By Anthony Ha
So you’ve built an amazing product — how do you actually get customers to use it and pay for it? That’s what Alloy co-founder Laura Spiekerman joined us to discuss during a recent conversation with founders in Eniac’s portfolio.
We’re proud investors in Alloy, a fintech unicorn. As Laura explained in a previous interview, its product serves as a “command center” for banks and fintech companies looking to centralize customer approval, fraud reduction, and other identity-related tasks.
In the startup’s early days, Laura (who recently transitioned from being Alloy’s chief revenue officer to its president) had to teach herself how to be an effective salesperson and marketer, which is why we thought she’d be the perfect person to explain those skills to some of our early-stage founders. And although the full recording of the session is only available to Eniac’s portfolio, we were so impressed with her insights that we thought they deserved to be shared more broadly.
Alloy’s most effective tactic when it first started growing, and its biggest mistake
“Most effective, I think, was paying a ton of attention [to our early clients,] especially on the solution side. We had a dedicated solutions engineer for clients to ensure they had a successful implementation of our platform and a resource for any ongoing questions. That was a very non-scalable thing, but ultimately was probably one of the single most effective things, even if it felt counterintuitive to me at the time.
“[Our biggest mistake] was probably not doing the very basic segmentation from a reporting and internal learning perspective earlier. Saying: Who are the different [ideal customer profiles]? And again, we didn’t have a marketer until 2020, so five years in. I think that would’ve been the job of a marketer in the early days, going, ‘Who are we selling to? Why are they buying us?’ We just didn’t have that person and I wasn’t doing it, because I didn’t know I was supposed to be doing it.”
Seriously, focus on those early customers
“[Our CEO, Tommy Nicholas] spent a ton of time with our first few clients. At the time, I kept telling him it was too much time and that we need to move on to our next 10 clients. I was totally wrong there, and he was right. Investing in those first clients very heavily, and making them love us, was huge. That was what mattered the most for the next one or two fundraises.
“I remember in our Series A, an investor who gave us a term sheet said, ‘I called this neobank customer of yours and they said Alloy is the first bill that they pay.’ That was a really big signal for them. So I was wrong to say, ‘We need 25 customers, who cares how much they love us?’ [Instead,] let’s get three that are just going to get on these investor calls and express how much we matter to them.”
But you can also fire customers, or at least say no to them
“We’ve probably overinvested in a couple [customers]. There are companies that get really, really hot and grow quickly and some founders can be really crazy people, as many of you know.
“So when you’re dealing with founders of hot companies, it can be easy to be bullied a little bit by them. We’ve seen that maybe once or twice, there are probably times where we should have put clearer guardrails.
“And that may not even [mean] doing less work, but it might be saying, ‘Here’s the scope, here’s the timeline, here’s the deliverables.’ Just putting more of it in writing would’ve helped us.”
Don’t forget to train your sales team
“There was a point where we went from a single small sales team, where everyone was doing every type of deal, to hiring the next five or eight or something and breaking into [separate] teams. That was probably the biggest miss, where we hadn’t built in any sort of enablement for them.
“Really, that’s what I would do differently next time. If you’re scaling from the first two to four reps, they should be, at the start, people who can just go and figure it out themselves and build their own collateral and help train themselves. But the next set you’re going to bring on probably won’t. And you have to start thinking about how to actually on-board and train people.”
Don’t overreact to your competitors
“We didn’t have direct competitors for a very long time, but from a pricing perspective, you either were going to use Alloy or you were going to build a solution yourself by taking a few different data products that exist in the market. [So that was how we thought about competitive pricing, at first.]
“Eventually, in 2020, we saw competitors, and that’s when we had to start reacting. The biggest thing is pricing. Newer entrants in the market will underprice us to win deals, which makes sense, it’s a good strategy. That’s been the biggest thing about deciding if and how to react to that: Do we just meet their pricing and then go down from there, or do we out-product them?
“I think it’s about keeping your eye on what their strategy is, but I’m very glad we didn’t overreact early, because I think we would’ve destroyed our pricing. If you overreact, you can end up in a weird path.”
Thanks again to Laura for being so generous with her time and knowledge! For more of her insight, check out our panel last year on product-market fit.