How We Went from Zero Buyers to One of the Fastest-Growing B2B StartupsㅣTranscend, Ben Brook

Intro

00:00throw out a big number, see what happens. If somebody bulks at it and says that's way too high, you know, you've at least done the right thing and figured out what the top of the market might be. Most founders are shocked at the market uh will pay for their product.

00:11And especially if you're a first-time founder, you almost feel like guilty or greedy asking for certain numbers, but ultimately for pricing, you really have to understand the business value that a company is getting by using your product. So, I'm Ben Brookke.

00:30I'm the co-founder and CEO of Transcend. We are a data privacy infrastructure company. We help other businesses uh encode privacy rules across all of their technology. We're helping them comply with privacy laws and really adopting the spirit of privacy and giving consumers far better control over their personal data.

00:48We're backed by uh Excel Index. We're now a series B startup.

From the First 10 Customers to 100

00:58I think the biggest challenge for us um like many founders were finding that first product market fit. As a founder in the weeds, you're like so excited about this thing and you think like we've got it. This is going to land. People are going to love it.

01:11Nobody wants to buy it. And then like really kind of learning to trust the data and test understand what the customer really needs. like you can't stress enough when you're building a product to like really understand your customer. What we ended up doing was we found a few early customers.

01:31We basically just said like what if we just automated this for you? We'll be like your extended privacy engineering team. Let us build the solution and kind of just like help us understand every aspect of it. It was actually a fairly consultative engagement with the first two or three customers and we made sure that like they were aligned to the fact that yes we are going to build a product here but that was how we approached it.

01:53So especially when it's in I think like a little bit more toward like the enterprise software motion I think that's like absolutely a path you can take where you just kind of let customers vent their problems and offer to just find a way to fix them.

02:06As for scaling from you know 10 to 100 customers in enterprise this is when you need to have your first sellers. Typically, you can do founderled sales for the first call it 20, 30 customers, but not only should you start handing that off, but also like it's an important part of proving that you're able to scale the business past yourself who knows every nook and cranny of the product and you've been thinking about this problem for like, you know, 5 years or whatever.

02:34To be able to have a seller become successful in selling your product is an important first milestone. And we we really spent the time to find that right sort of first seller. And the first seller is completely different from like the latest stage seller where they're super creative.

02:49They kind of do every sales role alone which includes generating pipeline, you know, actually running the deal with as an account executive would and then even a lot of like sales engineering in some cases probably contracting all of the sort of the full endto-end sales process.

03:05And we found somebody who's just incredible at this. I I really believe there's nothing more important than like finding the best hire. If you need to slow down to get it right, it's 100% worth it. And then after that, depending on what your sort of AR is at around 100 customers, you either need to scale your sales team or you probably like if it's way up market, you probably already have.

03:26But in any case, being able to scale a sales team really is about if you don't have a sales background, like you should find a sales leader. It is such a huge subject with so much expertise that it is one of the things where you just you need to find a great leader who can do all of the right pieces of like building playbooks, breaking out the sales process with like uh sales development representatives, account executives, sales engineering, revenue operations and so forth.

03:53There's a whole organization and that sort of meta process is very playooked but not something a founder should do. They should absolutely find the the best leader that they can. That's really the sort of like 0 to 10, 10 to 100 and

Make Your Pricing Super Iterative

04:11beyond. There's a few things I'll say about pricing. The first is make it super iterative. You really need to adapt it and change it until you find your price point. Even then, like it's only going to last for maybe a year, a year and a half before you have gotten enough data to say certain parts of this are stupid.

04:26We need to change it. The second is you should start as high as pro possible because most founders are shocked at the market uh will pay for their product and especially if you're a first-time founder you almost feel like guilty or greedy asking for certain numbers but ultimately for pricing you really have to understand the business value that a company is getting by using your product.

04:50And it kind of sounds like just corporate jargon, but this is actually how companies buy. And so if you're not articulating the actual dollar value of your product or if you have no idea how to even start, the person who's buying your product is going to try to create that assessment themselves so that they can take it to the CFO and get it approved.

05:09And so it's the the real answer is like, do you want to be involved in that process or do you not? If it's going to get approved, you better be involved in that process. So you actually do have to articulate if you're going to drive revenue in the company, how much can you drive?

05:20If you're going to decrease cost, how much can you decrease cost? Can you actually articulate what we call value drivers and educate the person who's trying to buy your product who's interested in it and work with them to sort of build this value case together?

05:32And then whatever that value is, your price should be about a quarter, two or one/3 of that so that they get the ROI number on top for the remaining three quarters.

Your Next Steps Until Closing Series B

05:45The real sort of key to our series B was proving that we could repeatably switch customers off of the status quo in privacy, which is incredibly manual operational work where data owners are consistently being interviewed, asked to manually operate on one individual's data when that individual asks to be deleted.

06:07And that is the status quo sort of encoded by legacy incumbent software. The real bet at our series A was like, can we repeatably show that we can take market share? Is there a long-term outcome where transcend takes that sort of top spot in the market?

06:22And so our series A to our series B was really all about building our sales team, scaling up marketing operation, and really like delivering a customer experience that customers would be happy to sort of like do case studies and and sort of shout shout about us from the rooftops and tell their friends to switch as well.

06:41And so we we we really tracked like milestones around like uh our win rate against uh the incumbent competitor and if we could get it to a certain number we thought that would be really critical for our series B story and ultimately kind of like help unstick the market that felt like it was kind of like turning into a bit of a cottage industry around this this sort of status quo way of doing things.

07:00And so we we really kind of like had a metric driven process against that and just executed really really well on that plan. So that at the series B we could tell the full story of customers are making this like mass migration

Current Privacy Trends in the AI Era

07:19switch. The current trend in privacy right now is first governance of AI systems. There is a sort of mad dash inside every business right now to adopt AI and part of that is uh compiling all of the data into a format uh that can be leveraged for the purpose of AI for the those who are technical these are like vector databases and building embeddings but there are very few guard rails around any of these systems and the way that you know perhaps personal information may be processed on one hand there's the way that personal data is being used uh in AI systems and then on

08:00the other there's the way that AI systems may be impacting individuals so like bias and harm fairness uh particularly when AI systems are being used for decision-m and so the most recent kind of landmark regulation was the AI act in Europe many businesses are trying to understand how they're using AI put processes in place around ensuring that the guard rails are in place or that they've appropriately assessed the impacts of using that AI.

08:32And so that's certainly a current trend in uh privacy today. And one of the effects of that a lot of the people who became like the chief privacy officer are going through a title change uh and sort of role and scope change to also be the owner of AI governance.

08:48Uh and a lot of companies are saying kind of like while we're at it, let's make it like everything digital governance, all regulatory policy, all governance of our systems short of security. And that has been like a big sort of industry shift.

09:06The customers and the buyer, the the people that we sell to are undergoing just a massive sort of change in scope. And so that's that's a really important trend right now. And then like every day there's something with in privacy that's like wow that's a really creepy thing and like or there'll be a data breach or there'll be you know something that is like always driving the news you know the news meta sunglasses for example um it took about like 3 days for someone at uh some two kids at Harvard uh turn that into a system which can like literally just tell like find people's online

09:40profiles as you walk down the street. it's just like overlaying their like name, LinkedIn, job title, just by facial recognition. So there's like all kinds of crazy stuff um just like in the the the daily news. But categorically the shift toward u AI governance and this broadening sort of supererset of privacy.

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