At Team8, we invest in companies that are solving big problems and creating meaningful digital transformation for enterprises. And as our first investment in October 2019, SetSail is no exception.
We invested in SetSail because of their innovative approach to helping companies grow by improving their sales performance. Using a combination of AI, behavioral science and micro-rewards, SetSail solves one of the oldest problems in the sales book — how to meaningfully incentivize sales reps to close highly strategic deals, rather than only focus on low hanging fruit.
Of course, solving this problem translates into significant impact for any organization, and with a track record of helping salespeople achieve a 15–20% gain in their revenue contribution, SetSail is making strides. But it’s not just about compensation, SetSail is also changing the way companies make sense of all their sales activities.
To really understand SetSail’s impact, it’s important to look at current tools for sales performance. These tools focus primarily on optimizing data entry and management, which is key to strengthening client relationships. While these tools streamline these processes, they don’t necessarily help salespeople make better decisions.
SetSail takes this to the next level. SetSail collects data and uses AI and Machine Learning to deliver superior insights and automation to optimize the sales process and yield better, more efficient and productive sales processes. This is a game-changer for companies.
And the world is taking notice. Last month Setsail announced raising $26M in a new Series A led by our friends at Insight Partners, with participation from existing seed investors Wing Venture Capital, Operator Collective and ourselves.
Moreover, when we first met SetSail in 2019 they had 1 customer. Fast forward to the end of 2020 and they have more than twenty, including Lyft, Pendo, Dropbox, HubSpot, and Fortune 500 organizations like Cisco. And when it comes to revenue — they’ve grown 900% between their seed round and Series A.
Now, let’s look into SetSail’s technology and team.
The technology: Rethinking sales compensation
Setsail’s success is based on its data-driven approach to helping sales reps change their behavior and replicate specific, optimal sales activities that result in significant revenue gains.
And how do you get salespeople (and really, anybody) to change their behavior? By changing the incentives.
This is where SetSail shines. SetSail completely changes the way sales people get compensated by paying them throughout the sales cycle, rather than simply offering them a single commission after the sale closes.
This is important because of the old adage: higher risk, higher reward. When companies only compensate their sales people when (and if) they close a deal, they’re inadvertently incentivizing them to take the shortest path to close a deal. Since, if they don’t close the deal, they don’t get compensated. As a result, salespeople oftentimes choose the sales route with the lowest risk, which isn’t necessarily the deal that achieves the long-term goals of the organization.
By compensating salespeople throughout the deal process, and not just at the end, SetSail encourages healthy, strategic risk taking, which leads to greater rewards. And, ofcourse, more revenue and growth for the companies themselves. It’s a win-win.
Now, it’s not just about changing the way companies think about compensation. SetSail makes it easy for organizations to connect to all their sales data and make sense of what’s happening between their reps and their customers.
SetSail works by connecting to a company’s CRM, email, calendar and other systems, identifying buying signals about the progress of a particular sale, and then using machine learning to convert these signals into recommendations and provide micro-incentives (monetary and otherwise) when a salesperson follows the optimal path of action and builds good selling habits.
To date, SetSail has analyzed 57M emails and made 1.4M AI deal recommendations. It’s created 248,000 new contacts and saved humans upwards of 200,000 hours of manual data entry. These are great numbers, but the proof is in the pudding.
When it comes to bottom line impact — SetSail has delivered $30M in additional revenue by deploying $200,000 worth of rewards to salespeople. That’s an ROI of 15X. This is a remarkable achievement.
As a former CEO and CFO, with 25 years of experience leading several companies to IPO and acquisitions, I’m familiar with the challenges and frustrations that companies face when it comes to building an effective sales engine. Specifically, companies struggle to incentivize salespeople to achieve the strategic goals of a company, as well as to measure and predict sales activities.
By building this type of sales engine, SetSail will quickly become a mission-critical tool for any sales and client-facing organization. As a previous operational executive , the value of this technology is clear: Having this kind of insight and predictability into the sales pipeline — and the ability to accurately predict and support growth — is game changing.
I saved the best for last. The three co-founders of SetSail — Haggai Levi, Bert Lui and Jen Hsin — met at Google, where they worked on machine learning systems at Google Ads and Google Cloud sales organizations.
With backgrounds in business consulting and academia — Haggai and Bert are ex-McKinsey, and Bert and Jen both have PhDs (Bert in Bioengineering from Stanford and Jen in Physics from the University of Illinois) — the trio was well-equipped to apply rigorous data science principles to solve real-world business challenges.
And that’s exactly what they did at Google. The three founders spent years experimenting with ways to combine machine learning and behavioral economics to achieve impressive productivity gains.
In 2018, they left Google and partnered with CRM experts to begin work on their own company and in 2019, they launched SetSail.
So what is our approach in making investment decisions?
We look for solutions to tomorrow’s business challenges — and believe that the keys to these solutions will be data and machine learning.
In today’s world, data collection and centralization is no longer enough. The truly stand out companies will not only collect data, but leverage technologies such as AI, Machine Learning, and natural language processing to make us all smarter. These technologies are used to deliver superior insights, recommendations and strategies for optimizing organizational performance — and SetSail does this with sales.
And since having an effective sales engine is mission-critical for any growing company, we believe SetSail is well-positioned to be a market leader in this space.
But it’s not just about having an amazing idea. We invest in companies led by strong, smart and resilient teams. And when it comes to Haggai, Bert and Jen, SetSail has all this and more.
We’re excited to see where SetSail is headed.