The Biggest Thing in Sales Since the Commission

Sales enablement technology has been fertile ground for investment and value creation. Tom Siebel built an enormous enterprise software business here in the 90’s. Marc Benioff took it to the cloud, building a company worth over $120 billion. Today a crop of younger companies strives to carve out their own new categories, such as Gong.io in conversation intelligence, or Outreach in sales engagement. A handful of them will create markets of true scale, but most will be drowned out amidst the clutter of niche players. SetSail, a Wing portfolio company newly emerged from stealth, aims to dramatically improve ROI on the biggest sales investment of all: compensation. It might be the biggest thing to happen in sales since the invention of the commission.

To our knowledge, SetSail is the first independent company to develop an AI-powered sales compensation system. The SetSail system is equally rooted in the fields of machine learning and behavioral economics. The ML part taps into primary data sources to make an objective measurement of deal status. Principles of behavioral economics are used to offer real-time incentives that reward forward progress, even before the deal closes.

So why do this? The answer lies in human behavior. Most people naturally focus on shorter term deals with higher probabilities of closing. Longer term, higher impact opportunities may be neglected. There is also a tendency to be “inbox-driven”, spending time reacting rather than proactively prosecuting the most important opportunities and building valuable pipeline. If sales leaders augment traditional commission plans with SetSail’s real-time incentives, they can focus their reps on the things that matter, while offering them guidance as to how to make the most progress. It is important to note that SetSail does not reward activity, which might not actually be directly connected to desired outcomes and can be gamed. Only true progress, as evidenced by the data and measured by the ML, is rewarded. The result is increased sales team productivity and top line growth.

The SetSail story begins at Google, where the founding team pioneered the use of AI-powered real-time sales incentives over the course of a 5-year-plus project spanning 2 very different lines of business. The results were stunning: double digit percentage increases in sales rep productivity (directly attributable to the compensation system, as rigorously measured versus control groups) and over a billion dollars in incremental annual revenue.

Since time immemorial, sales compensation has consisted of two components: base salary plus commissions. SetSail opens the door to a third category of sales compensation: real-time. Might we eventually see a meaningful proportion of total sales comp come in the form of data-driven real-time incentives? If this drives effective rep behavior, and delivers superior ROI versus other compensation levers, then the answer is yes. It is our belief that up to a third of total sales compensation might someday flow through the real-time AI system. This is already happening inside cutting-edge companies on the forefront of applying AI to their sales processes. SetSail is poised to bring this capability to the broader market.

Speaking more broadly, we believe that the keys to success for new business applications of all sorts will be data and machine learning. Incumbents (e.g. Salesforce) were built as workflow engines atop a sparsely populated relational database. Data acquisition fell to busy, biased humans (e.g. sales reps), resulting in incomplete and subjectively filtered data. The best strategy for would-be attackers is to go upstream, capturing the raw data at its source, using algorithmic power such as machine learning, natural language processing and computer vision to deliver superior insight and automation. In past writings I have referred to this model as “Data First” software, although it is just as easily described as “AI-powered”. This approach will yield new leaders in most business application categories, while also spawning entirely new sectors yet to be imagined.