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Benaissance — A new name and a new blog

Posted on November 11, 2008. Filed under: Other |

I am very proud to announce that we have just launched a new name for our company — Benaissance, Reinventing Benefits Administration. In all our free time, we have also started a company blog.  Please grab a cup of coffee and check out the new site and the blog.  I’ll mostly be posting thoughts about sales strategies on the new blog.  My first post is “Be Proud to Sell — Your Prospects Will Respect You.”

Benaissance Logo

Benaissance Logo

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The Importance of your People

Posted on June 26, 2008. Filed under: Other |

We’ve been just a little bit busy lately.  The company is in full ramp, scaling rapidly, and our sales activity is intense.  Add three children ages four and under at home, and I haven’t had a lot of blogging time.  I had to take a moment today though to make a quick statement about the people we have on our team, and how important the people are to a business.

So far today we’ve had the joy of successfully practicing our business continuity plans in real life for our production system due to a corrupt SAN drive, we’ve had a customer flat out refuse to upgrade to our latest release because they won’t upgrade from IE 6 to IE7, we’ve had two power outages in our office due to lighting strikes, and we’re so busy on the sales side that I have recruited our Director of Support Services and our Controller to run a critical, last minute sales demo for a very large potential customer becuase everyone else is booked solid.  Through all of this, I’m only seeing smiles around the office.  I can’t say enough about the team we have, and the importance of the people to a any business — but especially one at this stage.  The attitude around here is pure “game on!”  I love it (and I really appreciate our people)!

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Satisfaction

Posted on November 12, 2007. Filed under: Other |

I enjoyed the Eagles win over the Redskins yesterday.  I wasn’t jumping up and down with excitement like I was a few years ago when the team was on the path to the Super Bowl, but I was on the edge of my seat through the fourth quarter, and I did do a little dance in my seat when they took the lead with 3 minutes to go.

I am emotionally invested in this team — I’m a fan — and the core of the NFC East (Eagles, Redskins, Giants, & Cowboys) have been great rivals for a long time.  The result is that I can take satisfaction from a win over a rival even in a year when the season doesn’t look too promising.  Each win is celebrated and offers promise for the future.

In many ways this is similar to starting a company.  I can’t imagine being more emotionally invested in a “job” than I am in this company we’re building.  The “seasons” are shorter — measured in months or weeks or less — and the opponents/challenges are certainly different, but the emotional roller coaster can be very similar.  You can have bad weeks, bad days, bad hours, but you also have lots of little, and some big, wins.  You also have the promise of the future — the dream.  It is this vision of the future and the little wins along the way that keep you moving through the bad seasons.

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Imprecise Precision and Company Valuation

Posted on November 6, 2007. Filed under: Company Financing, Other |

My Eagles aren’t so good this year, and I’m the kind of sports fan who ties my emotions pretty tightly to the fate of my team (at least until the last whistle blows and I go back to being my kids’ dad).  I don’t get loud or violent when my team stinks, but I do get negative, and when I’m feeling a little less than sunny, I can spot flaws and find faults in just about anything.  So, while the Eagles were putting the nation to sleep last night against the Cowboys, I had plenty of opportunity to give some thought to something which I realized has made me uneasy me for some time now.

Why do NFL referees make such a big show out of bringing the chains on the field to precisely measure whether a team has made a first down when they’re using the highly imprecise spot of the ball to make this determination?  Is this a P.T. Barnum sucker kind of show?  You have a head linesman on the sideline sometimes as far away as the entire width of the field (or more if he’s behind the play) who comes running in from the sidelines at the end of a play to dictate where the ball was down and place the ball for the next play.  There is no way he gets the spot exactly right.  In general, I’m OK with this.  Human error is part of the game.  What bothers me is them bringing the chains on the field to check to see whether the highly imprecise spot of the ball resulted in the nose of the ball precisely breaking the plane of the first down marker.  Whether or not my team gets the first down may have a precise impact on the outcome of the game, and yet this is often based on a highly imprecise spot of the ball.  Short term imprecision may play a part in producing a highly precise result in the long run.

I’m finding that pre-money valuations from potential capital investors are starting to engender the same kind of emotions in me in that a very imprecise pre-money valuation may ultimately result in a very precise result to my family in the long run.  Ask the VC provides a good and simple explanation of how VC’s determine pre-money valuations here.  As above, in general, I’m fine with the way this process works.  For relatively early stage investments, pre-money valuation is simply an entry into a formula that spits out share price to determine equity ownership percentages relative to the amount of the investment.  In many cases the entrepreneur and the investor can even start at the desired result and work backwards together to produce the pre-money valuation.  Clearly this isn’t a precise science.  What is a company worth when it has some product, little or no revenue, and a defined but not yet proven market?  If a knowledgeable entrepreneur has one capital investor with whom they really want to work, and the entrepreneur and the investor can both amicably agree to a deal which results in an investment amount and an equity share which they both believe is reasonable, then as far as I’m concerned this was a good deal for both parties — a classic win-win.

The difficultly starts to set in though when the entrepreneur has multiple possible sources for funding and all of them have different opinions about how the company should approach the goal of dominating the market.  Different approaches may produce different opinions about a company’s pre-money valuation, require different investment amounts, and result in different ultimate equity shares.  Take for example a company who may be talking to a “classic” venture capital firm, a “classic” private equity firm, and a public company interested in making a strategic investment.  All three by their very nature have different investment philosophies and different goals for their investments.  They may also have very different opinions about the value of the entrepreneur’s “product” in its relation to the market which will produce different company valuations.  Again, taken independently, each deal may be “fair” as a stand alone deal, and I suspect that just about every company has faced a “fork in the road” at one time or another and had to choose their direction.  Will option A which gives me less equity result in a more valuable company meaning my smaller equity percentage is actually worth more?  I’m learning quickly that this is the kind of stuff which separates the winners from everyone else.  In my next post I’ll discuss our current personal fork in the road and the options facing us.

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Evhead, the Valley, and the Awesome Power of Communication

Posted on November 2, 2007. Filed under: Other |

Evan Williams (Nebraska native and co-founder of two Silicon Valley companies that produced Blogger and now Twitter) has written a great post sharing his experiences and thoughts on the pros/cons of the Valley versus anywhere else from the perspective of both an individual wanting to get into the game and an entrepreneur building a new tech startup.  Ev’s advice is fantastic, and I agree with him on all points. 

I spent close to a year of my life all told in my twenties living out of hotels in Sunnyvale working with Tandem Computers (the two Motel 6s across the street from each other on Lawrence Expressway — I was high-end in those days), and the relationships I built and the spirit of the area play a big part in who I am today.  Today though I’m a husband and father working with my partners to build a growth enterprise to revolutionize part of the US health insurance industry and capture a $50B annual payment processing market.  We’re using state-of-the-art Internet based technology to do this, but we need insurance and payment processing experience and contacts as much as we need technical skill, so Omaha is a great place to be.

What is really cool about all of this though to me is that Ev, whom I’ve never met, wrote his post in response to a question I posed on his blog, Marc Andreessen’s post here, and my post here.  The fact that Ev played such an instrumental role in revolutionizing the way the world communicates by founding Blogger and now Twitter just makes it even more fun.

I think perhaps that many Americans don’t appreciate how incredibly precious and powerful access and communication are.  Censorship in China is a hot topic on the blogsphere these days, but I’d like to tell a more personal story.

Lori and I had the great fortune to spend our honeymoon 5 years ago traveling through Eastern Germany with great friends.  A long time friend and colleague, Horst Franz from Wiesbaden, arranged a trip for us from Berlin through Dresden and the Wartburg and down to Munich for Oktoberfest.  While Oktoberfest was great, the most amazing part of this trip were the days we spent in Berlin and Dresden with Horst’s wife’s younger brothers and their university friends.  All of these people in their early 20’s had grown up behind the wall.  They all spoke brilliant English, and we spent great days bicycling along the Elbe, drinking and talking, exploring Berlin and Dresden, drinking and talking, climbing through hilltop castles, drinking and talking… 

The drinking aside, what they wanted to do more than anything, was TALK.  They wanted to know everythingabout the US, and Lori and I were equally interested in learning what their life was like growing up behind the Iron Curtain.  Perhaps our most interesting discovery though was this — about 8 of the students in Dresden lived together in an apartment in an old cement block building which should probably have been condemned.  Their bedrooms had simple mattresses on the floor, and their kitchen and one bathroom were worse than my fraternity house.  However, when you first walked in the front door, you had to duck to avoid the brand new Cisco router mounted to the wall, and brightly colored Cat 5 cables snaked down the long hallway and into each room.  In each bedroom, next to the mattress on the floor, was a fully loaded, high-end PC or MAC.  When I asked them about this apparent incongruity, they each explained that their computer was the most important possession they owned.  When asked why, they each said “access and communication.”  To them, the fall of the wall and restoration of their freedom meant that they finally had access to truth and the free ability to communicate with others — not just talking to friends, but communicating with the world.  It is easy for us today in the US to debate the pros/cons of blogging, twittering, tumblogging, etc., but the greatest thing is simply that we can.  And, we owe great thanks to people like Ev Williams who keep creating new and better ways for us to communicate.

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A Startup SaaS Company in Omaha and Pmarca

Posted on October 27, 2007. Filed under: Other, SaaS Technologies |

I’m a big fan of Marc Andreessen’s PMARCA blog. I and thousands of others greatly appreciate the time he spends to share his experience and wisdom so freely with so many. His early series of posts on The Pmarca Guide to Startups, especially Part 1: Why not to do a startup, are wonderful reading for any entrepreneur who is considering starting their own company. You have to be one part crazy, one part lucky, one part gifted, and many parts incredibly committed to take a company from an idea to something really special. I personally will never forget the day when John and I decided our best course of action was to jettison every single one of our original developers and start over. I’m not sure how well John slept that night, but I’ll always admire the courage it took for him to do this, and in hind sight, it was one of our best decisions.

A recent series of posts, The Pmarca Guide to Career Planning, is equally entertaining and insightful, but one little piece of Part 3: Where to go and why has been bothering me since I fist read it on October 3. Marc advises:

Go to the city where all the action is happening. For technology, at least in the US, this is Silicon Valley…

In my opinion, living anywhere other than the center of your industry is a mistake. A lot of people — those who don’t live in that place — don’t want to hear it. But it’s true. Geographic locality is still — even in the age of the Internet — critically important if you want to maximize your access to the best companies, the best people, and the best opportunities. You can always cite exceptions, but that’s what they are: exceptions.

In general, Marc’s point is a good one, especially if you’re giving “go west young man” advice to a young person who dreams of striking it big in their chosen field, which is what Marc is doing here. To a certain extent, this advice also applies to entrepreneurs choosing to start a new company. John and I recently had one of the wisest and most experienced investors in Omaha (no, not him) explain to us that while people is the most important criteria in his investment philosophy and generally this refers to the founders, the talent pool within the company’s location is an important part of this people criteria. He explained that even if we each had years of experience working for Disney and Pixar and came to him wanting to start a new animated movie studio in Omaha he wouldn’t invest since Omaha isn’t exactly full of talent in this industry.

If you’re an entrepreneur wanting to start a technology company today though, there is no requirement that you be in Silicon Valley.

Sure, if you already happen to be there, your access to technical talent may be better than anywhere else in the US, but in my career I’ve worked with brilliant technical minds all over the US — Boston, NYC, Philly, DC, Charlotte, Atlanta, Tampa, Chicago, Dallas, Denver, even, gasp, Omaha! If you want to go international, I can point you to good friends and brilliant developers on five continents from Hanoi to Wiesbaden to Pretoria to Sydney to Toronto. Without hesitation, in Omaha, Nebraska, I’d put our VP of Technology and Chief Architect, John Borders, and our head DAL and database developer, Eric Smith, up against any technical minds in the world.

Also, as I’m sure Marc would agree, technical talent alone doesn’t make a good member of a startup team. Attitude and effort are equally important. While no company is ever a democracy, a startup company must be a team. To succeed in the early days, each member of the team must be able to pull their own weight and earn the trust of their team members. There simply isn’t room for non-contributing managers in the early days and there isn’t time to micro-manage everyone.

Finally, I’m going to shamelessly plug Omaha. Perhaps when you think of Omaha you think of Warren Buffett and Berkshire Hathaway, Union Pacific, Conagra, Mutual of Omaha, and Peter Kiewit Sons. You should, these are all great companies. Do you know though that Newsweek has named Omaha a “top 10 high tech haven?” Do you know that Omaha ranks first in the country in millionaires per capita and golf holes per capita? Do you know that Omaha ranks 8th in the top 50 US cities in billionaires per capita and Fortune 500 companies? Do you think of Omaha every time you use an ATM card or a credit card? You should. Check out ACI Worldwide, First Data, and First National Bank of Omaha. Do you think of Omaha when you call just about any large company for customer service? Check out West Corporation and SitelTD Ameritrade, Gallup, infoUSA, PayPal, LinkedIn — all are either headquartered here or have a major operations center here.  Who knew when Lori and I moved here 5 years ago that I’d become such a fan of Omaha?  I guess I just like being right in the heart of it all…

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CTOs and Market Driven Companies

Posted on October 22, 2007. Filed under: Other |

What is a CTO? I’ll do better than tell you, I’ll show you.  My friend Niel Roberston is posting again, and I think his blog is one of the best peeks inside the mind of a great CTO you can find.  His most recent post is titled Do Programming Languages Matter Anymore?  I had the great pleasure of working with Niel a few years ago at Newmerix, and I’ve never known a CTO who could so deeply understand the needs of a market, envision and articulate technology based solutions to those needs, and guide the engineering team to turn the vision into reality.  A truly great CTO starts with the market and goes back to the product and technology.  Far too many CTOs (and far too many companies for that matter) start with inventing a new technology and then try to create a market.

My positive experience working with Niel and my “lessons learned the hard way” experiences early in my career taught me how much easier it is to sell a solution which was built to solve a significant unmet market need then one invented by brilliant technologists simply because it is better than solutions which currently exist.  This is why I love our current company so much.

John Jenkins, our founder and CEO, built the nation’s largest independent third-party COBRA compliance administrator, COBRA Outsourcing Company, before conceiving our current company, COCO Development.  What do we do at COCO Development?  We solve the very specific pains John experienced in building COBRA Outsourcing Company.  John learned first hand why there is an incredible disconnect in the COBRA and Retiree Continuation industry where 72% of employers outsource continuation administration but no one third-party administrator owns greater than a 4% market share.  Simply put, the incumbent technology solutions on the market are outdated and can’t scale and the two largest operational pain points in continuation administration — payment processing and mail fulfillment — can’t scale efficiently without significant capital investment, economies of scale, and experienced process optimization.  So, we solve all three — technology, payment processing, and mail fulfillment.  I love the reactions of our prospective customers when they first learn of our integrated suite of solutions.  “You really get it,” and “this is exactly what we need” are pretty nice things to hear.

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When is hearing the F-bomb a good thing?

Posted on October 20, 2007. Filed under: Other |

I’m not exactly a choir boy. You can’t spend four years in one of the largest fraternities at Dartmouth and be a saint (you do know Chris Miller who wrote Animal House went to Dartmouth?) . I’ve also spent most of my professional life selling enterprise software, and when high-end sales people are together behind closed doors, ego and quota busting are all that matter — leave your sensitivities at the door or go home. However, I can’t think of one time when I’ve ever used any curse word in front of a customer. Customers using them in front of me is also pretty rare. It is rare enough that at a former company we routinely referred to one of our customers as “F-bomb ___” due to his incredible creativity at working the F-bomb into every other sentence when he spoke. He was so creative that George Carlin could have taken lessons from him.

The last few months though have produced a watershed of F-bomb droppings in meetings. In each case, we had an executive or c-level officer sitting in front of us start dropping them casually and without any malice towards the end of our meetings. It has happened so often in this recent stretch that John and I have begun to talk about this as much as the net results of the meetings themselves. I suppose I should note that all of these meetings went very well, and all of the relationships we were hoping to build are progressing nicely. So, when you hear the F-bomb like this, could it be a good thing? Could use of the F-bomb be a c-level code for “I like you guys and what you’re doing, and I’ll signal this to you by dropping the formality being very familiar with you?” If this is the case, I’m going to start hoping to hear the F-bomb as often as I can.

Of course, there is always the alternative theory which goes like this — “You’re in my f’in company on my f’in floor in the premier f’in office building in this f’in city, and I’ll say what I f’in please whenever I f’in feel like it.”

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The Power of Face-to-Face

Posted on October 18, 2007. Filed under: Other |

Don’t let my VP Ops title confuse you.  I’m a sales geek at heart.  In a good startup you have a small team of great people who all wear many different hats.  In our case, my title simply means I work hand-in-hand with John and John (our CEO and VP of Technology), our Director of Payment Processing, our Director of Marketing, and our Director of Customer Support to ensure that we execute on implementing our vision. 

My background though is defined by hundreds of thousands of air miles sitting in coach and more nights spent in hotels during my twenties than at home.  I remember a call once from my grandmother, Dori, when she scolded me for not letting her know that I was going to be in Milan since she could have given me wonderful advice on what to see.  I don’t think she really understood when I explained that I’d only been in Milan for 24 hours since in one week I’d had meetings in Amsterdam, Brussels, Paris, Milan, and Madrid.  Why on earth would someone do that???  The answer is simple — face time.  I was selling enterprise software and building international sales channels, and the only way to do that well was good old fashioned knee-to-knee selling.

Like many companies today, we’ve found that we can be highly successful selling our suite of services to most of our target market by web cast.  This is great for many reasons, and cost savings is only one of them.  The fact that my wife and kids know me really well is a pretty great benefit too.  What you miss though in a web cast are the intangibles — body language, force of personality, depth of understanding, influencing group dynamics, and most importantly, relationship building.

The old adage states that selling starts when the contract is signed.  This is pure BS when you’re selling enterprise class software as I can only think of one time in almost 15 years when all I had to do was answer my phone to take an order from a purchasing department.  The truth though is that relationship building can’t stop when the contract is signed, and if you haven’t done much relationship building before you got the signed contract, you now have your work cut out for you.  This is especially true in our case where our revenue comes in over time only as our customers ramp their use of our system and services.  So, if your close percentage is high through web cast selling but your support volume is high or your customer retention is lower than expected, perhaps the apparent cost savings from selling via web cast aren’t as great as you thought.

John and I got up at 4:30 AM today for a morning meeting in Kansas City and were back in the office in Omaha by 1 PM.  I’m a little tired this evening, but I’m so glad we made the trip.  Nothing beats face time, and its always good to get back to your roots and remember what got you here.

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  • About

    Mark Waterstraat

    VP Sales

    Benaissance

    www.benaissance.com

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