When just beginning a startup, if an offer was made for a million dollar investment, most people would probably take the money. That’s understandable. The blood, sweat, and tears of scraping along on your own dime is not a choice one would elect if another option existed.
But taking the money could be a terrible mistake, according to Andew Butt, the co-founder and CEO of Enable. “Being venture funded too early can result in spending a lot of capital before there’s any proof points,” he says. In his early years, he ground it out, and he says it made his company stronger.
Today, Enable helps companies manage complex B2B deals and has changed the way many leading brands do business.
On this edition of Founders Journey, Andrew talks about how he went from building software for other companies to following his dream of building his own, and how and when he eventually knew it was the right time to finally go after that funding.
More information: https://enable.com/
Andrew Butt is the Co-founder & CEO of Enable, a modern, cloud-based B2B software solution for rebate management. Distributors, wholesalers and manufacturers across over 50 industries now have an easy, seamless solution to execute and track their full range of trading programs. The company is backed by $16M in funding from notable Silicon Valley investors, Menlo Ventures and Sierra Ventures.show more
Launched in 2017, Andrew and his co-founder met twenty years ago while learning to fly helicopters. In March 2000, they formed their first business together, DCS E-Commerce, a profitable software engineering company, employing a team of 100. The company was ranked in the Sunday Times as the 50th fastest growing private technology company in Britain.
Four years later, they co-founded Information Matrix Ltd, a B2B SaaS business, which was acquired by London-based private equity firm Sovereign Capital.show less
Video Transcription: Why Bootstrapping is Better | Andrew Butt from Enable
DISCLAIMER: Below is an AI generated transcript. There could be a few typos but it should be at least 90% accurate. Watch video or listen to the podcast for the full experience!
Andrew Butt 0:00
What we’ve learned is, again, being focused on what type of customer we’re trying to win, where there’s a very, very good fit. So it comes back to what I was saying earlier about services versus services versus products with a service, you’re almost trying to win anyone and then find out what they want, and then build what they want. And that’s fine. That’s how that’s how that works.
Alexander Ferguson 0:24
Welcome to UpTech Report. This is our founders journey series UpTech Report is sponsored by TeraLeap. Learn how to leverage the power of video at teraleap.io. Today, I’m joined by my guest, again, Andrew Butt, this is part two of our discussion. He’s based in San Francisco, California, co founder and CEO of Enable now Enable is focused on supply chain digitization. They’re much more than a rebate management software. But it was a fascinating conversation, definitely go back and listen to Part One or a conversation to know more about Enable, but in this conversation, and I’d love to hear more about your story, your journey of building Enable, and because it’s been six, almost six years, five, six years now, since you started, how many? How did you get to where you are today?
Andrew Butt 1:09
Sure. So yeah, I mean, my background has always been in, in kind of application software applications. And, you know, starting out really in the late 90s, when, when web software started to take off, you know, and people were starting to create applications in the cloud. And of course, it wasn’t called the cloud back then. But that’s that’s kind of what it was. And I’ve then built a couple of different businesses. And a lot of that was focused on really building software for other people. So so we hired great engineering teams, and we built software for the people. And And along the way, then found lots of common problems and common requests where things were coming up time and time again. And that that really is what led to Enable, which which was really built to solve a very specific problem that we found that customers kept kept having. So that that I guess was the beginning.
Alexander Ferguson 1:59
Yeah, so see in your LinkedIn, sea of information matrix Ltd, and VCs e commerce, that’s where like that evolution started of building software for other companies. Which then yes, name Yeah,
Andrew Butt 2:11
yeah. So DCs ecommerce. I think I mentioned in part one, my co founders guy called Dennis short, and his business is called DCs so so we went into business together and created DCs e commerce,
Alexander Ferguson 2:22
the same time, the information matrix building stuff for others, while you’re also being a partner and building dcss.
Andrew Butt 2:30
So TCS was was really the kind of DCs ecommerce was the services that we were we build software for other people, and then info matrix or information matrix that was actually a previous SAS company. So that was a spin off. And that was actually exited to private equity quite a few years ago, but was a great, great company.
Alexander Ferguson 2:48
Now, for you going from a service business to going into to SAS talk about that, that transition and the mentality and the change there. How was it different? And what did you learn? Sure,
Andrew Butt 3:00
yeah, well, no, I really, that the appeal of actually building something ourselves, you know, our own products, our own IP, if you like that, we could really help lots of customers to get benefits from a standard product that was very appealing, rather than just building custom software for other people where that then became their IP, you know, and then we have sort of many, many different code bases if you like. And, and it’s, I think, building a SaaS business and creating our own product has a real sense of, of actually creating something of value to the world.
Alexander Ferguson 3:33
What would you say is the biggest challenge in in changing from service to, to product based?
Andrew Butt 3:39
Yeah, so it is a very different DNA, I’ll use that word again. In the service world, it’s all about just understanding deeply what the requirements are of a customer and then building something that’s perfectly tailored to meet those needs. Whereas in the product world, we have to have a fairly standard products that can help lots of people. And it’s a different mentality, and saying yes to everyone, and building whatever they want is definitely not the way to build a great product. So that is a big mindset shift
Alexander Ferguson 4:07
there for you when you started Enable it was bootstrapped. Is that correct?
Andrew Butt 4:09
Alexander Ferguson 4:11
What lessons have you learned from being starting bootstrap to now? you’ve you’ve raised recently, your your a round, is that correct? Yes.
Andrew Butt 4:18
That’s correct. Yeah. So I think the bootstrapping approach is a great way to be kind of very focused and efficient and scrappy, you know, you are literally kind of funding it yourself. So So, you know, cash is tight. And that really focuses the mind. I mean, one of my investors actually talks about a comparison with with vines when they grow and if there’s a very dry year, they have to the vines have to actually effectively, you know, dig deeper to get that’s a bit like a bootstrap company. You know, you have to really have that intensity to get things off the ground. And I think being kind of venture funded too early. result in just just spending a lot of capital. And you know, before there’s any kind of proof points, so. So I think bootstrapping is a great way to get started and have a kind of model, which is viable. And then really, the venture funding is how to then accelerate that and actually get into the market
Alexander Ferguson 5:18
for you, what was the indicator or data point saying, okay, now’s the time to go from just keep bootstrapping to let’s raise some money.
Andrew Butt 5:27
Yeah. But I think I realized that, you know, we had something really good in terms of the market needs the problem in the market, the opportunity, and the products that we had developed. And in order for us to kind of be the number one in that space, we had to go fast. And, and so we were kind of going quite slowly and quite cautiously to prove that out. But once we’d got say, you know, 20 customers, 20, separate customers who are all very happy, and it was working very well, then I realized I could just keep going and take another sort of two years, whatever, to get another 20 customers, but to really make this happen, we need to go faster. And that would require, you know, a lot more funding that we could provide ourselves. So that that was the point really,
Alexander Ferguson 6:12
was this the first company that you you personally went out and got funding for?
Andrew Butt 6:17
Yes, it was. Yeah.
Alexander Ferguson 6:18
What was the role the lessons learned in that? endeavor?
Andrew Butt 6:24
Yeah, I Well, I think it’s just like anything, really, you learn you do something for the first time. And it’s a learning curve. And often it can seem daunting and difficult. And then once you’ve actually done it, then it starts to become, you know, it’s actually you know, util demystify it. And it’s not not necessarily that complex. So, yeah, I think lots of things really, that I would say, came out of that. Just having having real laser focus on, you know, what we’re trying to do, or, you know, where we’re trying to get to, and what, what our, what our requirements are, and being very clear on that what our timescales are, you know, and being very deliberate. So, so yeah, we are raising funding for this reason, this is why we’re doing it, this is how much we’re raising. And this is what we’re gonna get it done by what’s most important, rather than kind of being it’s just important, be very committed to it.
Alexander Ferguson 7:15
How long from the decision, saying, Let’s go get funding to You got it? How long was that period for you?
Andrew Butt 7:21
Yeah. So I kind of decided, really, let me get this right, I decided, kind of in late 20. Let’s call it, let’s call it 2019. I decided that, you know, we this was the route forward, we wanted to do this. But I also knew we weren’t ready. You know, we there were things we had to do. And I looked at, you know, what the kind of benchmarks were for, say, series a funding, you know, what sorts of growth rate we needed, and what kind of size we needed to be and that type of thing. And so it took us a few months and focusing the whole team and really, you know, hitting those metrics. And we were hitting those metrics by late 2019. So call it call it say, October, I then had my first kind of real VC meetings in November. So I you know, during that previous six month period, I had had some conversations, but we were not fundraising, we were purely just exploring. So I started the real kind of meetings in mid November. And we actually signed a term sheet with our lead investor at the end of December. And we then flipped the whole company from being a UK company to a US and that did take a few weeks. So in the end, we closed the round, in kind of mid February. So I’d say kind of November to February was the timescale.
Alexander Ferguson 8:39
Gotcha. So you went from Alright, I need certain metrics, we need to be making certain metrics before we even jump into this, you six months of prep, talking, but not actually pitching yet. And then from three, four months or so into to actually raise and you and it’s acquired, and you you’re good to go.
Andrew Butt 8:57
Yeah, and I think we could have raised earlier. So I wasn’t saying we must do all these things in order to have any chance of raising investment, but I kind of just decided, based on how did you come up with the metrics? How
Alexander Ferguson 9:07
did you decide like, Alright, we these are the metrics, these are the benchmarks that I know that will will be good to start raising and,
Andrew Butt 9:12
yeah, I just looked at the so much benchmarking information available, you know, publicly but I also spoke for the CEOs, and really felt that, you know, we, we wanted to be, you know, so for example, the wisdom used to be you need to be a million dollars arr and you need to be tripling year on year. You know, that’s what that’s what you need to then there were things like that, you know, a few other metrics as well and I we were further along than that, by the way. But I just kind of looked at what the upper court aisle of series 100 companies were doing and decided that’s what I wanted to do.
Alexander Ferguson 9:45
Now, building a team is the next fun challenge. How big is the team now?
Andrew Butt 9:51
So today we are around 130 people
Alexander Ferguson 9:56
130 people, what would you say is is a Common Mistakes someone can make in building and hiring and building a team?
Andrew Butt 10:05
Well, I think a mistake is to not set a very high standard and keep the bar very high on people that you’re bringing in. So when things are getting very busy, and there’s lots of demand, it’s easy to kind of just always hire anyone. And and I found it’s been very important to take our time and make sure we bring you the right people. And that would be that would be one, one clear lesson.
Alexander Ferguson 10:30
What is your metric? Or when when you look at a candidate, what are you assessing beyond the resume?
Andrew Butt 10:37
Sure, well, I think the most important thing is, is attitude. Because everything else can be can be trained, really. So you know, has this person got the right attitude? Do they do they kind of, do they kind of get what we’re doing, why we’re doing it, you know, what our values are, these are the most important things. And, and, of course, in some roles, then then specific technical ability is is needed, you know, sometimes, but but often not as often. And we’ve, we’ve had a lot of success in hiring people who are quite Junior, who haven’t had particular skills or, or technical ability, but have the right attitude, and have been able to learn and been very successful.
Alexander Ferguson 11:19
Now, once you have the team to continue, expand is is the next fun challenge. So when it comes to marketing and sales, what would you say are some common mistakes that you’ve seen maybe even made, that you’ve never come and have been able to, to utilize to help you in in growing?
Andrew Butt 11:35
Did you say marketing and sales? Yeah, I’m aware, quite a sales lead business, because, you know, we’re selling quite high value solutions. So I think, you know, if you’re, for example, selling or making this up, but if you’re selling solutions at $500 a month or something, then it tends to be very marketing lead. And, and it’s about getting 1000s and 1000s of companies to sign up as quickly as possible. But we are really doing quite large deals with with, you know, reasonable sized companies. So I think sales is getting that right. And, and, you know, winning a good number of customers, getting them implemented, or getting some good case studies. And, and sharing those, and then kind of really building the marketing function comes maybe a little bit later, you know, once you’ve got those case studies. So, yeah, I think, you know, we over the last probably 12 months, we will certainly 12 months, we’ve gone from having a very small sales team in the UK, and no marketing, really, or very, you know, like one person maybe, to now having a really good size US and Canadian sales team. And, and also a marketing team that we’re building as well.
Alexander Ferguson 12:44
What’s your percentage of your 130 people or so that are sales and marketing?
Andrew Butt 12:48
Yeah. So sales, let’s get this right. So sales will be approaching about 45, I would say, marketing is probably say, six people on top of that, maybe a bit more. So call it 50 in sales and marketing. And then and then the others, you know, of the other 80. Half of those are engineers, software engineers. And then the other half are, are kind of implementation people on it, you know, supporting functions like finance, and systems.
Alexander Ferguson 13:19
When this this growth period that you’ve Okay, you’re scaling up, you’re hiring a bunch of salespeople, what would you say is some of the tactics that have worked really well in your sales enablement, be able to keep that pipeline full and keep the engagement and conversion happening?
Andrew Butt 13:35
of people coming in? You mean like it as a talent, or opportunities, actual kind of, say, let’s,
Alexander Ferguson 13:42
let’s actually look at the sales opportunities for a second. So being able comes into managing the sales team that that actual acquisitions or proper conversions are happening, but you found in this maybe just comes to the talent of a the right sales leader to lead the whole team, but what kind of tactics Have you seen work well, in in your environment?
Andrew Butt 13:59
Sure, sure. Okay. So I think for us, you know, what we’ve learned is, again, being focused on what type of customer we’re trying to win, where there’s a very, very good fit. So it comes back to what I was saying earlier about services versus services versus products with a service, you almost struggle with anyone and then find out what they want, and then build what they want. And that’s fine. That’s how that’s how that works. But with the product, being as as kind of focused and narrow as possible, and then finding kind of where, where there’s a great fit. And that requires pipeline velocity. So you need to talk to a lot of people, and you qualify out a lot of people, but then what you have left are the ones that fit very, very strongly. So that’s been something to really shift the mindset from being services to a product company. And and that philosophy has definitely helped, you know, the whole discipline of and tracking and measuring that and having clear goals on a weekly basis of what we’re looking for, at different sales stages and know what level of velocity we’re looking for, is a really, really important discipline.
Alexander Ferguson 14:59
Whatever you use, To make sure your velocities of the pipeline is is enough, so you can talk to enough people in your target market. Have you found any good tactics there?
Andrew Butt 15:07
Yeah, so I think we do the fairly traditional thing. So we’ve got a great BDR team who’s doing a lot of outreach, you know, we’ve done some have some good success with organic search on Google. So we get quite a lot of inbound inquiries, what we’re using, you know, paid acquisition on AdWords, LinkedIn, other things. So all of that. We’ve also, we’re also doing quite well with some kind of recommendations and referrals, because I mentioned earlier, our customers sign up for our products, and then they invite their trading partners to use the product. Okay. And I mentioned the 40,000 to organizations, so they then all come into contact with us. And there’s a kind of process for them to exactly. So that’s we only really starting to realize how that can work, but it is generating, generating velocity.
Alexander Ferguson 15:52
Did you have that in mindset already that the network effective of them, inviting other people would actually be a great scaling tool? Or did that just happen?
Andrew Butt 16:02
So I think, right at the beginning, we hadn’t thought of that, because again, we were just this kind of financial calculator tool. That’s where we started. But then we quite quickly moved into that commercial negotiation side where our customers were inviting their partners in, we then realized, but I think a big breakthrough for us was, we used to have a separate kind of portal that each of our customers would deploy. And then their trading partners would log into their own private portal, what we move to is a model where there’s just one portal, and that is Enable.com. And then everyone looks into that. And you get huge crossover, where, you know, one, trading partner supplies, lots of customers, and it’s all in one place. So that was definitely a breakthrough moment.
Alexander Ferguson 16:46
powerful, powerful. Now, moving looking forward from here, what do you see as kind of the next challenges you’re going to need to overcome to kind of continue that skill continue that velocity?
Andrew Butt 16:58
Sure. Yeah. So we’re kind of building our capacity, within sales within Customer Success within the implementation rapidly, because, you know, I really feel we have a big responsibility to get this product out into the market. And we’ve gone from, you know, a very small customer base to to a much larger one. But we’re still we’re still only starting, you know, selling as soon as a company, and so much more we can do, I mentioned 50, verticals. And you said 30 trillion of transactions going through distribution of retail. So so we’re gonna keep expanding the the the current teams, and I mentioned, we’re approaching 50, and sales marketing that will double over the next 12 months. So we’ll have you know, 100. And then really kind of getting into this next stage of product led growth. And, and that is a whole new sales motion. And again, we’ll be investing heavily in r&d, and really making that happen. So we will be raising a Series B stage to make that happen. So lots of things in the next 12 months to do.
Alexander Ferguson 17:59
For you, Andrew, what gets you really excited? Like, is it is the supply chain and digitization? Is it just technology overall? Is it business? Like what gets you excited?
Andrew Butt 18:10
Yeah, well, it’s just reacting to the words you’re using now, I think I think business gets me excited. And so as we said, previously, you know, driving profitable growth, this is really good. So so we’re helping our customers to drive profitable growth with their trading partners. So that gets me excited. And seeing us, you know, drive our business forward and grow, grow our business as well. You know, as our customers are more successful, we become more successful. So. So that’s really exciting. So I think I think business, I think seeing how we can convert ideas into reality, and then seeing how those that reality, you know, benefits our customers. That’s all hugely satisfying. So those are some of the things that excite me.
Alexander Ferguson 18:53
Or the future of retail and distributors, as well as suppliers, especially in this post endemic, I’m gonna say post, because that’s what would you predict that is the future? What does it look like? Where the the enablement of technology is going to play a role here?
Andrew Butt 19:16
Yeah, sure, sure. So, yeah, I mean, I think so many people have said that things will never be the same again. And I do think we’re going to get back to face to face meetings and traveling and all those good things. However, virtually the whole planet now is much more familiar and happy to do online meetings. So that won’t go away. You know, there’s going to be a lot more of this collaboration, and also using collaborative tools. So just like what we’re doing in the supply chain, and but everywhere, you know, there will be that increased use of those collaborative tools, the the world’s become a smaller place over the last 12 months. So you look at migration to the cloud. And everyone virtually, I talked to is is somewhere on that journey of moving all of their software. Is the cloud but it’s still a small percentage that has been completed. So that this is a huge opportunity ahead in over the next five years, there’s there’s we’re just on the tip of the iceberg of, of, you know, what’s going to be migrated and how much business will be transacted online.
Alexander Ferguson 20:20
We’re just just the tip of the iceberg of what will happen with our this digitization of entire entire world, but it is a small world. For sure, yes. And platforms like yours is going to help further. Connecting everyone together. Thank you so much. Thank you for sharing your insights on this journey that you’ve been on. And it’s as you said, it’s just just started, there’s still a lot a lot to still come. For those that want to learn more about enable, definitely listen to part one of our discussion on UpTech Report comm or you can also go to enable.com. And you can try it get a free trial to be able to take it for a spin of their platform. Thanks again for your time and, it’s good to have you on.
Andrew Butt 20:59
Great. Thank you for having me, Alexander.
Alexander Ferguson 21:01
Absolutely. And we’ll see you all on the next part. That concludes the audio version of this episode. To see the original and more visit our UpTech Report YouTube channel. If you know a tech company, we should interview you can nominate them at UpTech report.com. Or if you just prefer to listen, make sure you’re subscribed to this series on Apple podcasts, Spotify or your favorite podcasting app.