How Taleo Landed a Fortune 20 Company as an Early Adopter

Taleo

The story of how talent management startup Taleo landed Hewlett-Packard as an early client is inspiring. It’s a modern David and Goliath story.

The CEO of a small Canadian startup goes to Silicon Valley armed only with a vision and wins over an enterprise giant. Follows success, growth and a flurry of clients around the world.

To many investors, this is what successful product-market validation in the enterprise should be: big and bold.

To many entrepreneurs, this story can be intimidating.

It’s an inspiring story but, it’s also a story of exception. Few entrepreneurs had to do what Taleo CEO Louis Têtu did. Many successful companies have followed much smoother paths to product-market validation.

Louis Têtu was not a recruitment or talent management specialist, Taleo did not have a proven technology and, at the time, they didn’t have a complete product but, Têtu was able to get an appointment with Carly Fiorina, one of the most powerful CEOs in Silicon Valley.

How did that happen?

Then newly appointed Hewlett-Packard CEO, Carly Fiorina, had made a priority of better using the engineering talent in the company.

Although they had over 300,000 employees around the world, they were dissatisfied with the tools at their disposal to manage employee profiles and expertise.

Têtu, as a seasoned entrepreneur, saw an opportunity to help a newly appointed CEO solve a problem she had identified as a company priority. He took a chance and reached out to the CEO to understand the needs of Hewlett Packard, establish a relationship and convince her that Taleo could be the solution to their problem.

Têtu met with Fiorina on her own terms to present Taleo’s vision; a vision for a product that solved Hewlett-Packard’s problem, would be (almost) risk-free and would ultimately lead to a high return on investment for the company.

In other words:

  1. Talent management was a priority for Hewlett-Packard;
  2. A first contact was made to understand Carly Fiorina’s vision, her needs and her expectations;
  3. Têtu was perceived as a credible business partner;
  4. A face-to-face meeting was organized based on the mutual understanding of the problem Hewlett-Packard was facing;
  5. Têtu’s vision sparked confidence in Fiorina;
  6. Hewlett-Packard bought into Taleo’s story, their ability to deliver, their approach and their estimated return on investment (ROI).

Great entrepreneurs recognize that behind every enterprise are normal people like you and me. Those people have needs, challenges, responsibilities, dreams and desires; there are plenty of ways to make them care.

This is the lesson all entrepreneurs need to remember:

Louis Têtu would have never succeeded had he not understood what was motivating Carly Fiorina. Têtu was able to make her care.

After much discussion, Fiorina agreed to work with Taleo. The solution became a hit and Hewlett-Packard became Taleo’s first international client.

Getting Out of Recruitment — The Story of B2B Startup HireVoice

This story was originally published August 15, 2012.

Earlier this month, my business partner and I decided to close HireVoice, the business we started in November 2011.

It’s surprisingly easy to close a business, but it comes with a grieving period. Hopefully, I’m not writing this too soon…

How HireVoice came to be

In 2011, I came back to Canada with way too many business ideas. A friend of mine dropped his boring job and we started brainstorming full time.

All projects seem about equal until you have to make a decision.

I wanted to avoid the problems I had with my previous startup, bootstrap a company to greatness and get over my fear of partnerships (I had had bad experiences).

This is about the time that the Lean StartupTM came out, so we used it.

For weeks, we filled sticky notes with ideas, problems, market insights, trends; everything to make well-informed, rational market decisions.

Once we narrowed the list to a few opportunities, we started validating through cold calls, surveys and landing pages. We also started looking for the missing partner.

The same week my original partner decided to leave the business, a technical co-founder joined. The wheels were in motion, we were going in employer brand monitoring, a direction I had half-chosen.

With the wheels in motion

The week my original partner left was the week I convinced Louis- Philippe to join. I was having serious doubts, but I had sold him on a business I was trying to believe in.

If you’re not passionate about going at it every morning, you’re probably not working on something you love.

Focusing on the wrong things

I had learned that with half the time you get half the results. For HireVoice, I was all-in, committed to success or, at least, piling up debt.

Because my partner and I didn’t have prior expertise in HR or recruitment, we had to build credibility, a network of contacts and learn the basics so we got advisors early on.

You lose a lot of time learning a domain, which isn’t yours. You will never be as credible as a subject matter expert with established industry contacts. Get one!

In retrospect, we probably lost four months learning recruitment and HR. That’s four months we could have spent getting clients.

Because I was full-time on HireVoice and validating a product was a part- time job at this point, I was investing time in socializing HireVoice with the investment community and all kinds of smart people.

There is such a thing as too much strategy. Advisors don’t always help.

Although this felt like momentum, it was sidetracking us from focusing on Product-Market fit (the only thing that really mattered).

Advisors are not real victories. Funding is not real validation. These things only sidetrack you from getting s*** done.

Focus is key when launching any business, but small wins were probably not celebrated as much as they should have been. We were doing good things, but my impatience was causing unnecessary stress.

Momentum is essential to motivate team and partners. Small wins are significant and must be celebrated.

Watching a car crash

We started validating products with customers in the first few weeks and were always getting very positive feedback. We started building the first module of our solution because it felt like we were on the right track.

“Interesting” is a distraction. Watch out.

Our first product was the first step of the employer brand assessment cycle. It was logical, but in retrospect, we should have chosen the module that solved the biggest pain.

We released our first module to pilot customers. There was no demo possible; it was high commitment from the get go. It took months for any of our pilot customers to run tests.

Shorten time to demonstration of value of your product to increase engagement.

Nevertheless, people were getting excited about the potential of HireVoice. We even celebrated too early the signature of a customer.

A client is not a client until he has paid money for your product.

Everyone we met in recruitment was getting excited about our passive candidate perception module. The idea was to tell HR recruiters what passive candidates (candidates not currently looking for work) think of their company as an employer. Right… so, we built this module as well and went selling.

It’s very hard to sell information without established credibility.

It was a challenge getting passive candidate data. We honestly thought we had a good model.

User acquisition is never an after-fact. Always know how you’re going to acquire users.

We could have made the user acquisition part work, but ultimately, what made us change product was the fact that companies were not buying. It was just interesting.

People don’t need more information; they need better knowledge.

We tested two more products to help companies harness perception of their employer brand, but those products were probably a bit ahead of the curve.

Strategy is the fun part. It’s what people love doing. Don’t try to automate.

We were also seeing the limitations of the Lean Startup methodology. Since B2B is relational, you can’t just change product every week.

Landing pages and mockups don’t create a lot of trust.

A second breath

In the process of finding product-market fit, it’s very easy to lose track of what you, as an entrepreneur, want. Because of the nature of the information we were trying to sell and the price of our product, we were targeting large companies and I had to wear fancy pants to work.

It was never something I wanted to do. It just kind of happened.

At this point, HireVoice was part of the MIT entrepreneurial program. Their approach focused on identifying the biggest pains of a target market. For a month, I met with HR managers, directors and VPs and was able to identify their pains, budgets, needs, buying processes, team structures, etc.

We realized that we had been fooling ourselves in thinking that employer brand perception was a significant problem (or that it was a valid starting premise). It was a problem but it didn’t hurt enough for companies to pay for our solutions. We made the decision to go into recruiting.

At this point, we had a clear picture of our target end user and target customer (not the same in this case). We were following the right process, and we did a lot of good things:

  • We established trust and relationship by becoming partners in the recruitment success of in-house HR recruiters (your success is our success);
  • We set up a customer development panel with five or six target end users. They were helping us solve their own problems;
  • We were offering full-featured pilots with extra customer support for a base fee.

Those ideas were looking mighty promising.

Tiring out

Bootstrapping a startup when you’re 30 and have a rent to pay is incredibly hard. Beyond the monetary aspects, it is very hard on perception (people think you’re crazy) and personal relationships. Becoming comfortable in that situation is one of the hardest things I have done.

Validating products is also creatively tiring. At some point, it is possible to run out of ideas for new products. We were validating products faster when summer came around but, eight months in, we were tiring out.

It was hard to escape comparisons to LinkedIn.

Good luck getting money if your substitute products are free. Perceived comparables are more important than actual comparables.

At this point, my partner told me that he wanted to cut his losses and move on to other things.

I’m not sure if it was a failure in leadership, but it was definitely a failure in creating sustainable momentum.

I wanted to do one last round of validation before closing HireVoice. I built an ideal product that did everything a recruiter might want (a magic product) and went out pitching.

Running the regret analysis

We had built (or built part of ) five products at this point. We knew we had great customer research and knew the problems of our target end users, but the motivation was not there anymore.

My magic solution was interesting… but no one was throwing money at it.

In the end, I did what I do with every big decision. I asked myself if in one, two or five years I would regret closing the door on HireVoice. The answer was no.

The bulk of the pressure in a self-funded business is self-created. In retrospect, most nights spent working could have been avoided.

It is unfortunate but:

Not all problems lead to sellable solutions.

Time to move on.

Moving forward

The hardest thing with failing is telling others. Only people in the startup community perceive failure as part of a process.

As was the case with Flagback, my previous startup, I have learned enough through HireVoice to justify the monetary investment (a little more than a Bachelor’s degree).

I was able to get over my fear of partnerships and realize that I work well with complementary partners.

Overall, I could not honestly recommend starting up in recruiting. It’s a slow-moving market dominated by what LinkedIn is or could be doing. Budget for technology is limited; HR is usually perceived as a cost center. End users are rarely the buyers.

Moving forward, I will be taking a bit of a step back, but generating direct sales will be the focus of my future endeavours. I’m looking at unsexy startups.

How Taleo Repaid a Key Early Adopter

Taleo

Around the year 2000, Taleo was working hard to enter the American market with its talent management solution.

Then newly appointed Hewlett-Packard CEO, Carly Fiorina, had made a priority of better using the vast array of engineering talent at her disposal.

Although the Fortune 20 company had over 300,000 employees around the world, they were dissatisfied with the tools at their disposal to manage employee profiles and expertise.

A Taleo saleswoman on the West coast caught wind of the opportunity and managed to organize a meeting between the CEOs of Taleo and HP, Louis Tetu and Carly Fiorina.

The Taleo CEO pitched a partnership to help HP build the solution they would need that, in time, Taleo could sell to its other customers.

After much discussion, Fiorina agreed to work with Taleo on the condition that they build an extra solution for internal recruiters.

The solution for recruiters was built in just one weekend. HiringManager Webtop became a hit and Hewlett-Packard became Taleo’s first international client.

As a key contributor to Taleo’s early successes, Carly Fiorina was invited to be the keynote speaker at the 2006 and 2010 Taleo World events. The talks gave her great visibility and helped further her position as a market innovator and visionary CEO.

Fiorina helped Taleo become a multinational company. She was a real early adopter and, reaped the rewards of being an early adopter for them.

For more stories like this one, check out Lean B2B: Build Products Businesses Want.

The Importance of Long-Term Commitment in B2B

For the last 20 years, veteran B2B sales leader Vincent Guyaux has been selling to executives around the world (see Mindready Solutions case study).

In 2006, Vincent was CEO of Imaginum, a fabless semiconductor manufacturer providing parts for LED televisions. The company was under-financed at the time Vincent had a meeting with Samsung’s display screen division VP of technology in South Korea.

His pitch was going well, but his prospect had an uncommon smirk to his face when Vincent asked him if he was comfortable working with a company like Imaginum. He could feel something unusual was happening.

As he was wrapping up his pitch, the prospect turned to him and asked, “Will you come back?”

Vincent was a bit stunned by the question. The VP of technology followed by saying that he meets about a dozen of people like Vincent every week. “Everyone says they’ll come back, but only few do.”

Businesses want to work with other businesses that are in it for the long haul. They want long-term commitment to reduce their risk.

Vincent promised that he would come back on a regular schedule and gave specific dates for his return.

It took three trips to South Korea over a three-month period, but the Samsung display executive eventually signed a first design project with Imaginum.

Vincent had proven that he was reliable, trustworthy and that his firm was in it for the long game. These are three of the five attributes customers look for in credible vendors.

Do you have sufficient credibility in your market?

How iBwave Tackled Risk Head-On to Land its First Customers

iBwave logo

When entrepreneur and angel investor Mike Cegelski became CEO of iBwave Solutions in 2003, the company had already started working on its core product iBwave Design.

At the time, there were no clients. Cegelski knew that the company had to build a history of trust and client relationships to sign key customers.

The need had already been validated with prospects (see case study), and their demo was successful, it really helped prospects visualize the pain. There were many positives; all they needed were a few prospects to sign up for a pilot project.

To build trust and convince prospects, they agreed to put iBwave Design’s source code in escrow for security. Prospects could recuperate their investment if the solution didn’t deliver on the promise. It was the ultimate form of conditional purchase.

It was a risky move, but the team knew they were able to ship quality software and that this, in turn, would convince clients to sign on.

Cegelski’s team made every release a success and soon they were able to demonstrate the ROI of their solution. On average, it only took 55 days for clients to recuperate their investment.

They proved the value of their solution and removed the risk from the pilot by building trust and an history with their early customers.

Why SmartBear Founder Jason Cohen Decided to Focus on WP Engine

In 2007, Jason Cohen sold SmartBear Software, a company he had founded to create peer code review tool Code Collaborator.

When the entrepreneurial bug hit again, Jason had a few ideas he wanted to explore. One of these ideas was to create a spin-off of a marketing analytics tool he had developed at SmartBear. In his words, it was so accurate that it could tell when a (paper) catalog hit the desk of a prospect.

Jason quickly had a prototype ready to show to the 20 to 30 marketing people he met.

Although everyone thought the tool was “awesome” and they felt it was a good idea, most of the prospects were not ready to pay the $50 a month that Jason intended to charge. Some were even expecting it to be free.

It was a good idea, but Jason could not see a business forming around it. The market was very fragmented; everyone had different needs for the product. It would be very hard to scale a product that does many different things.

In parallel, Jason was also exploring the idea of offering premium WordPress hosting.

This time, to understand the market and validate the pain, Jason found experts on LinkedIn, reached out for quick interviews and gathered a lot of information on the problem.

The more people Jason spoke with, the clearer the opportunity became. It was night and day compared to the marketing analytics tool.

After 30 interviews, he could tell that many prospects had the same needs, the same reality and that there was agreement on the price.

Although Jason loved the analytics idea, he had to be honest with himself. The path for the product and the market weren’t clear. It would be a lot harder and riskier than the WordPress hosting idea.

As Jason moved away from the analytics app, the premium WordPress hosting idea came together. WP Engine was founded in 2010 and has been growing ever since.