1Mby1M Virtual Accelerator Investor Forum: With Mark Achler of MATH Venture Partners 2021 (Part 2)

Sramana Mitra: Let’s talk about trends. What are you investing in? You can use examples and case studies. What are you seeing? What would you like to see? What trends are you seeing that you would like to invest in more?

Mark Achler: In preparation for this interview, I was thinking about this question and I’m approaching this in a slightly different way.

Here’s what I’m interested in. I’m interested in trust. We live in a society where trust between companies and their customers, employees, and partners is at a premium. Most entrepreneurs don’t spend enough time thinking about the importance of value or what it means to be trusted.

A second area that I’m interested in is simplicity. One of the things I think about in technology, in general, is that we tend to overbuild our products with too many features. We see between 1,500 and 1,700 companies a year. 

Oftentimes, I hear entrepreneurs say our product does this and that. What I often think is they don’t understand their customers deep enough to have the courage to focus. One of the things that I tend to work on is an investment thesis around simplicity.

The next area is empathy. I often ask enterprise salespeople, “Who is your champion? What are the key performance indicators? When they get a bonus at the end of the year, what is that bonus predicated at? What are the financial levers of your customers?”

Most salespeople and entrepreneurs don’t know the answer to that. For me, it’s the best salespeople and entrepreneurs that deeply and truly understand their customers and the language of their customers. I have a saying, “It’s really not about you; it’s about them.” One of the things that I probe and think a lot about is empathy.

The next thing I look for is leverage, especially in B2B sales, but also in B2C. How can you force somebody to take an action? An example might be compliance, governmental regulations, and insurance requirements. Whatever the leverage in the sales model, I’m particularly sensitive to that.

I ask people who the champion is, especially in B2B sales. I then follow up with this question, “What would it take for your CFO to be your champion?” This is not just to approve your budget but to actually to be excited and enthusiastic based on the financial implication that your product or service has to offer.

I’ll leave you with this. Human nature, for all of us, tends to gravitate towards our strengths and avoid our weaknesses. Most entrepreneurs in technology who are technically-oriented are not good at sales. They would say, “If we build it, they will come.”

One of the statistics in the National Venture Capital Association shows that out of all the companies that get venture capital funding, 67% of them return less than 100% of the capital that they receive.

In my venture capital stat, we see around 1,500 deals a year. We make about 10 investments. According to the NVCA, out of those 10, seven are going to fail. 

Sramana Mitra: You are correct on all of those fronts. Let me ask you a question based on what you have said. You said you do mostly B2B SaaS. How much of that is enterprise and how much of that is a small business? 

Mark Achler: It’s a mix. We like enterprise sales, but we also do small businesses. Our portfolio is eclectic.

Sramana Mitra: What has changed? All the principles that you mentioned just now apply to enterprise sales even more because people go through more scrutiny and the price tag is much higher. Has anything changed drastically in the sales process of late?

Mark Achler: COVID changed everything of course. It’s hard for enterprise salespeople to sell a large ticket item when they are doing it remotely. What we saw in April and May was a dramatic slowdown in sales. By the October to December period, sales bounced back up.

Almost every single one of our enterprise portfolio companies is either at or ahead of where they were depending upon the industry that they serve. Everybody has to adjust. 

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Mark Achler of MATH Venture Partners 2021
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