MESSAGE FROM
Co-founder motiveOS
15th November 2021
Just over 1 and half years ago, in the middle of the pandemic, we set out to build a sales compensation automation tool for growing sales and revenue teams. We have now chosen to close down motiveOS after exploring a handful of pivots and a potential merge over the last 4 months. This document is an exploration of our reflections on motiveOS and our learnings.
Running a SaaS startup in London for 6 years, I experienced the pain of managing sales incentives, their inability to drive consistent sales behaviour and the dreaded administration when it came to payroll. 100's of the prospects we spoke with also had a vocal distaste for this administration, and on top of this, every sales reps we spoke with mentioned their frustration with compensation visibility. We identified an $800billion a year problem across sales organisations and decided to launch motiveOS, closing $550k from investors (during covid) and signing up a handful of early, well-known pilot customers.
Speaking with our prospects, we settled on the SMB market, with a focus on self service and templated compensation plans. On top of this, the mid-market/enterprise space was already populated with legacy platforms that dealt with complex compensation types that we felt would take time to gain parity with. We believed if we could solve this perennial problem for the SMB market, remaining product focussed, we could provide a superior product that would eventually allow us to move up market. However, as we worked through the SMB space we found several blocking issues.
<aside> 1️⃣ A deeper issue with sales comp. design
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We discovered that many businesses approached us with compensation issues that stemmed from poorly designed plans, and our prospects hoped our software could resolve these foundational issues. Additionally, we were slowed down in our onboarding process with poor CRM hygiene and sales compensation knowledge gaps. We iterated our compensation platform to suit the complex compensation plans of these smaller businesses - this led to longer sales cycles and a pressure on our limited resources to educate and onboard.
<aside> 2️⃣ Enterprise sales cycle in an SMB market
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Mission critical compensation software, sold by a small startup also resulted in longer sales cycles and extended onboarding time - unless we could solve this longer sales motion, serving the SMB customer cohort with unsustainable metrics would be difficult to scale. We attempted to combat this with our automated onboarding process and a pivot to help companies design better comp. plans. Even with these implemented (we couldnt‘t quite crack the self-serve onboarding process), we couldn't reduce the sales motion significantly enough which resulted in a stubbornly high CAC, low price per seat, and a heavily consultative sale.
<aside> 3️⃣ Competitive Mid-market / Enterprise
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With our efforts in the SMB market exhausted, we were left with a decision to move up market. The mid-market/enterprise had seen $150 million in fundraising in the last 6 months (see here, here, and here) - a great validation of our problem, but this also meant mid-market was already inundated with competitors. Most critically though, when we investigated up market, we couldn't find a clear differentiation with the competition, which would result in race to product parity with heavily funded startups and well established sales teams. With our limited resources, and a competitive upmarket, we decided this wasn’t a viable path.
When we started this journey, Linton and I had a strong determination to help businesses build world class commercial teams with better incentives - we understood that meant doing something different, not just incrementally better. We wanted to help businesses understand how to create better comp. plans with more transparency, helping them ditch their spreadsheets, prepare for growth and save days of admin in the process. What became clear is we could create a high impact product for our customers in designing effective comp. plans, but we couldn't demonstrate a path to automate this process enough to serve the initial SMB market - and ultimately we felt this would become a compounding challenge as we scaled.
Linton and I want to thank our early employees, investors and customers who backed us - we enjoyed helping so many businesses untangle the confusion of sales compensation design and administration.