Alan might have a PhD in chemistry, but he’s equally adept at understanding the properties of high performing sales, operations and executive teams. He is currently at Prime Vector, a services company he founded in the process automation industry, where he works directly with clients to improve operations using technologies like AI and RPA. Alan has spent the majority of his career running sales teams for large procurement services businesses, and has been part of early leadership teams at two startups with successful exits. He’s also been a management consultant, and a partner in an early-stage venture capital firm.
Why are you so passionate about helping people-based businesses?
I enjoy the thrill of building high-performing teams composed of the right people with the best skill stacks to match the roles a company needs to sustainably grow. I draw energy from teams that are passionate about growth, and love being a part of their growth engine.
What are the one or two most important considerations in the early stages of building a managed services offering?
I am a firm believer that establishing pricing and margin discipline is the most important aspect of building a strong business in the managed services industry. Too many startups underprice their offerings believing they need to be aggressive to gain market traction, only to regret that decision later when they are struggling against poor margins that affect everything from the ability to hire a high-quality team to getting a meaningful exit. A close second to pricing is building an outstanding culture where team members want to work. The second is much harder to do than the first.
What advice do you have for sales leaders who are transitioning from deal focus to account focus?
It is important to recognize that the mindset and motivation of “farmers” is quite different from “hunters”. Take, for example, incentive structures and performance measures. Hunters typically respond better to commission structures and are quite accustomed to sales targets. Farmers often don’t think of themselves as “sales”, and in my experience, tend to perform better with recognition/bonus incentives and directional growth goals instead of daunting sales targets, as well as inside sales support to grow their accounts.
Most managed services companies get frontline hunter sales right as the model is much simpler (more science than art), but they fail to figure out farmer account management to optimize revenue growth, client satisfaction, and team member engagement. Yet most managed services companies have almost as much, or more, revenue growth from farming current clients as from hunting new clients, so I always recommend doing the hard work to optimize farmer performance because it can become such a powerful engine to grow recurring revenue.
What advice do you have for a startup company when they lose their biggest customer?
The minute you sign your first “biggest customer” you need to think that you will likely lose them at some point, which means the race is on to diversify your customer base so the loss of your biggest customer will not tank your business. You also need to understand that the products/services your biggest customer is buying may not be what the rest of the market is buying, so invest in new, different products/services according to what the market is speaking to you. Finally, remember the adage that you are better when things seem at their worst, and less good when things seem at their best. If you have focused on building a sustainable business regardless of your largest customer, you likely can survive this downturn with determination, hard work, and focus.