DV Alumni: Talking AI-Powered Offer Automation with Christian Selchau-Hansen, CEO of Formation
We caught up with Christian Selchau-Hansen, CEO of offer automation company Formation, to talk about leadership and what he learned working at BCG Digital Ventures
In early 2016, Formation spun out of DV with Starbucks and DV as initial investors. We caught up with Christian Selchau-Hansen, Formation CEO and former DVer, to talk about his time at DV, his advice for entrepreneurs, and what’s next for Formation.
DV: What is Formation?
Christian Selchau-Hansen: Formation is an enterprise software company. We help large B2C companies connect with their customers with more personal offers throughout the customer journey. Our real-time offer automation platform helps them apply data science and machine learning to make offers more personal and automate the creation, deployment, monitoring and measurement of millions of offers in real time.
DV: Can you tell us a bit about your background and how you got to Formation?
Christian Selchau-Hansen: Sure. I’ve lived and worked in Silicon Valley for the last fifteen years and much of that experience has been about applying data to make better decisions, specifically around customer experiences. I’ve done that at a variety of places, including Zynga and Square, and now Formation.
DV: You are of course a DV alumnus, can you tell us about both your time here and how you got to DV?
Christian Selchau-Hansen: Sean Collins — one of the founders of DV — and I are long-time friends, and we started talking in 2014 about what DV was trying to do, in terms of unlocking potential in large enterprises through the formation of new companies. Specifically, I was advising a number of startups at the time and looking for my next ‘thing’. We felt like it would be a really interesting opportunity to join DV more or less as an ‘entrepreneur-in-residence’, looking for what could be the next product or service to start building.
I was fortunate in that first month to meet one of my co-founders, Ammon Haggerty. We found that we had a similar passion around applying data to improve customer experiences, and we started to develop the idea behind Formation.
DV: Could you tell us what your key learnings have been in developing a new company, and your advice for aspiring entrepreneurs?
Christian Selchau-Hansen: First, developing a new idea or concept that can become a new company is very much an iterative process, but it also takes setting a strong hypothesis about a gap in the market. One of the most important things to do is to start testing that hypothesis. At a very early stage, that means testing a concept — the idea that you’re starting to formulate around what is this gap, what is the opportunity, what is the potential for value, and testing that concept with prospective customers. Really what you’re looking for is an indication that someone who you think is in your target market is both interested and willing to pay for this new idea. From there, it’s a constant evolution throughout the startup journey — you’re continuing to test and learn and refine how you’re bringing value to your customers. The importance of constantly testing and learning is critical.
Second, focusing on customer understanding is really important. I would learn what your prospective customers really need, how you can add value, and identify very quickly where there are opportunities to add value and really focus on that.
Another key learning is the importance of focusing on your team and bringing together a group of people who are passionate about the mission of the company and what you’re trying to help ultimately bring to the world, who have relevant experience and skills, and also who have different backgrounds. This is so you can have that diversity of opinion as well as expertise in order to create the best answers possible. A startup needs to be a learning machine; the faster you can learn, the better you test your hypotheses and refine your execution path, the more success you will have.
“A startup needs to be a learning machine; the faster you can learn, the better you test your hypotheses and refine your execution path, the more success you will have.”
DV: What has leading a company been like for you?
Christian Selchau-Hansen: A constant adventure. It’s no surprise that the classic analogy is that a startup is like a rollercoaster. You have your ups, you have your downs and it can be an incredible journey but at times a wild ride. I would say generally that is absolutely the case.
What’s also fascinating is that it can happen not just over time, but in a single day. You can have an incredible thing happen and two hours later have something that just takes you aback and makes you go, okay, now we gotta figure this out. That happening in a matter of sometimes hours or minutes, that can make for a fascinating day, to say the least.
DV: What’s it like being a part of the BCG family?
Christian Selchau-Hansen: One of the advantages that we’ve had has been the relationship with BCG and BCGDV. That relationship, particularly given that we’re an enterprise-focused startup, has been really powerful. What it’s meant is that we have had access to experts, to people who can help us all along our journey, and that certainly has helped us as a startup. There are always plenty of questions, plenty of areas where we could use help — it’s something that has been a real advantage for us.
DV: And to wrap up, what’s next for Formation?
Christian Selchau-Hansen: There are a couple of things we’re very excited about. We’re seeing some really tremendous value of creation with our customers, which range across retail, quick-serve restaurants, travel and hospitality. Particularly given the kind of change in customer behaviour that’s happened because of COVID-19, it’s critical to connect with your customers at an individual level. Our customers are seeing personal offers playing a fundamental role in their strategies to engage their customers.
“Particularly given the kind of change in customer behaviour that’s happened because of COVID-19, it’s critical to connect with your customers at an individual level.”
A customer’s response to the pandemic is largely driven by their individual circumstances. It could be where they live, it could be their risk profile — their readiness in other words to begin adopting prior behaviours or maybe new behaviours. And that’s an area where we’ve been helping our customers to connect better with their customers.
It’s a real opportunity, because with COVID-19, all the different generations or demographics of the entire customer base has dramatically increased their engagement with digitally-enabled products and services across all verticals. It’s really driven home the importance of making those interactions relevant and valuable. That’s where we have been focused — really the whole focus of Formation — to help make your customer interactions and offers much more relevant and much more valuable, and connect your customers to the best of what you can offer.