Case Study: Convictional's Ability To Speak The Language Of Its Customers And Repeatedly Activate Enterprise Retailers At Scale Led To Explosive Growth
What have Convictional's Roger Kirkness and Chris Grouchy learned after raising their $40M Series B?
Author’s Note: Hello Founders! Just want to give you all a heads up reading this Case Study for today. Today’s Case Study on Convictional is written differently than past editions of this newsletter. Not only is it also shorter, but it’s more focused on where Convictional is currently as a company. To capture that concisely and in a compelling fashion, I needed to come up with a new set of questions specific to Convictional to highlight their growth and potential as a company after their $40M Series B raise.
To get the most out of reading this particular Case Study, I strongly encourage you to read the Background section, which includes all the F2F articles I’ve written on Convictional, starting with their Startup Spotlight and covering past Case Studies. The goal of this newsletter has always been to capture the growth of a high-performance, high-growth startup over time, so it’s critical to read about Convictional’s past to understand where how they came to be in the present, and where they will be headed in the future.
Companies that feature in subsequent Case Studies on F2F after their first Case Study will be profiled in this fashion going forward. I plan to explain more about why I’ve taken this directly in a short thread tomorrow morning. Enjoy today’s read!
Introduction:
Convictional is a B2B trade enablement network. Their customers are B2C retailers and marketplaces and B2B distributors who need a single way to source, onboard, integrate, and grow with third-party suppliers. Founded in 2017, Convictional has a vision of balancing the needs of buyers and sellers in all B2B trade transactions. The B2B Graph is our description of the dynamic of companies trading with each other in networked ways, and how we can provide a platform to enable it.
Roger Kirkness is the co-founder and CEO of Convictional. Roger started working at age 16 in retail management at GNC. He later spent three years at the family business, learning all aspects of operating a software business. He spun up and eventually sold a plant floor automation technology company, before joining Shopify to commercialize their wholesale product. Roger oversees product, engineering, design, finance, and HR at Convictional.
Chris Grouchy is the co-founder and COO of Convictional. Chris graduated from the Smith School of Business at Queen’s University, holding product marketing and sales roles at Oracle and Cisco during university. Upon graduation, Chris joined Shopify Plus as an early Account Executive, quickly becoming the #1 salesperson by ARR and deals closed. Chris oversees commercial, marketing, sales, customer success, operations, and growth at Convictional.
Background: (CRITICAL CONTEXT TO READ BEFORE DIVING INTO THE MAIN CASE STUDY!)
Startup Spotlight #100: Convictional - Convictional is the Seller Enablement Platform that enables enterprise B2C retailers and distributors to implement and scale their own digital marketplace.
What’s the most important thing you’ve learned since your last fundraising round?
Roger: We learned what it would take to activate (implement and get to a sustainable place) enterprise customers. During our prior fundraising round, we did not have a clear sense of the required effort involved in helping Top 100 retailers use and get value from our product. We have had to build a lot in support of this goal and ultimately have built a playbook we think will help us grow the number of companies that benefit from our work a lot faster than before, now having a clear way to do it. We have come to recognize that a lot of the reasons companies are the way they are because of how the leaders of those companies choose people and give them goals. To make an initiative that involves significant change or transformation successful, you need the buy-in of those who choose people and give them goals, to be able to ensure that what you bring is aligned with needs. We start there when we are activating new customers, and it goes well much more often.
Chris: On the customer side, we’ve learned that large retailers want freshness and differentiation in their eCommerce assortments. Alternatively, you’re competing on pricing and therefore competing against Amazon. When retail executives inspect how they are doing against their board-level goals of freshness and assortment, they are shocked to learn that they can only onboard 3-4 suppliers a quarter. That pace means that they will struggle to adapt and grow long-term. In contrast, enterprise retailers using Convictional are onboarding >60 brands and vendors each quarter. On a meta-level, we’ve learned how to speak the language of our customers.
After your Series A, what were the immediate, major pain points in your current process (at the time) to onboard these enterprise customers?
The main thing is that we need to provide paths that connect to the entire environment, which often means 2-4 different systems, through a combination of EDI and APIs. We have attempted to build the tech so that you can have a single connection per resource (e.g., one for handling orders, one for handling products) rather than requiring a single connection to be company-wide. Our customers often have multiple generations of IT products in their environment. The other is simply scaling the one-off effort. All the functionality we provide is abstracted behind generic APIs, which avoids having to customize the core of our platform for each customer, but means someone must connect that generalized service to these multiple outside systems. As we grow faster, it is harder for us to spend that necessary time to do that, so we’re working on finding partners to help us.
What assumptions did you make in building the process to support and sustain your relationships with these customers post-implementation that turned out to be incorrect or unscalable (the latter assuming you’ve had some of these relationships already established?)?
We didn’t realize that our customers would often have a system for each resource that ours touches. When we started from scratch, we assumed customers would want everything they needed to accomplish with their suppliers in one place. While true, we didn’t realize that wasn’t status quo. Likewise, our customers view us as an enabler of modernization. Enterprise companies are trying to move from siloed IT systems that are hard to connect to modern platform-based systems that connect through standardized APIs. This enables them to have local engineering resources within each function to progress the goals of that function without being blocked.
Often we will connect to a legacy system in phase one. Then later, the customer will rebuild that system which is no longer dependent on the supplier enablement technology, and take the opportunity to modernize. It means they can upgrade their systems because they aren’t stuck using EDI to connect them anymore. Last, IT is viewed as a central function in more established companies, whereas startups and newer companies tend to see it horizontally across every team. Often that means several different teams are involved, leading to complexity and communication barriers.
When it came to getting the buy-in of some of these key decision-makers within your customers’ organizations, how did you generalize your process to enable deploying a playbook that can be repeatedly and reliably used?
The most important thing we learned how to align ourselves with is the team’s incentives we are selling to. If you are measured on seller activations, we want to talk about seller activations, look at how much they are happening now, and be realistic about what impact we can have.
The generalization was that C-level executives set the strategy and the VPs that report to them own the results. If you can align what you do with the results that the VPs are trying to achieve and the strategies that the C-level team members have evaluated for the company, you can win the deal.
Convictional has chosen variety and novelty as the vectors to help larger retailers differentiate themselves from competitors. How does the company keep in mind those two factors at the forefront of product development to enable retailers to onboard suppliers at lightning speed?
Caring about our customer’s ability to accomplish fresh and differentiated catalogs is a serious commitment. There are ways that we could grow that would compromise these things, and we have had to take the harder road of doing what we think is healthiest for customers at the expense of our own growth in the short term.
Beyond increasing revenue and GMV, what has been the biggest impact of removing or decreasing the bottleneck from slow supplier onboarding due to EDI? How has this impact shaped where Convictional will go post-Series B?
The most satisfying impact is that companies that would otherwise be unable to transact with major retail channels can grow through this avenue. Compared to the duopoly of Google and Facebook advertising, B2B channels often present similar or better economics, much more diversity beyond just the Amazon and Walmart of the world, and a stronger ability to learn from customers. The other impact has been that in our customer’s businesses, once the integration problem is solved and that bottleneck is removed, it reveals a lot of other counterintuitive bottlenecks around forming commercial relationships. We think we can help there too, but it expands our scope to include unfamiliar areas like helping to establish the ideal pricing or commercial terms.
How did you learn to speak the language of your customers? How has this enabled you to serve them better than before?
Before starting Convictional, one of us worked in the space as a user of supplier enablement technology. Between that experience and our time at Shopify, we became more intimately familiar with the unique problems brands and retailers face engaging in trade together. Over time, we’ve learned the domain-specific terms used by each player in the supply chain. We can speak to these concepts interchangeably as a result and often flex to the customer to make it easier to understand what we do. Finally, when team members join, we share the ‘B2B Dictionary’ with them to help make sense of all the common jargon. Language is powerful, it can determine how you think about relationships with people, so we try to steer customers in the direction of language that puts suppliers as the focus and avoids them being overlooked in service of other stakeholders.
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Case Study: Aviron's Product-Market Fit Journey Started With Doing The Things That Don't Scale
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