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Managing professional services internally is often not cost-effective and can result in a large headcount. Scope matches you with an expert who will implement the product of your choice while providing the tools to manage the project. Xander Oltmann, CEO of Scope. chats to Brett about what it takes to create these partnerships and scale teams effectively.
What does it take to found a globally important company in these times? We’re interested in what happens before universally-acknowledged success.
Join Brett Kistler as he engages in deep conversations with business leaders from emerging markets, being vulnerable about their experience in the early- to median-stage moments of their founding journey.
Intro: I think that’s the number one big learning I got from HiQ is it is a very hard pill to swallow because it feels as though you are being replaced, but in reality you have done such a good job of building out the infrastructure, it’s time to pour gas on the fire.
Brett: Hey, everybody. Welcome to the ClearView podcast. Today I am speaking with Xander Oltmann, CEO of Scope Inc. How are you doing today, Xander?
Xander: Doing well. How are you?
Brett: I’m doing pretty fine. It is a nice sunny day here in Hawaii. Tell us a little bit about Scope Inc. What are you guys doing?
Xander: Scope partners with software vendors, like Square, Plaid, Argyle, Shippo, you name it, pretty much API, no code companies to help get their customers live and getting the most value out of the products that they are selling. For example, Argyle last week sent over a couple customers on the Scope platform. Those customers get connected and matched with an expert on the Scope platform, and then from there they help get Argyle implemented, up and running and making sure that the customer is using Argyle to its fullest possible capability.
Brett: So then you are providing a matching engine for experts in these, like Argyle and Plaid, who can help people get up and running.
Xander: That’s exactly right. We use the marketplace model just because we do it with a handful of vendors. What we have noticed and this is something I have noticed over the years is that doing professional services internally is really not cost effective and it is also a lot of head count to manage, so the original idea came from being able to extract that professional services team away from the company but then also realizing that if you are extracting professional services out of the way, you can add in additional services that you don’t necessarily get with a traditional professional services team. For example, a Square merchant, like your favorite taco shop down the street, maybe the Square online store built, so they will get matched with an expert on the Scope platform. We will have an expert that implements the Square online store for the taco shop, and then we will also have another expert that might provide some SEO services to help drive more traffic to the website. It’s not just implementation and getting that customer live, but it is also getting the most value out of the product that the customer can now do using Scope.
Brett: You are abstracting out this service providing layer, and then you are able to provide all kinds of other services wrapping that as well as the matching.
Xander: That’s exactly right.
Brett: What got you into this space?
Xander: I first started Scope. I started another business with the founding team, a company called HiQ Labs. HiQ Labs is a people analytics platform, and so when we started with just the four of us, it was pretty early days when we were running into issues getting customers live as any startup that age does, at this stage. What’s required by the whole team is getting live and whatever you have got to do. That means pulling in folks from the product team, pulling in folks from the engineering team.
As we started to scale past the first four of us to the next 10, 15, 20, 30, 40 employees, we also were scaling our customers up but also needed to get a little bit more strategic in how we used customer success and professional services. We ended up hiring a whole professional services team just to get our customers live on the platform. That was kind of the original germ of the idea for Scope, and really what I saw there was these asymmetrical relationships when deals were coming in and when our professional services team would basically get called off the bench and do some implementations, get those customers live and then kind of sit back down. That kind of piqued my interest in this interesting asymmetrical relationship that product and sales teams have with professional services teams when they are done internally.
I was doing some consulting work, especially with a company that had a bunch of third-party systems integrators they were using. The process there was also fairly broken just on connecting the right expert with the customer. That was kind of the final piece to Scope, and then from there I started digging around and put an ad on Craig’s list and actually got a bunch of software implementers for 40 bucks an hour and tried to match them up with a software vendor that I just called up. I think the first one was Plaid actually. From there, they were like we would like to use some of these experts that you found to get up and running. From there, that’s pretty much how the business got started.
Brett: Tell me a little bit more about that asymmetry you pointed to a moment ago. There was an asymmetry between sales and implementation, software services. There was something interesting in that, and I kind of wanted to double click on that.
Xander: So the asymmetry there really comes from if I am a professional service individual within a company and as the product for the company starts to expand. Let me actually step back. I think Salesforce is the perfect example of this. Historically, when Salesforce first got started, they used a lot of these professional services teams internally to be able to get those customers live and get early Salesforce configured. What they realized fairly quickly is that as the product expanded and as it needed to become more complicated to serve a large market, they also then needed to scale professional services teams up alongside the product. That then quickly becomes a managerial nightmare because you are growing your team pretty much one-to-one with the new features and functionalities of the product.
Brett: You have got a growth asymmetry. As the rest of your company is scaling exponentially, you are only able to scale your professional services team so fast. Eventually you hit barriers.
Xander: You eventually end up with professional services being the majority of the employees that you have on staff, and that’s not what any tech company wants to do. What Salesforce did as many other companies at that time did, they then spun up like a partner ecosystem. Historically, the partner ecosystem was really focused around referral and reselling as well as some systems integrators that were in charge of bringing deals to the table but also getting those customers up and running, mainly consulting firms like Deloitte and Excelsior, what have you.
But what you start to realize is that this huge gap between when you can actually go from doing professional services internally to having a full fledged partner ecosystem where you have got referral and reselling partners, you have got implementation partners, all that kind of stuff, and that only happens once you cross $100 million dollars in revenue because there is not enough business going around for everyone to be able to make it interesting for those third parties, those folks in the partner ecosystem.
Combining all of this together with the asymmetrical relationship I had mentioned before, what you start to see is this group of companies that are one, not able to serve their customers unless they have professional services. As they want to expand into the market, they either need to expand professional services or they need to minimize the number of features and roll outs for the products they are selling and building. What you start to see is if you can become a third-party expert for HiQ, as an example, the product is there. The volume maybe isn’t there yet, so you can now become an expert for HiQ. You can become an expert for Square. You can become an expert for Plaid, for Shippo, so you can actually expand as a single, individual expert the number of companies you can be an expert for.
What you start to see is companies don’t have to now pay that professional services individual full time because it is not coming out of their pocket. That’s one. Two is these experts now have a way to generate enough work to be able to sustain the lifestyle of being an expert or being an implementation professional.
Brett: Where are you in this journey now? How far have you guys reached towards your mission?
Xander: I mean we are not even close to the end goal. I mean where we are at now. We have got 14 employees. We are based in San Francisco.
Brett: All local employees?
Xander: Mixed, it is mainly San Francisco though. Our product and executive team are all based in San Francisco. We have some engineers that are in parts of Europe and a couple based in Texas, but the majority of the executive team and the product team are based in San Francisco. I think for where we are at today is we have raised $3.4 million so far. We pretty much started in. Gosh, we really went to market with our first MBP about a year ago and have been fighting our way, just growing the business month over month pretty significantly but trying to get to that point where we can develop a go to market playbook and that sales playbook that is very repeatable. We are close. We are really close to that.
Historically, for us, it has just been heads down on product and trying to find product market fit. We have been fortunate enough to be pulled into the market as opposed to trying to wiggle our way in and figure out what to build next. We have developed a really nice part of the world for us, and now it is up to us to take advantage of the market we have identified here. That’s kind of what is coming up next is going beyond our initial product roll out and then how we then scale up the go to market and continue to increase our growth.
Brett: What are the biggest points of friction you are experiencing right now?
Xander: For right now, a lot of it is just getting the features locked down that the customers are. It is actually prioritizing our feature list to be honest, which is a hell of a task that our head of product has been asked to do. The reason why it is difficult is because customers want a lot of different things from us, and so it is up to us to figure out what the most important ones are that are going to help us increase our user numbers and also increase just the amount of products, decrease the amount of match time from customers getting matched with the right expert. I think if I had to put it very cleanly, I would say the number one thing is identifying the most immediate priorities for our vendors, customers and our experts, putting those on to the product road map.
Brett: It can be hard to tell people no.
Xander: It is very hard to tell people no when they are willing to pay you.
Brett: What have you learned from having a previous startup and then moving into this one? What have you been doing differently on this one that you learned lessons from in your previous company?
Xander: I think for where we sit today or where Scope sits today, we really sit in this core need that businesses have. It is not a want. It is a need, and it sits in the core business subset. What I mean by that is our product is something that is actively used every single day. For us, the real big difference here from Scope and HiQ is that having a product that is relied upon by multiple parties every single day is a huge bar for us to leap and continue to leap every single day, where HiQ, we had a fairly large enterprise level product. It was used often, but it wasn’t a daily active user type of product. It didn’t need to be really.
I think the big learning from HiQ to Scope is figure out what that daily product is, figure out what that thing is a business is going to rely on to either help them grow their market or help close their customers quicker and help them make more money. I think that’s the big difference here in that learning. Being mission critical is I think the number one learning I Have.
Brett: The ways that mission critical can mean different things in different contexts in different aspects of the business. What about a personal? What is something that you did with HiQ that you didn’t do with Scope or that you did do with Scope because it just hurt too much to have made this particular mistake?
Xander: I would say leave ego at the door. I think that’s the number one thing.
Brett: What’s an example of where that showed up for you?
Xander: At HiQ, for example, I think I wore every hat except for head of engineering or CTO. That required me to very quickly and learn that, and that was really my first job I ever really had. I didn’t really have any kind of bias going into starting HiQ. I kind of initially assumed that first days are when you settle into your role, and so for the first few years I was running a product team. The product team finally reached a point where it was time for me to hire someone better than me for that role. That, to me, took a while.
Moving from product into the growth side of things, so how do we scale the business? How do we remove all the blockers to get customers signed up on the HiQ platform? Building that team out, the initial bones for that and developing that go to market playbook, and then having to again reach the point where it was time to hand over the reins and hire someone better than myself. I think that’s the number one big learning I got from HiQ. It is a very hard pill to swallow because it feels as though you are being replaced, but in reality you have done such a good job of building out the infrastructure, it is time to not pour gas on the fire. No different than when you are going to invest in marketing. You have got to spend money to make money. In this case, you have got to put the right talent in the right place to be able to scale it beyond what you can originally do.
At Scope now, it is very similar. The job that I have is to help essentially stand up different parts of our organization and then find the best player to take it over, and just be very comfortable with knowing what I know and the things I don’t know, be more than okay to hand those things off and delegate those because I think that’s the real power I see in being a good CEO and being able to build a big, successful business is make sure you have got the right players in place and just be honest with yourself about it. I think self-awareness is another really big thing that comes along with that.
Brett: Yeah, there is the framing that the ego has is I am being replaced or I am no longer needed, or this person is better than me. What is my role here anymore? But then the other framing is making yourself more and more irrelevant so that you can go more and more meta on looking at where the company is going and seeing the needs that nobody may see because they are doing all the things that you are delegating to them and better than you would have on your own.
Xander: That’s exactly right.
Brett: I am curious. How did you learn this about the ego? Was this just something you picked up along the way because the forces that were acting upon you or did you have some sort of mentorship or training?
Xander: I think it is all of the above. I think it requires an external person to let you know that there is maybe a certain trait that is being shown, and if you trust that person, then you accept their feedback. I have had a handful of people that I think have been super helpful in that regard, not just about the ego thing but just as far as mentors, guidance. But surrounding yourself with people who you can trust their feedback, I think that’s mission critical to being able to identify the weak spots you might have. If you do lack some self-awareness, which everybody does in some ways, they can really help you point out those flaws that may be inhibiting your ability to level up and reach the next level.
Brett: How have you built that into the company’s culture and permitted that kind of self-introspection and checking each other’s blind spots in your management?
Xander: I think the number one thing is consistent, open feedback and giving people the space to make mistakes and being honest about why things didn’t work or why things failed. It is about being honest as to either why you do things or why we do things or however it might be, and just making it very black and white, saying this was an idea that you maybe had, or this was a way you reacted. Why was that? Why did we do that? Why did you do that? Then hearing out the thinking behind it and getting down to the root cause of it because that’s really a lot of the actions that are ego-based or even just related to building products. It is like being very clear as to why and being very clear as to why and being. I am trying to think of the best word here, be very conscious of the actions and then identifying the outcomes or the facts that those actions might have.
Again, just being very, very clear with why something is done and going beyond the surface layer of the actual thing and going much deeper into understanding why that is something you would do or why that is a product investment we should make or why we should go in this particular direction. I think understanding the why is the most important piece to it. We do a lot of that here.
Brett: It is important, getting down to the root cause. What is it that somebody thinks this feature is going to do for the product? Or what do they think we are going to lose by not having it? What are they afraid they are going to lose by not being the person who suggested it or all the other different things that can happen? Somebody could really push for a feature simply because they mentioned it once and it seemed like a good idea to a bunch of people, and then they really want to see something they created by implemented. They then lose track of whether or not it actually battle tests all the way through to being useful.
Xander: Or even more particular, I mean this is a very black and white example. Why did you hit them? They made me mad. But why? Why did they make you mad? It’s not just being mad. That’s the emotion.
Brett: What makes anger arise in you right now? What is behind that? What is it that you care about? Beautiful. Where do you see Scope going in the next six to twelve months?
Xander: We are going to keep growing. We have got some new go-to-market strategies we have been testing out over the last quarter, the first quarter here and we have seen some really good early signs of success. Then, just how we are going to realign our metrics and our goals around that, from not only a go-to-market strategy but also from a product strategy as well. I think if we can keep doing that, keep iterating on it, that plan of continuous understanding why and planning, just being open to new twists and turns we learn from our customers, our vendors and experts and having them use the product and get extreme success out of it. It could be six months, twelve months, but that’s kind of the marching orders for indefinitely. It could be a week. It could be six months, but it is the same.
Brett: Thank you for this conversation, Xander. I really appreciate it.
Xander: Absolutely. Great meeting you.