CP13: Podcast with Mike Smalls from Hoopla Software about Boosting Team Performance
Welcome to the 13th episode of our podcast!
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Martin: Hi folks! Do you have a sales team and are really interested in pushing up your motivation while achieving more results? Today we have an entrepreneur who knows all about this. Hi, Mike, who are you and what do you do?
Mike: Hello, Mike Smalls, I’m the founder and CEO of Hoopla. So I lead the strategy and direction of the company.
Martin: What is Hoopla?
Mike: Hoopla is a sales motivation and communication platform that allows companies to take normally hidden data from backend systems like CRM systems and other areas, and bring that data to light. In order to drive the right kind of behaviors and actions from the sales teams and other people within the company by highlighting successes, creating competitions and recognizing performance as it happens through big screen TV’s or mobile devices around the company. It’s like an ESPN network for the entire company.
Martin: Mike, can you elaborate a little bit on your background and at what point in time did you come up with this idea? Was there some kind of moment where you thought: “Ah! That’s a super cool idea”?
Mike: So my background is in building and running sales teams, sales and marketing teams for a variety of companies, big companies like Symantec as well as a bunch of start-ups. I just kept seeing the same kind of patterns and challenges. I wanted to solve problems that I had, which was getting folks to do the right kind of actions and behaviors in advance to produce results as opposed to reporting on information after the fact.
So getting them to do the right kind of calls, meetings, and create opportunities we needed to tap into their natural psychology. And the Ah-ha moment really was sitting in front of my TV on a Sunday watching a football game. When I watched one of these athletes do a flip into the endzone just to get on the Sunday highlight reel and the next weeks review show. I realized that the wiring of an athlete and a sales person are very similar. They love to be on stage and they love to get the recognition and they love to compete and win. So there is a lot of similarities between athletes and sales people. That was the Ah-ha moment.
Martin: Cool, so after this football match what did you do next?
Mike: I was actually working for a company. I actually had a special clause in my contract that allowed me to work on my start-up in kind of my spare time without worry of them owning the idea. I had this idea where I hired a developer that came and worked out of my house. I paid him with my own money to build a prototype of an early sketch that I kind of thought through. It was very different from what Hoopla is today, but it was the beginnings of that. Essentially it was taking that data that was buried and was putting it out in an application, which then I was able to show some early investors, some seed investors the concept. Once that prototype was done it allowed me to raise a little bit of money to get the whole thing launched.
Martin: Cool, so you got investors before you approached potential clients?
Mike: Well, actually there is a sidebar to this story. One of the things I did to try and get prepared for launching this company was that we created a free application. It was just a simple little countdown clock that counted down the number of selling days left in a week, month, quarter, year, or what have you, subtracted out the weekends. That worked inside of sales force and it displayed the remaining selling days right at the sidebar. It was a component of Hoopla, but I figured we would get that out there on the market first to see if we could get some early adoption for free and build our marketing database.
That actually was a really great start because what it did was allow us to get into communication and conversations with potential customers before we launched the real product. To date, we have had over 2,000 companies download that free little countdown clock that is forming the basis for our marketing efforts.
Martin: Cool, Let’s talk about the first three or six months after you successfully raised the money and you developed the MVP version and put it out to the sales force. What was it really like when you got the money to your bank account and started to build a team?
Mike: Well, first of all, it was a little leap even though I had a little money it wasn’t a lot. It wasn’t enough to live off of. I ended up taking a serious haircut in salary, pay, compensation, and all that. I knew the clock was ticking from day one, but it was invigorating in that we got our very first customer. That moment when you sign that contract and they give you a check it is really invigorating. What happened from there was the word of mouth started to spread. Things started to build and to grow. Once we had the investment dollars we still had a six months of development to go before we could actually get out there and sell it full force.
BUSINESS MODEL OF HOOPLA SOFTWARE
Martin: Let’s talk about the business model. So who are your major customers? Is it only the sales department or others functions? Are you focusing on a specific industry or region? What are your target customers?
Mike: That is a good question. We started out built completely on the sales force platform and so our customers were the only customer who was used sale force at the beginning. Sales teams were the subset within that. Our customers were all sort of mid-size and larger companies that had inside sales teams that did transactions and had a lot of activity that they wanted to track and measure.
One of the main components of our system is our TV experience where the individual reps are being highlighted on the screen and they are being recognized. Having people inside an organization to be able to view that was a key element for that first success. We have since expanded out that customers can use us with other data sources as well as other departments. That core first audience of that inside sales team that within these organizations is still our primary foot in the door. We do sell in the US, Europe, Australia, and Canada. Those are our four main geographies.
Martin: Cool, I want to understand a little bit more how the product works. Is it really that a customer is building the dashboard for himself and needs to plug in the TV in order to show this to the sales people? Or is it that you are automatically building some great dashboards and distribute them to the TV?
Mike: Yes, good question. We have a bunch of template elements that can be displaced. So leaderboards, top performers, countdowns, and team versus team kind of elements. We have all these kind of templates that are fed by the data that the customer will link into our system. That linking in can come from a sales force report or it can come from a CSV file, Excel file, and soon a Google sheet spreadsheet. All that information can be fed in automatically.
The customer doesn’t have to be an expert in design or all that. Essentially it is like building a PowerPoint slide show if you will. Put these different components together that play in a loop and they are dynamically being updated as the data is changing. One of the key things that people love is the automated alerts or news flashes that occur whenever data changes that it significant. A deal gets closed, a goal gets met, somebody achieves something, there is fan fair, there is a song that plays, a video that plays and each individual rep can put their own walk-up song, their own custom soundtrack to their face and their image, or show a GIF image. It gets real fun and they have a lot of fun doing that.
Martin: Okay, I understand. So this is the unique selling point, I guess.
Mike: Part of it, yes.
Martin: Imagine I’m a sales guy. I have at least two options when I want to understand my metrics. I can either use Hoopla software or I can use some other dashboard provider which delivers me some real time analytics? Why should I use Hoopla?
Mike: Hoopla makes everything come to life and it is pushing that information out, it is broadcasting that information out as opposed to you having to log into some system to do your own analysis and to remember to do that, right. So to what is happening is as things are occurring in your organization information is being pushed out. People are being celebrated. Wins are being recognized. People can even challenge each other live on a given metric. So I might challenge you to a three-day competition that you have to accept and it’s all public information through a broadcast. The big difference is that it’s relevant, interesting, and engaging, but it’s being pushed out to you and being broadcast to you as opposed to you going I need to go check my dashboard.
Martin: So you are trying to use gamification and pushing the message out there?
Mike: Yes, that’s right. Game mechanics play a role here because it’s recognition, competition, and you can see progress against goals. It is very relevant as opposed to static information.
Martin: Can you put some light on how the competitive situation in a sales team changes once the Hoopla system is in place? For example, what is the average uplift in productivity, sales, per sales person, whatsoever? And what is the effect of the people selling the lowest? Are they team motivated?
Mike: Those are good questions and they come up a lot. First of all from an uplift perspective, are customers report to us all kinds of uplift activities that they see happening. Anywhere from 30% on up and it is pretty amazing the kind of changes that can happen. Sort of to highlight that we have, one customer they bought Hoopla and they had this problem where they had to field in a sales force that wasn’t being updated. It was like a lead source field and they wanted to get that done. What they did was created a little highlight and then focused on that. A competition around who could get those fields updated. The first day they broadcasted that information out there people started to question what field do we have to fill up and etc. By day three, 100% had been changed and been filled out. So by this quick and simple little highlighting gamification techniques, it actually causes the behavior change.
Your question about top performers versus bottom: I think one of the things that are interesting is people have control over these metrics. This is not something happening to them. So if for example you are measuring people on the number of calls being made and they are at the bottom of the list. They have control over how to change that. They can see that and see that as a fair system versus the manager giving favoritism for somebody over another and they don’t know if it’s fair or not. This is an objective system. It’s clear how you can win. That makes it much more motivational.
Martin: How is your pricing model working and how did you come up with this price point?
Mike: Our pricing model is we charge per user, per month. It’s around $15 a user, per month. It actually goes down depending on your connections. But that price point was built on some research that we did by talking to existing customers. We actually hired a firm to help us with that to help us understand the optimal point where customers really saw the value and wanted to have a price point that mapped to the value proposition. We did a lot of analysis on that and that has really been paying off for us. It helps to give us an optimal curve in terms of price point and value gained by the customer.
Martin: Mike, I understand how your business model is working right now. But did it change significantly over the years?
Mike: Not significantly, but definitely we have made tweaks. We have made changes things as we have learned by talking to customers and by seeing what happens on a given quarter or month basis. But nothing really has been significantly different. It’s just minor changes to packages and pricing over time.
Martin: How are you now a day’s acquiring customers and what did you do in terms of customer development?
Mike: So we started off very direct sales, inside sales, where we were using that marketing tool of a free application to kind of generate leads to then contact those folks to create our first customers. We built up a sales organization that did that over time. What we have been doing in the last six months is steering more and more toward making the self-service experience much more possible with the product. You can now go up to Hoopla.net today. You can sign up for a free trial. You get 14 days. You can set up your whole system. At the end of that time, you can just put your credit card in and you buy the product without even talking to anyone if you want or we are here to help. We have live chat. We have people on call. People that can help with the demo of it. The goal is to reduce all the friction to let people buy on their own and add users as they need.
Martin: Mike, when you are looking into the future for the next two or three years, what things of the following do you want to focus on? Is it:
- An internationalization because you said that you’re only active in only four countries?
- Do you want to focus down on the sales department meaning extending the value propositions you are offering the sales department? Or
- Extending the current value proposition you have that means active metrics and motivation gamification and extending this to other departments like for example marketing, customer support, product, and so on?
Mike: I would say that it is the latter. Our vision is that Hoopla is applicable and valuable to every employee in every company. We think every company in the world should be using the product because it makes the employees perform better. It makes them more engaged. It gives them visibility into where they are against their goals, progress, and against each other. So we think that multiple departments are the right answer going forward.
Martin: When you started out what had been your expectations? So let’s say this is what I wanted to have achieved after four years and now you are here and what is the delta between what you have expected and what you actually achieved?
Mike: Good question. You know that everybody always assumes a perfectly linear growth path that keeps going up and to the right. When the day you start till you advance four years and everything goes perfectly and smoothly. I think the difference in reality versus expectation is that is a very herky-jerky path to success. It is not a smooth road. You have got to expect a lot of bumps along the way and be able to react to those changes. Nothing ever goes as planned. Things take twice or three times as long as you expect, but you just got to stay the course otherwise you will get derailed. So it is definitely different than I expected, but very rewarding.
Martin: What have been the biggest bumps and how did you circumvent or manage them?
Mike: I would say categories of bumps, right. It is people, hiring the right kind of people and putting them on the team. It’s making the right kinds technology and product decisions. Where do you put your investment? How fast do you spend your money? Do you optimize for growth or different areas?
I think there is learning’s along the way. You know the CEO’s job is to make sure we have the right strategy, make sure we have the right people, and that we have money in the bank. I have made mistakes in each one of those areas, but I think we are settling down it that.
Martin: Good stuff.
ENTREPRENEURIAL ADVICE FROM MICHAEL SMALLS
Martin: Great, I assume you have a lot over the years. So if your child comes up to you and says: “Daddy, I would like to start a company” and imagine your child is a little bit older like 15 or 16 or so. What type of advice would you give your child?
Mike: Well, I would say first of all the company is going to be more successful if you’re attempting to solve a problem you are intimately aware of, something you are passionate about. Just starting a company for starting a company’s sake I would not recommend it. I would recommend you first identify an area of expertise and a problem to solve that you are passionate about solving because you have to be able to stick with it. I would also give him advice or her advice that you need to be prepared for a long grueling effort and you have got to be prepared for that. It’s not a get rich quick scheme at all. I would recommend that as well.
Martin: Any other things that you have learned?
Mike: I would say – go with your gut because you are going to get a lot of advice from a lot of people, investors, other folks, and if you get tossed and turned a little bit you are going to get off course. If you follow your gut you know exactly what and your gut can usually be trust on that. I think that is a key piece of advice.
I would say don’t spend the money too quickly, be careful, be conservative about it. It goes fast. So you have to make sure you are managing your finances very well because it’s a long road and you want to be equipped for that.
Martin: So when I talk to start-ups most of them, especially in the early days have problems with generating sales. Either because they don’t understand the customer, they don’t know how to reach them, close a deal, etc. You have lots of experience in terms of sales. What is your advice on really closing a deal and getting to the customers fast and cheap?
Mike: You know it’s back to the old crossing the chasm model, but you have to find the early adopters that are going to have influence with other customers. One of the most important things you can do is build sort of band equity and word of mouth within a particular area. If you have got a product and you want to find those customers that want to be your advocates and you want to really leverage those advocates to help spread the word to other customers.
We had the wonderful experience of having some early influential customers that they would tell other people about it or people would come to their offices with our product on the walls, being used and they wanted to know more about it. I think it’s that and making sure that you create really good equity with your customers so you don’t burn any of those bridges. You treat everybody fairly. It’s better to start off with a good group of customers than to have bad word of mouth to be spread out there.
Getting to them the challenges are always breaking through the noise. That is why we did the countdown clock. It allowed us to get in the door. But finding those customers and asking them for referrals, asking people to spread the word for you are really key elements.
Martin: Mike, thank you so much for sharing your knowledge and walking us through how you business model and your model works. Thank you so much.
Mike: My pleasure. Thank you.
Martin: Have a great day.
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Special thanks to Mike for joining me this week. Until next time!