Jan
26
2021
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SetSail nabs $26M Series A to rethink sales compensation

SetSail wants to upend the way sales people get compensated by paying them throughout the sales cycle, rather than a single commission after the sale closes. Today, the startup announced a $26 million Series A.

Insight Partners led the round with participation from existing investors Wing Venture Capital, Team8 and Operator Collective. Today’s investment brings the total raised to $37 million, according to the company.

SetSail connects to your CRM, email, calendar and other systems that have signals about the progress of a particular sale, and then using machine learning looks at points in the sales cycle where it would make sense to reward the sales person for the progress they are making.

As CEO and co-founder Haggai Levi told me at the time of the startup’s $7 million seed round in July, the single commission system discourages risk taking:

“If I’m closing the deal, I’m getting my commission. If I’m not closing the deal, I’m getting nothing. That means from a behavioral point of view, I would take the shortest path to win a deal, and I would take the minimum risk possible. So if there’s a competitive situation I will try to avoid that,” he said in July.

He said the idea of changing the way we think about compensation resonated with sales executives during the pandemic, especially as everyone’s role got altered and teams became distributed because of COVID, but he says while rethinking compensation was certainly a big factor so was SetSail’s ability to connect to all of the sales systems to help build these new approaches to pay.

“I think it’s even beyond just compensation. […] It’s also connecting to all of your data using an end-to-end platform that helps you understand what’s happening between you, your reps and your customers and allowing you to tie that back in using behavioral science to machine learning-based compensation,” he explained.

The company began 2020 with five customers, a reasonable start for an early stage startup, but it ended the year with more than 20 including Cisco, Dropbox and HubSpot. It now has over 5000 sales reps using the platform.

In spite of the growing number of users, Levi says they have no plans to aggregate data, leaving each customer’s data as distinct to build the compensation packages that make sense to them. “We try not to play kind of the data, aggregator role because we want to make sure that every customer’s data is encrypted and secured in a completely different container. The trade off between getting knowledge between customers versus receiving their data is is too high in our opinion,” he said.

The company now has 35 employees with five more hired who will be starting in the next several weeks and plans to reach 70 by the end of the year. They are thinking hard about how to hire a diverse workforce. For starters, Levi says that the company board has two female members. He says hiring in general is a challenge for every CEO, especially early on, and hiring a diverse group even more so, but he says it’s important to be thinking about this from the start because from a gender perspective at least, you are losing half the talent pool if you ignore it.

When the pandemic is over, he sees having at least some in-person office presence in spite of being spread out across San Francisco, New York and Tel Aviv, but it will be probably be a hybrid approach and not require as much office space as they might have rented prior to COVID.

Jul
08
2020
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SetSail raises raises $7M to change how sales teams are compensated

Most sales teams earn a commission after a sale closes, but nothing prior to that. Yet there are a variety of signals along the way that indicate the sales process is progressing, and SetSail, a startup from some former Google engineers, is using machine learning to figure out what those signals are, and how to compensate salespeople as they move along the path to a sale, not just after they close the deal.

Today, the startup announced a $7 million investment led by Wing Venture Capital with help from Operator Collective and Team8. Under the terms of the deal, Leyla Seka from Operator will be joining the board. Today’s investment brings the total raised to $11 million, according to the company.

CEO and co-founder Haggai Levi says his company is based on the idea that commission alone is not a good way to measure sales success, and that it is in fact a lagging indicator. “We came up with a different approach. We use machine learning to create progress-based incentives,” Levi explained.

To do that they rely on machine learning to discover the signals that are coming from the customer that indicate that the deal is moving forward, and using a points system, companies can begin compensating reps on hitting these milestones, even before the sale closes.

The seeds for the idea behind SetSail were planted years ago when the three founders were working at Google tinkering with ways to motivate sales reps beyond pure commission. From a behavioral perspective, Levi and his co-founders found that reps were taking fewer risks with a pure commission approach and they wanted to find a way to change that. The incremental compensation system achieves that.

“If I’m closing the deal, I’m getting my commission. If I’m not closing the deal, I’m getting nothing. That means from a behavioral point of view, I would take the shortest path to win a deal, and I would take the minimum risk possible. So if there’s a competitive situation I will try to avoid that,” he said.

They look at things like appointments, emails and call transcripts. The signals will vary by customer. One may find an appointment with CIO is a good signal a deal is on the right trajectory, but to avoid having reps gaming the system by filling the CRM with the kinds of positive signals the company is looking for, they only rely on objective data, rather than any kind of self-reporting information from reps themselves.

The team eventually built a system like this inside Google, and in 2018, left to build a solution for the rest of the world that does something similar.

As the company grows, Levi says he is building a diverse team, not only because it’s the right thing to do, but because it simply makes good business sense. “The reality is that we’re building a product for a diverse audience, and if we don’t have a diverse team we would never be able to build the right product,” he explained.

The company’s unique approach to sales compensation is resonating with customers like Dropbox, Lyft and Pendo, who are looking for new ways to motivate sales teams, especially during a pandemic when there may be a longer sales cycle. This kind of system provides a way to compensate sales teams more incrementally and reward positive approaches that have proven to result in sales.

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