Brett Queener @ Bonfire Ventures
People often ask me how I enjoy being a venture capitalist and why don’t I go back and “crush it again” as an operator?
My answer to them is always the same — if I have the opportunity to work with amazing founders and can help “influence” them to some modicum of success, then it is actually very similar to the work I did at Salesforce and others.
The greatest moments and the best successes of my “operational” career were always some version of the same story:
- Hire amazing people who were actually far better than they knew.
- Provide them strong guidance with some tough love along the way.
- Get the hell out of their way.
For those of you out there (at last count I think their combined worth would allow them to purchase Greenland) with whom I have had these amazing opportunities, thank you.
And so, venture investing, especially at the Seed Stage (revenue is sub $250K ARR, 5–15 people tops, etc.), is all about entering into some long-term partnerships with some amazing founders.
Which brings me to what will forever be known as “Brett’s first VC deal” — Aforza. I do fear that every subsequent institutional investment I make will be compared to this one — which I am pretty confident will be a tough measure. To understand my excitement, let me share with you my thoughts on the team, the opportunity, and the traction / potential for traction. Thanks as well to Alex Kayyal & the Salesforce Ventures team for joining us on this investment.
To no surprise to anyone, what is most important at investing at a very early stage is the quality of the team and how inspirational the leader is. In my personal investing portfolio, I knew after meeting Todd Olson@ Pendo & Manny Medina@ Outreach that I would invest within the first five minutes of our discussion. The same is true with Dominic Dinardo@ Aforza. Dom and I spent many years together at Salesforce — he was my partner in crime when I ran Product and he ran Sales Engineering (the not-so-secret to Salesforce’s enterprise success). After Salesforce, Dom led Europe for both Veevaand Vlocity- two of the most successful vertical SAAS companies in the market.
Therefore, when Dom reached out and conveyed that he couldn’t stop scratching at the entrepreneurial itch and a problem he felt had to be solved — I knew we would be interested from the get-go. As an added bonus, the terrific Nick Eales and Ed Butterworthhad agreed to join Dominic from the start on his new venture. So, a terrific leader that we knew and trusted? Check. Ability to assemble a top-flight team? Check. What about the problem they were going to tackle? Actually, with a team like this, we are often inclined to just invest first and worry about those small details later.
Fortunately, Aforza’s mission was and is not only a compelling one but a very easy concept to grok and get excited about. Simply put — Aforza applies modern cloud and machine learning technology to one of the oldest industries known to mankind — consumer packaged goods. Built on top of the Salesforce and Google Cloud Platforms (GCP), Aforza aims to power the over 400,000 CPG field force workers (the folks focused on last-mile execution) and their headquarter-based planning counterparts to new heights of productivity and success.
After evaluating teams, we spend a lot of time thinking about the market. One of the challenges in seed-stage investing is that there isn’t always perfect information on overall market size and potential product-market fit. Often what we do is spend a great deal of time speaking to existing or potential customers to understand their level of not just satisfaction but also their connection to the product.
For Aforza, this was an easier exercise. We knew the rough amount of spend consumer packaged goods spend on technology. We also knew (my 18-year CRM industry experience came into play here) that there had been a real lack of innovation over the last two decades for the field force execution side of CPG companies. More interesting however was what I call the emotional quotient — as it’s the emotion buyers have for a company’s product that can be a real accelerant if it’s overwhelmingly positive. Let’s dig in a bit deeper here:
In technology, we always bandy about the word disruption. In fact, there probably has not been an industry that has weathered more disruption in the last two decades than CPG. CPG companies used to take for granted the following but can no longer:
- The Access Channel- i.e. my buyers would go to X stores and visit Y aisles and I needed to make sure my products were displayed appropriately. Disruption: Amazon.com and all of the delivery companies that will provide to you whatever product you want when you want it without you having to go anywhere.
- The Promotion Medium- i.e. I would work with my ad agency to ensure I had great placement in radio, tv, and print in the form factor that each offered. Disruption: Internet, social, and on-demand programming whereby viewers refuse to watch long-form ads and one positive recommendation or negative hit from a hugely influential social media profile can make or break your trajectory.
- The Value Prop- i.e. I used to just have to come up with some clever combination if better, more, or cheaper and the consumers would eat it up. Disruption: buyers want authenticity from the brands they buy and care 100x more today about the social & eco-impact of not just your product ingredients but the positions your companies take
Net-net — consumer packaged good’s end customers are fussier and fickler than ever. In this world, where consumers expect to have exactly what they want wherever they are (do you go to a store now and wonder WTF they don’t have the product you always buy there that day — cmon you know you do), it has actually become more important than ever to do a far better job of perfecting the last mile(s) execution job. Do the thousands of field force professionals employed today represent a potential advantage to a CPG company or a relic of a past way in which business worked?
Aforza think it’s the former and is laser-focused at making that so. In doing so, they have a real opportunity at building deep emotional connections with their buyers and users as it’s a platform they can leverage to effectively adjust to these disruptions. This is huge. From a product perspective, I know Dom’s CTO well (having acquired his prior company years ago when I ran products at SFDC) and was confident that Nick could build something super focused and amazing in partnership with salesforce.com. In regard to winner-take-all, who knows and who cares right now. What we do know is that if the team deliver on their vision by overdelivering on product and customer success, these things generally take care of themselves.
Okay — the numbers look terrific in the spreadsheet “model”. Early-stage investing tends to be a bit bi-modal for companies you want to partner with. They can be younger less experienced teams who have shown some real traction to date or they can be like Dom and crew — a great team that we trust knows how to get to traction and as such we invest in them usually pre-GA.
What I did know before I invested and has been validated already (by the over 30+ potential customer conversations Aforza has had with large multi-national brands) was that the team would have little trouble engaging with their target customers. It is indeed one of the beauties of vertical industry SAAS (as long as the TAM is large enough) — the message and product are much easier to pinpoint for a very well-defined customer type and buyer type. Even better, the cost of customer acquisition is considerably lower than in horizontal SAAS application categories as you are not spraying and praying a bunch of sales and marketing ideas, dollars, and resources around — you are focusing them very squarely on a well-defined set of customers.
In regard to Aforza, we are excited about the team’s initial direction here — which is NOT to just focus on 50 large customers and build towards the widest possible set of solutions for them. Rather, it’s to start with a very focused solution (i.e. field force retail planning and execution) and offer that to every CPG company in the world that needs it. This will, in my view, allow Aforza to accomplish three things quicker a) a kick-ass fully functional product that will have to have amazing UX in the forefront b) a good mix of company energy fueled by more frequent customers wins and c) much better opportunity to partner with the product and sales teams at salesforce.com and google.
Finally, Net Retention is the one metric (aside from ACV growth) that differentiates many SAAS company winners from the losers. When it comes to Aforza — i.e. the pain they are addressing, the manner in which they are building the product, the experience and high character of the founding team leads us to believe Aforza will be a long term NRR winner.
Quick update — the team has built a product in less than six months that is blowing people away. It is close to GA — targeted for this winter (don’t ask me which hemisphere) and they are having a preview webinar coming up. If you are interested, go here and register: https://www.aforza.com/webinars/aforza-summer-demo/.