Learn more about Forma at: www.forma.ai
Find Nabeil Alazzam on LinkedIn here: https://www.linkedin.
JC: Welcome, everyone to another episode of the Future of BizTech. I’m your host, JC Granger. And I have another fantastic guest with us on the show today. And listen, if you end up loving this episode, please show your love and appreciation by following the podcast wherever you’re listening, be sure to give it a 5 star review, preferably with some nice comments. That always helps, because that is how other techies like you and I find cool podcasts like this. So today I have the absolute pleasure of interviewing the founder and CEO of Forma.ai Nabeil Alazzam. Nabeil, thank you so much for being on the show. Tell the audience a little bit about Forma. You know, what about yourself? And you know, what do you guys do?
Nabeil: Absolute pleasure to be here today, JC I’m glad that we have the opportunity to chat. Forma.Ai is a platform that helps large organizations better motivate their reps and manage sales compensation. And the fact that 15 million people in the US are on a variable compensation plan means that this is a big industry, it’s a big problem that needs to be tackled.
JC: Well, and I agree, here’s the thing. So I’m a born and bred sales guy. I don’t know if it feels natural, but I end up getting into sales a lot out of college. And I’ll tell you, when I got the opportunity to interview I jumped at it. Because I haven’t interviewed anyone who has a sales compensation SaaS company, this is a really big deal for me, just because I’ve got years and years of pain and struggle with these compensation plans. And so I really want to see how technology has helped not only to organize it, but I’m sure it helps to get even more creative, right? Because you have an organizational platform, you come up with cooler ideas that are tracked, right, I always found that there was always so many errors in payouts, because things were either complicated, and they didn’t have a way to do it right. So let’s hear a little about that. What is it like to use your software? And, you know, is it for giant companies? Is it for small mom and pops everyone in between? Let’s start there.
Nabeil: So I mean, you touched on something that’s really, really important. The fact is, if you’re in an organization and you are paid a fixed, fixed salary, maybe an annual bonus, you would never question your pay stub at the end of the day. Yeah. But in sales, there’s kind of, it’s the expectation that you should double check your Commission’s to make sure they’re right. You know, and the fact that we get it wrong is kind of unacceptable. But I would say that’s part of the problem. Like to me, that is table stakes, it’s not acceptable that we are mispaying our employees and some of the key individuals and organizations that are driving the growth. So that’s the table stakes part of the problem. But going back to my background I worked in as an agile consultant that focused on sales and marketing strategy. And we would go into these large enterprise organizations, whether it’s the Pfizer’s the Tebas, are large tech companies across the board, every time you going to do you know, to these organizations, you’re supporting their design process, and you’re helping them optimize the structures of comp as these external consultants, and you do these consulting engagements. And then you have to pass off the ideas to another team internally, that’s going to do the administration. So the real problem is the fact that strategy in the way that we think about analyzing our data to drive strategic decisions is done in completely different tools. It’s done a different by different teams in different people and different vendors, than the execution of comp. And so it’s no surprise that there’s a gap, not only that creates pay issues, and you know, administration issues, but also there’s a gap in how quickly we can react to change. And so I think the real, the real problem is the fact that in every part of our life, incentives drive behavior, using data in a much quicker way. And yet, and sales compensation, you know, we design a comp plan once every two to three years, and then we write it out until starts to fail. And it’s mind boggling.
JC: That’s interesting, you know, being AI, is there currently, and maybe there is in the future, if there’s not now but is there currently an AI aspect to your software? And more specifically, you know, does your software, maybe see or learn, like optimizations of comp plans and can spit out different ideas like, you know, what does that look like? Or is it just we come up with it, we throw it in there, and it manages it? Well, for us,
Nabeil: That’s the exact premise, it’s that we are leveraging the collective data model. So every customer, and all of the learnings that our platform gets of how incentives are actually driving behavior, are then applied to help optimize every customer’s individual unique needs for compensation.
JC: So that’s interesting, because, and correct me if I’m wrong, but the way I see this model then, is that let’s say you’ve got salespeople from organization are entered in right day one, and here’s their comp plan. And then I’m sure it has a calculation of course of how well they’ve done. And you might even be able to put in some costs in there I imagine so you can understand the net benefit to the company. And then it tracks basically how well the salespeople are doing with that comp and then across the whole network, right? So will it does it spit back suggestions like hey, you may want to raise the base or you may want to pull down the permission or you may want to add a tier level like does it give some questions at this point to the user?
Nabeil: Exactly, exactly. So the way to think about it is, in today’s world, most comp plans are designed based off of the experience of that sales leader, kind of what they’ve seen work in the past across the different organizations, and they bring it with them to their new organization, they kind of bring their insights they create this comp plan. But the question is, how much of that complaint is driven by data? And whether that tranche should be at the 65% attainment rate or the 75%? What’s the guess? It’s either the guesswork by the sales leader or a finance analyst internally doing a one off ad hoc analysis. We’re saying, if you understand and build the science of how incentives drive behavior and sales, you can actually start to optimize this using proper data and proper science.
JC: It’s funny, so far, every question I’ve asked. It’s been as I feel like people think that like, we prepare these we did not. It’s just every question I asked if it does that, it’s because like, this is something that I would have wished that I had, you know, as a part of, you know, when I was at organizations before, so Okay, so so far, what we’re three for three here on my wish list in question format. So okay, what about if a company goes in? What about the onboarding part? Does it already have enough data? Where if I tell it, the type of company I am, does it already say, Hey, these are the optimal compensation plans for like, because then I have a marketing agency, right? So that’s a very different compensation than let’s say, someone who’s doing maybe, you know, warehouse style, you know, in person or physical product sales, because there’s less overhead, or there’s more overhead, less net, so it’s gonna change, obviously, you know, what you want to pay people? So does it already have industry specific wants to kind of get you started? I mean, if you’re just like, I have no idea, you know, how to comp people like, can they start with your software to give them those initial ideas based on industry?
Nabeil: So there’s a difference between best practices, versus leveraging a data model like ours, and why I say that is jumping in, you can apply best practices to say, your marketing entity or you’re in the CPG space. And, yes, there are best practices to apply to each. But the thing with compensation is it’s so curated for every business’s needs, right, because even within the same domain, you win deals, because you have a differentiation against your competition. And you win deals in this ICP, when you know, when the requirements for the product look like XY and Z. So your comp plan, even if it’s the same, you know, you’re you’re talking about within a subset of being of an industry, at the most nice level, your Comp plan should look different, because you’re driving a different outcome and a different behavior and a very nuanced business. And so when we’re onboarding our customers, you’re onboarding them into our data, our data model, our approach, and there is some initial insights. Sure, but the insights grow over time, because we’re actually starting to, in fact, again, if you think about any sort of AI platform, the models evolve with the data. And yes, there are learnings that can be applied from the aggregate that can help. But the real benefit comes in when starting to optimize over time within your organization.
JC: Alright, so we’ll come back to more features here later for I want to know next, what was your motivation for starting this company? I mean, were you a frustrated salesperson who kept getting, you know, screwed on your, on your commissions, and they’re always wrong? And you’re like, ah, there must be changed, like, you know, what, what’s the origin story here?
Nabeil: I guess, you know, to go back, like to go way back, I guess, incentives have always been maybe a part of my life I, when I was in, I was in grade five, I used to be a seven newspaper, and the newspaper at the time came out with a spiff where you got an extra, you know, 15 bucks for signing on new customers. And the first thing I did was I called the newspaper I said, Well, how long do they have to be signed up for? And they said, two weeks. And I knew that it would cost me to $7 to cover the cost of two weeks. And so I literally went door to door just basically saying, you would like to sign up for newspaper, I’ll cover the first two weeks. And if you don’t want it after, I’ll cancel, and I ended up signing up. And of course, most people ended up staying on because you know, for $7, every two weeks, you end up staying on. And so what was interesting to me is this, you know, how quickly, and as such a young kid, like incentives can have a really meaningful impact. And so when I started managed consulting career, and helping large organizations design and, and tailor their incentive structures, there’s two things that stood out to me. One is that most organizations were not really taking a data driven approach, even when they hired consultants, you’re not gonna be able to afford to pay 1000s of analysts to do an individual like rep by rep analysis, you’re not going to do that. So you’re gonna hire a team of maybe 10 external consultants to come in and kind of help you design a one size fits all type sales approach for compliance Yeah, there’s one of these other 10,000 reps. And their plans look the same across the board, whether you’re in the middle of Nebraska, or New York City, or another country, like it doesn’t make sense.
Nabeil: And so I saw that, and I understood the limitations, but where we really starting to feel painful was we go in and we make these recommendations. And then I’ve also got the experience the side of being consultant that’s helping implement some of the existing tools in the space. And I implemented these tools and saw the pains of the organizations having to live with them. because they’re so rigid, and they’re so focused on administration, again, you have to do everything in series, you have to do the strategy first, once you come up with the right plan, then you go on to the tool to implement the administration. So now, naturally, organizations are starting to plan design, four to six months before the end of the fiscal year, not great. Two, what’s the plan, most of the times, you didn’t have the ability to actually execute properly on that administration, and then all the inefficiencies and all the pains that the sales team had to go through, and it again, it’s a it’s a human problem. On the internal side, the finance team is scrambling and running as fast as they can to try to support the business because they want to motivate the sales team, they want to drive the behavior. And then on the sales team side, most of the times reps don’t even have a full understanding of what their plan is meant to drive. So how is it supposed to motivate them, and then there’s no confidence in the paving being right, because of all the symptoms, again, this this really disjointed process. And so, coming out of consulting, you know, I had the opportunity where one of the customers I’ve worked with, was really experiencing a lot of pains, and they had reached out to me to come in and support. And this was my opportunity to really share the vision that I had of the future of sales comp, and, and they were, they were a strong believer in the vision as I wasn’t, so that’s where the business kicked off with our first customer.
JC: Do you see more companies signing on now, because of COVID. With staff going more remote? Do you see compensation plans changing based on the remote factor of a lot of their employees?
Nabeil: There’s an aspect of.. so change is happening in two ways. One is that, you know, naturally, the sales team, especially if they’re inside and inside sales team where there’s kind of a bullpen feel, you naturally now are having to create other ways of incentivizing kind of creating a team atmosphere. And so some organizations have leverage spiffs to kind of drive and change, and to create a kind of a team atmosphere, even though they’re all remote, and they’re working separately. But I think the biggest area where we’re seeing a big changes, you have to now pay for your top talent, because it’s no longer geo-based, right? If you’re an amazing rep and you you, you can help customers problem solve and implement the right solutions, you’re valuable and organizations that are across the globe see that. And so to retain your top talent, you need to make sure you’re designing a comp plan that truly rewards the top performers. And so naturally, you’re seeing organizations really try to button up their process so they can be confident or rewarding.
JC: Got it. Okay, now, I’m a marketing guy so I always asked this question. What are you guys doing to get the word out? I mean, I’m on the podcast. Okay, PR check. What else do I mean? You guys do? Do you guys do paid ads? Are you doing email marketing, LinkedIn, like, what are some things you’ve done and have they worked and have they not working a lot of people listening are probably might be in the same spot as you so it could be useful info.
Nabeil: So, I think we’ve had a relentless focus on customer execution. And so are, you know, we’re tackling this in a completely different way than anyone else’s. But we’re saying sales compensation is actually a lever for revenue growth. And it’s not just an administrative problem. And it’s not just the strategic problem over here with the consultants, it’s actually a single problem drive of being a very large lever for growth within organization. So the only way to demonstrate that is by actually seeing customers that have leveraged the platform your year to grow their business and improve the outcome of sales comp. And that’s been one of our biggest drivers is focusing on customer execution to the point where, you know, for us, every one of our customers is a satisfied customer that seeing their sales, compensation progress. And so yes, I mean, a lot of channels that you mentioned, are ways that we are, you know, we’re obviously looking to get our company out there to share the successes, we’ve had to help other organizations. But I also feel, you know, our biggest focus area is our customer success.
JC: That’s awesome. Okay, and then, let’s talk about your favorite features. Right? So what are some of the favorite features of your software that you think are at least the most popular ones, you know, like that people are like, Oh, wow, I can do that. That’s amazing, like, what are the top two or three?
Nabeil: So at the core, automating commission processing, you know, and being able to calculate is a requirement that everyone just immediately sees, it’s a chatter. But I think the the features that really kind of go above and beyond and really wow, is the ability to tailor the communication and the nudges and the dashboards to the individual and the plans that they’re on. And so really, again, driving that behavior, it’s kind of the visualizations and the nudging that the platform does to each individual on on a comp plan. I mean, maybe just to step back, if you think about it, we’re all wearing, you know, whether we wear an Apple Watch, I noticed you’re not wearing one right now. But, you know, we’re all living in a world where we’re constantly getting nudged and driven to be, you know, to get to the next step with individualized data. And I think that’s one year that’s a surprise words, were able to leverage an individualized viewpoint to nudge and drive behaviors,
JC: And I imagine that it integrates into the more popular payroll systems are, you know, financial management systems, right? Is it like I like you know, QuickBooks, you know, Gusto, things like that? Does it have those kind of native integrations or API’s?
Nabeil: So, on the input side, yes, of course, if they ingest data from, again, CRMs, ERPs, financial systems, and then on the output, we’re typically connecting into a HR system, we’re, you know, we’re more enterprise focused. So typically, we’re working with, you know, with tools, like a workday or, you know, again, other types of whether it’s ADP, but on both sides is integrations, data ingestion and data outputs.
JC: Gotcha. Okay. All right. So, The Future of BizTech, that’s a title, so we got to talk about the future. Alright. So first question is, where do you see the industry? So you and your competitors, right, where do you see this going in that 5 to 10 year span? Do you see, you know, AI hitting into a certain area? Do you see, you know, I don’t know, compliance or legislation affecting it? Like, what’s that five or 10 year vision where you think you and all your competitors might have to deal with or where you’re going? The evolution? I should say?
Nabeil: Yeah, so I would say if you look at across processes that impact sales, whether it’s marketing, whether it’s even the product itself, all the way to sales process, the decision time, time to decision has been declining across the board, right? If you think about marketing, 20-30 years ago, how long it took to redesign strategy and execute against strategy, months, not days, or seconds. And now we’re able to leverage data using from a marketing automation perspective, the tailor messages to the individual that’s that we’re targeting. And so, to me, I think sales comp, as a whole needs to reduce its time to decision because it needs to react as quickly as every other part of the sales process. Otherwise, it’s actually the laggard and holding organization back. And so one of the things I think it’s going to be demand from customers going forward is the agility and the speed at which they can execute with the tools that are coming about.
JC: Okay, and then second part of the question, then, now, where is Forma going, and let’s talk about the roadmap a little bit here, my audience likes the inside scoop. So give me something juicy, what do you have coming? What’s gonna be the the cool, next thing that you’re really excited to launch, even if it’s not out yet.
Nabeil: So you kind of alluded to it a little bit where imagine, you know, coming in, and being able to be a new customer, and enter some key parameters and kind of get an insight as to what a good comp plan would be. And so one of the things that we’ve been working towards, and again, it’s soon is a relative term. So I’m gonna say, I can’t give you an exact timeline. But in effect, being able to take a snapshot of an organization’s data, run it through our data models to kind of give back some quick insights and recommendations based off the collective. Again, it’s not the truly tailored individualized comp plan recommendation, but at a high level, recommending, based off of our collective data, data we’ve had processed so far.
JC: There’s a lot of people who just need that, that blank page, first word start, you know what I mean? They’re like, I don’t like, remember, there’s a lot of CEO-led sales, right? Until you get to a certain point where you can really hand it off. And so I know that some companies struggle, even saying, Okay, well, but what do I even offer, right? I don’t even know how to, I don’t even know what to offer to put out on the internet, you know, for a job posting, right? That’s a big deal. Like, what are they responding to? So I think that’s really cool. You have that come in. And as you have to give us an update when it hits. Alright, so next question to be if you had to recommend any book, to the audience, you know, just one of your favorite ones, whether it be a classic or something more niche that either inspired you, that’s a must read for the audience. What would it be for you?
Nabeil: Yeah, I mean, as a founder, I feel like “Crossing the Chasm” would be a must read. In my opinion, it kind of set the foundation for me to understand not only the stakeholders that I’d be selling to at the beginning of the business, but as the business scales up and kind of evolves, what that looks like. And for me, it was very clear early on that this, the early the early customers that you take on, especially being an enterprise SAS platform, you’re bringing on individuals that are going to help steer and shape the product as much as you know, as as much as help you grow the business. And so it’s an absolute gravy. But again, one of many, I’m sure, but..
JC: Well, that’s a good one. That’s a good one. All right, so last question, then, what’s the best piece of advice, business-wise you’ve ever been given?
Nabeil: There’s, this is one that I’ve heard recently, and it kind of stuck with me as being a very, very great piece of advice is leave no catastrophe unutilized I’m not.
JC: Oh, what was it? Uh, never let a good like, catastrophe go to waste or something like that?
Nabeil: Yeah, exactly.
JC: I think that was like Winston Churchill, if I’m not mistaken. It’s a political term. I remember it’s like, never let a good catastrophe or something like that go to waste, right? Like you can always, you can always and it starts with politics, which probably isn’t the best medium for it. But I see what you’re saying though, in that sense of, yeah, like, like if something goes wrong, okay, well learn from it, build a new process or create something that helps everyone with it. Yeah..
Nabeil: Exactly. I mean, and again, it’s not like thing have to blow up to the extreme literal term catastrophe. But I think, you know, what stuck with me is the premise of building a business. And solving a complex problem like this is that you are going to make mistakes and how quickly you can react and ultimately, mistakes or worries or areas that normally I can learn from a CEO founder, the company, but everyone in the organization can learn from and so it’s just learning from every single one and carrying that forward.
JC: Yeah, now that I do like that, quote, like I said, I’ve heard it before, and took a piece of advice. So how can people reach you personally, or the company if they’re interested in the service or any kind of high level deals with you,
Nabeil: I’m always open to dive in and chat sales comp and sales strategies. So LinkedIn is probably the best place to get a hold of me personally, check up Forma.AI or Forma on LinkedIn. And please reach out if you’re interested in talking about sales compensation.
JC: Thank you so much for everyone listening out there. Again, if you liked what you heard today, please be sure to subscribe to the podcast, give it that five star rating, you know, get put some cool comments in there that always helps the algorithms. So other techies like us can find it and enjoy learning about all these amazing and helpful b2b softwares on the market today. Nabeil thank you so much for being on the show. Personally I’m probably gonna talk a little bit after this podcast because I have some more questions additional but because I’m selfish like that, I’m gonna keep some of this to myself. I want to check out some more of the Forma.
Nabeil: Well, thank you for having me on, JC. It’s been an absolute pleasure.
JC: Alright, sir. Good to talk to you. Bye bye.