This is the third in a series of three interviews with entrepreneurs who attended MastermindTalks in Toronto in mid-June for two days of presentations, roundtables and networking. Jason Atkins is the 36-year-old founder of 360Incentives.com, a Whitby, Ont.-based business that helps engage, measure and motivate sales associates and channel partners.
Question: Can you tell me more about 360Incentives and how it works?
Answer: We help brands modernize the way they execute promotions and how they engage their channel partners: the retailers that sell their products, the retail salespeople who sell their products, and at the end of the day, the consumers who buy their products.
The way we looked at it is that the world of promotions and incentives is broken. The old world is you buy a product, you get a mail-in rebate, and you mail it in. Twelve weeks later you either get a cheque that says 'here's your money' and you've already forgotten about it, or you get a letter that says 'you got rejected.'
We changed that. We make brand advocates. We change the experience people have with it to ensure in a connected world that we promote the brand not detract the brand.
We were founded in the summer of 2008 and we launched the beta product in 2009.
Q: What was the inspiration for the launch? What took you from idea to execution?
A: I was working for a marketing company in the United States, and wanted to run a company, so I leased a building under my own name and figured if I put my back against the wall I'd figure it out. I bought a whiteboard and a desk the first day and really put three things on the wall.
The first was that I've always been the guy who applies technology to industry, so I put a carrot with a big stick and I was like "I want to play in a really big market that's broken." Second is I wanted to build a company that makes money while I sleep so I drew a little hammock, a platform. Third was that I wanted to make people happy.
I thought about my experiences around all that. In the '90s I built Hewlett-Packard's rebate system and people thought it was awesome, and it hasn't changed since. Back then someone tried to create a fraudulent cheque … tried to cash a $50,000 cheque that was supposed to be $50. I realized all the fraud stuff that happens in industry. How do these companies that mail things around track and capture fraud?
So I thought 'massive industry, I can build technology to do it and not people to do it, and at the end of the day the incentive is supposed to make people happy.' You bought a product, you got an incentive, you're supposed to be a happy person. That's how we came up with the idea.
Q: How has the company changed over the past five years? How has it evolved?
A: The company has taken on a bunch of different approaches. We've really embraced this whole connected world and experience. We thought about happiness before, but happiness is really about making sure people get paid quickly, making sure they get paid how they want.
Now what we've learned is that incentives and promotions have about eight touch points with a consumer. How do you leverage those touch points? How do you build them as advocates? How do you change the company and how we think about experience generally?
The other was just how much fraud is created out there. We hired a guy from the credit-card industry that now has a compliance department in our company, that has six or seven people now, and all they look for is fraudulent activities. People create fake invoices, people create fake people. It's amazing what people do to get paid fraudulent stuff.
It goes way beyond what I ever thought. When clients come on board, we realize between 8 per cent and 10 per cent savings on their spend. We'll move $1-billion this year, which means we'll save our clients $80-million to $100-million.
Q: Who are your key competitors, and how do you differentiate yourselves?
A: Typically mail houses, a bunch of companies are out there, but what they do is old process: mail things in, they try to be the cheapest companies out there, maybe trucks off to Mexico, have the data entered. We're all online. We don't think of them necessarily as competitors because we're a single-platform that runs whatever promotions you want in a web-based environment.
So we deal with thousands of competitors that win business, but when clients understand the value proposition of our experience – the compliance and the protection that they get – and the real-time visibility they can get, we usually get through the competition barrier pretty quick.
Q: Sales is one of the more crucial strengths a company can have. What makes a great salesperson? Can any of the skills be taught?
A: We did a whole case study on why people sell things. And there are six reasons. A lot of them are things you can teach somebody. People want to know 'what am I going to make from it?' People sell things because of the brand recognition they have. People sell things because of the reliability of the product.
If they sell something that's great, it's going to build referrals; it'll be somebody that comes into their house and says "I love my TV" or "I love my washer and dryer," and that builds referrals.
One big factor is the education people have. What do I know about your product and the value it has? All that can be taught. The value prop: the why your product over another product? It can be taught.
Those are all key reasons a salesperson can sell. And what we've learned with the technology is that we actually can tell you who sells your product at the retail level and how much. You can take that and mould the best salesperson you have, figure that out, and then bring it to everyone else.
Figure out the practices your best person does, and bring it to the masses.
Q: What are your personal contributions to the growth of the company?
A: I've focused on two areas from the beginning, and I still do today, and the first one is culture. Everyone says it's the people in your company, and I would say yes, people for sure, but culture is the belief system you use to hire the people. So we built an amazing culture. We won 'greatest place to work in Canada' last year.
The second is product mission. Where is the product going? How are companies going to leverage it? How does it save them on the compliance side? How do we help them grow their revenue?
Q: You raised more than $7-million in venture capital funding from OMERS Ventures. How did you secure the deal and what are your plans to use the money?
A: The deal was interesting. It was about two years ago. OMERS was talking to me for a long time. Howard Gwin was chairman of the board. He's no longer at OMERS, but he wanted us to raise capital. I said to them, "I don't want to spend a lot of time raising capital, I want to spend time building my company."
They wanted to be an investor, they could spend all the time they wanted with me. For about 12 months they followed me around. They understood the business. They got in airplanes and met customers with me. I didn't spend any time pitching them.
It was like a marriage, you get to know the other person. We got to know each other really well. We got really comfortable and we created a deal that made sense.
We put the money to use right away. The core focus was on hiring a great executive team. We also invested in the technology and development to bring the product to the next level. And to create systems and processes around sales and marketing to scale the organization.
Before the money, we were seeing 100-per-cent year-over-year growth. Harder to get as you get into bigger numbers. The money has allowed us to continue that.
Q: Were you boot-strapped to that point? And if so, how did you feel about giving up equity in the company?
A: I had an angel investor and myself do the funding up to that point. We were pretty much boot-strapped, we were less than $500,000 into the company between the two of us. When you're growing an organization you have to make tough decisions.
We were 30 per cent EBITDA positive and doing well, but part of the reason I'm building a company is that I want to change the world, change the way people look at organizations, change how people create their cultures and their businesses, and how they give back to the world.
You can't do that with a $10-million company or even a $50-million company, you can change it with a $1-billion company, and the money is going to allow us to become a $1-billion company.
We're at 130 employees now.
Q: Are incentives a great long-term strategy for a company or are they more of a short-term bridge to long-term growth?
A: Companies use them in different fashions. So absolutely certain product incentives in the short-term can drive demand for that product. Loyalty becomes something that's longer term. How do you create loyal customers?
There are incentives that happen around that. Incentives happen a lot around how your retailers advertising and co-advertise with you, and the floor space you get. Incentives will always be there, it's just that the type of incentives will change all the time.
Q: How do you give back to the entrepreneurial community?
A: I've done a bunch of angel investing, and I've learned that it's a tough thing to do. I try to mentor those companies. I've worked with Spark Centre (a business incubator in the Greater Toronto Area's Durham Region) and one of the things we're going to launch soon is to allow entrepreneurs to come into our environment and work with our experts. Work with our sales and marketing teams.
We're launching a new facility, hopefully, and there will be an incubation facility across the street, and our goal is that Mondays, for example, might be marketing days. People can come over and spend some time with our marketing group. We want them to understand that as a company scales you need to put certain things in place to allow that to scale.
Our new facility is going to be across the street from Spark Centre, which is the regional incubation centre. They're opening a new spot in Whitby, and hopefully we're getting a new spot in Whitby that we're working on now. We're hoping that because we'd be across the street from each other we can integrate them; allow their people to have lunch with our team in our cafeteria, for example.
Q: You have presumably put all the policies in place that you're 'selling' to other companies. Do you test new ideas out internally before selling them to clients?
A: Absolutely. Ours is much more of a technology sale, so the companies we work for have huge brand departments, marketing departments, people who think of ideas all the time, so we just want to give them the tools to execute those incentives. Do we work on best practices? Absolutely.
But ours is much more focused on channel stuff, where internally ours would be employee-faced incentives, which is a little different. We don't run employee-incentive programs in our technology, it's all channel-based incentives: dealer, salesperson and consumer.
Q: One of your key employees passed away recently. Who was it?
A: It was Todd Skinner, our chief of staff, who I think was employee No. 11 at the company, and one of the guys who, when he came in, really challenged me. He said, "Jason, you say you have happiness, you want to build happiness, unbelievable experiences for your team and your customers, these are key commitments you've made. But how are you really doing those things?"
He came in originally as a salesperson, and I moved him into culture almost instantly and we worked hard on building that together: the culture that we have within the organization. He was good friends with Tony (Gareri, CEO of Roma Moulding, featured in an earlier interview), and instrumental in helping me build the company.
Q: Entrepreneurs don't talk a lot about succession planning, they often don't have succession plans. This was clearly a key person, and an illustration of how a sudden death can have a significant impact on a company. How did his death affect the company, and you?
A: Super tough. Very close friend of mine so it was super tough on me, it made me ask myself a lot of questions about my succession planning. For the company, a person like that can't be replaced because of what he did and his heart and his goal in life was to help people achieve the things they never thought were possible.
What we did is create culture ambassadors. It's like when you want to vote in a mayor, you voted these people in, and they were our culture ambassadors. There are eight of them in our company. Three of them were people who were very close to Todd, and they will stay there every year all year. Another five are voted in every single year.
And we have culture mentors. Tony (Gareri) is actually one of our culture mentors. Bruce Croxon is another culture mentor, and he's a friend of mine, and then Dan Carter, who was a close friend of Todd's. These guys care about people and building happiness.
Our culture ambassadors report to our culture mentors on what they're doing, and initiatives they're taking. And they're really the voice of the company because culture is a living, breathing thing. They meet every week, I sit down with them once a month, and we talk about their plans and how we can continue to build the culture. It was too hard to replace one person so we essentially put it on eight people.