“How to Get Things in Place Before Selling to Enterprises”
Interview with 4me CEO Cor Winkler Prins.
There are always going to be challenges for startups that sell exclusively to enterprise clients. That’s particularly true in a crowded market like service management. However, CEO Cor Winkler Prins and his startup 4me have found a way to succeed by being able to thrive on complexity. Of course, it helps that Cor and the other leaders of 4me have past startup experience to help guide them on their journey.
Cor joined startup coach Roland Siebelink on the latest episode of the Midstage Startup Momentum Podcast. He talked about 4me and shared learnings that only someone with experience from multiple startups can know.
- What startups need to do to sell to enterprise clients.
- How startups without a track record or a lot of employees can get enterprise clients to take them seriously.
- How startups can position themselves to be acquired one day.
- What potential serial entrepreneurs should know about starting a new company or changing industries.
- Why 4me believes in avoiding channel conflict even when its competitors don’t.
- How 4me was able to create a stable and growing partner community.
Roland Siebelink: Hello and welcome to the Midstage Startup Momentum Podcast. My name is Roland Siebelink. I’m the founder and CEO of the Mid-stage Institute.
And I help startups around the world do much better and maintain their momentum while growing extremely fast. And of course, every week, we talk to one of those startups. And today we have in our studio Cor Winkler Prins, who is the founder and CEO of 4me.
Cor Winkler Prins: Hello, Roland. Very nice to speak with you.
Roland Siebelink: Absolutely. It’s an honor to have you. Let’s dive right in, Cor. What does 4me do? Who do you target? And what difference do you make in the world?
Cor Winkler Prins: 4me, in its most simple form you could describe as a self-service platform or portal for enterprise employees, behind it a workflow engine that allows workflows to cut across the silos within enterprises. For employee onboarding, for example, it cuts from HR to IT and facilities for a new cubicle or whatever. And then the third element, apart from the portal and the workflow engine, is the analytics to see where workflows can be improved.
Roland Siebelink: Perfect. Okay. Sounds very compelling. The user, the beneficiary seems to be enterprise employees. Who is the buyer of this platform?
Cor Winkler Prins: Well, typically we go in through IT. Many of these products - our competitors, essentially - come from an industry which we call IT service management. And IT service management products, they originated way back when as help desk tools. But at a certain point in time, the help desk tool when intranet became a big thing, got this portal. And then of course, other department heads would also use that portal like the HR director. They think, “Well, why don’t we have a portal?” And that’s pretty much where these things get started. But we basically now are considered enterprise service management products.
Enterprise service management being more than IT, but we always go in through IT because IT is the first one to set it up. There are a few technical things that need to happen to get that portal working. Single sign-on, for example, so every employee, once they’re on the network, they can make use of that portal. But also importing the organizational structure, the employee, et cetera. Then that is best handled by IT. It’s very simple, there are standard integrations. But if you go in through HR or facilities management or legal, they shy away from that work. But once it’s up and running for IT, what is unique about 4me is that it’s really easy to set up additional environments that are separate and can be configured without affecting any of the other 4me environments within the enterprise.
The important thing, particularly for really large enterprises that have IT departments around the world, for example, HR departments around the world, they have finance departments, then they have shared service centers in different regions, and they all need to work together. But they also have very different needs. You may have an IT department at the headquarters, quite large, and they have very advanced requirements there. They’ve all gone to IT training. They know exactly what to do. They’re very mature in their thinking around how to deliver services to the enterprise employees whilst maybe they have a very small representative office in the Philippines with two IT staff working there, and they just want to be able to get the tickets in from the employees, fix them, be done with it.
And their requirements in terms of the configuration of their environment is very simple. They don’t want to be confronted with the complexities that the IT department at the headquarters, for example, has put into their environment. But as a CIO, you want to be able to report over all of the IT departments around the world, and maybe break these reports down by region or by country. What we do with 4me is we make that possible whilst also giving each IT director in each country the autonomy to decide how they configure the environment to best serve the local business. And that is what makes 4me very unique.
Roland Siebelink: One key question I always hear is selling to an enterprise, it seems like you can get such a huge deal in one go with so many employees, but then you alluded to actually, then you need to start selling into every unit because it’s not because headquarters is convinced that automatically everyone will take up the service. How has that been in your experience? Whether in 4me or in some of your previous companies?
Cor Winkler Prins: It’s a very good question because I understand large enterprises quite well. That is where I spent essentially my entire career, even before I went into the IT industry. The thing people like about enterprise is that the deal sizes can be phenomenal. You can land a deal that is over a million dollars. You can get that paid and get that cash that you receive in your bank account that you can then use to expand without dilution.
Roland Siebelink: Exactly. And maybe just as a side remark, I’ve heard that if startups are targeting enterprise, that if they try to offer any price below a million, the enterprise won’t take them seriously anyway. Sometimes that’s a learning that founders need to get to at some point in time. Offer high enough or they won’t trust that you can actually deliver.
Cor Winkler Prins: Well, the problem is though, Roland, to get there, to get them to take you seriously, it is not just a matter of posturing. You actually need some things in place for them to even be willing to consider speaking with you.
Roland Siebelink: For instance, previous experience, like certifications.
Cor Winkler Prins: Exactly. First of all, when we started and we had our minimum viable product ready, we bootstrapped fast. We had quite a bit of cash. Then we actually had to sell it in order to get cash to further invest. We put all our savings into this. We’re getting to the point where our spouses were getting a little bit concerned. We decided we can do two things. We can raise money and dilute or we can bootstrap a little further, find a customer, a large enterprise that is willing to take a chance on us and spend some money with us so that we can continue to build. But at the same time, learn from that organization.
Now, obviously that’s hard. We were four people at that time, two developers and two on the process side. And we started to look in our own network, the two consultants. Fortunately, we used to deliver decent work, so people did take us seriously. But for a large public organization to take us seriously, a company of four people, it is really difficult.
Fortunately, we found such a customer. We were allowed to do a pilot with them and they provided a commitment that if we were successful - we had to do it in the UK with that organization, that’s where they were the most demanding - but if it worked there, then they will do a rollout to every IT department around the world. And we were successful. They paid us. We were able to breathe a little bit.
That’s how we continued to the next phase. We needed to learn a lot from this customer. They were pretty advanced. They were really complex as an organization, so many legal entities, so many brands. But from an IT point of view, this CIO wanted complete visibility.
Roland Siebelink: Is that now a criteria when you look for target customers, that it must be the kind of enterprise where the CIO wants a lot of transparency, wants a lot of control over the different units because that’s one of the benefits you provide.
Cor Winkler Prins: Typically what we find in these really, really large organizations, conglomerates is even more wonderful for us. The more complex, the more clear it becomes that 4me is the only solution.
Roland Siebelink: I love it. You’ll really thriving on complexity, right?
Cor Winkler Prins: Yes. We have a very practical answer for this.
Roland Siebelink: And that’s not a common thing with software. I think most software offerings are really meant for a simple use case. And then any complexity is waved away or they try to hack it on.
I wanted to come back a little bit, Cor, to the fact that both you and Laurens had several companies before and many of the listeners to this podcast are first-time entrepreneurs. Two questions about that. One is how do you actually get your company at some point in time into an acquisition? How do you make it attractive? What do you do to be acquired at some point in time? Maybe this is for later for them, but do you typically stick with your experience in your industry for your second and third startup? If not, are you just going to repeat yourself? How do you think about the evolution of several startups in your career?
Cor Winkler Prins: If you want to be acquired, the best way to do it is to establish relationships with organizations that you could see yourself potentially being acquired by. Preferably, the ones that you actually want to be acquired by. If you, for example, would like to be acquired by Microsoft or SAP or Workday, start building integrations with these organizations. Make sure that you have shared customers, that you celebrate shared successes. Press releases around a customer going live with your product and the integration to the other products. That will get the attention of, particularly, the salespeople of that organization. And if you can, meet with those salespeople, particularly at industry events, for example, and build a relationship with them. Then you can start to look for opportunities where you can together position the complete solution to a customer. That is probably the best way to start working toward an acquisition.
Coming then to the second part of your question, what was that again, Roland?
Roland Siebelink: Yeah, I’m trying to understand when you are a serial entrepreneur, so you found several companies in your career. Is there a drive to do something completely different every time? Or is it more staying in the same path, just doing the next iteration of what I’ve always been doing before. And how did you manage that balance in your own thinking?
Cor Winkler Prins: Yeah, it’s very tricky because I have to admit after I sold the second company - that was sold to the leader in the industry at the time BMC with their remedy product - I was seriously considering moving into a completely different field. I was a bit bored with service management. A new version of ITIL had just come out - the methodology, I wasn’t very keen on the direction it was taking. If I looked at all the products on the market, including the leader now ServiceNow, I was not terribly impressed with that either. There was nothing new in it, except that they host it for you rather than you having to host it on premise. But what’s the difference, right? From a philosophical point of view, it was all pretty much the same.
And the reason why you probably don’t want to look at something in a different industry is that you won’t have the benefit of your experience. You’ll have the benefit of the experience of setting up and selling a company in the past. But will it translate to the other industry that you’re now entering? It will be difficult. And there will be people who have 20 years of experience in that industry, they’ll be much better positioned to compete with you.
What I believe is that you should only set up a company if you see that there is a big gap that needs to be filled. There’s a big problem that may be not even apparent to people currently but will become a problem in the future. At least if that’s your expectation, then there’s a hole to fill, essentially. If you spot that, you spot the problem, and you see that there will be enormous demand for it, sufficient demands for you to create a billion-dollar company. Then there is a reason to do a startup. Anything less, just don’t even do it because it’ll be painful getting a company off the ground. It is super emotional and the amount of time that you need to put in is always way more than you expect. If any company that you start, if you knew the problems that you would encounter beforehand, you would never start. You can ignore that, but at least have the upside of a real problem that you’re attacking, so there will be demand for it and sufficient demand, addressable market, that it can grow into a billion-dollar company.
Roland Siebelink: Absolutely. And this is why you say that at a very young age of 52, you already say this is your last company because you know it’ll take a long time to actually get it to the billion dollars.
Can we talk a little bit about the team that you’ve built so far? People are always interested to get a feel for how big the team is now and what are the key departments and how big are they in relative proportion.
Cor Winkler Prins: Wow. We have quite a team nowadays. When we started, Roland, I honestly could not imagine that we would ever grow the company beyond 12 people. I just couldn’t see us needing any more.
Roland Siebelink: Whatever fits around the breakfast table, right? At the beginning?
Cor Winkler Prins: But now we’re at 54 people. But we’re still continuing to hire more people. About 10 of those are in the R&D department, maybe with more than 10 now. Then we have support. That is important. We also have partner enablement, our resellers because we don’t do implementations ourselves. We don’t have a professional services organization.
Roland Siebelink: You’ve worked with partners from the start. That’s really good.
Cor Winkler Prins: Exactly. We believe in avoiding a channel conflict. Even though none of our competitors seem to, it’s very important in the long run for a stable and healthy and growing partner community. We need to enable that, so we have very experienced people helping partners get started training their consultants and that sort of thing. That’s part of the enablement, just a few people there in the UK. Then we have a lot of pre-sales. We call them the service management architects. They do more than just pre-sales, actually, because they also look after the existing customers.
Roland Siebelink: Just as a small question since you mentioned avoiding channel conflict. It sounds like even if you have your own sales people that can set up demos and stuff, that you always do that in conjunction with the reseller, is that the right model that we’re talking about here?
Cor Winkler Prins: Not entirely. It varies a little bit. Some prospects come in through our website. Some of them we just pass to resellers because they’re not very big or the reseller already has an existing relationship with the organization. Some of them we feel are too important. We develop them ourselves. But we always have to give it to a partner. But we work with the customer to find the right partner for them. Toward the end but typically before the close, we make sure that the customer is comfortable with that partner.
Roland Siebelink: Yeah. You bring in the partner so that you don’t have to take on the implementation yourself.
Cor Winkler Prins: But the reality for our partners is typically they land a big deal and you don’t hear from them for a few months. They don’t concentrate on sales anymore at that point.
Roland Siebelink: Yeah. But that’s a great division of responsibilities when you are able to just land business for your partners and keep them busy that way. You already mentioned that your vision is big and compelling. Are you still striving to be a $1 billion company one day?
Cor Winkler Prins: Yes. Yes. Yeah, absolutely. It is also unavoidable at a certain point. In the startup community, the idea of a network effect is commonly discussed. If you look at how all of our competitors do business, they basically go out, they find prospects, they sell to them, they close the deal, and then they’ve lost the prospect. And then they start all over again. Whereas with 4me, you can go after a deal, you close it, and then you start the discussion - okay, first of all, internally, how can we extend, obviously? But the network effect comes in from talking to the customer, finding out who they rely on in terms of providers and asking them, can you introduce us to these providers?
And then when you land a provider, an MSP, you immediately have at least 200 customers. It makes a huge, huge difference. On the one hand, you have our competitors struggling with all these different infrastructures, separate infrastructures for their customers, tens of thousands of them, which makes the infrastructure cost really high. But also, these customers run different versions of the software, and they run them on different data centers, which makes support really expensive for them. And then if they don’t have a network effect, the largest costs for selling into the enterprise, selling such a complex solution into the enterprise is sales and marketing.
Roland Siebelink: Exactly. I really like how you’re disrupting this model by then finding the instructions to the MSPs and getting into the critical mass there.
We’re almost out of time, Cor, but I just wanted to ask you if people want to hear more about 4me and want to learn more about 4me, where should they go and what should they download?
Cor Winkler Prins: Well, I would recommend just go to 4me.com. Ask for a demo. Somebody will reach out to you and we’ll discuss your needs with you before actually showing you any screenshots and that sort of thing. You don’t want to get into that detail right away. But just have a conversation with us and see how we can help you.
Roland Siebelink: Excellent. Okay. Thank you so much, Cor Winkler Prins, 4me founder and CEO, thriving on complexity. That’s what I really get out of this conversation. Thank you so much for your time.
Cor Winkler Prins: I really enjoyed it, Roland. Thanks.
Roland Siebelink talks all things tech startup and bring you interviews with tech cofounders across the world.