EPISODE 112: Steve Goldenberg Made Learning Sales a Priority When He Started Interfolio after Graduating from Georgetown and Here’s How it Paid Off
STEVE’S TIP TO EMERGING SALES LEADERS: “I’ll reiterate one of the best pieces of advice that I ever got. It is that no one likes to be sold, everyone likes to buy and that is the magic that a salesperson can bring to their prospects and clients.”
Steve Goldenberg is the founder and President at Interfolio.
Steve started the company when he was a student at Georgetown University and has been running it ever since.
He is a unique business founder that understands the role sales plays in business growth and has worked hard to understand and implement sales principles to grow his business.
And it worked, because since the interview was conducted, it was reported by the Washingon Business Journal that Interfolio received an investment from Insight Venture Partners for a reported price of $110 million!
We interviewed Interfolio’s VP of Sales Jack Dilanian.
Find Steve on LinkedIn!
Fred Diamond: Steve, it’s great to have you on the Sales Game Changers podcast. Why don’t you fill in some of the blanks? Tell us a little more about you that we need to know.
Steve Goldenberg: It’s great to be here. I have been in DC since 1995, came here to attend Georgetown as my undergraduate education and I actually started this company after I wrote the business plan the fall of my senior year and this was the idea that we settled on and I incorporated in February of 1999. Three days after I graduated in June of 1999, I was on the road of my first sales conference and 19 years later, it’s been a resounding success. The joke I always like to make is it’s been a heck of a first job.
Fred Diamond: Tell us a little bit about what Interfolio sells today, tell us what excites you about that.
Steve Goldenberg: We’re a software as a service company in the higher education market and we help universities with their core academic decision making. These are the most important decisions that universities around the world make, things like who they hire to the faculty, what curriculum they teach, who’s promoted, etc.
The primary way in which they make those decisions today is – for a lack of a better phrase – manual. Email, paper, in person meetings which while effective at making those decisions is not very efficient so there’s a lot of administrative red tape and cost waste that goes into those decisions.
We make software that help the decision maker, specifically faculty and academic leaders, collaborate, act together and then make decisions and that helps them run a better institution as well as pursue their mission. We like to say when individual faculty are successful in their careers, institutions are successful in their missions and that’s what our software enables.
Fred Diamond: You told me that a couple days after you incorporated the company, you were already out there pounding the pavement selling. Tell us about some of those early stories as a business leader and a founder. How did you get the notion that you had to be in sales? Tell us some of the early stories.
Steve Goldenberg: I had a phenomenal education at Georgetown and I actually graduated from the business school. My focus was technology and entrepreneurship so I’m a self-taught software engineer but I’m really more of a business guy. Despite that phenomenal education, the one thing that the business school did not teach me was sales. I knew of course that in order for the company to be successful I had to actually connect buyers to the software that I was building and so I went out and taught myself how to sell.
Believe it or not, I taught myself how to sell from a book on tape, and it was an actual tape. I would listen to it in my car as I was driving back and forth to different universities around the DC area and I remember my first big sale was with University of Virginia. I was driving down to Charlottesville and the 6th tape literally ended as I pulled into the parking lot. It’s not a particular sales course or tape that I’d recommend today, but it taught me the process that I needed to follow. It allowed me to marry my natural instincts to connect with people and to help them see the value in what I was doing with the actual block and tackling steps of a sales process to move from introduction through demo, through qualification and then ultimately through close and it was absolutely invaluable to me.
I didn’t know what I was doing, I knew I had a product that met a need and I liked getting out there and talking to people about it but that process, the science, if you will, of selling, learning that and marrying it to the art, if you will, of my attachment to the market and to people, that was really instrumental to success.
Fred Diamond: Who exactly do you sell to today? Who exactly are your customers that purchase your software?
Steve Goldenberg: We sell to the academic leadership of universities. For those of you listening, if you think back to your university experience if you went to one and you think of who might have been your favorite professor, the person who had the most impact on your career and your life, those faculty become leaders. They become deans, they become provost and they lead the institution through all those critical decisions about who they hire, who gets promoted, etcetera. We sell to what we call academic affair, so it’s academic leadership at universities.
Fred Diamond: Very good. Again, your first big sales call, your first big win was at University of Virginia and for the people listening to the Sales Game Changers podcast around the globe, it’s about a hundred mile drive from Washington DC. Beautiful drive, you go past the Shenandoah Mountains and as you’re driving there, you’re listening to some tapes helping you understand what the sales process is and you get there and of course you close the University of Virginia. Why don’t you tell us about some of the things that you learned early on that have stuck with you?
Steve Goldenberg: I would say the most important lesson that I learned is that sales is not something that you do to someone, sales is something that you bring people along through. It’s a process of pulling them through the buying process. A mentor of mine early on, he once said to me, “Nobody likes to be sold, everybody likes to buy” and that has really stuck with me. In fact, I think of that even today. It’s so important to develop a high sense of empathy for what matters to the person that I’m talking to and so I spend time understanding what is their need, what is their pain and then attaching my sales activity to that pain or to that emotional connection. That has been instrumental in the success of my career because that has allowed me to walk into a room with antagonistic professors who think that we’re just some corporate shell and I’m able to overcome those objections and thaw the ice of their personality, and get them to say, “You actually understand us and you understand what we need, and that’s not something that we normally see in a vendor.”
That to me is a critical moment, when they acknowledge that we think of sales differently and we think of partnering with these clients differently but at the same time, we’re making money from it. I always like to say that attachment to and understanding of what is important to the buyer, that allows us to do two things which is: be excellent and expensive.
Fred Diamond: Let me ask you a question. Before I ask you about your specific area of brilliance, one of the themes that we’ve learned from the Sales Game Changers podcast, specially talking to people who’ve had 15, 20, 30 years success selling into a marketplace such as federal or education or hospitality, if you will. Your customer base is academic affairs, it’s the academic side of the university. Tell us something about them that they need. Obviously, your company’s been around for almost 20 somewhat years. Tell us something about your customer and how they were being underserved and how Interfolio has come to service them. What are the needs that they had that you were able to fill?
Steve Goldenberg: Some people don’t see just how large the global higher education market is, it’s about a 2 trillion dollar global market. It’s around 700 billion dollars a year of annual spend in the US. The vast majority of that expense, of course, is spent on human capital so the faculty and staff that run the institutions but in the US, there’s close to 30 billion dollars a year spent on technology. The vast majority of it, nearly all of that investment is in 3 areas: enterprise IT – the core infrastructure – students and administrative functions. The glaring omission there is the faculty.
If you can imagine the analogy of the healthcare market, imagine if all of the technology investment went to the property plant and equipment, the physicians and then the billing. You’re leaving the patients out of that mix, it makes no sense. Higher education is in this very interesting moment where the market is waking up to recognize that they need to invest more directly in the faculty who are half of the equation, of the institutional mission. That was an idea that we helped bring to market and help them uncover and realize, and that’s been instrumental to our success.
It was one of those ideas that is obvious once you hear it, but it was hiding in plain sight so we acknowledged that and then attached to that particular need, and that’s been a real game changer for how we drive our sales.
Fred Diamond: Steve, what are you an expert in? Tell us a little more about your specific area of brilliance.
Steve Goldenberg: I would say my superpower, if you will, is taking human processes and then using technology to improve them. One of my favorite experiences is when I go on site to visit a university for a sale. I love it when they say, “Can your software also do this for us?” and often times it will be something that is not part of our purview but I love it anyway just because it demonstrates to me that we’re really aligned well with the mission of the institution which is, “What is the #1 most important thing for our sale success?”
I’ll give you a specific example. Tenure at universities is the most important career accolade that exists at universities. Of course, not every university does it but all of the major research institutions and the most prestigious universities in the US offer tenure to a certain percentage of their faculty. These are 30 year multi-million dollar commitments that the university makes to the individuals, these are lifetime career appointments for the scholar to become tenured and so this is a high stakes, high value, high risk and reward decision that the universities make. It’s a complicated decision, it’s a complicated process and in 2013 I decided that we should make that one of the hallmarks of what our software serves.
At the time, no one in the market – no one in the world – had built a product around that. Part of the reason was it’s just so complicated and challenging a process to manage. I went and got on site with a number of our partners and I actually spent time face to face with university academic leadership and learned everything about how those decisions get made, how those processes work. We unpacked the complexity and we built the software to make that complexity more easy to manage. It was being face to face with the people who were going to be interacting with our software and then turning that into technology, or turning that learning, rather, into technology that made it a runaway success.
My expertise is taking those human experiences, identifying how technology can improve them and more important, identifying where technology shouldn’t or can’t improve them and then building systems around that. The value there is it brings a lot of value to the client which means it can be highly valuable to us and again, it can be expensive. One of my career goals is I like building things that are excellent and expensive.
Fred Diamond: Steve, talk to us about a mentor or two who has helped you on the sale side. Helped you really understand the role of sales, the value and how you can be as effective as possible.
Steve Goldenberg: One of my first board members who is still a great friend, we worked together for probably the first 10 years of the business and he was a management consultant. He was remarkable to me because he only worked with the president or provost of the university, so effectively the top 2 people by rank at a university. He would only work with them, he would only sign 5 year contracts with them and his price was as high as anyone else in the market. Anyone that came to him and said, “Look, we don’t sign 5 year contracts” or, “That’s too expensive, we need to negotiate” or, “I want you to work with this assistant provost” his answer was, “No, thanks.”
He consistently got reluctant clients to switch from that resistance to embracing him and he was the one that told me people buy from people and when you understand their needs and desires and challenges deeply, when you have that high degree of empathy, it allows you to break through their resistance or reluctance and you can then identify whether they can be a good client or not.
He said, “Qualification is a critical part of sales. There are times where you have to walk away because that person is not going to be a good buyer and I do that relatively frequently. But more often than not, even the recalcitrant prospect for me, once they see that I am well aligned with what their needs are, our price and our contract terms and our desire to work with the senior most leadership, those become assets rather than liabilities in our sales process.”
People buy from people and that attachment to empathy is something that has affected me for my entire career and will affect me for my entire career so I’m happy to share that.
Fred Diamond: Steve, why don’t you take us back to the two biggest challenges you face today as a sales leader?
Steve Goldenberg: I would say the most important challenge that we contend with on a day to day basis is sizing up the market and segmenting it appropriately. The reason that’s so important is that when you have a product that is meeting a need and has early sales, I think it’s relatively easy to get – let me back up. It’s hard to get your first sale, but then once you get your first sale it becomes a lot easier to go from say 2 to 10. We sell to enterprises so I’m talking enterprise sales, so this may be different in a consumer business but going from 2 to 10 is pretty easy. To go from 10 to 100 – and I’m just using round numbers, here – it’s going from the 10 to 100 that’s a real challenge and even 19 years in, we still deal with that problem on a day to day basis.
The issue is in our market, not every buyer or not every prospect is the same. They have similar needs and similar decisions but they don’t operate the same way. For example, large research institutions – your state universities, for example – these can be billion dollar budgets or multi-billion dollar budgets. They can have thousands of academic staff working there, they have enormous research budgets and their needs are very different from a small college, let’s say, that is primarily focused on teaching.
The same goes true for a campus that’s in an urban center versus a rural center. The way that they think and the way that they operate and the things that they need to accomplish, they can be very different. We have to segment our market well in order to create the right messages, in order to tailor our sales presentation to their unique needs. We’re constantly talking about how do we do that. That’s probably the most important challenge.
I’ll give you actually a current example: we’re currently working to expand our sales into the UK and there are 300 sum universities in Britain and they operate very similarly to the US but there are some key differences and we are currently working hard to tailor our message and tailor what we do to the UK universities as different from the US universities. It’s a huge sales market for us, a great opportunity but it’s definitely a challenge because even though they are very similar in so many ways, the differences are really critical and understanding those differences is what is our key to success.
The second thing that I would say is a constant challenge is the performance of sales reps at the company, there’s a wide disparity between the best performers and the worst performers. I’m not even talking about outliers like someone who is not coming anywhere close to quota and it’s a bad fit. I’m talking about the people who are delivering on our expectations for them, but some people are just above quota, some people are just below quota. It’s not a narrow range, it’s actually a pretty broad range and I think one of our biggest challenges is how do you manage a team when you have a wide spread of performance around the quota targets.
The advice I would give around that is if you’re struggling to close, if you’re struggling to hit your quota I would communicate early and often with your sales leaders to say, “Listen, I’m having trouble with X and I really want help with this.” What that’s going to do is it’s going to demonstrate your commitment to the outcome and demonstrate your commitment to the company and I find that our sales leadership want to help people that are struggling. Often times if they go radio silent and we don’t hear from them, that’s usually a bad sign and we’re unable to help them. It’s much better when someone is very forth right about what challenges they’re having because then we can roll out support to them and help them be successful.
Fred Diamond: What’s the state of your industry? Is it still early adopters or is it mature, or have you crossed the chasm, so to speak? Give us a brief understanding of where your market is to put a little more of this into context.
Steve Goldenberg: I would characterize our market as just now crossing the chasm of using the cloud as infrastructure rather than on premises infrastructure. There are certainly plenty of web based tools that universities use but their core enterprise technology is still primarily on premises technology. Part of my vision is that there is a missing core enterprise system in the university IT stack and we’re building that. Very specifically, there should be four core enterprise systems at universities and there are currently only three. The current three are the ERP for human capital management, payroll, etcetera, what’s called the Learning Management System or the LMS, those are the in-classroom technologies that help faculty actually do teaching and grading and such.
Then there’s the Student Information System or the SIS and that’s the core data system for student data and the missing system is a faculty information system, there is no faculty information system (FIS). There is no FIS and yet again, the market consists of faculty doing research and teaching, students coming to the institutions to benefit from that knowledge creation and that teaching to learn. That’s the heartbeat of the institution and so the lack of a system of technologies focused on faculty and their work at the institution and how they impact the success of the mission of the institution, that’s a huge opportunity.
Of that $30 billion, very little of it is spent today focused on faculty. It’s primarily focused on the core enterprise systems, the learning systems or the student system and so we believe that there is a ground swell transition where the universities recognize that in order to succeed in today’s environment and to keep higher education a critical part of US competitiveness world-wide, that they need to focus on faculty and specifically focus on technology. I think it’s an exciting time in this market because there is this once in a generation change going on.
Fred Diamond: Take us back to the #1 specific sale success or win from your career that you’re most proud of.
Steve Goldenberg: I have to admit, it’s hard to pick one that I would say I’m most proud of. I’ll pick a recent one that I’m particularly proud of. I would say 15 years ago, I first visited University of Michigan and I grew up in Ann Arbor which is where University of Michigan is. In fact, my high school was across the street from University of Michigan football stadium so it was my home town school. I wanted to come to a city, so I ended up in DC going to Georgetown but always loved U of M and loved Ann Arbor.
In the course of growing the business, I came home one day and went to the department on campus that was the potential buyer for our product back in 2003 or 4 and they said, “This is really interesting, we really like this but we really build our own technology. It’s rare that we outsource technology to another vendor” and I tried everything I could in my sales playbook to overcome that objection. I probably spent a year or two on it so the lesson there is that I didn’t qualify them well because I didn’t qualify them out soon enough. I should have moved on sooner than I did, but I didn’t and it didn’t kill us.
It wasn’t a fatal mistake but I definitely spent more time than I should have because they didn’t buy. Fast forward to last year, the same department and the same person who I had talked to 15 years prior called us out of the blue and said, “We want to exit this business. We want to shut down this service or at least we don’t want to run it anymore. Do you guys still do it? Because if you do, we’d like you to run it for us.”
Obviously that’s a great inbound lead when you get someone calling like that. Then 6 months later we sold them a system-wide enterprise product. As of now, the University of Michigan will hire all of their faculty using our technology.
Fred Diamond: Here you are presenting in 2003 and fast forward 14, 15 years in 2017 you get that phone call. How did you feel?
Steve Goldenberg: It was phenomenal.
Fred Diamond: Of course it was.
Steve Goldenberg: Knowing that I had made an impact so many years ago and that that impact resonated all those years and that when they were ready they came back, it just felt great. Obviously 15 years is not a good sale cycle, I recognize that. The most important part to me is that sometimes you have to be patient in order to win and I have been very patient in my career. That I think is one of the key skills that a good salesperson has to have is to know when to be patient and to know when to cut bait.
As I said, I’m not proud of it because it took 15 years. I’m proud of it because we eventually had them come back but it’s reflective of our product has a major impact to our clients and they recognize it and we’re able to help them connect the dots and turn that into real value for them. That’s what allows us to close deals and generate great revenue for our business.
Fred Diamond: Did you ever question the importance of being on the sales side? Did you ever question being in sales? Of course, you’re the business owner but you also truly get the value of sales. Did you ever think to yourself, “It’s too hard, the sales thing is just not for me”?
Steve Goldenberg: No. No qualification around that, sales is the most important thing a business does. It’s not just something you do with your clients, you do it to everyone. As the business owner, sales is important to me because I’m selling when I’m raising capital for an investment, I’m selling when I’m getting a person to join our team as an employee, I’m selling when I’m communicating with partners so it’s not just the traditional definition of sales activity. It’s the art and science of persuasion and moving forward in pursuit of our mission and vision.
Fred Diamond: Steve, what’s the most important thing you want to get across to junior selling professionals to help them improve their career?
Steve Goldenberg: I think the most important thing is to learn a sales process and become proficient in how to deploy it in a meeting. Again, I would not recommend a specific sales process. You have solution selling, you have challenger selling, there are a number of different established sales processes that people popularize. I don’t really have an opinion one way or another about which is the best because I think it depends on who your market is and what you’re trying to sell but you must learn a process and you must combine it with your own personality, your own charisma.
This is what I call the art and science of sales, the art is how you are as a person, how charismatic you are, the way you connect with people, the way that you talk, the way that you operate combined with a formal defined process.
Fred Diamond: Very good. What are some of the things you continue to do to sharpen your saw and stay fresh?
Steve Goldenberg: My answer may be a little different from a full time sales professional but I think it’s relevant. I stay in the market and stay connected to our customers and our prospects. The way in which I might be a little different is sometimes I’m not selling overtly. So for example I was just in the UK for 10 days and all of the meetings that we had were presented as information gathering. We’re growing our business in this market, we want to learn, could you spend 30 minutes and have a conversation about how the UK university market operates and how it’s different from the US?
We’ll share some stories about our clients in the US who may be peers of yours. It wasn’t an overt sales mission but I’m always selling, and so at the end of every one of these meetings because we were talking about issues that were important and relevant to them, most of those meetings ended up with, “We actually could really use your stuff here, we should talk.” Staying connected to our clients and to our market and really understanding what matters and what the trends are, that’s the #1 way that I stay sharp in terms of driving value to the company.
Fred Diamond: Good. What’s a major initiative you’re working on today to ensure your continued success?
Steve Goldenberg: That’s tough, there’s a lot. Right now we have 3 enterprise modules that we sell and one of the most important ways that we can grow the business is to add additional products to our product suite. I have a dual target when I go out on the road and visit our prospects. One is to help get deals closed and get universities either as clients or have them buying more from us.
The other goal is to learn what else the market needs, what else these university clients need and then bring that knowledge back to the company and share it with the product development organization, with marketing for messaging and with other parts of the company that can make that learning actionable.
Identifying where the new product opportunities are is a corollary to the selling activity that is the primary reason that I go on the road and visit clients.
Fred Diamond: Sales is hard, people don’t return your phone calls, they don’t return your emails anymore. What would be your encouragement for telling people to continue in sales? What is your insight into why sales as a career can be such a special career to pursue?
Steve Goldenberg: One thing I would say – and this is from being on the receiving end of salespeople. Obviously I have a large number of salespeople that contact me because of my role as president and founder. I actually struggle at times to keep up with the volume of inbound inquiries and so if someone only writes me once or twice or calls me once or twice, it slips through the cracks. Not getting a response is not necessarily indicative of a lack of interest and so I think it’s highly beneficial to be aggressive as a salesperson and continue to connect with prospects even if you’re not getting immediate feedback from them. Now, that can be annoying.
Again, I’m speaking from the receiving end of this, it can be really annoying if someone is sending me messages that don’t resonate with me. I’ll give you an example right now. I won’t say who it is because I don’t want to out them, but we have a salesperson that has contacted me. In fact, he called me during this podcast, I saw his number pop up and he has been very consistent about getting in touch with me. I’ve had lunch with him and I’ve talked to him on a number of occasions but I just haven’t had time to pay attention to him for long enough for what he wants to talk about. I actually don’t mind that he continues to contact me because when we have talked he has brought me relevant and tailored information that actually is pretty helpful to me.
I would say that yes, it is extremely hard to get people’s attention but if you believe that what you are delivering to your clients brings them real value, then it is in their benefit for you to get through to them. It’s in their benefit for you to break through the noise and deliver the message to them.
Often times like I said, I will frequently just not have time to deal with all the inbound requests and so having the consistency of someone continuing to come back and say, “I hope I’m not bothering you, but I really want to make sure that I can connect with you and provide this value to you.” Being consistent like that and not giving up makes all the difference in the world.
Fred Diamond: Why don’t you give us one final thought to inspire our listeners today?
Steve Goldenberg: I’ll reiterate one of the best pieces of advice that I ever got, it is that no one likes to be sold, everyone likes to buy and that is the magic that a salesperson can bring to their prospects and clients.