Sarika Garg shares her experiences with Notion Capital on building a dominant industry player, disrupting the procure to pay category.
The question of how to define a vision and execute a strategy to carry an entire industry, is one that exercises many tech founders and venture capitalists alike. When you think of any technology company doing something entirely new (rather than just trying a better way of doing something) their ability to shape a vision, tell a compelling story and then create the connection between the two is critical. There are few people better to discuss this with in the tech industry today than Sarika Garg, the Chief Strategy Officer at Tradeshift.
Tradeshift was founded in Denmark in 2009 by three danes, Christian Lanng, Mikkel Hippe Brun and Gert Sylvest, and their vision was to connect every company in the world to create economic opportunity for all. Notion led the Series A in 2011, prior to the company relocating to San Francisco. Sarika joined in 2015 and is responsible for strategy and marketing. The company is on its way to achieving that grand vision: it’s recognised as a unicorn, it’s recognised as a leader in its field and as a business commerce and supply chain platform.
Connecting every company in the world to create economic opportunity for all is a grand vision; if we can get even close to delivering on that vision, we can create enormous value.
Business is personal to me, so I always think about the impact in terms of how I can relate to it. I grew up in India and Africa, and as a child I saw small businesses struggle - including my Dad’s - because they didn’t have access to capital. I have now lived in the US for more than 20 years and when I return to India to visit my family and go to isolated towns, people are now connected thanks to email and technology, and that has changed their lives profoundly.
While WhatsApp connects people, Tradeshift connects companies for global trade and, by connecting companies on a common platform, you see unprecedented opportunities for all companies, both big and small.
Two questions we ask ourselves:
Both access to capital and business commerce are multi-trillion dollar opportunities, and we see a complete path to make this vision a reality, but it will take many years. We have been working on this for ten years and will be working on it for another ten years.
How do you bridge the gap between that vision and the here and now?
We use the concept of value ladders to bridge that gap.
We sell to Fortune 500 companies and when we talk to our customers they get it: they buy into our vision and they buy into the need for marketplaces and end-to-end payments as the future. But, when we look into their business, we often find that these businesses are immature in their digital transformation journey. If you think about any procurement or finance department in a big company, it is often the place where the tools are not the best, where paper is still the preferred working format. For example, 90% of businesses in America still make their vendor payments by cheque.
So if customers buy into the vision, we need to be able to take them on a journey. And we split that customer journey into steps on the value ladder.
So, we are on a mission to take every procurement and finance department and transform them from “efficiency plays” to a “strategic plays” and the value ladder helps us deliver on that.
Geoffrey Moore and two of his books - Crossing the Chasm and Zones to Win - have had a transformational impact on us.
I have been a fan of Geoffrey Moore since first reading Crossing the Chasm and while it’s a pretty old book (first published in 1991) it has become something of a bible for us - helping us define ourselves, find product market fit, and scale from there. A few years ago we also absorbed and adopted much of the philosophy in his more recent book, Zones to Win, which we use as a framework for making hard choices about how and where to focus.
We engaged with The Chasm Group in 2018, and they undertook 50+ interviews with employees, customers and investors and, based on those interviews, they laid out some concrete recommendations for us: they helped to validate our propositions and define our value ladders. We are still implementing their recommendations and we can feel the difference it is making. We have tested value ladders - which was one of the main outputs of the work - and have seen a dramatic improvement in the customer’s understanding of us at all levels - from the CEO to the VP of Finance to the back office person - they all see the value Tradeshift can deliver.
We take a different approach to category design, by focusing on impact.
We always knew we were disrupting the “procure to pay” category, defined 30 years ago by SAP and Ariba, and people still buy solutions in this category and we always knew we were disrupting this category completely.However, the question we were asking ourselves was, do we need to create an entirely new category?
We spent two years studying and thinking about this challenge. Stephen Chandler, one of the Notion team who sits on the board, introduced us to the Play Bigger team. We read the book and we really dug into the topic. We started to think about whether we should start to define our own unique space - this is what we do, this is why we are different and this is what we stand for.
We decided that what was right for us was to focus on the problem we were solving for our customers and the wider market, and not worry too much about categories. We believe that you must find markets for the products you create. The most important thing is to identify the market, understand the category and then, most importantly, convince customers you are solving their problems in better ways. This means that automatically a new category will emerge, as customers adopt your solution and new competitors emerge.
If we think on the Segue,if you remember them, they tried to create a new category but didn’t know if they were a bike, a car or a scooter, so they confused the market. Tesla, on the other hand, squarely went after the car market. EV (Electric Vehicle) was a differentiator for them, but they didn’t start off by saying they were creating a new category. Now we see more and more EV’s emerging, but Tesla is still going after the existing category, not a niche or different category.
Delivering outcomes for our customers is our focus now and is how we think about turning our strategy into execution.
Our focus is about delivering impact and therefore moving to outcome based selling. Jacco vanderKooij, the founder of Winning By Design - a friend of mine for many years - is super talented, and if The Chasm Group is helping define our strategy then Jacco and his team are helping our marketing and sales teams to execute on their strategy.
We are now also talking about outcome based implementations. It is not enough to sell outcomes - you have to make them a reality, We have taken the work Winning By Design has done and taken it to our customer success and support teams - indeed all parts of our organisation - to ensure we are delivering the very best results for our customers.
What advice would you give your younger self, reflecting on the experience you have had with Tradeshift?
You learn so much on your journey as you grow and expand. I spend time with start ups to advise on their journey - one is an expenses company called Fyle another is an email security company called Clearedin. My advice to them has been to focus on who you can partner with to complete a solution in the market. So as an expenses company, such as Filed, could they partner with a bank? Or could Cleardon partner with Google or Microsoft? You need to connect yourself to the market.
My central point is that startups should obsess about their market and figure out how to have early success and worry about category creation later. We started looking at category creation in year nine or ten, and that’s the right time, not earlier.