CIBC Innovation Banking Podcast

Michael [00:00:03] Hello. I'm Michael Hainsworth. The CIBC Innovation Banking podcast explores the world of startups, growth stage companies and late stage companies that have made a big splash in their industries around the world. Account-based marketing is a B2B strategy that targets accounts within a specific market and focuses its sales and marketing resources on it. Terminus has a goal of moving from an ABM company to a platform of record. It's considered game changing within the industry. But how does a start up evolve as it moves into its expansion phase? From home turf to Europe, the Middle East and Asia, big moves risk stalling growth. Entrepreneur, CEO, Tim Kopp is leaning on his experience from working for global companies like Coca-Cola. On this episode of the CIBC Innovation Banking podcast, we come up with some new rules and maxims for startups to apply when accelerating their growth. But I began by asking Kopp to explain what Terminus is, as if I was his mom. 

Tim [00:01:14] Well, you know, yeah, we do get into a lot of jargon and B2B software pretty quick. So the way I think about it, I've been a career marketer. This helps marketers fish with a spear gun instead of a net. So if you are a typical CMO and you're trying to get to ten people you really want to talk to. Sometimes you start with like, OK, let's go out and create a campaign for a thousand and then we'll get down to the ten. We just help you start with the right ten. So we hope you get account-based intelligence goes straight to the customers you want to talk with and then create programs between marketing and sales to build better relationships with them. 

Michael [00:01:49] It sounds to me a lot like that old Mad Men era phrase that goes about advertising that says "We know 50 percent of advertising works. We just don't know which 50 percent." That was the olden days. That's not anymore. 

Tim [00:02:05] That's right. That's exactly right. And the reason why is data. When you don't have data and you're just buying a big- maybe people could draw an analogy to email marketing. If you just bought a list of 10,000 people who might be in an industry and blindly sent them the same message. It's not going to have the same results of just starting with a highly prescriptive message to the ten or 12 companies you really want to know and send them a highly targeted message that you know shows you've done your homework insights, understand their company, the business, the person. So it's just personalizing all B2B marketing. 

Michael [00:02:38] How have you leaned on 20 years at global companies like Coca-Cola? 

Tim [00:02:44] Well, one, it gives you patience. So you spend time at a bigger company. It does give you some patience. You know, the coolest way it's helped me, I never would have predicted, was going into COVID, because if you had to figure out remote work in any kind of discipline before this, it was running a global team. So I had people from probably like 16 different countries reporting into me, all different time zones. Some you had met, some you hadn't met. Sometimes you met just once a year, then you had to figure out how to do Zoom. So I never would have expected it, but some of the lessons I really drew on kind of from COVID were more around, how do you build community? How do you build engagement? How do you build a team? And I had been in sort of a remote first or remote-ish kind of world. Globalization prepared me pretty well to do that. 

Michael [00:03:33] Give me some examples of how that's helped you in how it's ultimately helped Terminus. 

Tim [00:03:37] If you think about it, look again. I'll go back to the example, I think it was probably like 80 people on my team at Coke. And we all had a set of common objectives. We wanted to create and install like a worldwide technology platform to standardize across all of our companies, operating companies, and hiring? I didn't get a chance, I can't practically fly to Poland for every time I want to do interviews, right? You can't fly there every time you want to do a review. You couldn't fly there every time you wanted to meet with somebody but what you could do is build a team on the ground you really trusted, you connected with well. And then find the right- it turns out kind of on the issue of community, I believe it works best when you first establish a relationship with somebody. So if you and I had a chance to sit down and have coffee for five minutes before we did all of this, we would think about this interaction a different way. Like, your mind just picks up on it differently. And so I think the best community is built organically, face to face, usually over a meal or a drink, whatever it might be time together and then you could extend that virtually. So you move into a world like Terminus where we're growing incredibly rapid. We've hired well over 150 people this year. I bet I've met 10 of them face to face. That is incredibly different, right? I mean, it's just that that's just not a world where we're used to, and frankly, it kind of takes some practice. But the core principles are the same: hire people you trust find a way to build that community in person and find a way to extend it virtually. 

Michael [00:05:11] You helped scale revenue from 50 million to 400. What lessons did you learn by leading a team of what, 300 marketing leaders? 

Tim [00:05:20] What I learned, probably the most, was creating a culture of executing and doing what works well. But realizing what got you to where you are is not going to be, what gets you to where you need to be. And so to really build and scale a company I think you're first and foremost a change agent. And so it's just the ability to constantly adapt and to get into a company as you get bigger, you tend to get more conservative. And so it's making sure that you keep the risk taking, making sure I would try to start a lot of one on ons with "What did not go well this week? Where did you fail this week? What do we learn did not work?" Because if you don't celebrate what doesn't work, you just get too conservative and you quit taking risk and you forget what got you to where you were in the first place. 

Michael [00:06:04] Tell me more about how you avoid that natural tendency to become more conservative as there's more money on the line. There is a cultural component to that. 

Tim [00:06:15] There's a big cultural component to it. And I think as humans, everybody says that you're a risk taker but inherently you don't want to take risks because there's danger with taking risks. And so it's finding that kind of right frontier. And so what I mean by taking risk, it's really calculated risk taking. It's not gambling, right? You go into something with a very strong thesis because you've tinkered with it, you've started with some small things, you've learn how to how to scale it. But oftentimes it's the delicate balance between trying to hire generalists and specialists. So what I mean is like if I came into a marketing team, there was not, maybe you have one person is great at content, one person is great at email, one person is great at social, but nobody knows how to pull it all together. So then all of a sudden you need a VP of Marketing. You need a generalist who can do resource allocation and figure out what's working and what's not. But then sometimes you end up with too much middle management. So it's this constant building of a team and I found this kind of framework of generalists and specialists to be helpful. And people too often correlate career progression with managing more people, which I think is fundamentally flawed. So some of the best sales reps I've worked with are terrible sales managers. Some of the best marketers I've worked with are awful CMOs. There are people like me who were a CMO or a CEO, but there was people who knew far more about marketing than I do. So it's just really creating a different way to summarize it would be. If you can create a team that is better than you and fully aligned to what the mission is and all the pieces kind of working together, incredible things happen but you have to, if the pace of change, if you're growing 50 to 100 percent, your team probably needs the change by almost that percent that year, too. In terms of growth of raw headcount, things they're focusing on. So it's just the raw change management and realizing leadership does not have to do with how many people you're managing. Leadership has to do with driving outcomes for a company. 

Michael [00:08:23] Did we just come up with Kopp's law? 100 percent growth requires 100 percent change. 

Tim [00:08:29] I mean, it does! I kind of like that, Kopp's law. It's crazy. I mean, that is really what I think one of the things we talked about, if I had to write a book coming out of that, it would have been marketing from the inside out. We started a user conference that was originally three to 400 people. We grew it to almost a 10,000 person conference. But a key part of why we did that was everything that we launched, did, communicate was about getting our employees to be part of that journey and experience and understand it. It's the same principle, like if you go out to eat and you ask your waitress, you know, "What's good here?" and it's like, "Well, I haven't really tried the pizza, so I don't know." So you have to, it's getting everybody, you can't just dictate to your team what it is that you want, they have to experience it right? They have to be in it. They have to feel it. You have to create these experiences. And it just occurs to me how many companies don't save their very best marketing for their people, and the companies that do? When you see Apple and many of the others, there are people who live and breathe the brand. They're ambassadors of the brand. You see, they're not doing it because they want to. It's just the vibe, right? Like, you walk into an Apple store and it's a little bit different if you're in Silicon Valley than if you are in New York, but they all have the same vibe and the people have the vibe of that. And I think that is going to be a big part of marketing in the future is kind of the employee engagement wave of getting everybody truly enrolled into the brand mission. 

Michael [00:10:04] According to market research, the global account-based marketing industry is projected to reach $1.2 billion within the next two years. Thanks to a more than 12 percent compound annual growth rate. The market is filled with a patchwork of solutions to a basket of problems. Kopp wants to make the lives of marketers easier. For Terminus, the road to becoming the platform of record is paved with acquisitions. It's a strategy to keep ahead of an evolving industry. I mentioned earlier that whole concept of the Mad Men in advertising, in marketing have evolved from the 1960s into that digital era but you've been quoted as saying that the ABM industry is evolving again. How so? 

Tim [00:10:47] It totally is. I think it's the most important fundamental trend that's happened in B2B marketing since marketing automation. In the way that we used to there was companies like Marketo and Pardot, and many other kind of important category companies that emerged in that category. But the whole construct for really how to have transformational sales and marketing programs, you can't do it with just what lead nurturing was. What that would have been is I know you're Michael and I'm going to put you just on a batch and blast email that sends every two months. That was one way of doing it. Now, buying centers are dynamic. Like people come in and out of, not one person makes a decision inside of a company on what software to buy. It's usually three people, five people. Heaven forbid it's a global enterprise with multiple divisions. It's hundreds of people. So it's understanding the living, breathing nature of an account and pulling together all that intelligence and information about the account and driving all the engagement around it. And there is just not a software platform that helps you do that. And so marketers are also tired of having, the average CMO today has, depending on the research you read between 10 and 15 different pieces of software just to run the basic communications. They don't want that. They want all-in-one, they want to be able to have. So that's why we've been on this journey from kind of point solution to platform. So in our world, if you're trying to serve somebody a targeted ad or once you click on that ad, what's going to happen, you're going to land on the website. And don't you want to have the same platform then just pick up that conversation simultaneously via chat and continue? You can't have the latency, you can't have the duplication. So now what we're finding is people are just re-architecting their entire B2B software stack to be account-based. 

Michael [00:12:43] Privacy has increasingly been an issue, a concern when it comes to our internet footprint. And some companies have put a stake in the ground saying that this is our position. And one of them you sort of touched on Apple there. Apple's a perfect example of that where they've decided that they're going to try to lock things down to protect the consumer. What of that evolution towards greater privacy on the internet? What does that mean for you? 

Tim [00:13:07] Well, I think it's phenomenally liberating for both sides. And if you want to know where B2B marketing is going, you just have to look back at where B2C was 10 years ago. So in an era of, it was very lazy marketing, B2C,10 years ago. It would be something like you'd buy an email list, you'd upload it, you would just batch and blast the same thing out to everybody. You can't do that now. In B2B that's what people want to do. It's the same thing. You don't automatically just switch gears in your head. You know what, now I'm buying B2B software so you can give me a totally different experience than what I'm used to in B2C. So what I really see happening is marketers are going to need to build their own first party engagement databases. So what do I mean by that? In a world where you used to just buy email lists, if you go back to why did direct marketing become so important? So many small brands come along. Because they started natively building all their own email databases. So it'd be 10 percent off if you opt into our program today. Have you noticed nobody really does that in B2B? They really don't. Like you go to a trade show, you go to something, you download a white paper and then you get spam forever. I mean, that's kind of like the way, it's bananas. It shouldn't work that way. So what you're going to see is a higher quality. Let me come at it this way. I think what you're going to see with ABM is more focus on quality and less impact on quantity. So back to these phishing with a spear gun and not a net, you're better off driving a really high level that just the white noise is so incredible and our email boxes and our voicemail boxes across it looks like just too much proliferation. But I mean, tell me, Michael, when was the last time that you got a cold inbound email or an ad that was so targeted it really did make you stop, stop in your tracks and take action? 

Michael [00:15:06] Right, that's the sort of thing that doesn't happen very often because the natural muscle memory is a hello insert name here. 

Tim [00:15:14] Right, exactly. Exactly. And so it's a little bit more work to do it properly is the bottom line. So if you like, if I wanted to send you something targeted, I have to know more information about you in advance. And so you can pull that together through your different data sources. 

Michael [00:15:30] Your goal of turning Terminus from a single account-based marketing company to a platform of record. Help me understand what that means to you. 

Tim [00:15:40] So what it means to us is making the lives of our marketers easier. It is what they want. Like I've said, I've been in the shoes of a marketer trying to stitch together 15 different pieces of software to make something work. You don't want to do it that way. Like, why would you set out to do that? It's overly complex. So to give you such an indication of what that is, what the market, once we started off as an ad serving company. We would serve highly targeted ads to you on LinkedIn and different places that you might be based on your interest. Well, we've now added email marketing to the mix. So there's a company by the name of Six There that we acquire that does in email kind of personalizes all the footers that goes at the bottom of an email and helps you drive more personalized email. We bought a chat company, we bought a data platform. All of these things create this loop that the more intelligence you have about somebody in all these different mediums, the more you can stitch together into one cohesive picture that is just better for both sides. So we've gone from just two years ago, 100 percent of our revenue coming from one product line to now, fast forward to where we are today, more than half of our customers are using multiple forms of our product moving out toward the platform. 

Michael [00:16:58] You're diversifying the revenue streams. You don't want to rely on one particular source. 

Tim [00:17:02] Yeah. And it's kind of like a flywheel. One makes the other better, right? So and you're just creating this really important linkage of a person across all these, if you're using different pieces of software, it doesn't work. Again I'll go back to the example. If we were trying to build a deeper relationship, they could start off by just serving an ad. As soon as you click on that ad, you're going to land on that company's website. Most particularly, would you rather just get to the answer you want right away with a chat like, "Hey, I'm looking for this" or "I want a demo" or "I want" or do you want to have the latency of leaving your email address, waiting for two days, waiting for somebody to call you back, then trying to pull you through an hour meeting? So it's the immediacy and kind of the feedback loop it drives that is the important piece. 

Michael [00:17:49] So becoming a platform of record by amalgamating all sorts of disparate methods of doing the job to your point, you know 15 different types of apps, you want to bring that into one platform. Is that what addresses one of the biggest issues in your industry, that being churn? Is this what reduces the churn rate because people aren't going to be hopping from one app to another, trying out new technologies and different companies? 

Tim [00:18:14] It certainly is part of it. In ABM, it's a new category of software. ABM did not exist just three or four years ago. If we had been meeting and it was said to tell me who does ABM? It's not the way it is today. So any time that you're entering a new category, there's a lot of tire kickers. They'll come in, they'll try it out because that's what marketers like to do. So they'll try something else. But they're not waking up every day thinking, I need to go buy this. It's not yet that mission critical. So it's part that it's a new category and you need to build that category and build the education. And then it is part stickiness at a data layer. And so when you create the stickiness into and out of other things, like in this case, it can be as simple as, in our case, give us all your Salesforce data, give us all your marketing automation data, give us the pipes that come in. We'll cleanse that, enrich it, help you take better action and then push it back out. That's way more sticky than just, hey, we serve and ad and if you don't like us, you can rip that out out and go and try something else in a couple of weeks. So it really comes down to the stickiness that happens at a data layer. 

Michael [00:19:26] One of the greatest challenges to growth for any startup is the expansion phase into new markets. Entrepreneurs face that pull between focusing on the core business and innovating. But how do you take what you do well in your home market and apply it globally, by listening to the unique needs of customers abroad and by admitting mistakes will be made? Kopp has taken Terminus to the continent, but Europe isn't the only prize. The Middle East and Asia are part of the expansion plan. So how does Kopp cast the widest net possible without stalling growth? Let's talk about expansion. While you've got global expansion plans into Europe, the Middle East, Asia, casting the widest net possible for a company can often stall growth. So how are you avoiding that? 

Tim [00:20:16] It is tough. It really is. The constant balance between focus and then innovation is a tough one. And so the way I think about it is you have to take what is going well and continue to do more of it. So if you're Zoom and it's video, you will probably always need to be world class at video management and virtual experiences, but you'll need to extend out further from that. So the way we think about it is, hey, we're going to make some mistakes but we're going to be amazing at what our core business is. We're going to listen to our customers and see where they're pulling us. So we went into Europe this year with the help of CIBC as a great partner, actually. But our customers pulled us there, like it was all ready. We had several dozen customers who started US, became international, then wanted 'on the ground' support. So in that case, you kind of get pulled into something. But in other cases you have to have instinct on where the market is going next. And I think that is where something like chat became very important to us. It was just sort of understanding that is what a modern web experience will look like. It will be conversational and that when I log on, I'm in a buying mode. I've got 15 minutes on lunch break and I want to come in and want to get it right and get answer right now. I don't know what my mindset will be tomorrow but if you wait till tomorrow to follow up with me, it might be too late. So you have to have, we call them "green shoots". So we want to be amazing at what our core business is. But just like you're diversifying a hand, you carve off as part of your strategic planning exercise, a geography or two that might be important, a product adjacency or two that might be important. And you experiment. And rather than go all in, you pick a couple, you figure out what's most strategic and what your customers really want. But where I think you can help, actually, let me put it this way, if I had to think about what is the biggest detractor of any company's velocity and success, it is distraction, and when you have a lack of focus. So you can only try so many new bets in a given year. Like I think opening up one new geography a year, for a company of our size, is a lot. Would I rather do one well, or do three subpar, you'd rather do one well. So doing fewer things better in a way that you are taking a couple of bets. You see what happens. Then you just kind of, like a winning hand, you just continue to double down each year on what's working and you have to be able to pull away on what's not. But if you put out all these little bets, and you don't choke off any of the ones that aren't working, I think that's where the problems come. 

Michael [00:22:55] You mentioned the geographical expansion for the organization. You know, how do you balance the need to strengthen the company geographically through M&A? 

Tim [00:23:06] I look for the strongest leader in a given geography that you can start to build the team around. So don't look for the leader you need now, look for the one that you're going to need in a couple of years. And I think the right way to get into a geography is by people on the ground who have already done it. So we wanted to go into a EMEA, which is our last market. We wanted to open an office in London. We could try to just buy a brand new piece of technology and hope that it snaps in or hope that it works. My favorite way to do this is to find a phenomenal on the ground leader who's already done this at a couple of companies. Then take one of your very best rising stars inside the company and fuse the two together. So in our case, we took the best client success leader we had, the kind of person that like when you take them away from the leader, they're like yelling at you, right? So I go to the VP of Customer Success, like "I need Christina." She's like, "You can't have Christina." I'm like, "But I need her because she's amazing." And you take somebody who already knows your culture, who knows your company, who knows the people, who knows how to get things done. It's always very messy. You fuse those two together, some really powerful things happen. So the best of the on the ground experience and domain with kind of somebody who already knows how things get done inside a corporate kind of an O.G. (old guard) kind of person who's been around a while. You put those two together in market, that's probably been one of the tricks of the trade I've picked up along the way that really works whereas just jumping in via an acquisition, there's too much cultural incongruity. And it's just it's hard to figure out, you've got time zones and it just doesn't work. 

Michael [00:24:44] So that's working with the bench strength you've got on the inside. What about bringing in fresh bench strength? You know, you recently acquired a chief technology officer, a chief marketing officer. How do you attract the talent to fuel the expansion.

Tim [00:24:59]  I mean, that's harder than ever, right? No secret. The market for talent has never been hotter and it just continues to get more hot. But if you really strip that back, we oftentimes focus on salary and salary is a really important part of this. You need to pay market wages. But I think people are over kind of the, you know, the ping pong table, free T-shirt. You know, we're going to do happy hour after work, right? I mean, that was cool for a minute and we did it. And I don't know if it's been because of COVID.

Michael [00:25:28] How many nerf gun battles did you really need? 

Tim [00:25:30] Yeah. Now it's like, you know what people really want? They want to do work that matters and they want to do it with really smart people. That's really what they want. And who I work with is almost more important than what the actual company does. And so they both go hand in hand. But the best way that I found to hire top talent is to let them talk to other people in our team and to be proactive and not rush it. So the CTO that we needed, I needed somebody world class and this is somebody who was CTO the entire marketing cloud prior to this. So they don't, they're not out looking for a job. They already have something to do. But over a three month period, you build a relationship. Here's some of what we're doing. Boy, you ought to come to one of our company events and see what you think. How about that? It's a courting process. And why do we try to make recruiting like like a microwave dating process or something, we're like in two meetings, both people are going to make, you know, one of the most important decisions they need to make over the next year or two. So it actually, I think it comes down to always having lines in the water. Always be recruiting. I'm just constantly recruiting, always out, looking for the best talent. But doing it in a way, for the very best talent, you realize their timeline is months. It might be a year. It's not weeks. So it's building that relationship over a longer period and helping them understand. I mean, if you get to do important work that matters with other great people and then you're rewarded for it, that's kind of the triumvirate I think of where it works. And I do think a lot of what we're seeing in the market right now, what are they saying that the data might be this year in the U.S.? Up to 40 percent turnover rates in many companies as part of this great resignation wave. The anecdote for that, in many cases, is just continually reminding people of mission, vision and letting them do work with other great people. 

Michael [00:27:27] Kopp's second law, always be recruiting. 

Tim [00:27:30] Always. I'm serious. This is like the thing, it is, I think people spend more time trying to manage investors and manage all this other complication. Always be recruiting. I mean it, constantly. 

Michael [00:27:43] Tim, fascinating conversation. Thank you for your time and insight. 

Tim [00:27:45] Yeah, yeah, you bet. And the final thing I'll say on that one, that's kind of fun. I tell my team, go out and find two or three people who are better at your job than you are. That's pretty easy for me. I can find a lot of people who are, you know, phenomenal CEOs. I want to know them. I want to connect with them. I spend time with them. But always benchmarking, what does great look like? And it's coming at it from multiple dimensions and having like an actual picture, not a textbook, but it's like. That's what Sally does. She's amazing. Like, I've spent the time with her. And so it's also this idea it's harder to do than ever when we're all remote, all kind of heads down. So but finding that time to find other people who are world class and just pick up the phone and call them and say, "I'm here and hey, I want to learn, do you want to exchange notes?" We don't do that enough. 

Michael [00:28:34] This has been fascinating. Thanks again. 

Tim [00:28:35] Yeah, you bet. 

Michael [00:28:41] As Tim Kopp continues to expand his network, compare notes with other industry players and keep his eye on the global prize, Terminus will continue to focus on what works, expand through strategic relationships and acquisitions and learn from its mistakes, and perhaps add to the list of Kopp's rules of business along the way. I'm Michael Hainsworth. Thanks for listening.