"From Paperboy to CEO" with Nabeil Alazzam

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Episode Transcript

Tim Geisert:
Hey, welcome to the Selling Excellence Podcast for business executives. We all know B2B selling isn’t getting any easier and what’s worse, it’s getting more expensive. Hello, I’m Tim Geisert, your host and partner AuctusIQ is selling excellence as a service company. Our goal today is to give you insights on how you can turn your sales force into a company asset. We hope you enjoy. Data, data, data, this is what it’s all about. Data and insights, that’s what we do here at AuctusIQ. And I’m so excited to introduce to you Nabeil Alazzam, who is with one of our partners called Forma.ai. Hi Nabeil, how are you today?

Nabeil Alazzam:
I’m doing great. Tim, it’s absolute pleasure to be here as well.

Tim Geisert:
Well, it’s good to have you. It’s good to have you as one of our partners. Here’s why I love these guys. And they provide data for so many things that sales organizations need, but it’s not just data, it’s real time data. So, we’ll get into that. We’ll get into that. But first, let’s just kind of do a little character development here. Okay? So, Nabeil, tell us, what’s your story?

Nabeil Alazzam:
So, my story is I’m an entrepreneur since I was very young, maybe because of the fact that my parents immigrated, my family immigrated to Canada when I was young, so seven years old. And I believe that migration, especially if you go back 30 years ago, how much of a… You’re entering a new country, no internet, no ability to… The availability of information, we take so much for granted. You go into a new country today, you pull up Google Translate, you have access to all that. So, I think that drive from day one to take a burden off my parents, support myself as much as possible. So, my first business when I was effectively 10 years old and have continued to do that since. But the real background and where… I graduated from university, went into management consulting at a firm’s YES Associates.

Tim Geisert:
Yep. Good firm. Really good firm.

Nabeil Alazzam:
Yep. Great firm and absolutely I think great people, great culture. I learned a tremendous amount and a lot of my close friends. I’ve built up great relationships through my time working there. And so what I got to experience was this, the pain that these Fortune 500 large enterprise type organizations faced managing and driving behavior within their sales teams. And I saw this disjointed planning and execution process.

Tim Geisert:
Yeah, right. That’s kind of where you… Okay. And that we’re going to talk a lot about that. But one of the things… Okay, we’re going to pull on a little bit of a thread here, and that is that entrepreneurialism 10 years old. At 10 years old, you tasted opportunity. What was that? What exactly did you do at 10 that started you on a pathway of career of entrepreneurism?

Nabeil Alazzam:
I’ve told the story a few times now, but every time I tell it’s kind of a… You look back and you appreciate some of the things where sometimes success comes with chance preparedness. You get these minute, these opportunities. Yep.

Tim Geisert:
Yep. Yep.

Nabeil Alazzam:
So, funny enough, speaking about sales comp, there was a [inaudible 00:03:30] I was in paper boy, so I delivered newspapers. And the way it worked was you effectively collected revenue from the people, whether it’s cash or if they paid direct by debit. If they paid by cash, I collected the cash, I would kick back the money at the end of the two weeks back to the newspaper, they would net out what they’d collect through credit versus cash. And so the newspapers at the time it was $14 is what the end user paid for, and then $7 of that went to the newspaper.

Tim Geisert:
Okay.

Nabeil Alazzam:
I got to keep that delta.

Tim Geisert:
Yeah.

Nabeil Alazzam:
And so there was spiff that was if you sign up a new customer, you get X dollars. And it was very obvious right away. I saw the spiff, and I was like, wait a sec, I can make money on this. I called newspaper up. I called newspaper and I asked them how long do they have to stay a customer. And they only had to stay a customer for two weeks, and so the cost of me covering their newspapers for the first two weeks was less than the amount I would make. So, I basically just applied in arbitration that situation. I would try to sell newspapers. And then the moment that they said they didn’t want to buy, I’d say I’ll give it to you for two weeks for free. and then you can decide after. And it ended up more than quadrupling my newspaper route size. And that was kind of the beginning. But what ended up happening was I ended up going into a computer shop to try to sell them a newspaper subscription.

Tim Geisert:
Yeah. Yeah.

Nabeil Alazzam:
And I met the owner of the computer shop who basically started… I started going there more frequently and learning about how to build and fix and sell computers. And so I started buying parts in wholesale and actually building computers. And that was the first business that came out of that. It all got started because I went after this incentive, this small spiff.

Tim Geisert:
Don’t you love that? That’s great. That’s great. Everybody’s got a story, especially people like you who are building companies and have had great success, is there’s always something that happened in their formative years that just taught them and taught them something and it showed them a pathway that maybe at the time they didn’t really think about, but it really did drive it. So, my story is my brother and I wanted a race track. We wanted those little electric race tracks where the cars run around and you had these little things that would speed them up and slow them down. My dad was like, “I’m not buying you that. No, you don’t need that. That’s dumb.” But we were undeterred, so we decided to start a business. I don’t know if it’s called a business, but we would make these macrame hangings, because in the seventies, that was the thing. You hang your plants from these MACRA may things where you have these tables and all this kind of stuff.
So, we would spend all of our time while watching TV, making these macrame things. And then we’d go into town, because I grew up on a farm, we’d go into town, dad would drop us off and we’d go door to door selling these macrame hanging. And it was pure dumb but incredibly profitable. So after a point, we ran out of all of the macrame may jute, as they call it, the rope. And we then started taking our dad’s baling hay twine and stealing that, turning that into macrame. And it was really beautiful what it came out, just really kind of a golden color. Those things sold hot cakes. Needless to say, we not only bought the one racetrack, we bought the extra super duper thing. And that really was our foray into you sell something, you can make some money. And that’s how we learn it. It’s great though, isn’t it?

Nabeil Alazzam:
A hundred percent. It’s funny because I think you want to empower kids to take that, because you give them everything. There’s not enough of a push. I mean, I say this as a new father and thinking about how I want to raise my daughter. And I think about this element of we had this opportunity of learning because we had this incentive that drove us. I mean, I vividly remember wanting this exact same thing as a kid. And those racetracks were hot commodity or hot gift that you’d want, but that flight to get it is something that I think kind of instills this drive that you get [inaudible 00:08:02]

Tim Geisert:
Yeah. And it’s not greed, it’s just a drive. It’s a thing. It’s much more kind of almost human. It’s almost do something and get reward, right? And when you’re building a business like you are with Forma.ai, I mean, you’re building something and that there’s going to be reward, not just for you, for your customers of course, but for your employees, for your family and all. That’s a great thing to do for the world, is to provide that. Yeah.

Nabeil Alazzam:
It’s something I share with the team actually on that. I share this concept as like, not many people are fortunate enough to be doing something, or I think… I hope that everyone aspires to this, but to tackle something at a global level. And when you’re building a startup and when you’re building a business and a business like a startup, you’re aiming to solve this really big audacious problem that is effectively at a global level. What we’re trying to do at Forma is say the way the sales conversation is done today is not adequate for the future of business and the way that the world needs to operate. And it’s bad for the business, it’s bad for the individual, and it’s ultimately bad for society. When you think about the more efficient that we can make the businesses, the more efficient we can make the go to market motion, the more the products perforate, the more the technology advances quicker.
And so for us, we’re saying we are going to compete at a global level. We are taking on the world within the sales compensation space. And to have that ability as a team member at Forma to come in and we’re all working on solving this really complicated challenge at a global level. And that’s pretty privileged and pretty fortunate. So, I do see it as, yes, is there a financial reward? Yes, but much more beyond that. The day to day is not the financial [inaudible 00:09:53].

Tim Geisert:
The challenge… If I’m hearing what you’re saying, it’s the problem. Let’s solve the problem, let’s make it a big problem, and let’s put our brains to work on it and figure out what it is. So, let’s dissect that a little bit. How is Forma going after solving that problem? Break it down for me. Make it… For our listeners who are really trying to figure out what’s the practical way in which to get stuff done, how do you guys do that, and how do you report it?

Nabeil Alazzam:
So, the two problems that I saw that faced every enterprise we worked with when I was at YES was a disconnected strategy and execution, and then this element of tackling and solving this problem in a silo. So, when I say this, the disconnect between planning and execution, every organization that we worked with, the teams that were designing incentives for their sales teams, that were financially modeling them, budgeting them and deciding on what to use as their strategy for the following year were different people, sometimes reporting to different parts of the organization, usually sales leaders and finance using different tools, mostly Excel. And then they would do all this work. Maybe sometimes they’d bring in consultants like YES or Alexander Group, et cetera. And then once they finished the planning, they would pass it off to the IT and the sales comp team.

Tim Geisert:
There you go.

Nabeil Alazzam:
… on the actual payouts of the reps, which is a critical component. If I can’t pay a rep and I can’t provide the transparency to comp, it’s a serious problem. And so this disconnect created a bottleneck. It made a process that was so painful to do that most organizations ended up only making minor tweaks to plans on an annual basis and kind of leaving the big rethink to only until it was super broken. The second part is that this execution of compensation, the way everyone is approaching it is basically saying, “Okay, well, we’re going to take these different tools that are available to us, some that are sales comp tools, some that are reporting some that are data transformation tools, and we’re going to piece it all together to solve this problem.”
And every organization that we worked on, whether we were just supporting the design side or actually implementing some of these incumbent solutions, we were effectively architecting and designing this data pipeline from scratch for them. And there’d be cases where we’d be working on multiple implementations together and for different customers. And you couldn’t take the work you did for customer A that was similar because every customer has their own unique data, their own unique complex, unique go to market [inaudible 00:12:22]

Tim Geisert:
Or dynamics. All of those, yeah.

Nabeil Alazzam:
That’s all unique. But at the smaller granular level there are transformations and work that is done that is similar across customers and you could not take that duplication. So, what I saw was these brilliant smart people that work in sales competition. When I say that, they’re technical, they know how to manage senior stakeholders, as well as the individual contributors, the reps, they’re personable, and they’re analytically smart. And so you have this profile that is very difficult to hire for. And what are they doing? They’re stuck in the weeds, building out and just repeating the same work that they do one business to the next. I’ve seen multiple times, these sales competition leaders, they transition to a new role within a new company, and they’re then back to rebuilding from scratch everything they had built up. And I saw this as an opportunity to say we can actually elevate the entirety of sales competition by bringing planning and execution together within one platform and removing the repetitiveness of all that work by building a collective data model across every single customer on the platform.

Tim Geisert:
But there’s also a byproduct on that, isn’t there? I mean, you get visibility, right? You’ve got more visibility across both parties, and I’m assuming with the rep themselves, right?

Nabeil Alazzam:
Yep.

Tim Geisert:
Because that’s always been… When I ran sales organizations, there always seemed to be this kind of black box, kind of this black space in a rep’s mind where they thought they knew what the comp plan was, but then if it got too complex, they’d get it all confused. And of course they always thought they needed to get paid more than they actually got paid, or there was some sort of misstep that you have to make up for. And that’s embarrassing. Those are unfun conversations, especially when reps are making stuff happen, putting points up on the board and winning deals, right?

Nabeil Alazzam:
Yeah, one hundred percent. I mean, I feel like there’s two components to it. One is giving your reps transparency to how they’re performing, and ultimately what they need to do to hit their on target earnings.

Tim Geisert:
Right. But you’re, what you’re talking about is delivering it at the time. I mean, right? You’re not waiting till the end of the year or end of the quarter. It’s like real time reporting in real time.

Nabeil Alazzam:
Yeah.

Tim Geisert:
And that’s huge.

Nabeil Alazzam:
The vision of format is, and the future that we’re building towards and we’re providing for our customers is, sales computation needs to be dynamic and real time and it needs to be tailored to the individual profiles within your business. And one thing I mention is… Maybe this is not necessarily the most factual statement, but there’s an element of… In some cases, loyalty programs like Starbucks would probably know more about what motivates and drives your sales rep than you as a sales leader for that individual know. And I think to us, this was a problem I saw. One, the reps didn’t have visibility in real time and understood not only how much they’re getting paid, but more importantly, what they need to do to get to their on target earnings. And then the second part is, when we talk about that black box element, sometimes you give them visibility. But if you’re not able to articulate what the plan is, if we can’t get the rep to understand the plan, we’re in trouble.
And I think this second part is interesting because you know kind of hear this common saying of a sales comp plan needs to be to be simple, it needs to be simple. And one hundred percent, it needs to be simple, but that’s because simple is closely related to being understood.

Tim Geisert:
Right.

Nabeil Alazzam:
So, the actual thing that you need to think about is, it doesn’t need to be simple, it needs to be well understood.

Tim Geisert:
Exactly. That’s the goal.

Nabeil Alazzam:
Yeah. And so then it changes your perspective because maybe for your business, you do need to have some elements of complexity, whether it’s… Maybe for your business, you need to focus on driving margin or there’s an element of a certain customer traction, a halo effect where if we land product X, it means more to the business, the landing product Y because it has a higher proportion of expansion, but there’s all these things where, okay, we need to drive these behaviors. It’s not necessarily a downside to make the plan have a few more elements. You just need to make sure that your reps truly understand what that means for them.

Tim Geisert:
Yes. And what I love about where you guys are going and where us as a partnership has a lot of opportunity is that you’re taking all of this, I don’t know if you call it bio data or if you call it compensation data and all of the pieces around that make the drivers, and we’re going to try to sneak in what we know as far as those psychometric drivers. How is the rep wired? What drives their upside and their fears and their opportunities, and how good are they at the job that we can make them better at? And all of those sorts of things. So, there’s kind of a neat little package that we’re talking about here, but really if you think about, it’s the racetrack, right? It’s getting the paper subscription sold.
Part of… And it’s the terrible thing to say a rep is a salesperson is coin operated. That’s not the case. But what it is that there is the achievement reward thing we’re talking about here, right? The racetrack. I’m going to do make macrame things so I can get a race track. Salespeople are that way. You need to understand what that is and how close they are, and how to help them get to that, right? Because that’s really how you drive their success and how you drive, ultimately, the business success is. I hope I’m not being too elementary about this.

Nabeil Alazzam:
No, I mean think it’s spot on. It’s spot on. And go a step further, the notion of coin operated, I mean, let’s be fair and call out how difficult sales is, right? If you think about a role in the organization, there are very few roles where if you make a mistake, it’s game over. And if you think about a sales process, at every stage in that process, if a sales rep makes a mistake, that deal is done. And it’s not guaranteed. You are bringing the solution to the customer and you’re managing a very complicated process, and so there’s a lot at stake. These are individuals that are taking on a very challenging role within our organization. And if they don’t see that reward, if you’re not able to motivate them the way that you’re motivated as a child to get that racetrack, to get that first Game Boy, or whatever it is. I mean, for me, that was my case.
I want to be able to buy my own Game Boy. And so to be able to go out, and I saw this spiff as an opportunity to make money. If you don’t have that intrinsic motivation to overcome what is an extremely challenging role that is sales… And there’s something you touched on using that all the data at our disposal to better engage and motivate sales reps. Every rep is different and behaves differently, has a different profile. Some of the things that… You look at data and you see you’ll have reps who close the majority of their business two weeks before the end of the quarter. And then you have other reps that have this consistent kind of cadence of they’re just working their pipeline, they’re more structured and it’s a consistent closing ratio of maybe once every three weeks, a deal across line. Well, those two reps are motivated and driven off very different things.

Tim Geisert:
Right. Right.

Nabeil Alazzam:
A, you need to… Whether you change the comp plan and tailor incentives to be much more short term focused, smaller bite size incentives that have tighter deadlines so that you can get them working more ahead of the time. Because likely, if they’re hitting their number and they’re that type of rep, man, can we squeeze a lot more juice out of them if we get them motivated earlier in the quarter.

Tim Geisert:
Yeah, I mean, yeah. I mean, what talking about here, Nabeil, is we’ve passed through the age where we manage our sales people in a herd sort of way.

Nabeil Alazzam:
Exactly.

Tim Geisert:
Because of the data or insights and the science and what you’re talking about to now where we’re going to be able to have the ability and have the ability, with companies like yours, to manage an incent individually, right?

Nabeil Alazzam:
Exactly.

Tim Geisert:
Not everybody’s a number. Everybody is the number, right?

Nabeil Alazzam:
Yes.

Tim Geisert:
And I’d love that about where you’re going with your business. And I kind of interrupted you. You were on a thought. Finish that thought and we’ll finish it up from there.

Nabeil Alazzam:
Yeah, no, and I mean I think it goes back to, again, what you are doing and what you’re bringing to business is very similar in that. And competency and coaching is not a one size fits all solution. It’s the same premise. We have all this data. It’s bringing it back in and leveraging it to drive the right behavior. And back to… You mentioned something around the individualized comp. It doesn’t necessarily mean that every rep in your business needs to have an individual comp plan, but you certainly need to be taking the individual into account when you create your comp strategy.

Tim Geisert:
There you go.

Nabeil Alazzam:
And the right comp strategy, the right coaching strategy, the right competency model might be a one size fits all. As long as you’ve taken in the individual data to make that decision, at least you’re aware of what you know can be more predictive and more accurate in your predictions and design as you go forward. But yeah, I mean, look, the world needs to evolve. Everywhere of the world of sales needs to evolve. Everything else, our marketing engine operates in a dynamic fashion. We throttle up and throttle down campaigns based off their performance in real time. Why are we not doing that with a sales rep? Why are we not redesigning and thinking about how our comp strategy, our competency model is driving the right behaviors within a sales organization in real time?

Tim Geisert:
I love your success. I love your mission, love your promise, and I love the fact that you came on the show today and shared it with us. Nabeil, congratulations on your success, and have a great rest of the year and into next year. Thanks for coming on.

Nabeil Alazzam:
Absolutely. Thank you for having me. I really enjoy the conversation.

Tim Geisert:
Thank you so much for listening to this episode of the Selling Excellence podcast for business executives. I hope you’ve gained some insight on how to help turn your sales organization into a company asset. Don’t forget to subscribe to the Sales Excellence podcast wherever you get your podcast. And for more information about AuctusIQ or to schedule a discovery call, visit our website at auctusiq.com. Until next time, this is Tim Geisert, your host and partner at AuctusIQ, here to help you sell more and grow your company.

Speaker 3:
A Hurrdat Media production.