to that. When you become a consultant, people, even though they are paying you, might not even listen to you.

It’s an influence game. You have to help people do stuff without position authority. What did you do to make that happen?

First, I had to let go of caring more about the result than they did because it didn’t allow me to sleep at night. We had to instill a culture here at Zebrafi in caring enough about the customer but also holding them accountable for their success. That was a balance because we couldn’t do it for them and they weren’t going to succeed if we tried.

You couldn’t care more than they did and then you had to make sure that they were clear on what had to happen and be fully engaged in that process. What about the internal team? I hear you. I know some of these lessons translate from working with clients. How did you engage the internal team to share their thoughts and opinions on how to serve customers and how to build the business?

The management team would turn things over to them. We give them a leadership role before they were in a leadership role. For example, setting up a lead generation leveraging technology like marketing automation, figuring out how to your message in an engaging way that isn’t viewed as spam and represents your brand. It starts a relationship with a prospective opportunity or accounts long before you even know you are starting a relationship with them because you do it in the right way with the thought leadership materials that you have and the approach that you take. That’s one example.

You start to get some traction. You left Baan. You start Zebrafi, this consulting practice or consulting business. You are learning how to get people to take action when you don’t have full control or you don’t have the resources and people aren’t necessarily saying yes to everything that you bring up or ask them to do.

That starts to go and then you start to add more team members to your consulting business. What other challenges did you come across when you started to get some momentum going? You passed that $1 million mark. I don’t know how many people you had at that point. Maybe 8, 10, or something. What started to happen in the team dynamics and in your leadership of the team that allowed you guys to keep going forward?

When we passed $1 million here, we were only 6 people. I harken back to my days at Baan. Once we passed it, we started to ramp up like crazy. The biggest issue we had was hiring and finding enough people and learning the profile that it took to maintain the culture, but also that would allow us the growth and to support the growth that we were experiencing. Both of those things have been important here at Zebrafi but were important at Baan. I made a lot of mistakes at Baan, so I have not repeated them here.

I hate to have you revisit them, but we’d like to learn from some of those mistakes. What would you say was one of your biggest mistakes as it relates to getting the right people in and keeping the culture the way you wanted it? Tell us at least one good nightmare. We want the lesson but set it up with what was a challenge.

I would say the biggest one was when you hire people that come from larger companies and we hired some folks from IBM, HP, and even SAP. Not so much Oracle folks, but SAP we did. The big difference with an entrepreneurial startup is that we stayed that way for a long time as we had this pretty big growth curve. You don’t have the resources that they are used to.

When you interview people, you share with them the excitement. They feel your excitement. They have seen in the marketplace that you are crushing it and they want to be part of that. What they don’t realize is when they joined, we were still figuring it out as we went. We were still creating some of our presentations.

We didn’t have depth in marketing and at the services level. You had to fix problems as you went and you had to create your materials. If you didn’t know how to do that, it’s like hearing about the sexy stories of people finding joy heading West in the early pioneer days. Yet the reality of that or the facts of that is that 50% of the people died on the trail and never made it out there. That’s the way it is in a startup. It sounds like it’s for everybody. It sounds sexy, but it’s not for everybody.

I love this topic and I appreciate you bringing it up. We always talk about the 1s and 3s of revenue and whether or not you have ever had a model around stages of business growth. I would imagine you have felt something like this even if you never put a picture of it. The journey from $100,000 to $300,000 would be a stage in our model.

$300,000 to $1 million. $1 million to $3 million, $3 million to $10 million, $10 million to $30 million, and so on. Roughly every time you triple in size, there’s a new type of business that you are leading. The talent, processes, systems, and maturity of all the people processes and systems are different at that stage of business than at the previous stage. Unfortunately, it’s different at that new stage than it is at the next one you are trying to get to.

There’s this constant balancing act where you love the outside perspective of people who have been a stage or two ahead of you. If they have not done the journey from where you are to that point, it’s unnecessarily messy for them. They don’t know how to cope in that environment. How do you bring in the right amount of perspective of the stages ahead of you without bringing in people who can’t relate to and can’t function well in the messiness? Did you find that?

Yeah. You do have to rethink your business at those stages like you described. I mentioned and picked on maybe some of the established companies, not picked on them, but those are different talents. We thought we could also hire Xi2 people, which was another high-flying company alongside Baan at that time. Those people had experienced the type of growth we were experiencing.

We also learned that you had to find the people that helped create the tornado and knew what that was like or had experienced it someplace. As you said, they have backward talent but also forward talent. If you found those people versus someone who had gotten on board after the magic was already created, to use different words, they oftentimes couldn’t help you build your business because they jumped in when it was considerably easier. Let’s put it that way.

A lot more stability. There’s this group of people who know what it’s like to ride the tornado that you described. There’s another group that does pretty well in stability. There’s another stage dimension to this if they have been in the $3 million to $30 million journey. You are at $30 million and they have never been beyond that. It gets tricky for them to continue that success path. I’d love to take a slight variation on this theme here and ask you about leadership. How did you successfully develop leaders fast enough to keep up with your pace, or did you have to get most of your leaders from the outside because nobody had been there yet?

It was a mix. Not everybody continued to grow and not everybody continued to want to grow. We brought in a new CEO, who was our third CEO at Baan before we took off. One of the things I learned from her was how to retain those people that the organization outgrows. If they are good people, they want to be there and you are growing. There’s always a place for them. How to do that with dignity that preserves their position in the organization? I don’t want to use the word saves face, but allow them to keep their dignity and feel good about staying so that they could. You could stand on their shoulders as you hired additional leaders that could help the business grow.

I hope everybody reading this can grab onto that concept at the appropriate stage for themselves. Let me try to draw that out because what you said is spot on. I have seen it a lot as well, where you have loyal and great contributors who are on the journey for a fair amount of time. At least if you are on more of a rocket ship growth, they moved a couple of stages with you of that growth. They either don’t have the full capability to keep up with where it’s going or maybe not the interest, like you said, but they are still great people and could contribute not in the same seat as before.

Unfortunately, human tendency can get in the way because some people will let their ego not allow them to stay on the bus. For example, if they are in a VP or executive type of role over a function that needs leadership to take them from $10 million to $30 million or $30 million to $100 million, or $3 million to $10 million and they have never done that, but their contribution has been very valuable, some of them aren’t willing to not be the leader of that function.

You bring in somebody else who can help move it forward, and they are like, “I got to go.” That’s unfortunate, but some people are willing and able to recognize, “I don’t have the interest or the know-how to go to that next leg in the journey. There are ways for me to contribute and I will contribute in that way.”

It’s tricky. I love hearing all these stories. It sounds very familiar to some of the journeys that we had in a company that I experienced and what we are trying to bring to these seven-figure business owners or some of those same lessons at their applicable stage. Whether it’s back at Baan or now with Zebrafi, talk to us about the point in time when the leadership team is like before. You were a COO in a larger company and you were part of that whole startup. Now you are the leader at Zebrafi.

How do you choose when it’s time to bring in a little more horsepower from the outside? I don’t mean more than you have, but I mean more than the team has. Maybe to lead a certain function of the team start to hand more responsibility off to another capable leader. How do you know when that time is right?

Up until $1 million-plus, maybe even $3 million, the entrepreneur is often heavily involved in everything still. They know it all and they help build it all. How do you make that transition from knowing it all being the founder to, “Now I’m breaking off a good chunk of responsibility and giving it to a capable leader that I’m bringing in?”

I’m not the smartest guy in the room and I don’t have to be. There are a lot of things I don’t know and if we don’t have that expertise on the team, we are pretty good at recognizing that. One example is the first version of the software that we created. Maybe we didn’t know what we didn’t know because we failed on the first attempt. We bartered to get the job done. We didn’t have the cash. Sometimes you’re cash constrained, so sometimes you find another way. We gave away a piece of the business. We had an organization that was headquartered in the US but used talent in Poland.

Scaling A Business: When you have cash constraints, you sometimes have to find other ways, like giving away a piece of the business.

What we were doing was replicating the models that we built. We built financial models inside of Excel that would predict the value that a prospects solution or a customer of our solution would create for their prospects and their customers. We built some pretty elaborate Excel spreadsheets. We made Excel look like a program and we skinned it and everything. We made Excel do things that most people don’t know it can do. When we designed our first software application, we were, in essence, trying to replicate Excel, which was a huge mistake because if you are going to try to replicate Excel, you might as well use Excel.

Why are we trying to do this again?

It may be the best application Microsoft ever created and very powerful. When we brought in a new CIO, he came in and he took a look at it. He looked at us as a management team in the eye and he said, “You are 50% of the reason this failed. They own 50% and you own 50%.” That was a ding to the helmet at first.

I said, “Why did it fail?” He said, “It’s because they did exactly what you asked them to do. You wanted them to do what you were doing in Excel. You have got to redesign. You have got to sit down and figure out what in your process creates value that could be turned into software. How can you simplify it and how can you eliminate things that people don’t use?”

He made us go through a year-long design before any code was ever written. It was a humbling experience. It was an educational experience. What he created was so much easier to use that it could be used as we expect now from applications on our phones. We don’t expect to have to read a manual or go through any tutorial of any type to learn how to use an app. That was his goal and that’s what he did.

It sounds like a lot of learning. You said, “We failed on our first attempt.” Thanks to some great people like this CIO that you mentioned, that was learning, not failure. You learned a ton in the process. It probably costs a lot to have that learning. It delayed the process for a year. You talked about designing, but now you are happy with the outcome.

It was like paying for a university education.

Most of the people reading this have done that a few times over, and we got to keep doing that. That’s part of the journey. How do you keep doing it? How do you keep pushing yourself to learn and grow so you are not forced to do it by circumstance?

This was a little while back already too, but we got it released. We tried to think about how do we make it easier for somebody to buy from us. How do we offer something of such compelling value and maybe even free, that’s what we arrived at, that solves a problem that we know every one of our customers has and that they have been mentioning to us? It’s like that black box thing that you can offer that works for somebody without having to do anything. That’s your entree into many other businesses and we think we found one of those. We are offering it to your readers for free.

If they have Salesforce, for example. It’s the first CRM that we are using or they can do it in our software, but the way that they get it for free is if they have Salesforce and they go to an opportunity in Salesforce and they say, “This is a good one.” Maybe it’s a good customer they already sold and they click on a button. It’s called Find Similars. It means it’s similar to that prospect.

Our software will go out and find up to five companies that look and feel like the one they are on. That helps them save a lot of time because they don’t have to go do the research. They don’t have to go and figure it out. All they do is go through their accounts and their opportunities and say, “This is a good one. Click on it and get five more. Click on another one, and get five more. We have been hearing for years from our customers to help us more easily fill the pipeline with targets that are perfect for us.

We will get to the way that people can take advantage of that generous offer here. We go to wrap up. You had this cool experience with Baan. You are taking a ton of lessons learned from that as you grow Zebrafi. What are the challenges that you are facing in terms of scaling or growing your business now?

We have to make sure Find Similars produces excellent results. Quality first. We are beta-ing it right now, and what everybody would get would be a beta version. We have got to take our software product to the next level. Salespeople want something that doesn’t burden them in any way and helps advance their deals and have it do that consistently and then update CRM for them. We already do some of that and we need to do more of that so that sellers will naturally adopt our products. They won’t have to be forced to.

What everyone should be taking away from what Jeff is saying here is that the example that Jeff is giving is he is so customer-centric. He didn’t even think twice about going to what the customer needs and what we need to provide the customer in order to continue to scale our business. He probably doesn’t know any other way to think.

I asked the question, fishing for things that you might be trying to figure out still in terms of building the business or scaling the business internally, and Jeff took us right back to what matters most. When you go and solve the biggest problems for your customers in ways that they can easily extract the value, you are going to have lots of customer success pulling you forward. You will then figure out some of the scaling things that you have to figure out internally to keep up with that. I love the focus. It’s a way to be an example of customer-centric thinking there. That was awesome.

You put it better than me and you queued it up very well.

Before your gift or offer for that beta to find a similar capability, what last nugget of wisdom can you share with this group of seven-figure business owners? Those who want to scale, who want to do it without hitting their heads on as many walls if they can help it, and who want to learn from people who have done that before.

You want to pivot quickly but try not to be doing three pivots at a time. How’s that?

Pick a thing and go make it happen.

That’s a flaw I have. I sometimes try to fix too many things at one time.

That’s super-wise. We haven’t talked about this before, so this may flop as a question. Do you have some process in your company, and I will assume it’s quarterly, planning and execution rhythm that helps you narrow down from all the possibilities to select 1 or 2 or maybe 3 things that you are going to focus on? Do you have a way of doing that built into how you run your company?

We do and the mechanism that forces us to do that is we put out a quarterly letter that talks about what did we say we were going to do. What did we do? Did we change any of our priorities during the quarter for any reason and why did we report back? We do have shareholders, but if we had a VC to report to, for example, we try to operate as if we do. We don’t at the moment, but we may someday. We are trying to operate in a way that we would want to be communicated to if we had money in this business, which we all do.

It’s not too hard for you to think that way. I love the discipline there. You have got a quarterly planning and execution cadence, but to hold yourselves accountable to shareholders or would-be future investors, you are developing the muscle now of reporting back and saying, “We said we were going to do this. Here’s what we did. If we did make a pivot in the middle of the quarter around a priority, here’s what it was and why.” I love that. It’s a great practice.

Thank you for that wisdom. I hope everyone reading is thinking about how I can improve my planning and execution cadence on a quarterly basis. That’s something we are all constantly working at in our business. I love the idea of slapping on the accountability to that on the backend that says, “Here’s what we said we would do, and here’s what happened.” Great practice. I love it. Thank you, Jeff. As we wrap up here, how would they take advantage of your generous offer to try out the beta Find Similars functionality that you guys have created, this little product?

If they go to our website, they can click on the link for it and they can sign up right there.

This has been an amazing interview. Thank you for sharing your experiences both at Baan and at Zebrafi. All those lessons learned are the valuable nuggets and reasons that people keep coming back to this show. Thank you for joining us.

You are a great question-asker. I appreciate being on here with you.

Thank you again. For all of you reading, please pass this along to your business owner friends. They need to learn from Jeff especially if they sell to enterprises. They need to learn about Zebrafi. Help them in their business scaling efforts, but also help them in their selling to enterprises by passing along Jeff and Zebrafi as great information. Thanks for reading. Please review, rate, share, and join us again in the next episode.

Important Links

• Zebrafi
• Selling to Zebras
• GrowWithElite.com
• Link – Zebra™ Salesbot for Salesforce